HF 3093

1st Engrossment - 94th Legislature (2025 - 2026)

Posted on 04/08/2026 10:33 a.m.

A bill for an act
relating to state government; enhancing minimum eligibility criteria for state grants;
requiring sworn certification of compliance; amending Minnesota Statutes 2024,
section 16B.981, subdivisions 1, 2, by adding subdivisions; Minnesota Statutes
2025 Supplement, section 16B.981, subdivision 4.

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

Section 1.

Minnesota Statutes 2024, section 16B.981, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) As used in this section, the following terms have the
meanings given.

(b) "Grant" means a grant of $50,000 or more as defined in section 16B.97, subdivision
1, paragraph (a); or business subsidy of $50,000 or more as defined in section 116J.994,
subdivision 3, paragraph (b).

(c) "Grantee" means a political subdivision, as defined in section 471.345, subdivision
1; a nonprofit, as defined in chapter 317A; or a business entity, as defined in section 5.001,
subdivision 2.

new text begin (d) "Related entity" means:
new text end

new text begin (1) a firm, partnership, corporation, joint venture, or other legal entity substantially under
the control of a potential grantee;
new text end

new text begin (2) a subsidiary of a potential grantee;
new text end

new text begin (3) a person, firm, partnership, corporation, joint venture, or other legal entity that
substantially controls a potential grantee; or
new text end

new text begin (4) an entity that shares three or more of the following characteristics with a potential
grantee:
new text end

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

new text begin (ii) has one or more of the same telephone or fax numbers;
new text end

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

new text begin (iv) employs or engages substantially the same individuals;
new text end

new text begin (v) utilizes substantially the same vehicles, facilities, or equipment; or
new text end

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

Sec. 2.

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 new text begin receive the certification required under subdivision 2b and new text end 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;

deleted text begin (4) evidence of good standing with the secretary of state under chapter deleted text end deleted text begin 317A deleted text end deleted text begin , or other
applicable law;
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end 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

deleted text begin (6) deleted text end new text begin (5) new text end certification, provided by the potential grantee, that none of its current principals
have been convicted of a felony financial crime in the last ten years. For 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.

Sec. 3.

Minnesota Statutes 2024, section 16B.981, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Minimum eligibility criteria. new text end

new text begin (a) In addition to any eligibility criteria specific
to the grant program, a potential grantee must certify compliance, as provided under
subdivision 2b, with all of the following minimum criteria:
new text end

new text begin (1) be in good standing with the Office of the Secretary of State, as defined by section
5.26, if applicable;
new text end

new text begin (2) possess a valid federal tax identification number or a valid Social Security number
if an individual;
new text end

new text begin (3) be in compliance with Department of Revenue registration requirements if the
potential grantee has employees;
new text end

new text begin (4) be up to date with all required tax filings and payments, including estimated tax
filings, with the federal Internal Revenue Service and the Department of Revenue;
new text end

new text begin (5) be in compliance with workers' compensation requirements under chapter 176,
unemployment insurance requirements under chapter 268, and paid leave requirements
under chapter 268B;
new text end

new text begin (6) be in compliance with, both currently and during the three-year period before
submitting the certification, sections 177.24, 177.25, 177.41 to 177.44, 181.03, 181.101,
and 181.722, and not have violated United States Code, title 29, sections 201 to 219, or
United States Code, title 40, sections 3141 to 3148. For the purposes of this clause, a violation
occurs when a potential grantee:
new text end

new text begin (i) repeatedly fails to pay statutorily required wages or penalties on one or more separate
projects for a total underpayment of $25,000 or more within the three-year period, provided
that a failure to pay is "repeated" only if it involves two or more separate and distinct
occurrences of underpayment during the three-year period;
new text end

new text begin (ii) has been found by the commissioner of labor and industry to have repeatedly or
willfully violated any of the sections referenced in this clause pursuant to section 177.27;
new text end

new text begin (iii) has been issued a ruling or findings of underpayment by the administrator of the
Wage and Hour Division of the United States Department of Labor that have become final
or have been upheld by an administrative law judge or the Administrative Review Board;
or
new text end

new text begin (iv) has been found liable for underpayment of wages or penalties or misrepresenting a
worker as an independent contractor in an action brought in a court having jurisdiction;
new text end

new text begin (7) be in compliance with, both currently and during the three-year period before
submitting the certification, section 181.723. For the purposes of this clause, a violation
occurs when a potential grantee has been issued a final administrative order;
new text end

new text begin (8) none of the potential grantee's owners, officers, directors, managers, controlling
parties, or related entities were convicted of violating section 609.445, 609.465, 609.466,
609.52, 609.611, 609.651, 609.7475, or 609.821, a substantially similar federal law or law
of another state, or another offense indicating a lack of integrity or honesty that affects
responsibility as a potential grantee; and
new text end

new text begin (9) the potential grantee or related entity is not currently suspended, debarred, or formerly
debarred and not reinstated by the federal government, the state, or any department, agency,
or political subdivision of the state with authority to debar a vendor or contractor.
new text end

new text begin (b) For the purposes of this subdivision, any violation, suspension, revocation, sanction,
conviction, or noncompliance of a related entity must be treated as the potential grantee's
violation, suspension, revocation, sanction, conviction, or noncompliance.
new text end

new text begin (c) Any violation, suspension, revocation, sanction, conviction, or noncompliance
included in this subdivision and occurring at least 36 months prior to the date that the
certification is submitted under subdivision 2b must not be considered in determining
whether a potential grantee meets the minimum criteria.
new text end

Sec. 4.

Minnesota Statutes 2024, section 16B.981, is amended by adding a subdivision to
read:

new text begin Subd. 2b. new text end

new text begin Verification of compliance. new text end

new text begin (a) A potential grantee must submit to the head
of the granting agency a statement signed under oath by an owner or officer certifying
compliance with all of the minimum criteria in subdivision 2a.
new text end

new text begin (b) An agency head may accept a signed statement under oath as sufficient to demonstrate
that a potential grantee is in compliance with subdivision 2a. The agency head is not liable
for awarding the potential grantee a grant in reasonable reliance on such statement.
new text end

new text begin (c) A potential grantee that fails to certify compliance with any one of the required
minimum criteria or makes a false statement under oath in a certification of compliance is
ineligible to receive the grant.
new text end

new text begin (d) A false statement under oath certifying compliance with any of the minimum criteria
may result in termination of eligibility or termination of a grant agreement that has already
been entered.
new text end

new text begin (e) An agency head is not liable for declining to enter a grant agreement or terminating
a grant agreement based on a reasonable determination that the potential grantee failed to
certify compliance with the minimum criteria or falsely stated that the potential grantee
meets the minimum criteria.
new text end

new text begin (f) A certification of compliance need not be notarized and may be provided electronically
if it contains an electronic signature as defined in section 325L.02, paragraph (h).
new text end

Sec. 5.

Minnesota Statutes 2025 Supplement, section 16B.981, subdivision 4, is amended
to read:

Subd. 4.

Agency authority to not award grant.

(a) new text begin Except as provided in paragraph
(f), new text end if, while performing the required steps in subdivision 2 and pursuant to sections 16B.97,
16B.98, and 16B.991, the agency requires additional information to determine whether there
is a substantial risk that the potential grantee cannot or would not perform the required
duties of the grant agreement, the agency must give the grantee 15 calendar days within
which the grantee can respond to the agency for the purpose of satisfying the agency's
concerns or work with the agency to develop a plan to satisfy the concerns.

(b) If, after performing the required steps in subdivision 2 and pursuant to sections
16B.97, 16B.98, and 16B.991, and after reviewing any additional requested information
from the grantee, the agency still has concerns that there is a substantial risk that a potential
grantee cannot or would not perform the required duties under the grant agreement, the
agency must either create a plan to satisfy remaining concerns with the grantee or must not
award the grant.

(c) If, pursuant to paragraphs (a) and (b), the agency does not award a competitive,
single-source, or sole-source grant, the agency must provide notification to the grantee and
the commissioner of administration of the determination. The notification to the grantee
must include the agency's reason for postponing or forgoing the grant, including information
sufficient to explain and support the agency's decision, and notify the applicant of the process
for contesting the agency's decision under paragraph (d).

(d) The final decision by an agency under paragraph (c) may be challenged as a contested
case under chapter 14. The contested case proceeding must be initiated within 30 calendar
days of the date of written notification of a final decision by the agency.

(e) If, pursuant to paragraphs (a) and (b) new text begin or (f) new text end , the agency does not award a legislatively
named grant, the agency must delay award of the grant until adjournment of the next regular
or special legislative session for action from the legislature. The agency must provide
notification to the potential grantee, the commissioner of administration, and the chairs and
ranking minority members of the Ways and Means Committee in the house of representatives
and the chairs and ranking minority members of the Finance Committee in the senate. The
notification to the grantee must include the agency's reason for postponing or forgoing the
grant, including information sufficient to explain and support the agency's decision and
notify the applicant of the process for contesting the agency's decision under paragraph (d).
The notification to the commissioner of administration and legislators must identify the
legislatively named potential grantee and the agency's reason for postponing or forgoing
the grant. After hearing the concerns of the agency, the legislature may reaffirm the award
of the grant or reappropriate the funds to a different legislatively named grantee. Based on
the action of the legislature, the agency must award the grant to the legislatively named
grantee. If the legislature does not provide direction to the agency on the disposition of the
grant, the funds revert to the original appropriation source.

new text begin (f) The agency must not award a grant to any potential grantee that does not submit the
certification of compliance required under subdivision 2b.
new text end