Establishes an Office of Inspector General (OIG); outlines powers and duties of the office; creates procedures for reporting suspected fraud, misuse, and other unlawful uses of state funds by any entity the receives, disburses, or has custody of such funds; establishes a website and phone hotline to report suspected fraud or misuse of state funds; provides temporary sanctions, including withholding of payment; requires periodic reports to the Legislature and Legislative Audit Commission; establishes data protection practices; prohibits retaliation; requires nonprofits that receive state grants to highlight fraud reporting tools on the organization's website; requires at least one in-person unannounced monitoring visit before final payment of any grant over $50,000, and potentially more for grants over $250,000; requires funds be withheld from any grantee that does not submit a progress report required by the grant agreement, with exceptions; provides for suspension of grants if recipient is charged with a criminal offense relating to a state grant agreement, and terminated upon conviction.

Requires employees of state departments and boards to report suspected fraud; requires state departments and boards to post an organizational chart on the entity’s website that includes the names of, and contact information for, the commissioner, deputy commissioner, assistant commissioner(s), and the head of each division or bureau within the agency;
requires the commissioner of the Department of Administration to provide leadership and direction to state agencies regarding the prevention of fraud, waste, and abuse in state grant programs; requires the Department of Administration, as part of its grantmaking policies for state agencies, to require agencies to, without exception: (1) conduct at least one in-person, unannounced monitoring visit before final payment of any grant over $50,000 and annual unannounced in-person monitoring visits for grants over $250,000; (2) conduct a financial reconciliation of each grant project expenditure prior to disbursement for grants over $50,000; and (3) withhold funds from any grantee that does not submit a required progress report provides that a state employee who knowingly violates one or more of these requirements is guilty of a misdemeanor crime; requires state employees to report violations of grantmaking laws or rules; provides that grant agreements between the state and grantees must require the grantee to post on its website a current organizational chart for the duration of the grant agreement; provides that grant agreements between the state and grantees must require the grantee to allow audits; requires state agencies, when performing the mandatory pre-award financial review of potential nonprofit or for-profit grantees, to confirm that the grantees internal controls, at a minimum, require the segregation of duties concerning the authorization, disbursement, and recording of expenditures; requires agencies to require additional information and provide additional oversight when the potential grantee has not previously received state or federal grants of similar amounts or for similar duties or has not demonstrated the ability to perform the duties on the required scale; requires agencies, when requiring additional information from potential nonprofit grantees, to request and examine certain information concerning employee compensation; require state grant agreements to include a clause providing that the state will immediately suspend the grant if the grantee is charged with a criminal offense relating to a state grant agreement.

Establishes the director of grants management within the Department of Administration to oversee the implementation of law, ensure compliance with the laws, be a resource in ensuring public accountability and transparency; requires granting agencies to use technology systems that meet certain requirements; requires the director to review and approve or disapprove request of waivers, deadline extensions, or other variances from the terms of a written agreement; requires grantees identify all grants the grantee has received or applied to receive from an executive agency, and the director would record that info in the grants management tech system and review; requires a balance sheet for proposed grants of $500,000 or more.

AMENDED via SUBSTITUTE - requires Minnesota Management and Budget to proactively raise awareness about the capital budget process and provide technical assistance around the requirements associated with the capital budget process and receiving general fund or general obligation bond funding for capital projects, including compliance requirements that must be met at various stages of capital project development, with particular focus on nonprofits, American Indian communities, and communities of color that have traditionally not participated in the state capital budget process; allows the agency to increase its capacity to coordinate with other state agencies regarding the administration of grant agreements, programs, and technical assistance related to certain capital projects; allows agency heads to administratively withhold funds from state contractors or grantees, including nonprofits, for 60 days where there is strong evidence of fraud; provides withholding, appeal and data protection procedures, and imposes reporting requirements; requires state grantees to post on their website the names and contact information of the organization's leadership and the person who directly manages the grant; requires all state agency grant managers to complete grants management training before assuming grants management duties, and to continue this training annually; outlines unenforceable terms for state contracts.

Requires eligibility criteria for grants; prohibits an organization from receiving a grant if an officer or employee is compensated in an amount greater than the governor’s annual compensation or has an employee of a state agency or elected official on its governor board; requires an organization that received more than 50% of revenues from state funds to submit a certified financial audit and prohibits any officer or member of the governing board to have been convicted of any offense involving theft, fraud, embezzlement, or other misuse or misappropriation of funds or properties; requires a state agency to report if a recipient is determined ineligible; requires all applications to include the purpose of the grant, eligibility requirements, proposed geographic service area, reporting requirements, and certification of eligibility; requires a detailed accounting of the use of any grant proceeds, description of program outcomes, and portion spend on operating expenses; requires prompt report any comments or concerns received about fraud or waste for a grant; requires the
books, records, documents, and accounting procedures and practices of a grantee receiving a grant of more than $500,000 be subject to examination by the granting state agency, legislative auditor, and/or state auditor, for two years prior to the grant and during the term of the grant.

Prohibits grants and contracts to nonprofits under any economic development or workforce development program if the nonprofit compensates an officer or employee at an amount greater than 125% of the governor’s salary; provides an exception for a job training grant.

Creates an excise tax up to 25% on an applicable educational institution’s asset growth for institution’s with total assets of $100 million or more with at least 500 tuition-paying students with mor than 50% of them located in Minnesota; provides exceptions to what constitutes assets; establishes the Higher Education Assets Growth Account with the excise tax revenues for the Minnesota State Grant program to provide financial assistance to students from low and middle income families.

Eliminates the estate tax by 2034.