Bill > HF3395

This bill, titled the "Fraud Isn't Free Act," establishes new requirements for state agencies when fraud is committed against programs they administer. "Fraud" is defined broadly to include intentional deception for financial gain, submitting false information to obtain benefits, and specific criminal acts like theft or forgery. When fraud is suspected or confirmed, agency heads must report it to state budget officials and legislative committees, and then implement a corrective action plan. This plan must detail the fraud, outline steps to prevent future occurrences (including staff dismissal if their actions abetted the fraud), propose legal changes, and describe efforts to recover stolen funds. Furthermore, the bill mandates suspending enrollment in the affected program until certain conditions are met, and requires the dismissal of any employee whose intentional or negligent actions contributed to the fraud, with a five-year ban from state employment for those discharged. The bill also mandates budget reductions for agencies found to have committed fraud, specifically cutting administrative budgets by ten percent and agency head salaries by twenty-five percent, with these reductions continuing until fraud recovery and accountability measures are certified. Additionally, the state's budget forecast will now be required to include an estimate and discussion of fraud's impact on the state budget and any actions taken to combat it. Finally, the bill repeals an existing provision that would have allowed agency payment withholding authority to expire.

Government Affairs

https://www.revisor.mn.gov/bills/94/2026/0/HF/3395/