US state nominates loony (9)
I believe the answer is:
minnesota
'us state' is the definition.
(I've seen this before)
'nominates loony' is the wordplay.
'loony' indicates anagramming the letters.
'nominates' with letters rearranged gives 'MINNESOTA'.
(Other definitions for minnesota that I've seen before include "American state, capital St Paul" , "Superior neighbour" , "Nominates for American state" , "US state, capital St Paul" , "Wobegon state (Keillor)" .)