State contracts with the federal government authorization for the state to withhold fraudulent payments requirement

SF 2677 requires Minnesota state agencies to include a specific clause in contracts with the federal government when administering federal funds. This clause authorizes the state to withhold payments from recipients if state officials have a reasonable suspicion that the recipient obtained the funds through intentional or deceptive acts for an unlawful benefit. The bill directly affects state agencies managing federal programs and the recipients of those federal funds. It becomes effective the day after enactment and applies to all new contracts signed on or after that date.