SF5020

Purpose

This bill aims to modernize and improve information technology (IT) across state and local government programs. It creates a dedicated funding mechanism called the technology obsolescence reduction keystone account, directs surplus general fund dollars to several priorities (including IT modernization), and requires a formal IT modernization plan from Minnesota IT Services. It also provides a one-time transfer to the new IT account to jump-start modernization efforts.

Main Provisions

• Priority use of forecasted general fund surplus

  • When the forecast shows a positive unrestricted general fund balance, the commissioner of management and budget must allocate funds in a specific order: 1) cash flow account up to a cap of $350,000,000 2) budget reserve account up to a cap of $2,852,098,000 3) enough funds to increase school district aids and credits payments (section 127A.45) to not more than 90% of the target, rounded to the nearest tenth of a percent 4) enough funds to restore all or part of net aid reductions under section 127A.441 and to reduce the property tax revenue recognition shift under section 123B.75, subdivision 5, by the same amount 5) the technology obsolescence reduction keystone account until that account reaches $80,000,000

• Funding mechanics

  • The amounts identified above are appropriated from the general fund within two weeks after the forecast is released (or as needed to meet existing appropriation schedules).
  • The commissioner of management and budget must certify the total reductions for items 3 and 4 to the commissioner of education. The commissioner of education must then adjust the aid payment percentage and the property tax shift percentage accordingly for the current year and future years.

• Technology obsolescence reduction keystone account

  • A new account is created in the special revenue fund called the technology obsolescence reduction keystone account.
  • Money in this account can be appropriated by the Legislature to modernize or replace outdated or inadequate IT infrastructure and systems used by the state or by local units of government to administer state programs.

• Information Technology Modernization Plan requirement

  • By February 1, 2027, the commissioner of Minnesota Information Technology Services must submit an IT modernization plan to the relevant legislative chairs and ranking members.
  • The plan must identify and rank IT infrastructure and systems most in need of modernization or replacement, with priority given to systems used by local units of government to administer state programs.
  • For each project, the plan must identify anticipated costs and the recommendation to modernize or replace the infrastructure or system.

• One-time funding transfer

  • In fiscal year 2027, $30,000,000 is transferred from the general fund to the technology obsolescence reduction keystone account. This is a one-time transfer to support initial modernization efforts.

Significant Changes to Existing Law

• Creation of the technology obsolescence reduction keystone account

  • Establishes a new dedicated funding source within the special revenue fund for IT modernization efforts, separate from general funding streams.

• Revisions to general fund surplus allocation

  • Adds IT modernization funding to the established priorities for allocating any positive unrestricted general fund balance at the end of a biennium, alongside cash flow and budget reserves and education funding adjustments.

• IT planning requirement

  • Introduces a mandatory IT modernization plan from Minnesota IT Services, focusing on modernization priorities and local-government IT needs.

• One-time funding infusion

  • Requires a one-time transfer of $30 million from the general fund to the new IT keystone account to accelerate modernization activities.

Implementation & Timeline (Key Dates)

• By February 1, 2027: Minnesota IT Services must submit the IT modernization plan detailing prioritized projects and cost estimates.
• Fiscal year 2027: A one-time transfer of $30,000,000 from the general fund to the technology obsolescence reduction keystone account.

Relevant notes - The bill links IT modernization funding to an overall framework of state budgeting that prioritizes various accounts (cash flow, budget reserve, and education-related adjustments) when forecasted surplus funds become available. - The plan emphasizes prioritizing IT modernization for systems used by local units of government to deliver state programs, not just state-level systems.

Relevant Terms - technology obsolescence reduction keystone account - information technology modernization plan - Minnesota Information Technology Services - general fund - special revenue fund - cash flow account - budget reserve account - school district aids and credits (section 127A.45) - net aid reductions (section 127A.441) - property tax revenue recognition shift (section 123B.75, subdivision 5) - modernization or replacement of IT infrastructure - local units of government - onetime transfer - anticipated costs - modernization vs. replacement decisions