HF 2370

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/17/2025 02:58 p.m.

A bill for an act
relating to state government; withholding payments to program participants under
certain circumstances; proposing coding for new law in Minnesota Statutes, chapter
15.

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

Section 1.

new text begin [15.013] PROGRAM PAYMENTS WITHHELD; FRAUD.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Credible allegation of fraud" means an allegation of fraud that has been verified by
the head of a state agency from any source, including but not limited to fraud complaints;
patterns identified through audits, civil cases, law enforcement investigations, or
investigations by other state or federal agencies; and court filings and other legal documents,
including but not limited to police reports, complaints, indictments, information, affidavits,
declarations, and search warrants.
new text end

new text begin (c) "Fraud" means an intentional or deliberate act to deprive another of property or
money or to acquire property or money by deception or other unfair means. Fraud includes
intentionally submitting false information to a federal, state, or local government entity for
the purpose of obtaining a greater compensation or benefit than that to which the person is
legally entitled. Fraud also includes acts which constitute a crime against any program, or
the attempts or plans to commit those crimes, including but not limited to theft in violation
of section 609.52; perjury in violation of section 609.48; and aggravated forgery and forgery
in violation of sections 609.625 and 609.63, and substantially similar federal laws.
new text end

new text begin (d) "Individual" means a natural person.
new text end

new text begin (e) "Program" means any program funded by a state or federal agency that involves the
transfer or disbursement of public funds or other public resources.
new text end

new text begin (f) "Program participant" means any entity or individual that receives, disburses, or has
custody of funds or other resources transferred or disbursed under a program.
new text end

new text begin (g) "State agency" means any department or agency of the state as defined in sections
15.01 and 15.012.
new text end

new text begin Subd. 2. new text end

new text begin Withholding of payments. new text end

new text begin (a) Except as otherwise authorized and to the extent
permitted by federal law, the head of any state agency may withhold payments to a program
participant in any program administered by that agency if the agency head determines there
is a credible allegation of fraud under investigation and the program participant is a subject
of the investigation.
new text end

new text begin (b) Notwithstanding subdivision 3, the state agency head must send notice of the
withholding of payments to the program participant within five days of taking such action.
The notice must:
new text end

new text begin (1) state that payments are being withheld in accordance with this section;
new text end

new text begin (2) state the reasons for withholding payments, but need not disclose specific information
concerning an ongoing investigation;
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new text begin (3) state that the withholding is for a temporary period and cite the circumstances under
which withholding shall be terminated; and
new text end

new text begin (4) inform the program participant of the right to submit written evidence for
consideration by the state agency head.
new text end

new text begin (c) The withholding of payments shall not continue after the state agency head determines
there is insufficient evidence of fraud by the program participant, or after legal proceedings
relating to the alleged fraud are completed, unless the state agency head is authorized by
law to take additional action against the program participant and complies with all
requirements in law to take such action.
new text end

new text begin (d) The withholding of payments is a temporary action and is not subject to appeal under
chapter 14.
new text end

new text begin Subd. 3. new text end

new text begin Data classification and access. new text end

new text begin (a) During the payment withholding period
under this section, all data relating to a credible allegation of fraud and withholding of
payments under this section are classified as: (1) confidential data on individuals pursuant
to section 13.02, subdivision 3; or (2) protected nonpublic data pursuant to section 13.02,
subdivision 13, in the case of data not on individuals. The agency head may disclose that
payments are being withheld from a program participant if the agency head determines that
doing so will not compromise an ongoing investigation.
new text end

new text begin (b) Except for the identity of a complainant, after a determination has been made under
subdivision 2, paragraph (c), that withholding of payments shall not continue, all data relating
to a credible allegation of fraud and withholding of payments under this section becomes
public unless classified otherwise under state or federal law. The identity of a complainant
is private.
new text end

new text begin (c) Any state agency may disclose any data classified as confidential or protected
nonpublic under this section to any federal, state, or local government agency, or any law
enforcement agency, if the state agency determines that access will help prevent fraud
against public programs or aid the law enforcement process.
new text end