Questions Raised About Minnesota Economic Development Agency

ST. PAUL, Minn. (AP) — A new report suggests the structure of a crucial Iron Range oversight board may be unconstitutional.

The Office of the Legislative Auditor made that conclusion in an examination of the Iron Range Resources and Rehabilitation Board released Friday. The IRRRB is a state agency based in Eveleth that doles out grants and loans to spur economic development in northeastern Minnesota.

But the auditor's report says its governance is a potential problem. A board of nine lawmakers approves spending decisions. Because it's an executive agency, the audit says that's ripe for a constitutional challenge over separation of powers.

The audit also shows the agency hasn't adequately tracked the payoff from its investments and has heavily subsidized Giant's Ridge ski resort amid heavy losses.

Commissioner Mark Phillips says he'll make some changes.