HF4883

Purpose

Explain and update how the Minnesota legislature operates in several areas: - Establish a formal ethics framework for the legislative branch. - Clarify how government data is collected, stored, and shared. - Create a standardized approach to handling cash transactions and rounding. - Strengthen grant processes to avoid directing funds to a specific person or entity. - Update state government appropriations and related financial rules.

Key Provisions

1) Code of Ethics for the Legislative Branch

• Defines who enforces ethics (appointing authorities: House Rules and Legislative Administration Committee, Senate Rules and Administration Committee, and Legislative Coordinating Commission for certain staff).
• Creates definitions used in ethics rules:
  • Business, confidential information, employee, and private interest.
• Sets rules on accepting gifts and favors:
  • Employees cannot accept gifts, favors, or other benefits related to their duties, with listed exceptions (nominal value gifts, plaques, charitable donations, approved travel reimbursements, honoraria for personal work, etc.).
• Prohibits the improper use of confidential information.
• Regulates use of state property (time, equipment, or facilities) for private interests; allows reasonable personal use if policies permit.
• Establishes what counts as a conflict of interest (using official position for private gain, outside employment that affects judgment, certain financial arrangements, etc.) and how to handle conflicts.
• Describes the process for resolving conflicts of interest by delegating to a non-conflicted employee if possible.
• Sets precedence rules (10A and 3.084) when overlapping requirements apply.
• Requires rulemaking to enforce ethics provisions and lays out consequences for noncompliance (disciplinary action and potential application of relevant state laws).

2) Data Practices and Transparency

• Updates who is the “responsible authority” for government data (including listings for the legislature, state agencies, and political subdivisions).
• Defines terms to govern government data, including what constitutes government data and privacy considerations.
• Modifies data practices rules so certain data are nonpublic or public at specific times, with guidance on sharing data to aid budgeting and administration.
• Clarifies data responsibilities for the Legislative Coordinating Commission, the Secretary of the Senate, and the Chief Clerk of the House, and assigns data duties to counties, cities, school districts, and other political subdivisions.

3) Grant Management and Procurement

• Prohibits directing funds to a specific or uniquely qualified recipient in general, with listed exceptions (general obligation and certain capital grants, grants to tribal governments, etc.). The change applies to new appropriations beginning in fiscal year 2028 and requires adjustments to grant bases to support open, competitive processes.
• For grants over $50,000, requires a preaward risk assessment before awarding a competitive or legislatively named singlesource or solesource grant. The assessment looks at:
  • The potential grantee’s history with similar duties.
  • The size and changes to the grantee’s operations.
  • Financial information such as Form 990/990EZ for nonprofits, tax returns and financial statements for for-profit entities, good standing, audits, and disclosures of financial issues.
  • Whether current principals have felony financial crime convictions in the last decade.
  • The definition of “principal” includes public officials, board members, or staff with access to grant funds.
• This process is designed to support a competitive grant process and ensure accountability before funds are awarded.

4) Cash Transaction Rounding

• Allows agencies to round cash payments under specific rules:
  • If the total ends in 1, 2, 6, or 7 cents, round down to the nearest 5-cent increment.
  • If the total ends in 3, 4, 8, or 9 cents, round up to the nearest 5-cent increment.
  • Special case: totals ending in 0.01 or 0.02 are rounded up to 0.05.
  • Excludes electronic payments and similar methods (e.g., EFT, checks, gift cards).
• Agencies must publish a rounding policy at locations where cash transactions occur.

5) Tax-Forfeited Lands Settlement Appropriation

• Revisions related to funds from tax-forfeited lands settlements:
  • The claims administrator must return to the state General Fund the lesser of $40 million or the portion of the applicable Laws 2024 appropriation that isn’t needed to settle related claims.
  • The returned funds must be canceled into the general fund within one day of receipt.

6) Other Adjustments to Grants and Data

• Affected statutes (as amended) include provisions on government data, responsible authorities for data, and amendments to budget proposal data handling to protect sensitive information while enabling public transparency where appropriate.

Significant Changes at a Glance

• Ethics framework introduced for legislators and staff, with clear definitions and conflict-of-interest rules and a mandate for enforcement.
• Data governance clarified, including who is responsible for data and how data becomes public/nonpublic at different stages.
• Grants policy tightens control on directing funds to a single recipient and mandates competitive processes where appropriate.
• A formal preaward risk assessment is required for certain large or high-stakes grants.
• Cash handling policy standardizes rounding of cash transactions and requires posted guidelines.
• Funds from tax-forfeited lands settlements are to be returned to the General Fund if not needed and promptly canceled, improving fiscal management.
• Appropriations structure for state government and elections is updated with new baselines and timing for fiscal years 2026–2027.

Implementation and Enforcement

• Ethics rules are enforceable through established disciplinary processes and the state’s existing enforcement framework.
• Data practices enforceable under existing data laws, with defined responsible authorities and reporting requirements.
• The rounding rules require agency-wide policy adoption and posting.
• Grant standards rely on a formal risk assessment process and compliance with competitive grant requirements.

Relevant Terms - Code of Ethics for the Legislative Branch - Appointing authority - Conflicts of interest - Private interest - Confidential information - Use of state property - Gifts and favors - Guidelines and rulemaking - Noncompliance and disciplinary action - Data practices - Responsible authority - Government data - Public data vs nonpublic data - Legislative Coordinating Commission - Budget proposals - Preaward risk assessment - Grants and competitive grant process - Legislatively named singlesource/solesource grants - Form 990 / Form 990EZ - Public audits and internal controls - Principal (grant context) - Grant recipients - Cash transaction rounding - Rounding policy - Tax-forfeited lands settlement - General Fund - Appropriations - Supplemental appropriations

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