HF3621 (Legislative Session 94 (2025-2026))
Fraud; payments to program participants withheld under certain circumstances.
Related bill: SF4283
AI Generated Summary
Purpose
- Give state agencies the authority to withhold payments to program participants when fraud is suspected or under investigation, in order to protect public funds and ensure program integrity.
- Establish common definitions for terms like fraud, program, program participant, evidence, and agency.
- Create rules for notice, data handling, appeals or reconsideration, and reporting on withholding actions.
- Set a sunset date for at least part of the provisions and outline data-sharing protections and transparency.
Main Provisions and What They Do
- Definitions:
- Clarifies terms: fraud, program, program participant, agency, evidence, individual, and entity.
- Administrative withholding of payments (short-term):
- The head of a state agency may withhold payments to a program participant for up to 60 days if a preponderance of evidence indicates fraud to obtain payments.
- Requires at least 24 hours’ notice before withholding and must include: effective date, reasons (without jeopardizing an active investigation), end date, right to submit written evidence, and right to appeal.
- The agency must provide a contact point for those affected.
- Participants not implicated in fraud should be notified about their rights to continued access to eligible funds/services.
- A program participant may appeal via contested case proceedings or court relief; this withholding is described as temporary.
- Data handling during withholding:
- Data related to fraud evidence are classified as confidential or protected nonpublic data while withholding is ongoing; all such data generally become public after the withholding period ends unless law says otherwise.
- Complainant identity remains private.
- Agencies may share data with other government or law enforcement agencies if it helps prevent fraud or aids investigations.
- Court authority:
- Agencies may seek a temporary court order to withhold payments if fraud is shown by a preponderance of the evidence.
- Reporting to the legislature:
- Agencies must report numbers of withholds, reasons, dollar amounts, program identifiers, whether funds were state or federal, and outcomes of any challenges.
- The commissioner of management and budget compiles and forwards a consolidated report to legislative chairs and ranking members by a set deadline.
- Sunset and scope:
- The section includes an expiration date for the original provisions (sunset July 1, 2027), after which different or extended rules may apply.
- Credible allegations (expanded framework in later language):
- A separate or expanded track allows withholding based on credible allegations of fraud that are under investigation, including actions if another agency head has determined a credible allegation exists.
- Requires notice to the affected party within five days of withholding.
- Provides for administrative reconsideration (in writing) and a 60-day review period by the agency head to decide whether the withholding should continue.
- If the agency head determines insufficient evidence or if legal proceedings conclude, withholding ends unless other law allows further action.
- The withholding is described as temporary and not subject to standard Chapter 14 appeals, but it may be reconsidered or revisited under the administrative process described.
- Data handling for credible-allegation track:
- Data related to credible allegations and withholding remain confidential or protected nonpublic during the period, with potential disclosures allowed if they won’t compromise ongoing investigations.
- After a determination, data generally become public unless otherwise classified by law.
How It Changes Existing Law
- Expands authority to withhold public funds from program participants during fraud investigations, beyond existing due-process or remedy structures.
- Introduces explicit notice requirements and time limits for withholdings, and adds a formal data privacy framework around fraud-related information.
- Creates a formal pathway for administrative reconsideration and (in parts) limits or alters traditional appeal routes under Chapter 14.
- Establishes a standardized reporting mechanism to track and summarize withholdings and outcomes for legislative oversight.
- Introduces a sunset for the original withholding framework, signaling a temporary expansion that may be revisited.
Process and Protections for Participants
- Notice and reasons: Participants receive timely notice and a summary of reasons for withholding, with a stated end date and the right to submit evidence.
- Right to respond: Participants can submit written evidence or request reconsideration; under some tracks, an independent review or court relief may be available.
- Due process balance: The bill aims to balance preventing fraud and protecting individuals not implicated in fraud, with protections around data privacy and controlled disclosure.
- Data privacy: During withholding, fraud-related data are kept confidential or protected; after withholding ends, data may become public unless otherwise restricted.
Data Privacy and Access
- Classification: Fraud evidence data are treated as confidential or protected nonpublic data during withholding.
- Public access: Data generally become public after withholding ends, except where law keeps them private.
- Disclosure: Agencies may share data with other government or law enforcement bodies if it helps prevent fraud or facilitate investigations.
- Complainant privacy: The identity of complainants remains private.
Relevant Terms
- program payments withholding
- fraud
- program participant
- evidence
- credible allegation of fraud
- agency
- notice
- administrative withholding
- preponderance of the evidence
- court order
- data classification
- confidential data on individuals
- protected nonpublic data
- administrative reconsideration
- contested case
- public funds
- reporting requirements
- sunset
Relevant Terms - withholdings - public funds - program - fraud investigation - notice - appeal - reconsideration - data privacy - confidential data - protected nonpublic data - complainant - credible allegation of fraud - agency head - department of management and budget - reporting to legislature - sunset date
Bill text versions
- Introduction PDF PDF file
Upcoming committee meetings
- Judiciary Finance and Civil Law on: March 10, 2026 10:15
Past committee meetings
- State Government Finance and Policy on: March 05, 2026 08:15
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 23, 2026 | House | Action | Introduction and first reading, referred to | State Government Finance and Policy | |
| March 05, 2026 | House | Action | Author added |
Citations
[
{
"analysis": {
"added": [
"Definitions for Evidence, Fraud, Program, Program participant, and Agency.",
" cross-references to theft (Minnesota Statutes section 609.52), perjury (609.48), and forgery (609.625 and 609.63) and to substantially similar federal laws."
],
"removed": [],
"summary": "Defines key terms used in the program payments withholding fraud provision, including Evidence, Fraud, Program, Program participant, and Agency, and references related criminal provisions.",
"modified": [
"Constitutes the foundational definitions for the amended withholding framework in Minn. Stat. 2025 Supplement, §15.013."
]
},
"citation": "15.013",
"subdivision": "subd.1"
},
{
"analysis": {
"added": [
"Authority for agency heads to withhold payments up to 60 days upon a preponderance of evidence of fraud."
],
"removed": [],
"summary": "Authorizes administrative withholding of payments to a program participant for up to 60 days based on a preponderance of evidence of fraud.",
"modified": [
"Establishes procedural elements around withholding, including notice requirements and temporary nature."
]
},
"citation": "15.013",
"subdivision": "subd.2"
},
{
"analysis": {
"added": [
"Data relating to evidence of fraud classified as confidential data on individuals (13.02, subd.3) or protected nonpublic data (13.02, subd.13) during the withholding period."
],
"removed": [],
"summary": "Data classification for the withholding period, detailing how fraud-related data are treated.",
"modified": [
"Defines data handling during the administrative withholding period."
]
},
"citation": "15.013",
"subdivision": "subd.3"
},
{
"analysis": {
"added": [
"Court order mechanism under Rule 65 of the Minnesota Rules of Civil Procedure to withhold payments."
],
"removed": [],
"summary": "Permits a court order to withhold payments temporarily in connection with fraud investigations.",
"modified": [
"Adds a judicial instrument to support withholding actions."
]
},
"citation": "15.013",
"subdivision": "subd.4"
},
{
"analysis": {
"added": [
"Reporting requirements to the commissioner of management and budget by March 1, 2026, including counts, dollar amounts, and outcomes."
],
"removed": [],
"summary": "Requires annual reporting by agencies that have withheld payments.",
"modified": [
"Adds structured reporting to oversight entities."
]
},
"citation": "15.013",
"subdivision": "subd.5"
},
{
"analysis": {
"added": [
"Sunset date of July 1, 2027."
],
"removed": [],
"summary": "Sunset provision for the withholding framework.",
"modified": [
"Sets a time-limited duration for the new withholding provisions."
]
},
"citation": "15.013",
"subdivision": "subd.6"
},
{
"analysis": {
"added": [
"Clarifies that 'Agency' includes the Minnesota State Colleges and Universities."
],
"removed": [],
"summary": "Defines the meaning of Agency for the purposes of this act, including the Minnesota State Colleges and Universities.",
"modified": [
"Uses 16B.01, subd. 2 to anchor the definition of 'Agency' in the bill."
]
},
"citation": "16B.01",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"During the withholding period, fraud-related data classified as confidential or protected nonpublic data under 13.02."
],
"removed": [],
"summary": "Data privacy during the withholding period.",
"modified": [
"Specifies data classification during withholding."
]
},
"citation": "13.02",
"subdivision": "subd.3"
},
{
"analysis": {
"added": [
"All data relating to evidence of fraud become public at termination unless otherwise lawfully restricted."
],
"removed": [],
"summary": "Public disclosure at termination of the withholding period.",
"modified": [
"Sets default public data status after withholding period ends."
]
},
"citation": "13.02",
"subdivision": "subd.13"
},
{
"analysis": {
"added": [
"Identity of a complainant is private data."
],
"removed": [],
"summary": "Privacy of complainant identity.",
"modified": [
"Keeps complainant identity protected in line with data privacy."
]
},
"citation": "13.02",
"subdivision": "subd.12"
},
{
"analysis": {
"added": [
"Establishes scope for what counts as a State agency via cited sections."
],
"removed": [],
"summary": "Defines 'State agency' for purposes of this act, referencing sections 15.01 and 15.012.",
"modified": [
"Anchors key definitions to specific statutory sections (15.01 and 15.012)."
]
},
"citation": "15.01",
"subdivision": ""
},
{
"analysis": {
"added": [
"Completes the definition framework for State agencies by referencing 15.012."
],
"removed": [],
"summary": "Additional definition scope for 'State agency' under this act.",
"modified": [
"Works with 15.01 to define 'State agency' in this bill."
]
},
"citation": "15.012",
"subdivision": ""
},
{
"analysis": {
"added": [
"References theft in violation of Minnesota Statutes §609.52 as part of the fraud definitions."
],
"removed": [],
"summary": "Theft in the definition of fraud-related conduct.",
"modified": [
"Incorporates criminal conduct into the fraud framework guiding withholdings."
]
},
"citation": "609.52",
"subdivision": ""
},
{
"analysis": {
"added": [
"References perjury in violation of Minnesota Statutes §609.48 as part of the fraud framework."
],
"removed": [],
"summary": "Perjury as part of fraud-related acts.",
"modified": [
"Links fraud to criminal acts including perjury."
]
},
"citation": "609.48",
"subdivision": ""
},
{
"analysis": {
"added": [
"References forgery in violation of Minnesota Statutes §609.625 as part of fraud."
],
"removed": [],
"summary": "Forgery as part of fraud-related acts.",
"modified": [
"Expands the set of crimes constituting fraud for this framework."
]
},
"citation": "609.625",
"subdivision": ""
},
{
"analysis": {
"added": [
"References forgery in violation of Minnesota Statutes §609.63 as part of fraud."
],
"removed": [],
"summary": "Forgery in another degree included in fraud-related acts.",
"modified": [
"Expands the set of crimes constituting fraud for this framework."
]
},
"citation": "609.63",
"subdivision": ""
},
{
"analysis": {
"added": [
"References Minnesota Statutes §609.542 as part of the fraud definitions."
],
"removed": [],
"summary": "Forgery-related provision included in the fraud framework.",
"modified": [
"Broadens the criminal basis for fraud under the program withholding framework."
]
},
"citation": "609.542",
"subdivision": ""
},
{
"analysis": {
"added": [
"Includes cross-reference to Minn. Stat. §127A.21, subd. 5, among authorities related to withholding actions."
],
"removed": [],
"summary": "Notwithstanding clause cross-referenced in the withholding framework.",
"modified": [
"Links other youth or welfare-related sections to the withholding framework."
]
},
"citation": "127A.21",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Includes cross-reference to Minn. Stat. §142A.12, subdivision 6.5, in the framework."
],
"removed": [],
"summary": "Cross-reference to additional withholding-related provisions.",
"modified": [
"Expands the network of related statutory authorities for withholding of payments."
]
},
"citation": "142A.12",
"subdivision": "subdivision 6.5"
},
{
"analysis": {
"added": [
"Cross-reference to Minn. Stat. §245.095, subd. 5."
],
"removed": [],
"summary": "Intersects with reporting or action provisions related to fraud in public programs.",
"modified": [
"Incorporates related social services or program fraud provisions into the withholding framework."
]
},
"citation": "245.095",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Cross-reference to Minn. Stat. §256B.064, subd. 2, paragraph (b)."
],
"removed": [],
"summary": "Paraphrase cross-reference to paragraph b within the withholding framework.",
"modified": [
"Links health and human services program provisions to the withholding framework."
]
},
"citation": "256B.064",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"References to Minnesota Statutes chapter 14 (administrative procedures) as a path for appeals."
],
"removed": [],
"summary": "General authority for the contested-case appeal framework referenced in the bill.",
"modified": [
"Contextualizes the appeals process within established statutory procedures."
]
},
"citation": "chapter 14",
"subdivision": ""
}
]Progress through the legislative process
In Committee