Plain English Breakdown
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HF4215 • 2026
Federal funding protection trust fund established, conditional receipt and remittance of federal funds provided, and report required.
Federal funding protection trust fund established, conditional receipt and remittance of federal funds provided, and report required.
Passed Legislature
This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.
Bill History
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2026-03-25
House
Author added Xiong
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2026-03-12
House
Introduction and first reading, referred to State Government Finance and Policy
Official Summary Text
Federal funding protection trust fund established, conditional receipt and remittance of federal funds provided, and report required.
Current Bill Text
Read the full stored bill text
A bill for an act relating to state finance; establishing the federal funding protection trust fund; providing for conditional receipt and remittance of federal funds; requiring a report; proposing coding for new law in Minnesota Statutes, chapter 16A. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. new text begin [16A.5311] MINNESOTA FEDERAL FUNDING PROTECTION TRUST FUND. new text end new text begin Subdivision 1. new text end new text begin Purpose and findings. new text end new text begin (a) The legislature finds that: new text end new text begin (1) federal funds support critical programs for the health, safety, and welfare of Minnesotans; new text end new text begin (2) Minnesota relies on predictable, timely, and nondiscriminatory distribution of federal funds appropriated by Congress; new text end new text begin (3) suspension, delay, or conditional withholding of federal funds for political or nonstatutory reasons creates fiscal instability and undermines cooperative federalism; and new text end new text begin (4) Minnesota has a compelling interest in protecting residents, local governments, nonprofit providers, and state agencies from disruptions. new text end new text begin (b) The purpose of this section is to establish a state trust fund mechanism to receive, hold, and manage federal funds and federal pass-through funds in a manner that protects state programs while preserving compliance with federal law. new text end new text begin Subd. 2. new text end new text begin Establishment of the trust fund. new text end new text begin The Minnesota federal funding protection trust fund is established in the state treasury. The trust fund is a special revenue fund and is not part of the general fund. Money in the trust fund is held in trust and may be expended only as provided in this section. new text end new text begin Subd. 3. new text end new text begin Sources of funds. new text end new text begin The trust fund consists of: new text end new text begin (1) federal funds awarded, granted, or otherwise made available to the state of Minnesota or its agencies; new text end new text begin (2) federal pass-through funds intended for political subdivisions, nonprofit organizations, or service providers within Minnesota; new text end new text begin (3) interest earnings on amounts held in the trust fund; and new text end new text begin (4) any other money authorized by law to be credited to the fund. new text end new text begin Subd. 4. new text end new text begin Conditional holding authority. new text end new text begin (a) Notwithstanding any other law, the commissioner of management and budget, in consultation with the attorney general and the governor, may temporarily hold federal funds in the trust fund if the governor determines that: new text end new text begin (1) federal funds have been suspended, delayed, reduced, or conditioned in a manner not expressly authorized by federal statute or regulation; or new text end new text begin (2) federal actions create a material risk of interruption to essential state services. new text end new text begin (b) Funds held under this subdivision remain dedicated to the original federal purpose and may not be repurposed, transferred, or spent for any other use. new text end new text begin Subd. 5. new text end new text begin Release and remittance of funds. new text end new text begin (a) Federal funds held in the trust fund must be released and distributed when the governor certifies in writing that: new text end new text begin (1) the federal government has restored or confirmed the availability of funds consistent with federal law; or new text end new text begin (2) continued holding of the funds would place the state or recipients at risk of noncompliance with federal requirements. new text end new text begin (b) Certification under this subdivision must be transmitted to the chairs and ranking minority members of the legislative committees with jurisdiction over state government finance and the affected program areas. new text end new text begin Subd. 6. new text end new text begin Taxpayer and recipient protections. new text end new text begin (a) Nothing in this section authorizes the state to: new text end new text begin (1) collect federal taxes on behalf of the United States; new text end new text begin (2) interfere with individual or business tax obligations to the federal government; or new text end new text begin (3) assume liability for federal penalties, interest, or enforcement actions. new text end new text begin (b) This section must be administered to ensure that individual taxpayers, service recipients, and program beneficiaries experience no disruption in eligibility, benefits, or services to the maximum extent permitted by law. new text end new text begin Subd. 7. new text end new text begin Reporting and oversight. new text end new text begin (a) The commissioner of management and budget must submit a quarterly report to the legislature that includes the: new text end new text begin (1) amount of federal funds held in the trust fund; new text end new text begin (2) programs and agencies affected; new text end new text begin (3) legal or administrative basis for holding the funds; and new text end new text begin (4) communications received from federal agencies related to the funds. The report must be published on the department's website. new text end new text begin (b) The legislative auditor must conduct a review of the trust fund within two years of enactment and report findings to the chairs and ranking minority members of the legislative committees with jurisdiction over state budget and finance. new text end new text begin Subd. 8. new text end new text begin Severability. new text end new text begin If any provision of this section is held invalid, the invalidity does not affect other provisions or applications of this section that can be given effect without the invalid provision. new text end Sec. 2. new text begin EFFECTIVE DATE. new text end new text begin This act is effective the day following final enactment. new text end