1.2relating to state government; changing provisions in grants management process
1.3and contract management; providing an encumbrance exception in the grant
1.4process;amending Minnesota Statutes 2012, sections 16B.98, subdivision 5, by
1.5adding a subdivision; 16C.05, subdivision 2.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7    Section 1. Minnesota Statutes 2012, section 16B.98, subdivision 5, is amended to read:
1.8    Subd. 5. Creation and validity of grant agreements. (a) A grant agreement is
1.9not valid and the state is not bound by the grant unless:
1.10    (1) the grant has been executed by the head of the agency or a delegate who is
1.11party to the grant;
1.12    (2) the accounting system shows an encumbrance for the amount of the grant in
1.13accordance with policy approved by the commissioner except as provided in subdivision
1.1411; and
1.15(3) the grant agreement includes an effective date that references either section
1.1616C.05, subdivision 2 , or 16B.98, subdivisions 5 and 7, as determined by the granting
1.17agency.
1.18    (b) The combined grant agreement and amendments must not exceed five years
1.19without specific, written approval by the commissioner according to established policy,
1.20procedures, and standards, or unless the commissioner determines that a longer duration is
1.21in the best interest of the state.
1.22    (c) A fully executed copy of the grant agreement with all amendments and other
1.23required records relating to the grant must be kept on file at the granting agency for a time
1.24equal to that required of grantees in subdivision 8.
2.1    (d) Grant agreements must comply with policies established by the commissioner
2.2for minimum grant agreement standards and practices.
2.3    (e) The attorney general may periodically review and evaluate a sample of state
2.4agency grants to ensure compliance with applicable laws.

2.5    Sec. 2. Minnesota Statutes 2012, section 16B.98, is amended by adding a subdivision
2.6to read:
2.7    Subd. 11. Encumbrance exception. Notwithstanding subdivision 5, paragraph (a),
2.8clause (2), or section 16C.05, subdivision 2, paragraph (a), clause (3), agencies may
2.9permit a specifically named, legislatively appropriated, noncompetitive grant recipient to
2.10incur eligible expenses based on an agreed upon work plan and budget for up to 60 days
2.11prior to an encumbrance being established in the accounting system.

2.12    Sec. 3. Minnesota Statutes 2012, section 16C.05, subdivision 2, is amended to read:
2.13    Subd. 2. Creation and validity of contracts. (a) A contract is not valid and the state
2.14is not bound by it and no agency, without the prior written approval of the commissioner
2.15granted pursuant to subdivision 2a, may authorize work to begin on it unless:
2.16    (1) it has first been executed by the head of the agency or a delegate who is a party
2.17to the contract;
2.18    (2) it has been approved by the commissioner; and
2.19    (3) the accounting system shows an encumbrance for the amount of the contract
2.20liability, except as allowed by policy approved by the commissioner and commissioner
2.21of management and budget for routine, low-dollar procurements and section 16B.98,
2.22subdivision 11.
2.23    (b) The combined contract and amendments must not exceed five years without
2.24specific, written approval by the commissioner according to established policy, procedures,
2.25and standards, or unless otherwise provided for by law. The term of the original contract
2.26must not exceed two years unless the commissioner determines that a longer duration is
2.27in the best interest of the state.
2.28    (c) Grants, interagency agreements, purchase orders, work orders, and annual plans
2.29need not, in the discretion of the commissioner and attorney general, require the signature
2.30of the commissioner and/or the attorney general. A signature is not required for work
2.31orders and amendments to work orders related to Department of Transportation contracts.
2.32Bond purchase agreements by the Minnesota Public Facilities Authority do not require
2.33the approval of the commissioner.
3.1    (d) Amendments to contracts must entail tasks that are substantially similar to
3.2those in the original contract or involve tasks that are so closely related to the original
3.3contract that it would be impracticable for a different contractor to perform the work. The
3.4commissioner or an agency official to whom the commissioner has delegated contracting
3.5authority under section 16C.03, subdivision 16, must determine that an amendment would
3.6serve the interest of the state better than a new contract and would cost no more.
3.7    (e) A fully executed copy of every contract, amendments to the contract, and
3.8performance evaluations relating to the contract must be kept on file at the contracting
3.9agency for a time equal to that specified for contract vendors and other parties in
3.10subdivision 5.
3.11    (f) The attorney general must periodically review and evaluate a sample of state
3.12agency contracts to ensure compliance with laws.