SF 2897

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/25/2025 09:46 a.m.

A bill for an act
relating to state government; establishing a Commission on Government Efficiency
and Ethics to investigate allegations of fraud in state programs and undisclosed
legislative conflicts of interest; requiring a report; appropriating money; amending
Minnesota Statutes 2024, section 16B.98, subdivision 8; proposing coding for new
law in Minnesota Statutes, chapter 3.

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

Section 1.

new text begin [3.99] COMMISSION ON GOVERNMENT EFFICIENCY AND ETHICS.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin The Commission on Government Efficiency and Ethics is
established to investigate allegations of fraud in state government and undisclosed conflicts
of interest in the legislature.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin The commission consists of six members, three citizens appointed
by the speaker of the house and three citizens appointed by the minority leader of the house
of representatives, with the six citizen appointees approved as a slate by both the majority
leader and minority leader of the senate. If the majority leader or minority leader of the
senate rejects the slate, the speaker of the house and minority leader of the house of
representatives must appoint a new slate for consideration. The speaker of the house and
minority leader of the house must make appointments as soon as possible after the opening
of the regular session of the legislature each odd-numbered year and must not appoint a
current federal, state, or local elected official or a person who at any time was a candidate
for partisan office.
new text end

new text begin Subd. 3. new text end

new text begin Terms. new text end

new text begin Members of the commission serve a two-year term beginning upon
appointment and expiring upon appointment and approval of a successor after the opening
of the next regular session of the legislature in the odd-numbered year. There is no term
limit for commission members.
new text end

new text begin Subd. 4. new text end

new text begin Reporting; reward. new text end

new text begin (a) The commission must maintain a website and telephone
hotline for any person to report, and to do so anonymously if the person so chooses:
new text end

new text begin (1) suspected fraud in a program funded fully or partially, or administered fully or
partially, by the state; or
new text end

new text begin (2) an undisclosed conflict of interest by a member of the house of representatives or
senate.
new text end

new text begin (b) The commission may award up to $5,000 to any person whose report results in a
criminal conviction, successful civil action, or the expulsion of a member of the house of
representative or senate.
new text end

new text begin (c) For purposes of this section, "undisclosed conflict of interest" means voting on a
question when the member has an immediate financial interest in the question without first
disclosing the conflict as required under the rules of the house of representatives for members
of the house, or the rules of the senate for members of the senate.
new text end

new text begin Subd. 5. new text end

new text begin Investigations; private investigator; cooperation required. new text end

new text begin (a) Any member
of the commission may order an investigation based on a report or tip received by the
commission or a commission member under subdivision 4 or otherwise.
new text end

new text begin (b) The commission must contract with a private investigator to perform an investigation
under this subdivision.
new text end

new text begin (c) All public officials and their deputies and employees and all corporations, firms, and
individuals having business involving the receipt, disbursement, or custody of public funds
shall at all times:
new text end

new text begin (1) afford reasonable facilities for examinations by an investigator performing an
investigation ordered by the commission;
new text end

new text begin (2) provide returns and reports required by the investigator;
new text end

new text begin (3) attend and answer under oath the investigator's lawful inquiries;
new text end

new text begin (4) produce and exhibit all books, accounts, documents, and property that the investigator
requests to inspect; and
new text end

new text begin (5) in all things cooperate with the investigator.
new text end

new text begin Subd. 6. new text end

new text begin Forensic audits. new text end

new text begin A member of the commission may order a full forensic audit
of any state agency or grantee named by the legislature. The commission must contract with
a private entity to conduct the audit. For purposes of this subdivision, "forensic audit" means
a systematic evaluation of the effectiveness of the grantee's internal controls over programs,
processes, receipts, and expenditures to identify ineffective controls and vulnerabilities and
to expose fraud, waste, and abuse.
new text end

new text begin Subd. 7. new text end

new text begin Reporting required. new text end

new text begin (a) If an investigation or forensic audit documents credible
evidence of fraud, the commission must report to the appropriate law enforcement entity,
the chair and ranking minority member of the Committee on Rules and Legislative
Administration in the house of representatives, and the chair and ranking minority member
of the Committee on Rules and Administration in the senate.
new text end

new text begin (b) If an investigation documents credible evidence of an undisclosed conflict of interest,
the commission must issue a public report and submit this report to the chair and ranking
minority member of the Committee on Rules and Legislative Administration in the house
of representatives for an investigation concerning a member of the house of representatives,
or the chair and ranking minority member of the Committee on Rules and Administration
in the senate for an investigation concerning a member of the senate.
new text end

new text begin (c) At least annually, the commission must submit a report to the chair and ranking
minority member of the Committee on Rules and Legislative Administration in the house
of representatives and the chair and ranking minority member of the Committee on Rules
and Administration in the senate with recommendations concerning the prevention of fraud
in state programs and undisclosed conflicts of interest in the legislature.
new text end

new text begin Subd. 8. new text end

new text begin Meetings; officers. new text end

new text begin (a) The open meeting requirements of section 3.055 apply
to meetings of the Commission on Government Efficiency and Ethics, except the commission
may conduct a closed meeting when discussing a report received under subdivision 4, an
active investigation ordered under subdivision 5, or a forensic audit ordered under subdivision
6. A meeting is not required for a member of the commission to order an investigation under
subdivision 5 or a forensic audit under subdivision 6.
new text end

new text begin (b) The commission members must elect a chair and vice-chair, and other officers from
its membership as it deems necessary.
new text end

new text begin Subd. 9. new text end

new text begin Staff support. new text end

new text begin The executive director of the Legislative Coordinating
Commission must provide administrative support for the Commission on Government
Efficiency and Ethics under section 3.305, subdivision 4.
new text end

new text begin Subd. 10. new text end

new text begin Compensation. new text end

new text begin Members serve without compensation but, if approved by
the chair, may be reimbursed for their reasonable expenses in the same manner and amount
as authorized by the commissioner's plan adopted under section 43A.18, subdivision 2.
new text end

Sec. 2.

Minnesota Statutes 2024, section 16B.98, subdivision 8, is amended to read:

Subd. 8.

Audit.

(a) A grant agreement made by an executive agency must include an
audit clause that provides that the books, records, documents, and accounting procedures
and practices of the grantee or other party that are relevant to the grant or transaction are
subject to examination by the commissioner, the granting agency new text begin , private investigators
under contract with the Commission on Government Efficiency and Ethics, new text end and either the
legislative auditor or the state auditor, as appropriate, for a minimum of six years from the
grant agreement end date, receipt and approval of all final reports, or the required period
of time to satisfy all state and program retention requirements, whichever is later. If a grant
agreement does not include an express audit clause, the audit authority under this subdivision
is implied.

(b) If the granting agency is a local unit of government, and the governing body of the
local unit of government requests that the state auditor examine the books, records,
documents, and accounting procedures and practices of the grantee or other party according
to this subdivision, the granting agency shall be liable for the cost of the examination. If
the granting agency is a local unit of government, and the grantee or other party requests
that the state auditor examine all books, records, documents, and accounting procedures
and practices related to the grant, the grantee or other party that requested the examination
shall be liable for the cost of the examination.

new text begin (c) A grant agreement between an executive agency and a grantee named by the legislature
must include a forensic audit clause requiring the grantee to fully cooperate with an
investigation or forensic audit ordered by a member of the Commission on Government
Efficiency and Ethics.
new text end

Sec. 3. new text begin APPROPRIATION; COMMISSION ON GOVERNMENT EFFICIENCY
AND ETHICS.
new text end

new text begin $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
fund to the executive director of the Legislative Coordinating Commission for purposes of
the Commission on Government Efficiency and Ethics.
new text end