Committee backs bill forcing audited cities to repay misused street funds or face loss of turnback revenue

Representative Feige introduced House Bill 16‑90 with testimony from legislative audit staff. Auditors described a recurring statewide issue in which some municipalities have used street‑fund dollars for other purposes. The bill would require cities found in an audit to repay misused street funds by the end of the fiscal year. If repayment is not completed, affected municipalities could lose turnback funds, including the half‑cent sales tax and fuel turnback distributions. For outstanding past amounts, the bill would require a repayment plan with payments of 10% of general revenue, or the city may seek relief by presenting an alternative plan to the committee for approval.

Committee members pressed auditors on the scope of the problem; audit staff reported there are 39 cities identified with the practice dating back to at least 2003. Senators discussed whether the conduct could be appealed and whether the bill precludes judicial review; auditors said cities could still pursue court remedies and that audit makes findings but committee peers would decide whether to refer matters to the treasurer to cut off funds.

After questions and the absence of public opposition, Senator Johnson moved to pass HB16‑90 and Senator Sullivan seconded. The committee approved the measure by voice vote and advanced the bill.