1.1                          A bill for an act 
  1.2             relating to child care assistance; clarifying the 
  1.3             duties of state agencies; providing for program 
  1.4             integrity and fraud investigation; appropriating 
  1.5             money; amending Minnesota Statutes 1998, sections 
  1.6             119B.01, by adding a subdivision; 119B.02, by adding 
  1.7             subdivisions; 119B.11, subdivision 2a; 256.01, 
  1.8             subdivision 4; 256.045, subdivisions 6, 7, and by 
  1.9             adding a subdivision; 256.046, subdivision 1; 256.98, 
  1.10            subdivisions 1, 7, and 8; and 256.983, subdivisions 3 
  1.11            and 4. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1998, section 119B.01, is 
  1.14  amended by adding a subdivision to read: 
  1.15     Subd. 2a.  [APPLICATION.] "Application" means the 
  1.16  submission to a county agency, by or on behalf of a family, of a 
  1.17  completed, signed, and dated child care assistance universal 
  1.18  application form that indicates the family's desire to receive 
  1.19  assistance. 
  1.20     Sec. 2.  Minnesota Statutes 1998, section 119B.02, is 
  1.21  amended by adding a subdivision to read: 
  1.22     Subd. 3.  [UNIVERSAL APPLICATION FORM.] The commissioner 
  1.23  must develop and make available to all counties a universal 
  1.24  application form for child care assistance under this chapter.  
  1.25  The application must provide notice of eligibility requirements 
  1.26  for assistance and penalties for wrongfully obtaining assistance.
  1.27     Sec. 3.  Minnesota Statutes 1998, section 119B.02, is 
  1.28  amended by adding a subdivision to read: 
  2.1      Subd. 4.  [SUPERVISION OF COUNTIES.] The commissioner shall 
  2.2   supervise child care programs administered by the counties 
  2.3   through standard setting, technical assistance to the counties, 
  2.4   approval of county plans, and distribution of public money for 
  2.5   services.  The commissioner shall provide training and other 
  2.6   support services to assist counties in planning for and 
  2.7   implementing child care assistance programs.  The commissioner 
  2.8   shall establish minimum administrative and service standards for 
  2.9   the provision of child care social services by county boards of 
  2.10  commissioners through the adoption of a permanent administrative 
  2.11  rule under chapter 14. 
  2.12     Sec. 4.  Minnesota Statutes 1998, section 119B.02, is 
  2.13  amended by adding a subdivision to read: 
  2.14     Subd. 5.  [PROGRAM INTEGRITY.] For child care assistance 
  2.15  programs under this chapter, the commissioner shall enforce, in 
  2.16  cooperation with the commissioner of human services, the 
  2.17  requirements for program integrity and fraud prevention 
  2.18  investigations under sections 256.046, 256.98, and 256.983. 
  2.19     Sec. 5.  Minnesota Statutes 1998, section 119B.11, 
  2.20  subdivision 2a, is amended to read: 
  2.21     Subd. 2a.  [RECOVERY OF OVERPAYMENTS.] An amount of child 
  2.22  care assistance paid to a recipient in excess of the payment due 
  2.23  is recoverable by the county agency.  If the family remains 
  2.24  eligible for child care assistance, the overpayment must be 
  2.25  recovered through recoupment as identified in Minnesota Rules, 
  2.26  part 9565.5110, subpart 11, items A and B, if the family remains 
  2.27  eligible for assistance.  If the family no longer remains 
  2.28  eligible for child care assistance, the county may choose to 
  2.29  initiate efforts to recover overpayments from the family for 
  2.30  overpayment less than $50.  If the overpayment is greater than 
  2.31  or equal to $50, the county shall seek voluntary repayment of 
  2.32  the overpayment from the family.  If the county is unable to 
  2.33  recoup the overpayment through voluntary repayment, the county 
  2.34  shall initiate civil court proceedings to recover the 
  2.35  overpayment unless the county's costs to recover the overpayment 
  2.36  will exceed the amount of the overpayment.  A family with an 
  3.1   outstanding debt under this subdivision is not eligible for 
  3.2   child care assistance until:  (1) the debt is paid in full; or 
  3.3   (2) satisfactory arrangements are made with the county to retire 
  3.4   the debt consistent with the requirements of this chapter and 
  3.5   Minnesota Rules, chapter 3400, and the family is in compliance 
  3.6   with the agreement. 
  3.7      Sec. 6.  Minnesota Statutes 1998, section 256.01, 
  3.8   subdivision 4, is amended to read: 
  3.9      Subd. 4.  [DUTIES AS STATE AGENCY.] The state agency shall: 
  3.10     (1) supervise the administration of assistance to dependent 
  3.11  children under Laws 1937, chapter 438, by the county agencies in 
  3.12  an integrated program with other service for dependent children 
  3.13  maintained under the direction of the state agency; 
  3.14     (2) may subpoena witnesses and administer oaths, make 
  3.15  rules, and take such action as may be necessary, or desirable 
  3.16  for carrying out the provisions of Laws 1937, chapter 438.  All 
  3.17  rules made by the state agency shall be binding on the counties 
  3.18  and shall be complied with by the respective county agencies; 
  3.19     (3) establish adequate standards for personnel employed by 
  3.20  the counties and the state agency in the administration of Laws 
  3.21  1937, chapter 438, and make the necessary rules to maintain such 
  3.22  standards; 
  3.23     (4) prescribe the form of and print and supply to the 
  3.24  county agencies blanks for applications, reports, affidavits, 
  3.25  and such other forms as it may deem necessary and advisable; 
  3.26     (5) cooperate with the federal government and its public 
  3.27  welfare agencies in any reasonable manner as may be necessary to 
  3.28  qualify for federal aid for aid to dependent children and in 
  3.29  conformity with the provisions of Laws 1937, chapter 438, 
  3.30  including the making of such reports and such forms and 
  3.31  containing such information as the Federal Social Security Board 
  3.32  may from time to time require, and comply with such provisions 
  3.33  as such board may from time to time find necessary to assure the 
  3.34  correctness and verification of such reports; 
  3.35     (6) may cooperate with other state agencies in establishing 
  3.36  reciprocal agreements in instances where a child receiving aid 
  4.1   to dependent children moves or contemplates moving into or out 
  4.2   of the state, in order that such child may continue to receive 
  4.3   supervised aid from the state moved from until the child shall 
  4.4   have resided for one year in the state moved to; 
  4.5      (7) on or before October 1 in each even-numbered year make 
  4.6   a biennial report to the governor concerning the activities of 
  4.7   the agency; and 
  4.8      (8) enter into agreements with other departments of the 
  4.9   state as necessary to meet all requirements of the federal 
  4.10  government; and 
  4.11     (9) cooperate with the commissioner of children, families, 
  4.12  and learning to enforce the requirements for program integrity 
  4.13  and fraud prevention for investigation for child care assistance 
  4.14  under chapter 119B. 
  4.15     Sec. 7.  Minnesota Statutes 1998, section 256.045, is 
  4.16  amended by adding a subdivision to read: 
  4.17     Subd. 3c.  [FINAL ORDER IN HEARING UNDER SECTION 
  4.18  119B.16.] The state human services referee shall recommend an 
  4.19  order to the commissioner of children, families, and learning in 
  4.20  an appeal under section 119B.16.  The commissioner shall affirm, 
  4.21  reverse, or modify the order.  An order issued under this 
  4.22  subdivision is conclusive on the parties unless an appeal is 
  4.23  taken under subdivision 7. 
  4.24     Sec. 8.  Minnesota Statutes 1998, section 256.045, 
  4.25  subdivision 6, is amended to read: 
  4.26     Subd. 6.  [ADDITIONAL POWERS OF THE COMMISSIONER; 
  4.27  SUBPOENAS.] (a) The commissioner of human services, or the 
  4.28  commissioner of health for matters within the commissioner's 
  4.29  jurisdiction under subdivision 3b, or the commissioner of 
  4.30  children, families, and learning for matters within the 
  4.31  commissioner's jurisdiction under subdivision 3c, may initiate a 
  4.32  review of any action or decision of a county agency and direct 
  4.33  that the matter be presented to a state human services referee 
  4.34  for a hearing held under subdivision 3, 3a, 3b, or 4a.  In all 
  4.35  matters dealing with human services committed by law to the 
  4.36  discretion of the county agency, the commissioner's judgment may 
  5.1   be substituted for that of the county agency.  The commissioner 
  5.2   may order an independent examination when appropriate. 
  5.3      (b) Any party to a hearing held pursuant to subdivision 3, 
  5.4   3a, 3b, or 4a may request that the commissioner issue a subpoena 
  5.5   to compel the attendance of witnesses and the production of 
  5.6   records at the hearing.  A local agency may request that the 
  5.7   commissioner issue a subpoena to compel the release of 
  5.8   information from third parties prior to a request for a hearing 
  5.9   under section 256.046 upon a showing of relevance to such a 
  5.10  proceeding.  The issuance, service, and enforcement of subpoenas 
  5.11  under this subdivision is governed by section 357.22 and the 
  5.12  Minnesota Rules of Civil Procedure. 
  5.13     (c) The commissioner may issue a temporary order staying a 
  5.14  proposed demission by a residential facility licensed under 
  5.15  chapter 245A while an appeal by a recipient under subdivision 3 
  5.16  is pending or for the period of time necessary for the county 
  5.17  agency to implement the commissioner's order. 
  5.18     Sec. 9.  Minnesota Statutes 1998, section 256.045, 
  5.19  subdivision 7, is amended to read: 
  5.20     Subd. 7.  [JUDICIAL REVIEW.] Except for a prepaid health 
  5.21  plan, any party who is aggrieved by an order of the commissioner 
  5.22  of human services, or the commissioner of health in appeals 
  5.23  within the commissioner's jurisdiction under subdivision 3b, or 
  5.24  the commissioner of children, families, and learning for matters 
  5.25  within the commissioner's jurisdiction under subdivision 3c, may 
  5.26  appeal the order to the district court of the county responsible 
  5.27  for furnishing assistance, or, in appeals under subdivision 3b, 
  5.28  the county where the maltreatment occurred, by serving a written 
  5.29  copy of a notice of appeal upon the commissioner and any adverse 
  5.30  party of record within 30 days after the date the commissioner 
  5.31  issued the order, the amended order, or order affirming the 
  5.32  original order, and by filing the original notice and proof of 
  5.33  service with the court administrator of the district court.  
  5.34  Service may be made personally or by mail; service by mail is 
  5.35  complete upon mailing; no filing fee shall be required by the 
  5.36  court administrator in appeals taken pursuant to this 
  6.1   subdivision, with the exception of appeals taken under 
  6.2   subdivision 3b.  The commissioner may elect to become a party to 
  6.3   the proceedings in the district court.  Except for appeals under 
  6.4   subdivision 3b, any party may demand that the commissioner 
  6.5   furnish all parties to the proceedings with a copy of the 
  6.6   decision, and a transcript of any testimony, evidence, or other 
  6.7   supporting papers from the hearing held before the human 
  6.8   services referee, by serving a written demand upon the 
  6.9   commissioner within 30 days after service of the notice of 
  6.10  appeal.  Any party aggrieved by the failure of an adverse party 
  6.11  to obey an order issued by the commissioner under subdivision 5 
  6.12  may compel performance according to the order in the manner 
  6.13  prescribed in sections 586.01 to 586.12. 
  6.14     Sec. 10.  Minnesota Statutes 1998, section 256.046, 
  6.15  subdivision 1, is amended to read: 
  6.16     Subdivision 1.  [HEARING AUTHORITY.] A local agency shall 
  6.17  must initiate an administrative fraud disqualification hearing 
  6.18  for individuals accused of wrongfully obtaining assistance or 
  6.19  intentional program violations, in lieu of a criminal action 
  6.20  when it has not been pursued, in the aid to families with 
  6.21  dependent children, MFIP-S, child care assistance programs under 
  6.22  chapter 119B, general assistance, family general assistance, 
  6.23  Minnesota supplemental aid, medical care, or food stamp 
  6.24  programs.  The hearing is subject to the requirements of section 
  6.25  256.045 and the requirements in Code of Federal Regulations, 
  6.26  title 7, section 273.16, for the food stamp program and title 
  6.27  45, section 235.112, as of September 30, 1995, for the cash 
  6.28  grant and medical care programs. 
  6.29     Sec. 11.  Minnesota Statutes 1998, section 256.98, 
  6.30  subdivision 1, is amended to read: 
  6.31     Subdivision 1.  [WRONGFULLY OBTAINING ASSISTANCE.] A person 
  6.32  who commits any of the following acts or omissions with intent 
  6.33  to defeat the purposes of sections 145.891 to 145.897, 256.12, 
  6.34  256.031 to 256.361, 256.72 to 256.871, 256.9365, 256.94 to 
  6.35  256.966, child care, MFIP-S MFIP, chapter 256B, 256D, 256J, 
  6.36  256K, or 256L, child care assistance programs under chapter 
  7.1   119B, or all of these sections, is guilty of theft and shall be 
  7.2   sentenced under section 609.52, subdivision 3, clauses (1) to 
  7.3   (5): 
  7.4      (1) obtains or attempts to obtain, or aids or abets any 
  7.5   person to obtain by means of a willfully false statement or 
  7.6   representation, by intentional concealment of any material fact, 
  7.7   or by impersonation or other fraudulent device, assistance or 
  7.8   the continued receipt of assistance, to include child 
  7.9   care assistance under chapter 119B or vouchers produced 
  7.10  according to sections 145.891 to 145.897 and MinnesotaCare 
  7.11  services according to sections 256.9365, 256.94, and 256L.01 to 
  7.12  256L.16, to which the person is not entitled or assistance 
  7.13  greater than that to which the person is entitled; 
  7.14     (2) knowingly aids or abets in buying or in any way 
  7.15  disposing of the property of a recipient or applicant of 
  7.16  assistance without the consent of the county agency; or 
  7.17     (3) obtains or attempts to obtain, alone or in collusion 
  7.18  with others, the receipt of payments to which the individual is 
  7.19  not entitled as a provider of child care subsidized through 
  7.20  programs in chapter 119B, or by furnishing or concurring in a 
  7.21  willfully false claim for child care assistance under chapter 
  7.22  119B. 
  7.23     The continued receipt of assistance to which the person is 
  7.24  not entitled or greater than that to which the person is 
  7.25  entitled as a result of any of the acts, failure to act, or 
  7.26  concealment described in this subdivision shall be deemed to be 
  7.27  continuing offenses from the date that the first act or failure 
  7.28  to act occurred. 
  7.29     Sec. 12.  Minnesota Statutes 1998, section 256.98, 
  7.30  subdivision 7, is amended to read: 
  7.31     Subd. 7.  [DIVISION OF RECOVERED AMOUNTS.] (a) Except for 
  7.32  recoveries under paragraph (b), if the state is responsible for 
  7.33  the recovery, the amounts recovered shall be paid to the 
  7.34  appropriate units of government as provided under section 
  7.35  256.863.  If the recovery is directly attributable to a county, 
  7.36  the county may retain one-half of the nonfederal share of any 
  8.1   recovery from a recipient or the recipient's estate. 
  8.2      (b) Recoveries for child care assistance under chapter 119B 
  8.3   must be distributed according to section 119B.11, subdivision 3. 
  8.4   This subdivision does not apply to recoveries from medical 
  8.5   providers or to recoveries involving the department of human 
  8.6   services, surveillance and utilization review division, state 
  8.7   hospital collections unit, and the benefit recoveries division. 
  8.8      Sec. 13.  Minnesota Statutes 1998, section 256.98, 
  8.9   subdivision 8, is amended to read: 
  8.10     Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] (a) Any person 
  8.11  found to be guilty of wrongfully obtaining assistance by a 
  8.12  federal or state court or by an administrative hearing 
  8.13  determination, or waiver thereof, through a disqualification 
  8.14  consent agreement, or as part of any approved diversion plan 
  8.15  under section 401.065, or any court-ordered stay which carries 
  8.16  with it any probationary or other conditions, in the aid to 
  8.17  families with dependent children program, the Minnesota family 
  8.18  assistance program-statewide, the food stamp program, the 
  8.19  Minnesota family investment plan, child care program, the 
  8.20  general assistance or family general assistance program, or the 
  8.21  Minnesota supplemental aid program shall be disqualified from 
  8.22  that program.  The needs of that individual shall not be taken 
  8.23  into consideration in determining the grant level for that 
  8.24  assistance unit:  
  8.25     (1) for one year after the first offense; 
  8.26     (2) for two years after the second offense; and 
  8.27     (3) permanently after the third or subsequent offense.  
  8.28     The period of program disqualification shall begin on the 
  8.29  date stipulated on the advance notice of disqualification 
  8.30  without possibility of postponement for administrative stay or 
  8.31  administrative hearing and shall continue through completion 
  8.32  unless and until the findings upon which the sanctions were 
  8.33  imposed are reversed by a court of competent jurisdiction.  The 
  8.34  period for which sanctions are imposed is not subject to 
  8.35  review.  The sanctions provided under this subdivision are in 
  8.36  addition to, and not in substitution for, any other sanctions 
  9.1   that may be provided for by law for the offense involved.  A 
  9.2   disqualification established through hearing or waiver shall 
  9.3   result in the disqualification period beginning immediately 
  9.4   unless the person has become otherwise ineligible for 
  9.5   assistance.  If the person is ineligible for assistance, the 
  9.6   disqualification period begins when the person again meets the 
  9.7   eligibility criteria of the program from which they were 
  9.8   disqualified and makes application for that program. 
  9.9      (b) A family receiving assistance through child care 
  9.10  assistance programs under chapter 119B with a family member who 
  9.11  is found to be guilty of wrongfully obtaining assistance by a 
  9.12  federal court, state court, or an administrative hearing 
  9.13  determination or waiver, through a disqualification consent 
  9.14  agreement, as part of an approved diversion plan under section 
  9.15  401.065, or a court-ordered stay with probationary or other 
  9.16  conditions is disqualified from child care assistance programs.  
  9.17  The disqualifications must be for periods of three months, six 
  9.18  months, and nine months for the first, second, and third 
  9.19  offenses respectively.  During the disqualification period, 
  9.20  disqualification from any child care program must extend to all 
  9.21  child care programs and must be immediately applied. 
  9.22     Sec. 14.  Minnesota Statutes 1998, section 256.983, 
  9.23  subdivision 3, is amended to read: 
  9.24     Subd. 3.  [DEPARTMENT RESPONSIBILITIES.] The commissioner 
  9.25  shall establish training programs which shall be attended by all 
  9.26  investigative and supervisory staff of the involved county 
  9.27  agencies.  The commissioner shall also develop the necessary 
  9.28  operational guidelines, forms, and reporting mechanisms, which 
  9.29  shall be used by the involved county agencies.  An individual's 
  9.30  application or redetermination form shall for public assistance 
  9.31  benefits, including child care assistance programs under chapter 
  9.32  119B and medical care programs, must include an authorization 
  9.33  for release by the individual to obtain documentation for any 
  9.34  information on that form which is involved in a fraud prevention 
  9.35  investigation.  The authorization for release would be is 
  9.36  effective until for six months after public assistance benefits 
 10.1   have ceased. 
 10.2      Sec. 15.  Minnesota Statutes 1998, section 256.983, 
 10.3   subdivision 4, is amended to read: 
 10.4      Subd. 4.  [FUNDING.] (a) County agency reimbursement shall 
 10.5   be made through the settlement provisions applicable to the aid 
 10.6   to families with dependent children program, food stamp program, 
 10.7   Minnesota family investment program-statewide, child care 
 10.8   assistance programs under chapter 119B, and medical assistance 
 10.9   program and other federal and state-funded programs. 
 10.10     (b) The commissioner will maintain program compliance if 
 10.11  for any three consecutive month period, a county agency fails to 
 10.12  comply with fraud prevention investigation program guidelines, 
 10.13  or fails to meet the cost-effectiveness standards developed by 
 10.14  the commissioner.  This result is contingent on the commissioner 
 10.15  providing written notice, including an offer of technical 
 10.16  assistance, within 30 days of the end of the third or subsequent 
 10.17  month of noncompliance.  The county agency shall be required to 
 10.18  submit a corrective action plan to the commissioner within 30 
 10.19  days of receipt of a notice of noncompliance.  Failure to submit 
 10.20  a corrective action plan or, continued deviation from standards 
 10.21  of more than ten percent after submission of a corrective action 
 10.22  plan, will result in denial of funding for each subsequent 
 10.23  month, or billing the county agency for fraud prevention 
 10.24  investigation (FPI) service provided by the commissioner, or 
 10.25  reallocation of program grant funds, or investigative resources, 
 10.26  or both, to other counties.  The denial of funding shall apply 
 10.27  to the general settlement received by the county agency on a 
 10.28  quarterly basis and shall not reduce the grant amount applicable 
 10.29  to the FPI project. 
 10.30     Sec. 16.  [APPROPRIATIONS.] 
 10.31     $350,000 each year of the biennium ending June 30, 2001, is 
 10.32  appropriated from the general fund to the commissioner of 
 10.33  children, families, and learning to fund fraud prevention and 
 10.34  program integrity efforts for child care assistance programs 
 10.35  under Minnesota Statutes, chapter 119B.