1.1 	A bill for an act
1.2 	relating to child care; modifying the basic sliding fee allocation formula;amending 
1.3 	Minnesota Statutes 2024, sections 142E.04, subdivisions 6, 7; 142E.17, by adding 
1.4 	a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2024, section 142E.04, subdivision 6, is amended to read:
1.7 		Subd. 6.Allocation formula. (a) The allocation component of basic sliding fee state 
1.8 	and federal funds shall must be allocated on a calendar year basis. Funds shall must be 
1.9 	allocated first in amounts equal to each county's guaranteed floor according to subdivision 
1.10 	9, with any remaining available funds allocated according to the following formula:.
1.11 	(a) (b) One-fourth of the funds shall must be allocated in proportion to each county's 
1.12 	total expenditures for the basic sliding fee child care program reported during the most 
1.13 	recent fiscal calendar year completed at the time of the notice of allocation.
1.14 	(b) (c) Up to one-fourth of the funds shall must be allocated in proportion to the number 
1.15 	of families participating in the transition year child care program as reported during and 
1.16 	averaged over the most recent six 12 months completed at the time of the notice of allocation. 
1.17 	Funds in excess of the amount necessary to serve all families in this category shall must be 
1.18 	allocated according to paragraph (e) (g).
1.19 	(c) (d) Up to one-half one-fourth of the funds shall must be allocated in proportion to 
1.20 	the average of each county's most recent 12 months of reported waiting list as defined in 
1.21 	subdivision 2 and the reinstatement list of those families whose assistance was terminated 
1.22 	with the approval of the commissioner under Minnesota Rules, part 3400.0183, subpart 1.
1.23 	For a county that spent less than 90 percent of the funds allocated under this subdivision in 
2.1 	the most recent calendar year, the allocation amount under this paragraph must be reduced 
2.2 	by an amount equal to the average monthly number of families that could have been served 
2.3 	if the county had spent 90 percent of its allocation under this subdivision in the most recent 
2.4 	calendar year multiplied by the monthly cost per family according to paragraph (f). The 
2.5 	allocation amount under this paragraph for a county cannot be reduced to zero. Funds in 
2.6 	excess of the amount necessary to serve all families in this category shall must be allocated 
2.7 	according to paragraph (e) (g).
2.8 	(e) Up to one-fourth of the funds must be allocated to offset child care rate increases 
2.9 	under section 142E.17, subdivision 1, paragraph (b). The allocation must be based on the 
2.10 	commissioner's best estimate of the rate increases by age for each category of provider. The 
2.11 	commissioner must make this estimation by county and weigh the distribution of recent 
2.12 	payments. Funds in excess of the amount necessary to cover child care rate increases must 
2.13 	be allocated according to paragraph (g).
2.14 	(d) (f) The amount necessary to serve all families in paragraphs (b) and (c) shall and (d) 
2.15 	must be calculated based on the basic sliding fee average cost of care per family in the each
2.16 	county with the highest cost in the most recently completed calendar year.
2.17 	(e) (g) Funds in excess of the amount necessary to serve all families in paragraphs (b) 
2.18 	and (c) shall and (d) must be allocated in proportion to each county's total expenditures for 
2.19 	the basic sliding fee child care program reported during the most recent fiscal calendar year 
2.20 	completed at the time of the notice of allocation.

2.21 	Sec. 2. Minnesota Statutes 2024, section 142E.04, subdivision 7, is amended to read:
2.22 		Subd. 7.Allocation due to increased funding. When funding increases are implemented 
2.23 	within a calendar year, every county must receive an allocation at least equal to its original 
2.24 	allocation for the same time period. The remainder of the allocation must be recalculated 
2.25 	to reflect the funding increase, according to formulas identified in subdivision 7 6.

2.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.27 	Sec. 3. Minnesota Statutes 2024, section 142E.17, is amended by adding a subdivision to 
2.28 	read:
2.29 		Subd. 11.Allocation of funds. All funds appropriated to cover child care rate increases 
2.30 	under subdivision 1, paragraph (b), must be allocated based on the commissioner's best 
2.31 	estimate of the rate increases by age for each category of provider. The commissioner must 
2.32 	make this estimation by county and weigh the distribution of recent payments. Funds in 
3.1 	excess of the amount necessary to cover child care rate increases must be allocated according 
3.2 	to section 142E.04, subdivision 6, paragraph (g).