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Minnesota Legislature

Office of the Revisor of Statutes

HF 2694

as introduced - 91st Legislature (2019 - 2020) Posted on 03/25/2019 02:37pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/25/2019

Current Version - as introduced

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A bill for an act
relating to human services; providing for public assistance and child care assistance
program fraud prevention; establishing penalties for certain theft offenses;
modifying eligibility for early learning scholarships; requiring a report;
appropriating money; amending Minnesota Statutes 2018, sections 13.46,
subdivisions 2, 3; 13.461, subdivision 28; 119B.02, subdivision 6, by adding a
subdivision; 119B.09, subdivisions 4, 7, 9a; 119B.125, subdivisions 6, 9, by adding
subdivisions; 119B.13, subdivisions 6, 7; 124D.142; 124D.165, subdivisions 2, 4,
by adding a subdivision; 245.095; 245A.07, subdivisions 2, 2a, 3; 245E.03,
subdivision 2; 245E.04; 256.98, subdivision 8, by adding a subdivision; 256.984,
subdivision 1; 256B.02, by adding a subdivision; 256B.056, subdivisions 3, 4;
256J.08, subdivision 47; 256J.21, subdivision 2; 256L.01, subdivision 5; 256P.04,
subdivision 4; 256P.06, subdivision 3; 609.27, subdivision 2; 609.48, subdivision
1; proposing coding for new law in Minnesota Statutes, chapters 245A; 256; 609;
proposing coding for new law as Minnesota Statutes, chapter 245I.

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

ARTICLE 1

CHILD CARE ASSISTANCE PROGRAM FRAUD PREVENTION

Section 1.

Minnesota Statutes 2018, 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 of the welfare system and an 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 assess parental contribution amounts for purposes
of section 252.27, subdivision 2a, administer and evaluate tax refund or tax credit programs
and to identify individuals who may benefit from these programs. The following information
may be disclosed under this paragraph: an individual's and their dependent's names, dates
of birth, Social Security 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 and rental credit 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, 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 food support,
cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter
119B, medical programs under chapter 256B or 256L, or a medical program formerly
codified under chapter 256D; 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 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 food support 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 Stamp Act, according to Code
of Federal Regulations, title 7, section 272.1(c);

(18) the address, Social Security number, and, if available, photograph of any member
of a household receiving food support 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 food support 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 256.998,
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 256.741, 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 and Education, on recipients and former
recipients of food support, cash assistance under chapter 256, 256D, 256J, or 256K, child
care assistance under chapter 119B, 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 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 new text beginand the Department of Human Services, including licensing staff, new text endoperating
child care assistance programs under chapter 119B 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; or

(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.

(b) Information on persons who have been treated for drug or alcohol abuse 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 5, paragraph (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.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2018, section 13.461, subdivision 28, is amended to read:


Subd. 28.

Child care assistance program.

Data collected, maintained, used, or
disseminated by the welfare system pertaining to persons selected as legal nonlicensed child
care providers by families receiving child care assistance are classified under section 119B.02,
subdivision 6
new text begin, paragraph (a).new text endnew text begin Child care assistance program payment data are classified
under section 119B.02, subdivision 6, paragraph (b)
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2018, section 119B.02, subdivision 6, is amended to read:


Subd. 6.

Data.

new text begin(a) new text endData collected, maintained, used, or disseminated by the welfare
system pertaining to persons selected as legal nonlicensed child care providers by families
receiving child care assistance shall be treated as licensing data as provided in section 13.46,
subdivision 4
.

new text begin (b) For purposes of this paragraph, "child care assistance program payment data" means
data for a specified time period showing (1) that a child care assistance program payment
under this chapter was made, and (2) the amount of child care assistance payments made
to a child care center. Child care assistance program payment data may include the number
of families and children on whose behalf payments were made for the specified time period.
Any child care assistance program payment data that may identify a specific child care
assistance recipient or benefit paid on behalf of a specific child care assistance recipient,
as determined by the commissioner, is private data on individuals as defined in section
13.02, subdivision 12. Data related to a child care assistance payment is public if the data
relates to a child care assistance payment made to a licensed child care center or a child
care center exempt from licensure and:
new text end

new text begin (1) the child care center receives payment of more than $100,000 from the child care
assistance program under this chapter in a period of one year or less; or
new text end

new text begin (2) when the commissioner or county agency either:
new text end

new text begin (i) disqualified the center from receipt of a payment from the child care assistance
program under this chapter for wrongfully obtaining child care assistance under section
256.98, subdivision 8, paragraph (c);
new text end

new text begin (ii) refused a child care authorization, revoked a child care authorization, stopped
payment, or denied payment for a bill for the center under section 119B.13, subdivision 6,
paragraph (d); or
new text end

new text begin (iii) made a finding of financial misconduct under section 245E.02.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2018, section 119B.02, is amended by adding a subdivision to
read:


new text begin Subd. 8. new text end

new text begin Provider billing forms. new text end

new text begin The commissioner shall include a notice on the billing
form advising providers that the child care provider, center owner, director, manager, license
holder, or other controlling individual and the employee responsible for submitting billing
forms may each be held liable for intentionally providing materially false information on
the provider's billing forms.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for billing forms issued on or after July
1, 2020.
new text end

Sec. 5.

Minnesota Statutes 2018, section 119B.09, subdivision 7, is amended to read:


Subd. 7.

Date of eligibility for assistance.

(a) The date of eligibility for child care
assistance under this chapter is the later of the date the application was received by the
county; the beginning date of employment, education, or training; the date the infant is born
for applicants to the at-home infant care program; or the date a determination has been made
that the applicant is a participant in employment and training services under Minnesota
Rules, part 3400.0080, or chapter 256J.

(b) Payment ceases for a family under the at-home infant child care program when a
family has used a total of 12 months of assistance as specified under section 119B.035.
Payment of child care assistance for employed persons on MFIP is effective the date of
employment or the date of MFIP eligibility, whichever is later. Payment of child care
assistance for MFIP or DWP participants in employment and training services is effective
the date of commencement of the services or the date of MFIP or DWP eligibility, whichever
is later. Payment of child care assistance for transition year child care must be made
retroactive to the date of eligibility for transition year child care.

(c) Notwithstanding paragraph (b), payment of child care assistance for participants
eligible under section 119B.05 may only be made retroactive for a maximum of deleted text beginsixdeleted text endnew text begin threenew text end
months from the date of application for child care assistance.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications processed on or after
July 1, 2019.
new text end

Sec. 6.

Minnesota Statutes 2018, section 119B.09, subdivision 9a, is amended to read:


Subd. 9a.

Child care deleted text begincentersdeleted text endnew text begin authorizationsnew text end; deleted text beginassistancedeleted text endnew text begin dependents of employees
and controlling individuals
new text end.

(a) A child care center deleted text beginmaydeleted text endnew text begin must notnew text end receive authorizations
for deleted text begin25 or fewer childrendeleted text endnew text begin more than ten percent of total licensed capacity of childrennew text end who
are dependents of the center's employeesnew text begin or controlling individualsnew text end. deleted text beginIf a child care center is
authorized for more than 25 children who are dependents of center employees, the county
cannot authorize additional dependents of an employee until the number of children falls
below 25.
deleted text end

deleted text begin (b) Funds paid to providers during the period of time when a center is authorized for
more than 25 children who are dependents of center employees must not be treated as
overpayments under section 119B.11, subdivision 2a, due to noncompliance with this
subdivision.
deleted text end

deleted text begin (c)deleted text endnew text begin (b)new text end Nothing in this subdivision precludes the commissioner from conducting fraud
investigations relating to child care assistance, imposing sanctions, and obtaining monetary
recovery as otherwise provided by law.

Sec. 7.

Minnesota Statutes 2018, section 119B.125, is amended by adding a subdivision
to read:


new text begin Subd. 1c. new text end

new text begin Declaration and penalty. new text end

new text begin (a) At the time of initial authorization and at each
reauthorization, each child care provider receiving reimbursement for services provided
under this chapter, and all employees of a provider, shall sign the following declaration:
new text end

new text begin "I declare under the penalties of perjury that this registration has been examined by me
and to the best of my knowledge is a true and correct statement of every material point. I
understand that a person convicted of perjury may be sentenced to imprisonment of not
more than five years or to payment of a fine of not more than $10,000, or both."
new text end

new text begin (b) Any person who willfully and falsely makes the declaration in paragraph (a) is guilty
of perjury and shall be subject to the penalties prescribed in section 609.48.
new text end

new text begin (c) Signing registration to receive reimbursement under this chapter pursuant to paragraph
(a) constitutes "verification upon oath or affirmation" as defined in section 358.52, without
administration of an oath under section 358.07, provided that the signature is affixed
immediately below the required declaration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for child care assistance program provider
authorizations and reauthorizations completed on or after July 1, 2019.
new text end

Sec. 8.

Minnesota Statutes 2018, section 119B.125, subdivision 6, is amended to read:


Subd. 6.

Record-keeping requirement.

new text begin(a) As a condition of payment, new text endall providers
receiving child care assistance payments mustnew text begin: (1)new text end keepnew text begin accurate and legiblenew text end daily attendance
records at the site where services are delivered for children receiving child care assistancenew text begin;new text end
andnew text begin (2)new text end must make those records available immediately to the county or the commissioner
upon request. new text beginAttendance records that are not immediately made available to the county or
the commissioner upon request are not valid for purposes of establishing proof that a child
was present during the time period in question.
new text end

deleted text begin Thedeleted text endnew text begin (b) As a condition of payment,new text end attendance records must be completed daily and
include the date, the first and last name of each child in attendance, and the times when
each child is dropped off and picked up. To the extent possible, the times that the child was
dropped off to and picked up from the child care provider must be entered by the person
dropping off or picking up the child.

new text begin (c) new text endThe daily attendance records must be retained at the site where services are delivered
for six years after the date of service.

new text begin (d) new text endA county or the commissioner may denynew text begin or revoke a provider'snew text end authorization deleted text beginas a
child care provider to any applicant, rescind authorization of any provider
deleted text endnew text begin to receive child
care assistance payments under section 119B.13, subdivision 6, paragraph (d), pursue a
fraud disqualification under section 256.98, take an action against the provider under chapter
245E
new text end, or establish annew text begin attendance recordnew text end overpayment deleted text beginclaim in the systemdeleted text endnew text begin under paragraph
(f)
new text end against a current or former provider, when the county or the commissioner knows or has
reason to believe that the provider has not complied with the record-keeping requirement
in this subdivision.

new text begin (e) If an attendance record is found to be insufficient to support the information submitted
on a billing form, a county or the commissioner may establish an overpayment claim in the
system against a current or former provider, regardless of whether a child was eligible for
an absent day payment under section 119B.13, subdivision 7.
new text end

deleted text begin A provider's failure to produce attendance records as requested on more than one occasion
constitutes grounds for disqualification as a provider.
deleted text end new text begin (f) To calculate an attendance record
overpayment under this subdivision, the commissioner or county agency shall subtract the
maximum daily rate from the total amount paid to a provider for each day that a child's
attendance record is missing, unavailable, incomplete, illegible, inaccurate, or otherwise
inadequate.
new text end

new text begin (g) The commissioner shall develop criteria for a county to determine an attendance
record overpayment under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 9.

Minnesota Statutes 2018, section 119B.125, subdivision 9, is amended to read:


Subd. 9.

Reporting required for child's part-time attendance.

new text begin(a) new text endA provider must
report to the county and report on the billing form as required when a child's attendance in
child care falls to less than half of the child's authorized hours or days for a four-week
period. If requested by the county or the commissioner, the provider must provide additional
information to the county or commissioner on the attendance of specific children.

new text begin (b) A county may rescind authorization of a provider for up to three months if the county
knows or has reason to believe that the provider has not met the reporting requirements
under paragraph (a).
new text end

new text begin (c) The commissioner or county may impose an administrative penalty of $1,000 against
any provider who intentionally violates the requirements in paragraph (a). The provider
must receive notice of their right to appeal the administrative penalty.
new text end

Sec. 10.

Minnesota Statutes 2018, section 119B.125, is amended by adding a subdivision
to read:


new text begin Subd. 10. new text end

new text begin Proof of surety bond coverage. new text end

new text begin All licensed child care centers authorized
for reimbursement under this chapter that received child care assistance program revenue
equal to or greater than $250,000 in the previous calendar year must provide to the
commissioner at least once per year proof of surety bond coverage of $100,000 in a format
determined by the commissioner. The surety bond must be in a form approved by the
commissioner, be renewed annually, and allow for recovery of costs and fees in pursuing
a claim on the bond.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 11.

Minnesota Statutes 2018, section 119B.13, subdivision 6, is amended to read:


Subd. 6.

Provider payments.

(a) The provider shall bill for services provided within
ten days of the end of the service period. Payments under the child care fund shall be made
within 21 days of receiving a complete bill from the provider. Counties or the state may
establish policies that make payments on a more frequent basis.

(b) If a provider has received an authorization of care and been issued a billing form for
an eligible family, the bill must be submitted within deleted text begin60deleted text endnew text begin 30new text end days of the last date of service
on the bill. A bill submitted more than deleted text begin60deleted text endnew text begin 30new text end days after the last date of service must be paid
if the county determines that the provider has shown good cause why the bill was not
submitted within deleted text begin60deleted text endnew text begin 30new text end days. Good cause must be defined in the county's child care fund
plan under section 119B.08, subdivision 3, and the definition of good cause must include
county error. Any bill submitted more than a year after the last date of service on the bill
must not be paid.

(c) If a provider provided care for a time period without receiving an authorization of
care and a billing form for an eligible family, payment of child care assistance may only be
made retroactively for a maximum of deleted text beginsixdeleted text endnew text begin threenew text end months from the date the provider is issued
an authorization of care and billing form.

new text begin (d) The provider shall receive a notice on the billing form advising providers that the
child care provider, center owner, director, manager, license holder, or other controlling
individual and the employee responsible for submitting billing forms may each be held
liable for intentionally providing materially false information on the provider's billing forms.
new text end

deleted text begin (d)deleted text endnew text begin (e)new text end A county or the commissioner may refuse to issue a child care authorization to
a licensed or legal nonlicensed provider, revoke an existing child care authorization to a
licensed or legal nonlicensed provider, stop payment issued to a licensed or legal nonlicensed
provider, or refuse to pay a bill submitted by a licensed or legal nonlicensed provider if:

(1) the provider admits to intentionally giving the county materially false information
on the provider's billing forms;

(2) a county or the commissioner finds by a preponderance of the evidence that the
provider intentionally gave the county materially false information on the provider's billing
forms, or provided false attendance records to a county or the commissioner;

(3) the provider is in violation of child care assistance program rules, until the agency
determines those violations have been corrected;

(4) the provider is operating after:

(i) an order of suspension of the provider's license issued by the commissioner;

(ii) an order of revocation of the provider's license; or

(iii) a final order of conditional license issued by the commissioner for as long as the
conditional license is in effect;

(5) the provider submits false attendance reports or refuses to provide documentation
of the child's attendance upon request; or

(6) the provider gives false child care price information.

deleted text begin (e)deleted text endnew text begin (f)new text end For purposes of paragraph deleted text begin(d)deleted text endnew text begin (e)new text end, clauses (3), (5), and (6), the county or the
commissioner may withhold the provider's authorization or payment for a period of time
not to exceed three months beyond the time the condition has been corrected.

deleted text begin (f)deleted text endnew text begin (g)new text end A county's payment policies must be included in the county's child care plan under
section 119B.08, subdivision 3. If payments are made by the state, in addition to being in
compliance with this subdivision, the payments must be made in compliance with section
16A.124.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for billing forms submitted on or after
July 1, 2019, except paragraph (d) is effective for billing forms issued on or after July 1,
2020.
new text end

Sec. 12.

Minnesota Statutes 2018, section 119B.13, subdivision 7, is amended to read:


Subd. 7.

Absent days.

(a) Licensed child care providers and license-exempt centers
must not be reimbursed for more than 25 full-day absent days per child, excluding holidays,
in a deleted text beginfiscaldeleted text endnew text begin calendarnew text end year, or for more than ten consecutive full-day absent days. new text begin"Absent
day" means any day that the child is authorized and scheduled to be in care with a licensed
provider or license exempt center and the child is absent from the care for the entire day.
new text end Legal nonlicensed family child care providers must not be reimbursed for absent days. If a
child attends for part of the time authorized to be in care in a day, but is absent for part of
the time authorized to be in care in that same day, the absent time must be reimbursed but
the time must not count toward the absent days limit. Child care providers must only be
reimbursed for absent days if the provider has a written policy for child absences and charges
all other families in care for similar absences.

(b) Notwithstanding paragraph (a), children with documented medical conditions that
cause more frequent absences may exceed the 25 absent days limit, or ten consecutive
full-day absent days limit. Absences due to a documented medical condition of a parent or
sibling who lives in the same residence as the child receiving child care assistance do not
count against the absent days limit in a deleted text beginfiscaldeleted text endnew text begin calendarnew text end year. Documentation of medical
conditions must be on the forms and submitted according to the timelines established by
the commissioner. A public health nurse or school nurse may verify the illness in lieu of a
medical practitioner. If a provider sends a child home early due to a medical reason,
including, but not limited to, fever or contagious illness, the child care center director or
lead teacher may verify the illness in lieu of a medical practitioner.

(c) Notwithstanding paragraph (a), children in families may exceed the absent days limit
if at least one parent: (1) is under the age of 21; (2) does not have a high school diploma or
commissioner of education-selected high school equivalency certification; and (3) is a
student in a school district or another similar program that provides or arranges for child
care, parenting support, social services, career and employment supports, and academic
support to achieve high school graduation, upon request of the program and approval of the
county. If a child attends part of an authorized day, payment to the provider must be for the
full amount of care authorized for that day.

(d) Child care providers must be reimbursed for up to ten federal or state holidays or
designated holidays per year when the provider charges all families for these days and the
holiday or designated holiday falls on a day when the child is authorized to be in attendance.
Parents may substitute other cultural or religious holidays for the ten recognized state and
federal holidays. Holidays do not count toward the absent days limit.

(e) A family or child care provider must not be assessed an overpayment for an absent
day payment unless (1) there was an error in the amount of care authorized for the family,
(2) all of the allowed full-day absent payments for the child have been paid, or (3) the family
or provider did not timely report a change as required under law.

(f) The provider and family shall receive notification of the number of absent days used
upon initial provider authorization for a family and ongoing notification of the number of
absent days used as of the date of the notification.

(g) For purposes of this subdivision, "absent days limit" means 25 full-day absent days
per child, excluding holidays, in a deleted text beginfiscaldeleted text endnew text begin calendarnew text end year; and ten consecutive full-day absent
days.

new text begin (h) For purposes of this subdivision, "holidays limit" means ten full-day holidays per
child, excluding absent days, in a calendar year.
new text end

new text begin (i) If a day meets the criteria of an absent day or a holiday under this subdivision, the
provider must bill that day as an absent day or holiday. A provider's failure to properly bill
an absent day or a holiday results in an overpayment, regardless of whether the child reached,
or is exempt from, the absent days limit or holidays limit for the calendar year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 13.

new text begin [245A.24] MANDATORY REPORTING.
new text end

new text begin All licensors whether employed by a county or the Department of Human Services must
immediately report any suspected fraud to the appropriate authorities.
new text end

Sec. 14.

Minnesota Statutes 2018, section 245E.03, subdivision 2, is amended to read:


Subd. 2.

Failure to provide access.

new text begin(a) new text endFailure to provide access deleted text beginmaydeleted text endnew text begin shallnew text end result in
denial or termination of authorizations for or payments to a recipient, provider, license
holder, or controlling individual in the child care assistance program.

new text begin (b) The intentional failure to provide access as required by subdivision 1 is punishable
as a misdemeanor. Notwithstanding any other law, when a court sentences a person for a
violation of this subdivision, it must impose a fine of not less than 50 percent of the maximum
fine authorized by law nor more than the maximum fine authorized by law. The minimum
fine required by this subdivision is in addition to the surcharge or assessment required by
section 357.021, subdivision 6, and is in addition to any sentence of imprisonment or
restitution imposed or ordered by the court. The provisions of section 609.101, subdivision
5, apply to a fine imposed under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019, and applies to crimes
committed on or after that date.
new text end

Sec. 15.

Minnesota Statutes 2018, section 245E.04, is amended to read:


245E.04 HONEST AND TRUTHFUL STATEMENTS.

new text begin (a) new text endIt shall be deleted text beginunlawfuldeleted text endnew text begin a gross misdemeanornew text end for a provider, license holder, controlling
individual, or recipient to:

(1) falsify, conceal, or cover up by any trick, scheme, or device a material fact;

(2) make any materially false, fictitious, or fraudulent statement or representation; or

(3) make or use any false writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry related to any child care assistance program
services that the provider, license holder, or controlling individual supplies or in relation to
any child care assistance payments received by a provider, license holder, or controlling
individual or to any fraud investigator or law enforcement officer conducting a financial
misconduct investigation.

new text begin (b) Notwithstanding any other law, when a court sentences a person for a violation of
this section, it must impose a fine of not less than 50 percent of the maximum fine authorized
by law nor more than the maximum fine authorized by law. The minimum fine required by
this section is in addition to the surcharge or assessment required by section 357.021,
subdivision 6, and is in addition to any sentence of imprisonment or restitution imposed or
ordered by the court. The provisions of section 609.101, subdivision 5, apply to a fine
imposed under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019, and applies to crimes
committed on or after that date.
new text end

Sec. 16. new text beginDIRECTION TO COMMISSIONER; CHILD CARE ASSISTANCE
PROGRAM PROVIDER BILLING.
new text end

new text begin The commissioner of human services shall propose legislation for the 2020 legislative
session necessary to ensure that the child care provider, center owner, director, manager,
license holder, or other controlling individual and the employee responsible for submitting
billing forms are each held liable if materially false information is intentionally provided
to a county on a child care assistance program billing form.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

EARLY LEARNING PROGRAMS FRAUD PREVENTION

Section 1.

Minnesota Statutes 2018, section 13.461, subdivision 28, is amended to read:


Subd. 28.

Child care assistance program.

new text begin(a) new text endData collected, maintained, used, or
disseminated by the welfare system pertaining to persons selected as legal nonlicensed child
care providers by families receiving child care assistance are classified under section 119B.02,
subdivision 6
.

new text begin (b) Data related to child care assistance program disqualification is governed by section
124D.165, subdivision 4a.
new text end

Sec. 2.

Minnesota Statutes 2018, section 124D.142, is amended to read:


124D.142 QUALITY RATING AND IMPROVEMENT SYSTEM.

(a) There is established a quality rating and improvement system (QRIS) framework to
ensure that Minnesota's children have access to high-quality early learning and care programs
in a range of settings so that they are fully ready for kindergarten deleted text beginby 2020deleted text end. deleted text beginCreation of adeleted text endnew text begin
The
new text end standards-based voluntary quality rating and improvement system includes:

(1) quality opportunities in order to improve the educational outcomes of children so
that they are ready for school. The framework shall be based on the Minnesota quality rating
system rating tool and a common set of child outcome and program standards and informed
by evaluation results;

(2) a tool to increase the number of publicly funded and regulated early learning and
care services in both public and private market programs that are high quality. If a program
or provider chooses to participate, the program or provider will be rated and may receive
public funding associated with the rating. The state shall develop a plan to link future early
learning and care state funding to the framework in a manner that complies with federal
requirements; and

(3) tracking progress toward statewide access to high-quality early learning and care
programs, progress toward the number of low-income children whose parents can access
quality programs, and progress toward increasing the number of children who are fully
prepared to enter kindergarten.

deleted text begin (b) In planning a statewide quality rating and improvement system framework in
paragraph (a), the state shall use evaluation results of the Minnesota quality rating system
rating tool in use in fiscal year 2008 to recommend:
deleted text end

deleted text begin (1) a framework of a common set of child outcome and program standards for a voluntary
statewide quality rating and improvement system;
deleted text end

deleted text begin (2) a plan to link future funding to the framework described in paragraph (a), clause (2);
and
deleted text end

deleted text begin (3) a plan for how the state will realign existing state and federal administrative resources
to implement the voluntary quality rating and improvement system framework. The state
shall provide the recommendation in this paragraph to the early childhood education finance
committees of the legislature by March 15, 2011.
deleted text end

deleted text begin (c) Prior to the creation of a statewide quality rating and improvement system in paragraph
(a), the state shall employ the Minnesota quality rating system rating tool in use in fiscal
year 2008 in the original Minnesota Early Learning Foundation pilot areas and additional
pilot areas supported by private or public funds with its modification as a result of the
evaluation results of the pilot project.
deleted text end

new text begin (b) A child care provider who has a quality rating under this section and is disqualified
from receiving child care assistance program reimbursement under chapter 119B, as provided
under section 256.98, subdivision 8, paragraph (c), must also have the quality rating
rescinded.
new text end

Sec. 3.

Minnesota Statutes 2018, section 124D.165, subdivision 2, is amended to read:


Subd. 2.

Family eligibility.

(a) For a family to receive an early learning scholarship,
parents or guardians must meet the following eligibility requirements:

(1) have an eligible child; deleted text beginand
deleted text end

(2) have income equal to or less than 185 percent of federal poverty level income in the
current calendar year, or be able to document their child's current participation in the free
and reduced-price lunch program or Child and Adult Care Food Program, National School
Lunch Act, United States Code, title 42, sections 1751 and 1766; the Food Distribution
Program on Indian Reservations, Food and Nutrition Act, United States Code, title 7, sections
2011-2036; Head Start under the federal Improving Head Start for School Readiness Act
of 2007; Minnesota family investment program under chapter 256J; child care assistance
programs under chapter 119B; the supplemental nutrition assistance program; or placement
in foster care under section 260C.212deleted text begin.deleted text endnew text begin; and
new text end

new text begin (3) must not currently be disqualified from the child care assistance program under
chapter 119B, as provided under section 256.98, subdivision 8, paragraph (b).
new text end

(b) An "eligible child" means a child who has not yet enrolled in kindergarten and is:

(1) at least three but not yet five years of age on September 1 of the current school year;

(2) a sibling from birth to age five of a child who has been awarded a scholarship under
this section provided the sibling attends the same program as long as funds are available;

(3) the child of a parent under age 21 who is pursuing a high school degree or a course
of study for a high school equivalency test; or

(4) homeless, in foster care, or in need of child protective services.

(c) A child who has received a scholarship under this section must continue to receive
a scholarship each year until that child is eligible for kindergarten under section 120A.20
and as long as funds are available.

(d) Early learning scholarships may not be counted as earned income for the purposes
of medical assistance under chapter 256B, MinnesotaCare under chapter 256L, Minnesota
family investment program under chapter 256J, child care assistance programs under chapter
119B, or Head Start under the federal Improving Head Start for School Readiness Act of
2007.

(e) A child from an adjoining state whose family resides at a Minnesota address as
assigned by the United States Postal Service, who has received developmental screening
under sections 121A.16 to 121A.19, who intends to enroll in a Minnesota school district,
and whose family meets the criteria of paragraph (a) is eligible for an early learning
scholarship under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 4.

Minnesota Statutes 2018, section 124D.165, subdivision 4, is amended to read:


Subd. 4.

Early childhood program eligibility.

(a) In order to be eligible deleted text beginto accept andeleted text endnew text begin
for
new text end early learning scholarshipnew text begin fundsnew text end, a program must:

(1) participate in the quality rating and improvement system under section 124D.142;
and

(2) beginning July 1, 2020, have a three- or four-star rating in the quality rating and
improvement system.

(b) Any program accepting scholarships must use the revenue to supplement and not
supplant federal funding.

(c) Notwithstanding paragraph (a), all Minnesota early learning foundation scholarship
program pilot sites are eligible to accept an early learning scholarship under this section.

new text begin (d) A program is not eligible for early learning scholarship funds if:
new text end

new text begin (1) it is disqualified from receiving payment for child care services from the child care
assistance program under chapter 119B, as provided under section 256.98, subdivision 8,
paragraph (c); or
new text end

new text begin (2) the commissioner of human services refuses to issue a child care authorization,
revokes an existing child care authorization, stops payment issued to a program, or refuses
to pay a bill under section 119B.13, subdivision 6, paragraph (d), clause (2).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 5.

Minnesota Statutes 2018, section 124D.165, is amended by adding a subdivision
to read:


new text begin Subd. 4a. new text end

new text begin Data sharing. new text end

new text begin The commissioner of human services may disseminate to the
commissioner of education data on child care assistance program disqualification for purposes
of determining family eligibility under subdivision 2, paragraph (a), clause (3), and program
eligibility under subdivision 4, paragraph (d). The commissioner of education may
disseminate the data to an early learning scholarship area administrator.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

ARTICLE 3

PUBLIC ASSISTANCE FRAUD PREVENTION

Section 1.

Minnesota Statutes 2018, 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; deleted text beginor
deleted text end

new text begin (4) to an agent of the welfare system or an 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 determines that disclosure may compromise a department
of human services ongoing investigation; or
new text end

deleted text begin (4)deleted text endnew text begin (5)new text end 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 626.556 or 626.557, 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 commissionernew text begin of human servicesnew text end of possible overpayments of public funds to a service
provider or recipient may be disclosed if the commissioner determines that it will not
compromise the investigation.

Sec. 2.

Minnesota Statutes 2018, section 245.095, is amended to read:


245.095 LIMITS ON RECEIVING PUBLIC FUNDS.

Subdivision 1.

Prohibition.

new text begin(a) new text endIf a provider, vendor, or individual enrolled, licensed,
deleted text begin ordeleted text end receiving funds under a grant contractnew text begin, or registerednew text end in any program administered by the
commissionernew text begin, including under the commissioner's powers and authorities in section 256.01,new text end
is excluded from deleted text beginanydeleted text endnew text begin thatnew text end program deleted text beginadministered by the commissioner, including under the
commissioner's powers and authorities in section 256.01
deleted text end, the commissioner shallnew text begin:
new text end

new text begin (1) new text endprohibit the excluded provider, vendor, or individual from enrolling deleted text beginordeleted text endnew text begin,new text end becoming
licensednew text begin, receiving grant funds, or registeringnew text end in any other program administered by the
commissionerdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (2) disenroll, revoke or suspend a license, disqualify, or debar the excluded provider,
vendor, or individual in any other program administered by the commissioner.
new text end

new text begin (b)new text end The duration of this prohibitionnew text begin, disenrollment, revocation, suspension,
disqualification, or debarment
new text end must last for the longest applicable sanction or disqualifying
period in effect for the provider, vendor, or individual permitted by state or federal law.

Subd. 2.

Definitions.

(a) For purposes of this section, the following definitions have the
meanings given them.

(b) "Excluded" means disenrolled, deleted text beginsubject to license revocation or suspension,
disqualified, or subject to vendor debarment
deleted text endnew text begin disqualified, having a license that has been
revoked or suspended under chapter 245A, or debarred or suspended
new text end under Minnesota Rules,
part 1230.1150new text begin, or excluded pursuant to section 256B.064, subdivision 3new text end.

(c) "Individual" means a natural person providing products or services as a provider or
vendor.

(d) "Provider" deleted text beginmeansdeleted text endnew text begin includes any entity or individual receiving payment from a program
administered by the Department of Human Services, and
new text end an owner, controlling individual,
license holder, director, or managerial officialnew text begin of an entity receiving payment from a program
administered by the Department of Human Services
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2018, section 245A.07, subdivision 2, is amended to read:


Subd. 2.

Temporary immediate suspension.

(a) The commissioner shall act immediately
to temporarily suspend a licensenew text begin issued under this chapternew text end if:

(1) the license holder's 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; deleted text beginor
deleted text end

(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 programdeleted text begin.deleted text endnew text begin;
new text end

new text begin (3) a child care license holder fails to comply with the child care assistance fraud
investigation requirements under chapter 245E; or
new text end

new text begin (4) the license holder is criminally charged in state or federal court with an offense that
involves fraud or theft against a program administered by the commissioner.
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 licensenew text begin issued under this chapternew text end 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 deleted text beginordeleted text endnew text begin,new text end personal servicenew text begin, or other means expressly set
forth in the commissioner's order
new text end. 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 EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 4.

Minnesota Statutes 2018, section 245A.07, subdivision 2a, is amended to read:


Subd. 2a.

Immediate suspension expedited hearing.

(a) Within five working days of
receipt of the license holder's timely appeal, the commissioner shall request assignment of
an administrative law judge. The request must include a proposed date, time, and place of
a hearing. A hearing must be conducted by an administrative law judge within 30 calendar
days of the request for assignment, unless an extension is requested by either party and
granted by the administrative law judge for good cause. The commissioner shall issue a
notice of hearing by certified mail or personal service at least ten working days before the
hearing. The scope of the hearing shall be limited solely to the issue of whether the temporary
immediate suspension should remain in effect pending the commissioner's final order under
section 245A.08, regarding a licensing sanction issued under subdivision 3 following the
immediate suspension. For suspensions under subdivision 2, paragraph (a), clause (1), the
burden of proof in expedited hearings under this subdivision shall be limited to the
commissioner's demonstration that reasonable cause exists to believe that the license holder's
actions or failure to comply with applicable law or rule poses, or the actions of other
individuals or conditions in the program poses an imminent risk of harm to the health, safety,
or rights of persons served by the program. "Reasonable cause" means there exist specific
articulable facts or circumstances which provide the commissioner with a reasonable
suspicion that there is an imminent risk of harm to the health, safety, or rights of persons
served by the program. When the commissioner has determined there is reasonable cause
to order the temporary immediate suspension of a license based on a violation of safe sleep
requirements, as defined in section 245A.1435, the commissioner is not required to
demonstrate that an infant died or was injured as a result of the safe sleep violations. For
suspensions under subdivision 2, paragraph (a), clause (2), the burden of proof in expedited
hearings under this subdivision shall be limited to the commissioner's demonstration by a
preponderance of evidence that, since the license was revoked, the license holder committed
additional violations of law or rule which may adversely affect the health or safety of persons
served by the program.

(b) The administrative law judge shall issue findings of fact, conclusions, and a
recommendation within ten working days from the date of hearing. The parties shall have
ten calendar days to submit exceptions to the administrative law judge's report. The record
shall close at the end of the ten-day period for submission of exceptions. The commissioner's
final order shall be issued within ten working days from the close of the record. When an
appeal of a temporary immediate suspension is withdrawn or dismissed, the commissioner
shall issue a final order affirming the temporary immediate suspension within ten calendar
days of the commissioner's receipt of the withdrawal or dismissal. Within 90 calendar days
after a final order affirming an immediate suspension, the commissioner shall make a
determination regarding whether a final licensing sanction shall be issued under subdivision
3. The license holder shall continue to be prohibited from operation of the program during
this 90-day period.

(c) When the final order under paragraph (b) affirms an immediate suspension, and a
final licensing sanction is issued under subdivision 3 and the license holder appeals that
sanction, the license holder continues to be prohibited from operation of the program pending
a final commissioner's order under section 245A.08, subdivision 5, regarding the final
licensing sanction.

new text begin (d) For suspensions under subdivision 2, paragraph (a), clause (3), the burden of proof
in expedited hearings under this subdivision shall be limited to the commissioner's
demonstration by a preponderance of evidence that a criminal complaint and warrant or
summons was issued for the license holder that was not dismissed, and that the criminal
charge is an offense that involves fraud or theft against a program administered by the
commissioner.
new text end

Sec. 5.

Minnesota Statutes 2018, section 245A.07, subdivision 3, is amended to read:


Subd. 3.

License suspension, revocation, or fine.

(a) The commissioner may suspend
or revoke a license, or impose a fine if:

(1) a license holder fails to comply fully with applicable laws or rulesnew text begin including but not
limited to the requirements of this chapter and chapter 245C
new text end;

(2) a license holder, a controlling individual, or an individual living in the household
where the licensed services are provided or is otherwise subject to a background study has
deleted text begin adeleted text endnew text begin been disqualified and thenew text end disqualification deleted text beginwhich hasdeleted text endnew text begin wasnew text end not deleted text beginbeendeleted text end set aside deleted text beginunder section
245C.22
deleted text endnew text begin and no variance has been grantednew text end;

(3) a license holder knowingly withholds relevant information from or gives false or
misleading information to the commissioner in connection with an application for a license,
in connection with the background study status of an individual, during an investigation,
or regarding compliance with applicable laws or rules; deleted text beginor
deleted text end

(4) deleted text beginafter July 1, 2012, and upon request by the commissioner, a license holder fails to
submit the information required of an applicant under section 245A.04, subdivision 1,
paragraph (f) or (g).
deleted text endnew text begin a license holder is excluded from any program administered by the
commissioner under section 245.095; or
new text end

new text begin (5) revocation is required under section 245A.04, subdivision 7, paragraph (e).
new text end

A license holder who has had a license new text beginissued under this chapter new text endsuspended, revoked,
or has been ordered to pay a fine must be given notice of the action by certified mail or
personal service. If mailed, the notice must be mailed to the address shown on the application
or the last known address of the license holder. The notice must state in plain language the
reasons the license was suspended or revoked, or a fine was ordered.

(b) If the license was suspended or revoked, the notice must inform the license holder
of the right to a contested case hearing under chapter 14 and Minnesota Rules, parts
1400.8505 to 1400.8612. The license holder may appeal an order suspending or revoking
a license. The appeal of an order suspending or revoking a license must be made in writing
by certified mail or personal service. If mailed, the appeal must be postmarked and sent to
the commissioner within ten calendar days after the license holder receives notice that the
license has been suspended or revoked. If a request is made by personal service, it must be
received by the commissioner within ten calendar days after the license holder received the
order. Except as provided in subdivision 2a, paragraph (c), if a license holder submits a
timely appeal of an order suspending or revoking a license, the license holder may continue
to operate the program as provided in section 245A.04, subdivision 7, paragraphs (g) and
(h), until the commissioner issues a final order on the suspension or revocation.

(c)(1) If the license holder was ordered to pay a fine, the notice must inform the license
holder of the responsibility for payment of fines and the right to a contested case hearing
under chapter 14 and Minnesota Rules, parts 1400.8505 to 1400.8612. The appeal of an
order to pay a fine must be made in writing by certified mail or personal service. If mailed,
the appeal must be postmarked and sent to the commissioner within ten calendar days after
the license holder receives notice that the fine has been ordered. If a request is made by
personal service, it must be received by the commissioner within ten calendar days after
the license holder received the order.

(2) The license holder shall pay the fines assessed on or before the payment date specified.
If the license holder fails to fully comply with the order, the commissioner may issue a
second fine or suspend the license until the license holder complies. If the license holder
receives state funds, the state, county, or municipal agencies or departments responsible for
administering the funds shall withhold payments and recover any payments made while the
license is suspended for failure to pay a fine. A timely appeal shall stay payment of the fine
until the commissioner issues a final order.

(3) A license holder shall promptly notify the commissioner of human services, in writing,
when a violation specified in the order to forfeit a fine is corrected. If upon reinspection the
commissioner determines that a violation has not been corrected as indicated by the order
to forfeit a fine, the commissioner may issue a second fine. The commissioner shall notify
the license holder by certified mail or personal service that a second fine has been assessed.
The license holder may appeal the second fine as provided under this subdivision.

(4) Fines shall be assessed as follows:

(i) the license holder shall forfeit $1,000 for each determination of maltreatment of a
child under section 626.556 or the maltreatment of a vulnerable adult under section 626.557
for which the license holder is determined responsible for the maltreatment under section
626.556, subdivision 10e, paragraph (i), or 626.557, subdivision 9c, paragraph (c);

(ii) if the commissioner determines that a determination of maltreatment for which the
license holder is responsible is the result of maltreatment that meets the definition of serious
maltreatment as defined in section 245C.02, subdivision 18, the license holder shall forfeit
$5,000;

(iii) for a program that operates out of the license holder's home and a program licensed
under Minnesota Rules, parts 9502.0300 to deleted text begin9502.0495deleted text endnew text begin 9502.0445new text end, the fine assessed against
the license holder shall not exceed $1,000 for each determination of maltreatment;

(iv) the license holder shall forfeit $200 for each occurrence of a violation of law or rule
governing matters of health, safety, or supervision, including but not limited to the provision
of adequate staff-to-child or adult ratios, and failure to comply with background study
requirements under chapter 245C; and

(v) the license holder shall forfeit $100 for each occurrence of a violation of law or rule
other than those subject to a $5,000, $1,000, or $200 fine in items (i) to (iv).

For purposes of this section, "occurrence" means each violation identified in the
commissioner's fine order. Fines assessed against a license holder that holds a license to
provide home and community-based services, as identified in section 245D.03, subdivision
1
, and a community residential setting or day services facility license under chapter 245D
where the services are provided, may be assessed against both licenses for the same
occurrence, but the combined amount of the fines shall not exceed the amount specified in
this clause for that occurrence.

(5) When a fine has been assessed, the license holder may not avoid payment by closing,
selling, or otherwise transferring the licensed program to a third party. In such an event, the
license holder will be personally liable for payment. In the case of a corporation, each
controlling individual is personally and jointly liable for payment.

(d) Except for background study violations involving the failure to comply with an order
to immediately remove an individual or an order to provide continuous, direct supervision,
the commissioner shall not issue a fine under paragraph (c) relating to a background study
violation to a license holder who self-corrects a background study violation before the
commissioner discovers the violation. A license holder who has previously exercised the
provisions of this paragraph to avoid a fine for a background study violation may not avoid
a fine for a subsequent background study violation unless at least 365 days have passed
since the license holder self-corrected the earlier background study violation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 6.

new text begin [245I.01] OFFICE OF INSPECTOR GENERAL.
new text end

new text begin The Office of Inspector General is created as a standalone office outside of the
Department of Human Services. The governor shall appoint the executive director of the
Office of Inspector General under section 15.06. The executive director shall develop and
maintain licensing, background studies, and fraud prevention services in a manner consistent
with sections 256.98 to 256.9861; 256B.0705, subdivision 4; 256B.0949, subdivision 16;
256B.85, subdivision 16; and chapters 245A, 245C, 245D, 245E, and 245H. Office of
Inspector General services shall be provided in coordination with counties and other vendors.
Office of Inspector General services shall include licensing, background studies, fraud
prevention and investigations, and other services consistent with the mission of the Office
of Inspector General. The administrative structure of the Office of Inspector General must
be statewide in character.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 7.

new text begin [245I.05] TRANSFER OF DUTIES.
new text end

new text begin (a) Section 15.039 applies to the transfer of duties required by this chapter.
new text end

new text begin (b) The commissioner of administration, with the approval of the governor, may issue
reorganization orders under section 16B.37 as necessary to carry out the transfer of duties
required by this chapter. The provision of section 16B.37, subdivision 1, stating that transfers
under section 16B.37 may be made only to an agency that has been in existence for at least
one year does not apply to transfers to an agency created by this chapter.
new text end

new text begin (c) The initial salary for the executive director of the Office of Inspector General is the
same as the salary for the commissioner of health. The salary may be changed in the manner
specified in section 15A.0815.
new text end

new text begin (d) The commissioner of management and budget must ensure that the aggregate cost
for the executive director of the Office of Inspector General is not more than the aggregate
cost of the primary executives in the Department of Human Services responsible for
management of licensing, background studies, and fraud prevention and investigations
immediately before the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 8.

new text begin [256.0113] ELIGIBILITY VERIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Verification required; vendor contract. new text end

new text begin (a) The commissioner shall
ensure that medical assistance, MinnesotaCare, child care assistance programs under chapter
119B, and Supplemental Nutrition Assistance Program (SNAP) eligibility determinations
through the MNsure information technology system and through other agency eligibility
determination systems include the computerized verification of income, residency, identity,
and, when applicable, assets and compliance with SNAP work requirements.
new text end

new text begin (b) The commissioner shall contract with a vendor to verify the eligibility of all enrollees
of medical assistance, MinnesotaCare, child care assistance programs, and SNAP during a
specified audit period. This contract shall be exempt from sections 16C.08, subdivision 2,
clause (1); 16C.09, paragraph (a), clause (1); 43A.047, paragraph (a); and any other law to
the contrary.
new text end

new text begin (c) The contract must require the vendor to comply with enrollee data privacy
requirements and to use encryption to safeguard enrollee identity. The contract must also
provide penalties for vendor noncompliance.
new text end

new text begin (d) The contract must include a revenue-sharing agreement, under which vendor
compensation is limited to a portion of any savings to the state resulting from the vendor's
implementation of eligibility verification initiatives under this section.
new text end

new text begin (e) The commissioner shall use existing resources to fund any agency administrative
and technology-related costs incurred as a result of implementing this section.
new text end

new text begin (f) All state savings resulting from implementation of the vendor contract under this
section, minus any payments to the vendor made under the terms of the revenue sharing
agreement, shall be deposited into the health care access fund.
new text end

new text begin Subd. 2. new text end

new text begin Verification process; vendor duties. new text end

new text begin (a) The verification process implemented
by the vendor must include but is not limited to data matches of the name, date of birth,
address, and Social Security number of each medical assistance, MinnesotaCare, child care
assistance programs, and SNAP enrollee against relevant information in federal and state
data sources, including the federal data hub established under the Affordable Care Act. In
designing the verification process, the vendor, to the extent feasible, shall incorporate
procedures that are compatible and coordinated with, and build upon or improve, existing
procedures used by the MNsure information technology system and other agency eligibility
determination systems.
new text end

new text begin (b) The vendor, upon preliminary determination that an enrollee is eligible or ineligible,
shall notify the commissioner. Within 20 business days of notification, the commissioner
shall accept the preliminary determination or reject the preliminary determination with a
stated reason. The commissioner shall retain final authority over eligibility determinations.
The vendor shall keep a record of all preliminary determinations of ineligibility submitted
to the commissioner.
new text end

new text begin (c) The vendor shall recommend to the commissioner an eligibility verification process
that allows ongoing verification of enrollee eligibility under the MNsure information
technology system and other agency eligibility determination systems.
new text end

new text begin (d) An eligibility verification vendor contract shall be awarded for an initial one-year
period beginning January 1, 2020. The commissioner shall renew the contract for up to
three additional one-year periods and require additional eligibility verification audits if the
commissioner or the legislative auditor determines that the MNsure information technology
system and other agency eligibility determination systems cannot effectively verify the
eligibility of medical assistance, MinnesotaCare, child care assistance programs under
chapter 119B, and SNAP enrollees.
new text end

Sec. 9.

Minnesota Statutes 2018, section 256.98, is amended by adding a subdivision to
read:


new text begin Subd. 1a. new text end

new text begin Unauthorized transfer. new text end

new text begin A person who violates subdivision 1 with the intent
to transfer any payments or other benefits to an individual or organization in a foreign
country whose residents are subject to travel restrictions under federal law or executive
order based on information-sharing practices that have been determined to be inadequate
is guilty of a crime and may be sentenced as follows:
new text end

new text begin (1) to imprisonment for not more than 25 years or to payment of a fine of not more than
$125,000, or both if the value of the payments or benefits wrongfully obtained exceeds
$35,000;
new text end

new text begin (2) to imprisonment for not more than 15 years or to payment of a fine of not more than
$75,000, or both if the value of the payments or benefits wrongfully obtained is more than
$5,000 but not more than $35,000;
new text end

new text begin (3) to imprisonment for not more than ten years or to payment of a fine of not more than
$50,000, or both if the value of the payments or benefits wrongfully obtained is more than
$1,000 but not more than $5,000;
new text end

new text begin (4) to imprisonment for not more than five years or to payment of a fine of not more
than $15,000, or both if the value of the payments or benefits wrongfully obtained is more
than $500 but not more than $1,000; and
new text end

new text begin (5) to imprisonment for not more than two years or to payment of a fine of not more
than $5,000, or both if the value of the payments or benefits wrongfully obtained is $500
or less.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019, and applies to offenses
committed on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2018, section 256.98, subdivision 8, is amended to read:


Subd. 8.

Disqualification from program.

(a) Any person found to be guilty of
wrongfully obtaining assistance by a federal or state court or by an administrative hearing
determination, or waiver thereof, through a disqualification consent agreement, or as part
of any approved diversion plan under section 401.065, or any court-ordered stay which
carries with it any probationary or other conditions, in the Minnesota family investment
program and any affiliated program to include the diversionary work program and the work
participation cash benefit program, the food stamp or food support program, the general
assistance program, housing support under chapter 256I, or the Minnesota supplemental
aid program shall be disqualified from that program. In addition, any person disqualified
from the Minnesota family investment program shall also be disqualified from the food
stamp or food support program. The needs of that individual shall not be taken into
consideration in determining the grant level for that assistance unit:

(1) for one year after the first offense;

(2) for two years after the second offense; and

(3) permanently after the third or subsequent offensenew text begin, or for a violation of subdivision
1a
new text end.

The period of program disqualification shall begin on the date stipulated on the advance
notice of disqualification without possibility of postponement for administrative stay or
administrative hearing and shall continue through completion unless and until the findings
upon which the sanctions were imposed are reversed by a court of competent jurisdiction.
The period for which sanctions are imposed is not subject to review. The sanctions provided
under this subdivision are in addition to, and not in substitution for, any other sanctions that
may be provided for by law for the offense involved. A disqualification established through
hearing or waiver shall result in the disqualification period beginning immediately unless
the person has become otherwise ineligible for assistance. If the person is ineligible for
assistance, the disqualification period begins when the person again meets the eligibility
criteria of the program from which they were disqualified and makes application for that
program.

(b) A family receiving assistance through child care assistance programs under chapter
119B with a family member who is found to be guilty of wrongfully obtaining child care
assistance by a federal court, state court, or an administrative hearing determination or
waiver, through a disqualification consent agreement, as part of an approved diversion plan
under section 401.065, or a court-ordered stay with probationary or other conditions, is
disqualified from child care assistance programs. The disqualifications deleted text beginmust be for periods
of one year and two years for the first and second offenses, respectively. Subsequent
violations
deleted text end must deleted text beginresult indeleted text endnew text begin benew text end permanent deleted text begindisqualificationdeleted text end. deleted text beginDuring the disqualification period,deleted text end
Disqualification from any child care program must extend to all child care programs and
must be immediately applied.

(c) A provider caring for children receiving assistance through child care assistance
programs under chapter 119B is disqualified from receiving payment for child care services
from the child care assistance program under chapter 119B when the provider is found to
have wrongfully obtained child care assistance by a federal court, state court, or an
administrative hearing determination or waiver under section 256.046, through a
disqualification consent agreement, as part of an approved diversion plan under section
401.065, or a court-ordered stay with probationary or other conditions. The disqualification
must be deleted text beginfor a period of one year for the first offense and two years for the second offense.
Any subsequent violation must result in
deleted text end permanent deleted text begindisqualificationdeleted text end. The disqualification
deleted text begin perioddeleted text end must be imposed immediately after a determination is made under this paragraph.
deleted text begin During thedeleted text endnew text begin Uponnew text end disqualification deleted text beginperioddeleted text end, the provider is disqualified from receiving payment
from any child care program under chapter 119B.

(d) Any person found to be guilty of wrongfully obtaining MinnesotaCare for adults
without children and upon federal approval, all categories of medical assistance and
remaining categories of MinnesotaCare, except for children through age 18, by a federal or
state court or by an administrative hearing determination, or waiver thereof, through a
disqualification consent agreement, or as part of any approved diversion plan under section
401.065, or any court-ordered stay which carries with it any probationary or other conditions,
is disqualified from that program. The period of disqualification is one year after the first
offense, two years after the second offense, and permanently after the third or subsequent
offense. The period of program disqualification shall begin on the date stipulated on the
advance notice of disqualification without possibility of postponement for administrative
stay or administrative hearing and shall continue through completion unless and until the
findings upon which the sanctions were imposed are reversed by a court of competent
jurisdiction. The period for which sanctions are imposed is not subject to review. The
sanctions provided under this subdivision are in addition to, and not in substitution for, any
other sanctions that may be provided for by law for the offense involved.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2019.
new text end

Sec. 11.

Minnesota Statutes 2018, section 256.984, subdivision 1, is amended to read:


Subdivision 1.

Declaration.

new text begin(a) new text endEvery application for public assistance under this chapter
or chapters 256B, 256D, 256J, and 256L; child care programs under chapter 119B; and food
stamps or food support under chapter 393 shall be in writing or reduced to writing as
prescribed by the state agency and shall contain the following declaration which shall be
signed by the applicant:

"I declare under the penalties of perjury that this application has been examined by me
and to the best of my knowledge is a true and correct statement of every material point.
I understand that a person convicted of perjury may be sentenced to imprisonment of
not more than five years or to payment of a fine of not more than $10,000, or both."

new text begin (b) Signing an application for public assistance pursuant to paragraph (a) constitutes
"verification upon oath or affirmation" as defined in section 358.52, without administration
of an oath under section 358.07, provided that the signature is affixed immediately below
the required declaration.
new text end

Sec. 12.

Minnesota Statutes 2018, section 609.27, subdivision 2, is amended to read:


Subd. 2.

Sentence.

Whoever violates subdivision 1 may be sentenced as follows:

(1) to imprisonment for not more than 90 days or to payment of a fine of not more than
$1,000, or both if neither the pecuniary gain received by the violator nor the loss suffered
by the person threatened or another as a result of the threat exceeds $300, or the benefits
received or harm sustained are not susceptible of pecuniary measurement; or

(2) to imprisonment for not more than five years or to payment of a fine of not more
than $10,000, or both, if such pecuniary gain or loss is more than $300 but less than $2,500;
or

(3) to imprisonment for not more than ten years or to payment of a fine of not more than
$20,000, or both, if such pecuniary gain or loss is $2,500, or morenew text begin, or if the person violates
subdivision 1 with the intent to involve another person in financial misconduct as defined
in section 245E.01, subdivision 8
new text end.

Sec. 13.

Minnesota Statutes 2018, section 609.48, subdivision 1, is amended to read:


Subdivision 1.

Acts constituting.

Whoever makes a false material statement not believing
it to be true in any of the following cases is guilty of perjury and may be sentenced as
provided in subdivision 4:

(1) in or for an action, hearing or proceeding of any kind in which the statement is
required or authorized by law to be made under oath or affirmation;

(2) in any writing which is required or authorized by law to be under oath or affirmation;

(3) in any writing made according to section 358.115;

(4) in any writing made according to section 358.116; deleted text beginor
deleted text end

(5)new text begin in any writing made according to sections 119B.125 or 256.984; or
new text end

new text begin (6)new text end in any other case in which the penalties for perjury are imposed by law and no specific
sentence is otherwise provided.

Sec. 14.

new text begin [609.817] CRIMINAL PENALTIES FOR ACTS INVOLVING HUMAN
SERVICES PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Payments made relating to human services programs. new text end

new text begin A person who
intentionally offers or pays any remuneration, including any kickback, bribe, or rebate,
directly or indirectly, overtly or covertly, in cash or in kind, to a person is guilty of a crime
and may be sentenced as provided in subdivision 3 if such offer or payment is made to
induce the person:
new text end

new text begin (1) to apply for, receive, or induce another person to apply for or receive a human services
benefit, service, or grant related to a program funded in whole or in part by the Department
of Human Services or administered by the commissioner of human services, including but
not limited to a human services benefit, service, or grant funded in whole or in part by a
local social services agency, the Department of Human Services, or the United States
Department of Health and Human Services; or
new text end

new text begin (2) to apply for or to use a particular vendor providing a service administered or funded
in whole or in part by the Department of Human Services, a local social services agency,
or the United States Department of Health and Human Services.
new text end

new text begin Subd. 2. new text end

new text begin Payments received relating to human services programs. new text end

new text begin A person who
intentionally solicits or receives any remuneration, including any kickback, bribe, or rebate,
directly or indirectly, overtly or covertly, in cash or in kind is guilty of a crime and may be
sentenced as provided in subdivision 3 if the remuneration is solicited or received:
new text end

new text begin (1) in return for applying for or receiving a human services benefit, service, or grant
administered or funded in whole or in part by the Department of Human Services or
administered by the commissioner of human services, including but not limited to a human
services benefit, service, or grant funded in whole or in part by a local social services agency,
the Department of Human Services, or the United States Department of Health and Human
Services;
new text end

new text begin (2) in return for applying for or using a particular vendor providing a service administered
or funded in whole or in part by the Department of Human Services, a local social services
agency, or the United States Department of Health and Human Services; or
new text end

new text begin (3) in return for receiving or agreeing to receive payments in excess of fair and reasonable
market value for services or supplies provided to a company or person who is being paid
in whole or in part by the Department of Human Services, a local social services agency,
or the United States Department of Health and Human Services to provide a human services
benefit to a person.
new text end

new text begin Subd. 3. new text end

new text begin Sentence. new text end

new text begin Whoever violates subdivision 1 or 2 may be sentenced to
imprisonment for not more than ten years or to payment of a fine of not more than $20,000,
or both.
new text end

new text begin Subd. 4. new text end

new text begin Defense. new text end

new text begin It is not a defense under this section for the person or company
receiving or making the payments in excess of fair and reasonable market value to claim
the person did not have knowledge of the source of the payments.
new text end

new text begin Subd. 5. new text end

new text begin Persons exempt. new text end

new text begin This section does not apply if:
new text end

new text begin (1) the employee receiving the remuneration is a bona fide employee of the company
receiving payment for providing care or services;
new text end

new text begin (2) the remuneration received by the employee is for work performed by the employee
and is paid via a standard payroll check or a direct deposit from the company payroll account
to the bank designated by the employee; and
new text end

new text begin (3) the company making the payment complies with all state and federal laws relating
to tax withholding, Social Security and Medicare withholding, and wage reporting to the
Department of Employment and Economic Development.
new text end

new text begin Subd. 6. new text end

new text begin Additional sanctions. new text end

new text begin (a) Claims or payments for any service rendered or
claimed to have been rendered by a provider or individual who violated this section in regard
to the person for whom such services were rendered or claimed to have been rendered are
noncompensable, unenforceable as a matter of law, and constitute the value of any restitution
owed to the Department of Human Services, a county, or the United States Department of
Health and Human Services.
new text end

new text begin (b) For the purposes of this section, service includes any benefit, service, or grant
administered or funded in whole or in part by the Department of Human Services, a county,
or the United States Department of Health and Human Services.
new text end

new text begin (c) A person convicted under this section is subject to prohibitions described under
section 245.095.
new text end

Sec. 15. new text beginDIRECTION TO COMMISSIONER; REQUIRING ELIGIBILITY
VERIFICATION AUDIT REPORT.
new text end

new text begin The commissioner and the vendor, following the conclusion of the initial contract period,
shall jointly submit an eligibility verification audit report to the chairs and ranking minority
members of the legislative committees with jurisdiction over health and human services
policy and finance. The report shall include but is not limited to information in the form of
unidentified summary data on preliminary determinations of eligibility or ineligibility
communicated by the vendor, the actions taken on those preliminary determinations by the
commissioner, and the commissioner's reasons for rejecting preliminary determinations by
the vendor. The report must also include the recommendations for ongoing verification of
enrollee eligibility required under Minnesota Statutes, section 256.0113, subdivision 2,
paragraph (c).
new text end

Sec. 16. new text beginAPPROPRIATIONS.
new text end

new text begin (a) $....... in fiscal year 2020 and $....... in fiscal year 2021 are appropriated from the
general fund to the commissioner of human services for purposes of adding four additional
full-time equivalent positions to the Office of Inspector General, Financial Fraud and Abuse
Investigation Division. Of these full-time equivalent positions, three positions must be
investigator positions and the fourth position must be a child care assistance fraud supervisor.
The individuals who fill the positions must have a background in law enforcement.
new text end

new text begin (b) $355,000 in fiscal year 2020 and $105,000 in fiscal year 2021 are appropriated from
the general fund to the commissioner of human services for purposes of implementing and
maintaining a case tracking system in the Office of Inspector General, Financial Fraud and
Abuse Investigation Division.
new text end

new text begin (c) $1,275,000 in fiscal year 2020 and $1,275,000 in fiscal year 2021 are appropriated
from the general fund to the commissioner of human services for the purposes of the fraud
prevention investigation grant program under Minnesota Statutes, section 256.983.
new text end

Sec. 17. new text beginREVISOR INSTRUCTION; CONFORMING STATUTORY CHANGES.
new text end

new text begin The revisor of statutes, in consultation with House Research Department and Senate
Counsel, Research and Fiscal Analysis, and the commissioner of human services, shall
prepare a bill for introduction in the 2020 legislative session proposing the statutory changes
needed to implement the transfers of duties required by this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

ARTICLE 4

PUBLIC ASSISTANCE ELIGIBILITY DETERMINATIONS

Section 1.

Minnesota Statutes 2018, section 119B.09, subdivision 4, is amended to read:


Subd. 4.

Eligibility; annual income; calculation.

(a) Annual income of the applicant
family is the current monthly income of the family multiplied by 12 or the income for the
12-month period immediately preceding the date of application, or income calculated by
the method which provides the most accurate assessment of income available to the family.

(b) Self-employment income must be calculated based on gross receipts less operating
expensesnew text begin authorized by the Internal Revenue Servicenew text end.

(c) Income changes are processed under section 119B.025, subdivision 4. Included lump
sums counted as income under section 256P.06, subdivision 3, must be annualized over 12
months. Income must be verified with documentary evidence.new text begin Income includes all deposits
into accounts owned or controlled by the applicant, including amounts spent on personal
expenses including rent, mortgage, automobile-related expenses, utilities, and food, and
amounts received as salary or draws from business accounts. Income does not include a
deposit specifically identified by the applicant as a loan or gift, for which the applicant
provides the source, date, amount, and repayment terms.
new text end If the applicant does not have
sufficient evidence of income, verification must be obtained from the source of the income.

Sec. 2.

Minnesota Statutes 2018, section 256B.02, is amended by adding a subdivision to
read:


new text begin Subd. 20. new text end

new text begin Income. new text end

new text begin Income is calculated using the adjusted gross income methodology
under the Affordable Care Act. Income includes funds in personal or business accounts
used to pay personal expenses including rent, mortgage, automobile-related expenses,
utilities, food, and other personal expenses not directly related to the business, unless the
funds are directly attributable to an exception to the income requirement specifically
identified by the applicant.
new text end

Sec. 3.

Minnesota Statutes 2018, section 256B.056, subdivision 3, is amended to read:


Subd. 3.

Asset limitations for certain individuals.

(a) To be eligible for medical
assistance, a person must not individually own more than $3,000 in assets, or if a member
of a household with two family members, husband and wife, or parent and child, the
household must not own more than $6,000 in assets, plus $200 for each additional legal
dependent. In addition to these maximum amounts, an eligible individual or family may
accrue interest on these amounts, but they must be reduced to the maximum at the time of
an eligibility redetermination. The accumulation of the clothing and personal needs allowance
according to section 256B.35 must also be reduced to the maximum at the time of the
eligibility redetermination. The value of assets that are not considered in determining
eligibility for medical assistance is the value of those assets excluded under the Supplemental
Security Income program for aged, blind, and disabled persons, with the following
exceptions:

(1) household goods and personal effects are not considered;

(2) capital and operating assets of a trade or business that the local agency determines
are necessary to the person's ability to earn an income are not considereddeleted text begin;deleted text endnew text begin. A bank account
that contains personal income or assets, or is used to pay personal expenses, is not a capital
or operating asset of a trade or business;
new text end

(3) motor vehicles are excluded to the same extent excluded by the Supplemental Security
Income program;

(4) assets designated as burial expenses are excluded to the same extent excluded by the
Supplemental Security Income program. Burial expenses funded by annuity contracts or
life insurance policies must irrevocably designate the individual's estate as contingent
beneficiary to the extent proceeds are not used for payment of selected burial expenses;

(5) for a person who no longer qualifies as an employed person with a disability due to
loss of earnings, assets allowed while eligible for medical assistance under section 256B.057,
subdivision 9
, are not considered for 12 months, beginning with the first month of ineligibility
as an employed person with a disability, to the extent that the person's total assets remain
within the allowed limits of section 256B.057, subdivision 9, paragraph (d);

(6) when a person enrolled in medical assistance under section 256B.057, subdivision
9
, is age 65 or older and has been enrolled during each of the 24 consecutive months before
the person's 65th birthday, the assets owned by the person and the person's spouse must be
disregarded, up to the limits of section 256B.057, subdivision 9, paragraph (d), when
determining eligibility for medical assistance under section 256B.055, subdivision 7. The
income of a spouse of a person enrolled in medical assistance under section 256B.057,
subdivision 9
, during each of the 24 consecutive months before the person's 65th birthday
must be disregarded when determining eligibility for medical assistance under section
256B.055, subdivision 7. Persons eligible under this clause are not subject to the provisions
in section 256B.059; and

(7) effective July 1, 2009, certain assets owned by American Indians are excluded as
required by section 5006 of the American Recovery and Reinvestment Act of 2009, Public
Law 111-5. For purposes of this clause, an American Indian is any person who meets the
definition of Indian according to Code of Federal Regulations, title 42, section 447.50.

(b) No asset limit shall apply to persons eligible under section 256B.055, subdivision
15.

Sec. 4.

Minnesota Statutes 2018, section 256B.056, subdivision 4, is amended to read:


Subd. 4.

Income.

(a) To be eligible for medical assistance, a person eligible under section
256B.055, subdivisions 7, 7a, and 12, may have income up to 100 percent of the federal
poverty guidelines. Effective January 1, 2000, and each successive January, recipients of
Supplemental Security Income may have an income up to the Supplemental Security Income
standard in effect on that date.

(b) Effective January 1, 2014, to be eligible for medical assistance, under section
256B.055, subdivision 3a, a parent or caretaker relative may have an income up to 133
percent of the federal poverty guidelines for the household size.

(c) To be eligible for medical assistance under section 256B.055, subdivision 15, a
person may have an income up to 133 percent of federal poverty guidelines for the household
size.

(d) To be eligible for medical assistance under section 256B.055, subdivision 16, a child
age 19 to 20 may have an income up to 133 percent of the federal poverty guidelines for
the household size.

(e) To be eligible for medical assistance under section 256B.055, subdivision 3a, a child
under age 19 may have income up to 275 percent of the federal poverty guidelines for the
household size or an equivalent standard when converted using modified adjusted gross
income methodology as required under the Affordable Care Act. Children who are enrolled
in medical assistance as of December 31, 2013, and are determined ineligible for medical
assistance because of the elimination of income disregards under modified adjusted gross
income methodology as defined in subdivision 1a remain eligible for medical assistance
under the Children's Health Insurance Program Reauthorization Act of 2009, Public Law
111-3, until the date of their next regularly scheduled eligibility redetermination as required
in subdivision 7a.

(f) In computing income to determine eligibility of persons under paragraphs (a) to (e)
who are not residents of long-term care facilities, the commissioner shallnew text begin: (1)new text end disregard
increases in income as required by Public Laws 94-566, section 503; 99-272; and 99-509.
For persons eligible under paragraph (a), veteran aid and attendance benefits and Veterans
Administration unusual medical expense payments are considered income to the recipientdeleted text begin.deleted text endnew text begin;
and (2) include all assets available to the applicant that are considered income according to
the Internal Revenue Service. Income includes all deposits into accounts owned or controlled
by the applicant, including amounts spent on personal expenses including rent, mortgage,
automobile-related expenses, utilities, and food, and amounts received as salary or draws
from business accounts and not otherwise excluded by federal or state laws. Income does
not include a deposit specifically identified by the applicant as a loan or gift, for which the
applicant provides the source, date, amount, and repayment terms.
new text end

Sec. 5.

Minnesota Statutes 2018, section 256J.08, subdivision 47, is amended to read:


Subd. 47.

Income.

"Income" means cash or in-kind benefit, whether earned or unearned,
received by or available to an applicant or participant that is not property under section
256P.02.new text begin An applicant must document that the property is not available to the applicant.
new text end

Sec. 6.

Minnesota Statutes 2018, section 256J.21, subdivision 2, is amended to read:


Subd. 2.

Income exclusions.

The following must be excluded in determining a family's
available income:

(1) payments for basic care, difficulty of care, and clothing allowances received for
providing family foster care to children or adults under Minnesota Rules, parts 9555.5050
to 9555.6265, 9560.0521, and 9560.0650 to 9560.0654, payments for family foster care for
children under section 260C.4411 or chapter 256N, and payments received and used for
care and maintenance of a third-party beneficiary who is not a household member;

(2) reimbursements for employment training received through the Workforce Investment
Act of 1998, United States Code, title 20, chapter 73, section 9201;

(3) reimbursement for out-of-pocket expenses incurred while performing volunteer
services, jury duty, employment, or informal carpooling arrangements directly related to
employment;

(4) all educational assistance, except the county agency must count graduate student
teaching assistantships, fellowships, and other similar paid work as earned income and,
after allowing deductions for any unmet and necessary educational expenses, shall count
scholarships or grants awarded to graduate students that do not require teaching or research
as unearned income;

(5) loans, regardless of purpose, from public or private lending institutions, governmental
lending institutions, or governmental agencies;

(6) loans from private individuals, regardless of purpose, provided an applicant or
participant deleted text begindocuments that the lender expectsdeleted text endnew text begin provides documentation of the source of the
loan, dates, amount of the loan, and terms of
new text end repayment;

(7)(i) state income tax refunds; and

(ii) federal income tax refunds;

(8)(i) federal earned income credits;

(ii) Minnesota working family credits;

(iii) state homeowners and renters credits under chapter 290A; and

(iv) federal or state tax rebates;

(9) funds received for reimbursement, replacement, or rebate of personal or real property
when these payments are made by public agencies, awarded by a court, solicited through
public appeal, or made as a grant by a federal agency, state or local government, or disaster
assistance organizations, subsequent to a presidential declaration of disaster;

(10) the portion of an insurance settlement that is used to pay medical, funeral, and burial
expenses, or to repair or replace insured property;

(11) reimbursements for medical expenses that cannot be paid by medical assistance;

(12) payments by a vocational rehabilitation program administered by the state under
chapter 268A, except those payments that are for current living expenses;

(13) in-kind income, including any payments directly made by a third party to a provider
of goods and servicesnew text begin. In-kind income does not include in-kind payments of living expensesnew text end;

(14) assistance payments to correct underpayments, but only for the month in which the
payment is received;

(15) payments for short-term emergency needs under section 256J.626, subdivision 2;

(16) funeral and cemetery payments as provided by section 256.935;

(17) nonrecurring cash gifts of $30 or less, not exceeding $30 per participant in a calendar
month;

(18) any form of energy assistance payment made through Public Law 97-35,
Low-Income Home Energy Assistance Act of 1981, payments made directly to energy
providers by other public and private agencies, and any form of credit or rebate payment
issued by energy providers;

(19) Supplemental Security Income (SSI), including retroactive SSI payments and other
income of an SSI recipient;

(20) Minnesota supplemental aid, including retroactive payments;

(21) proceeds from the sale of real or personal property;

(22) adoption or kinship assistance payments under chapter 256N or 259A and Minnesota
permanency demonstration title IV-E waiver payments;

(23) state-funded family subsidy program payments made under section 252.32 to help
families care for children with developmental disabilities, consumer support grant funds
under section 256.476, and resources and services for a disabled household member under
one of the home and community-based waiver services programs under chapter 256B;

(24) interest payments and dividends from property that is not excluded from and that
does not exceed the asset limit;

(25) rent rebates;

(26) income earned by a minor caregiver, minor child through age 6, or a minor child
who is at least a half-time student in an approved elementary or secondary education program;

(27) income earned by a caregiver under age 20 who is at least a half-time student in an
approved elementary or secondary education program;

(28) MFIP child care payments under section 119B.05;

(29) all other payments made through MFIP to support a caregiver's pursuit of greater
economic stability;

(30) income a participant receives related to shared living expenses;

(31) reverse mortgages;

(32) benefits provided by the Child Nutrition Act of 1966, United States Code, title 42,
chapter 13A, sections 1771 to 1790;

(33) benefits provided by the women, infants, and children (WIC) nutrition program,
United States Code, title 42, chapter 13A, section 1786;

(34) benefits from the National School Lunch Act, United States Code, title 42, chapter
13, sections 1751 to 1769e;

(35) relocation assistance for displaced persons under the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970, United States Code, title 42, chapter
61, subchapter II, section 4636, or the National Housing Act, United States Code, title 12,
chapter 13, sections 1701 to 1750jj;

(36) benefits from the Trade Act of 1974, United States Code, title 19, chapter 12, part
2, sections 2271 to 2322;

(37) war reparations payments to Japanese Americans and Aleuts under United States
Code, title 50, sections 1989 to 1989d;

(38) payments to veterans or their dependents as a result of legal settlements regarding
Agent Orange or other chemical exposure under Public Law 101-239, section 10405,
paragraph (a)(2)(E);

(39) income that is otherwise specifically excluded from MFIP consideration in federal
law, state law, or federal regulation;

(40) security and utility deposit refunds;

(41) American Indian tribal land settlements excluded under Public Laws 98-123, 98-124,
and 99-377 to the Mississippi Band Chippewa Indians of White Earth, Leech Lake, and
Mille Lacs reservations and payments to members of the White Earth Band, under United
States Code, title 25, chapter 9, section 331, and chapter 16, section 1407;

(42) all income of the minor parent's parents and stepparents when determining the grant
for the minor parent in households that include a minor parent living with parents or
stepparents on MFIP with other children;

(43) income of the minor parent's parents and stepparents equal to 200 percent of the
federal poverty guideline for a family size not including the minor parent and the minor
parent's child in households that include a minor parent living with parents or stepparents
not on MFIP when determining the grant for the minor parent. The remainder of income is
deemed as specified in section 256J.37, subdivision 1b;

(44) payments made to children eligible for relative custody assistance under section
257.85;

(45) vendor payments for goods and services made on behalf of a client unless the client
has the option of receiving the payment in cash;

(46) the principal portion of a contract for deed payment;

(47) cash payments to individuals enrolled for full-time service as a volunteer under
AmeriCorps programs including AmeriCorps VISTA, AmeriCorps State, AmeriCorps
National, and AmeriCorps NCCC;

(48) housing assistance grants under section 256J.35, paragraph (a); and

(49) child support payments of up to $100 for an assistance unit with one child and up
to $200 for an assistance unit with two or more children.

Sec. 7.

Minnesota Statutes 2018, section 256L.01, subdivision 5, is amended to read:


Subd. 5.

Income.

"Income" has the meaning given for modified adjusted gross income,
as defined in Code of Federal Regulations, title 26, section 1.36B-1, and means a household's
current income, or if income fluctuates month to month, the income for the 12-month
eligibility period.new text begin Income includes amounts deposited into checking and savings accounts
for personal expenses including rent, mortgage, automobile-related expenses, utilities, and
food.
new text end

Sec. 8.

Minnesota Statutes 2018, section 256P.04, subdivision 4, is amended to read:


Subd. 4.

Factors to be verified.

(a) The agency shall verify the following at application:

(1) identity of adults;

(2) age, if necessary to determine eligibility;

(3) immigration status;

(4) income;

(5) spousal support and child support payments made to persons outside the household;

(6) vehicles;

(7) checking and savings accountsdeleted text begin;deleted text endnew text begin. Verification of checking and savings accounts must
include the source of deposits into accounts; identification of any loans, including the date,
source, amount, and terms of repayment; and identification of deposits for personal expenses
including rent, mortgage, automobile-related expenses, utilities, and food;
new text end

(8) inconsistent information, if related to eligibility;

(9) residence;

(10) Social Security number; deleted text beginand
deleted text end

(11) use of nonrecurring income under section 256P.06, subdivision 3, clause (2), item
(ix), for the intended purpose for which it was given and receiveddeleted text begin.deleted text endnew text begin;
new text end

new text begin (12) loans. Verification of loans must include the source, the full amount, and repayment
terms; and
new text end

new text begin (13) direct or indirect gifts of money.
new text end

(b) Applicants who are qualified noncitizens and victims of domestic violence as defined
under section 256J.08, subdivision 73, clause (7), are not required to verify the information
in paragraph (a), clause (10). When a Social Security number is not provided to the agency
for verification, this requirement is satisfied when each member of the assistance unit
cooperates with the procedures for verification of Social Security numbers, issuance of
duplicate cards, and issuance of new numbers which have been established jointly between
the Social Security Administration and the commissioner.

Sec. 9.

Minnesota Statutes 2018, section 256P.06, subdivision 3, is amended to read:


Subd. 3.

Income inclusions.

The following must be included in determining the income
of an assistance unit:

(1) earned incomenew text begin:
new text end

new text begin (i) calculated according to Minnesota Rules, part 3400.0170, subpart 7, for earned income
from self-employment, except if the participant is drawing a salary, taking a draw from the
business, or using the business account to pay personal expenses including rent, mortgage,
automobile-related expenses, utilities, or food not directly related to the business, the salary
or payment must be treated as earned income; and
new text end

new text begin (ii) excluding expenses listed in Minnesota Rules, part 3400.0170, subpart 8, items A
to I and M to P
new text end; and

(2) unearned income, which includes:

(i) interest and dividends from investments and savings;

(ii) capital gains as defined by the Internal Revenue Service from any sale of real property;

(iii) proceeds from rent and contract for deed payments in excess of the principal and
interest portion owed on property;

(iv) income from trusts, excluding special needs and supplemental needs trusts;

(v) interest income from loans made by the participant or household;

(vi) cash prizes and winnings;

(vii) unemployment insurance income;

(viii) retirement, survivors, and disability insurance payments;

(ix) nonrecurring income over $60 per quarter unless earmarked and used for the purpose
for which it is intended. Income and use of this income is subject to verification requirements
under section 256P.04;

(x) retirement benefits;

(xi) cash assistance benefits, as defined by each program in chapters 119B, 256D, 256I,
and 256J;

(xii) tribal per capita payments unless excluded by federal and state law;

(xiii) income and payments from service and rehabilitation programs that meet or exceed
the state's minimum wage rate;

(xiv) income from members of the United States armed forces unless excluded from
income taxes according to federal or state law;

(xv) all child support payments for programs under chapters 119B, 256D, and 256I;

(xvi) the amount of child support received that exceeds $100 for assistance units with
one child and $200 for assistance units with two or more children for programs under chapter
256J; and

(xvii) spousal support.