Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF2578 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to state government; changing grants management provisions; amending
3	3	1.3 Minnesota Statutes 2024, sections 16B.97, subdivision 1; 16B.98, subdivisions 1,
4	4	1.4 4; 16B.981, subdivision 4; 16B.991, subdivision 2.
5	5	1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6	6	1.6 Section 1. Minnesota Statutes 2024, section 16B.97, subdivision 1, is amended to read:
7	7	1.7 Subdivision 1.Grant agreement Definitions.(a) For the purposes of this section, the
8	8	1.8following terms have the meanings given:
9	9	1.9 A grant agreement is (1) "grant agreement" means a written instrument or electronic
10	10	1.10document defining a legal relationship between a granting agency and a grantee when the
11	11	1.11principal purpose of the relationship is to transfer cash or something of value to the recipient
12	12	1.12to support a public purpose authorized by law instead of acquiring by professional or technical
13	13	1.13contract, purchase, lease, or barter property or services for the direct benefit or use of the
14	14	1.14granting agency.; and
15	15	1.15 (2) "grantee" means a potential or current recipient of a state-issued grant.
16	16	1.16 (b) This section does not apply to general obligation grants as defined by section 16A.695
17	17	1.17and, capital project grants to political subdivisions as defined by section 16A.86, or capital
18	18	1.18project grants otherwise subject to section 16A.642.
19	19	1.19 Sec. 2. Minnesota Statutes 2024, section 16B.98, subdivision 1, is amended to read:
20	20	1.20 Subdivision 1.Limitation.(a) As a condition of receiving a grant from an appropriation
21	21	1.21of state funds, the recipient of the grant must agree to minimize that administrative costs
22	22	1.22must be necessary and reasonable. The granting agency is responsible for negotiating
23	23	1Sec. 2.
24	24	25-00446 as introduced03/10/25 REVISOR EB/BM
25	25	SENATE
26	26	STATE OF MINNESOTA
27	27	S.F. No. 2578NINETY-FOURTH SESSION
28	28	(SENATE AUTHORS: XIONG)
29	29	OFFICIAL STATUSD-PGDATE
30	30	Introduction and first reading03/17/2025
31	31	Referred to State and Local Government 2.1appropriate limits to these costs so that the state derives the optimum benefit for grant
32	32	2.2funding.
33	33	2.3 (b) This section does not apply to general obligation grants as defined by section 16A.695
34	34	2.4and also capital project grants to political subdivisions as defined by section 16A.86, or
35	35	2.5capital project grants otherwise subject to section 16A.642.
36	36	2.6 Sec. 3. Minnesota Statutes 2024, section 16B.98, subdivision 4, is amended to read:
37	37	2.7 Subd. 4.Reporting of violations.A state employee who discovers evidence of violation
38	38	2.8of laws or rules governing grants is encouraged required to report the violation or suspected
39	39	2.9violation to the employee's supervisor, the commissioner or the commissioner's designee,
40	40	2.10or the legislative auditor. The legislative auditor shall report to the Legislative Audit
41	41	2.11Commission if there are multiple complaints about the same agency. The auditor's report
42	42	2.12to the Legislative Audit Commission under this section must disclose only the number and
43	43	2.13type of violations alleged. An employee making a good faith report under this section has
44	44	2.14the protections provided for under section 181.932, prohibiting the employer from
45	45	2.15discriminating against the employee.
46	46	2.16 Sec. 4. Minnesota Statutes 2024, section 16B.981, subdivision 4, is amended to read:
47	47	2.17 Subd. 4.Agency authority to not award grant.(a) If, while performing the required
48	48	2.18steps in subdivision 2 and pursuant to sections 16B.97, 16B.98, and 16B.991, the agency
49	49	2.19requires additional information to determine whether there is a substantial risk that the
50	50	2.20potential grantee cannot or would not perform the required duties of the grant agreement,
51	51	2.21the agency must give the grantee 30 business 15 calendar days within which the grantee
52	52	2.22can respond to the agency for the purpose of satisfying the agency's concerns or work with
53	53	2.23the agency to develop a plan to satisfy the concerns.
54	54	2.24 (b) If, after performing the required steps in subdivision 2 and pursuant to sections
55	55	2.2516B.97, 16B.98, and 16B.991, and after reviewing any additional requested information
56	56	2.26from the grantee, the agency still has concerns that there is a substantial risk that a potential
57	57	2.27grantee cannot or would not perform the required duties under the grant agreement, the
58	58	2.28agency must either create a plan to satisfy remaining concerns with the grantee or must not
59	59	2.29award the grant.
60	60	2.30 (c) If, pursuant to paragraphs (a) and (b), the agency does not award a competitive,
61	61	2.31single-source, or sole-source grant, the agency must provide notification to the grantee and
62	62	2.32the commissioner of administration of the determination. The notification to the grantee
63	63	2.33must include the agency's reason for postponing or forgoing the grant, including information
64	64	2Sec. 4.
65	65	25-00446 as introduced03/10/25 REVISOR EB/BM 3.1sufficient to explain and support the agency's decision, and notify the applicant of the process
66	66	3.2for contesting the agency's decision with the agency and the applicant's options under
67	67	3.3paragraph (d). If the applicant contests the agency's decision no later than 15 business days
68	68	3.4after receiving the notice, the agency must consider any additional written information
69	69	3.5submitted by the grantee. The agency has 15 business days to consider this information,
70	70	3.6during which the agency may reverse or modify the agency's initial decision to postpone
71	71	3.7or forgo the grant.
72	72	3.8 (d) The final decision by an agency under paragraph (c) may be challenged as a contested
73	73	3.9case under chapter 14. The contested case proceeding must be initiated within 30 business
74	74	3.10calendar days of the date of written notification of a final decision by the agency.
75	75	3.11 (e) If, pursuant to paragraphs (a) and (b), the agency does not award a legislatively named
76	76	3.12grant, the agency must delay award of the grant until adjournment of the next regular or
77	77	3.13special legislative session for action from the legislature. The agency must provide
78	78	3.14notification to the potential grantee, the commissioner of administration, and the chairs and
79	79	3.15ranking minority members of the Ways and Means Committee in the house of representatives
80	80	3.16and the chairs and ranking minority members of the Finance Committee in the senate. The
81	81	3.17notification to the grantee must include the agency's reason for postponing or forgoing the
82	82	3.18grant, including information sufficient to explain and support the agency's decision and
83	83	3.19notify the applicant of the process for contesting the agency's decision under paragraph (d).
84	84	3.20If the applicant contests the agency's decision no later than 15 business days after receiving
85	85	3.21the notice, the agency must consider any additional written information submitted by the
86	86	3.22grantee. The agency has 15 business days to consider this information, during which the
87	87	3.23agency may reverse or modify the agency's initial decision to postpone or forgo the grant.
88	88	3.24The notification to the commissioner of administration and legislators must identify the
89	89	3.25legislatively named potential grantee and the agency's reason for postponing or forgoing
90	90	3.26the grant. After hearing the concerns of the agency, the legislature may reaffirm the award
91	91	3.27of the grant or reappropriate the funds to a different legislatively named grantee. Based on
92	92	3.28the action of the legislature, the agency must award the grant to the legislatively named
93	93	3.29grantee. If the legislature does not provide direction to the agency on the disposition of the
94	94	3.30grant, the funds revert to the original appropriation source.
95	95	3.31 Sec. 5. Minnesota Statutes 2024, section 16B.991, subdivision 2, is amended to read:
96	96	3.32 Subd. 2.Authority.A grant agreement must by its terms permit the commissioner to
97	97	3.33unilaterally terminate the grant agreement prior to completion if the commissioner determines
98	98	3Sec. 5.
99	99	25-00446 as introduced03/10/25 REVISOR EB/BM 4.1that further performance under the grant agreement would not serve agency purposes or
100	100	4.2performance under the grant agreement is not in the best interests of the state.
101	101	4Sec. 5.
102	102	25-00446 as introduced03/10/25 REVISOR EB/BM