1.1 A bill for an act
1.2 relating to state government; withholding payments to program participants under
1.3 certain circumstances; proposing coding for new law in Minnesota Statutes, chapter
1.4 15.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [15.013] PROGRAM PAYMENTS WITHHELD; FRAUD.
1.7 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
1.8the meanings given.
1.9 (b) "Credible allegation of fraud" means an allegation of fraud that has been verified by
1.10the head of a state agency from any source, including but not limited to fraud complaints;
1.11patterns identified through audits, civil cases, law enforcement investigations, or
1.12investigations by other state or federal agencies; and court filings and other legal documents,
1.13including but not limited to police reports, complaints, indictments, information, affidavits,
1.14declarations, and search warrants.
1.15 (c) "Fraud" means an intentional or deliberate act to deprive another of property or
1.16money or to acquire property or money by deception or other unfair means. Fraud includes
1.17intentionally submitting false information to a federal, state, or local government entity for
1.18the purpose of obtaining a greater compensation or benefit than that to which the person is
1.19legally entitled. Fraud also includes acts which constitute a crime against any program, or
1.20the attempts or plans to commit those crimes, including but not limited to theft in violation
1.21of section 609.52; perjury in violation of section 609.48; and aggravated forgery and forgery
1.22in violation of sections 609.625 and 609.63, and substantially similar federal laws.
1.23 (d) "Individual" means a natural person.
1Section 1.
REVISOR EB/HL 25-0040702/27/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2370
NINETY-FOURTH SESSION
Authored by Klevorn; Norris; Anderson, P. E.; Nadeau; Greenman and others03/17/2025
The bill was read for the first time and referred to the Committee on State Government Finance and Policy 2.1 (e) "Program" means any program funded by a state or federal agency that involves the
2.2transfer or disbursement of public funds or other public resources.
2.3 (f) "Program participant" means any entity or individual that receives, disburses, or has
2.4custody of funds or other resources transferred or disbursed under a program.
2.5 (g) "State agency" means any department or agency of the state as defined in sections
2.615.01 and 15.012.
2.7 Subd. 2.Withholding of payments.(a) Except as otherwise authorized and to the extent
2.8permitted by federal law, the head of any state agency may withhold payments to a program
2.9participant in any program administered by that agency if the agency head determines there
2.10is a credible allegation of fraud under investigation and the program participant is a subject
2.11of the investigation.
2.12 (b) Notwithstanding subdivision 3, the state agency head must send notice of the
2.13withholding of payments to the program participant within five days of taking such action.
2.14The notice must:
2.15 (1) state that payments are being withheld in accordance with this section;
2.16 (2) state the reasons for withholding payments, but need not disclose specific information
2.17concerning an ongoing investigation;
2.18 (3) state that the withholding is for a temporary period and cite the circumstances under
2.19which withholding shall be terminated; and
2.20 (4) inform the program participant of the right to submit written evidence for
2.21consideration by the state agency head.
2.22 (c) The withholding of payments shall not continue after the state agency head determines
2.23there is insufficient evidence of fraud by the program participant, or after legal proceedings
2.24relating to the alleged fraud are completed, unless the state agency head is authorized by
2.25law to take additional action against the program participant and complies with all
2.26requirements in law to take such action.
2.27 (d) The withholding of payments is a temporary action and is not subject to appeal under
2.28chapter 14.
2.29 Subd. 3.Data classification and access.(a) During the payment withholding period
2.30under this section, all data relating to a credible allegation of fraud and withholding of
2.31payments under this section are classified as: (1) confidential data on individuals pursuant
2.32to section 13.02, subdivision 3; or (2) protected nonpublic data pursuant to section 13.02,
2Section 1.
REVISOR EB/HL 25-0040702/27/25 3.1subdivision 13, in the case of data not on individuals. The agency head may disclose that
3.2payments are being withheld from a program participant if the agency head determines that
3.3doing so will not compromise an ongoing investigation.
3.4 (b) Except for the identity of a complainant, after a determination has been made under
3.5subdivision 2, paragraph (c), that withholding of payments shall not continue, all data relating
3.6to a credible allegation of fraud and withholding of payments under this section becomes
3.7public unless classified otherwise under state or federal law. The identity of a complainant
3.8is private.
3.9 (c) Any state agency may disclose any data classified as confidential or protected
3.10nonpublic under this section to any federal, state, or local government agency, or any law
3.11enforcement agency, if the state agency determines that access will help prevent fraud
3.12against public programs or aid the law enforcement process.
3Section 1.
REVISOR EB/HL 25-0040702/27/25