Panel examines bill to keep Commerce Fraud Bureau under Commerce after transfer to BCA

Chair Luke O’Driscoll moved House File 25,22 on March 25 to keep Minnesota’s Commerce Fraud Bureau within the Department of Commerce, seeking legislative resolution after the governor’s January 3 executive order moved the unit into the Department of Public Safety and consolidated it with the BCA’s financial crimes section.

Commissioner Bob Jacobson of the Department of Public Safety and BCA Superintendent Drew Evans testified the administrative transfer (completed Feb. 7, per testimony) combined Commerce’s fraud investigators with the BCA financial crimes unit and generated efficiencies, including centralized digital forensics, streamlined case handling and expanded investigative capacity. Jacobson said DPS updated proposed budget language to ensure general funds appropriated to the new BCA financial crimes and fraud section cannot be shifted to other purposes, to allocate 100% of insurance assessment dollars to insurance‑fraud investigations (up from 70% under prior structure) and to create annual reporting requirements to the legislature and public safety leaders.

Opponents and some committee members raised concerns about process and oversight. Multiple representatives said they were troubled that an executive order rather than legislative action produced the move; others warned that removing the investigative unit from the agency that regulates insurance and other commerce matters could weaken regulatory‑investigative coordination. Representative Paul Davids and several members argued the Commerce Fraud Bureau had been effective and that legislative discussion was the proper forum for a structural change. Representative Nolan Hewitt and other members said the BCA brings sworn investigators, digital forensics and scale and that the consolidation could improve capabilities.

Several members asked what guardrails would ensure insurance fraud remains a priority under the BCA. Superintendent Evans said the new structure preserves the civil and regulatory function at Commerce — criminal referrals would come to the BCA — and that the administration’s proposed language includes reporting and protections for the dedicated funding source. He also said the BCA’s consolidated unit is already accepting state program‑fraud referrals and that combining specialized investigators can speed case work.

Action: The committee laid House File 25,22 over for possible inclusion in a future omnibus bill.

Next steps: Multiple members asked for legislative language to codify guardrails, reporting timelines and funding protections; proponents and opponents signaled they will continue to negotiate statutory language and oversight provisions.