SF5088

Purpose

• Establish a code of ethics for the legislative branch.
• Update data practices rules and other state government policies to improve transparency, accountability, and administration.
• Create new or revised rules for grant management, procurement, and related processes.
• Address rounding of cash transactions and prevent funds from being directed to a specific or uniquely qualified person.

Key Provisions (What the bill does)

• Code of Ethics for the Legislative Branch

  • Defines key terms (e.g., appointing authority, confidential information, private interest, employee, business).
  • Sets rules on accepting gifts and favors, use of confidential information, use of state property, and avoidance of conflicts of interest.
  • Establishes procedures for identifying, resolving, and if needed, disciplining conflicts of interest.
  • Establishes rulemaking and enforcement responsibilities for appointing authorities.
  • Clarifies precedence of existing ethics and conduct provisions (e.g., Chapter 10A and related sections).

• Data Practices and Privacy

  • Updates definitions and responsibilities for who is the responsible authority for government data and how data is collected, used, and disclosed.
  • Specifies who (or which offices) is responsible for data management in different government entities including the legislature and political subdivisions.
  • Addresses legislative and budget proposals data status, including what data are public versus nonpublic.

• Cash Transaction Rounding

  • Allows agencies to round cash payments to the nearest 5 cents when totals end in certain digits (e.g., 1, 2, 3, 4, 6, 7, 8, 9 cents) with specific rounding rules (down for some endings, up for others).
  • Requires agencies to publish and post a rounding policy at locations where cash transactions occur.
  • Excludes transactions paid by electronic funds transfer, checks, gift cards, and similar methods from rounding.

• Grant Governance and Procurement

  • Prohibits mandates to direct funds to a specific or uniquely qualified recipient for most grants, with certain exceptions (e.g., general obligation grants, capital projects, and tribal or defined political subdivisions).
  • Requires adjustment of appropriations bases to support competitive grant processes when grants would direct funds to a particular recipient.
  • For grants of $50,000 or more, requires a preaward risk assessment to evaluate the potential grantee’s ability to perform duties, including reviews of financial history, tax returns, audits, and other suitability factors.
  • Sets standards for evaluating potential grantees (nonprofits, for-profits, and other entities) and requires documentation of internal controls and other indicators of responsibility.

• Other Administrative Changes

  • Updates certain Minnesota Statutes to align with the new ethics and data practices provisions (e.g., definitions of government entity and responsible authority).
  • Addresses modernization of data governance and oversight within state agencies and the legislature.

Notable Changes to Existing Law

• Establishes a formal state legislative ethics framework with defined terms and enforcement mechanisms.
• Recasts data governance roles by clarifying who is the responsible authority for data in various government entities, including the legislature and political subdivisions.
• Introduces a formal cash transaction rounding policy for agency cash transactions.
• Tightens grant-making rules to promote competitive processes and reduce direct-to-recipient mandates, with explicit preaward risk assessment requirements for larger grants.
• Requires public-facing policies and potential rulemaking to implement these ethics, data, and grants provisions.

Fiscal and Administrative Context

• Article 1 sets appropriations for various agencies (Attorney General, Administration, Minnesota Management and Budget, Revenue) and includes a provision about returning and cancelling funds related to tax-forfeited lands settlements, directing how surplus funds must be handled.
• These changes interact with existing budget authority and may affect how money is allocated, tracked, and reported in the fiscal years 2026 and 2027, with baselines stated for future years.

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Relevant terms - code of ethics for the legislative branch - confidential information - private interest - conflicts of interest - gifts and favors (acceptance limits) - use of state property - appointment authority - data practices - responsible authority - government data - public vs nonpublic data - cash transaction rounding - rounding policy - grant recipients - competitive grant processes - preaward risk assessment - direct-to-recipient mandate (funds directed to a specific recipient) - grants for general obligations, capital projects, tribal governments - state agencies (Attorney General, Administration, MMB, Revenue)