House File 1 advances after committee votes to re‑refer; bill would create a legislative Office of Inspector General

Representative Anderson presented House File 1, saying the bill “is essentially sets up, an Office of Inspector General” that would merge existing agency inspector general functions into an independent office.

The bill's stated purpose in committee testimony is to investigate and combat suspected fraud, misuse and other unlawful uses of public funds with a focus on providers and recipients of state funding. Deputy Commissioner Britta Rayton of Minnesota Management and Budget told the committee: “fraud against public programs designed to help improve the lives of Minnesotans is absolutely unacceptable and harms the people that benefit from the access to these programs.”

Members adopted a series of amendments before voting to re‑refer the bill. The committee approved an A15 amendment that, according to the author, replaces the terms “waste and abuse” with a statutory definition of “misuse,” clarifies classified versus unclassified positions and incorporates language from the Senate. The committee also approved amendments described in the hearing as A14 and A13 that move a data provision into the internal auditing statute and add an annual reporting requirement for the inspector general's office.

Several members raised legal and operational concerns during discussion. Representative Muller pressed staff about statutory privileges, pointing to a provision that would allow the inspector general to require “full and unrestricted access to all records, reports, plans, contracts, memoranda, correspondence and other information” from recipients of state funds. Nonpartisan staff attorney Nathan Hopkins told the committee that “the status of any privileges is not addressed in the bill,” and later clarified that the bill's access language is “substantively identical to the current language for the legislative auditor.” Members asked the authors to clarify whether attorney‑client, patient, victim‑advocate, and other statutory privileges will be protected.

Several members also raised separation‑of‑powers and structure questions. Representative Liebling said she had constitutional concerns about where an OIG would be housed, and Representative Anderson said nonpartisan legal staff had advised that the House version (within the legislative branch) did not present constitutional issues while the Senate version posed concerns. Deputy Commissioner Rayton warned that embedding legislative staff into executive agencies could “blur[] some lines between the executive and the legislative functions” and said the executive branch typically places centralized OIG functions inside that branch with legislative oversight models.

Members asked about practical implementation: Representative Finke asked whether the office would lead investigations of past conduct and how long staff hiring would take. Anderson said the office would likely take about a year to create and “most of it will be going forward” but that past investigations could be transferred. On staffing, Anderson said she expected the eventual office to be “about the size of the legislative auditor's office,” likely under 100 people and with a mix of classified and unclassified positions.

After discussion, the committee voted to re‑refer House File 1, as amended, to the Committee on Children and Families Finance and Policy. The committee recorded voice approval on the motion to re‑refer.