HF 13

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 02/13/2023 06:47pm

A bill for an act
relating to child care assistance; modifying child care assistance rates and funding
priorities; modifying procedures for termination and disqualification of human
services providers and grant recipients; appropriating money for child care
assistance programs and grants; amending Minnesota Statutes 2022, sections
119B.03, subdivision 4a; 119B.13, subdivisions 1, 4; 245.095; repealing Minnesota
Statutes 2022, section 119B.03, subdivision 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 119B.03, subdivision 4a, is amended to read:

Subd. 4a.

deleted text begin Temporary reprioritization deleted text end new text begin Funding priorities new text end .

(a) deleted text begin Notwithstanding
subdivision 4 deleted text end new text begin In the event that inadequate funding necessitates the use of waiting lists new text end ,
priority for child care assistance under the basic sliding fee assistance program shall be
determined according to this subdivision deleted text begin beginning July 1, 2021, through May 31, 2024 deleted text end .

(b) First priority must be given to eligible non-MFIP families who do not have a high
school diploma or commissioner of education-selected high school equivalency certification
or who need remedial and basic skill courses in order to pursue employment or to pursue
education leading to employment and who need child care assistance to participate in the
education program. This includes student parents as defined under section 119B.011,
subdivision 19b. Within this priority, the following subpriorities must be used:

(1) child care needs of minor parents;

(2) child care needs of parents under 21 years of age; and

(3) child care needs of other parents within the priority group described in this paragraph.

(c) Second priority must be given to families in which at least one parent is a veteran,
as defined under section 197.447.

(d) Third priority must be given to eligible families who do not meet the specifications
of paragraph (b), (c), (e), or (f).

(e) Fourth priority must be given to families who are eligible for portable basic sliding
fee assistance through the portability pool under subdivision 9.

(f) Fifth priority must be given to eligible families receiving services under section
119B.011, subdivision 20a, if the parents have completed their MFIP or DWP transition
year, or if the parents are no longer receiving or eligible for DWP supports.

(g) Families under paragraph (f) must be added to the basic sliding fee waiting list on
the date they complete their transition year under section 119B.011, subdivision 20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 2.

Minnesota Statutes 2022, section 119B.13, subdivision 1, is amended to read:

Subdivision 1.

Subsidy restrictions.

(a) Beginning deleted text begin November 15 deleted text end new text begin August 7 new text end , deleted text begin 2021 deleted text end new text begin 2023 new text end ,
the maximum rate paid for child care assistance in any county or county price cluster under
the child care fund shall be deleted text begin : deleted text end new text begin the greater of the 75th percentile of the most recent child care
provider rate survey or the rates in effect at the time of the update. Thereafter, each rate
change is effective the first full service period on or after January 1 of the year following
the provider rate survey.
new text end

deleted text begin (1) for all infants and toddlers, the greater of the 40th percentile of the 2021 child care
provider rate survey or the rates in effect at the time of the update; and
deleted text end

deleted text begin (2) for all preschool and school-age children, the greater of the 30th percentile of the
2021 child care provider rate survey or the rates in effect at the time of the update.
deleted text end

deleted text begin (b) Beginning the first full service period on or after January 1, 2025, the maximum rate
paid for child care assistance in a county or county price cluster under the child care fund
shall be:
deleted text end

deleted text begin (1) for all infants and toddlers, the greater of the 40th percentile of the 2024 child care
provider rate survey or the rates in effect at the time of the update; and
deleted text end

deleted text begin (2) for all preschool and school-age children, the greater of the 30th percentile of the
2024 child care provider rate survey or the rates in effect at the time of the update.
deleted text end

deleted text begin The rates under paragraph (a) continue until the rates under this paragraph go into effect.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end For a child care provider located within the boundaries of a city located in two
or more of the counties of Benton, Sherburne, and Stearns, the maximum rate paid for child
care assistance shall be equal to the maximum rate paid in the county with the highest
maximum reimbursement rates or the provider's charge, whichever is less. The commissioner
may: (1) assign a county with no reported provider prices to a similar price cluster; and (2)
consider county level access when determining final price clusters.

deleted text begin (d) deleted text end new text begin (c) new text end A rate which includes a special needs rate paid under subdivision 3 may be in
excess of the maximum rate allowed under this subdivision.

deleted text begin (e) deleted text end new text begin (d) new text end The department shall monitor the effect of this paragraph on provider rates. The
county shall pay the provider's full charges for every child in care up to the maximum
established. The commissioner shall determine the maximum rate for each type of care on
an hourly, full-day, and weekly basis, including special needs and disability care.

deleted text begin (f) deleted text end new text begin (e) new text end If a child uses one provider, the maximum payment for one day of care must not
exceed the daily rate. The maximum payment for one week of care must not exceed the
weekly rate.

deleted text begin (g) deleted text end new text begin (f) new text end If a child uses two providers under section 119B.097, the maximum payment
must not exceed:

(1) the daily rate for one day of care;

(2) the weekly rate for one week of care by the child's primary provider; and

(3) two daily rates during two weeks of care by a child's secondary provider.

deleted text begin (h) deleted text end new text begin (g) new text end Child care providers receiving reimbursement under this chapter must not be
paid activity fees or an additional amount above the maximum rates for care provided during
nonstandard hours for families receiving assistance.

deleted text begin (i) deleted text end new text begin (h) new text end If the provider charge is greater than the maximum provider rate allowed, the
parent is responsible for payment of the difference in the rates in addition to any family
co-payment fee.

deleted text begin (j) deleted text end new text begin (i) new text end The maximum registration fee paid for child care assistance in any county or
county price cluster under the child care fund shall be deleted text begin set as follows: (1) beginning November
15, 2021, the greater of the 40th percentile of the 2021 child care provider rate survey or
the registration fee in effect at the time of the update; and (2) beginning the first full service
period on or after January 1, 2025, the maximum registration fee shall be the greater of the
40th percentile of the 2024 child care provider rate survey or the registration fee in effect
at the time of the update. The registration fees under clause (1) continue until the registration
fees under clause (2) go into effect deleted text end new text begin the greater of the 75th percentile of the most recent child
care provider rate survey or the registration fee in effect at the time of the update. Each
maximum registration fee update must be implemented on the same schedule as maximum
child care assistance rate increases under paragraph (a) new text end .

deleted text begin (k) deleted text end new text begin (j) new text end Maximum registration fees must be set for licensed family child care and for child
care centers. For a child care provider located in the boundaries of a city located in two or
more of the counties of Benton, Sherburne, and Stearns, the maximum registration fee paid
for child care assistance shall be equal to the maximum registration fee paid in the county
with the highest maximum registration fee or the provider's charge, whichever is less.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 119B.13, subdivision 4, is amended to read:

Subd. 4.

Rates charged to publicly subsidized families.

Child care providers receiving
reimbursement under this chapter may not charge a rate to clients receiving assistance under
this chapter that is higher than the private, full-paying client rate. new text begin This subdivision shall not
prohibit a child care provider receiving reimbursement under this chapter from providing
discounts, scholarships, or other financial assistance to any clients.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2022, section 245.095, is amended to read:

245.095 LIMITS ON RECEIVING PUBLIC FUNDS.

Subdivision 1.

Prohibition.

(a) If a provider, vendor, or individual enrolled, licensed,
receiving funds under a grant contract, or registered in any program administered by the
commissioner, including under the commissioner's powers and authorities in section 256.01,
is excluded from that program, the commissioner shall:

(1) prohibit the excluded provider, vendor, or individual from enrolling, becoming
licensed, receiving grant funds, or registering in any other program administered by the
commissioner; and

(2) disenroll, revoke or suspend a license, disqualify, or debar the excluded provider,
vendor, or individual in any other program administered by the commissioner.

new text begin (b) If a provider, vendor, or individual enrolled, licensed, receiving funds under a grant
contract, or registered in any program administered by the commissioner, including under
the commissioner's powers and authorities in section 256.01, is excluded from that program,
the commissioner may:
new text end

new text begin (1) prohibit any associated entities or associated individuals from enrolling, becoming
licensed, receiving grant funds, or registering in any other program administered by the
commissioner; and
new text end

new text begin (2) disenroll, revoke or suspend a license of, disqualify, or debar any associated entities
or associated individuals, in any other program administered by the commissioner.
new text end

new text begin (c) If a provider, vendor, or individual enrolled, licensed, or otherwise receiving funds
under any contract or registered in any program administered by a Minnesota state or federal
agency is excluded from that program, the commissioner of human services may:
new text end

new text begin (1) prohibit the excluded provider, vendor, or individual, or any associated entities or
associated individuals from enrolling, becoming licensed, receiving grant funds, or registering
in any program administered by the commissioner; and
new text end

new text begin (2) disenroll, revoke or suspend a license of, disqualify, or debar the excluded provider,
vendor, or individual, or any associated entities or associated individuals, in any program
administered by the commissioner.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end The duration of deleted text begin this deleted text end new text begin a new text end prohibition, disenrollment, revocation, suspension,
disqualification, or debarment new text begin under paragraph (a) new text end must last for the longest applicable
sanction or disqualifying period in effect for the provider, vendor, or individual permitted new text begin ,
as new text end by state or federal law. new text begin The duration of a prohibition, disenrollment, revocation,
suspension, disqualification, or debarment under paragraphs (b) and (c) may last up until
the longest applicable sanction or disqualifying period in effect for the provider, vendor,
individual, associated entity, or associated individual, as permitted by state or federal law.
new text end

Subd. 2.

Definitions.

(a) For purposes of this section, the following definitions have the
meanings given them.

new text begin (b) "Associated entity" means a provider or vendor owned or controlled by an excluded
individual.
new text end

new text begin (c) "Associated individual" means an individual who owns or is an executive officer or
board member of an excluded provider or vendor.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end "Excluded" means deleted text begin disenrolled, disqualified, having a license that has been revoked
or suspended under chapter deleted text end deleted text begin 245A deleted text end deleted text begin , or debarred or suspended under Minnesota Rules, part
1230.1150, or excluded pursuant to section 256B.064, subdivision 3 deleted text end new text begin removed under other
authorities from a program administered by a Minnesota state or federal agency, including
a final determination to stop payments new text end .

deleted text begin (c) deleted text end new text begin (e) new text end "Individual" means a natural person providing products or services as a provider
or vendor.

deleted text begin (d) deleted text end new text begin (f) new text end "Provider" deleted text begin includes any entity or individual receiving payment from a program
administered by the Department of Human Services, and an owner, controlling individual,
license holder, director, or managerial official of an entity receiving payment from a program
administered by the Department of Human Services deleted text end new text begin means any entity, individual, owner,
controlling individual, license holder, director, or managerial official of an entity receiving
payment from a program administered by a Minnesota state or federal agency new text end .

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin Within five days of taking an action under subdivision (1), paragraph
(a), (b), or (c), against a provider, vendor, individual, associated individual, or associated
entity, the commissioner must send notice of the action to the provider, vendor, individual,
associated individual, or associated entity. The notice must state:
new text end

new text begin (1) the basis for the action;
new text end

new text begin (2) the effective date of the action;
new text end

new text begin (3) the right to appeal the action; and
new text end

new text begin (4) the requirements and procedures for reinstatement.
new text end

new text begin Subd. 4. new text end

new text begin Appeal. new text end

new text begin (a) Upon receipt of a notice under subdivision 3, a provider, vendor,
individual, associated individual, or associated entity may request a contested case hearing,
as defined in section 14.02, subdivision 3, by filing with the commissioner a written request
of appeal. The scope of any contested case hearing shall be solely limited to action taken
under this section. The commissioner must receive the appeal request no later than 30 days
after the date the notice was mailed to the provider, vendor, individual, associated individual,
or associated entity. The appeal request must specify:
new text end

new text begin (1) each disputed item and the reason for the dispute;
new text end

new text begin (2) the authority in statute or rule upon which the provider, vendor, individual, associated
individual, or associated entity relies for each disputed item;
new text end

new text begin (3) the name and address of the person or entity with whom contacts may be made
regarding the appeal; and
new text end

new text begin (4) any other information required by the commissioner.
new text end

new text begin (b) The action of the commissioner shall be considered final and binding on the effective
date of the action as stated in the notice under subdivision 3, unless timely and proper appeal
is received by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Withholding of payments. new text end

new text begin (a) Except as otherwise provided by state or federal
law, the commissioner may withhold payments to a provider, vendor, individual, associated
individual, or associated entity in any program administered by the commissioner, if the
commissioner determines there is a credible allegation of fraud for which an investigation
is pending for a program administered by a Minnesota state or federal agency.
new text end

new text begin (b) For purposes of this subdivision, a "credible allegation of fraud" is an allegation
which has been verified by the commissioner from any source, including but not limited
to:
new text end

new text begin (1) fraud hotline complaints;
new text end

new text begin (2) claims data mining;
new text end

new text begin (3) patterns identified through provider audits, civil false claims cases, and law
enforcement investigations; and
new text end

new text begin (4) court filings and other legal documents, including but not limited to police reports,
complaints, indictments, informations, affidavits, declarations, and search warrants.
new text end

new text begin (c) The commissioner must send notice of the withholding of payments within five days
of taking such action. The notice must:
new text end

new text begin (1) state that payments are being withheld according to this subdivision;
new text end

new text begin (2) set forth the general allegations related to the withholding action, except the notice
need not disclose specific information concerning an ongoing investigation;
new text end

new text begin (3) state that the withholding is for a temporary period and cite the circumstances under
which the withholding will be terminated; and
new text end

new text begin (4) inform the provider, vendor, individual, associated individual, or associated entity
of the right to submit written evidence to contest the withholding action for consideration
by the commissioner.
new text end

new text begin (d) The commissioner shall stop withholding payments if the commissioner determines
there is insufficient evidence of fraud by the provider, vendor, individual, associated
individual, or associated entity or when legal proceedings relating to the alleged fraud are
completed, unless the commissioner has sent notice under subdivision 3 to the provider,
vendor, individual, associated individual, or associated entity.
new text end

new text begin (e) The withholding of payments is a temporary action and shall not be subject to appeal
under section 256.045 or chapter 14.
new text end

Sec. 5. new text begin APPROPRIATIONS; DEPARTMENT OF HUMAN SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin MFIP child care assistance. new text end

new text begin $56,176,000 in fiscal year 2024 and
$147,153,000 in fiscal year 2025 are appropriated from the general fund to the commissioner
of human services for child care grants.
new text end

new text begin Subd. 2. new text end

new text begin Basic sliding fee child care grants. new text end

new text begin $62,834,000 in fiscal year 2024 and
$86,778,000 in fiscal year 2025 are appropriated from the general fund to the commissioner
for child care grants. The general fund base for this appropriation is $91,537,000 in fiscal
year 2026 and $88,318,000 in fiscal year 2027.
new text end

new text begin Subd. 3. new text end

new text begin Central office operations. new text end

new text begin (a) $268,000 in fiscal year 2024 and $4,000 in fiscal
year 2025 are appropriated from the general fund to the commissioner for the state share
of technology systems costs related to changes in this act. The general fund base for this
appropriation is $4,000 in fiscal year 2026 and $4,000 in fiscal year 2027.
new text end

new text begin (b) $573,000 in fiscal year 2024 and $669,000 in fiscal year 2025 are appropriated from
the general fund to the commissioner for staffing costs related to changes in this act. The
general fund base for this appropriation is $669,000 in fiscal year 2026 and $669,000 in
fiscal year 2027.
new text end

new text begin (c) $50,000 in fiscal year 2024 and $50,000 in fiscal year 2025 are appropriated from
the general fund to the commissioner for appeals adjudication costs related to changes in
this act. The general fund base for this appropriation is $50,000 in fiscal year 2026 and
$50,000 in fiscal year 2027.
new text end

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 119B.03, subdivision 4, new text end new text begin is repealed effective July 1,
2023.
new text end

APPENDIX

Repealed Minnesota Statutes: H0013-2

119B.03 BASIC SLIDING FEE PROGRAM.

Subd. 4.

Funding priority.

(a) First priority for child care assistance under the basic sliding fee program must be given to eligible non-MFIP families who do not have a high school diploma or commissioner of education-selected high school equivalency certification or who need remedial and basic skill courses in order to pursue employment or to pursue education leading to employment and who need child care assistance to participate in the education program. This includes student parents as defined under section 119B.011, subdivision 19b. Within this priority, the following subpriorities must be used:

(1) child care needs of minor parents;

(2) child care needs of parents under 21 years of age; and

(3) child care needs of other parents within the priority group described in this paragraph.

(b) Second priority must be given to parents who have completed their MFIP or DWP transition year, or parents who are no longer receiving or eligible for diversionary work program supports.

(c) Third priority must be given to families who are eligible for portable basic sliding fee assistance through the portability pool under subdivision 9.

(d) Fourth priority must be given to families in which at least one parent is a veteran as defined under section 197.447.

(e) Families under paragraph (b) must be added to the basic sliding fee waiting list on the date they begin the transition year under section 119B.011, subdivision 20, and must be moved into the basic sliding fee program as soon as possible after they complete their transition year.