This bill establishes the Minnesota Federal Funding Protection Trust Fund, a special revenue fund designed to receive, hold, and manage federal funds and federal pass-through funds. The fund aims to protect state programs from disruptions caused by the suspension, delay, or conditional withholding of federal funds. The legislation outlines the purpose of the trust fund, which includes ensuring compliance with federal law while safeguarding the interests of residents, local governments, and state agencies. The trust fund will consist of federal funds awarded to Minnesota, pass-through funds for local entities, interest earnings, and any other legally authorized money.

The bill also grants the commissioner of management and budget the authority to temporarily hold federal funds under certain conditions, such as when federal funds are suspended or when there is a risk of interruption to essential state services. It mandates that federal funds held in the trust must be released when the governor certifies their availability or compliance with federal requirements. Additionally, the bill includes provisions for taxpayer protections, ensuring that the state does not collect federal taxes or assume liability for federal penalties. A quarterly report to the legislature is required to provide oversight of the trust fund, and the legislative auditor will review the fund within two years of enactment. The act will take effect the day following its final enactment.