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 outlines that funds will be appropriated in fiscal year 2026 for grants to local governments, which can apply for reimbursement of eligible costs related to federal executive orders, such as continuing special education services, reducing disparities, challenging federal censorship, and upholding conflicting state laws.

Local governments can apply for grants on a first-come, first-served basis, with individual grants capped at $500,000. Any remaining balance in the grant account after July 1, 2026, will be transferred back to the budget reserve account. The bill is set to take effect the day after it is enacted.