1.1                          A bill for an act 
  1.2             relating to human services; establishing program 
  1.3             integrity initiatives; establishing procedures for 
  1.4             overpayment of assistance and establishing 
  1.5             notification requirements; establishing criminal 
  1.6             penalties for wrongfully obtaining assistance; 
  1.7             requiring fraud prevention investigation programs to 
  1.8             be budget neutral; establishing the presumption of 
  1.9             receipt of benefits for persons who have been issued 
  1.10            an assistance transaction card; establishing recovery 
  1.11            of overpayments and ATM errors; requiring notification 
  1.12            to undocumented persons regarding the release of 
  1.13            personal data; amending Minnesota Statutes 1996, 
  1.14            sections 13.82, subdivision 1; 256.01, subdivision 2; 
  1.15            256.017, subdivision 2; 256.019; 256.045, subdivision 
  1.16            3; 256.046; 256.98, subdivisions 1, 4, and 8; 256.983, 
  1.17            subdivisions 1 and 4; 256.984, subdivision 1; 256.986; 
  1.18            256.9861, subdivisions 1, 2, 4, and 5; 256D.09, 
  1.19            subdivision 6; 270A.03, subdivision 5; 388.23, 
  1.20            subdivision 1; 393.07, subdivision 10; proposing 
  1.21            coding for new law in Minnesota Statutes, chapter 256. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23     Section 1.  Minnesota Statutes 1996, section 13.82, 
  1.24  subdivision 1, is amended to read: 
  1.25     Subdivision 1.  [APPLICATION.] This section shall apply to 
  1.26  agencies which carry on a law enforcement function, including 
  1.27  but not limited to municipal police departments, county sheriff 
  1.28  departments, fire departments, the bureau of criminal 
  1.29  apprehension, the Minnesota state patrol, the board of peace 
  1.30  officer standards and training, the department of commerce, and 
  1.31  the department of labor and industry fraud investigation unit, 
  1.32  and the program integrity section and county human services 
  1.33  agency client and provider fraud prevention and control units 
  2.1   operated or supervised by the department of human services.  
  2.2      Sec. 2.  Minnesota Statutes 1996, section 256.01, 
  2.3   subdivision 2, is amended to read: 
  2.4      Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
  2.5   section 241.021, subdivision 2, the commissioner of human 
  2.6   services shall: 
  2.7      (1) Administer and supervise all forms of public assistance 
  2.8   provided for by state law and other welfare activities or 
  2.9   services as are vested in the commissioner.  Administration and 
  2.10  supervision of human services activities or services includes, 
  2.11  but is not limited to, assuring timely and accurate distribution 
  2.12  of benefits, completeness of service, and quality program 
  2.13  management.  In addition to administering and supervising human 
  2.14  services activities vested by law in the department, the 
  2.15  commissioner shall have the authority to: 
  2.16     (a) require county agency participation in training and 
  2.17  technical assistance programs to promote compliance with 
  2.18  statutes, rules, federal laws, regulations, and policies 
  2.19  governing human services; 
  2.20     (b) monitor, on an ongoing basis, the performance of county 
  2.21  agencies in the operation and administration of human services, 
  2.22  enforce compliance with statutes, rules, federal laws, 
  2.23  regulations, and policies governing welfare services and promote 
  2.24  excellence of administration and program operation; 
  2.25     (c) develop a quality control program or other monitoring 
  2.26  program to review county performance and accuracy of benefit 
  2.27  determinations; 
  2.28     (d) require county agencies to make an adjustment to the 
  2.29  public assistance benefits issued to any individual consistent 
  2.30  with federal law and regulation and state law and rule and to 
  2.31  issue or recover benefits as appropriate; 
  2.32     (e) delay or deny payment of all or part of the state and 
  2.33  federal share of benefits and administrative reimbursement 
  2.34  according to the procedures set forth in section 256.017; and 
  2.35     (f) make contracts with and grants to public and private 
  2.36  agencies and organizations, both profit and nonprofit, and 
  3.1   individuals, using appropriated funds. 
  3.2      (2) Inform county agencies, on a timely basis, of changes 
  3.3   in statute, rule, federal law, regulation, and policy necessary 
  3.4   to county agency administration of the programs. 
  3.5      (3) Administer and supervise all child welfare activities; 
  3.6   promote the enforcement of laws protecting handicapped, 
  3.7   dependent, neglected and delinquent children, and children born 
  3.8   to mothers who were not married to the children's fathers at the 
  3.9   times of the conception nor at the births of the children; 
  3.10  license and supervise child-caring and child-placing agencies 
  3.11  and institutions; supervise the care of children in boarding and 
  3.12  foster homes or in private institutions; and generally perform 
  3.13  all functions relating to the field of child welfare now vested 
  3.14  in the state board of control. 
  3.15     (4) Administer and supervise all noninstitutional service 
  3.16  to handicapped persons, including those who are visually 
  3.17  impaired, hearing impaired, or physically impaired or otherwise 
  3.18  handicapped.  The commissioner may provide and contract for the 
  3.19  care and treatment of qualified indigent children in facilities 
  3.20  other than those located and available at state hospitals when 
  3.21  it is not feasible to provide the service in state hospitals. 
  3.22     (5) Assist and actively cooperate with other departments, 
  3.23  agencies and institutions, local, state, and federal, by 
  3.24  performing services in conformity with the purposes of Laws 
  3.25  1939, chapter 431. 
  3.26     (6) Act as the agent of and cooperate with the federal 
  3.27  government in matters of mutual concern relative to and in 
  3.28  conformity with the provisions of Laws 1939, chapter 431, 
  3.29  including the administration of any federal funds granted to the 
  3.30  state to aid in the performance of any functions of the 
  3.31  commissioner as specified in Laws 1939, chapter 431, and 
  3.32  including the promulgation of rules making uniformly available 
  3.33  medical care benefits to all recipients of public assistance, at 
  3.34  such times as the federal government increases its participation 
  3.35  in assistance expenditures for medical care to recipients of 
  3.36  public assistance, the cost thereof to be borne in the same 
  4.1   proportion as are grants of aid to said recipients. 
  4.2      (7) Establish and maintain any administrative units 
  4.3   reasonably necessary for the performance of administrative 
  4.4   functions common to all divisions of the department. 
  4.5      (8) Act as designated guardian of both the estate and the 
  4.6   person of all the wards of the state of Minnesota, whether by 
  4.7   operation of law or by an order of court, without any further 
  4.8   act or proceeding whatever, except as to persons committed as 
  4.9   mentally retarded.  
  4.10     (9) Act as coordinating referral and informational center 
  4.11  on requests for service for newly arrived immigrants coming to 
  4.12  Minnesota. 
  4.13     (10) The specific enumeration of powers and duties as 
  4.14  hereinabove set forth shall in no way be construed to be a 
  4.15  limitation upon the general transfer of powers herein contained. 
  4.16     (11) Establish county, regional, or statewide schedules of 
  4.17  maximum fees and charges which may be paid by county agencies 
  4.18  for medical, dental, surgical, hospital, nursing and nursing 
  4.19  home care and medicine and medical supplies under all programs 
  4.20  of medical care provided by the state and for congregate living 
  4.21  care under the income maintenance programs. 
  4.22     (12) Have the authority to conduct and administer 
  4.23  experimental projects to test methods and procedures of 
  4.24  administering assistance and services to recipients or potential 
  4.25  recipients of public welfare.  To carry out such experimental 
  4.26  projects, it is further provided that the commissioner of human 
  4.27  services is authorized to waive the enforcement of existing 
  4.28  specific statutory program requirements, rules, and standards in 
  4.29  one or more counties.  The order establishing the waiver shall 
  4.30  provide alternative methods and procedures of administration, 
  4.31  shall not be in conflict with the basic purposes, coverage, or 
  4.32  benefits provided by law, and in no event shall the duration of 
  4.33  a project exceed four years.  It is further provided that no 
  4.34  order establishing an experimental project as authorized by the 
  4.35  provisions of this section shall become effective until the 
  4.36  following conditions have been met: 
  5.1      (a) The proposed comprehensive plan, including estimated 
  5.2   project costs and the proposed order establishing the waiver, 
  5.3   shall be filed with the secretary of the senate and chief clerk 
  5.4   of the house of representatives at least 60 days prior to its 
  5.5   effective date. 
  5.6      (b) The secretary of health, education, and welfare of the 
  5.7   United States has agreed, for the same project, to waive state 
  5.8   plan requirements relative to statewide uniformity. 
  5.9      (c) A comprehensive plan, including estimated project 
  5.10  costs, shall be approved by the legislative advisory commission 
  5.11  and filed with the commissioner of administration.  
  5.12     (13) In accordance with According to federal requirements, 
  5.13  establish procedures to be followed by local welfare boards in 
  5.14  creating citizen advisory committees, including procedures for 
  5.15  selection of committee members. 
  5.16     (14) Allocate federal fiscal disallowances or sanctions 
  5.17  which are based on quality control error rates for the aid to 
  5.18  families with dependent children in effect until January 1, 
  5.19  1998, medical assistance, or food stamp program in the following 
  5.20  manner:  
  5.21     (a) One-half of the total amount of the disallowance shall 
  5.22  be borne by the county boards responsible for administering the 
  5.23  programs.  For the medical assistance and AFDC programs in 
  5.24  effect until January 1, 1998, disallowances shall be shared by 
  5.25  each county board in the same proportion as that county's 
  5.26  expenditures for the sanctioned program are to the total of all 
  5.27  counties' expenditures for the AFDC program in effect until 
  5.28  January 1, 1998, and medical assistance programs program.  For 
  5.29  the food stamp program, sanctions shall be shared by each county 
  5.30  board, with 50 percent of the sanction being distributed to each 
  5.31  county in the same proportion as that county's administrative 
  5.32  costs for food stamps are to the total of all food stamp 
  5.33  administrative costs for all counties, and 50 percent of the 
  5.34  sanctions being distributed to each county in the same 
  5.35  proportion as that county's value of food stamp benefits issued 
  5.36  are to the total of all benefits issued for all counties.  Each 
  6.1   county shall pay its share of the disallowance to the state of 
  6.2   Minnesota.  When a county fails to pay the amount due hereunder, 
  6.3   the commissioner may deduct the amount from reimbursement 
  6.4   otherwise due the county, or the attorney general, upon the 
  6.5   request of the commissioner, may institute civil action to 
  6.6   recover the amount due. 
  6.7      (b) Notwithstanding the provisions of paragraph (a), if the 
  6.8   disallowance results from knowing noncompliance by one or more 
  6.9   counties with a specific program instruction, and that knowing 
  6.10  noncompliance is a matter of official county board record, the 
  6.11  commissioner may require payment or recover from the county or 
  6.12  counties, in the manner prescribed in paragraph (a), an amount 
  6.13  equal to the portion of the total disallowance which resulted 
  6.14  from the noncompliance, and may distribute the balance of the 
  6.15  disallowance according to paragraph (a).  
  6.16     (15) Develop and implement special projects that maximize 
  6.17  reimbursements and result in the recovery of money to the 
  6.18  state.  For the purpose of recovering state money, the 
  6.19  commissioner may enter into contracts with third parties.  Any 
  6.20  recoveries that result from projects or contracts entered into 
  6.21  under this paragraph shall be deposited in the state treasury 
  6.22  and credited to a special account until the balance in the 
  6.23  account reaches $1,000,000.  When the balance in the account 
  6.24  exceeds $1,000,000, the excess shall be transferred and credited 
  6.25  to the general fund.  All money in the account is appropriated 
  6.26  to the commissioner for the purposes of this paragraph. 
  6.27     (16) Have the authority to make direct payments to 
  6.28  facilities providing shelter to women and their children 
  6.29  pursuant according to section 256D.05, subdivision 3.  Upon the 
  6.30  written request of a shelter facility that has been denied 
  6.31  payments under section 256D.05, subdivision 3, the commissioner 
  6.32  shall review all relevant evidence and make a determination 
  6.33  within 30 days of the request for review regarding issuance of 
  6.34  direct payments to the shelter facility.  Failure to act within 
  6.35  30 days shall be considered a determination not to issue direct 
  6.36  payments. 
  7.1      (17) Have the authority to establish and enforce the 
  7.2   following county reporting requirements:  
  7.3      (a) The commissioner shall establish fiscal and statistical 
  7.4   reporting requirements necessary to account for the expenditure 
  7.5   of funds allocated to counties for human services programs.  
  7.6   When establishing financial and statistical reporting 
  7.7   requirements, the commissioner shall evaluate all reports, in 
  7.8   consultation with the counties, to determine if the reports can 
  7.9   be simplified or the number of reports can be reduced. 
  7.10     (b) The county board shall submit monthly or quarterly 
  7.11  reports to the department as required by the commissioner.  
  7.12  Monthly reports are due no later than 15 working days after the 
  7.13  end of the month.  Quarterly reports are due no later than 30 
  7.14  calendar days after the end of the quarter, unless the 
  7.15  commissioner determines that the deadline must be shortened to 
  7.16  20 calendar days to avoid jeopardizing compliance with federal 
  7.17  deadlines or risking a loss of federal funding.  Only reports 
  7.18  that are complete, legible, and in the required format shall be 
  7.19  accepted by the commissioner.  
  7.20     (c) If the required reports are not received by the 
  7.21  deadlines established in clause (b), the commissioner may delay 
  7.22  payments and withhold funds from the county board until the next 
  7.23  reporting period.  When the report is needed to account for the 
  7.24  use of federal funds and the late report results in a reduction 
  7.25  in federal funding, the commissioner shall withhold from the 
  7.26  county boards with late reports an amount equal to the reduction 
  7.27  in federal funding until full federal funding is received.  
  7.28     (d) A county board that submits reports that are late, 
  7.29  illegible, incomplete, or not in the required format for two out 
  7.30  of three consecutive reporting periods is considered 
  7.31  noncompliant.  When a county board is found to be noncompliant, 
  7.32  the commissioner shall notify the county board of the reason the 
  7.33  county board is considered noncompliant and request that the 
  7.34  county board develop a corrective action plan stating how the 
  7.35  county board plans to correct the problem.  The corrective 
  7.36  action plan must be submitted to the commissioner within 45 days 
  8.1   after the date the county board received notice of noncompliance.
  8.2      (e) The final deadline for fiscal reports or amendments to 
  8.3   fiscal reports is one year after the date the report was 
  8.4   originally due.  If the commissioner does not receive a report 
  8.5   by the final deadline, the county board forfeits the funding 
  8.6   associated with the report for that reporting period and the 
  8.7   county board must repay any funds associated with the report 
  8.8   received for that reporting period. 
  8.9      (f) The commissioner may not delay payments, withhold 
  8.10  funds, or require repayment under paragraph (c) or (e) if the 
  8.11  county demonstrates that the commissioner failed to provide 
  8.12  appropriate forms, guidelines, and technical assistance to 
  8.13  enable the county to comply with the requirements.  If the 
  8.14  county board disagrees with an action taken by the commissioner 
  8.15  under paragraph (c) or (e), the county board may appeal the 
  8.16  action according to sections 14.57 to 14.69. 
  8.17     (g) Counties subject to withholding of funds under 
  8.18  paragraph (c) or forfeiture or repayment of funds under 
  8.19  paragraph (e) shall not reduce or withhold benefits or services 
  8.20  to clients to cover costs incurred due to actions taken by the 
  8.21  commissioner under paragraph (c) or (e). 
  8.22     (18) Allocate federal fiscal disallowances or sanctions for 
  8.23  audit exceptions when federal fiscal disallowances or sanctions 
  8.24  are based on a statewide random sample for the foster care 
  8.25  program under title IV-E of the Social Security Act, United 
  8.26  States Code, title 42, in direct proportion to each county's 
  8.27  title IV-E foster care maintenance claim for that period. 
  8.28     (19) Be responsible for ensuring the detection, prevention, 
  8.29  investigation, and resolution of fraudulent activities or 
  8.30  behavior by applicants, recipients, and other participants in 
  8.31  the human services programs administered by the department. 
  8.32     (20) Require county agencies to identify overpayments, 
  8.33  establish claims and utilize all available and cost-beneficial 
  8.34  methodologies to collect and recover these overpayments in the 
  8.35  human services programs administered by the department. 
  8.36     Sec. 3.  Minnesota Statutes 1996, section 256.017, 
  9.1   subdivision 2, is amended to read: 
  9.2      Subd. 2.  [DEFINITIONS.] The following terms have the 
  9.3   meanings given for the purpose purposes of this section. 
  9.4      (a) "Administrative penalty" means an adjustment against 
  9.5   the county agency's state and federal benefit and federal 
  9.6   administrative reimbursement when the commissioner determines 
  9.7   that the county agency is not in compliance with the policies 
  9.8   and procedures established by the commissioner. 
  9.9      (b) "Quality control case penalty" means an adjustment 
  9.10  against the county agency's federal administrative reimbursement 
  9.11  and state and federal benefit reimbursement when the 
  9.12  commissioner determines through a quality control review that 
  9.13  the county agency has made incorrect payments, terminations, or 
  9.14  denials of benefits as determined by state quality control 
  9.15  procedures for the aid to families with dependent children in 
  9.16  effect until January 1, 1998, Minnesota family investment 
  9.17  program-statewide, food stamp, or medical assistance programs, 
  9.18  or any other programs for which the commissioner has developed a 
  9.19  quality control system.  Quality control case penalties apply 
  9.20  only to agency errors as defined by state quality control 
  9.21  procedures. 
  9.22     (c) "Quality control/quality assurance" means a review 
  9.23  system of a statewide random sample of cases, designed to 
  9.24  provide data on program outcomes and the accuracy with which 
  9.25  state and federal policies are being applied in issuing benefits 
  9.26  and as a fiscal audit to ensure the accuracy of expenditures.  
  9.27  The quality control/quality assurance system is administered by 
  9.28  the department.  For the aid to families with dependent children 
  9.29  in effect until January 1, 1998, Minnesota family investment 
  9.30  program-statewide, food stamp, and medical assistance programs, 
  9.31  the quality control system is that required by federal 
  9.32  regulation, or those developed by the commissioner. 
  9.33     Sec. 4.  Minnesota Statutes 1996, section 256.019, is 
  9.34  amended to read: 
  9.35     256.019 [RECOVERY OF MONEY; APPORTIONMENT.] 
  9.36     When an amount is recovered from any source for assistance 
 10.1   given under the provisions governing public assistance programs 
 10.2   including aid to families with dependent children, MFIP-S, 
 10.3   general assistance medical care, emergency assistance, general 
 10.4   assistance, work readiness, and Minnesota supplemental aid, 
 10.5   there shall be paid to the United States the amount due under 
 10.6   the terms of the Social Security Act and the balance must be 
 10.7   paid into the treasury of the state or county in accordance with 
 10.8   current rates of financial participation; except the county may 
 10.9   keep one-half of any recovery made by the county agency using 
 10.10  any method other than recoupment.  For medical assistance, if 
 10.11  the recovery is made by a county agency using any method other 
 10.12  than recoupment, the county may keep one-half of the nonfederal 
 10.13  share of the recovery.  This does not apply to recoveries from 
 10.14  medical providers or to recoveries begun by the department of 
 10.15  human services' surveillance and utilization review division, 
 10.16  state hospital collections unit, and the benefit recoveries 
 10.17  division or, by the attorney general's office, or child support 
 10.18  collections.  In the food stamp program, the non-federal share 
 10.19  of recoveries in the federal tax refund offset program (FTROP) 
 10.20  only will be divided equally between the state agency and the 
 10.21  involved county agency. 
 10.22     Sec. 5.  Minnesota Statutes 1996, section 256.045, 
 10.23  subdivision 3, is amended to read: 
 10.24     Subd. 3.  [STATE AGENCY HEARINGS.] (a) State agency 
 10.25  hearings are available for the following:  (1) any person 
 10.26  applying for, receiving or having received public assistance, 
 10.27  medical care, or a program of social services granted by the 
 10.28  state agency or a county agency under sections 252.32, 256.031 
 10.29  to 256.036, and 256.72 to 256.879, chapters 256B, 256D, 256E, 
 10.30  261, or the federal Food Stamp Act whose application for 
 10.31  assistance is denied, not acted upon with reasonable promptness, 
 10.32  or whose assistance is suspended, reduced, terminated, or 
 10.33  claimed to have been incorrectly paid; (2) any patient or 
 10.34  relative aggrieved by an order of the commissioner under section 
 10.35  252.27; (3) a party aggrieved by a ruling of a prepaid health 
 10.36  plan; (4) any individual or facility determined by a lead agency 
 11.1   to have maltreated a vulnerable adult under section 626.557 
 11.2   after they have exercised their right to administrative 
 11.3   reconsideration under section 626.557; (5) any person whose 
 11.4   claim for foster care payment pursuant according to a placement 
 11.5   of the child resulting from a child protection assessment under 
 11.6   section 626.556 is denied or not acted upon with reasonable 
 11.7   promptness, regardless of funding source; (6) any person to whom 
 11.8   a right of appeal pursuant according to this section is given by 
 11.9   other provision of law; or (7) an applicant aggrieved by an 
 11.10  adverse decision to an application for a hardship waiver under 
 11.11  section 256B.15.  The failure to exercise the right to an 
 11.12  administrative reconsideration shall not be a bar to a hearing 
 11.13  under this section if federal law provides an individual the 
 11.14  right to a hearing to dispute a finding of maltreatment.  
 11.15  Individuals and organizations specified in this section may 
 11.16  contest the specified action, decision, or final disposition 
 11.17  before the state agency by submitting a written request for a 
 11.18  hearing to the state agency within 30 days after receiving 
 11.19  written notice of the action, decision, or final disposition, or 
 11.20  within 90 days of such written notice if the applicant, 
 11.21  recipient, patient, or relative shows good cause why the request 
 11.22  was not submitted within the 30-day time limit. 
 11.23     The hearing for an individual or facility under clause (4) 
 11.24  is the only administrative appeal to the final lead agency 
 11.25  disposition specifically, including a challenge to the accuracy 
 11.26  and completeness of data under section 13.04.  Hearings 
 11.27  requested under clause (4) apply only to incidents of 
 11.28  maltreatment that occur on or after October 1, 1995.  Hearings 
 11.29  requested by nursing assistants in nursing homes alleged to have 
 11.30  maltreated a resident prior to October 1, 1995, shall be held as 
 11.31  a contested case proceeding under the provisions of chapter 14. 
 11.32     For purposes of this section, bargaining unit grievance 
 11.33  procedures are not an administrative appeal. 
 11.34     The scope of hearings involving claims to foster care 
 11.35  payments under clause (5) shall be limited to the issue of 
 11.36  whether the county is legally responsible for a child's 
 12.1   placement under court order or voluntary placement agreement 
 12.2   and, if so, the correct amount of foster care payment to be made 
 12.3   on the child's behalf and shall not include review of the 
 12.4   propriety of the county's child protection determination or 
 12.5   child placement decision. 
 12.6      (b) Except for a prepaid health plan, a vendor of medical 
 12.7   care as defined in section 256B.02, subdivision 7, or a vendor 
 12.8   under contract with a county agency to provide social services 
 12.9   under section 256E.08, subdivision 4, is not a party and may not 
 12.10  request a hearing under this section, except if assisting a 
 12.11  recipient as provided in subdivision 4. 
 12.12     (c) An applicant or recipient is not entitled to receive 
 12.13  social services beyond the services included in the amended 
 12.14  community social services plan developed under section 256E.081, 
 12.15  subdivision 3, if the county agency has met the requirements in 
 12.16  section 256E.081. 
 12.17     (d) The commissioner may summarily affirm the county or 
 12.18  state agency's proposed action without a hearing when the sole 
 12.19  issue is an automatic change due to a change in state or federal 
 12.20  law. 
 12.21     Sec. 6.  Minnesota Statutes 1996, section 256.046, is 
 12.22  amended to read: 
 12.23     256.046 [ADMINISTRATIVE FRAUD DISQUALIFICATION HEARINGS.] 
 12.24     Subdivision 1.  [HEARING AUTHORITY.] A local agency may 
 12.25  shall initiate an administrative fraud disqualification hearing 
 12.26  for individuals accused of wrongfully obtaining assistance or 
 12.27  intentional program violations, in lieu of a criminal action, in 
 12.28  the aid to families with dependent children in effect until 
 12.29  January 1, 1998, MFIP-S, child care, general assistance, family 
 12.30  general assistance, Minnesota supplemental aid, medical care, or 
 12.31  food stamp programs.  The hearing is subject to the requirements 
 12.32  of section 256.045 and the requirements in Code of Federal 
 12.33  Regulations, title 7, section 273.16, for the food stamp program 
 12.34  and title 45, section 235.112, as of September 30, 1995, for the 
 12.35  aid to families with dependent children program cash grant and 
 12.36  medical care programs. 
 13.1      Subd. 2.  [COMBINED HEARING.] The referee may combine a 
 13.2   fair hearing and administrative fraud disqualification hearing 
 13.3   into a single hearing if the factual issues arise out of the 
 13.4   same, or related, circumstances and the individual receives 
 13.5   prior notice that the hearings will be combined.  If the 
 13.6   administrative fraud disqualification hearing and fair hearing 
 13.7   are combined, the time frames for administrative fraud 
 13.8   disqualification hearings set forth specified in Code of Federal 
 13.9   Regulations, title 7, section 273.16, and title 45, section 
 13.10  235.112, as of September 30, 1995, apply.  If the individual 
 13.11  accused of wrongfully obtaining assistance is charged under 
 13.12  section 256.98 for the same act or acts which are the subject of 
 13.13  the hearing, the individual may request that the hearing be 
 13.14  delayed until the criminal charge is decided by the court or 
 13.15  withdrawn. 
 13.16     Sec. 7.  [256.0471] [OVERPAYMENTS BECOME JUDGMENTS BY 
 13.17  OPERATION OF LAW.] 
 13.18     Subdivision 1.  [QUALIFYING OVERPAYMENT.] Any overpayment 
 13.19  for assistance granted under sections 256.031 to 256.0361, 
 13.20  256.72 to 256.871, and 256H.05; chapters 256B, 256D, 256I, 256J, 
 13.21  and 256K; and the food stamp program, except agency error 
 13.22  claims, becomes a judgment by operation of law 90 days after the 
 13.23  notice of overpayment is personally served upon the recipient in 
 13.24  a manner that is sufficient under rule 4.03(a) of the Rules of 
 13.25  Civil Procedure or by certified mail, return receipt requested.  
 13.26  This judgment shall be entitled to full faith and credit in this 
 13.27  and any other state. 
 13.28     Subd. 2.  [OVERPAYMENTS INCLUDED.] This section is limited 
 13.29  to overpayments for which notification is issued within the time 
 13.30  period specified under section 541.05. 
 13.31     Subd. 3.  [NOTIFICATION REQUIREMENTS.] A judgment is only 
 13.32  obtained after: 
 13.33     (1) a notice of overpayment has been personally served on 
 13.34  the recipient or former recipient in a manner sufficient under 
 13.35  rule 4.03(a) of the Rules of Civil Procedure for district 
 13.36  courts, or mailed to the recipient or former recipient by 
 14.1   certified mail, return receipt requested; and 
 14.2      (2) the time period under section 256.045, subdivision 3, 
 14.3   has elapsed without a request for a hearing, or a hearing 
 14.4   decision has been rendered under section 256.045 or 256.046 
 14.5   which concludes the existence of an overpayment that meets the 
 14.6   requirements of this section. 
 14.7      Subd. 4.  [NOTICE OF OVERPAYMENT.] The notice of 
 14.8   overpayment shall include the amount and cause of the 
 14.9   overpayment, appeal rights, and an explanation of the 
 14.10  consequences of the judgment that will be established if an 
 14.11  appeal is not filed timely or if the administrative hearing 
 14.12  decision establishes that there is an overpayment which 
 14.13  qualifies for judgment. 
 14.14     Subd. 5.  [JUDGMENTS ENTERED AND DOCKETED.] A judgment 
 14.15  shall be entered and docketed under section 548.09 only after at 
 14.16  least three months have elapsed since: 
 14.17     (1) the notice of overpayment was served on the recipient 
 14.18  under subdivision 3; and 
 14.19     (2) the last time a monthly recoupment was applied to the 
 14.20  overpayment. 
 14.21     Subd. 6.  [DOCKETING OF OVERPAYMENTS.] On or after the date 
 14.22  an unpaid overpayment becomes a judgment by operation of law 
 14.23  under subdivision 1, the agency or public authority may file 
 14.24  with the court administrator: 
 14.25     (1) a statement identifying, or a copy of, the overpayment 
 14.26  notice which provides for an appeal process and requires payment 
 14.27  of the overpayment; 
 14.28     (2) proof of service of the notice of overpayment; 
 14.29     (3) an affidavit of default, stating the full name, 
 14.30  occupation, place of residence, and last name of the debtor; the 
 14.31  name and post office address of the agency or public authority; 
 14.32  the date or dates the overpayment was incurred; the program that 
 14.33  was overpaid; and the total amount of the judgment; and 
 14.34     (4) an affidavit of service of a notice of entry of 
 14.35  judgment made by first class mail at the address where the 
 14.36  debtor was served with the notice of overpayment.  Service is 
 15.1   completed upon mailing in the manner designated. 
 15.2      Subd. 7.  [DOES NOT IMPEDE OTHER METHODS.] Nothing in this 
 15.3   section shall be construed to impede or restrict alternative 
 15.4   recovery methods for these overpayments or overpayments which do 
 15.5   not meet the requirements of this section. 
 15.6      Sec. 8.  Minnesota Statutes 1996, section 256.98, 
 15.7   subdivision 1, is amended to read: 
 15.8      Subdivision 1.  [WRONGFULLY OBTAINING ASSISTANCE.] A person 
 15.9   who commits any of the following acts or omissions with intent 
 15.10  to defeat the purposes of sections 145.891 to 145.897, 256.12, 
 15.11  256.031 to 256.0361, 256.72 to 256.871, 256.9351 to 256.966, 
 15.12  child care, MFIP-S, chapter 256B, 256D, 256J, or 256K, or all of 
 15.13  these sections, is guilty of theft and shall be sentenced under 
 15.14  section 609.52, subdivision 3, clauses (1) to (5): 
 15.15     (1) obtains, or attempts to obtain, or aids or abets any 
 15.16  person to obtain by means of a willfully false statement or 
 15.17  representation, by intentional concealment of a any material 
 15.18  fact, or by impersonation or other fraudulent device, assistance 
 15.19  or the continued receipt of assistance, including, but not 
 15.20  limited to, child care or vouchers produced according to 
 15.21  sections 145.891 to 145.897 and MinnesotaCare services according 
 15.22  to sections 256.9351 to 256.966, to which the person is not 
 15.23  entitled or assistance greater than that to which the person is 
 15.24  entitled, or who; or 
 15.25     (2) knowingly aids or abets in buying or in any way 
 15.26  disposing of the property of a recipient or applicant of 
 15.27  assistance without the consent of the county agency with intent 
 15.28  to defeat the purposes of sections 256.12, 256.031 to 256.0361, 
 15.29  256.72 to 256.871, and chapter 256B, or all of these sections is 
 15.30  guilty of theft and shall be sentenced pursuant to section 
 15.31  609.52, subdivision 3, clauses (2), (3)(a) and (c), (4), and (5).
 15.32     The continued receipt of assistance to which the person is 
 15.33  not entitled or greater than that to which the person is 
 15.34  entitled as a result of any of the acts, failure to act, or 
 15.35  concealment described in this subdivision shall be deemed to be 
 15.36  continuing offenses from the date that the first act or failure 
 16.1   to act occurred. 
 16.2      Sec. 9.  Minnesota Statutes 1996, section 256.98, 
 16.3   subdivision 4, is amended to read: 
 16.4      Subd. 4.  [RECOVERY OF ASSISTANCE.] The amount of 
 16.5   assistance determined to have been incorrectly paid is 
 16.6   recoverable from: 
 16.7      (1) the recipient or the recipient's estate by the county 
 16.8   or the state as a debt due the county or the state or both in 
 16.9   proportion to the contribution of each.; and 
 16.10     (2) any person found to have taken independent action to 
 16.11  establish eligibility for, conspired with, or aided and abetted, 
 16.12  any recipient of public assistance found to have been 
 16.13  incorrectly paid. 
 16.14     Sec. 10.  Minnesota Statutes 1996, section 256.98, 
 16.15  subdivision 8, is amended to read: 
 16.16     Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] Any person found 
 16.17  to be guilty of wrongfully obtaining assistance by a federal or 
 16.18  state court or by an administrative hearing determination, or 
 16.19  waiver thereof, through a disqualification consent agreement, or 
 16.20  as part of any approved diversion plan under section 401.065, or 
 16.21  any court ordered stay which carries with it any probationary or 
 16.22  other conditions, in the aid to families with dependent children 
 16.23  program in effect until January 1, 1998, the Minnesota family 
 16.24  assistance program-statewide, the food stamp program, the 
 16.25  Minnesota family investment plan, child care program, the 
 16.26  general assistance or family general assistance program, or the 
 16.27  Minnesota supplemental aid program, or the work readiness 
 16.28  program shall be disqualified from that program.  The needs of 
 16.29  that individual shall not be taken into consideration in 
 16.30  determining the grant level for that assistance unit:  
 16.31     (1) for six months one year after the first offense; 
 16.32     (2) for 12 months two years after the second offense; and 
 16.33     (3) permanently after the third or subsequent offense.  
 16.34     The period of program disqualification shall begin on the 
 16.35  date stipulated on the advance notice of disqualification 
 16.36  without possibility of postponement for administrative stay or 
 17.1   administrative hearing and shall continue through completion 
 17.2   unless and until the findings upon which the sanctions were 
 17.3   imposed are reversed by a court of competent jurisdiction.  The 
 17.4   period for which sanctions are imposed is not subject to 
 17.5   review.  The sanctions provided under this subdivision are in 
 17.6   addition to, and not in substitution for, any other sanctions 
 17.7   that may be provided for by law for the offense involved.  A 
 17.8   disqualification established through hearing or waiver shall 
 17.9   result in the disqualification period beginning immediately 
 17.10  unless the person has become otherwise ineligible for 
 17.11  assistance.  If the person is ineligible for assistance, the 
 17.12  disqualification period begins when the person again meets the 
 17.13  eligibility criteria of the program from which they were 
 17.14  disqualified and makes application for that program. 
 17.15     Sec. 11.  Minnesota Statutes 1996, section 256.983, 
 17.16  subdivision 1, is amended to read: 
 17.17     Subdivision 1.  [PROGRAMS ESTABLISHED.] Within the limits 
 17.18  of available appropriations, and to the extent required or 
 17.19  authorized by applicable federal regulations, the commissioner 
 17.20  of human services shall require the establishment maintenance of 
 17.21  budget neutral fraud prevention investigation programs in the 
 17.22  seven counties participating in the fraud prevention 
 17.23  investigation pilot project established under this section, and 
 17.24  in 11 additional Minnesota counties with the largest aid to 
 17.25  families with dependent children program caseloads as of July 1, 
 17.26  1991.  If funds are sufficient, the commissioner may also extend 
 17.27  fraud prevention investigation programs to:  (1) other 
 17.28  counties that have welfare fraud control programs already in 
 17.29  place based on enhanced funding contracts covering the fraud 
 17.30  investigation function; and (2) counties that have the largest 
 17.31  AFDC caseloads as of July 1, 1994, and are not currently 
 17.32  participating in the fraud prevention investigation pilot 
 17.33  project.  The pilot project may be expanded provided the 
 17.34  expansion is budget neutral to the state. 
 17.35     Sec. 12.  Minnesota Statutes 1996, section 256.983, 
 17.36  subdivision 4, is amended to read: 
 18.1      Subd. 4.  [FUNDING.] (a) Every involved county agency shall 
 18.2   either have in place or obtain an approved contract which meets 
 18.3   all federal requirements necessary to obtain enhanced federal 
 18.4   funding for its welfare fraud control and fraud prevention 
 18.5   investigation programs.  County agency reimbursement shall be 
 18.6   made through the settlement provisions applicable to the aid to 
 18.7   families with dependent children and program in effect until 
 18.8   January 1, 1998, food stamp programs program, Minnesota family 
 18.9   investment program-statewide, and medical assistance program and 
 18.10  other federal and state funded programs. 
 18.11     (b) After allowing an opportunity to establish compliance, 
 18.12  The commissioner will deny administrative reimbursement maintain 
 18.13  program compliance if for any three-month three consecutive 
 18.14  month period during any grant year, a county agency fails to 
 18.15  comply with fraud prevention investigation program guidelines, 
 18.16  or fails to meet the cost-effectiveness standards developed by 
 18.17  the commissioner.  This result is contingent on the commissioner 
 18.18  providing written notice, including an offer of technical 
 18.19  assistance, within 30 days of the end of the third or subsequent 
 18.20  month of noncompliance.  The county agency shall be required to 
 18.21  submit a corrective action plan to the commissioner within 30 
 18.22  days of receipt of a notice of noncompliance.  Failure to submit 
 18.23  a corrective action plan or, continued deviation from standards 
 18.24  of more than ten percent after submission of a corrective action 
 18.25  plan, will result in denial of funding for each subsequent month 
 18.26  during the grant year, or billing the county agency for fraud 
 18.27  prevention investigation (FPI) service provided by the 
 18.28  commissioner or reallocation of program grant funds, or 
 18.29  investigative resources, or both, to other counties.  The denial 
 18.30  of funding shall apply to the general settlement received by the 
 18.31  county agency on a quarterly basis and shall not reduce the 
 18.32  grant amount applicable to the FPI project.  
 18.33     Sec. 13.  Minnesota Statutes 1996, section 256.984, 
 18.34  subdivision 1, is amended to read: 
 18.35     Subdivision 1.  [DECLARATION.] Every application for public 
 18.36  assistance under this chapter or chapters 256B, 256D, 256K, or 
 19.1   MFIP-S or food stamps under chapter 393 shall be in writing or 
 19.2   reduced to writing as prescribed by the state agency and shall 
 19.3   contain the following declaration which shall be signed by the 
 19.4   applicant: 
 19.5      "I declare under the penalties of perjury that this 
 19.6      application has been examined by me and to the best of my 
 19.7      knowledge is a true and correct statement of every material 
 19.8      point.  I understand that a person convicted of perjury may 
 19.9      be sentenced to imprisonment of not more than five years or 
 19.10     to payment of a fine of not more than $10,000, or both." 
 19.11     Sec. 14.  Minnesota Statutes 1996, section 256.986, is 
 19.12  amended to read: 
 19.13     256.986 [COUNTY COORDINATION OF FRAUD CONTROL ACTIVITIES.] 
 19.14     (a) The county agency shall prepare and submit to the 
 19.15  commissioner of human services by January 1 April 30 of each 
 19.16  state fiscal year a plan to coordinate county duties related to 
 19.17  the prevention, investigation, and prosecution of fraud in 
 19.18  public assistance programs.  Plans may be submitted on a 
 19.19  voluntary basis prior to January 1, 1996.  Each county must 
 19.20  submit its first annual plan prior to January 1, 1997 April 30, 
 19.21  1998. 
 19.22     (b) Within the limits of appropriations specifically made 
 19.23  available for this purpose, the commissioner may make grants to 
 19.24  counties submitting plans under paragraph (a) to implement 
 19.25  coordination activities. 
 19.26     Sec. 15.  Minnesota Statutes 1996, section 256.9861, 
 19.27  subdivision 1, is amended to read: 
 19.28     Subdivision 1.  [PROGRAM ESTABLISHED.] Within the limits of 
 19.29  available state and federal appropriations, and to the extent 
 19.30  required or authorized by applicable federal regulations, the 
 19.31  commissioner of human services shall make funding available to 
 19.32  county agencies for the establishment of program integrity 
 19.33  reinvestment initiatives.  The project shall initially be 
 19.34  limited to those county agencies participating in federally 
 19.35  funded optional fraud control programs as of January 1, 
 19.36  1995 fraud control efforts and require the maintenance of county 
 20.1   efforts and financial contribution that were in place during 
 20.2   fiscal year 1996.  
 20.3      Sec. 16.  Minnesota Statutes 1996, section 256.9861, 
 20.4   subdivision 2, is amended to read: 
 20.5      Subd. 2.  [COUNTY PROPOSALS.] Each included county shall 
 20.6   develop and submit annual funding, staffing, and operating grant 
 20.7   proposals to the commissioner no later than April 30 of each 
 20.8   year for the purpose of allocating federal and state funding and 
 20.9   appropriations.  For the first operating year only, the proposal 
 20.10  shall be submitted no later than October 30.  Each proposal 
 20.11  shall provide information on: 
 20.12     (1) the staffing and funding of the fraud investigation and 
 20.13  prosecution operations; 
 20.14     (2) job descriptions for agency fraud control staff; 
 20.15     (3) contracts covering outside investigative agencies; 
 20.16     (4) operational methods to integrate the use of fraud 
 20.17  prevention investigation techniques; and 
 20.18     (5) implementation and utilization of administrative 
 20.19  disqualification hearings and diversions into by the existing 
 20.20  county fraud control and prosecution procedures.  
 20.21     Sec. 17.  Minnesota Statutes 1996, section 256.9861, 
 20.22  subdivision 4, is amended to read: 
 20.23     Subd. 4.  [STANDARDS.] The commissioner shall, after 
 20.24  consultation with the involved counties, establish standards 
 20.25  governing the performance levels of involved county 
 20.26  investigative units based on grant agreements negotiated with 
 20.27  the involved county agencies.  The standards shall take into 
 20.28  consideration and may include investigative caseloads, grant 
 20.29  savings levels, the comparison of fraud prevention and 
 20.30  prosecution directed investigations, utilization levels of 
 20.31  administrative disqualification hearings, the timely reporting 
 20.32  and implementation of disqualifications, and the timeliness 
 20.33  of the submission of statistical reports received from 
 20.34  prosecutors.  
 20.35     Sec. 18.  Minnesota Statutes 1996, section 256.9861, 
 20.36  subdivision 5, is amended to read: 
 21.1      Subd. 5.  [FUNDING.] (a) Grant funds are intended to help 
 21.2   offset the reduction in federal financial participation to 50 
 21.3   percent and may be apportioned to the participating counties 
 21.4   whenever feasible, and within the commissioner's discretion, to 
 21.5   achieve this goal.  State funding shall be made available 
 21.6   contingent on counties submitting a plan that is approved by the 
 21.7   department of human services.  Failure or delay in obtaining 
 21.8   that approval shall not, however, eliminate the obligation to 
 21.9   maintain fraud control efforts at the January 1, 1995 June 30, 
 21.10  1996, level.  Additional counties may be added to the project to 
 21.11  the extent that funds are subsequently made available.  Every 
 21.12  involved county must meet all federal requirements necessary to 
 21.13  obtain federal funding for its welfare fraud control and 
 21.14  prevention programs.  County agency reimbursement shall be made 
 21.15  through the settlement provisions applicable to the AFDC and 
 21.16  MFIP-S, food stamp and medical assistance programs.  
 21.17     (b) Should a county agency fail to comply with the 
 21.18  standards set, or fail to meet cost-effectiveness standards 
 21.19  developed by the commissioner for three months during any grant 
 21.20  year any three-month period, the commissioner shall deny 
 21.21  reimbursement or administrative costs, after allowing an 
 21.22  opportunity to establish compliance.  
 21.23     (c) Any denial of reimbursement under paragraph (b) is 
 21.24  contingent on the commissioner providing written notice, 
 21.25  including an offer of technical assistance, within 30 days of 
 21.26  the end of the third or subsequent months of noncompliance.  The 
 21.27  county agency shall be required to submit a corrective action 
 21.28  plan to the commissioner within 30 days of receipt of a notice 
 21.29  of noncompliance.  Failure to submit a corrective action plan or 
 21.30  continued deviation from standards of more than ten percent 
 21.31  after submission of corrective action plan, will result in 
 21.32  denial of funding for each such month during the grant year, or 
 21.33  billing of the county agency for program integrity reinvestment 
 21.34  project services provided by the commissioner or reallocation of 
 21.35  grant funds to other counties.  The denial of funding shall 
 21.36  apply to the general settlement received by the county agency on 
 22.1   a quarterly basis and shall not reduce the grant amount 
 22.2   applicable to the program integrity reinvestment project. 
 22.3      Sec. 19.  [256.9863] [ASSISTANCE TRANSACTION CARD; 
 22.4   PRESUMPTION OF RECEIPT OF BENEFITS.] 
 22.5      Any person in whose name an assistance transaction card has 
 22.6   been issued shall be presumed to have received the benefit of 
 22.7   all transactions involving that card.  This presumption applies 
 22.8   in all situations unless the card in question has been reported 
 22.9   lost or stolen by the cardholder.  This presumption may be 
 22.10  overcome by a preponderance of evidence indicating that the card 
 22.11  was neither used by nor with the consent of the cardholder.  
 22.12  Overcoming this presumption does not create any new or 
 22.13  additional payment obligation not otherwise established in law, 
 22.14  rule, or regulation. 
 22.15     Sec. 20.  [256.9864] [REPORTS BY RECIPIENT.] 
 22.16     (a) An assistance unit with a recent work history or with 
 22.17  earned income shall report monthly to the county agency on 
 22.18  income received and other circumstances affecting eligibility or 
 22.19  assistance amounts.  All other assistance units shall report on 
 22.20  income and other circumstances affecting eligibility and 
 22.21  assistance amounts as specified by the state agency. 
 22.22     (b) An assistance unit required to submit a report on the 
 22.23  form designated by the commissioner and within ten days of the 
 22.24  due date or the date of the significant change, whichever is 
 22.25  later, or otherwise report significant changes which would 
 22.26  affect eligibility or assistance amounts, is considered to have 
 22.27  continued its application for assistance effective the date the 
 22.28  required report is received by the county agency, if a complete 
 22.29  report is received within a calendar month in which assistance 
 22.30  was received, except that no assistance shall be paid for the 
 22.31  period beginning with the end of the month in which the report 
 22.32  was due and ending with the date the report was received by the 
 22.33  county agency. 
 22.34     Sec. 21.  [256.9865] [RECOVERY OF OVERPAYMENTS AND ATM 
 22.35  ERRORS.] 
 22.36     Subdivision 1.  [OBLIGATION TO RECOVER.] If an amount of 
 23.1   MFIP-S assistance is paid to a recipient in excess of the 
 23.2   payment due, it shall be recoverable by the county agency.  This 
 23.3   recovery authority also extends to preexisting claims or newly 
 23.4   discovered claims established under the AFDC program in effect 
 23.5   on January 1, 1997.  The agency shall give written notice to the 
 23.6   recipient of its intention to recover the overpayment.  County 
 23.7   agency efforts and financial contributions shall be maintained 
 23.8   at the level in place during fiscal year 1996. 
 23.9      Subd. 2.  [VOLUNTARY REPAYMENTS.] Overpayments may also be 
 23.10  voluntarily repaid, in part or in full, by the individual, in 
 23.11  addition to the aid reductions in subdivision 2, to include 
 23.12  further voluntary reductions in the grant level agreed to in 
 23.13  writing by the individual, until the total amount of the 
 23.14  overpayment is repaid. 
 23.15     Subd. 3.  [CLOSED CASE RECOVERIES.] The county agency shall 
 23.16  make reasonable efforts to recover overpayments to persons no 
 23.17  longer on assistance according to standards adopted by rule by 
 23.18  the commissioner of human services.  The county agency need not 
 23.19  attempt to recover overpayments of less than $35 paid to an 
 23.20  individual no longer on assistance unless the individual has 
 23.21  been convicted of fraud under section 256.98. 
 23.22     Sec. 22.  [256.9866] [COMMUNITY SERVICE AS A COUNTY 
 23.23  OBLIGATION.] 
 23.24     Community service shall be an acceptable sentencing option 
 23.25  but shall not reduce the state or federal share of any amount to 
 23.26  be repaid or any subsequent recovery.  Any reduction or offset 
 23.27  of any such amount ordered by a court shall be treated as 
 23.28  follows: 
 23.29     (1) any reduction in an overpayment amount, to include the 
 23.30  amount ordered as restitution, shall not reduce the underlying 
 23.31  amount established as an overpayment by the state or county 
 23.32  agency; 
 23.33     (2) total overpayments shall continue as a debt owed and 
 23.34  may be recovered by any civil or administrative means otherwise 
 23.35  available to the state or county agency; and 
 23.36     (3) any amount ordered to be offset against any overpayment 
 24.1   shall be deducted from the county share only of any recovery and 
 24.2   shall be based on the prevailing state minimum wage.  To the 
 24.3   extent that any deduction is in fact made against any state or 
 24.4   county share, it shall be reimbursed from the county share of 
 24.5   payments to be made under section 256.025. 
 24.6      Sec. 23.  Minnesota Statutes 1996, section 256D.09, 
 24.7   subdivision 6, is amended to read: 
 24.8      Subd. 6.  [RECOVERY OF OVERPAYMENTS.] (a) If an amount of 
 24.9   general assistance or family general assistance is paid to a 
 24.10  recipient in excess of the payment due, it shall be recoverable 
 24.11  by the county agency.  The agency shall give written notice to 
 24.12  the recipient of its intention to recover the overpayment. 
 24.13     (b) When an overpayment occurs, the county agency shall 
 24.14  recover the overpayment from a current recipient by reducing the 
 24.15  amount of aid payable to the assistance unit of which the 
 24.16  recipient is a member, for one or more monthly assistance 
 24.17  payments, until the overpayment is repaid.  All county agencies 
 24.18  in the state shall reduce the assistance payment by three 
 24.19  percent of the assistance unit's standard of need in nonfraud 
 24.20  cases and ten percent where fraud has occurred, or the amount of 
 24.21  the monthly payment, whichever is less, for all overpayments. 
 24.22  whether or not the overpayment is due solely to agency error.  
 24.23  The amount of this reduction is ten percent, if the overpayment 
 24.24  is due solely to having wrongfully obtained assistance, whether 
 24.25  based on: 
 24.26     (1) a court order; 
 24.27     (2) the finding of an administrative fraud disqualification 
 24.28  hearing or the waiver of such a hearing; or 
 24.29     (3) a confession or judgment containing an admission of an 
 24.30  intentional program violation. 
 24.31     (c) In cases when there is both an overpayment and 
 24.32  underpayment, the county agency shall offset one against the 
 24.33  other in correcting the payment. 
 24.34     (d) Overpayments may also be voluntarily repaid, in part or 
 24.35  in full, by the individual, in addition to the aid reductions 
 24.36  provided in this subdivision, to include further voluntary 
 25.1   reductions in the grant level agreed to in writing by the 
 25.2   individual, until the total amount of the overpayment is repaid. 
 25.3      (e) The county agency shall make reasonable efforts to 
 25.4   recover overpayments to persons no longer on assistance under 
 25.5   standards adopted in rule by the commissioner of human 
 25.6   services.  The county agency need not attempt to recover 
 25.7   overpayments of less than $35 paid to an individual no longer on 
 25.8   assistance if the individual does not receive assistance again 
 25.9   within three years, unless the individual has been convicted of 
 25.10  violating section 256.98. 
 25.11     Sec. 24.  Minnesota Statutes 1996, section 270A.03, 
 25.12  subdivision 5, is amended to read: 
 25.13     Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
 25.14  natural person to pay a fixed and certain amount of money, which 
 25.15  equals or exceeds $25 and which is due and payable to a claimant 
 25.16  agency.  The term includes criminal fines imposed under section 
 25.17  609.10 or 609.125 and restitution.  A debt may arise under a 
 25.18  contractual or statutory obligation, a court order, or other 
 25.19  legal obligation, but need not have been reduced to judgment.  
 25.20     A debt does not include includes any legal obligation of a 
 25.21  current recipient of assistance which is based on overpayment of 
 25.22  an assistance grant where that payment is based on a client 
 25.23  waiver or an administrative or judicial finding of an 
 25.24  intentional program violation, or where the debt is owed to a 
 25.25  program wherein the debtor is not a client at the time 
 25.26  notification is provided to initiate recovery under this chapter.
 25.27     A debt does not include any legal obligation to pay a 
 25.28  claimant agency for medical care, including hospitalization if 
 25.29  the income of the debtor at the time when the medical care was 
 25.30  rendered does not exceed the following amount: 
 25.31     (1) for an unmarried debtor, an income of $6,400 or less; 
 25.32     (2) for a debtor with one dependent, an income of $8,200 or 
 25.33  less; 
 25.34     (3) for a debtor with two dependents, an income of $9,700 
 25.35  or less; 
 25.36     (4) for a debtor with three dependents, an income of 
 26.1   $11,000 or less; 
 26.2      (5) for a debtor with four dependents, an income of $11,600 
 26.3   or less; and 
 26.4      (6) for a debtor with five or more dependents, an income of 
 26.5   $12,100 or less.  
 26.6      The income amounts in this subdivision shall be adjusted 
 26.7   for inflation for debts incurred in calendar years 1991 and 
 26.8   thereafter.  The dollar amount of each income level that applied 
 26.9   to debts incurred in the prior year shall be increased in the 
 26.10  same manner as provided in section 290.06, subdivision 2d, for 
 26.11  the expansion of the tax rate brackets. 
 26.12     Sec. 25.  Minnesota Statutes 1996, section 388.23, 
 26.13  subdivision 1, is amended to read: 
 26.14     Subdivision 1.  [AUTHORITY.] The county attorney, or any 
 26.15  deputy or assistant county attorney whom the county attorney 
 26.16  authorizes in writing, has the authority to subpoena and require 
 26.17  the production of any records of telephone companies, cellular 
 26.18  phone companies, paging companies, electric companies, gas 
 26.19  companies, water utilities, chemical suppliers, hotels and 
 26.20  motels, pawn shops, airlines, buses, taxis, and other entities 
 26.21  engaged in the business of transporting people, and freight 
 26.22  companies, warehousing companies, self-service storage 
 26.23  facilities, package delivery companies, and other entities 
 26.24  engaged in the businesses of transport, storage, or delivery, 
 26.25  and records of the existence of safe deposit box account numbers 
 26.26  and customer savings and checking account numbers maintained by 
 26.27  financial institutions and safe deposit companies, insurance 
 26.28  records relating to the monetary payment or settlement of 
 26.29  claims, and wage and employment records of an applicant or 
 26.30  recipient of public assistance who is the subject of a welfare 
 26.31  fraud investigation relating to eligibility information for 
 26.32  public assistance programs.  Subpoenas may only be issued for 
 26.33  records that are relevant to an ongoing legitimate law 
 26.34  enforcement investigation.  Administrative subpoenas may only be 
 26.35  issued in welfare fraud cases if there is probable cause to 
 26.36  believe a crime has been committed.  This provision applies only 
 27.1   to the records of business entities and does not extend to 
 27.2   private individuals or their dwellings.  Subpoenas may only be 
 27.3   served by peace officers as defined by section 626.84, 
 27.4   subdivision 1, paragraph (c). 
 27.5      Sec. 26.  Minnesota Statutes 1996, section 393.07, 
 27.6   subdivision 10, is amended to read: 
 27.7      Subd. 10.  [FEDERAL FOOD STAMP PROGRAM AND THE MATERNAL AND 
 27.8   CHILD NUTRITION ACT.] (a) The local social services agency shall 
 27.9   establish and administer the food stamp program pursuant 
 27.10  according to rules of the commissioner of human services, the 
 27.11  supervision of the commissioner as specified in section 256.01, 
 27.12  and all federal laws and regulations.  The commissioner of human 
 27.13  services shall monitor food stamp program delivery on an ongoing 
 27.14  basis to ensure that each county complies with federal laws and 
 27.15  regulations.  Program requirements to be monitored include, but 
 27.16  are not limited to, number of applications, number of approvals, 
 27.17  number of cases pending, length of time required to process each 
 27.18  application and deliver benefits, number of applicants eligible 
 27.19  for expedited issuance, length of time required to process and 
 27.20  deliver expedited issuance, number of terminations and reasons 
 27.21  for terminations, client profiles by age, household composition 
 27.22  and income level and sources, and the use of phone certification 
 27.23  and home visits.  The commissioner shall determine the 
 27.24  county-by-county and statewide participation rate.  
 27.25     (b) On July 1 of each year, the commissioner of human 
 27.26  services shall determine a statewide and county-by-county food 
 27.27  stamp program participation rate.  The commissioner may 
 27.28  designate a different agency to administer the food stamp 
 27.29  program in a county if the agency administering the program 
 27.30  fails to increase the food stamp program participation rate 
 27.31  among families or eligible individuals, or comply with all 
 27.32  federal laws and regulations governing the food stamp program.  
 27.33  The commissioner shall review agency performance annually to 
 27.34  determine compliance with this paragraph. 
 27.35     (c) A person who commits any of the following acts has 
 27.36  violated section 256.98 or 609.821, or both, and is subject to 
 28.1   both the criminal and civil penalties provided under those 
 28.2   sections: 
 28.3      (1) obtains or attempts to obtain, or aids or abets any 
 28.4   person to obtain by means of a willfully false willful statement 
 28.5   or representation misrepresentation, or intentional concealment 
 28.6   of a material fact, food stamps or vouchers issued according to 
 28.7   sections 145.891 to 145.897 to which the person is not entitled 
 28.8   or in an amount greater than that to which that person is 
 28.9   entitled or which specify nutritional supplements to which that 
 28.10  person is not entitled; or 
 28.11     (2) presents or causes to be presented, coupons or vouchers 
 28.12  issued according to sections 145.891 to 145.897 for payment or 
 28.13  redemption knowing them to have been received, transferred or 
 28.14  used in a manner contrary to existing state or federal law; or 
 28.15     (3) willfully uses, possesses, or transfers food stamp 
 28.16  coupons or, authorization to purchase cards or vouchers issued 
 28.17  according to sections 145.891 to 145.897 in any manner contrary 
 28.18  to existing state or federal law, rules, or regulations; or 
 28.19     (4) buys or sells food stamp coupons, authorization to 
 28.20  purchase cards or, other assistance transaction devices, 
 28.21  vouchers issued according to sections 145.891 to 145.897, or any 
 28.22  food obtained through the redemption of vouchers issued 
 28.23  according to sections 145.891 to 145.897 for cash or 
 28.24  consideration other than eligible food. 
 28.25     (d) A peace officer or welfare fraud investigator may 
 28.26  confiscate food stamps, authorization to purchase cards, or 
 28.27  other assistance transaction devices found in the possession of 
 28.28  any person who is neither a recipient of the food stamp program 
 28.29  nor otherwise authorized to possess and use such materials.  
 28.30  Confiscated property shall be disposed of as the commissioner 
 28.31  may direct and consistent with state and federal food stamp 
 28.32  law.  The confiscated property must be retained for a period of 
 28.33  not less than 30 days to allow any affected person to appeal the 
 28.34  confiscation under section 256.045. 
 28.35     (e) Food stamp overpayment claims which are due in whole or 
 28.36  in part to client error shall be established by the county 
 29.1   agency for a period of six years from the date of any resultant 
 29.2   overpayment.  
 29.3      (f) With regard to the federal tax revenue offset program 
 29.4   only, recovery incentives authorized by the federal food and 
 29.5   consumer service shall be retained at the rate of 50 percent by 
 29.6   the state agency and 50 percent by the certifying county agency. 
 29.7      (g) A peace officer, welfare fraud investigator, federal 
 29.8   law enforcement official, or the commissioner of health may 
 29.9   confiscate vouchers found in the possession of any person who is 
 29.10  neither issued vouchers under sections 145.891 to 145.897, nor 
 29.11  otherwise authorized to possess and use such vouchers.  
 29.12  Confiscated property shall be disposed of as the commissioner of 
 29.13  health may direct and consistent with state and federal law.  
 29.14  The confiscated property must be retained for a period of not 
 29.15  less than 30 days. 
 29.16     Sec. 27.  [FUNDING AVAILABILITY.] 
 29.17     Unexpended funds appropriated for the provision of program 
 29.18  integrity activities for fiscal year 1998 will also be available 
 29.19  to the commissioner to fund fraud prevention and control 
 29.20  initiatives and do not cancel but are available to the 
 29.21  commissioner for these purposes for fiscal year 1999.  
 29.22  Unexpended funds may be transferred between the fraud prevention 
 29.23  investigation program and fraud control programs to promote the 
 29.24  provisions of sections 256.983 and 256.9861. 
 29.25     Sec. 28.  [UNDOCUMENTED PERSONS NOTIFICATION.] 
 29.26     County agencies in consultation with the department of 
 29.27  human services shall provide notification to undocumented 
 29.28  persons regarding the release of personal data and develop 
 29.29  protocols regarding the release or sharing of data about 
 29.30  undocumented persons with the Immigration and Naturalization 
 29.31  Service (INS) according to sections 404, 434, and 411A of the 
 29.32  Personal Responsibility and Work Opportunity Reconciliation Act 
 29.33  of 1996. 
 29.34     Sec. 29.  [EFFECTIVE DATE.] 
 29.35     Sections 1 to 27 are effective July 1, 1997.