HF 1638

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to state government; establishing a grants management process,
governance, and structure; appropriating money; proposing coding for new law
in Minnesota Statutes, chapters 13; 16B.

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

Section 1.

new text begin [13.595] GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (a) "Completion of the evaluation process" means that the granting agency has
completed negotiating the grant agreement with the selected grantee.
new text end

new text begin (b) "Grant agreement" means the document that details the responsibilities of the
grantee and the granting agency and the value to be provided to the grantee.
new text end

new text begin (c) "Grantee" means a person that applies for or receives a grant.
new text end

new text begin (d) "Granting agency" means the state agency that provides the grant.
new text end

new text begin (e) "Opened" means the act that occurs once the deadline for submitting a response
to a proposal to the granting agency has been reached.
new text end

new text begin (f) "Request for proposal" means the data outlining the responsibilities the granting
agency wants the grantee to assume.
new text end

new text begin (g) "Response" means the data submitted by a grantee as required by a request for
proposal.
new text end

new text begin Subd. 2. new text end

new text begin Request for applications. new text end

new text begin Data created by a granting agency to create a
request for proposal is classified as nonpublic until the request for proposal is published.
To the extent that a granting agency involves persons outside the granting agency to create
the request for proposal, the data remain nonpublic in the hands of all persons who may
not further disseminate any data that are created or reviewed as part of the request for
proposal development. At publication, the data in the request for proposal is public.
new text end

new text begin Subd. 3. new text end

new text begin Responses to request for proposals. new text end

new text begin (a) Responses submitted by a grantee
are private or nonpublic until the responses are opened. Once the responses are opened,
the name and address of the grantee and the amount requested is public. All other data in a
response is private or nonpublic data until completion of the evaluation process. After a
granting agency has completed the evaluation process, all remaining data in the responses
is public with the exception of trade secret data as defined and classified in section 13.37.
A statement by a grantee that the response is copyrighted or otherwise protected does
not prevent public access to the response.
new text end

new text begin (b) If all responses are rejected prior to completion of the evaluation process,
all data, other than that made public at the opening, remain private or nonpublic
until a resolicitation of proposals results in completion of the evaluation process or a
determination is made to abandon the grant. If the rejection occurs after the completion of
the evaluation process, the data remain public. If a resolicitation of proposals does not
occur within one year of the grant opening date, the remaining data become public.
new text end

new text begin Subd. 4. new text end

new text begin Evaluation data. new text end

new text begin (a) Data created or maintained by a granting agency as
part of the evaluation process referred to in this section are protected nonpublic data until
completion of the evaluation process at which time the data are public with the exception
of trade secret data as defined and classified in section 13.37.
new text end

new text begin (b) If a granting agency asks individuals outside the granting agency to assist with
the evaluation of the responses, the granting agency may share not public data in the
responses with those individuals. The individuals participating in the evaluation may not
further disseminate the not public data they review.
new text end

Sec. 2.

new text begin [16B.97] GRANTS MANAGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Grant agreement. new text end

new text begin (a) A grant agreement is a written instrument
or electronic document defining a legal relationship between a granting agency and a
grantee when the principal purpose of the relationship is to transfer cash or something of
value to the recipient to support a public purpose authorized by law instead of acquiring
by professional/technical contract, purchase, lease, or barter property or services for the
direct benefit or use of the granting agency.
new text end

new text begin (b) This section does not apply to capital project grants to political subdivisions as
defined by section 16A.86.
new text end

new text begin Subd. 2. new text end

new text begin Grants governance. new text end

new text begin The commissioner shall provide leadership and
direction for policy related to grants management in Minnesota in order to foster more
consistent, streamlined interaction between executive agencies, funders, and grantees that
will enhance access to grant opportunities and information and lead to greater program
accountability and transparency. The commissioner has the duties and powers stated in this
section. An executive agency must do what the commissioner requires under this section.
new text end

new text begin Subd. 3. new text end

new text begin Discretionary powers. new text end

new text begin The commissioner has the authority to:
new text end

new text begin (1) review grants management practices and propose policy and procedure
improvements to the governor, legislature, executive agencies, and the federal government;
new text end

new text begin (2) sponsor, support, and facilitate innovative and collaborative grants management
projects with public and private organizations;
new text end

new text begin (3) review, recommend, and implement alternative strategies for grants management;
new text end

new text begin (4) collect and disseminate information, issue reports relating to grants management,
and sponsor and conduct conferences and studies; and
new text end

new text begin (5) participate in conferences and other appropriate activities related to grants
management issues.
new text end

new text begin Subd. 4. new text end

new text begin Duties. new text end

new text begin (a) The commissioner shall:
new text end

new text begin (1) create general grants management policies and procedures that are applicable to
all executive agencies. The commissioner may approve exceptions to these policies and
procedures for particular grant programs. Exceptions shall expire or be renewed after five
years. Executive agencies shall retain management of individual grants programs;
new text end

new text begin (2) provide a central point of contact concerning statewide grants management
policies and procedures;
new text end

new text begin (3) serve as a resource to executive agencies in such areas as training, evaluation,
collaboration, and best practices in grants management;
new text end

new text begin (4) ensure grants management needs are considered in the development, upgrade,
and use of statewide administrative systems and leverage existing technology whereever
possible;
new text end

new text begin (5) oversee and approve future professional and technical service contracts and
other information technology spending related to executive agency grants management
activities;
new text end

new text begin (6) provide a central point of contact for comments about executive agencies
violating statewide grants governance policies and about fraud and waste in grants
processes;
new text end

new text begin (7) forward received comments to the appropriate agency for further action, and
may follow up as necessary; and
new text end

new text begin (8) provide a single listing of all available executive agency competitive grant
opportunities and resulting grant recipients.
new text end

new text begin (b) The commissioner may determine that it is cost-effective for agencies to develop
and use shared grants management technology systems. This system would be governed
under section 16E.01, subdivision 3, paragraph (b).
new text end

Sec. 3.

new text begin [16B.98] LIMIT ON ADMINISTRATIVE COSTS.
new text end

new text begin Subdivision 1. new text end

new text begin Limitation. new text end

new text begin As a condition of receiving a grant from an appropriation
of state funds, the recipient of the grant must agree to minimize administrative costs. The
granting agency is responsible for negotiating appropriate limits to these costs so that the
state derives the optimum benefit for grant funding.
new text end

new text begin Subd. 2. new text end

new text begin Ethical practices and conflict of interest. new text end

new text begin An employee of the executive
branch involved directly or indirectly in grants processes, at any level, is subject to the
code of ethics in section 43A.38.
new text end

new text begin Subd. 3. new text end

new text begin Conflict of interest. new text end

new text begin (a) The commissioner must develop policies
regarding code of ethics and conflict of interest designed to prevent conflicts of interest
for employees, committee members, or others involved in the recommendation, award,
and administration of grants. The policies must apply to employees who are directly or
indirectly in the grants process, which may include the following:
new text end

new text begin (1) developing request for proposals or evaluation criteria;
new text end

new text begin (2) drafting, recommending, awarding, amending, revising, or entering into grant
agreements;
new text end

new text begin (3) evaluating or monitoring performance; or
new text end

new text begin (4) authorizing payments.
new text end

new text begin (b) The policies must include:
new text end

new text begin (1) a process to make all parties to the grant aware of policies and laws relating to
conflict of interest, and training on how to avoid and address potential conflicts; and
new text end

new text begin (2) a process under which those who have a conflict of interest or a potential conflict
of interest must disclose the matter.
new text end

new text begin (c) If the employee, appointing authority, or commissioner 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 personnel shall be notified of the conflict and the
employee may proceed with the assignment.
new text end

new text begin Subd. 4. new text end

new text begin Reporting of violations. new text end

new text begin A state employee who discovers evidence
of violation of laws or rules governing grants is encouraged to report the violation or
suspected violation to the employee's supervisor, the commissioner or the commissioner's
designee, or the legislative auditor. The legislative auditor shall report to the Legislative
Audit Commission if there are multiple complaints about the same agency. The auditor's
report to the Legislative Audit Commission under this section must disclose only the
number and type of violations alleged. An employee making a good faith report under this
section has the protections provided for under section 181.932, prohibiting the employer
from discriminating against the employee.
new text end

new text begin Subd. 5. new text end

new text begin Creation and validity of grant agreements. new text end

new text begin (a) A grant agreement is
not valid and the state is not bound by the grant unless:
new text end

new text begin (1) the grant has been executed by the head of the agency or a delegate who is
party to the grant; and
new text end

new text begin (2) the accounting system shows an encumbrance for the amount of the grant in
accordance with policy approved by the commissioner.
new text end

new text begin (b) The combined grant agreement and amendments must not exceed five years
without specific, written approval by the commissioner according to established policy,
procedures, and standards, or unless the commissioner determines that a longer duration is
in the best interest of the state.
new text end

new text begin (c) A fully executed copy of the grant agreement with all amendments and other
required records relating to the grant must be kept on file at the granting agency for a time
equal to that required of grantees in subdivision 8.
new text end

new text begin (d) Grant agreements must comply with policies established by the commissioner
for minimum grant agreement standards and practices.
new text end

new text begin (e) The attorney general may periodically review and evaluate a sample of state
agency grants to ensure compliance with applicable laws.
new text end

new text begin Subd. 6. new text end

new text begin Grant administration. new text end

new text begin A granting agency shall diligently administer
and monitor any grant it has entered into.
new text end

new text begin Subd. 7. new text end

new text begin Grant payments. new text end

new text begin Payments to the grantee may not be issued until the
grant agreement is fully executed.
new text end

new text begin Subd. 8. new text end

new text begin Audit. new text end

new text begin (a) A grant agreement made by an executive agency must include
an expressed or implied 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 granting agency 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.
new text end

new text begin (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 end

new text begin Subd. 9. new text end

new text begin Authority of attorney general. new text end

new text begin The attorney general may pursue
remedies available by law to avoid the obligation of an agency to pay under a grant or to
recover payments made if activities under the grant are so unsatisfactory, incomplete, or
inconsistent that payment would involve unjust enrichment. The contrary opinion of the
granting agency does not affect the power of the attorney general under this subdivision.
new text end

new text begin Subd. 10. new text end

new text begin Grants with Indian tribes and bands. new text end

new text begin Notwithstanding any other law,
an agency may not require an Indian tribe or band to deny its sovereignty as a requirement
or condition of a grant with an agency.
new text end

Sec. 4. new text begin APPROPRIATION.
new text end

new text begin $125,000 is appropriated from the general fund to the commissioner of administration
for the biennium beginning July 1, 2007, for the purposes in this act. If an appropriation
for this purpose is enacted more than once, the appropriation is effective only once.
new text end

new text begin For the fiscal year beginning July 1, 2008, the commissioner of administration must
deduct from state grants to nongovernmental entities up to $125,000, as necessary to fund
the commissioner's duties under this act. The amount deducted from appropriations for
these grants is transferred to the commissioner for purposes of administering this act.
new text end