SF4283 (Legislative Session 94 (2025-2026))
Payment denial to program participants under certain circumstances
Related bill: HF3621
AI Generated Summary
Purpose
- Give state agencies a way to temporarily stop paying program participants when there is fraud suspected in programs that distribute public funds. The goal is to protect public money while an investigation proceeds.
Key terms used in the bill
- Program: any state or federally funded program that transfers or disburses public funds or resources.
- Program participant: an entity or an individual that receives, disburses, or holds public funds or resources in a program.
- Fraud: a deliberate act to deprive someone of property or money, or to obtain more money or benefits than entitled, including lying or other crimes against a program.
- Evidence / credible allegation of fraud: information from investigations, audits, court records, or law enforcement that shows fraud or a credible claim of fraud.
- Agency: a state department or agency (including Minnesota State Colleges and Universities).
- Withholding of payments: temporarily stopping payments to a program participant.
- Confidential data on individuals / protected nonpublic data: privacy rules that apply to information about people during a withholding investigation.
Main provisions and what the bill seeks to accomplish
- Authority to withhold payments
- State agency heads may withhold payments to a program participant if there is suspected fraud, for a period up to 60 days (under one version) or for a temporary period (under another section).
- The decision is based on a preponderance of evidence (i.e., more likely than not).
- In some parts of the bill, this action is allowed if another agency head has found a credible allegation of fraud and the participant is part of the related program.
- Notice and documentation
- The agency must notify the program participant before withholding begins (often within 24 hours or within five days, depending on the section).
- The notice must say that payments will be withheld, the effective date, the reasons (without disclosing sensitive investigation details), when the withholding ends, and the participant’s right to submit written evidence for consideration and to appeal or seek review.
- Rights and review processes
- Right to respond: participants can submit written evidence for the agency’s consideration.
- Appeal / reconsideration: the bill provides different paths in different sections:
- Some sections allow an appeal through a contested case under chapter 14 or court relief (injunctive relief).
- Other sections require an administrative reconsideration, with a timeline (typically within 60 days) and a decision by the agency head. In one portion, the withholding action is not subject to Chapter 14 appeal.
- Continued services for those not implicated
- The agency should, when practical, inform people who are not implicated about their rights to continue receiving eligible services or programs.
- Data privacy and disclosure
- Data about the fraud allegations and the withholding are kept confidential or protected nonpublic data during the withholding period.
- After the period ends, most data become public unless allowed to remain confidential or protected by law. The identity of the complainant remains private.
- Agencies may share data with other government entities or law enforcement if it helps prevent fraud or aids investigations.
- Court tools
- Agencies can seek a temporary court order (Rule 65) to withhold payments when there is fraud evidence.
- Reporting requirements
- Agencies must report the withholding activity to the budget office, including how many people were withheld, how much money, which programs, and outcomes of any challenges.
- The budget office must compile these reports and share them with key legislative committees by a set date.
- Sunset
- The new withholding provisions are set to expire on a specific date (for example, July 1, 2027) unless renewed or updated.
Significant changes to existing law
- Creates a new framework giving agencies explicit authority to withhold payments while fraud investigations occur, with defined notice requirements, privacy protections, and review paths.
- Establishes formal reporting to the budget office and lawmakers on how often withholding happens and its outcomes.
- Introduces a sunset for these provisions, requiring reconsideration after a set date.
- Adds or clarifies data privacy rules around withholding discussions, including when information becomes public or remains private.
- Creates alternative dispute mechanisms (administrative reconsideration in some parts, and court-based review in others) and clarifies when Chapter 14 appeal rights apply or do not apply.
- Extends the concept to both individuals and entities that participate in programs and to providers/vendors associated with those programs.
Practical impact
- Public funds may be shielded from potentially fraudulent disbursements more quickly.
- Participants in programs must be prepared to receive notices and provide evidence if funds are being withheld.
- Privacy protections aim to balance fraud fighting with individual privacy during investigations.
- Agencies must develop processes for notification, review, and reporting, and lawmakers will review outcomes.
Note on parallel provisions
- The bill contains multiple sections that describe similar ideas (withholding, notices, and appeals) but with slightly different procedures (e.g., timelines, whether Chapter 14 appeals are allowed, and how reconsideration works). In practice, this means some parts would let a participant appeal, while other parts would use administrative reconsideration and may limit traditional appeals.
What to watch for
- How the 60-day withholding cap is applied in practice.
- How often agencies will use this authority and what types of programs are affected.
- The balance between swift protection of funds and due process for participants.
- The exact sunset date and any legislative action to extend or modify the provisions.
Relevant Terms - program - program participant - agency - withholding of payments - fraud - credible allegation of fraud - evidence - notice - administrative reconsideration - Chapter 14 (contested case / appeals) - court order (Rule 65) - confidential data on individuals - protected nonpublic data - data disclosure - continued receipt of funds - public funds - provider/vendor - competing program eligibility - report to the commissioner of management and budget - sunset date - preponderance of evidence
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 09, 2026 | Senate | Action | Introduction and first reading | ||
| March 09, 2026 | Senate | Action | Referred to | State and Local Government |
Citations
[
{
"analysis": {
"added": [
"Adds/clarifies definitions for Entity, Evidence, Fraud, Individual, Program, Program participant, and Agency."
],
"removed": [],
"summary": "Amends Minn. Stat. 2025 Supplement §15.013 Subd. 1 (Definitions) to establish and clarify terms used for program payments withheld due to fraud.",
"modified": [
"Recasts/expands the Fraud definition to include acts of deception aimed at obtaining greater compensation or benefits, and to include crimes against any program, referencing both state and federal contexts."
]
},
"citation": "15.013",
"subdivision": "Subdivision 1"
},
{
"analysis": {
"added": [
"Allows the head of an agency to withhold payments for up to 60 days when a preponderance of evidence indicates fraud."
],
"removed": [],
"summary": "Amends Minn. Stat. 2025 Supplement §15.013 Subd. 2 (Administrative withholding of payments) to authorize temporary withholding of program payments.",
"modified": [
"Introduces notice and procedural requirements for withholding (e.g., 24-hour advance notice before withholding; enumerates notice content and rights to submit evidence).",
"Allows appeal of withholding under established processes (subsequent referenced rights under Chapter 14)."
]
},
"citation": "15.013",
"subdivision": "Subdivision 2"
},
{
"analysis": {
"added": [
"Data related to evidence of fraud classified as confidential data on individuals (per §13.02, subd. 3) or protected nonpublic data (per §13.02, subd. 13) for nonindividual data."
],
"removed": [],
"summary": "Adds data classification and access rules during the administrative payment withholding period.",
"modified": [
"Clarifies that data related to fraud becomes public after the withholding period unless otherwise classified; maintains privacy for complainants (private data on individuals per §13.02, subd. 12).",
"Permits limited disclosures to federal, state, or local agencies or law enforcement to prevent fraud or aid enforcement."
]
},
"citation": "15.013",
"subdivision": "Subdivision 3"
},
{
"analysis": {
"added": [
"Explicit inclusion of the Minnesota State Colleges and Universities within the definition of Agency."
],
"removed": [],
"summary": "Cites the meaning of Agency as defined by §16B.01, subdivision 2, and explicitly includes the Minnesota State Colleges and Universities.",
"modified": []
},
"citation": "16B.01",
"subdivision": "Subdivision 2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference indicating State agency definition draws from §15.01.",
"modified": []
},
"citation": "15.01",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference indicating State agency definition draws from §15.012.",
"modified": []
},
"citation": "15.012",
"subdivision": ""
},
{
"analysis": {
"added": [
"Specifies that data relating to credible fraud allegations during withholding are confidential data on individuals per §13.02, subd. 3."
],
"removed": [],
"summary": "In the data handling context, defines that data relating to a credible allegation of fraud can be confidential data on individuals.",
"modified": []
},
"citation": "13.02",
"subdivision": "Subdivision 3"
},
{
"analysis": {
"added": [
"Allows data not on individuals to be protected nonpublic data under §13.02, subd. 13."
],
"removed": [],
"summary": "Data handling related to nonindividual data during the withholding period.",
"modified": []
},
"citation": "13.02",
"subdivision": "Subdivision 2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Identity of a complainant is private data on individuals.",
"modified": []
},
"citation": "13.02",
"subdivision": "Subdivision 12"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fraud definitions in later section include theft in violation of §609.52.",
"modified": []
},
"citation": "609.52",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fraud definitions in later section include perjury in violation of §609.48.",
"modified": []
},
"citation": "609.48",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fraud definitions in later section include aggravated forgery/forgery in violation of §609.542.",
"modified": []
},
"citation": "609.542",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fraud definitions in later section include forgery in violation of §609.625.",
"modified": []
},
"citation": "609.625",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fraud definitions in later section include forgery in violation of §609.63.",
"modified": []
},
"citation": "609.63",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Appeal/process options reference Chapter 14 (Minnesota Statutes) for contested cases related to withholding decisions.",
"modified": []
},
"citation": "14",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference noting that withholding authority does not supersede other law including §127A.21, subd. 5.",
"modified": []
},
"citation": "127A.21",
"subdivision": "Subdivision 5"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to withholding authority not superseded by other law including §142A.12, subd. 6.",
"modified": []
},
"citation": "142A.12",
"subdivision": "Subdivision 6"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to withholding authority not superseded by other law including §245.095, subd. 5.",
"modified": []
},
"citation": "245.095",
"subdivision": "Subdivision 5"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to withholding authority not superseded by other law including §256B.064, subd. 2, para. (b).",
"modified": []
},
"citation": "256B.064",
"subdivision": "Subdivision 2, Paragraph b"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Reiterates cross-reference to Agency definition including Minnesota State Colleges and Universities.",
"modified": []
},
"citation": "16B.01",
"subdivision": "Subdivision 2"
}
]Progress through the legislative process
In Committee