This bill establishes a local government legal grant account within the special revenue fund, aimed at providing financial assistance to local governments in Minnesota for specific legal expenses incurred due to federal actions. The commissioner of management and budget is tasked with creating this account and will transfer $10 million from the budget reserve account to fund it. The bill appropriates these funds for fiscal year 2026, allowing the commissioner of revenue to distribute grants to local governments for eligible costs, which include legal expenses related to federal executive orders affecting local governance.

Local governments, defined as counties, cities, townships, or school districts, can apply for grants to cover costs associated with continuing special education services, reducing disparities, challenging federal censorship or segregation orders, and upholding state laws conflicting with federal orders effective after January 19, 2025. The bill stipulates that no individual grant may exceed $500,000 and mandates that any remaining balance in the grant account after July 1, 2026, be transferred back to the budget reserve account. The provisions of this bill will take effect the day after it is enacted.