HF 2040

as introduced - 94th Legislature (2025 - 2026) Posted on 03/10/2025 02:44pm

A bill for an act
relating to human services; directing the commissioner of human services to provide
updates and seek federal approval for children's mental health projects; funding
gaps in children's residential facilities; establishing crisis stabilization facility;
creating a legislative task force on children's residential facilities; requiring licensing
for facilities for youth with sexual behavior concerns; providing for rulemaking;
requiring a financial study; requiring reports; appropriating money; amending
Minnesota Statutes 2024, sections 245.4874, subdivision 1; 245A.03, subdivision
7; proposing coding for new law in Minnesota Statutes, chapter 245A.

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

Section 1.

Minnesota Statutes 2024, section 245.4874, subdivision 1, is amended to read:

Subdivision 1.

Duties of county board.

(a) The county board must:

(1) develop a system of affordable and locally available children's deleted text begin mental deleted text end new text begin behavioral new text end
health services according to sections 245.487 to 245.4889;

(2) consider the assessment of unmet needs in the county as reported by the local
children's mental health advisory council under section 245.4875, subdivision 5, paragraph
(b), clause (3). The county shall provide, upon request of the local children's mental health
advisory council, readily available data to assist in the determination of unmet needs;

(3) assure that parents and providers in the county receive information about how to
gain access to services provided according to sections 245.487 to 245.4889;

(4) coordinate the delivery of children's mental health services with services provided
by social services, education, corrections, health, and vocational agencies to improve the
availability of mental health services to children and the cost-effectiveness of their delivery;

(5) assure that mental health services delivered according to sections 245.487 to 245.4889
are delivered expeditiously and are appropriate to the child's deleted text begin diagnostic deleted text end new text begin screening, needs new text end
assessment new text begin , new text end and individual treatment plan;

(6) provide for case management services to each child with severe emotional disturbance
according to sections 245.486; 245.4871, subdivisions 3 and 4; and 245.4881, subdivisions
1, 3, and 5;

(7) provide for screening new text begin and needs assessment new text end of each child under section 245.4885
upon admission to a residential treatment new text begin or juvenile detention new text end facility, acute care hospital
inpatient treatment, or informal admission to a regional treatment center;

(8) prudently administer grants and purchase-of-service contracts that the county board
determines are necessary to fulfill its responsibilities under sections 245.487 to 245.4889;

(9) assure that mental health professionals, mental health practitioners, and case managers
employed by or under contract to the county to provide mental health services are qualified
under section 245.4871;

(10) assure that children's mental health services are coordinated with adult mental health
services specified in sections 245.461 to 245.486 so that a continuum of mental health
services is available to serve persons with mental illness, regardless of the person's age;

(11) assure that culturally competent mental health consultants are used as necessary to
assist the county board in assessing and providing appropriate treatment for children of
cultural or racial minority heritage; deleted text begin and
deleted text end

new text begin (12) assure that a child involved in the juvenile justice system sees a mental health
professional for a diagnostic assessment as early as possible; and
new text end

deleted text begin (12) deleted text end new text begin (13) new text end consistent with section 245.486, arrange for or provide a children's mental
health screening for:

(i) a child receiving child protective services;

(ii) a child in out-of-home placement;

(iii) a child for whom parental rights have been terminated; new text begin or
new text end

(iv) a child deleted text begin found to be delinquent; or deleted text end new text begin involved in the juvenile justice system.
new text end

deleted text begin (v) a child found to have committed a juvenile petty offense for the third or subsequent
time.
deleted text end

A children's mental health screening new text begin and needs assessment new text end is not required when a
screening or diagnostic assessment has been performed within the previous 180 days, or
the child is currently under the care of a mental health professional.

(b) When a child is receiving protective services or is in out-of-home placement, the
court or county agency must notify a parent or guardian whose parental rights have not been
terminated of the potential mental health screening and the option to prevent the screening
by notifying the court or county agency in writing.

(c) When a child is deleted text begin found to be delinquent or a child is found to have committed a
juvenile petty offense for the third or subsequent time deleted text end new text begin involved in the juvenile justice system new text end ,
the court or county agency must obtain written informed consent from the parent or legal
guardian before a screening is conducted unless the court, notwithstanding the parent's
failure to consent, determines that the screening is in the child's best interest.

(d) The screening new text begin and needs assessment new text end shall be conducted with a screening instrument
approved by the commissioner of human services according to criteria that are updated and
issued annually to ensure that approved screening instruments are valid and useful for child
welfare and juvenile justice populations. Screenings new text begin and needs assessments new text end shall be conducted
by a mental health practitioner as defined in section 245.4871, subdivision 26, or a probation
officer or local social services agency staff person who is trained in the use of the screening
new text begin and needs new text end instrument. Training in the use of the instrument shall include:

(1) training in the administration of the instrument;

(2) the interpretation of its validity given the child's current circumstances;

(3) the state and federal data practices laws and confidentiality standards;

(4) the parental consent requirement; and

(5) providing respect for families and cultural values.

If the screen indicates a need for assessment, the child's family, or if the family lacks
mental health insurance, the local social services agency, in consultation with the child's
family, shall have conducted a diagnostic assessment, including a functional assessment.
The administration of the screening shall safeguard the privacy of children receiving the
screening and their families and shall comply with the Minnesota Government Data Practices
Act, chapter 13, and the federal Health Insurance Portability and Accountability Act of
1996, Public Law 104-191. Screening results are classified as private data on individuals,
as defined by section 13.02, subdivision 12. The county board or Tribal nation may provide
the commissioner with access to the screening results for the purposes of program evaluation
and improvement.

(e) When the county board refers clients to providers of children's therapeutic services
and supports under section 256B.0943, the county board must clearly identify the desired
services components not covered under section 256B.0943 and identify the reimbursement
source for those requested services, the method of payment, and the payment rate to the
provider.

Sec. 2.

Minnesota Statutes 2024, section 245A.03, subdivision 7, is amended to read:

Subd. 7.

Licensing moratorium.

(a) The commissioner shall not issue an initial license
for child foster care licensed under Minnesota Rules, parts 2960.3000 to 2960.3340, which
does not include child foster residence settings with residential program certifications for
compliance with the Family First Prevention Services Act under section 245A.25, subdivision
1, paragraph (a), or adult foster care licensed under Minnesota Rules, parts 9555.5105 to
9555.6265, under this chapter for a physical location that will not be the primary residence
of the license holder for the entire period of licensure. If a child foster residence setting that
was previously exempt from the licensing moratorium under this paragraph has its Family
First Prevention Services Act certification rescinded under section 245A.25, subdivision 9,
or if a family adult foster care home license is issued during this moratorium, and the license
holder changes the license holder's primary residence away from the physical location of
the foster care license, the commissioner shall revoke the license according to section
245A.07. The commissioner shall not issue an initial license for a community residential
setting licensed under chapter 245D. When approving an exception under this paragraph,
the commissioner shall consider the resource need determination process in paragraph (h),
the availability of foster care licensed beds in the geographic area in which the licensee
seeks to operate, the results of a person's choices during their annual assessment and service
plan review, and the recommendation of the local county board. The determination by the
commissioner is final and not subject to appeal. Exceptions to the moratorium include:

(1) a license for a person in a foster care setting that is not the primary residence of the
license holder and where at least 80 percent of the residents are 55 years of age or older;

(2) foster care licenses replacing foster care licenses in existence on May 15, 2009, or
community residential setting licenses replacing adult foster care licenses in existence on
December 31, 2013, and determined to be needed by the commissioner under paragraph
(b);

(3) new foster care licenses or community residential setting licenses determined to be
needed by the commissioner under paragraph (b) for the closure of a nursing facility, ICF/DD,
or regional treatment center; restructuring of state-operated services that limits the capacity
of state-operated facilities; or allowing movement to the community for people who no
longer require the level of care provided in state-operated facilities as provided under section
256B.092, subdivision 13, or 256B.49, subdivision 24;

(4) new foster care licenses or community residential setting licenses determined to be
needed by the commissioner under paragraph (b) for persons requiring hospital-level care;
deleted text begin or
deleted text end

(5) new community residential setting licenses determined necessary by the commissioner
for people affected by the closure of homes with a capacity of five or six beds currently
licensed as supervised living facilities licensed under Minnesota Rules, chapter 4665, but
not designated as intermediate care facilities. This exception is available until June 30,
2025 deleted text begin . deleted text end new text begin ; or
new text end

new text begin (6) new child foster residence setting or community residential setting licenses determined
to be needed by the commissioner under paragraph (b) to allow movement to the community
for a person who no longer requires the level of care provided under section 256B.0625,
subdivisions 1 and 1a. This exception is available when:
new text end

new text begin (i) the person has not required the level of care provided in a hospital setting for 30 or
more days but has been unable to discharge from the hospital; or
new text end

new text begin (ii) the person has been unable to discharge from the hospital due to the person's needs
being unable to be met within the existing child foster residence setting or community
residential setting capacity of the region.
new text end

(b) The commissioner shall determine the need for newly licensed foster care homes or
community residential settings as defined under this subdivision. As part of the determination,
the commissioner shall consider the availability of foster care capacity in the area in which
the licensee seeks to operate, and the recommendation of the local county board. The
determination by the commissioner must be final. A determination of need is not required
for a change in ownership at the same address.

new text begin (c) The commissioner may grant a license to a child foster residence setting to prepare
beds available in advance for individuals with complex behavioral or medical support needs
if the setting accepts individuals described in the exceptions in paragraph (a).
new text end

deleted text begin (c) deleted text end new text begin (d) new text end When an adult resident served by the program moves out of a foster home that
is not the primary residence of the license holder according to section 256B.49, subdivision
15, paragraph (f), or the adult community residential setting, the county shall immediately
inform the Department of Human Services Licensing Division. The department may decrease
the statewide licensed capacity for adult foster care settings.

deleted text begin (d) deleted text end new text begin (e) new text end Residential settings that would otherwise be subject to the decreased license
capacity established in paragraph (c) must be exempt if the license holder's beds are occupied
by residents whose primary diagnosis is mental illness and the license holder is certified
under the requirements in subdivision 6a or section 245D.33.

deleted text begin (e) deleted text end new text begin (f) new text end A resource need determination process, managed at the state level, using the
available data required by section 144A.351, and other data and information must be used
to determine where the reduced capacity determined under section 256B.493 will be
implemented. The commissioner shall consult with the stakeholders described in section
144A.351, and employ a variety of methods to improve the state's capacity to meet the
informed decisions of those people who want to move out of corporate foster care or
community residential settings, long-term service needs within budgetary limits, including
seeking proposals from service providers or lead agencies to change service type, capacity,
or location to improve services, increase the independence of residents, and better meet
needs identified by the long-term services and supports reports and statewide data and
information.

deleted text begin (f) deleted text end new text begin (g) new text end At the time of application and reapplication for licensure, the applicant and the
license holder that are subject to the moratorium or an exclusion established in paragraph
(a) are required to inform the commissioner whether the physical location where the foster
care will be provided is or will be the primary residence of the license holder for the entire
period of licensure. If the primary residence of the applicant or license holder changes, the
applicant or license holder must notify the commissioner immediately. The commissioner
shall print on the foster care license certificate whether or not the physical location is the
primary residence of the license holder.

deleted text begin (g) deleted text end new text begin (h) new text end License holders of foster care homes identified under paragraph (f) that are not
the primary residence of the license holder and that also provide services in the foster care
home that are covered by a federally approved home and community-based services waiver,
as authorized under chapter 256S or section 256B.092 or 256B.49, must inform the human
services licensing division that the license holder provides or intends to provide these
waiver-funded services.

deleted text begin (h) deleted text end new text begin (i) new text end The commissioner may adjust capacity to address needs identified in section
144A.351. Under this authority, the commissioner may approve new licensed settings or
delicense existing settings. Delicensing of settings will be accomplished through a process
identified in section 256B.493.

deleted text begin (i) deleted text end new text begin (j) new text end The commissioner must notify a license holder when its corporate foster care or
community residential setting licensed beds are reduced under this section. The notice of
reduction of licensed beds must be in writing and delivered to the license holder by certified
mail or personal service. The notice must state why the licensed beds are reduced and must
inform the license holder of its right to request reconsideration by the commissioner. The
license holder's request for reconsideration must be in writing. If mailed, the request for
reconsideration must be postmarked and sent to the commissioner within 20 calendar days
after the license holder's receipt of the notice of reduction of licensed beds. If a request for
reconsideration is made by personal service, it must be received by the commissioner within
20 calendar days after the license holder's receipt of the notice of reduction of licensed beds.

deleted text begin (j) deleted text end new text begin (k) new text end The commissioner shall not issue an initial license for children's residential
treatment services licensed under Minnesota Rules, parts 2960.0580 to 2960.0700, under
this chapter for a program that Centers for Medicare and Medicaid Services would consider
an institution for mental diseases. Facilities that serve only private pay clients are exempt
from the moratorium described in this paragraph. The commissioner has the authority to
manage existing statewide capacity for children's residential treatment services subject to
the moratorium under this paragraph and may issue an initial license for such facilities if
the initial license would not increase the statewide capacity for children's residential treatment
services subject to the moratorium under this paragraph.

Sec. 3.

new text begin [245A.0952] ADOPTION OF RULES FOR LICENSURE FOR YOUTH
WITH SEXUAL BEHAVIOR CONCERNS.
new text end

new text begin The commissioner of human services shall adopt rules to govern the licensure of treatment
facilities for youth with sexual behavior concerns.
new text end

Sec. 4. new text begin DIRECTION TO COMMISSIONERS; RULES ON RESTRICTIVE
PROCEDURES.
new text end

new text begin The commissioner of corrections and the commissioner of human services must amend
Minnesota Rules, part 2960.0710, to require training to ensure trauma-responsive and
culturally appropriate practices. Notwithstanding any other requirements for good cause
exempt rulemaking, the commissioner may use the procedure under Minnesota Statutes,
section 14.388, subdivision 1, clause (3), for changes to Minnesota Rules pursuant to this
section. Minnesota Statutes, section 14.386, does not apply to rules adopted pursuant to this
section except as provided under Minnesota Statutes, section 14.388.
new text end

Sec. 5. new text begin LEGISLATIVE TASK FORCE ON CHILDREN'S RESIDENTIAL MENTAL
HEALTH FACILITY LICENSING.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A legislative task force is established to create specific
licensing standards for unique levels of mental health care for children's residential facilities
licensed under Minnesota Rules, parts 2960.0580 to 2960.0690.
new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin The task force shall:
new text end

new text begin (1) identify gaps in the current licensing system;
new text end

new text begin (2) review any national, interstate, or nongovernmental licensing systems or best practices;
new text end

new text begin (3) solicit comments from state agencies, Tribal Nations, cities, counties, providers,
patients, and stakeholders on potential licensing changes; and
new text end

new text begin (4) draft a report identifying what changes to Minnesota Rules are required to implement
specific licensing standards for unique levels of mental health care for children's residential
facilities licensed under Minnesota Rules, parts 2960.0580 to 2960.0690.
new text end

new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin (a) The task force shall include the following members:
new text end

new text begin (1) two members from the house of representatives, one appointed by each of the leaders
of the two largest caucuses;
new text end

new text begin (2) two members from the senate, one appointed by the majority leader and one appointed
by the minority leader;
new text end

new text begin (3) the commissioner of human services or a designee;
new text end

new text begin (4) the commissioner of corrections or a designee;
new text end

new text begin (5) the commissioner of children, youth, and families or a designee;
new text end

new text begin (6) two county employees, one from the seven-county metropolitan area and one from
outside the seven-county metropolitan area, appointed by the commissioner of human
services;
new text end

new text begin (7) the ombudsperson for families;
new text end

new text begin (8) two children's residential facility providers, appointed by the commissioner of human
services; and
new text end

new text begin (9) two members of the community who have been patients of a children's residential
facility and received mental health services or had an immediate family member who did,
appointed by the commissioner of human services.
new text end

new text begin (b) The speaker of the house and the senate majority leader shall each appoint a member
from the task force to be chair and vice-chair. The chair and vice-chair shall rotate after
each meeting.
new text end

new text begin Subd. 4. new text end

new text begin Meetings. new text end

new text begin (a) The task force shall meet at least once per month. The meetings
shall take place in person in the Capitol complex. The chair may direct that a meeting be
conducted electronically if doing so would facilitate public testimony or would protect the
health or safety of the members of the task force.
new text end

new text begin (b) The task force shall invite input from the public, the leadership of advocacy groups,
and provider organizations.
new text end

new text begin (c) The chair designated by the speaker of the house shall convene the first meeting of
the task force no later than August 1, 2025.
new text end

new text begin Subd. 5. new text end

new text begin Expenses; per diem. new text end

new text begin Members serving on the task force shall receive the
following per diem:
new text end

new text begin (1) the community members shall receive the per diem listed in Minnesota Statutes,
section 15.059, subdivision 3; and
new text end

new text begin (2) all other task force members shall not receive a per diem.
new text end

new text begin Subd. 6. new text end

new text begin Report. new text end

new text begin The task force shall submit a report with recommendations to the chairs
and ranking minority members of the legislative committees with jurisdiction over health
and human services finance and policy, children and families, and public safety by January
15, 2027.
new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin The task force expires January 31, 2027.
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. 6. new text begin UPDATES ON CHILDREN'S RESIDENTIAL MENTAL HEALTH CRISIS
STABILIZATION BENEFIT.
new text end

new text begin (a) By July 1, 2025, the commissioner must provide an update to the chairs and ranking
minority members of the legislative committees with jurisdiction over human services policy
and finance on the progress in developing the covered children's residential mental health
crisis stabilization benefit required under Laws 2024, chapter 127, article 61, section 30.
new text end

new text begin (b) By August 1, 2025, the commissioner must share a draft of the report and
recommendations required under Laws 2024, chapter 127, article 61, section 30, paragraphs
(b) and (d), with the counties.
new text end

Sec. 7. new text begin 1115 WAIVER FOR MEDICAL ASSISTANCE REENTRY
DEMONSTRATION FOR JUVENILES.
new text end

new text begin (a) By September 1, 2025, the commissioner of human services must submit an
application to the United States Secretary of Health and Human Services to implement a
medical assistance reentry demonstration for detained and incarcerated juveniles compliant
with the Consolidated Appropriations Act, Public Law 117-328. The application must
include behavioral health screening, diagnostic, and targeted case management services
provided to detained and incarcerated juveniles 30 days prior to release and 30 days after
release.
new text end

new text begin (b) The commissioner must produce a draft of the application under this section to
counties and providers for comment by May 30, 2025.
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. 8. new text begin IMPLEMENTATION OF OUTPATIENT AND BEHAVIORAL HEALTH
SERVICE RATES.
new text end

new text begin By July 1, 2025, the commissioner of human services must begin phased implementation
of the recommendations from the second report of the Minnesota health care programs
fee-for-service outpatient services rate study required under Laws 2021, First Special Session
chapter 7, article 17, section 18.
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. 9. new text begin MEDICAL ASSISTANCE RESIDENTIAL CHILDREN'S FACILITIES
FINANCIAL STUDY.
new text end

new text begin (a) The commissioner of human services must conduct an analysis of the current financial
model for all residential children's facilities. By January 1, 2026, the commissioner must
issue a request for proposals for frameworks and modeling of residential children's facilities.
Financial models must be predicated on a framework that is transparent, sustainable,
culturally responsive, and supportive of staffing needed to treat a patient's assessed needs,
quality service delivery, integration of care, and patient choice. The commissioner must
consult with providers from across each region of the state, including but not limited to
culturally responsive providers, in developing the request for proposals and for the duration
of the contract.
new text end

new text begin (b) By January 15, 2027, the commissioner of human services shall submit a report to
the chairs and ranking minority members of the legislative committees with jurisdiction
over human services policy and finance. The report must include a detailed fiscal analysis
and proposed legislation necessary to modify existing or implement sustainable financial
models.
new text end

Sec. 10. new text begin APPROPRIATION; RESIDENTIAL CHILDREN'S FACILITIES
FINANCIAL STUDY.
new text end

new text begin $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
fund to the commissioner of human services for the analysis and reporting required under
section 9.
new text end

Sec. 11. new text begin APPROPRIATION; RESIDENTIAL CHILDREN'S FACILITIES INTERIM
FINANCIAL GAPS.
new text end

new text begin $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
fund to the commissioner of human services to address financial gaps for the existing seven
children's residential treatment facilities until the financial study under section 9 is
implemented.
new text end

Sec. 12. new text begin APPROPRIATION; REGIONAL CONTINUUM OF CARE.
new text end

new text begin $12,500,000 in fiscal year 2026 and $7,500,000 in fiscal year 2027 are appropriated
from the general fund to the commissioner of human services for a grant to Anoka, Carver,
Dakota, Hennepin, Olmsted, Ramsey, Scott, and Washington Counties for staffing, programs,
services, and facilities for a regional continuum of care to fill gaps for high-need youth who
need services. This is a onetime appropriation.
new text end

Sec. 13. new text begin APPROPRIATION; CRISIS STABILIZATION FACILITY.
new text end

new text begin $2,000,000 in fiscal year 2025 and $9,000,000 in fiscal year 2026 are appropriated from
the general fund to the commissioner of human services for a grant to Hennepin County to
design and construct or adapt a facility for a regional youth behavioral health crisis
stabilization center that will increase access to services that appropriately meet the needs
of youth and address a gap in the existing system.
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