Legislative branch code of ethics established, data practices modified, cash transaction rounding required, funds mandate determination provided, other state government provisions modified, and money appropriated.

A bill for an act

relating to state government; establishing a code of ethics for the legislative branch;

changing data practices provisions; requiring rounding for cash transaction;

determining a mandate to direct funds to a specific or uniquely qualified person

is not valid; changing grant management and procurement provisions; defining

terms; changing a provision under state personnel management; waiving building

permit in a certain site; requiring return and cancellation of tax-forfeited settlement

appropriation not needed; appropriating money; amending Minnesota Statutes

2024, sections 13.02, subdivisions 7a, 16; 13.605, subdivision 1; 16B.98, by adding

a subdivision; 16B.981, subdivision 2; 16C.02, by adding subdivisions; 16C.06,

subdivision 6; Minnesota Statutes 2025 Supplement, section 43A.23, subdivision

1; proposing coding for new law in Minnesota Statutes, chapters 3; 16A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

STATE GOVERNMENT AND ELECTIONS APPROPRIATIONS

Section 1.
new text begin
STATE GOVERNMENT AND ELECTIONS APPROPRIATIONS.
new text end

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The sums shown in the columns marked "Appropriations" are added to the appropriations

in Laws 2025, chapter 39, article 1, to the agencies and for the purposes specified in this

article. The appropriations are from the general fund, or another named fund, and are

available for the fiscal years indicated for each purpose. The figures "2026" and "2027"

used in this article mean that the appropriations listed under them are available for the fiscal

year ending June 30, 2026, or June 30, 2027, respectively. Supplemental appropriations for

the fiscal year ending June 30, 2026, are effective the day following final enactment unless

a different effective date is explicit.

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APPROPRIATIONS

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Available for the Year

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Ending June 30

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2026

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2027

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Sec. 2.
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ATTORNEY GENERAL

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$

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-0-

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$

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1,231,000

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Sec. 3.
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ADMINISTRATION
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$

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-0-

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$

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172,000

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Sec. 4.
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MINNESOTA MANAGEMENT AND

BUDGET
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$

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-0-

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$

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1,726,000

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The base for this appropriation is $2,301,000

in fiscal year 2028 and each fiscal year

thereafter.

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Sec. 5.
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REVENUE
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$

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-0-

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$

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1,839,000

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The base for this appropriation is $2,786,000

in fiscal year 2028 and $2,725,000 in fiscal

year 2029.

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Sec. 6.
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RETURN AND CANCELLATION OF TAX-FORFEITED SETTLEMENT

APPROPRIATION.
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Subdivision 1.

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Return of funds.

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Notwithstanding Laws 2024, chapter 113, section 1,

subdivision 5, on June 29, 2026, the claims administrator appointed under Laws 2024,

chapter 113, to settle litigation related to the state's retention of tax-forfeited lands, surplus

proceeds from the sale of tax-forfeited lands, and mineral rights in those lands, must return

to the commissioner of management and budget the lesser of $40,000,000 or the amount of

the appropriation under Laws 2024, chapter 113, section 1, subdivision 5, that is not needed

to settle claims under Laws 2024, chapter 113.

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Subd. 2.

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Cancellation.

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The commissioner of management and budget must cancel the

amount received under subdivision 1 to the general fund within one day of receipt of the

funds.

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ARTICLE 2

STATE GOVERNMENT POLICY

Section 1.

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[3.0841] CODE OF ETHICS FOR THE LEGISLATIVE BRANCH.

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Subdivision 1.

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Definitions.

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(a) For purposes of this section, the following terms have

the meanings given.

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(b) "Appointing authority" means the house of representatives Rules and Legislative

Administration Committee for employees of the house of representatives, the senate Rules

and Administration Committee for employees of the senate, and the Legislative Coordinating

Commission for the unclassified employees of joint commissions and offices.

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(c) "Business" means any corporation, partnership, proprietorship, firm, enterprise,

franchise, association, organization, self-employed individual, or any other legal entity that

engages in either nonprofit or profit-making activities.

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(d) "Confidential information" means any information obtained under government

authority that has not become part of the body of public information and which, if released

prematurely or in nonsummary form, may provide an unfair economic advantage to or

adversely affect the competitive position of an individual or a business.

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(e) "Employee" means all members and all employees of the legislature, legislative

committees, or commissions.

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(f) "Private interest" means any interest, including but not limited to a financial interest,

that pertains to a person or business whereby the person or business would gain a benefit,

privilege, exemption, or advantage from the action of a state agency or employee that is not

available to the general public.

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Subd. 2.

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Acceptance of gifts; favors.

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Employees in the course of or in relation to the

employees' official duties shall not directly or indirectly receive or agree to receive any

payment of expense, compensation, gift, reward, gratuity, favor, service, or promise of

future employment or other future benefit from any source except the state for any activity

related to the duties of the employee, unless otherwise provided by law. The acceptance of

any of the following is not a violation of this subdivision:

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(1) gifts of nominal value;

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(2) plaques or similar mementos recognizing individual services in a field of specialty

or to a charitable cause;

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(3) payment of reimbursement expenses for travel or meals, not to exceed actual expenses

incurred, that are not reimbursed by the state and have been approved in advance by the

appointing authority as part of the work assignment; or

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(4) honoraria or expenses paid for papers, talks, demonstrations, or appearances made

by employees on their own time for which they are not compensated by the state.

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Subd. 3.

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Use of confidential information.

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An employee shall not use confidential

information to further the employee's private interest and shall not accept outside employment

or involvement in a business or activity that will require the employee to disclose or use

confidential information.

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Subd. 4.

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Use of state property.

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(a) An employee shall not use or allow the use of state

time, supplies, or state-owned or leased property and equipment for the employee's private

interests or any other use not in the interest of the state, except as provided by law.

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(b) Appointing authorities in the legislature shall issue policies on these issues for their

employees. The policies shall permit employees to make reasonable use of state time,

property, and equipment for personal communications and shall address issues of privacy,

content of communications, and the definition of reasonable use as well as other issues the

appointing authorities identify as necessary and relevant.

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Subd. 5.

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Conflicts of interest.

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The following actions by an employee shall be deemed

a conflict of interest and are subject to procedures in this section regarding resolution of the

conflicts or disciplinary action as appropriate:

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(1) use or attempted use of the employee's official position to secure benefits, privileges,

exemptions, or advantages for the employee, the employee's immediate family, or an

organization with which the employee is associated that are different from those available

to the general public;

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(2) acceptance of other employment or contractual relationship that will affect the

employee's independence of judgment in the exercise of official duties;

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(3) actions as an agent or attorney in any action or matter pending before the employing

agency, except in the proper discharge of official duties or on the employee's behalf; or

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(4) the solicitation of a financial agreement for the employee or entity other than the

state when the state is currently engaged in the provision of the services that are the subject

of the agreement or where the state has expressed an intention to engage in competition for

the provision of the services, unless the affected state agency waives this clause.

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Subd. 6.

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Determination of conflicts of interest.

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When an employee believes the potential

for a conflict of interest exists, it is the employee's duty to avoid the situation. A conflict of

interest shall be deemed to exist when a review of the situation by the employee or the

appointing authority determines any one of the following conditions to be present:

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(1) the use of state time, facilities, equipment, or supplies or the use of a badge, uniform,

prestige, or influence of a state office or employment for private gain or advantage;

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(2) receipt or acceptance by the employee of any money or other thing of value from

anyone other than the state for the performance of an act that the employee would be required

or expected to perform in the regular course or hours of state employment or as part of the

duties as an employee;

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(3) employment by a business which is subject to the direct or indirect control, inspection,

review, audit, or enforcement by the employee; or

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(4) the performance of an act in a capacity other than the employee's official capacity

that may later be subject directly or indirectly to the control, inspection, review, audit, or

enforcement by the employee.

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Subd. 7.

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Resolution of conflict of interest.

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If the employee or appointing authority

determines that a conflict of interest exists, the matter shall be assigned to another employee

who does not have a conflict of interest. If it is not possible to assign the matter to an

employee who does not have a conflict of interest, interested persons shall be notified of

the conflict and the employee may proceed with the assignment.

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Subd. 8.

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Precedence of chapter 10A.

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Where specific provisions of chapter 10A apply

to employees and conflict with this section, the provisions of chapter 10A shall apply.

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Subd. 9.

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Precedence of section 3.084.

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Where specific provisions of section 3.084 apply

to employees and conflict with this section, the provisions of section 3.084 shall apply.

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Subd. 10.

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Noncompliance.

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Any employee who intentionally fails to comply with the

provisions of this section shall be subject to disciplinary action and action pursuant to chapter

609, if applicable.

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Subd. 11.

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Rulemaking; enforcement.

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Appointing authorities must adopt rules to enforce

this section.

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Sec. 2.

Minnesota Statutes 2024, section 13.02, subdivision 7a, is amended to read:

Subd. 7a.

Government entity.

"Government entity" means
new text begin
the legislature or
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a state

agency, statewide system, or political subdivision.

Sec. 3.

Minnesota Statutes 2024, section 13.02, subdivision 16, is amended to read:

Subd. 16.

Responsible authority.

(a) "Responsible authority" in a state agency or

statewide system means the state official designated by law or by the commissioner as the

individual responsible for the collection, use and dissemination of any set of data on

individuals, government data, or summary data.

(b) "Responsible authority" in any political subdivision means the individual designated

by the governing body of that political subdivision as the individual responsible for the

collection, use, and dissemination of any set of data on individuals, government data, or

summary data, unless otherwise provided by state law.
new text begin
"Responsible authority" in the

legislature means the chair of the Legislative Coordinating Commission, the secretary of

the senate, and the chief clerk of the house of representatives.
new text end
Until an individual is

designated by the political subdivision's governing body, the responsible authority is:

(1) for counties, the county coordinator or administrator. If the county does not employ

a coordinator or administrator, the responsible authority is the county auditor;

(2) for statutory or home rule charter cities, the elected or appointed city clerk. If the

home rule charter does not provide for an office of city clerk, the responsible authority is

the chief clerical officer for filing and record keeping purposes;

(3) for school districts, the superintendent; and

(4) for all other political subdivisions, the chief clerical officer for filing and record

keeping purposes.

Sec. 4.

Minnesota Statutes 2024, section 13.605, subdivision 1, is amended to read:

Subdivision 1.

Legislative and budget proposal data.

(a)
Definition.
As used in this

section, "state administration" means the governor's office, the Department of Management

and Budget, and any state agency that is under the direct control of the governor.

(b)
Classifications.
Legislative and budget proposals, including preliminary drafts, that

are created, collected, or maintained by the state administration
new text begin
or the legislature
new text end
are protected

nonpublic data. After the budget is presented to the legislature by the state administration,

supporting data
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maintained by state administration
new text end
, including agency requests, are public

data.
new text begin
After the legislature or a legislator introduces a proposal impacting the state budget,

supporting data maintained by the legislature or a legislator are public data.
new text end
Supporting data

do not include preliminary drafts. The state administration may disclose any of the data

within the state administration and to the public at any time if disclosure would aid the

administration in considering and preparing its proposals.
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The legislature may disclose any

legislative or budget proposals within the legislature if disclosure would aid in considering

and preparing its proposals.
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Sec. 5.

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[16A.402] CASH TRANSACTION ROUNDING.

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Subdivision 1.

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Authorization to round cash transactions.

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(a) Notwithstanding any

other provision of law, an agency entering into any transaction with a person that results in

a payment or transfer of cash between the parties to the transaction may round the payment

in the following manner:

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(1) in any case in which the total transaction amount ends with 1 cent, 2 cents, 6 cents,

or 7 cents as the final digit, the amount of cents in the sum shall be rounded down to the

nearest amount divisible by 5;

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(2) in any case in which the total transaction amount ends with 3 cents, 4 cents, 8 cents,

or 9 cents as the final digit, the amount of cents in the sum shall be rounded up to the nearest

amount divisible by 5; or

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(3) notwithstanding clause (1), transactions in which the transaction total is $0.01 or

$0.02 shall be rounded up to $0.05.

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(b) A party authorized to engage in a transaction on behalf of an agency may round the

payment in the manner directed by the agency consistent with this section.

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(c) This section does not apply to a transaction for which payment is made by electronic

fund transfer, check, gift card, money order, credit card, or other similar instrument or

method.

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Subd. 2.

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Policy posted.

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An agency that engages in cash transactions must establish a

policy for rounding cash transactions consistent with this section and post the policy at each

location where cash transactions occur.

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Sec. 6.

Minnesota Statutes 2024, section 16B.98, is amended by adding a subdivision to

read:

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Subd. 15.

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Grant recipients.

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(a) Notwithstanding a later enacted provision specific to

an appropriation, a mandate to direct funds to a specified or uniquely qualified person is

not valid.

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(b) This subdivision does not apply to:

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(1) general obligation grants as defined in section 16A.695, capital project grants to

political subdivisions as defined in section 16A.86, or capital project grants otherwise subject

to section 16A.642;

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(2) grants for allowable activities under the Minnesota Constitution, article XI, sections

14 and 15; or

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(3) grants to Minnesota Tribal governments as defined in section 10.65, subdivision 2,

or political subdivisions as defined in section 465.719.

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(c) This subdivision applies to appropriations beginning in fiscal year 2028. Pursuant

to section 16A.11 and for budgets submitted to the legislature, the commissioner of

management and budget shall adjust the appropriation base for appropriations that direct

funds to a specified or uniquely qualified person in a manner that ensures compliance with

this subdivision and supports a competitive grant process.

new text end

Sec. 7.

Minnesota Statutes 2024, section 16B.981, subdivision 2, is amended to read:

Subd. 2.

Financial information required; determination of ability to perform.

For

grants of $50,000 or more and subject to sections
16B.97
and
16B.98
, before an agency

awards a competitive, legislatively named, single-source, or sole-source grant, the agency

must complete a preaward risk assessment to assess the risk that a potential grantee cannot

or would not perform the required duties. In making this assessment, the agency must review

the following information as applicable:

(1) the potential grantee's history of performing duties similar to those required by the

grant, whether the grant requires the potential grantee to perform services at a significantly

increased scale, and whether the grant will require significant changes to the operation of

the potential grantee's organization;

(2) for a potential grantee that is a nonprofit organization, the potential grantee's most

recent Form 990 or Form 990-EZ filed with the Internal Revenue Service. If the potential

grantee has not been in existence long enough or is not required to file Form 990 or Form

990-EZ, the potential grantee must demonstrate to the agency's satisfaction that the potential

grantee is exempt and must instead submit the potential grantee's most recent board-reviewed

financial statements and documentation of internal controls or, if there is no such board, by

the applicant's managing group;

(3) for a potential grantee that is a for-profit business, the potential grantee's most recent

federal and state tax returns, current financial statements, certification that the business is

not under bankruptcy proceedings, and disclosure of any liens on its assets. If a business

has not been in business long enough to have a tax return, the grantee must demonstrate to

the agency's satisfaction that the grantee has appropriate internal financial controls;

(4) evidence of good standing with the secretary of state under chapter 317A, or other

applicable law;

(5) if the potential grantee is required to complete an audit under section
309.53
,

subdivision 3, the potential grantee's most recent audit report performed by an independent

third party in accordance with generally accepted accounting principles; and

(6) certification, provided by the potential grantee, that
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none
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all
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of its current principals
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have been convicted of a felony financial crime in the last ten years
deleted text end
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meet applicable

responsibility requirements as defined in section 16C.02, subdivision 14a
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. For
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purposes of
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this section, a principal is defined as a public official, a board member, or staff with the

authority to access funds provided by this agency or determine how those funds are used.

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EFFECTIVE DATE.

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This section is effective August 1, 2026.

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Sec. 8.

Minnesota Statutes 2024, section 16C.02, is amended by adding a subdivision to

read:

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Subd. 6c.

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Debarment.

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"Debarment" means the disqualification of a vendor or related

entity by the Director of the Office of State Procurement from receiving solicitations, an

award of a contract by a governmental unit, or selling any products or services to state

agencies for a specified time commensurate with the seriousness of the offense, the failure,

or the inadequacy of performance.

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Sec. 9.

Minnesota Statutes 2024, section 16C.02, is amended by adding a subdivision to

read:

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Subd. 10b.

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Related entity.

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"Related entity" means a vendor that:

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(1) is a firm, partnership, corporation, joint venture, or other legal entity substantially

under the control of a vendor;

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(2) is a subsidiary of a vendor;

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(3) is a person, firm, partnership, corporation, joint venture, or other legal entity that

substantially controls a contractor or vendor; or

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(4) shares three or more of the following with a vendor doing business with the state:

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(i) has one or more of the same owners, principals, officers, or managers;

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(ii) has one or more of the same telephone or fax numbers;

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(iii) has one or more of the same email addresses, business addresses, or websites;

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(iv) employs or engages substantially the same individuals;

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(v) utilizes substantially the same vehicles, facilities, or equipment; or

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(vi) lists or advertises substantially the same project experience and portfolio of work.

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Sec. 10.

Minnesota Statutes 2024, section 16C.02, is amended by adding a subdivision to

read:

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Subd. 14a.

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Responsibility.

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"Responsibility" or "responsible vendor" means a person

who has demonstrated integrity, reliability, quality, fitness, capacity, and experience to

satisfactorily perform. Responsibility factors include the ability to demonstrate:

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(1) adequate financial, physical, personnel, or other resources or the ability to obtain

them;

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(2) a satisfactory record of performance, integrity, and reliability;

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(3) that it is qualified legally to contract and do business within the state;

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(4) it has supplied all necessary information concerning its responsibility;

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(5) it meets any other specific criteria for a particular award, provided, as applicable,

that the criteria is in the solicitation and is otherwise in conformity with law;

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(6) that it, or a related entity, is not currently suspended, debarred or formerly debarred,

and not reinstated by the federal government or the state of Minnesota or any of its

departments, commissions, agencies, or political subdivisions that have authority to debar;

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(7) that none of its owners, officers, directors, managers, controlling parties, or related

entities have been convicted of a felony financial crime in the last three years. Felony

financial crimes include felony convictions under section 609.445, 609.465, 609.466, 609.52,

609.611, 609.651, 609.7475, or 609.821, any successor provisions, or any convictions under

state, federal, or another state's statutes on embezzlement, theft, forgery, bribery, falsification,

or destruction of records, receiving stolen property, or any other offense indicating a lack

of business integrity; and

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(8) that all subcontractors or subrecipients have verified through a signed statement

under oath by an owner or officer that they meet the minimum criteria listed in clauses (1)

to (7).

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Sec. 11.

Minnesota Statutes 2024, section 16C.02, is amended by adding a subdivision to

read:

new text begin

Subd. 19a.

new text end

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Suspension.

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new text begin

"Suspension" means the temporary suspension of a vendor or

related entity by the director of the Office of State Procurement, from receiving solicitations,

the award of a contract, or selling any products or services to state agencies while the director

determines if there is probable cause for debarment.

new text end

Sec. 12.

Minnesota Statutes 2024, section 16C.06, subdivision 6, is amended to read:

Subd. 6.

Awards.

(a) Contract awards shall be made utilizing requests for bids, requests

for proposals, reverse auctions as provided in section
16C.10, subdivision 7
, or other methods

provided by law, unless a section of law requires a particular method of acquisition to be

used. The determination of the acquisition method and all decisions involved in the

acquisition process, unless otherwise provided for by law, shall be determined by the

commissioner. The commissioner is authorized to utilize tools, including but not limited to

contract consolidation, product standardization, and mandatory-use enterprise contracts to

the extent determined to be in the best interest of the state.

(b) Awards based on competitive proposals must include an evaluation of price and

other considerations, such as environmental considerations, quality, and vendor performance.

The solicitation document used to obtain competitive proposals must state the relative

importance of price and the other factors.

(c) Awards based on a low bid process must be made to the lowest responsive and

responsible bidder, taking into consideration conformity with the specifications, terms of

delivery, the purpose for which the contract or purchase is intended, the status and capability

of the vendor, and other considerations imposed in the request for bids. The commissioner

may decide which is the lowest responsible bidder for all purchases and may use the

principles of life-cycle costing, where appropriate, in determining the lowest overall bid.

new text begin

(d) A vendor is not eligible to receive an award unless the responsibility requirements,

as defined in section 16C.02, subdivision 14a, and other applicable laws are met. The

commissioner may establish additional factors defining responsibility if it is determined to

be in the best interest of the state. A false statement of compliance with any of the criteria

in section 16C.02, subdivision 14a, defining responsibility may result in ineligibility or

termination of a contract awarded to a prime contractor or a subcontractor and may result

in suspension or debarment proceedings.

new text end

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EFFECTIVE DATE.

new text end

new text begin

This section is effective January 15, 2027, and applies to all

solicitations issued on or after that date.

new text end

Sec. 13.

Minnesota Statutes 2025 Supplement, section 43A.23, subdivision 1, is amended

to read:

Subdivision 1.

General.

(a) The commissioner is authorized to request proposals or to

negotiate and to enter into contracts with parties which in the judgment of the commissioner

are best qualified to provide service to the benefit plans. Contracts entered into are not

subject to the requirements of sections
16C.16
to
16C.19
. The commissioner may negotiate

premium rates and coverage. The commissioner shall consider the cost of the plans,

conversion options relating to the contracts, service capabilities, character, financial position,

and reputation of the carriers, and any other factors that the commissioner deems appropriate.

Each benefit contract must be for a uniform term of at least one year, but may be made

automatically renewable from term to term in the absence of notice of termination by either

party. A carrier licensed under chapter 62A is exempt from the taxes imposed by chapter

297I on premiums paid to it by the state.

(b) All self-insured hospital and medical service products must comply with coverage

mandates, data reporting, and consumer protection requirements applicable to the licensed

carrier administering the product, had the product been insured, including chapters 62J,

62M, and 62Q. Any self-insured products that limit coverage to a network of providers or

provide different levels of coverage between network and nonnetwork providers shall comply

with section
62D.123
and geographic access standards for health maintenance organizations

adopted by the commissioner of health in rule under chapter 62D.

(c) Notwithstanding paragraph (b), a self-insured hospital and medical product offered

under sections
43A.22
to
43A.30
is required to extend dependent coverage to an eligible

employee's child to the full extent required under chapters 62A and 62L. Dependent child

coverage must, at a minimum, extend to an eligible employee's dependent child to the

limiting age as defined in section
62Q.01
, subdivision 2a, disabled children to the extent

required in sections
62A.14
and
62A.141
, and dependent grandchildren to the extent required

in sections
62A.042
and
62A.302
.

(d) Beginning January 1, 2010, the health insurance benefit plans offered in the

nonrepresented employees compensation plan under section
43A.18, subdivision 2
, and the

managerial plan under section
43A.18, subdivision 3
,
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must
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may
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include an option for a

health plan that is compatible with the definition of a high-deductible health plan in section

223 of the United States Internal Revenue Code.

Sec. 14.
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BUILDING PERMIT NOT REQUIRED.
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Notwithstanding any law, rule, or ordinance to the contrary, a building permit under the

State Building Code is not required to construct a new perimeter eight-foot security fence

and access controls at the BCA Maryland Building site enacted in Laws 2023, chapter 72,

article 1, section 15, subdivision 3.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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Sec. 15.
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REVISOR INSTRUCTION.
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The revisor of statutes shall renumber the subdivisions in Minnesota Statutes, section

16C.02, in alphabetical order. The revisor shall make necessary cross-reference changes

consistent with the renumbering.

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