SF 4635

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/18/2026 01:09 p.m.

A bill for an act
relating to foster youth; establishing a trust for current and recent foster youth
receiving benefits and other income; authorizing rulemaking; requiring a report;
appropriating money; amending Minnesota Statutes 2024, sections 142A.609,
subdivisions 11, 12; 260C.331, subdivision 7; 260C.452, by adding a subdivision;
proposing coding for new law in Minnesota Statutes, chapter 142A.

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

Section 1.

Minnesota Statutes 2024, section 142A.609, subdivision 11, is amended to
read:

Subd. 11.

Treatment of Supplemental Security Income.

(a) If a child placed in foster
care receives benefits through Supplemental Security Income (SSI) at the time of foster
care placement or subsequent to placement in foster care, the financially responsible agency
may apply to be the payee for the child new text begin pursuant to section 142A.6091, subdivision 3, new text end for
the duration of the child's placement in foster care. If a child continues to be eligible for
SSI after finalization of the adoption or transfer of permanent legal and physical custody
and is determined to be eligible for a payment under Northstar Care for Children, a permanent
caregiver may choose to receive payment from both programs simultaneously. The permanent
caregiver is responsible to report the amount of the payment to the Social Security
Administration and the SSI payment will be reduced as required by the Social Security
Administration.

(b) If a financially responsible agency applies to be the payee for a child who receives
benefits through SSI, or receives the benefits under this subdivision on behalf of a child,
the financially responsible agency must provide written notice new text begin . The notice must state that
the financially responsible agency applied to be the payee for the child and must include
information about the foster care benefits trust under section 142A.6091. The notice must
be sent new text end by certified mail, return receipt requested to:

(1) the child, if the child is 13 years of age or older;

(2) the child's parent, guardian, or custodian or if there is no legal parent or custodian
the child's relative selected by the agency;

(3) the guardian ad litem;

(4) the legally responsible agency; and

(5) the counsel appointed for the child pursuant to section 260C.163, subdivision 3.

(c) If a financially responsible agency receives benefits under this subdivision on behalf
of a child 13 years of age or older, the legally responsible agency and the guardian ad litem
must disclose this information to the child in person in a manner that best helps the child
understand the information. This paragraph does not apply in circumstances where the child
is living outside of Minnesota.

deleted text begin (d) If a financially responsible agency receives the benefits under this subdivision on
behalf of a child, it cannot use those funds for any other purpose than the care of that child.
The financially responsible agency must not commingle any benefits received under this
subdivision and must not put the benefits received on behalf of a child under this subdivision
into a general fund.
deleted text end

deleted text begin (e) If a financially responsible agency receives any benefits under this subdivision, it
must keep a record of:
deleted text end

deleted text begin (1) the total dollar amount it received on behalf of all children it receives benefits for;
deleted text end

deleted text begin (2) the total number of children it applied to be a payee for; and
deleted text end

deleted text begin (3) the total number of children it received benefits for.
deleted text end

deleted text begin (f) By July 1, 2025, and each July 1 thereafter, each financially responsible agency must
submit a report to the commissioner of children, youth, and families that includes the
information required under paragraph (e). By September 1 of each year, the commissioner
must submit a report to the chairs and ranking minority members of the legislative committees
with jurisdiction over child protection that compiles the information provided to the
commissioner by each financially responsible agency under paragraph (e); subdivision 12,
paragraph (e); and section 260C.331, subdivision 7, paragraph (d). This paragraph expires
January 31, 2034.
deleted text end

Sec. 2.

Minnesota Statutes 2024, section 142A.609, subdivision 12, is amended to read:

Subd. 12.

Treatment of Retirement, Survivors, and Disability Insurance; veteran's
benefits; railroad retirement benefits; and black lung benefits.

(a) If a child placed in
foster care receives Retirement, Survivors, and Disability Insurance; veteran's benefits;
railroad retirement benefits; or black lung benefits at the time of foster care placement or
subsequent to placement in foster care, the financially responsible agency may apply to be
the payee for the child new text begin pursuant to section 142A.6091, subdivision 3, new text end for the duration of the
child's placement in foster care. If it is anticipated that a child will be eligible to receive
Retirement, Survivors, and Disability Insurance; veteran's benefits; railroad retirement
benefits; or black lung benefits after finalization of the adoption or assignment of permanent
legal and physical custody, the permanent caregiver shall apply to be the payee of those
benefits on the child's behalf.

(b) If deleted text begin the deleted text end new text begin a new text end financially responsible agency applies to be the payee for a child who receives
Retirement, Survivors, and Disability Insurance; veteran's benefits; railroad retirement
benefits; or black lung benefits, or receives the benefits under this subdivision on behalf of
a child, the financially responsible agency must provide written notice new text begin . The notice must
state that the financially responsible agency applied to be the payee for the child and must
include information about the foster care benefits trust under section 142A.6091. The notice
must be sent new text end by certified mail, return receipt requested to:

(1) the child, if the child is 13 years of age or older;

(2) the child's parent, guardian, or custodian or if there is no legal parent or custodian
the child's relative selected by the agency;

(3) the guardian ad litem;

(4) the legally responsible agency; and

(5) the counsel appointed for the child pursuant to section 260C.163, subdivision 3.

(c) If a financially responsible agency receives benefits under this subdivision on behalf
of a child 13 years of age or older, the legally responsible agency and the guardian ad litem
must disclose this information to the child in person in a manner that best helps the child
understand the information. This paragraph does not apply in circumstances where the child
is living outside of Minnesota.

deleted text begin (d) If a financially responsible agency receives the benefits under this subdivision on
behalf of a child, it cannot use those funds for any other purpose than the care of that child.
The financially responsible agency must not commingle any benefits received under this
subdivision and must not put the benefits received on behalf of a child under this subdivision
into a general fund.
deleted text end

deleted text begin (e) If a financially responsible agency receives any benefits under this subdivision, it
must keep a record of:
deleted text end

deleted text begin (1) the total dollar amount it received on behalf of all children it receives benefits for;
deleted text end

deleted text begin (2) the total number of children it applied to be a payee for; and
deleted text end

deleted text begin (3) the total number of children it received benefits for.
deleted text end

deleted text begin (f) By July 1, 2025, and each July 1 thereafter, each financially responsible agency must
submit a report to the commissioner of children, youth, and families that includes the
information required under paragraph (e).
deleted text end

Sec. 3.

new text begin [142A.6091] FOSTER CARE BENEFITS TRUST.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Beneficiary" means a current or former child in foster care who is or was entitled
to cash benefits.
new text end

new text begin (c) "Cash benefits" means all federal and state sources of income a child in foster care
is entitled to receive.
new text end

new text begin (d) "Commissioner" means the commissioner of children, youth, and families.
new text end

new text begin (e) "Financial institution" means the qualified third-party financial institution selected
according to subdivision 9.
new text end

new text begin (f) "Financially responsible agency" has the meaning given in section 142A.602,
subdivision 10.
new text end

new text begin (g) "Ombudsperson" means the foster youth ombudsperson established in section
260C.80.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin (a) The foster care benefits trust is established. The trust must
be funded by deposits made by financially responsible agencies to the financial institution
as provided in subdivision 3. The trust must be managed to ensure the stability and growth
of the trust.
new text end

new text begin (b) All assets of the trust are held in trust for the exclusive benefit of beneficiaries by
the financial institution. Assets must be held by the financial institution. The financial
institution must maintain segregated accounts for each beneficiary in compliance with
federal fiduciary standards. The financial institution is responsible for asset protection,
investment management, and tax compliance.
new text end

new text begin Subd. 3. new text end

new text begin Requirements of financially responsible agencies. new text end

new text begin (a) As soon as the custody
of a child is transferred to a child-placing agency or responsible social services agency
pursuant to section 260C.201, subdivision 1, or as soon as the child is otherwise transferred
to the state, the agency that is financially responsible for the child must assess whether the
child is eligible to receive any cash benefits. The financially responsible agency must reassess
benefit eligibility for each child in its custody annually and whenever there is a material
change in a child's circumstances, including but not limited to changes in parental status,
the child's disability status, or the discovery of previously unknown benefit entitlements.
new text end

new text begin (b) The financially responsible agency must apply for all cash benefits the child is eligible
to receive. The financially responsible agency must apply for cash benefits in the following
order of priority:
new text end

new text begin (1) Supplemental Security Income;
new text end

new text begin (2) Retirement, Survivors, and Disability Insurance;
new text end

new text begin (3) veterans benefits;
new text end

new text begin (4) railroad retirement benefits;
new text end

new text begin (5) civil rights settlements and crime victim restitution; and
new text end

new text begin (6) any other federal, state, Tribal, or municipal cash benefits as determined by the
ombudsperson.
new text end

new text begin (c) If a child placed in foster care is eligible to receive cash benefits, the financially
responsible agency must:
new text end

new text begin (1) apply to be the payee for the beneficiary for the duration of the beneficiary's placement
in foster care;
new text end

new text begin (2) deposit the cash benefits received on behalf of a beneficiary into the trust and, within
30 days of deposit, document compliance with this subdivision by entering deposit
information into the social service information system;
new text end

new text begin (3) no less frequently than annually, notify the ombudsperson and commissioner of all
cash benefits received and deposited for each beneficiary along with documentation
identifying the beneficiary and amounts received for the beneficiary within 60 days of the
end of the fiscal year;
new text end

new text begin (4) notify each beneficiary over 18 years of age that the beneficiary may be entitled to
disbursements pursuant to the foster children benefits trust and inform the beneficiary how
to contact the commissioner about the trust;
new text end

new text begin (5) retain all documentation related to cash benefits received for a beneficiary for at least
five years after the agency is no longer the beneficiary's financially responsible agency; and
new text end

new text begin (6) in the event of any denial of cash benefits, consult with the beneficiary, if applicable;
the beneficiary's guardian ad litem; and the counsel appointed for the beneficiary pursuant
to section 260C.163, subdivision 3, to discuss the beneficiary's options. The financially
responsible agency must appeal the denial of cash benefits if the appeal is in the beneficiary's
best interest.
new text end

new text begin (d) The financially responsible agency is liable to a beneficiary for any benefit payment
the agency receives as payee for the beneficiary that is not deposited into the trust and not
included in the documentation sent to the ombudsperson and commissioner or entered into
the social service information system as required by this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Reimbursement of financially responsible agencies. new text end

new text begin (a) The commissioner
must reimburse each financially responsible agency quarterly in an amount equal to the
cash benefits deposited into the trust by each financially responsible agency, except as
provided under paragraph (b).
new text end

new text begin (b) A financially responsible agency must not be reimbursed for any quarter in which
the financially responsible agency cannot produce documentation on the amounts received
on behalf of its beneficiaries or does not submit a complete request for reimbursement. A
financially responsible agency must not be reimbursed for any quarter in which the financially
responsible agency cannot produce documentation on the amounts received on behalf of
beneficiaries or does not submit a complete request for reimbursement.
new text end

new text begin (c) The commissioner must establish a standard reimbursement form and timeline for
submissions by financially responsible agencies in consultation with the Minnesota
Association of County Social Service Administrators to ensure that the reimbursement
process aligns with the administrative capacity and fiscal year cycles of financially
responsible agencies.
new text end

new text begin (d) Financially responsible agencies must submit the following information to the
commissioner when requesting reimbursement:
new text end

new text begin (1) complete documentation on the amount of cash benefits deposited by the financially
responsible agency into the trust for each beneficiary;
new text end

new text begin (2) documentation on the amount of cash benefits received by the financially responsible
agency for each beneficiary; and
new text end

new text begin (3) certification from the finance director of the financially responsible agency that all
information provided to the commissioner in the reimbursement request is correct.
new text end

new text begin Subd. 5. new text end

new text begin Ombudsperson's duties; commissioner's duties. new text end

new text begin (a) For each beneficiary
ages 14 through 18, the ombudsperson must notify the beneficiary of the amount of cash
benefits received on the beneficiary's behalf in the prior calendar year and the tax implications
of those benefits by February 1 each year.
new text end

new text begin (b) For each beneficiary ages 14 through 18, the ombudsperson must provide written
notice at least quarterly that cash benefits have been received on behalf of the beneficiary
and are held in trust. The notice must include contact information for the ombudsperson
and the financial institution.
new text end

new text begin (c) For each beneficiary ages 19 through 21 who is eligible for the John H. Chafee Foster
Care Program for Successful Transition to Adulthood, trust disbursements must not reduce
Chafee eligibility or benefits. The ombudsperson must coordinate with Chafee administrators
to ensure trust amounts are counted as independent resources and are excluded from the
means-testing calculations for Chafee extension, housing, or stipend benefits. The
ombudsperson must provide written guidance to Chafee administrators confirming that trust
disbursements are exempt from means testing and must annually verify with Chafee
administrators that this exemption is applied correctly.
new text end

new text begin (d) The ombudsperson must verify that financially responsible agencies are conducting
required benefit eligibility screenings and must investigate complaints regarding a financially
responsible agency's failure to assess or apply for benefits.
new text end

new text begin (e) The commissioner must keep a record of the amounts deposited by each financially
responsible agency pursuant to subdivision 3 and all disbursements for each beneficiary's
account.
new text end

new text begin (f) The commissioner must provide financial literacy training and support to each
beneficiary in a developmentally appropriate manner beginning when the beneficiary reaches
14 years of age. Beneficiaries must receive specific information on the existence, availability,
and use of cash benefits held in trust for the beneficiary.
new text end

new text begin (g) For each beneficiary who exits foster care, the commissioner must provide exit
documentation to the ombudsperson within 30 days of the beneficiary's exit. The
documentation must include final cash benefit amounts, confirmation that all benefits
received through the exit date have been deposited into the trust, and account closure
instructions for the trust.
new text end

new text begin Subd. 6. new text end

new text begin Financial institution duties; account protections. new text end

new text begin (a) The financial institution
must annually determine the annual interest earnings of the trust, including realized capital
gains and losses.
new text end

new text begin (b) The financial institution must apportion any annual capital gains earnings to the
separate beneficiary accounts. The rate to be used in this apportionment, calculated to the
last full quarter percent, must be determined by dividing the capital gains earnings by the
total invested assets of the trust.
new text end

new text begin (c) The financial institution must establish appropriate accounts to use and conserve
cash benefits for each beneficiary in each beneficiary's best interest for current unmet and
future needs. The financial institution must establish and maintain these accounts in a manner
consistent with federal and state asset and resource limits. The accounts may include:
new text end

new text begin (1) a special needs trust;
new text end

new text begin (2) a pooled special needs trust;
new text end

new text begin (3) an ABLE account under section 529A of the Internal Revenue Code; or
new text end

new text begin (4) any other trust account that does not interfere with Social Security or asset limitations
for any other benefit program.
new text end

new text begin (d) Trust assets are not subject to claims by creditors of the state, are not part of the
general fund, and are not subject to appropriation by the state.
new text end

new text begin (e) Trust assets may not be used as collateral, as a part of a structured settlement, or in
any way contracted to be paid to anyone who is not the beneficiary.
new text end

new text begin (f) Trust assets are not subject to seizure or garnishment as assets or income of the
beneficiary.
new text end

new text begin (g) Account owner data, account data, and data on beneficiaries of accounts is private
data on individuals or nonpublic data as defined in section 13.02.
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin Beginning December 1, 2027, and annually thereafter, the
commissioner, in consultation with the ombudsperson, must submit a report to the chairs
and ranking minority members of the legislative committees with jurisdiction over foster
youth. The report must include:
new text end

new text begin (1) the total amount of benefits deposited into the trust by financially responsible agencies;
new text end

new text begin (2) the total amount of benefits each financially responsible agency received, organized
by benefit type;
new text end

new text begin (3) the total number of beneficiaries in Minnesota, including information on beneficiary
ages, the number of current beneficiaries, and the number of beneficiaries who exited the
foster care system;
new text end

new text begin (4) the number and amount of disbursements made pursuant to subdivision 8 and each
reason for each disbursement;
new text end

new text begin (5) information on the performance of the financial institution, including processing
time, beneficiary satisfaction, and account accuracy rate;
new text end

new text begin (6) a tax compliance summary;
new text end

new text begin (7) an update on the repayment program under subdivision 10, including the number of
applications received, approved, and denied and the average payment amount;
new text end

new text begin (8) the amount of any third-party money received;
new text end

new text begin (9) an update on reimbursing financially responsible agencies, including the number of
disputed claims and whether the financially responsible agencies are complying with
documentation requirements;
new text end

new text begin (10) information on any barriers to benefit preservation the ombudsperson, beneficiaries,
or financially responsible agencies identify; and
new text end

new text begin (11) any recommendations for statutory changes.
new text end

new text begin Subd. 8. new text end

new text begin Disbursements. new text end

new text begin (a) Once a beneficiary has reached 18 years of age, the financial
institution must disburse to the beneficiary $10,000 or the total amount remaining in the
beneficiary's account, whichever is less, annually on the beneficiary's birthday until the
beneficiary's account is depleted.
new text end

new text begin (b) With each disbursement, the financial institution must include information about the
potential tax and benefits consequences of the disbursement, including information on
estimated federal and state tax liability and any impact the disbursement would have on
other public benefits. The financial institution must also provide resources for tax filing
assistance and financial planning.
new text end

new text begin (c) On petition of a minor beneficiary who is 14 years of age or older, a court may order
the ombudsperson to deliver or pay to the beneficiary or expend for the beneficiary's benefit
the amount of the beneficiary's trust account as the court considers advisable for the use
and benefit of the beneficiary.
new text end

new text begin (d) Upon written request to the ombudsperson, a beneficiary may request up to 50 percent
of the beneficiary's account balance for a documented need, including for housing, education,
transportation, mental health, or legal fees. The ombudsperson may verify the documented
need but cannot deny requests arbitrarily. Upon approval, the ombudsperson must contact
the financial institution to initiate the accelerated disbursement.
new text end

new text begin Subd. 9. new text end

new text begin Financial institution selection. new text end

new text begin (a) The commissioner must select a financial
institution to administer the trust through a competitive request for proposals. The selected
financial institution must:
new text end

new text begin (1) have demonstrated experience managing fiduciary accounts for vulnerable
populations;
new text end

new text begin (2) have the capacity to maintain segregated accounts, process tax reporting, and provide
quarterly statements to beneficiaries;
new text end

new text begin (3) provide an assessment of tax implications and capital gains allocation methodology;
new text end

new text begin (4) have an investment management strategy that protects the principal amount while
generating modest returns; and
new text end

new text begin (5) demonstrate compliance with federal fiduciary standards and state banking regulations.
new text end

new text begin (b) The commissioner must establish a selection panel to develop the request for
proposals, evaluate proposals, and recommend a financial institution to the commissioner
for selection under this subdivision. The panel must include:
new text end

new text begin (1) the commissioner or a designee;
new text end

new text begin (2) the ombudsperson or a designee;
new text end

new text begin (3) at least one member from the Minnesota Association of County Social Service
Administrators;
new text end

new text begin (4) at least one member from an organization serving foster youth;
new text end

new text begin (5) at least two members who are current or former foster youth 18 years of age or older;
and
new text end

new text begin (6) at least two members who are subject matter experts in trust administration, fiduciary
services, or financial management for vulnerable populations.
new text end

new text begin (c) The ombudsperson must retain oversight authority, including annual audits,
beneficiary notification, and appeals processes.
new text end

new text begin (d) The contract with the selected financial institution must include performance metrics
tied to account accuracy, beneficiary satisfaction, and tax compliance.
new text end

new text begin Subd. 10. new text end

new text begin Repayment program. new text end

new text begin (a) No later than July 1, 2027, the commissioner must
identify every person for whom a financially responsible agency received cash benefits as
the person's representative payee between January 1, 1976, and December 31, 2026, and
the amount of money diverted to the financially responsible agency during that time. The
commissioner must establish a simple claims process that requires only basic information
that may include agency records, affidavits from the beneficiary, or county administrative
records.
new text end

new text begin (b) No later than January 1, 2028, the commissioner must begin accepting applications
for individuals described in paragraph (a) to receive compensation for cash benefits diverted
to the individual's financially responsible agency between January 1, 1976, and December
31, 2026. The commissioner must develop a system to process the applications and approve
all applications that show that the applicant had cash benefits diverted to a financially
responsible agency between January 1, 1976, and December 31, 2026. The process to
approve applications must prioritize applicants currently in foster care or who recently
exited foster care and high-value cases where more than $5,000 was diverted from the
applicant to the financially responsible agency.
new text end

new text begin (c) The commissioner must notify each person identified under paragraph (a) that the
person was impacted by a financially responsible agency's diversion of cash benefits, how
to obtain more information on which cash benefits were diverted, when the diversion
occurred, and the total amount of cash benefits that were diverted. The commissioner must
also include information on the person's eligibility for the repayment program under this
subdivision and instructions for submitting an application.
new text end

new text begin (d) For each beneficiary already enrolled in the foster youth benefits trust that the
commissioner determines had cash benefits diverted to a financially responsible agency
between January 1, 1976, and December 31, 2026, the commissioner must deposit an amount
equal to the cash benefits diverted to a financially responsible agency between January 1,
1976, and December 31, 2026, into the beneficiary's trust account. The commissioner must
automatically screen beneficiaries for eligibility under this paragraph without requiring an
application from the beneficiaries.
new text end

new text begin (e) For each applicant under paragraph (b) who is not already enrolled in the foster youth
benefits trust, the commissioner must directly award the applicant an amount equal to the
cash benefits diverted to a financially responsible agency between January 1, 1976, and
December 31, 2026.
new text end

new text begin (f) No later than December 31, 2027, the commissioner must issue a report to the chairs
and ranking minority members of the legislative committees with jurisdiction over foster
youth. The report must include preliminary findings on the number of individuals identified
under this subdivision, estimated diversion amounts, and projected costs for the repayment
program.
new text end

new text begin Subd. 11. new text end

new text begin Fraud prevention and accountability. new text end

new text begin (a) Each financially responsible agency
must submit beneficiary and cash benefits documentation to the ombudsperson and
commissioner no later than 60 days after the end of the fiscal year.
new text end

new text begin (b) The commissioner must conduct annual audit sampling of at least ten percent of each
financially responsible agency's accounts to verify:
new text end

new text begin (1) documentation completeness and accuracy;
new text end

new text begin (2) that the cash benefits reported match federal source records;
new text end

new text begin (3) that there were no unreported cash benefits received; and
new text end

new text begin (4) that all cash benefits received were deposited into the trust.
new text end

new text begin (c) Any financially responsible agency that fails to report cash benefits received or fails
to deposit cash benefits into the trust is subject to:
new text end

new text begin (1) civil liability to the beneficiary for the full amount of cash benefits with 18 percent
interest;
new text end

new text begin (2) public reporting to the legislature on the agency's name, the amount of cash benefits,
and the reason the cash benefits were not reported or deposited; and
new text end

new text begin (3) if the financially responsible agency is a private agency, license revocation for up
to two years.
new text end

new text begin (d) The commissioner must maintain a public dashboard on the commissioner's website
that shows the total amount of cash benefits deposited into the trust by each financially
responsible agency, the names of financially responsible agencies that are not in compliance
with this section, and the disbursement amounts to beneficiaries.
new text end

new text begin Subd. 12. new text end

new text begin Rulemaking authority. new text end

new text begin The commissioner and the ombudsperson may adopt
rules under chapter 14 that are necessary to the operation of the foster care benefits trust
and repayment program and to aid in performing the commissioner's and the ombudsperson's
administrative duties to ensure an equitable result for beneficiaries and former foster youth.
new text end

Sec. 4.

Minnesota Statutes 2024, section 260C.331, subdivision 7, is amended to read:

Subd. 7.

Notice.

(a) If the responsible social services agency receives Retirement,
Survivors, and Disability Insurance; Supplemental Security Income; veteran's benefits;
railroad retirement benefits; or black lung benefits on behalf of a child, it must provide
written notice new text begin . The notice must state that the responsible social services agency receives
benefits on behalf of the child and must include information about the foster care benefits
trust under section 142A.6091. The notice must be sent new text end by certified mail, return receipt
requested to:

(1) the child, if the child is 13 years of age or older;

(2) the child's parent, guardian, or custodian or if there is no legal parent or custodian,
the child's relative selected by the agency;

(3) the guardian ad litem;

(4) the legally responsible agency as defined in section 142A.602, if different than the
responsible social services agency; and

(5) the counsel appointed for the child pursuant to section 260C.163, subdivision 3.

(b) If the responsible social services agency receives benefits under this subdivision on
behalf of a child 13 years of age or older, the legally responsible agency as defined in section
142A.602, subdivision 13, if different, and the guardian ad litem must disclose this
information to the child in person in a manner that best helps the child understand the
information. This paragraph does not apply in circumstances where the child is living outside
of Minnesota.

(c) If the responsible social services agency receives the benefits listed under this
subdivision on behalf of a child, it cannot use those funds for any other purpose than the
care of that child. The responsible social services agency must not commingle any benefits
received under this subdivision and must not put the benefits received on behalf of a child
into a general fund.

(d) If the responsible social services agency receives any benefits listed under this
subdivision, it must keep a record of:

(1) the total dollar amount it received on behalf of all children it receives benefits for;

(2) the total number of children it applied to be a payee for; and

(3) the total number of children it receives benefits for.

new text begin (e) new text end By July 1, 2025, and each July 1 thereafter, the responsible social services agency
must submit a report to the commissioner that includes the information required under deleted text begin this deleted text end
paragraph new text begin (d). By September 1 of each year, the commissioner must submit a report to the
chairs and ranking minority members of the legislative committees with jurisdiction over
child protection that compiles the information provided to the commissioner by each
responsible agency under paragraph (d). This paragraph expires January 31, 2034 new text end .

Sec. 5.

Minnesota Statutes 2024, section 260C.452, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Notice of foster care benefits trust. new text end

new text begin (a) The responsible social services agency
must provide information on the foster care benefits trust under section 142A.6091 in the
foster youth's transition plan for foster youth who are 16 years of age or older. The
information must include:
new text end

new text begin (1) the projected trust balance and disbursement timeline;
new text end

new text begin (2) how to coordinate with the John H. Chafee Foster Care Program for Successful
Transition to Adulthood, extended foster care program, and other supports to avoid benefit
cliffs; and
new text end

new text begin (3) financial literacy information.
new text end

new text begin (b) When the foster youth exits foster care, the commissioner must include trust account
statements in the foster youth's exit packet and must have a meeting with the foster youth,
the foster youth's attorney and, if applicable, a Chafee coordinator within 30 days of the
foster youth's exit.
new text end

Sec. 6. new text begin IMPLEMENTATION TIMELINE FOR FOSTER CARE BENEFITS TRUST.
new text end

new text begin (a) By January 15, 2027, the commissioner of children, youth, and families must issue
a competitive request for proposals to select a qualified third-party financial institution in
accordance with Minnesota Statutes, section 142A.6091, subdivision 9.
new text end

new text begin (b) By April 1, 2027, the commissioner of children, youth, and families must select and
contract with a qualified third-party financial institution in accordance with Minnesota
Statutes, section 142A.6091, subdivision 9. If no financial institution is selected by April
1, 2027, the commissioner of children, youth, and families must become a temporary trustee
until a qualified financial institution is selected. The commissioner of children, youth, and
families must notify the chairs and ranking minority members of the legislative committees
with jurisdiction over children, youth, and families by April 31, 2027, if the commissioner
of children, youth, and families becomes the temporary trustee.
new text end

new text begin (c) By June 30, 2027, all financially responsible agencies must be trained on and in
compliance with all reporting requirements under Minnesota Statutes, section 142A.6091.
The training must include clear guidance on the timeline and screening procedures for
conducting cash benefit eligibility screenings. The commissioner of children, youth, and
families, in consultation with the Minnesota Association of County Social Service
Administrators, must develop best practices guidelines to ensure uniformity statewide
regarding which children are subject to screening requirements and when screenings must
occur.
new text end

new text begin (d) By July 1, 2027, accounts for each beneficiary must be created or transferred to the
financial institution and the foster care benefits trust under Minnesota Statutes, section
142A.6091, must be operational.
new text end

new text begin (e) By October 1, 2027, financially responsible agencies must make the first deposits to
the trust, as provided under Minnesota Statutes, section 142A.6091, subdivision 3.
new text end

new text begin (f) By January 1, 2028, the repayment application and portal maintained by the
commissioner of children, youth, and families must be live and the outreach campaign must
be completed.
new text end

new text begin (g) By January 15, 2028, the first reimbursements to financially responsible agencies
must be processed in accordance with Minnesota Statutes, section 142A.6091, subdivision
4.
new text end

Sec. 7. new text begin APPROPRIATIONS; FOSTER CARE BENEFITS TRUST AND
REPAYMENT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Foster care benefits trust. new text end

new text begin (a) $....... in fiscal year 2027 is appropriated
from the general fund to the foster youth ombudsperson for the purposes of the foster care
benefits trust under Minnesota Statutes, section 142A.6091. The base for this appropriation
is $....... in fiscal year 2028 and $....... in fiscal year 2029.
new text end

new text begin (b) The foster youth ombudsperson may use the appropriations in this subdivision to
hire up to two full-time equivalent staff members for the foster care benefits trust and
repayment program.
new text end

new text begin Subd. 2. new text end

new text begin Financial institution selection. new text end

new text begin $....... in fiscal year 2027 is appropriated from
the general fund to the commissioner of children, youth, and families to select the third-party
financial institution in accordance with Minnesota Statutes, section 142A.6091, subdivision
9. This is a onetime appropriation.
new text end

new text begin Subd. 3. new text end

new text begin Financially responsible agency reimbursement. new text end

new text begin $15,000,000 in fiscal year
2027 is appropriated from the general fund to the commissioner of children, youth, and
families to reimburse financially responsible agencies according to Minnesota Statutes,
section 142A.6091, subdivision 4. The commissioner of children, youth, and families must
prioritize reimbursement of financially responsible agencies with the highest historical
diversion amounts.
new text end

new text begin Subd. 4. new text end

new text begin Repayment program. new text end

new text begin (a) $15,000,000 in fiscal year 2027 is appropriated from
the general fund to the commissioner of children, youth, and families to:
new text end

new text begin (1) identify current and former individuals in foster care for whom a financially
responsible agency received cash benefits as the person's representative payee between
January 1, 1976, and December 31, 2026;
new text end

new text begin (2) identify the amount of money diverted away from each individual; and
new text end

new text begin (3) repay individuals formerly in foster care pursuant to Minnesota Statutes, section
142A.6091, subdivision 10.
new text end

new text begin (b) Any unspent amount in fiscal year 2027 does not cancel and is carried over to fiscal
year 2028.
new text end