HF 2217

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 04/10/2014 02:08pm

A bill for an act
relating to state government; changing provisions in grants management process
and contract management; providing an encumbrance exception in the grant
process; amending Minnesota Statutes 2012, sections 16B.98, subdivision 5, by
adding a subdivision; 16C.05, subdivision 2.

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

Section 1.

Minnesota Statutes 2012, section 16B.98, subdivision 5, is amended to read:

Subd. 5.

Creation and validity of grant agreements.

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

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

(2) the accounting system shows an encumbrance for the amount of the grant in
accordance with policy approved by the commissioner new text begin except as provided in subdivision
11 new text end ; and

(3) the grant agreement includes an effective date that references either section
16C.05, subdivision 2, or 16B.98, subdivisions 5 and 7, as determined by the granting
agency.

(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.

(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.

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

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

Sec. 2.

Minnesota Statutes 2012, section 16B.98, is amended by adding a subdivision
to read:

new text begin Subd. 11. new text end

new text begin Encumbrance exception. new text end

new text begin Notwithstanding subdivision 5, paragraph (a),
clause (2), or section 16C.05, subdivision 2, paragraph (a), clause (3), agencies may
permit a specifically named, legislatively appropriated, noncompetitive grant recipient to
incur eligible expenses based on an agreed upon work plan and budget for up to 60 days
prior to an encumbrance being established in the accounting system. For a grant funded
in whole or in part with state general obligation bond proceeds, an agency may permit
incurring of expenses under this subdivision only with prior approval of the Commissioner
of Management and Budget.
new text end

Sec. 3.

Minnesota Statutes 2012, section 16C.05, subdivision 2, is amended to read:

Subd. 2.

Creation and validity of contracts.

(a) A contract is not valid and the state
is not bound by it and no agency, without the prior written approval of the commissioner
granted pursuant to subdivision 2a, may authorize work to begin on it unless:

(1) it has first been executed by the head of the agency or a delegate who is a party
to the contract;

(2) it has been approved by the commissioner; and

(3) the accounting system shows an encumbrance for the amount of the contract
liability, except as allowed by policy approved by the commissioner and commissioner
of management and budget for routine, low-dollar procurements new text begin and section 16B.98,
subdivision 11 new text end .

(b) The combined contract and amendments must not exceed five years without
specific, written approval by the commissioner according to established policy, procedures,
and standards, or unless otherwise provided for by law. The term of the original contract
must not exceed two years unless the commissioner determines that a longer duration is
in the best interest of the state.

(c) Grants, interagency agreements, purchase orders, work orders, and annual plans
need not, in the discretion of the commissioner and attorney general, require the signature
of the commissioner and/or the attorney general. A signature is not required for work
orders and amendments to work orders related to Department of Transportation contracts.
Bond purchase agreements by the Minnesota Public Facilities Authority do not require
the approval of the commissioner.

(d) Amendments to contracts must entail tasks that are substantially similar to
those in the original contract or involve tasks that are so closely related to the original
contract that it would be impracticable for a different contractor to perform the work. The
commissioner or an agency official to whom the commissioner has delegated contracting
authority under section 16C.03, subdivision 16, must determine that an amendment would
serve the interest of the state better than a new contract and would cost no more.

(e) A fully executed copy of every contract, amendments to the contract, and
performance evaluations relating to the contract must be kept on file at the contracting
agency for a time equal to that specified for contract vendors and other parties in
subdivision 5.

(f) The attorney general must periodically review and evaluate a sample of state
agency contracts to ensure compliance with laws.