- Associated Press - Wednesday, April 20, 2016

ST. PAUL, Minn. (AP) - House Republicans are taking aim at a state agency that invests in Minnesota’s Iron Range, saying it lacks proper accountability and oversight and that its structure is open to a constitutional challenge.

The House Government Operations and Elections committee on Wednesday passed Rep. Tom Hackbarth’s measure that would replace the Iron Range Resources and Rehabilitation Board with a nine-member commission made up of legislators and citizens from around the state who would need the Legislature to sign off on all spending decisions.

The board - made up of nine Iron Range lawmakers - doles out grants and loans meant to spur economic development and diversify an Iron Range economy that’s seen mine closures and layoffs due to an unprecedented downturn in the steel industry. The board has faced scrutiny in recent months following an auditor’s report that concluded the agency poured $17 million into a money-losing ski resort, gave financial assistance to businesses that may not have needed it and failed to require job creation in return for many of the loans it doled out.

The board has final approval on its spending decisions - a job normally reserved for the executive branch. The report from the Office of the Legislative Auditor suggested eliminating the board or having members be appointed by the governor.

Hackbarth’s measure would scrap the board and replace it with a commission with six statewide lawmakers and three citizens who would evaluate budget proposals from the agency’s commissioner before submitting their recommendations for funding to the state Legislature for approval.

“We want to give this some clarity, some transparency and accountability to what’s happening with the money,” he said.

The agency is largely funded through a tax on production of the region’s taconite, a low-grade iron ore used to make steel.

Iron Range legislators roundly rejected the changes Wednesday. Democratic Reps. Tom Anzelc, Jason Metsa and Rep. Robert Ecklund, all on the IRRRB, said they weren’t consulted for input and don’t think it’s appropriate for lawmakers from across the state to decide how money generated from the Iron Range should be spent.

“This is outrageous and it’s unnecessary,” Anzelc said.

For now, Anzelc said, he and his fellow Rangers are working on legislation that would require the board to first get approval from the governor before spending money from three of its funds, but they don’t see a need for further legislation. He said a measure could come as early as Thursday in the Senate.

IRRRB Commissioner Mark Phillips told lawmakers that he agrees that the agency can improve and that they’re working on implementing recommendations outlined in the audit earlier this year.

“No other region in the state is facing this type of scrutiny or legislative oversight,” he said. “We will fix the areas addressed in the (auditor’s report), but this bill, in my opinion, is not the way to address it.”

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