SF 3647

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/20/2026 09:16 a.m.

A bill for an act
relating to grants management; restricting issuance of grants under certain
conditions; amending Minnesota Statutes 2024, section 16B.981, subdivision 2,
by adding a subdivision.

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

Section 1.

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 new text begin , including but not limited to evidence of current registration as a charitable
organization with the attorney general under section 309.52, unless exempt from registration new text end ;

(5) if the potential grantee is new text begin a charitable organization new text end 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 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. 2.

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

new text begin Subd. 7. new text end

new text begin Conditions under which an agency is prohibited from awarding
grant. new text end

new text begin Notwithstanding subdivisions 4 and 5, an agency is prohibited from awarding a grant
to a potential grantee that is unable to provide the information required in subdivision 2, as
applicable, until the potential grantee is able to provide all required information.
new text end