HF 2260

2nd Engrossment - 94th Legislature (2025 - 2026) Posted on 04/03/2025 03:46pm

A bill for an act
relating to human services; Department of Human Services policy bill sections on
background studies, fraud prevention, Department of Corrections reconsiderations,
illegal remuneration crimes, and appeals division worker protections; providing
for criminal penalties; amending Minnesota Statutes 2024, sections 13.46,
subdivisions 1, 2, 3, 4; 15.471, subdivision 6; 142E.51, subdivisions 5, 6, by adding
a subdivision; 245.095, subdivision 5, by adding a subdivision; 245A.04,
subdivision 1; 245A.05; 245A.07, subdivision 2; 245C.05, by adding a subdivision;
245C.08, subdivision 3; 245C.14, by adding a subdivision; 245C.22, subdivision
5; 254A.19, subdivision 4; 256.98, subdivision 1; 256B.064, subdivision 1a;
256B.12; 256G.01, subdivision 3; 256G.08, subdivisions 1, 2; 256G.09,
subdivisions 1, 2; 480.40, subdivision 1; 611.43, by adding a subdivision; 611.46,
subdivision 1; 611.55, by adding a subdivision; Laws 2023, chapter 70, article 7,
section 34; proposing coding for new law in Minnesota Statutes, chapter 609.

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

Section 1.

Minnesota Statutes 2024, section 13.46, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

As used in this section:

(a) "Individual" means an individual according to section 13.02, subdivision 8, but does
not include a vendor of services.

(b) "Program" includes all programs for which authority is vested in a component of the
welfare system according to statute or federal law, including but not limited to Native
American Tribe programs that provide a service component of the welfare system, the
Minnesota family investment program, medical assistance, general assistance, general
assistance medical care formerly codified in chapter 256D, the child care assistance program,
and child support collections.

(c) "Welfare system" includes the Department of Human Services; Direct Care and
Treatment; the Department of Children, Youth, and Families; local social services agencies;
county welfare agencies; county public health agencies; county veteran services agencies;
county housing agencies; private licensing agencies; the public authority responsible for
child support enforcement; human services boards; community mental health center boards,
state hospitals, state nursing homes, the ombudsman for mental health and developmental
disabilities; Native American Tribes to the extent a Tribe provides a service component of
the welfare system; new text begin the Minnesota Competency Attainment Board and forensic navigators
under chapter 611; new text end and persons, agencies, institutions, organizations, and other entities
under contract to any of the above agencies to the extent specified in the contract.

(d) "Mental health data" means data on individual clients and patients of community
mental health centers, established under section 245.62, mental health divisions of counties
and other providers under contract to deliver mental health services, Direct Care and
Treatment mental health services, or the ombudsman for mental health and developmental
disabilities.

(e) "Fugitive felon" means a person who has been convicted of a felony and who has
escaped from confinement or violated the terms of probation or parole for that offense.

(f) "Private licensing agency" means an agency licensed by the commissioner of children,
youth, and families under chapter 142B to perform the duties under section 142B.30.

Sec. 2.

Minnesota Statutes 2024, section 13.46, subdivision 2, is amended to read:

Subd. 2.

General.

(a) Data on individuals collected, maintained, used, or disseminated
by the welfare system are private data on individuals, and shall not be disclosed except:

(1) according to section 13.05;

(2) according to court order;

(3) according to a statute specifically authorizing access to the private data;

(4) to an agent deleted text begin of the welfare system and an deleted text end new text begin or new text end investigator acting on behalf of a county,
the state, or the federal government, including a law enforcement person or attorney in the
investigation or prosecution of a criminal, civil, or administrative proceeding relating to the
administration of a program;

(5) to personnel of the welfare system who require the data to verify an individual's
identity; determine eligibility, amount of assistance, and the need to provide services to an
individual or family across programs; coordinate services for an individual or family;
evaluate the effectiveness of programs; assess parental contribution amounts; and investigate
suspected fraud;

(6) to administer federal funds or programs;

(7) between personnel of the welfare system working in the same program;

(8) to the Department of Revenue to administer and evaluate tax refund or tax credit
programs and to identify individuals who may benefit from these programs, and prepare
the databases for reports required under section 270C.13 and Laws 2008, chapter 366, article
17, section 6. The following information may be disclosed under this paragraph: an
individual's and their dependent's names, dates of birth, Social Security or individual taxpayer
identification numbers, income, addresses, and other data as required, upon request by the
Department of Revenue. Disclosures by the commissioner of revenue to the commissioner
of human services for the purposes described in this clause are governed by section 270B.14,
subdivision 1. Tax refund or tax credit programs include, but are not limited to, the dependent
care credit under section 290.067, the Minnesota working family credit under section
290.0671, the property tax refund under section 290A.04, and the Minnesota education
credit under section 290.0674;

(9) between the Department of Human Services; the Department of Employment and
Economic Development; the Department of Children, Youth, and Families; Direct Care and
Treatment; and, when applicable, the Department of Education, for the following purposes:

(i) to monitor the eligibility of the data subject for unemployment benefits, for any
employment or training program administered, supervised, or certified by that agency;

(ii) to administer any rehabilitation program or child care assistance program, whether
alone or in conjunction with the welfare system;

(iii) to monitor and evaluate the Minnesota family investment program or the child care
assistance program by exchanging data on recipients and former recipients of Supplemental
Nutrition Assistance Program (SNAP) benefits, cash assistance under chapter 142F, 256D,
256J, or 256K, child care assistance under chapter 142E, medical programs under chapter
256B or 256L; and

(iv) to analyze public assistance employment services and program utilization, cost,
effectiveness, and outcomes as implemented under the authority established in Title II,
Sections 201-204 of the Ticket to Work and Work Incentives Improvement Act of 1999.
Health records governed by sections 144.291 to 144.298 and "protected health information"
as defined in Code of Federal Regulations, title 45, section 160.103, and governed by Code
of Federal Regulations, title 45, parts 160-164, including health care claims utilization
information, must not be exchanged under this clause;

(10) to appropriate parties in connection with an emergency if knowledge of the
information is necessary to protect the health or safety of the individual or other individuals
or persons;

(11) data maintained by residential programs as defined in section 245A.02 may be
disclosed to the protection and advocacy system established in this state according to Part
C of Public Law 98-527 to protect the legal and human rights of persons with developmental
disabilities or other related conditions who live in residential facilities for these persons if
the protection and advocacy system receives a complaint by or on behalf of that person and
the person does not have a legal guardian or the state or a designee of the state is the legal
guardian of the person;

(12) to the county medical examiner or the county coroner for identifying or locating
relatives or friends of a deceased person;

(13) data on a child support obligor who makes payments to the public agency may be
disclosed to the Minnesota Office of Higher Education to the extent necessary to determine
eligibility under section 136A.121, subdivision 2, clause (5);

(14) participant Social Security or individual taxpayer identification numbers and names
collected by the telephone assistance program may be disclosed to the Department of
Revenue to conduct an electronic data match with the property tax refund database to
determine eligibility under section 237.70, subdivision 4a;

(15) the current address of a Minnesota family investment program participant may be
disclosed to law enforcement officers who provide the name of the participant and notify
the agency that:

(i) the participant:

(A) is a fugitive felon fleeing to avoid prosecution, or custody or confinement after
conviction, for a crime or attempt to commit a crime that is a felony under the laws of the
jurisdiction from which the individual is fleeing; or

(B) is violating a condition of probation or parole imposed under state or federal law;

(ii) the location or apprehension of the felon is within the law enforcement officer's
official duties; and

(iii) the request is made in writing and in the proper exercise of those duties;

(16) the current address of a recipient of general assistance may be disclosed to probation
officers and corrections agents who are supervising the recipient and to law enforcement
officers who are investigating the recipient in connection with a felony level offense;

(17) information obtained from a SNAP applicant or recipient households may be
disclosed to local, state, or federal law enforcement officials, upon their written request, for
the purpose of investigating an alleged violation of the Food and Nutrition Act, according
to Code of Federal Regulations, title 7, section 272.1(c);

(18) the address, Social Security or individual taxpayer identification number, and, if
available, photograph of any member of a household receiving SNAP benefits shall be made
available, on request, to a local, state, or federal law enforcement officer if the officer
furnishes the agency with the name of the member and notifies the agency that:

(i) the member:

(A) is fleeing to avoid prosecution, or custody or confinement after conviction, for a
crime or attempt to commit a crime that is a felony in the jurisdiction the member is fleeing;

(B) is violating a condition of probation or parole imposed under state or federal law;
or

(C) has information that is necessary for the officer to conduct an official duty related
to conduct described in subitem (A) or (B);

(ii) locating or apprehending the member is within the officer's official duties; and

(iii) the request is made in writing and in the proper exercise of the officer's official duty;

(19) the current address of a recipient of Minnesota family investment program, general
assistance, or SNAP benefits may be disclosed to law enforcement officers who, in writing,
provide the name of the recipient and notify the agency that the recipient is a person required
to register under section 243.166, but is not residing at the address at which the recipient is
registered under section 243.166;

(20) certain information regarding child support obligors who are in arrears may be
made public according to section 518A.74;

(21) data on child support payments made by a child support obligor and data on the
distribution of those payments excluding identifying information on obligees may be
disclosed to all obligees to whom the obligor owes support, and data on the enforcement
actions undertaken by the public authority, the status of those actions, and data on the income
of the obligor or obligee may be disclosed to the other party;

(22) data in the work reporting system may be disclosed under section 142A.29,
subdivision 7;

(23) to the Department of Education for the purpose of matching Department of Education
student data with public assistance data to determine students eligible for free and
reduced-price meals, meal supplements, and free milk according to United States Code,
title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to allocate federal and state
funds that are distributed based on income of the student's family; and to verify receipt of
energy assistance for the telephone assistance plan;

(24) the current address and telephone number of program recipients and emergency
contacts may be released to the commissioner of health or a community health board as
defined in section 145A.02, subdivision 5, when the commissioner or community health
board has reason to believe that a program recipient is a disease case, carrier, suspect case,
or at risk of illness, and the data are necessary to locate the person;

(25) to other state agencies, statewide systems, and political subdivisions of this state,
including the attorney general, and agencies of other states, interstate information networks,
federal agencies, and other entities as required by federal regulation or law for the
administration of the child support enforcement program;

(26) to personnel of public assistance programs as defined in section 518A.81, for access
to the child support system database for the purpose of administration, including monitoring
and evaluation of those public assistance programs;

(27) to monitor and evaluate the Minnesota family investment program by exchanging
data between the Departments of Human Services; Children, Youth, and Families; and
Education, on recipients and former recipients of SNAP benefits, cash assistance under
chapter 142F, 256D, 256J, or 256K, child care assistance under chapter 142E, medical
programs under chapter 256B or 256L, or a medical program formerly codified under chapter
256D;

(28) to evaluate child support program performance and to identify and prevent fraud
in the child support program by exchanging data between the Department of Human Services;
Department of Children, Youth, and Families; Department of Revenue under section 270B.14,
subdivision 1, paragraphs (a) and (b), without regard to the limitation of use in paragraph
(c); Department of Health; Department of Employment and Economic Development; and
other state agencies as is reasonably necessary to perform these functions;

(29) counties and the Department of Children, Youth, and Families operating child care
assistance programs under chapter 142E may disseminate data on program participants,
applicants, and providers to the commissioner of education;

(30) child support data on the child, the parents, and relatives of the child may be
disclosed to agencies administering programs under titles IV-B and IV-E of the Social
Security Act, as authorized by federal law;

(31) to a health care provider governed by sections 144.291 to 144.298, to the extent
necessary to coordinate services;

(32) to the chief administrative officer of a school to coordinate services for a student
and family; data that may be disclosed under this clause are limited to name, date of birth,
gender, and address;

(33) to county correctional agencies to the extent necessary to coordinate services and
diversion programs; data that may be disclosed under this clause are limited to name, client
demographics, program, case status, and county worker information; or

(34) between the Department of Human Services and the Metropolitan Council for the
following purposes:

(i) to coordinate special transportation service provided under section 473.386 with
services for people with disabilities and elderly individuals funded by or through the
Department of Human Services; and

(ii) to provide for reimbursement of special transportation service provided under section
473.386.

The data that may be shared under this clause are limited to the individual's first, last, and
middle names; date of birth; residential address; and program eligibility status with expiration
date for the purposes of informing the other party of program eligibility.

(b) Information on persons who have been treated for substance use disorder may only
be disclosed according to the requirements of Code of Federal Regulations, title 42, sections
2.1 to 2.67.

(c) Data provided to law enforcement agencies under paragraph (a), clause (15), (16),
(17), or (18), or paragraph (b), are investigative data and are confidential or protected
nonpublic while the investigation is active. The data are private after the investigation
becomes inactive under section 13.82, subdivision 7, clause (a) or (b).

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but are
not subject to the access provisions of subdivision 10, paragraph (b).

For the purposes of this subdivision, a request will be deemed to be made in writing if
made through a computer interface system.

Sec. 3.

Minnesota Statutes 2024, section 13.46, subdivision 3, is amended to read:

Subd. 3.

Investigative data.

(a) Data on persons, including data on vendors of services,
licensees, and applicants that is collected, maintained, used, or disseminated by the welfare
system in an investigation, authorized by statute, and relating to the enforcement of rules
or law are confidential data on individuals pursuant to section 13.02, subdivision 3, or
protected nonpublic data not on individuals pursuant to section 13.02, subdivision 13, and
shall not be disclosed except:

(1) pursuant to section 13.05;

(2) pursuant to statute or valid court order;

(3) to a party named in a civil or criminal proceeding, administrative or judicial, for
preparation of defense;

(4) to an agent deleted text begin of the welfare system deleted text end or deleted text begin an deleted text end investigator acting on behalf of a county,
state, or federal government, including a law enforcement officer or attorney in the
investigation or prosecution of a criminal, civil, or administrative proceeding, unless the
commissioner of human services deleted text begin or deleted text end new text begin ; the new text end commissioner of children, youth, and families new text begin ; or
the Direct Care and Treatment executive board new text end determines that disclosure may compromise
a Department of Human Services deleted text begin or deleted text end new text begin ; new text end Department of Children, Youth, and Families new text begin ; or Direct
Care and Treatment new text end ongoing investigation; or

(5) to provide notices required or permitted by statute.

The data referred to in this subdivision shall be classified as public data upon submission
to an administrative law judge or court in an administrative or judicial proceeding. Inactive
welfare investigative data shall be treated as provided in section 13.39, subdivision 3.

(b) Notwithstanding any other provision in law, the commissioner of human services
shall provide all active and inactive investigative data, including the name of the reporter
of alleged maltreatment under section 626.557 or chapter 260E, to the ombudsman for
mental health and developmental disabilities upon the request of the ombudsman.

(c) Notwithstanding paragraph (a) and section 13.39, the existence of an investigation
by the commissioner of human services of possible overpayments of public funds to a service
provider or recipient new text begin or the reduction or withholding of payments new text end may be disclosed if the
commissioner determines that it will not compromise the investigation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 4.

Minnesota Statutes 2024, section 13.46, subdivision 4, is amended to read:

Subd. 4.

Licensing data.

(a) As used in this subdivision:

(1) "licensing data" are all data collected, maintained, used, or disseminated by the
welfare system pertaining to persons licensed or registered or who apply for licensure or
registration or who formerly were licensed or registered under the authority of the
commissioner of human services;

(2) "client" means a person who is receiving services from a licensee or from an applicant
for licensure; and

(3) "personal and personal financial data" are Social Security numbers, identity of and
letters of reference, insurance information, reports from the Bureau of Criminal
Apprehension, health examination reports, and social/home studies.

(b)(1)(i) Except as provided in paragraph (c), the following data on applicants, license
holders, certification holders, and former licensees are public: name, address, telephone
number of licensees, email addresses except for family child foster care, date of receipt of
a completed application, dates of licensure, licensed capacity, type of client preferred,
variances granted, record of training and education in child care and child development,
type of dwelling, name and relationship of other family members, previous license history,
class of license, the existence and status of complaints, and the number of serious injuries
to or deaths of individuals in the licensed program as reported to the commissioner of human
services; the commissioner of children, youth, and families; the local social services agency;
or any other county welfare agency. For purposes of this clause, a serious injury is one that
is treated by a physician.

(ii) Except as provided in item (v), when a correction order, an order to forfeit a fine,
an order of license suspension, an order of temporary immediate suspension, an order of
license revocation, an order of license denial, or an order of conditional license has been
issued, or a complaint is resolved, the following data on current and former licensees and
applicants are public: the general nature of the complaint or allegations leading to the
temporary immediate suspension; the substance and investigative findings of the licensing
or maltreatment complaint, licensing violation, or substantiated maltreatment; the existence
of settlement negotiations; the record of informal resolution of a licensing violation; orders
of hearing; findings of fact; conclusions of law; specifications of the final correction order,
fine, suspension, temporary immediate suspension, revocation, denial, or conditional license
contained in the record of licensing action; whether a fine has been paid; and the status of
any appeal of these actions.

(iii) When a license denial under section 142A.15 or 245A.05 or a sanction under section
142B.18 or 245A.07 is based on a determination that a license holder, applicant, or controlling
individual is responsible for maltreatment under section 626.557 or chapter 260E, the identity
of the applicant, license holder, or controlling individual as the individual responsible for
maltreatment is public data at the time of the issuance of the license denial or sanction.

(iv) When a license denial under section 142A.15 or 245A.05 or a sanction under section
142B.18 or 245A.07 is based on a determination that a license holder, applicant, or controlling
individual is disqualified under chapter 245C, the identity of the license holder, applicant,
or controlling individual as the disqualified individual is public data at the time of the
issuance of the licensing sanction or denial. If the applicant, license holder, or controlling
individual requests reconsideration of the disqualification and the disqualification is affirmed,
the reason for the disqualification and the reason to not set aside the disqualification are
private data.

(v) A correction order or fine issued to a child care provider for a licensing violation is
private data on individuals under section 13.02, subdivision 12, or nonpublic data under
section 13.02, subdivision 9, if the correction order or fine is seven years old or older.

(2) For applicants who withdraw their application prior to licensure or denial of a license,
the following data are public: the name of the applicant, the city and county in which the
applicant was seeking licensure, the dates of the commissioner's receipt of the initial
application and completed application, the type of license sought, and the date of withdrawal
of the application.

(3) For applicants who are denied a license, the following data are public: the name and
address of the applicant, the city and county in which the applicant was seeking licensure,
the dates of the commissioner's receipt of the initial application and completed application,
the type of license sought, the date of denial of the application, the nature of the basis for
the denial, the existence of settlement negotiations, the record of informal resolution of a
denial, orders of hearings, findings of fact, conclusions of law, specifications of the final
order of denial, and the status of any appeal of the denial.

(4) When maltreatment is substantiated under section 626.557 or chapter 260E and the
victim and the substantiated perpetrator are affiliated with a program licensed under chapter
142B or 245A; the commissioner of human services; commissioner of children, youth, and
families; local social services agency; or county welfare agency may inform the license
holder where the maltreatment occurred of the identity of the substantiated perpetrator and
the victim.

(5) Notwithstanding clause (1), for child foster care, only the name of the license holder
and the status of the license are public if the county attorney has requested that data otherwise
classified as public data under clause (1) be considered private data based on the best interests
of a child in placement in a licensed program.

(c) The following are private data on individuals under section 13.02, subdivision 12,
or nonpublic data under section 13.02, subdivision 9: personal and personal financial data
on family day care program and family foster care program applicants and licensees and
their family members who provide services under the license.

(d) The following are private data on individuals: the identity of persons who have made
reports concerning licensees or applicants that appear in inactive investigative data, and the
records of clients or employees of the licensee or applicant for licensure whose records are
received by the licensing agency for purposes of review or in anticipation of a contested
matter. The names of reporters of complaints or alleged violations of licensing standards
under chapters 142B, 245A, 245B, 245C, and 245D, and applicable rules and alleged
maltreatment under section 626.557 and chapter 260E, are confidential data and may be
disclosed only as provided in section 260E.21, subdivision 4; 260E.35; or 626.557,
subdivision 12b.

(e) Data classified as private, confidential, nonpublic, or protected nonpublic under this
subdivision become public data if submitted to a court or administrative law judge as part
of a disciplinary proceeding in which there is a public hearing concerning a license which
has been suspended, immediately suspended, revoked, or denied.

(f) Data generated in the course of licensing investigations that relate to an alleged
violation of law are investigative data under subdivision 3.

(g) Data that are not public data collected, maintained, used, or disseminated under this
subdivision that relate to or are derived from a report as defined in section 260E.03, or
626.5572, subdivision 18, are subject to the destruction provisions of sections 260E.35,
subdivision 6, and 626.557, subdivision 12b.

(h) Upon request, not public data collected, maintained, used, or disseminated under
this subdivision that relate to or are derived from a report of substantiated maltreatment as
defined in section 626.557 or chapter 260E may be exchanged with the Department of
Health for purposes of completing background studies pursuant to section 144.057 and with
the Department of Corrections for purposes of completing background studies pursuant to
section 241.021.

(i) Data on individuals collected according to licensing activities under chapters 142B,
245A, and 245C, data on individuals collected by the commissioner of human services
according to investigations under section 626.557 and chapters 142B, 245A, 245B, 245C,
245D, and 260E may be shared with the Department of Human Rights, the Department of
Health, the Department of Corrections, the ombudsman for mental health and developmental
disabilities, and the individual's professional regulatory board when there is reason to believe
that laws or standards under the jurisdiction of those agencies may have been violated or
the information may otherwise be relevant to the board's regulatory jurisdiction. Background
study data on an individual who is the subject of a background study under chapter 245C
for a licensed service for which the commissioner of human services deleted text begin or deleted text end new text begin ; commissioner of new text end
children, youth, and families new text begin ; or the Direct Care and Treatment executive board new text end is the license
holder may be shared with the commissioner and the commissioner's delegate by the licensing
division. Unless otherwise specified in this chapter, the identity of a reporter of alleged
maltreatment or licensing violations may not be disclosed.

(j) In addition to the notice of determinations required under sections 260E.24,
subdivisions 5 and 7, and 260E.30, subdivision 6, paragraphs (b), (c), (d), (e), and (f), if the
commissioner of children, youth, and families or the local social services agency has
determined that an individual is a substantiated perpetrator of maltreatment of a child based
on sexual abuse, as defined in section 260E.03, and the commissioner or local social services
agency knows that the individual is a person responsible for a child's care in another facility,
the commissioner or local social services agency shall notify the head of that facility of this
determination. The notification must include an explanation of the individual's available
appeal rights and the status of any appeal. If a notice is given under this paragraph, the
government entity making the notification shall provide a copy of the notice to the individual
who is the subject of the notice.

(k) All not public data collected, maintained, used, or disseminated under this subdivision
and subdivision 3 may be exchanged between the Department of Human Services, Licensing
Division, and the Department of Corrections for purposes of regulating services for which
the Department of Human Services and the Department of Corrections have regulatory
authority.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 5.

Minnesota Statutes 2024, section 15.471, subdivision 6, is amended to read:

Subd. 6.

Party.

(a) Except as modified by paragraph (b), "party" means a person named
or admitted as a party, or seeking and entitled to be admitted as a party, in a court action or
contested case proceeding, or a person admitted by an administrative law judge for limited
purposes, and who is:

(1) an unincorporated business, partnership, corporation, association, or organization,
having not more than 500 employees at the time the civil action was filed or the contested
case proceeding was initiated; and

(2) an unincorporated business, partnership, corporation, association, or organization
whose annual revenues did not exceed $7,000,000 at the time the civil action was filed or
the contested case proceeding was initiated.

(b) "Party" also includes a partner, officer, shareholder, member, or owner of an entity
described in paragraph (a), clauses (1) and (2).

(c) "Party" does not include a person providing services pursuant to licensure or
reimbursement on a cost basis by the Department of Health deleted text begin or deleted text end new text begin , new text end the Department of Human
Services, new text begin or Direct Care and Treatment new text end when that person is named or admitted or seeking
to be admitted as a party in a matter which involves the licensing or reimbursement rates,
procedures, or methodology applicable to those services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 6.

Minnesota Statutes 2024, section 142E.51, subdivision 5, is amended to read:

Subd. 5.

Administrative disqualification of child care providers caring for children
receiving child care assistance.

(a) The department shall pursue an administrative
disqualification deleted text begin , deleted text end if the child care provider is accused of committing an intentional program
violation, deleted text begin in lieu of a criminal action when it has not been pursued deleted text end new text begin the department refers
the investigation to a law enforcement or prosecutorial agency for possible criminal
prosecution, and the law enforcement or prosecutorial agency does not pursue a criminal
action new text end . Intentional program violations include intentionally making false or misleading
statements; new text begin intentionally offering, providing, soliciting, or receiving illegal remuneration
as described in subdivision 6a or in violation of section 609.542, subdivision 2; new text end intentionally
misrepresenting, concealing, or withholding facts; and repeatedly and intentionally violating
program regulations under this chapter. new text begin No conviction is required before the department
pursues an administrative disqualification. new text end Intent may be proven by demonstrating a pattern
of conduct that violates program rules under this chapter.

(b) To initiate an administrative disqualification, the commissioner must send written
notice using a signature-verified confirmed delivery method to the provider against whom
the action is being taken. Unless otherwise specified under this chapter or Minnesota Rules,
chapter 3400, the commissioner must send the written notice at least 15 calendar days before
the adverse action's effective date. The notice shall state (1) the factual basis for the agency's
determination, (2) the action the agency intends to take, (3) the dollar amount of the monetary
recovery or recoupment, if known, and (4) the provider's right to appeal the agency's proposed
action.

(c) The provider may appeal an administrative disqualification by submitting a written
request to the state agency. A provider's request must be received by the state agency no
later than 30 days after the date the commissioner mails the notice.

(d) The provider's appeal request must contain the following:

(1) each disputed item, the reason for the dispute, and, if applicable, an estimate of the
dollar amount involved for each disputed item;

(2) the computation the provider believes to be correct, if applicable;

(3) the statute or rule relied on for each disputed item; and

(4) the name, address, and telephone number of the person at the provider's place of
business with whom contact may be made regarding the appeal.

(e) On appeal, the issuing agency bears the burden of proof to demonstrate by a
preponderance of the evidence that the provider committed an intentional program violation.

(f) The hearing is subject to the requirements of section 142A.20. The human services
judge may combine a fair hearing and administrative disqualification hearing into a single
hearing if the factual issues arise out of the same or related circumstances and the provider
receives prior notice that the hearings will be combined.

(g) A provider found to have committed an intentional program violation and is
administratively disqualified must be disqualified, for a period of three years for the first
offense and permanently for any subsequent offense, from receiving any payments from
any child care program under this chapter.

(h) Unless a timely and proper appeal made under this section is received by the
department, the administrative determination of the department is final and binding.

Sec. 7.

Minnesota Statutes 2024, section 142E.51, subdivision 6, is amended to read:

Subd. 6.

Prohibited hiring deleted text begin practice deleted text end new text begin practices new text end .

deleted text begin It is prohibited to deleted text end new text begin A person must not new text end
hire a child care center employee when, as a condition of employment, the employee is
required to have one or more children who are eligible for or receive child care assistance,
if:

(1) the individual hiring the employee is, or is acting at the direction of or in cooperation
with, a child care center provider, center owner, director, manager, license holder, or other
controlling individual; and

(2) the individual hiring the employee knows or has reason to know the purpose in hiring
the employee is to obtain child care assistance program funds.

Sec. 8.

Minnesota Statutes 2024, section 142E.51, is amended by adding a subdivision to
read:

new text begin Subd. 6a. new text end

new text begin Illegal remuneration. new text end

new text begin (a) Except as provided in paragraph (b), program
applicants, participants, and providers must not offer, provide, solicit, or receive money, a
discount, a credit, a waiver, a rebate, a good, a service, employment, or anything else of
value in exchange for:
new text end

new text begin (1) obtaining or attempting to obtain child care assistance program benefits; or
new text end

new text begin (2) directing a person's child care assistance program benefits to a particular provider.
new text end

new text begin (b) The prohibition in paragraph (a) does not apply to:
new text end

new text begin (1) marketing or promotional offerings that directly benefit an applicant or recipient's
child or dependent for whom the child care provider is providing child care services; or
new text end

new text begin (2) child care provider discounts, scholarships, or other financial assistance allowed
under section 142E.17, subdivision 7.
new text end

new text begin (c) An attempt to buy or sell access to a family's child care assistance program benefits
to an unauthorized person by an applicant, a participant, or a provider is an intentional
program violation under subdivision 5 and wrongfully obtaining assistance under section
256.98.
new text end

Sec. 9.

Minnesota Statutes 2024, section 245.095, subdivision 5, is amended to read:

Subd. 5.

Withholding of payments.

(a) Except as otherwise provided by state or federal
law, the commissioner may withhold payments to a provider, vendor, individual, associated
individual, or associated entity in any program administered by the commissioner if the
commissioner determines new text begin :
new text end

new text begin (1) new text end there is a credible allegation of fraud for which an investigation is pending for a
program administered by a Minnesota state or federal agency deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) the individual, the entity, or an associated individual or entity was convicted of a
crime charged in state or federal court with an offense that involves fraud or theft against
a program administered by the commissioner or another Minnesota state or federal agency.
For purposes of this subdivision, "convicted" means a judgment of conviction has been
entered by a federal, state, or local court, regardless of whether an appeal from the judgment
is pending, and includes a stay of adjudication, a court-ordered diversion program, or a plea
of guilty or nolo contendere;
new text end

new text begin (3) the provider is operating after a Minnesota state or federal agency orders the
suspension, revocation, or decertification of the provider's license;
new text end

new text begin (4) the provider, vendor, associated individual, or associated entity, including those
receiving money under any contract or registered program, has a background study
disqualification under chapter 245C that has not been set aside and for which no variance
has been issued, except for a disqualification under section 245C.14, subdivision 5; or
new text end

new text begin (5) by a preponderance of the evidence that the provider, vendor, individual, associated
individual, or associated entity intentionally provided materially false information when
billing the commissioner.
new text end

(b) For purposes of this subdivision, "credible allegation of fraud" means an allegation
that has been verified by the commissioner from any source, including but not limited to:

(1) fraud hotline complaints;

(2) claims data mining;

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

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

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

(1) state that payments are being withheld according to this subdivision;

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

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

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

(d) If the commissioner withholds payments under this subdivision, the provider, vendor,
individual, associated individual, or associated entity has a right to request administrative
reconsideration. A request for administrative reconsideration must be made in writing, state
with specificity the reasons the payment withholding decision is in error, and include
documents to support the request. Within 60 days from receipt of the request, the
commissioner shall judiciously review allegations, facts, evidence available to the
commissioner, and information submitted by the provider, vendor, individual, associated
individual, or associated entity to determine whether the payment withholding should remain
in place.

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

(f) The withholding of payments is a temporary action and is not subject to appeal under
section 256.045 or chapter 14.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 10.

Minnesota Statutes 2024, section 245.095, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Data practices. new text end

new text begin The commissioner may exchange information, including claims
data, with state or federal agencies, professional boards, departments, or programs for the
purpose of investigating or prosecuting a criminal, civil, or administrative proceeding related
to suspected fraud or exclusion from any program administered by a state or federal agency.
new text end

Sec. 11.

Minnesota Statutes 2024, section 245A.04, subdivision 1, is amended to read:

Subdivision 1.

Application for licensure.

(a) An individual, organization, or government
entity that is subject to licensure under section 245A.03 must apply for a license. The
application must be made on the forms and in the manner prescribed by the commissioner.
The commissioner shall provide the applicant with instruction in completing the application
and provide information about the rules and requirements of other state agencies that affect
the applicant. An applicant seeking licensure in Minnesota with headquarters outside of
Minnesota must have a program office located within 30 miles of the Minnesota border.
An applicant who intends to buy or otherwise acquire a program or services licensed under
this chapter that is owned by another license holder must apply for a license under this
chapter and comply with the application procedures in this section and section 245A.043.

The commissioner shall act on the application within 90 working days after a complete
application and any required reports have been received from other state agencies or
departments, counties, municipalities, or other political subdivisions. The commissioner
shall not consider an application to be complete until the commissioner receives all of the
required information. new text begin If the applicant or a controlling individual is the subject of a pending
administrative, civil, or criminal investigation, the application is not complete until the
investigation has closed or the related legal proceedings are complete.
new text end

When the commissioner receives an application for initial licensure that is incomplete
because the applicant failed to submit required documents or that is substantially deficient
because the documents submitted do not meet licensing requirements, the commissioner
shall provide the applicant written notice that the application is incomplete or substantially
deficient. In the written notice to the applicant the commissioner shall identify documents
that are missing or deficient and give the applicant 45 days to resubmit a second application
that is substantially complete. An applicant's failure to submit a substantially complete
application after receiving notice from the commissioner is a basis for license denial under
section 245A.043.

(b) An application for licensure must identify all controlling individuals as defined in
section 245A.02, subdivision 5a, and must designate one individual to be the authorized
agent. The application must be signed by the authorized agent and must include the authorized
agent's first, middle, and last name; mailing address; and email address. By submitting an
application for licensure, the authorized agent consents to electronic communication with
the commissioner throughout the application process. The authorized agent must be
authorized to accept service on behalf of all of the controlling individuals. A government
entity that holds multiple licenses under this chapter may designate one authorized agent
for all licenses issued under this chapter or may designate a different authorized agent for
each license. Service on the authorized agent is service on all of the controlling individuals.
It is not a defense to any action arising under this chapter that service was not made on each
controlling individual. The designation of a controlling individual as the authorized agent
under this paragraph does not affect the legal responsibility of any other controlling individual
under this chapter.

(c) An applicant or license holder must have a policy that prohibits license holders,
employees, subcontractors, and volunteers, when directly responsible for persons served
by the program, from abusing prescription medication or being in any manner under the
influence of a chemical that impairs the individual's ability to provide services or care. The
license holder must train employees, subcontractors, and volunteers about the program's
drug and alcohol policy.

(d) An applicant and license holder must have a program grievance procedure that permits
persons served by the program and their authorized representatives to bring a grievance to
the highest level of authority in the program.

(e) The commissioner may limit communication during the application process to the
authorized agent or the controlling individuals identified on the license application and for
whom a background study was initiated under chapter 245C. Upon implementation of the
provider licensing and reporting hub, applicants and license holders must use the hub in the
manner prescribed by the commissioner. The commissioner may require the applicant,
except for child foster care, to demonstrate competence in the applicable licensing
requirements by successfully completing a written examination. The commissioner may
develop a prescribed written examination format.

(f) When an applicant is an individual, the applicant must provide:

(1) the applicant's taxpayer identification numbers including the Social Security number
or Minnesota tax identification number, and federal employer identification number if the
applicant has employees;

(2) at the request of the commissioner, a copy of the most recent filing with the secretary
of state that includes the complete business name, if any;

(3) if doing business under a different name, the doing business as (DBA) name, as
registered with the secretary of state;

(4) if applicable, the applicant's National Provider Identifier (NPI) number and Unique
Minnesota Provider Identifier (UMPI) number; and

(5) at the request of the commissioner, the notarized signature of the applicant or
authorized agent.

(g) When an applicant is an organization, the applicant must provide:

(1) the applicant's taxpayer identification numbers including the Minnesota tax
identification number and federal employer identification number;

(2) at the request of the commissioner, a copy of the most recent filing with the secretary
of state that includes the complete business name, and if doing business under a different
name, the doing business as (DBA) name, as registered with the secretary of state;

(3) the first, middle, and last name, and address for all individuals who will be controlling
individuals, including all officers, owners, and managerial officials as defined in section
245A.02, subdivision 5a, and the date that the background study was initiated by the applicant
for each controlling individual;

(4) if applicable, the applicant's NPI number and UMPI number;

(5) the documents that created the organization and that determine the organization's
internal governance and the relations among the persons that own the organization, have
an interest in the organization, or are members of the organization, in each case as provided
or authorized by the organization's governing statute, which may include a partnership
agreement, bylaws, articles of organization, organizational chart, and operating agreement,
or comparable documents as provided in the organization's governing statute; and

(6) the notarized signature of the applicant or authorized agent.

(h) When the applicant is a government entity, the applicant must provide:

(1) the name of the government agency, political subdivision, or other unit of government
seeking the license and the name of the program or services that will be licensed;

(2) the applicant's taxpayer identification numbers including the Minnesota tax
identification number and federal employer identification number;

(3) a letter signed by the manager, administrator, or other executive of the government
entity authorizing the submission of the license application; and

(4) if applicable, the applicant's NPI number and UMPI number.

(i) At the time of application for licensure or renewal of a license under this chapter, the
applicant or license holder must acknowledge on the form provided by the commissioner
if the applicant or license holder elects to receive any public funding reimbursement from
the commissioner for services provided under the license that:

(1) the applicant's or license holder's compliance with the provider enrollment agreement
or registration requirements for receipt of public funding may be monitored by the
commissioner as part of a licensing investigation or licensing inspection; and

(2) noncompliance with the provider enrollment agreement or registration requirements
for receipt of public funding that is identified through a licensing investigation or licensing
inspection, or noncompliance with a licensing requirement that is a basis of enrollment for
reimbursement for a service, may result in:

(i) a correction order or a conditional license under section 245A.06, or sanctions under
section 245A.07;

(ii) nonpayment of claims submitted by the license holder for public program
reimbursement;

(iii) recovery of payments made for the service;

(iv) disenrollment in the public payment program; or

(v) other administrative, civil, or criminal penalties as provided by law.

Sec. 12.

Minnesota Statutes 2024, section 245A.05, is amended to read:

245A.05 DENIAL OF APPLICATION.

(a) The commissioner may deny a license if an applicant or controlling individual:

(1) fails to submit a substantially complete application after receiving notice from the
commissioner under section 245A.04, subdivision 1;

(2) fails to comply with applicable laws or rules;

(3) knowingly withholds relevant information from or gives false or misleading
information to the commissioner in connection with an application for a license or during
an investigation;

(4) has a disqualification that has not been set aside under section 245C.22 and no
variance has been granted;

(5) has an individual living in the household who received a background study under
section 245C.03, subdivision 1, paragraph (a), clause (2), who has a disqualification that
has not been set aside under section 245C.22, and no variance has been granted;

(6) is associated with an individual who received a background study under section
245C.03, subdivision 1, paragraph (a), clause (6), who may have unsupervised access to
children or vulnerable adults, and who has a disqualification that has not been set aside
under section 245C.22, and no variance has been granted;

(7) fails to comply with section 245A.04, subdivision 1, paragraph (f) or (g);

(8) fails to demonstrate competent knowledge as required by section 245A.04, subdivision
6;

(9) has a history of noncompliance as a license holder or controlling individual with
applicable laws or rules, including but not limited to this chapter and chapters 142E and
245C; deleted text begin or
deleted text end

(10) is prohibited from holding a license according to section 245.095 deleted text begin . deleted text end new text begin ; or
new text end

new text begin (11) is the subject of a pending administrative, civil, or criminal investigation.
new text end

(b) An applicant whose application has been denied by the commissioner must be given
notice of the denial, which must state the reasons for the denial in plain language. Notice
must be given by certified mail, by personal service, or through the provider licensing and
reporting hub. The notice must state the reasons the application was denied and must inform
the applicant of the right to a contested case hearing under chapter 14 and Minnesota Rules,
parts 1400.8505 to 1400.8612. The applicant may appeal the denial by notifying the
commissioner in writing by certified mail, by personal service, or through the provider
licensing and reporting hub. If mailed, the appeal must be postmarked and sent to the
commissioner within 20 calendar days after the applicant received the notice of denial. If
an appeal request is made by personal service, it must be received by the commissioner
within 20 calendar days after the applicant received the notice of denial. If the order is issued
through the provider hub, the appeal must be received by the commissioner within 20
calendar days from the date the commissioner issued the order through the hub. Section
245A.08 applies to hearings held to appeal the commissioner's denial of an application.

Sec. 13.

Minnesota Statutes 2024, section 245A.07, subdivision 2, is amended to read:

Subd. 2.

Temporary immediate suspension.

(a) The commissioner shall act immediately
to temporarily suspend a license issued under this chapter if:

(1) the license holder's new text begin or controlling individual's new text end actions or failure to comply with
applicable law or rule, or the actions of other individuals or conditions in the program, pose
an imminent risk of harm to the health, safety, or rights of persons served by the program;

(2) while the program continues to operate pending an appeal of an order of revocation,
the commissioner identifies one or more subsequent violations of law or rule which may
adversely affect the health or safety of persons served by the program; or

(3) the license holder new text begin or controlling individual new text end is criminally charged in state or federal
court with an offense that involves fraud or theft against a program administered by deleted text begin the
commissioner deleted text end new text begin a state or federal agency new text end .

(b) No state funds shall be made available or be expended by any agency or department
of state, county, or municipal government for use by a license holder regulated under this
chapter while a license issued under this chapter is under immediate suspension. A notice
stating the reasons for the immediate suspension and informing the license holder of the
right to an expedited hearing under chapter 14 and Minnesota Rules, parts 1400.8505 to
1400.8612, must be delivered by personal service to the address shown on the application
or the last known address of the license holder. The license holder may appeal an order
immediately suspending a license. The appeal of an order immediately suspending a license
must be made in writing by certified mail, personal service, or other means expressly set
forth in the commissioner's order. If mailed, the appeal must be postmarked and sent to the
commissioner within five calendar days after the license holder receives notice that the
license has been immediately suspended. If a request is made by personal service, it must
be received by the commissioner within five calendar days after the license holder received
the order. A license holder and any controlling individual shall discontinue operation of the
program upon receipt of the commissioner's order to immediately suspend the license.

new text begin (c) The commissioner may act immediately to temporarily suspend a license issued
under this chapter if the license holder or controlling individual is the subject of a pending
administrative, civil, or criminal investigation or subject to an administrative or civil action
related to fraud against a program administered by a state or federal agency.
new text end

Sec. 14.

Minnesota Statutes 2024, section 245C.05, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Electronic signature. new text end

new text begin For documentation requiring a signature under this
chapter, use of an electronic signature as defined under section 325L.02, paragraph (h), is
allowed.
new text end

Sec. 15.

Minnesota Statutes 2024, section 245C.08, subdivision 3, is amended to read:

Subd. 3.

Arrest and investigative information.

(a) For any background study completed
under this section, if the commissioner has reasonable cause to believe the information is
pertinent to the disqualification of an individual, the commissioner also may review arrest
and investigative information from:

(1) the Bureau of Criminal Apprehension;

(2) the commissioners of children, youth, and families; health; and human services;

(3) a deleted text begin county attorney deleted text end new text begin prosecutor new text end ;

deleted text begin (4) a county sheriff;
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end a county agency;

deleted text begin (6) deleted text end new text begin (5) new text end a deleted text begin local chief of police deleted text end new text begin law enforcement agency new text end ;

deleted text begin (7) deleted text end new text begin (6) new text end other states;

deleted text begin (8) deleted text end new text begin (7) new text end the courts;

deleted text begin (9) deleted text end new text begin (8) new text end the Federal Bureau of Investigation;

deleted text begin (10) deleted text end new text begin (9) new text end the National Criminal Records Repository; and

deleted text begin (11) deleted text end new text begin (10) new text end criminal records from other states.

(b) Except when specifically required by law, the commissioner is not required to conduct
more than one review of a subject's records from the Federal Bureau of Investigation if a
review of the subject's criminal history with the Federal Bureau of Investigation has already
been completed by the commissioner and there has been no break in the subject's affiliation
with the entity that initiated the background study.

(c) If the commissioner conducts a national criminal history record check when required
by law and uses the information from the national criminal history record check to make a
disqualification determination, the data obtained is private data and cannot be shared with
private agencies or prospective employers of the background study subject.

(d) If the commissioner conducts a national criminal history record check when required
by law and uses the information from the national criminal history record check to make a
disqualification determination, the license holder or entity that submitted the study is not
required to obtain a copy of the background study subject's disqualification letter under
section 245C.17, subdivision 3.

Sec. 16.

Minnesota Statutes 2024, section 245C.14, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Disqualification from owning, operating, or billing. new text end

new text begin The commissioner shall
disqualify an individual who is the subject of a background study from any position involving
ownership, management, or control of a program or billing activities if a background study
completed under this chapter shows a violation of section 142A.12, 245.095, or 256B.064.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 17.

Minnesota Statutes 2024, section 245C.22, subdivision 5, is amended to read:

Subd. 5.

Scope of set-aside.

(a) If the commissioner sets aside a disqualification under
this section, the disqualified individual remains disqualified, but may hold a license and
have direct contact with or access to persons receiving services. Except as provided in
paragraph (b), the commissioner's set-aside of a disqualification is limited solely to the
licensed program, applicant, or agency specified in the set aside notice under section 245C.23.
For personal care provider organizations, new text begin financial management services organizations,
community first services and supports organizations, unlicensed home and community-based
organizations, and consumer-directed community supports organizations, new text end the commissioner's
set-aside may further be limited to a specific individual who is receiving services. For new
background studies required under section 245C.04, subdivision 1, paragraph (h), if an
individual's disqualification was previously set aside for the license holder's program and
the new background study results in no new information that indicates the individual may
pose a risk of harm to persons receiving services from the license holder, the previous
set-aside shall remain in effect.

(b) If the commissioner has previously set aside an individual's disqualification for one
or more programs or agencies, and the individual is the subject of a subsequent background
study for a different program or agency, the commissioner shall determine whether the
disqualification is set aside for the program or agency that initiated the subsequent
background study. A notice of a set-aside under paragraph (c) shall be issued within 15
working days if all of the following criteria are met:

(1) the subsequent background study was initiated in connection with a program licensed
or regulated under the same provisions of law and rule for at least one program for which
the individual's disqualification was previously set aside by the commissioner;

(2) the individual is not disqualified for an offense specified in section 245C.15,
subdivision 1 or 2;

(3) the commissioner has received no new information to indicate that the individual
may pose a risk of harm to any person served by the program; and

(4) the previous set-aside was not limited to a specific person receiving services.

(c) Notwithstanding paragraph (b), clause (2), for an individual who is employed in the
substance use disorder field, if the commissioner has previously set aside an individual's
disqualification for one or more programs or agencies in the substance use disorder treatment
field, and the individual is the subject of a subsequent background study for a different
program or agency in the substance use disorder treatment field, the commissioner shall set
aside the disqualification for the program or agency in the substance use disorder treatment
field that initiated the subsequent background study when the criteria under paragraph (b),
clauses (1), (3), and (4), are met and the individual is not disqualified for an offense specified
in section 245C.15, subdivision 1. A notice of a set-aside under paragraph (d) shall be issued
within 15 working days.

(d) When a disqualification is set aside under paragraph (b), the notice of background
study results issued under section 245C.17, in addition to the requirements under section
245C.17, shall state that the disqualification is set aside for the program or agency that
initiated the subsequent background study. The notice must inform the individual that the
individual may request reconsideration of the disqualification under section 245C.21 on the
basis that the information used to disqualify the individual is incorrect.

Sec. 18.

Minnesota Statutes 2024, section 254A.19, subdivision 4, is amended to read:

Subd. 4.

Civil commitments.

For the purposes of determining level of care, a
comprehensive assessment does not need to be completed for an individual being committed
as a chemically dependent person, as defined in section 253B.02, and for the duration of a
civil commitment under section 253B.09 or 253B.095 in order for deleted text begin a county deleted text end new text begin the individual new text end
to deleted text begin access deleted text end new text begin be eligible for new text end the behavioral health fund under section 254B.04. The deleted text begin county deleted text end new text begin
commissioner new text end must determine if the individual meets the financial eligibility requirements
for the behavioral health fund under section 254B.04.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 19.

Minnesota Statutes 2024, section 256.98, subdivision 1, is amended to read:

Subdivision 1.

Wrongfully obtaining assistance.

(a) A person who commits any of the
following acts or omissions with intent to defeat the purposes of sections 145.891 to 145.897,
the MFIP program formerly codified in sections 256.031 to 256.0361, the AFDC program
formerly codified in sections 256.72 to 256.871, chapter 142G, 256B, 256D, 256I, 256K,
or 256L, child care assistance programs, and emergency assistance programs under section
256D.06, is guilty of theft and shall be sentenced under section 609.52, subdivision 3, clauses
(1) to (5):

(1) obtains or attempts to obtain, or aids or abets any person to obtain by means of a
willfully false statement or representation, by intentional concealment of any material fact,
or by impersonation or other fraudulent device, assistance or the continued receipt of
assistance, to include child care assistance or food benefits produced according to sections
145.891 to 145.897 and MinnesotaCare services according to sections 256.9365, 256.94,
and 256L.01 to 256L.15, to which the person is not entitled or assistance greater than that
to which the person is entitled;

(2) knowingly aids or abets in buying or in any way disposing of the property of a
recipient or applicant of assistance without the consent of the county agency; or

(3) obtains or attempts to obtain, alone or in collusion with others, the receipt of payments
to which the individual is not entitled as a provider of subsidized child care deleted text begin , or deleted text end new text begin ; new text end by deleted text begin furnishing
or concurring in deleted text end new text begin offering, providing, soliciting, or receiving illegal remuneration as described
in section 142E.51, subdivision 6a, or in violation of section 609.542, subdivision 2; or by
submitting or aiding and abetting the submission of new text end a willfully false claim for child care
assistance.

(b) The continued receipt of assistance to which the person is not entitled or greater than
that to which the person is entitled as a result of any of the acts, failure to act, or concealment
described in this subdivision shall be deemed to be continuing offenses from the date that
the first act or failure to act occurred.

Sec. 20.

Minnesota Statutes 2024, section 256B.064, subdivision 1a, is amended to read:

Subd. 1a.

Grounds for sanctions.

(a) The commissioner may impose sanctions against
any individual or entity that receives payments from medical assistance or provides goods
or services for which payment is made from medical assistance for any of the following:

(1) fraud, theft, or abuse in connection with the provision of goods and services to
recipients of public assistance for which payment is made from medical assistance;

(2) a pattern of presentment of false or duplicate claims or claims for services not
medically necessary;

(3) a pattern of making false statements of material facts for the purpose of obtaining
greater compensation than that to which the individual or entity is legally entitled;

(4) suspension or termination as a Medicare vendor;

(5) refusal to grant the state agency access during regular business hours to examine all
records necessary to disclose the extent of services provided to program recipients and
appropriateness of claims for payment;

(6) failure to repay an overpayment or a fine finally established under this section;

(7) failure to correct errors in the maintenance of health service or financial records for
which a fine was imposed or after issuance of a warning by the commissioner; and

(8) any reason for which an individual or entity could be excluded from participation in
the Medicare program under section 1128, 1128A, or 1866(b)(2) of the Social Security Act.

new text begin (b) new text end For the purposes of this section, goods or services for which payment is made from
medical assistance includes but is not limited to care and services identified in section
256B.0625 or provided pursuant to any federally approved waiver.

new text begin (c) Regardless of the source of payment or other thing of value, the commissioner may
impose sanctions against any individual or entity that solicits, receives, pays, or offers to
pay any illegal remuneration as described in section 142E.51, subdivision 6a, in violation
of section 609.542, subdivision 2, or in violation of United States Code, title 42, section
1320a-7b(b)(1) or (2). No conviction is required before the commissioner can impose
sanctions under this paragraph.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end The commissioner may impose sanctions against a pharmacy provider for failure
to respond to a cost of dispensing survey under section 256B.0625, subdivision 13e,
paragraph (h).

Sec. 21.

Minnesota Statutes 2024, section 256B.12, is amended to read:

256B.12 LEGAL REPRESENTATION.

The attorney general or the appropriate county attorney appearing at the direction of the
attorney general shall be the attorney for the state agency, and the county attorney of the
appropriate county shall be the attorney for the deleted text begin local deleted text end agency in all matters pertaining hereto.
To prosecute under this chapter or sections 609.466 deleted text begin and deleted text end new text begin , new text end 609.52, subdivision 2, new text begin and 609.542 new text end
or to recover payments wrongfully made under this chapter, the attorney general or the
appropriate county attorney, acting independently or at the direction of the attorney general
may institute a criminal or civil action.

Sec. 22.

Minnesota Statutes 2024, section 256G.01, subdivision 3, is amended to read:

Subd. 3.

Program coverage.

This chapter applies to all social service programs
administered by the commissioner of human services or the Direct Care and Treatment
executive board in which residence is the determining factor in establishing financial
responsibility. These include, but are not limited to: commitment proceedings, including
voluntary admissions; emergency holds; new text begin competency proceedings under chapter 611; new text end poor
relief funded wholly through local agencies; social services, including title XX, IV-E and
section 256K.10; social services programs funded wholly through the resources of county
agencies; social services provided under the Minnesota Indian Family Preservation Act,
sections 260.751 to 260.781; costs for delinquency confinement under section 393.07,
subdivision 2; service responsibility for these programs; and housing support under chapter
256I.

Sec. 23.

Minnesota Statutes 2024, section 256G.08, subdivision 1, is amended to read:

Subdivision 1.

Commitment new text begin and competency new text end proceedings.

In cases of voluntary
admission deleted text begin or deleted text end new text begin , new text end commitment to state or other institutions, new text begin or criminal orders for inpatient
examination or participation in a competency attainment program under chapter 611, new text end the
committing county new text begin or the county from which the first criminal order for inpatient examination
or order for participation in a competency attainment program under chapter 611 is issued
new text end shall initially pay for all costs. This includes the expenses of the taking into custody,
confinement, emergency holds under sections 253B.051, subdivisions 1 and 2, and 253B.07,
examination, commitment, conveyance to the place of detention, rehearing, and hearings
under deleted text begin section deleted text end new text begin sections new text end 253B.092 new text begin and 611.47 new text end , including hearings held under deleted text begin that section
deleted text end deleted text begin which deleted text end new text begin those sections that new text end are venued outside the county of commitment new text begin or the county of
the chapter 611 competency proceedings order new text end .

Sec. 24.

Minnesota Statutes 2024, section 256G.08, subdivision 2, is amended to read:

Subd. 2.

Responsibility for nonresidents.

If a person committed deleted text begin or deleted text end new text begin , new text end voluntarily admitted
to a state institution new text begin , or ordered for inpatient examination or participation in a competency
attainment program under chapter 611 new text end has no residence in this state, financial responsibility
belongs to the county of commitment new text begin or the county from which the first criminal order for
inpatient examination or order for participation in a competency attainment program under
chapter 611 was issued new text end .

Sec. 25.

Minnesota Statutes 2024, section 256G.09, subdivision 1, is amended to read:

Subdivision 1.

General procedures.

If upon investigation the local agency decides that
the application deleted text begin or deleted text end new text begin , new text end commitment new text begin , or first criminal order under chapter 611 new text end was not filed in
the county of financial responsibility as defined by this chapter, but that the applicant is
otherwise eligible for assistance, it shall send a copy of the application deleted text begin or deleted text end new text begin , new text end commitment
claim, new text begin or chapter 611 claim new text end together with the record of any investigation it has made, to the
county it believes is financially responsible. The copy and record must be sent within 60
days of the date the application was approved or the claim was paid. The first local agency
shall provide assistance to the applicant until financial responsibility is transferred under
this section.

The county receiving the transmittal has 30 days to accept or reject financial
responsibility. A failure to respond within 30 days establishes financial responsibility by
the receiving county.

Sec. 26.

Minnesota Statutes 2024, section 256G.09, subdivision 2, is amended to read:

Subd. 2.

Financial disputes.

(a) If the county receiving the transmittal does not believe
it is financially responsible, it should provide to the commissioner of human services and
the initially responsible county a statement of all facts and documents necessary for the
commissioner to make the requested determination of financial responsibility. The submission
must clearly state the program area in dispute and must state the specific basis upon which
the submitting county is denying financial responsibility.

(b) The initially responsible county then has 15 calendar days to submit its position and
any supporting evidence to the commissioner. The absence of a submission by the initially
responsible county does not limit the right of the commissioner of human services or Direct
Care and Treatment executive board to issue a binding opinion based on the evidence actually
submitted.

(c) A case must not be submitted until the local agency taking the application deleted text begin or deleted text end new text begin , new text end making
the commitment new text begin , or residing in the county from which the first criminal order under chapter
611 was issued new text end has made an initial determination about eligibility and financial responsibility,
and services have been initiated. This paragraph does not prohibit the submission of closed
cases that otherwise meet the applicable statute of limitations.

Sec. 27.

Minnesota Statutes 2024, section 480.40, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section and section 480.45, the
following terms have the meanings given.

(b) "Judicial official" means:

(1) every Minnesota district court judge, senior judge, retired judge, and every judge of
the Minnesota Court of Appeals and every active, senior, recalled, or retired federal judge
who resides in Minnesota;

(2) a justice of the Minnesota Supreme Court;

(3) employees of the Minnesota judicial branch;

(4) judicial referees and magistrate judges; and

(5) current and retired judges and current employees of the Office of Administrative
Hearings, new text begin Department of Human Services Appeals Division, new text end Workers' Compensation Court
of Appeals, and Tax Court.

(c) "Personal information" does not include publicly available information. Personal
information means:

(1) a residential address of a judicial official;

(2) a residential address of the spouse, domestic partner, or children of a judicial official;

(3) a nonjudicial branch issued telephone number or email address of a judicial official;

(4) the name of any child of a judicial official; and

(5) the name of any child care facility or school that is attended by a child of a judicial
official if combined with an assertion that the named facility or school is attended by the
child of a judicial official.

(d) "Publicly available information" means information that is lawfully made available
through federal, state, or local government records or information that a business has a
reasonable basis to believe is lawfully made available to the general public through widely
distributed media, by a judicial official, or by a person to whom the judicial official has
disclosed the information, unless the judicial official has restricted the information to a
specific audience.

(e) "Law enforcement support organizations" do not include charitable organizations.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

new text begin [609.542] ILLEGAL REMUNERATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin As used in this section, "federal health care program" has the
meaning given in United States Code, title 42, section 1320a-7b(f).
new text end

new text begin Subd. 2. new text end

new text begin Human services program; unauthorized remuneration. new text end

new text begin (a) A person who
intentionally solicits or receives money, a discount, a credit, a waiver, a rebate, a good, a
service, employment, or anything else of value in return for doing any of the following is
guilty of a crime and may be sentenced as provided in subdivision 4:
new text end

new text begin (1) referring an individual to a person for the furnishing or arranging for the furnishing
of any item or service for which payment may be made in whole or in part under a federal
health care program, behavioral health program under chapter 254B, or program under
chapter 142E;
new text end

new text begin (2) purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing,
or ordering any good, facility, service, or item for which payment may be made in whole
or in part under a federal health care program, behavioral health program under chapter
254B, or program under chapter 142E; or
new text end

new text begin (3) applying for or receiving any item or service for which payment may be made in
whole or in part under a federal health care program, behavioral health program under
chapter 254B, or program under chapter 142E.
new text end

new text begin (b) A person who intentionally offers or provides money, a discount, a credit, a waiver,
a rebate, a good, a service, employment, or anything else of value to induce a person to do
any of the following is guilty of a crime and may be sentenced as provided in subdivision
4:
new text end

new text begin (1) refer an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part under a federal
health care program, behavioral health program under chapter 254B, or program under
chapter 142E;
new text end

new text begin (2) purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering
any good, facility, service, or item for which payment may be made in whole or in part
under a federal health care program, behavioral health program under chapter 254B, or
program under chapter 142E; or
new text end

new text begin (3) apply for or receive any item or service for which payment may be made in whole
or in part under a federal health care program, behavioral health program under chapter
254B, or program under chapter 142E.
new text end

new text begin Subd. 3. new text end

new text begin Exceptions. new text end

new text begin (a) Subdivision 2 does not apply to any payment, discount, waiver,
or other remuneration exempted under United States Code, title 42, section 1320a-7b(b)(3),
or payment made under a federal health care program that is exempt from liability by United
States Code, title 42, section 1001.952.
new text end

new text begin (b) For actions involving a program under chapter 142E, subdivision 2, does not apply
to:
new text end

new text begin (1) any amount paid by an employer to a bona fide employee for providing covered
items or services under chapter 142E while acting in the course and scope of employment;
or
new text end

new text begin (2) child care provider discounts, scholarships, or other financial assistance to families
allowed under section 142E.17, subdivision 7.
new text end

new text begin Subd. 4. new text end

new text begin Penalties. new text end

new text begin Whoever violates subdivision 2 may be sentenced as follows:
new text end

new text begin (1) to imprisonment of not more than 20 years or to payment of a fine of not more than
$100,000, or both, if the value of any money, discount, credit, waiver, rebate, good, service,
employment, or other thing of value solicited, received, offered, or provided exceeds $35,000;
new text end

new text begin (2) to imprisonment of not more than ten years or to payment of a fine of not more than
$20,000, or both, if the value of any money, discount, credit, waiver, rebate, good, service,
employment, or other thing of value solicited, received, offered, or provided is more than
$5,000 but not more than $35,000; or
new text end

new text begin (3) imprisonment for not more than five years or to payment of a fine of not more than
$10,000, or both, if the value of any money, discount, credit, waiver, rebate, good, service,
employment, or other thing of value solicited, received, offered, or provided is not more
than $5,000.
new text end

new text begin Subd. 5. new text end

new text begin Aggregation. new text end

new text begin In a prosecution under this section, the value of any money,
discount, credit, waiver, rebate, good, service, employment, or other thing of value solicited,
received, offered, or provided within a six-month period may be aggregated and the defendant
charged accordingly. When two or more offenses are committed by the same person in two
or more counties, the accused may be prosecuted in any county in which one of the offenses
was committed for all of the offenses aggregated under this subdivision.
new text end

new text begin Subd. 6. new text end

new text begin False claims. new text end

new text begin In addition to the penalties provided for in this section, a claim,
as defined in section 15C.01, subdivision 2, that includes items or services resulting from
a violation of this section constitutes a false or fraudulent claim for purposes of section
15C.02.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to crimes
committed on or after that date.
new text end

Sec. 29.

Minnesota Statutes 2024, section 611.43, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Costs related to confined treatment. new text end

new text begin (a) When a defendant is ordered to
participate in an examination in a treatment facility, a locked treatment facility, or a
state-operated treatment facility under subdivision 1, paragraph (b), the facility shall bill
the responsible health plan first. The county in which the criminal charges are filed is
responsible to pay any charges not covered by the health plan, including co-pays and
deductibles. If the defendant has health plan coverage and is confined in a hospital, but the
hospitalization does not meet the criteria in section 62M.07, subdivision 2, clause (1);
62Q.53; 62Q.535, subdivision 1; or 253B.045, subdivision 6, the county in which criminal
charges are filed is responsible for payment.
new text end

new text begin (b) The Direct Care and Treatment executive board shall determine the cost of
confinement in a state-operated treatment facility based on the executive board's
determination of cost of care pursuant to section 246.50, subdivision 5.
new text end

Sec. 30.

Minnesota Statutes 2024, section 611.46, subdivision 1, is amended to read:

Subdivision 1.

Order to competency attainment program.

(a) If the court finds the
defendant incompetent and the charges have not been dismissed, the court shall order the
defendant to participate in a program to assist the defendant in attaining competency. The
court may order participation in a competency attainment program provided outside of a
jail, a jail-based competency attainment program, or an alternative program. The court must
determine the least-restrictive program appropriate to meet the defendant's needs and public
safety. In making this determination, the court must consult with the forensic navigator and
consider any recommendations of the court examiner. The court shall not order a defendant
to participate in a jail-based program or a state-operated treatment program if the highest
criminal charge is a targeted misdemeanor.

(b) If the court orders the defendant to a locked treatment facility or jail-based program,
the court must calculate the defendant's custody credit and cannot order the defendant to a
locked treatment facility or jail-based program for a period that would cause the defendant's
custody credit to exceed the maximum sentence for the underlying charge.

(c) The court may only order the defendant to participate in competency attainment at
an inpatient or residential treatment program under this section if the head of the treatment
program determines that admission to the program is clinically appropriate and consents to
the defendant's admission. The court may only order the defendant to participate in
competency attainment at a state-operated treatment facility under this section if the Direct
Care and Treatment executive board or a designee determines that admission of the defendant
is clinically appropriate and consents to the defendant's admission. The court may require
a competency program that qualifies as a locked facility or a state-operated treatment program
to notify the court in writing of the basis for refusing consent for admission of the defendant
in order to ensure transparency and maintain an accurate record. The court may not require
personal appearance of any representative of a competency program. The court shall send
a written request for notification to the locked facility or state-operated treatment program
and the locked facility or state-operated treatment program shall provide a written response
to the court within ten days of receipt of the court's request.

(d) If the defendant is confined in jail and has not received competency attainment
services within 30 days of the finding of incompetency, the court shall review the case with
input from the prosecutor and defense counsel and may:

(1) order the defendant to participate in an appropriate competency attainment program
that takes place outside of a jail;

(2) order a conditional release of the defendant with conditions that include but are not
limited to a requirement that the defendant participate in a competency attainment program
when one becomes available and accessible;

(3) make a determination as to whether the defendant is likely to attain competency in
the reasonably foreseeable future and proceed under section 611.49; or

(4) upon a motion, dismiss the charges in the interest of justice.

(e) The court may order any hospital, treatment facility, or correctional facility that has
provided care or supervision to a defendant in the previous two years to provide copies of
the defendant's medical records to the competency attainment program or alternative program
in which the defendant was ordered to participate. This information shall be provided in a
consistent and timely manner and pursuant to all applicable laws.

(f) If at any time the defendant refuses to participate in a competency attainment program
or an alternative program, the head of the program shall notify the court and any entity
responsible for supervision of the defendant.

(g) At any time, the head of the program may discharge the defendant from the program
or facility. The head of the program must notify the court, prosecutor, defense counsel, and
any entity responsible for the supervision of the defendant prior to any planned discharge.
Absent emergency circumstances, this notification shall be made five days prior to the
discharge if the defendant is not being discharged to jail or a correctional facility. Upon the
receipt of notification of discharge or upon the request of either party in response to
notification of discharge, the court may order that a defendant who is subject to bail or
unmet conditions of release be returned to jail upon being discharged from the program or
facility. If the court orders a defendant returned to jail, the court shall notify the parties and
head of the program at least one day before the defendant's planned discharge, except in
the event of an emergency discharge where one day notice is not possible. The court must
hold a review hearing within seven days of the defendant's return to jail. The forensic
navigator must be given notice of the hearing and be allowed to participate.

(h) If the defendant is discharged from the program or facility under emergency
circumstances, notification of emergency discharge shall include a description of the
emergency circumstances and may include a request for emergency transportation. The
court shall make a determination on a request for emergency transportation within 24 hours.
Nothing in this section prohibits a law enforcement agency from transporting a defendant
pursuant to any other authority.

new text begin (i) If the defendant is ordered to participate in an inpatient or residential competency
attainment or alternative program, the program or facility must notify the court, prosecutor,
defense counsel, and any entity responsible for the supervision of the defendant if the
defendant is placed on a leave or elopement status from the program and if the defendant
returns to the program from a leave or elopement status.
new text end

new text begin (j) Defense counsel and prosecutors must have access to information relevant to a
defendant's participation and treatment in a competency attainment program or alternative
program, including but not limited to discharge planning.
new text end

Sec. 31.

Minnesota Statutes 2024, section 611.55, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Data access. new text end

new text begin Forensic navigators must have access to all data collected, created,
or maintained by a competency attainment program or an alternative program regarding a
defendant in order for navigators to carry out their duties under this section. A competency
attainment program or alternative program may request a copy of the court order appointing
the forensic navigator before disclosing any private information about a defendant.
new text end

Sec. 32.

Laws 2023, chapter 70, article 7, section 34, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective deleted text begin for background studies requested on or
after August 1, 2024 deleted text end new text begin the day following final enactment new text end .