HF 3257

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/18/2023 11:37am

A bill for an act
relating to state government; requiring fiscal notes to include a review of certain
information related to organizations named in legislation to receive a grant;
requiring granting agencies to submit an annual report to the legislature on their
grantmaking; amending Minnesota Statutes 2022, sections 3.98, subdivision 2, by
adding a subdivision; 16B.98, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2022, section 3.98, subdivision 2, is amended to read:

Subd. 2.

Contents.

(a) The fiscal note, where possible, shall:

(1) cite the effect in dollar amounts;

(2) cite the statutory provisions affected;

(3) estimate the increase or decrease in revenues or expenditures;

(4) include the costs which may be absorbed without additional funds;

(5) include the assumptions used in determining the cost estimates; deleted text begin and
deleted text end

(6) specify any long-range implication new text begin ; and
new text end

new text begin (7) where applicable, include information on any named grant recipients as required by
subdivision 2a new text end .

(b) The fiscal note may comment on technical or mechanical defects in the bill but shall
express no opinions concerning the merits of the proposal.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to fiscal
notes prepared on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2022, section 3.98, is amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Grant accountability and oversight. new text end

new text begin (a) A fiscal note prepared for legislation
that directly names a nonprofit organization as the recipient of a grant must indicate whether
the granting agency has conducted a review of the recipient's capacity to receive and
administer the purposes of the grant. The review must be conducted by a certified public
accountant and include verification that the named recipient organization:
new text end

new text begin (1) is registered with the secretary of state and the Internal Revenue Service;
new text end

new text begin (2) has a valid employer identification number or tax identification number issued by
the Internal Revenue Service, that the number matches its filings with the Internal Revenue
Service, and that the number is clearly listed on the organization's website;
new text end

new text begin (3) is current on required tax filings or other reporting to the Internal Revenue Service
and secretary of state;
new text end

new text begin (4) has filed the appropriate version of any applicable tax forms; and
new text end

new text begin (5) has conducted an independent, third-party audit of the organization's financial
statement as required by law.
new text end

new text begin (b) In addition to the verifications required by paragraph (a), the reviewing certified
public accountant must collect, at a minimum, the named recipient organization's:
new text end

new text begin (1) annual revenues for the prior two years;
new text end

new text begin (2) annual expenses for the prior two years;
new text end

new text begin (3) available cash on hand at the end of each of the prior two years;
new text end

new text begin (4) functional allocation of expenses for the prior two years;
new text end

new text begin (5) related party transaction summaries;
new text end

new text begin (6) restricted net assets summaries;
new text end

new text begin (7) independent audit summary, if the organization has been independently audited; and
new text end

new text begin (8) listing of directors, governors, board of directors, and other members as disclosed
in the organization's most recent tax filings.
new text end

new text begin (c) The information required to be collected by the certified public accountant under
paragraph (b) must be included as an appendix to the fiscal note.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, and applies to fiscal
notes prepared on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2022, section 16B.98, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Legislative report on grantmaking. new text end

new text begin No later than August 15 of each year,
each granting agency must submit a report to all members of the legislative committees
with jurisdiction over the agency's budget detailing its grantmaking activity in the prior
fiscal year. The report must include detail on the organizations that received grants, the
amount awarded to each organization, how each grant is intended to be used, and whether
the agency reviewed information related to each recipient organization's capacity to receive
and administer the purposes of the grant before making the award, in a manner consistent
with the information that is required to be reviewed and collected under section 3.98,
subdivision 2a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end