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                            CHAPTER 465-H.F.No. 219 
                  An act relating to human services; providing for 
                  MNJOBS program; making changes to MFIP and income 
                  assistance programs; changing assistance programs; 
                  changing health plan regulations; requiring coverage 
                  for treatment of Lyme disease; appropriating money; 
                  amending Minnesota Statutes 1994, sections 53A.09; 
                  62A.047; 256.031, by adding a subdivision; 256.033, by 
                  adding a subdivision; 256.034, by adding a 
                  subdivision; 256.035, subdivisions 1 and 6a; 256.73, 
                  subdivision 1, and by adding subdivisions; 256.736, 
                  subdivisions 1a, 3b, 4, and 12; 256D.06, by adding a 
                  subdivision; 256D.10; 256D.49, subdivision 3; 256E.08, 
                  subdivision 8; and 336.3-206; Minnesota Statutes 1995 
                  Supplement, sections 256.0475, by adding a 
                  subdivision; 256.048, subdivisions 1, 4, 6, and 13; 
                  256.73, subdivision 8; 256.736, subdivisions 10, 10a, 
                  14, and 16; 256.737, subdivision 7; 256.76, 
                  subdivision 1; 256.81; 256D.02, subdivision 12a; 
                  256D.03, subdivisions 2, 2a, and 3; 256D.05, 
                  subdivision 1; 256D.051, subdivisions 1 and 6; 
                  256D.055; and 256D.09, subdivision 1; proposing coding 
                  for new law in Minnesota Statutes, chapters 62A and 
                  256; repealing Minnesota Statutes 1994, section 
                  256.736, subdivisions 10b and 11; Minnesota Statutes 
                  1995 Supplement, section 256.736, subdivision 13. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                                 MNJOBS PROGRAM
           Section 1.  [256.7381] [MNJOBS PROGRAM.] 
           Subdivision 1.  [CITATION.] Sections 256.7381 to 256.7387 
        may be cited as the MNJOBS program. 
           Subd. 2.  [DEFINITIONS.] As used in sections 256.7381 to 
        256.7387, the following words have the meanings given them. 
           (a) "Recipient" means an individual who is receiving AFDC. 
           (b) "Caretaker" means a parent or eligible adult, including 
        a pregnant woman, who is part of the assistance unit that has 
        applied for or is receiving AFDC or a grant. 
           (c) "Child support" means a voluntary or court-ordered 
        payment by a noncustodial parent. 
           (d) "Commissioner" means the commissioner of human services.
           (e) "Employability development plan" or "EDP" means a plan 
        developed by the recipient, with advice from the employment 
        advisor, for the purposes of identifying an employment goal, 
        improving work skills through certification or education, 
        training or skills recertification, and which addresses barriers 
        to employment. 
           (f) "Employment advisor" means a provider staff person who 
        is qualified to assist the participant to develop a job search 
        or employability development plan, match the participant with 
        existing job openings, refer the participant to employers, and 
        has an extensive knowledge of employers in the area. 
           (g) "Financial specialist" means a program staff who is 
        trained to explain the benefits offered under the program, 
        determine eligibility for different assistance programs, and 
        broker other resources. 
           (h) "Participant" means a recipient who is required to 
        participate in the MNJOBS program. 
           (i) "Program" means the MNJOBS program. 
           (j) "Provider" means an employment and training agency 
        certified by the commissioner of economic security under section 
        268.871, subdivision 1. 
           (k) "Suitable employment" means employment which meets 
        conditions set forth in section 256.736, subdivision 1, clause 
        (h). 
           Subd. 3.  [ESTABLISHING THE MNJOBS PROGRAM.] At the request 
        of a county or counties, the commissioners of human services and 
        economic security shall develop and establish the MNJOBS 
        program, which requires recipients of AFDC to meet the 
        requirements of the program.  The purpose of the program is to: 
           (1) ensure that the participant is working as soon as 
        possible; 
           (2) promote a greater opportunity for economic 
        self-support, participation, and mobility in the work force; and 
           (3) minimize the risk for long-term welfare dependency. 
           Subd. 4.  [COUNTY DESIGN; MNJOBS PROGRAM.] The commissioner 
        shall issue a notice to counties to submit a plan for developing 
        and implementing a MNJOBS program.  The plan must be consistent 
        with provisions of the program. 
           The commissioner shall not approve a county plan that would 
        have an adverse impact on the Minnesota family investment 
        program (MFIP) or the MFIP evaluation.  However, this does not 
        preclude MFIP counties from operating a MNJOBS program.  If the 
        plan meets the requirements of the program, the commissioner 
        shall approve the county plan and the county may implement the 
        plan.  No county may implement a MNJOBS program without an 
        approved modification to its local service unit plan in 
        accordance with section 268.88. 
           Subd. 5.  [PROGRAM ADMINISTRATION.] The program must be 
        administered in a way that, in addition to the county agency, 
        other sectors in the community, such as employers from the 
        public and private sectors, not-for-profit organizations, 
        educational and social service agencies, labor unions, and 
        community-based organizations, are involved. 
           Subd. 6.  [PROGRAM DESIGN.] The purpose of the program is 
        to enable immediate labor force participation and assist 
        families in achieving self-sufficiency.  The program plan must 
        meet the following principles: 
           (1) work is the primary means of economic support; 
           (2) the individual's employment potential is reviewed 
        during the development of the EDP; 
           (3) public aid such as cash and medical assistance, child 
        care, child support, and other cash benefits are used to support 
        intensive job search and immediate work; and 
           (4) maximum use is made of tax credits to supplement income.
           Subd. 7.  [WAIVER REQUESTS.] The commissioner shall request 
        all waivers of federal law and regulation as soon as possible to 
        implement the program.  Upon obtaining all necessary federal 
        waivers, the commissioner shall amend the state plans for the 
        AFDC and the jobs opportunities and basic skills program (JOBS), 
        and supportive services plan to coordinate these programs under 
        the MNJOBS program for the approved counties, and shall seek 
        approval of state plan amendments. 
           Subd. 8.  [DUTIES OF COMMISSIONER.] In addition to any 
        other duties imposed by law, the commissioner shall: 
           (1) request all waivers to implement the program; 
           (2) establish the MNJOBS program; 
           (3) provide systems development and staff training; 
           (4) accept and supervise the disbursement of any funds that 
        may be provided from other sources for use in the program; 
           (5) approve county MNJOBS plans; and 
           (6) allocate program funds. 
           Subd. 9.  [DUTIES OF COUNTY AGENCY.] The county agency 
        shall: 
           (1) collaborate with the commissioners of human services, 
        economic security, and other agencies to develop, implement, and 
        evaluate the demonstration of the program; 
           (2) operate the program in partnership with private and 
        public employers, workforce councils, labor unions, and 
        employment, educational, and social service agencies, and 
        according to subdivision 5; and 
           (3) ensure that program components such as client 
        orientation, immediate job search, job development, creation of 
        community work experience jobs, job placements, and 
        postplacement follow-up are implemented according to the MNJOBS 
        program. 
           Subd. 10.  [DUTIES OF PARTICIPANT.] To be eligible for 
        AFDC, a participant shall cooperate with the county agency, the 
        provider, and the participant's employer in all aspects of the 
        program. 
           Sec. 2.  [256.7382] [PROGRAM PARTICIPANTS; PROGRAM 
        EXPECTATIONS.] 
           (a) All recipients selected for participation are expected 
        to meet the requirements of the program.  In determining who may 
        participate in the program, priority must be given to 
        individuals who are on the county's project STRIDE waiting list, 
        and also individuals who have applied for AFDC, and are 
        subsequently determined to be eligible for STRIDE.  An 
        individual who is enrolled in STRIDE, and is making satisfactory 
        progress towards completing the goals in the individual's 
        approved EDP, may continue with the existing EDP, and is not 
        required to participate in the MNJOBS program, but may volunteer 
        to participate in the program. 
           (b) Caretakers who are exempt from the program may 
        volunteer to participate in the program.  The caretaker will be 
        treated as a mandatory participant once an EDP is signed.  
           (c) Except as provided in paragraph (a), the program shall 
        supersede the STRIDE program in counties that operate a MNJOBS 
        program, except in MFIP counties, where STRIDE will be continued 
        for families assigned to certain research groups. 
           Sec. 3.  [256.7383] [PROGRAM REQUIREMENTS.] 
           Subdivision 1.  [NOTIFICATION OF PROGRAM.] At the time of 
        the face-to-face interview, the applicant or recipient being 
        recertified must be given a written referral to the orientation 
        and an appointment date for the EDP.  Orientation must be 
        completed within ten days of the face-to-face interview.  The 
        applicant or recipient must also be given the following 
        information: 
           (1) notification that, as part of continued receipt of 
        AFDC, the recipient is required to attend orientation, to be 
        followed immediately by an assessment and intensive job search; 
           (2) the program provider, the date, time, and location of 
        the scheduled program orientation; 
           (3) the procedures for qualifying for and receiving 
        benefits under the program; 
           (4) the immediate availability of supportive services, 
        including, but not limited to, child care, transportation, 
        medical assistance, and other work-related aid; 
           (5) the rights, responsibilities, and obligations of 
        participants in the program, including, but not limited to, the 
        grounds for exemptions and deferrals, the consequences for 
        refusing or failing to participate fully, and the appeal 
        process; and 
           (6) a determination of whether the applicant or recipient 
        is exempt from job search activity. 
           Subd. 2.  [PROGRAM ORIENTATION.] The county agency or the 
        provider must give a face-to-face orientation regarding the 
        program within ten days after the date of face-to-face 
        interview.  The orientation must be designed to inform the 
        recipient of: 
           (1) the importance of locating and obtaining a job as soon 
        as possible; 
           (2) benefits to be provided to support work; 
           (3) how other supportive services such as medical 
        assistance, child care, transportation, and other work-related 
        aid shall be available to support job search and work; 
           (4) the consequences for failure without good cause to 
        comply with program requirements; and 
           (5) the appeal process. 
           Subd. 3.  [ASSESSMENT AND EMPLOYMENT DEVELOPMENT PLAN.] At 
        the end of orientation, the provider must assign an employment 
        advisor and a financial specialist to the recipient.  Working 
        with the recipient, the employment advisor must assess the 
        recipient and develop an EDP based on the recipient's existing 
        educational level, available program resources, existing job 
        markets, prior employment, work experience, and transferable 
        work skills, unless exempt under subdivision 7.  The EDP must 
        require caretakers to participate in initial job search 
        activities for up to four consecutive weeks for at least 30 
        hours per week and accept suitable employment if offered during 
        participation in the program unless exempt under subdivision 7, 
        or subject to the provisions of subdivision 8, or deferred under 
        subdivision 9.  The job search activities must commence within 
        30 days of the face-to-face interview. 
           Subd. 4.  [JOB SEARCH ACTIVITIES.] The following job search 
        activities may be included in the job search plan: 
           (a) Job clubs, which shall consist of both of the following:
           (1) job search workshops, which shall be group training 
        sessions where participants learn various job finding skills, 
        including training in basic job seeking skills, job development 
        skills, job interviewing skills, understanding employer 
        requirements and expectations, and how to enhance self-esteem, 
        self-image, and confidence; and 
           (2) supervised job search, which shall include, but not be 
        limited to, access to phone banks in a clean and well-lighted 
        place, job orders, direct referrals to employers, or other 
        organized methods of seeking work which are overseen, reviewed, 
        and critiqued by a trained employment professional.  The amount 
        and type of activity required during this supervised job search 
        period shall be determined by the employment and training 
        service provider and the participant, based on the participant's 
        employment history and need for support services as defined in 
        section 256.736, subdivision 1a, paragraph (i), and shall be 
        consistent with regulations developed by the employment and 
        service training provider. 
           (b) Unsupervised job search, where the individual shall 
        seek work in the individual's own way, and make periodic 
        progress reports no less frequently than every two weeks to the 
        employment and training service provider. 
           (c) Job placement, which shall include, but not be limited 
        to, referrals to jobs listed by employers. 
           (d) Job development, which shall be active assistance in 
        seeking employment provided to a participant by a training 
        employment professional on a one-to-one basis. 
           (e) Employment counseling, which shall be counseling aimed 
        at helping a person reach an informed decision on an appropriate 
        employment goal. 
           Subd. 5.  [ACTIVITIES FOLLOWING INTENSE JOB SEARCH 
        ACTIVITIES.] (a) On completion of initial job search activities, 
        or determination that those services are not required, the 
        participant shall continue in additional job search activities 
        or be assigned to one or more of the following activities as 
        needed to attain the participant's employment goal: 
           (1) job training, which shall include, but is not limited 
        to, training employer-specific jobs skills in a classroom or 
        on-site setting, including training provided by local private 
        industry council programs; 
           (2)(i) community work experience, which shall include work 
        for a public or nonprofit agency that helps to provide basic job 
        skills; enhance existing job skills in a position related to a 
        participant's experience, training, or education; or provide a 
        needed community service.  Community work experience must be 
        operated in accordance with section 256.737; and 
           (ii) the continuation of the participant seeking employment 
        during the community work experience assignment.  The 
        participant may request job search services; 
           (3) adult basic education, which shall include reading, 
        writing, arithmetic, high school proficiency or general 
        education development certificate instruction, and 
        English-as-a-second-language (ESL), including vocational ESL, to 
        the extent necessary to attain the participant's employment 
        goal.  Vocational ESL shall be intensive instruction in English 
        for non-English-speaking participants, coordinated with specific 
        job training; or 
           (4) college and community college education, when that 
        education provides employment skills training that can 
        reasonably be expected to lead to employment and be limited to 
        two years. 
           (b) The assignment to one or more of the program activities 
        as required in paragraph (a), shall be based on the EDP 
        developed after an assessment.  The EDP shall be based, at a 
        minimum, on consideration of the individual's existing education 
        level, employment experience and goals, available program 
        resources, and local labor market opportunities.  The assessment 
        and EDP must comply with section 256.736, subdivision 10, 
        clauses (14) and (15). 
           (c) A participant who lacks basic literacy or mathematics 
        skills, a high school diploma or general education development 
        certificate, or English language skills, may be assigned to 
        participate in adult basic education, as appropriate and 
        necessary for achievement of the individual's employment goal. 
           (d) Participation in activities assigned pursuant to this 
        section may be sequential or concurrent.  The provider may 
        require concurrent participation in the assigned activities if 
        it is appropriate to the participant's abilities, consistent 
        with the participant's EDP, and the activities can be 
        concurrently scheduled.  However, to the extent possible, 
        activities should be full time.  The combined hours of 
        participation in assigned concurrent activities shall not exceed 
        32 hours per week for an individual who has primary 
        responsibility for personally providing care to a child under 
        six years of age or 40 hours per week for any other individual.  
        The maximum number of hours any participant may be required to 
        participate in activities under this subdivision is a number 
        equal to the amount of AFDC payable to the recipient divided by 
        the greater of the federal minimum wage or the applicable state 
        minimum wages. 
           Subd. 6.  [IMMEDIATE JOB SEARCH.] A recipient is required 
        to begin job search activities within 30 days after the 
        face-to-face interview for at least 30 hours per week for up to 
        four weeks, unless exempt under subdivision 7, subject to the 
        provisions of subdivision 8, or deferred under subdivision 9.  
        Notwithstanding section 256H.11, subdivision 1, for purposes of 
        the program the limit on job search child care is 480 hours 
        annually.  For a recipient who is working at least 20 hours per 
        week, job search must consist of 12 hours per week for up to 
        eight weeks.  The recipient is required to carry out the other 
        activities under the EDP developed under subdivision 3. 
           Subd. 7.  [EXEMPTION CATEGORIES.] The recipient is exempted 
        from mandatory participation in all activities except 
        orientation, if the recipient belongs to any of the following 
        groups: 
           (1) caretakers under age 20 who have not completed a high 
        school education and are attending high school or an equivalency 
        program under section 256.736, subdivision 3b; 
           (2) individuals who are age 60 or older; 
           (3) individuals who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment; 
           (4) caretakers whose presence in the home is needed because 
        of illness or incapacity of another member in the household; 
           (5) women who are pregnant, if it has been medically 
        verified that the child is expected to be born within the next 
        six months; 
           (6) caretakers or other caretaker relatives of a child 
        under the age of three years who personally provide full-time 
        care for the child.  In AFDC-UP cases, only one parent or other 
        relative may qualify for this exemption; 
           (7) individuals employed at least 30 hours per week; 
           (8) individuals for whom participation would require a 
        round trip commuting time by available transportation of more 
        than two hours, excluding transporting of children for child 
        care; 
           (9) a child under age 16, or a child age 16 or 17 who is 
        attending elementary or secondary school or a secondary-level 
        vocational or technical school full time; or 
           (10) individuals experiencing a personal or family crisis 
        which make them incapable of participating in the program, as 
        determined by the county. 
           Subd. 8.  [AFDC-UP RECIPIENTS.] All recipients under the 
        AFDC-UP program are required to meet the requirements of the job 
        search program under section 256.736, subdivision 14, and the 
        community work experience program under section 256.737. 
           Subd. 9.  [DEFERRAL FROM JOB SEARCH REQUIREMENT.] The 
        recipient may be deferred from the requirement to conduct at 
        least 30 hours of job search per week for up to four consecutive 
        weeks, if during the development of the EDP, the recipient is 
        determined to: 
           (1) be within two years of completing a post-secondary 
        training program that is likely to lead to employment provided 
        the recipient is attending school full time.  The recipient must 
        agree to develop and carry out an EDP which includes jobs search 
        immediately after the training is completed; 
           (2) be in treatment for chemical dependency, be a victim of 
        domestic abuse, or be homeless, provided that the recipient 
        agrees to develop an EDP, and immediately follow through with 
        the activities in the EDP.  The EDP must include specific 
        outcomes that the recipient must achieve for the duration of the 
        EDP and activities that are needed to address the issues 
        identified.  Under this clause, the recipient may be deferred 
        for up to three months; 
           (3) lack proficiency in English which is a barrier to 
        employment, provided such individuals are successfully 
        participating in an ESL program.  Caretakers can be deferred for 
        ESL for no longer than 12 months.  The EDP shall establish an 
        education plan which assigns caretakers to ESL programs 
        available in the community that provide the quickest advancement 
        of the caretaker's language skills; or 
           (4) need refresher courses for purposes of obtaining 
        professional certification or licensure, provided the plans are 
        approved in the EDP. 
           Subd. 10.  [DUTY TO REPORT.] The participant must 
        immediately inform the provider of any changes related to the 
        participant's employment status. 
           Sec. 4.  [256.7384] [COMMUNITY WORK EXPERIENCE PROGRAM FOR 
        SINGLE-PARENT FAMILIES.] 
           To the extent that funds are available or appropriated, 
        recipients who are participating in the program and are not 
        working in unsubsidized employment within 24 months are required 
        to participate in a community work experience program in 
        accordance with section 256.737. 
           Sec. 5.  [256.7385] [MOVE TO A DIFFERENT COUNTY.] 
           If the recipient who is required to participate in the 
        program moves to a different county, the benefits and enabling 
        services agreed upon in the EDP must be provided by the pilot 
        county where the recipient originated.  If the recipient is 
        moving to a different county and has failed to comply with the 
        requirements of the program, the recipient is not eligible for 
        AFDC for at least six months from the date of the move. 
           Sec. 6.  [256.7386] [SANCTIONS AND APPEAL PROCESS.] 
           The same sanctions and appeals imposed and available to 
        recipients of AFDC under this chapter shall be imposed and 
        available to participants in the MNJOBS program. 
           Sec. 7.  [256.7387] [PROGRAM FUNDING.] 
           (a)  [FUNDING.] After ensuring that all persons required to 
        participate in the county's food stamp employment and training 
        program will be served under that program, any remaining 
        unexpended state funds from the county's food stamp employment 
        and training program allocation for that fiscal year may be 
        combined with the county's Project STRIDE allocation for that 
        same fiscal year and are available to administer the program. 
           (b)  [TRANSFER OF ACCESS CHILD CARE FUNDS.] After the end 
        of the third quarter of the state fiscal year, any unencumbered 
        ACCESS funds of a county participating in the program shall be 
        transferred to the county's base sliding fee fund to be used to 
        provide child care to AFDC recipients beyond the one-year 
        transition period.  In determining the baseline funding for the 
        ACCESS and basic sliding fee programs, the commissioners of 
        finance and human services shall ignore any transfers made under 
        this section. 
           (c)  [USE OF CHILD CARE.] Participants in the program are 
        eligible for STRIDE child care funds. 
           (d)  [LEVERAGING GRANT AMOUNT TO SECURE OTHER FUNDS.] The 
        county agency or the provider in cooperation with the 
        commissioner may leverage the grant amount to secure other funds 
        from employers, foundations, and the community for the purpose 
        of developing additional components to benefit children and 
        improve the program. 
           Sec. 8.  [256.7388] [INCOME DISREGARDS.] 
           A participating county may utilize the county's own funds 
        in order to provide higher income disregards to recipients 
        participating in the program. 
           Sec. 9.  [WAIVER AUTHORITY.] 
           The commissioner of human services is authorized to seek 
        all necessary waivers to implement sections 1 to 8.  The waiver 
        requests must be submitted by the commissioner as part of the 
        federal waiver package authorized by Laws 1995, chapter 178, 
        article 2, section 46. 
           Sec. 10.  [APPROPRIATION.] 
           $102,000 is appropriated from the general fund to the 
        commissioner of human services for the fiscal year ending June 
        30, 1997, for purposes of applying for necessary federal waivers 
        to implement the program, and administering the MNJOBS program. 
           Sec. 11.  [EFFECTIVE DATE.] 
           Section 9 is effective July 1, 1996.  For purposes of 
        sections 1 to 8, the commissioner may allow the implementation 
        of the MNJOBS program in counties that have been approved by the 
        commissioner as early as April 1, 1997, but no later than July 
        1, 1997. 
                                   ARTICLE 2
           MFIP AND INCOME ASSISTANCE CHANGES BASED ON FEDERAL REFORM
           Section 1.  [MFIP; LEGISLATIVE POLICY.] 
           Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
        recognizes that: 
           (1) changes in federal law and federal funding may 
        necessitate changes to Minnesota's public assistance programs; 
           (2) Minnesota is in the process of testing and evaluating 
        the Minnesota family investment plan, a program that will change 
        public assistance programs in Minnesota; and 
           (3) the Minnesota family investment plan embodies the 
        principles that should guide Minnesota in implementing changes 
        necessitated by federal law and federal funding. 
           Subd. 2.  [WELFARE REFORM PROPOSAL.] (a) The commissioner 
        shall present the 1997 legislature with a proposal to modify the 
        Minnesota family investment plan for statewide implementation.  
        The proposed program must be designed around the following goals:
           (1) to support work; 
           (2) to foster personal responsibility; 
           (3) to support the family; 
           (4) to simplify the welfare system; 
           (5) to prevent dependency; and 
           (6) to enable families to achieve sustained 
        self-sufficiency. 
           (b) The proposed program shall provide assistance to all 
        families with minor children and individuals who meet program 
        eligibility rules and comply with program requirements and may 
        set limits on the number of years or months of assistance. 
           (c) In designing the proposal, the commissioner shall 
        consider: 
           (1) evaluation results from the Minnesota family investment 
        plan; 
           (2) any evaluation or other information regarding the 
        results of the work focused, work first, MNJOBS, and STRIDE 
        programs; 
           (3) evaluations from any programs which have increased 
        income disregards for working recipient families; and 
           (4) program and fiscal analysis of the impact of federal 
        laws, including proposals to simplify or block grant the food 
        stamp program. 
           (d) The commissioner shall consider the following 
        additional policy options in developing the proposal: 
           (1) consolidate all income assistance programs into a 
        single program; 
           (2) integrate the food stamp program more closely with 
        income assistance program; 
           (3) provide disregards of earned income that are not time 
        limited; 
           (4) establish asset limits which appropriately reflect the 
        needs of working families; 
           (5) provide for flexibility in establishing grant standards 
        which can be adapted to different needs of assistance units and 
        to different work and training requirements in order to maximize 
        successful outcomes; 
           (6) use of wage subsidies to increase employment 
        opportunities; 
           (7) development of individual asset accounts; 
           (8) expansion of employment and training options to include 
        the option of small business training; 
           (9) establishment of a loan or grant fund for transition to 
        work needs not covered under the grant; 
           (10) contingent on inclusion of clause (3), provide an 
        initial period of assistance, not to exceed six months, after 
        which the grant standard for all assistance units would be 
        reduced.  After this initial period: 
           (i) assistance units in which all adults are incapacitated, 
        as defined by the commissioner, would receive a supplement that 
        raises the unit's grant standard back to the standard of the 
        initial period; 
           (ii) assistance units not included in item (i) could earn 
        back a portion of the grant reduction by participating in 
        employment and training services; and 
           (iii) for assistance units not included in item (i), 
        earnings equal to the grant reduction would be entirely 
        disregarded in determining benefits; 
           (11) pay child support directly to custodial parents 
        receiving income assistance and budget all or part of the child 
        support amount against the income assistance benefit; 
           (12) address the question of providing assistance to 
        Minnesota residents who are legal noncitizens; 
           (13) divert applicants from using public assistance through 
        early intervention focused on meeting immediate needs; and 
           (14) implement an outcome-based quality assurance program 
        that measures the effectiveness of transitional support services 
        by defining target groups, program goals, outcome indicators, 
        data collection methods, and performance targets. 
           Sec. 2.  [INCOME ASSISTANCE PROGRAMS; FEDERAL POLICY 
        INITIATIVE.] 
           If the 104th Congress makes significant policy or funding 
        changes that affect income assistance, the commissioner of human 
        services shall develop a proposal that includes recommendations 
        for the legislature which address these changes. 
           Further, the commissioners of human services, health, 
        economic security, and children, families, and learning, shall, 
        upon request of a county, work with and jointly develop a 
        proposal that permits the county to merge funding and services 
        in order to meet the individual needs of eligible clients.  The 
        proposal and draft legislation are due to the chairs of the 
        senate family services committee and health and human services 
        finance division, and the house of representatives human 
        services committee and health and human services finance 
        division by December 1, 1996.  
                                   ARTICLE 3 
                           ASSISTANCE PROGRAM CHANGES
           Section 1.  Minnesota Statutes 1994, section 53A.09, is 
        amended to read: 
           53A.09 [POWERS; LIMITATIONS; PROHIBITIONS.] 
           Subdivision 1.  [DEPOSITS; ESCROW ACCOUNTS.] A currency 
        exchange may not accept money or currency for deposit, or act as 
        bailee or agent for persons, firms, partnerships, associations, 
        or corporations to hold money or currency in escrow for others 
        for any purpose.  However, a currency exchange may act as agent 
        for the issuer of money orders or travelers' checks. 
           Subd. 2.  [GAMBLING ESTABLISHMENTS.] A currency exchange 
        located on the premises of a gambling establishment as defined 
        in section 256.9831, subdivision 1, may not cash a warrant that 
        bears a restrictive endorsement under section 256.9831, 
        subdivision 3. 
           Sec. 2.  Minnesota Statutes 1994, section 256.031, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [USE OF FEDERAL AUTHORITY.] Federal authority as 
        cited in sections 256.031 to 256.0361 and section 256.047 is 
        reference to the United States Code, title 42, section 601, 
        United States Code, title 42, section 602, section 402 of the 
        Social Security Act, and Code of Federal Regulations, title 45, 
        as constructed on the day prior to their federal repeal. 
           Sec. 3.  Minnesota Statutes 1994, section 256.033, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [RECOVERY OF ATM ERRORS.] For recipients 
        receiving benefits via electronic benefit transfer, if the 
        recipient is overpaid as a result of an automated teller machine 
        (ATM) dispensing funds in error to the recipient, the agency may 
        recover the ATM error by immediately withdrawing funds from the 
        recipient's electronic benefit transfer account, up to the 
        amount of the error. 
           Sec. 4.  Minnesota Statutes 1994, section 256.034, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [PAYMENT METHODS.] Minnesota family investment 
        plan grant payments may be issued in the form of warrants 
        immediately redeemable in cash, electronic benefits transfer, or 
        by direct deposit into the recipient's account in a financial 
        institution. 
           Sec. 5.  Minnesota Statutes 1994, section 256.035, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXPECTATIONS.] All families eligible for 
        assistance under the family investment plan who are assigned to 
        a test group in the evaluation as provided in section 256.031, 
        subdivision 3, paragraph (d), are expected to be in transitional 
        status as defined in section 256.032, subdivision 12.  To be 
        considered in transitional status, families must meet the 
        following expectations: 
           (a) For a family headed by a single adult parental 
        caregiver, the expectation is that the parental caregiver will 
        independently pursue self-sufficiency until the family has 
        received assistance for 24 months within the preceding 36 
        months.  Beginning with the 25th month of assistance, the parent 
        must be developing or complying with the terms of the family 
        support agreement.  
           (b) For a family with a minor parental caregiver or a 
        family whose parental caregiver is 18 or 19 years of age and 
        does not have a high school diploma or its equivalent, the 
        expectation is that, concurrent with the receipt of assistance, 
        the parental caregiver must be developing or complying with a 
        family support agreement.  The terms of the family support 
        agreement must include compliance with section 256.736, 
        subdivision 3b.  However, if the assistance unit does not comply 
        with section 256.736, subdivision 3b, the sanctions in 
        subdivision 3 apply.  
           (c) For a family with two adult parental caregivers, the 
        expectation is that at least one parent will independently 
        pursue self-sufficiency until the family has received assistance 
        for six months within the preceding 12 months.  Beginning with 
        the seventh month of assistance, one parent must be developing 
        or complying with the terms of the family support agreement.  To 
        the extent of available resources and provided the other 
        caregiver is proficient in English, the commissioner may require 
        that both caregivers in a family with two adult parental 
        caregivers, in which the youngest child has attained the age of 
        six and is not in kindergarten, must be developing or complying 
        with the terms of a family support agreement by the seventh 
        month on assistance.  A caregiver shall be determined proficient 
        in English if the county agency, or its employment and training 
        service provider, determines that the person has sufficient 
        English language capabilities to become suitably employed.  
           If, as of July 1, 1996, the other caretaker is enrolled in 
        a post-secondary education or training program that is limited 
        to one year and can reasonably be expected to lead to 
        employment, that caretaker is exempt from job search and work 
        experience for a period of one year or until the caretaker stops 
        attending the post-secondary program, whichever is shorter. 
           Sec. 6.  Minnesota Statutes 1994, section 256.035, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [CASE MANAGEMENT SERVICES.] (a) The county 
        agency will provide case management services to caregivers 
        required to develop and comply with a family support agreement 
        as provided in subdivision 1.  For minor parents, the 
        responsibility of the case manager shall be as defined in 
        section 256.736, subdivision 3b.  Sanctions for failing to 
        develop or comply with the terms of a family support agreement 
        shall be imposed according to subdivision 3.  When a minor 
        parent reaches age 17, or earlier if determined necessary by the 
        social service agency, the minor parent shall be referred for 
        case management services.  
           (b) Case managers shall provide the following services: 
           (1) the case manager shall provide or arrange for an 
        assessment of the family and caregiver's needs, interests, and 
        abilities according to section 256.736, subdivision 11, 
        paragraph (a), clause (1); 
           (2) the case manager shall coordinate services according to 
        section 256.736, subdivision 11, paragraph (a), clause (3); 
           (3) the case manager shall develop an employability plan 
        according to subdivision 6b; 
           (4) the case manager shall develop a family support 
        agreement according to subdivision 6c; and 
           (5) the case manager shall monitor the caregiver's 
        compliance with the employability plan and the family support 
        agreement as required by the commissioner.  
           (c) Case management counseling and personal assistance 
        services may continue for up to six months following the 
        caregiver's achievement of employment goals.  Funds for specific 
        employment and training services may be expended for up to 90 
        days after the caregiver loses eligibility for financial 
        assistance. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 
        256.0475, is amended by adding a subdivision to read: 
           Subd. 2a.  [INTENSIVE ESL.] "Intensive ESL" means an 
        English as a second language program that offers at least 20 
        hours of class per week. 
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 
        256.048, subdivision 1, is amended to read: 
           Subdivision 1.  [EXPECTATIONS.] The requirement for a 
        caregiver to develop a family support agreement is tied to the 
        structure of the family and the length of time on assistance 
        according to paragraphs (a) to (c). 
           (a) In a family headed by a single adult parental caregiver 
        who has received AFDC, family general assistance, MFIP, or a 
        combination of AFDC, family general assistance, and MFIP 
        assistance for 12 or more months within the preceding 24 months, 
        the parental caregiver must be developing and complying with the 
        terms of the family support agreement commencing with the 13th 
        month of assistance. 
           (b) For a family with a minor parental caregiver or a 
        family whose parental caregiver is 18 or 19 years of age and 
        does not have a high school diploma or its equivalent, the 
        parental caregiver must be developing and complying with a 
        family support agreement concurrent with the receipt of 
        assistance.  The terms of the family support agreement must 
        include compliance with section 256.736, subdivision 3b.  If the 
        parental caregiver fails to comply with the terms of the family 
        support agreement, the sanctions in subdivision 4 apply.  When 
        the requirements in section 256.736, subdivision 3b, have been 
        met, a caregiver has fulfilled the caregiver's obligation.  
        County agencies must continue to offer MFIP-R services if the 
        caregiver wants to continue with an employability plan.  
        Caregivers who fulfill the requirements of section 256.736, 
        subdivision 3b, are subject to the expectations of paragraphs 
        (a) and (c). 
           (c) In a family with two adult parental caregivers, at 
        least one of whom has received AFDC, family general assistance, 
        MFIP, or a combination of AFDC, family general assistance, and 
        MFIP assistance for six or more months within the preceding 12 
        months, one parental caregiver must be developing and complying 
        with the terms of the family support agreement commencing with 
        the seventh month of assistance.  The family and MFIP-R staff 
        will designate the parental caregiver who will develop the 
        family support agreement based on which parent has the greater 
        potential to increase family income through immediate 
        employment.  To the extent of available resources and provided 
        the other caregiver is proficient in English, the commissioner 
        may require that both caregivers in a family with two adult 
        parental caregivers, in which the youngest child has attained 
        the age of six and is not in kindergarten, must be developing or 
        complying with the terms of a family support agreement by the 
        seventh month on assistance.  A caregiver shall be determined 
        proficient in English if the county agency, or its employment 
        and training service provider, determines that the person has 
        sufficient English language capabilities to become suitably 
        employed. 
           If, as of July 1, 1996, the other caretaker is enrolled in 
        a post-secondary education or training program that is limited 
        to one year and can reasonably be expected to lead to 
        employment, that caretaker is exempt from job search and work 
        experience for a period of one year or until the caretaker stops 
        attending the post-secondary program, whichever is shorter. 
           Sec. 9.  Minnesota Statutes 1995 Supplement, section 
        256.048, subdivision 4, is amended to read: 
           Subd. 4.  [SANCTION.] The county agency must reduce an 
        assistance unit's assistance payment by ten percent of the 
        transitional standard for the applicable family size when a 
        caregiver, who is not exempt from the expectations in this 
        section, fails to attend a mandatory briefing, fails to attend 
        scheduled meetings with MFIP-R staff, terminates employment 
        without good cause, or fails to develop or comply with the terms 
        of the caregiver's family support agreement.  MFIP-R staff must 
        send caregivers a notice of intent to sanction.  For the purpose 
        of this section, "notice of intent to sanction" means MFIP-R 
        staff must provide written notification to the caregiver that 
        the caregiver is not fulfilling the requirement to develop or 
        comply with the family support agreement.  This notification 
        must inform the caregiver of the right to request a conciliation 
        conference within ten days of the mailing of the notice of 
        intent to sanction or the right to request a fair hearing under 
        section 256.045.  If a caregiver requests a conciliation 
        conference, the county agency must postpone implementation of 
        the sanction pending completion of the conciliation conference.  
        If the caregiver does not request a conciliation conference 
        within ten calendar days of the mailing of the notice of intent 
        to sanction, the MFIP-R staff must notify the county agency that 
        the assistance payment should be reduced. 
           Upon notification from MFIP-R staff that an assistance 
        payment should be reduced, the county agency must send a notice 
        of adverse action to the caregiver stating that the assistance 
        payment will be reduced in the next month following the ten-day 
        notice requirement and state the reason for the action.  For the 
        purpose of this section, "notice of adverse action" means the 
        county agency must send a notice of sanction, reduction, 
        suspension, denial, or termination of benefits before taking any 
        of those actions.  The caregiver may request a fair hearing 
        under section 256.045, upon notice of intent to sanction or 
        notice of adverse action, but the conciliation conference is 
        available only upon notice of intent to sanction. 
           Sec. 10.  Minnesota Statutes 1995 Supplement, section 
        256.048, subdivision 6, is amended to read: 
           Subd. 6.  [PRE-EMPLOYMENT AND EMPLOYMENT SERVICES.] The 
        county agency must provide services identified in clauses (1) to 
        (10).  Services include: 
           (1) a required briefing for all nonmandatory caregivers 
        assigned to MFIP-R, which includes a review of the information 
        presented at an earlier MFIP-R orientation pursuant to 
        subdivision 5, and an overview of services available under 
        MFIP-R pre-employment and employment services, an overview of 
        job search techniques, and the opportunity to volunteer for 
        MFIP-R job search activities and basic education services; 
           (2) a briefing for all mandatory caregivers assigned to 
        MFIP-R, which includes a review of the information presented at 
        an earlier MFIP-R orientation pursuant to subdivision 5, and an 
        overview of services available under MFIP-R pre-employment and 
        employment services; 
           (3) an MFIP assessment that meets the requirements of 
        section 256.736, subdivision 10, paragraph (a), clause (14), and 
        addresses caregivers' skills, abilities, interests, and needs; 
           (4) development, together with the caregiver, of an 
        employability plan and family support agreement according to 
        subdivision 7; 
           (5) coordination of services including child care, 
        transportation, education assistance, and social services 
        necessary to enable caregivers to fulfill the terms of the 
        employability plan and family support agreement; 
           (6) provision of full-time English as a second language 
        (intensive ESL) classes; 
           (7) provision of a broad range of employment and 
        pre-employment services including basic skills testing, interest 
        and aptitude testing, career exploration, job search activities, 
        community work experience program under section 256.737, or 
        on-the-job training under section 256.738; 
           (8) evaluation of the caregiver's compliance with the 
        employability plan and family support agreement and support and 
        recognition of progress toward employment goals; 
           (9) provision of postemployment follow-up for up to six 
        months after caregivers become exempt or exit MFIP-R due to 
        employment if requested by the caregiver; and 
           (10) approval of education and training program activities. 
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        256.048, subdivision 13, is amended to read: 
           Subd. 13.  [EDUCATION AND TRAINING ACTIVITIES; BASIC 
        EDUCATION.] Basic education, including adult basic education, 
        high school or general equivalency diploma, or ESL may be 
        included in the family support agreement when a caregiver is 
        actively participating in job search activities as specified in 
        the family support agreement, or employed at least 12 hours per 
        week.  The concurrent work requirement for basic education does 
        not apply to caregivers under subdivision 1, paragraph (b), who 
        are attending secondary school full time.  Six months of basic 
        education activities may be included in the family support 
        agreement, and extension of basic education activities, 
        including intensive ESL, is contingent upon review and approval 
        by MFIP-R staff.  
           Non-English-speaking caregivers have the option to 
        participate in full-time intensive ESL activities for up to six 
        months prior to participation in job search with approval of 
        MFIP-R staff, provided the caregiver also works or participates 
        in job search.  For caregivers participating in intensive ESL, 
        hours spent in intensive ESL, employment, and job search must 
        equal at least 30 hours per week, or 20 hours per week for a 
        single parent caregiver with a child under age six. 
           Sec. 12.  Minnesota Statutes 1994, section 256.73, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEPENDENT CHILDREN.] Assistance shall be 
        given under sections 256.72 to 256.87 to or on behalf of any 
        dependent child who: 
           (1) Resides Has resided in Minnesota for at least 30 days 
        or, if residing in the state for less than 30 days, the child or 
        the child's caretaker relative meets one of the criteria 
        specified in subdivision 1b; 
           (2) Is otherwise eligible; the child shall not be denied 
        aid because of conditions of the home in which the child resides.
           Sec. 13.  Minnesota Statutes 1994, section 256.73, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [USE OF CODE OF FEDERAL REGULATIONS.] In the 
        event that federal block grant legislation eliminates the 
        federal regulatory basis for AFDC, the state shall continue to 
        determine eligibility for Minnesota's AFDC program using the 
        provisions of the Code of Federal Regulations, title 45, as 
        constructed on the day prior to their federal repeal, except as 
        expressly superseded in sections 256.72 to 256.87, or as 
        superseded by federal law, or as modified by state rule or by 
        regulatory waivers granted to the state. 
           Sec. 14.  Minnesota Statutes 1994, section 256.73, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [RESIDENCY CRITERIA.] A child or caretaker 
        relative who has resided in Minnesota for less than 30 days is 
        considered to be a Minnesota resident if: 
           (1) either the child or the caretaker relative was born in 
        the state; 
           (2) either the child or the caretaker relative has, in the 
        past, resided in this state for at least 365 consecutive days; 
           (3) either the child or the caretaker relative came to this 
        state to join a close relative who has resided in this state for 
        at least one year.  For purposes of this clause, "close 
        relative" means a parent, grandparent, brother, sister, spouse, 
        or child; or 
           (4) the caretaker relative came to this state to accept a 
        bona fide offer of employment and was eligible to accept the 
        employment. 
           A county agency may waive the 30-day residency requirement 
        in cases of emergency or where unusual hardship would result 
        from denial of assistance.  The county agency must report to the 
        commissioner within 30 days on any waiver granted under this 
        section.  The county shall not deny an application solely 
        because the applicant does not meet at least one of the criteria 
        in this subdivision, but shall continue to process the 
        application and leave the application pending until the 
        residency requirement is met or until eligibility or 
        ineligibility is established. 
           Sec. 15.  Minnesota Statutes 1995 Supplement, section 
        256.73, subdivision 8, is amended to read: 
           Subd. 8.  [RECOVERY OF OVERPAYMENTS AND ATM ERRORS.] (a) 
        Except as provided in subdivision 8a, if an amount of aid to 
        families with dependent children assistance is paid to a 
        recipient in excess of the payment due, it shall be recoverable 
        by the county agency.  The agency shall give written notice to 
        the recipient of its intention to recover the overpayment. 
           (b) When an overpayment occurs, the county agency shall 
        recover the overpayment from a current recipient by reducing the 
        amount of aid payable to the assistance unit of which the 
        recipient is a member for one or more monthly assistance 
        payments until the overpayment is repaid.  All county agencies 
        in the state shall reduce the assistance payment by three 
        percent of the assistance unit's standard of need or the amount 
        of the monthly payment, whichever is less, for all overpayments 
        whether or not the overpayment is due solely to agency 
        error.  For recipients receiving benefits via electronic benefit 
        transfer, if the overpayment is a result of an automated teller 
        machine (ATM) dispensing funds in error to the recipient, the 
        agency may recover the ATM error by immediately withdrawing 
        funds from the recipient's electronic benefit transfer account, 
        up to the amount of the error.  If the overpayment is due solely 
        to having wrongfully obtained assistance, whether based on a 
        court order, the finding of an administrative fraud 
        disqualification hearing or a waiver of such a hearing, or a 
        confession of judgment containing an admission of an intentional 
        program violation, the amount of this reduction shall be ten 
        percent.  In cases when there is both an overpayment and 
        underpayment, the county agency shall offset one against the 
        other in correcting the payment. 
           (c) Overpayments may also be voluntarily repaid, in part or 
        in full, by the individual, in addition to the above aid 
        reductions, until the total amount of the overpayment is repaid. 
           (d) The county agency shall make reasonable efforts to 
        recover overpayments to persons no longer on assistance in 
        accordance with standards adopted in rule by the commissioner of 
        human services.  The county agency need not attempt to recover 
        overpayments of less than $35 paid to an individual no longer on 
        assistance if the individual does not receive assistance again 
        within three years, unless the individual has been convicted of 
        fraud under section 256.98. 
           Sec. 16.  Minnesota Statutes 1994, section 256.736, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [DEFINITIONS.] As used in this section and 
        section 256.7365, the following words have the meanings given 
        them: 
           (a) "AFDC"  means aid to families with dependent children. 
           (b) "AFDC-UP" or "two-parent family" means that group of 
        AFDC clients who are eligible for assistance by reason of 
        unemployment as defined by the commissioner under section 
        256.12, subdivision 14. 
           (c) "Caretaker" means a parent or eligible adult, including 
        a pregnant woman, who is part of the assistance unit that has 
        applied for or is receiving AFDC. 
           (d) "Case manager" means the county agency's employment and 
        training service provider who provides the services identified 
        in sections 256.736 to 256.739 according to subdivision 12. 
           (e) "Employment and training services" means programs, 
        activities, and services related to job training, job placement, 
        and job creation, including job service programs, job training 
        partnership act programs, wage subsidies, remedial and secondary 
        education programs, post-secondary education programs excluding 
        education leading to a post-baccalaureate degree, and vocational 
        education programs, work readiness programs, job search, 
        counseling, case management, community work experience programs, 
        displaced homemaker programs, self-employment programs, grant 
        diversion, employment experience programs, youth employment 
        programs, community investment programs, refugee employment and 
        training programs, and counseling and support activities 
        necessary to stabilize the caretaker or the family. 
           (e) (f) "Employment and training service provider" means a 
        public, private, or nonprofit agency certified by the 
        commissioner of economic security to deliver employment and 
        training services under section 268.0122, subdivision 3, and 
        section 268.871, subdivision 1. 
           (f) (g) "Minor parent" means a caretaker relative who is 
        the person who is under age 18 who is either the birth parent of 
        the dependent a minor child or children in the assistance unit 
        and who is under the age of 18 or is eligible for AFDC as a 
        pregnant woman. 
           (g) (h) "Targeted groups" or "targeted caretakers" means 
        recipients of AFDC or AFDC-UP designated as priorities for 
        employment and training services under subdivision 16. 
           (h) (i) "Suitable employment" means employment which:  
           (1) is within the recipient's physical and mental capacity; 
           (2) meets health and safety standards established by the 
        Occupational Safety and Health Administration and the department 
        of economic security; 
           (3) pays hourly gross earnings which are not less than the 
        federal or state minimum wage for that type of employment, 
        whichever is applicable; 
           (4) does not result in a net loss of income.  Employment 
        results in a net loss of income when the income remaining after 
        subtracting necessary work-related expenses from the family's 
        gross income, which includes cash assistance, is less than the 
        cash assistance the family was receiving at the time the offer 
        of employment was made.  For purposes of this definition, "work 
        expenses" means the amount withheld or paid for; state and 
        federal income taxes; social security withholding taxes; 
        mandatory retirement fund deductions; dependent care costs; 
        transportation costs to and from work at the amount allowed by 
        the Internal Revenue Service for personal car mileage; costs of 
        work uniforms, union dues, and medical insurance premiums; costs 
        of tools and equipment used on the job; $1 per work day for the 
        costs of meals eaten during employment; public liability 
        insurance required by an employer when an automobile is used in 
        employment and the cost is not reimbursed by the employer; and 
        the amount paid by an employee from personal funds for business 
        costs which are not reimbursed by the employer; 
           (5) offers a job vacancy which is not the result of a 
        strike, lockout, or other bona fide labor dispute; 
           (6) requires a round trip commuting time from the 
        recipient's residence of less than two hours by available 
        transportation, exclusive of the time to transport children to 
        and from child care; 
           (7) does not require the recipient to leave children under 
        age 12 unattended in order to work, or if child care is 
        required, such care is available; and 
           (8) does not discriminate at the job site on the basis of 
        age, sex, race, color, creed, marital status, status with regard 
        to public assistance, disability, religion, or place of national 
        origin. 
           (i) (j) "Support services" means programs, activities, and 
        services intended to stabilize families and individuals or 
        provide assistance for family needs related to employment or 
        participation in employment and training services, including 
        child care, transportation, housing assistance, personal and 
        family counseling, crisis intervention services, peer support 
        groups, chemical dependency counseling and treatment, money 
        management assistance, and parenting skill courses. 
           Sec. 17.  Minnesota Statutes 1994, section 256.736, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [MANDATORY ASSESSMENT AND SCHOOL ATTENDANCE FOR 
        CERTAIN CUSTODIAL PARENTS.] This subdivision applies to the 
        extent permitted under federal law and regulation. 
           (a)  [DEFINITIONS.] The definitions in this paragraph apply 
        to this subdivision. 
           (1) "Custodial parent" means a recipient of AFDC who is the 
        natural or adoptive parent of a child living with the custodial 
        parent. 
           (2) "School" means: 
           (i) an educational program which leads to a high school 
        diploma.  The program or coursework may be, but is not limited 
        to, a program under the post-secondary enrollment options of 
        section 123.3514, a regular or alternative program of an 
        elementary or secondary school, a technical college, or a 
        college; 
           (ii) coursework for a general educational development (GED) 
        diploma of not less than six hours of classroom instruction per 
        week; or 
           (iii) any other post-secondary educational program that is 
        approved by the public school or the county agency under 
        subdivision 11. 
           (b)  [ASSESSMENT AND PLAN; REQUIREMENT; CONTENT.] The 
        county agency must examine the educational level of each 
        custodial parent under the age of 20 to determine if the 
        recipient has completed a high school education or its 
        equivalent.  If the custodial parent has not completed a high 
        school education or its equivalent and is not exempt from the 
        requirement to attend school under paragraph (c), the county 
        agency must complete an individual assessment for the custodial 
        parent.  The assessment must be performed as soon as possible 
        but within 60 days of determining AFDC eligibility for the 
        custodial parent.  The assessment must provide an initial 
        examination of the custodial parent's educational progress and 
        needs, literacy level, child care and supportive service needs, 
        family circumstances, skills, and work experience.  In the case 
        of a custodial parent under the age of 18, the assessment must 
        also consider the results of the early and periodic screening, 
        diagnosis and treatment (EPSDT) screening, if available, and the 
        effect of a child's development and educational needs on the 
        parent's ability to participate in the program.  The county 
        agency must advise the parent that the parent's first goal must 
        be to complete an appropriate educational option if one is 
        identified for the parent through the assessment and, in 
        consultation with educational agencies, must review the various 
        school completion options with the parent and assist the parent 
        in selecting the most appropriate option. 
           (c)  [RESPONSIBILITY FOR ASSESSMENT AND PLAN.] For 
        custodial parents who are under age 18, the assessment and the 
        employability plan must be completed by the county social 
        services agency, as specified in section 257.33.  For custodial 
        parents who are age 18 or 19, the assessment and employability 
        plan must be completed by the case manager.  The social services 
        agency or the case manager shall consult with representatives of 
        educational agencies required to assist in developing 
        educational plans under section 126.235. 
           (d)  [EDUCATION DETERMINED TO BE APPROPRIATE.] If the case 
        manager or county social services agency identifies an 
        appropriate educational option, it must develop an employability 
        plan in consultation with the custodial parent which reflects 
        the assessment.  The plan must specify that participation in an 
        educational activity is required, what school or educational 
        program is most appropriate, the services that will be provided, 
        the activities the parent will take part in including child care 
        and supportive services, the consequences to the custodial 
        parent for failing to participate or comply with the specified 
        requirements, and the right to appeal any adverse action.  The 
        employability plan must, to the extent possible, reflect the 
        preferences of the participant. 
           (e)  [EDUCATION DETERMINED TO BE NOT APPROPRIATE.] If the 
        case manager determines that there is no appropriate educational 
        option for a custodial parent who is age 18 or 19, the case 
        manager shall indicate the reasons for the determination.  The 
        case manager shall then notify the county agency which must 
        refer the custodial parent to case management services under 
        subdivision 11 the Project STRIDE program for completion of an 
        employability plan and mandatory participation in employment and 
        training services.  If the custodial parent fails to participate 
        or cooperate with case management employment and training 
        services and does not have good cause for the failure, the 
        county agency shall apply the sanctions listed in subdivision 4, 
        beginning with the first payment month after issuance of 
        notice.  If the county social services agency determines that 
        school attendance is not appropriate for a custodial parent 
        under age 18, the county agency shall refer the custodial parent 
        to social services for services as provided in section 257.33. 
           (f)  [SCHOOL ATTENDANCE REQUIRED.] Notwithstanding 
        subdivision 3, a custodial parent must attend school if all of 
        the following apply: 
           (1) the custodial parent is less than 20 years of age; 
           (2) transportation services needed to enable the custodial 
        parent to attend school are available; 
           (3) licensed or legal nonlicensed child care services 
        needed to enable the custodial parent to attend school are 
        available; 
           (4) the custodial parent has not already received a high 
        school diploma or its equivalent; and 
           (5) the custodial parent is not exempt because the 
        custodial parent: 
           (i) is ill or incapacitated seriously enough to prevent 
        attendance at school; 
           (ii) is needed in the home because of the illness or 
        incapacity of another member of the household; this includes a 
        custodial parent of a child who is younger than six weeks of 
        age; 
           (iii) works 30 or more hours a week; or 
           (iv) is pregnant if it has been medically verified that the 
        child's birth is expected within the next six months. 
           (g)  [ENROLLMENT AND ATTENDANCE.] The custodial parent must 
        be enrolled in school and meeting the school's attendance 
        requirements.  If enrolled, the custodial parent is considered 
        to be attending when the school is not in regular session, 
        including during holiday and summer breaks. 
           (h)  [GOOD CAUSE FOR NOT ATTENDING SCHOOL.] The county 
        agency shall not impose the sanctions in subdivision 4 if it 
        determines that a custodial parent has good cause for not being 
        enrolled or for not meeting the school's attendance 
        requirements.  The county agency shall determine whether good 
        cause for not attending or not enrolling in school exists, 
        according to this paragraph: 
           (1) Good cause exists when the county agency has verified 
        that the only available school program requires round trip 
        commuting time from the custodial parent's residence of more 
        than two hours by available means of transportation, excluding 
        the time necessary to transport children to and from child care. 
           (2) Good cause exists when the custodial parent has 
        indicated a desire to attend school, but the public school 
        system is not providing for the education and alternative 
        programs are not available. 
           (i)  [FAILURE TO COMPLY.] The case manager and social 
        services agency shall establish ongoing contact with appropriate 
        school staff to monitor problems that custodial parents may have 
        in pursuing their educational plan and shall jointly seek 
        solutions to prevent parents from failing to complete 
        education.  If the school notifies the county agency that the 
        custodial parent is not enrolled or is not meeting the school's 
        attendance requirements, or appears to be facing barriers to 
        completing education, the information must be conveyed to the 
        case manager for a custodial parent age 18 or 19, or to the 
        social services agency for a custodial parent under age 18.  The 
        case manager or social services agency shall reassess the 
        appropriateness of school attendance as specified in paragraph 
        (f).  If after consultation, school attendance is still 
        appropriate and the case manager or social services agency 
        determines that the custodial parent has failed to enroll or is 
        not meeting the school's attendance requirements and the 
        custodial parent does not have good cause, the case manager or 
        social services agency shall inform the custodial parent's 
        financial worker who shall apply the sanctions listed in 
        subdivision 4 beginning with the first payment month after 
        issuance of notice. 
           (j)  [NOTICE AND HEARING.] A right to notice and fair 
        hearing shall be provided in accordance with section 256.045 and 
        the Code of Federal Regulations, title 45, section 205.10. 
           (k)  [SOCIAL SERVICES.] When a custodial parent under the 
        age of 18 has failed to attend school, is not exempt, and does 
        not have good cause, the county agency shall refer the custodial 
        parent to the social services agency for services, as provided 
        in section 257.33. 
           (l)  [VERIFICATION.] No less often than quarterly, the 
        financial worker must verify that the custodial parent is 
        meeting the requirements of this subdivision.  Notwithstanding 
        section 13.32, subdivision 3, when the county agency notifies 
        the school that a custodial parent is subject to this 
        subdivision, the school must furnish verification of school 
        enrollment, attendance, and progress to the county agency.  The 
        county agency must not impose the sanctions in paragraph (i) if 
        the school fails to cooperate in providing verification of the 
        minor parent's education, attendance, or progress. 
           Sec. 18.  Minnesota Statutes 1994, section 256.736, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONDITIONS OF CERTIFICATION.] The commissioner 
        of human services shall: 
           (1) in consultation with the commissioner of children, 
        families, and learning, arrange for or provide any caretaker or 
        child required to participate who participates in employment and 
        training services pursuant to this section with child-care 
        services, transportation, and other necessary family services; 
           (2) provide that in determining a recipient's needs the 
        additional expenses attributable to participation in a program 
        are taken into account in grant determination to the extent 
        permitted by federal regulation; 
           (3) provide that the county board shall impose the 
        sanctions in clause (4) when the county board: 
           (a) determines that a custodial parent under the age of 16 
        who is required to attend school under subdivision 3b has, 
        without good cause, failed to attend school; or 
           (b) determines that subdivision 3c applies to a minor 
        parent and the minor parent has, without good cause, failed to 
        cooperate with development of a social service plan or to 
        participate in execution of the plan, to live in a group or 
        foster home, or to participate in a program that teaches skills 
        in parenting and independent living; 
           (4) to the extent permissible by federal law, impose the 
        following sanctions for a recipient's failure to participate in 
        the requirements of subdivision 3b or 3c: 
           (a) for the first failure, 50 percent of the grant provided 
        to the family for the month following the failure shall be made 
        in the form of protective or vendor payments; 
           (b) for the second and subsequent failures, the entire 
        grant provided to the family must be made in the form of 
        protective or vendor payments.  Assistance provided to the 
        family must be in the form of protective or vendor payments 
        until the recipient complies with the requirement; and 
           (c) when protective payments are required, the county 
        agency may continue payments to the caretaker if a protective 
        payee cannot reasonably be found; 
           (5) provide that the county board shall impose the 
        sanctions in clause (6) when the county board: 
           (a) determines that a caretaker or child required to 
        participate in employment and training services has been found 
        by the employment and training service provider to have failed 
        without good cause to participate in appropriate employment and 
        training services, to comply with the recipient's employability 
        development plan, or to have failed without good cause to 
        accept, through the job search program described in subdivision 
        14, or the provisions of an employability development plan if 
        the caretaker is a custodial parent age 18 or 19 and subject to 
        the requirements of subdivision 3b, a bona fide offer of public 
        or other employment; 
           (b) determines that a custodial parent aged 16 to 19 who is 
        required to attend school under subdivision 3b has, without good 
        cause, failed to enroll or attend school; or 
           (c) determines that a caretaker has, without good cause, 
        failed to attend orientation; 
           (6) to the extent required by federal law, impose the 
        following sanctions for a recipient's failure to participate in 
        required employment and training services, to comply with the 
        recipient's employability development plan, to accept a bona 
        fide offer of public or other employment, to enroll or attend 
        school under subdivision 3b, or to attend orientation: 
           (a) for the first failure, the needs of the noncompliant 
        individual shall not be taken into account in making the grant 
        determination, until the individual complies with the 
        requirements; 
           (b) for the second failure, the needs of the noncompliant 
        individual shall not be taken into account in making the grant 
        determination until the individual complies with the requirement 
        or for three consecutive months, whichever is longer; 
           (c) for subsequent failures, the needs of the noncompliant 
        individual shall not be taken into account in making the grant 
        determination until the individual complies with the requirement 
        or for six consecutive months, whichever is longer; 
           (d) aid with respect to a dependent child who has been 
        sanctioned under this paragraph shall be continued for the 
        parent or parents of the child if the child is the only child 
        receiving aid in the family, the child continues to meet the 
        conditions of section 256.73, and the family is otherwise 
        eligible for aid; 
           (e) if the noncompliant individual is a parent or other 
        relative caretaker, payments of aid for any dependent child in 
        the family must be made in the form of protective or vendor 
        payments.  When protective payments are required, the county 
        agency may continue payments to the caretaker if a protective 
        payee cannot reasonably be found.  When protective payments are 
        imposed on assistance units whose basis of eligibility is 
        unemployed parent or incapacitated parent a two-parent family, 
        cash payments may continue to the nonsanctioned caretaker in the 
        assistance unit who remains eligible for AFDC, subject to 
        paragraph (g); 
           (f) If, after removing a caretaker's needs from the grant, 
        only dependent children remain eligible for AFDC, the standard 
        of assistance shall be computed using the special children 
        standard; 
           (g) if the noncompliant individual is a principal wage 
        earner in a family whose basis of eligibility is the 
        unemployment of a parent in a two-parent family and the 
        nonprincipal wage earner other parent is not participating in an 
        approved employment and training service, the needs of both the 
        principal and nonprincipal wage earner parents must not be taken 
        into account in making the grant determination; and 
           (7) Request approval from the secretary of health and human 
        services to use vendor payment sanctions for persons listed in 
        paragraph (5), clause (b).  If approval is granted, the 
        commissioner must begin using vendor payment sanctions as soon 
        as changes to the state plan are approved. 
           Sec. 19.  Minnesota Statutes 1995 Supplement, section 
        256.736, subdivision 10, is amended to read: 
           Subd. 10.  [COUNTY DUTIES.] (a) To the extent of available 
        state appropriations, county boards shall:  
           (1) refer all mandatory and eligible volunteer caretakers 
        permitted to participate under subdivision 3a to an employment 
        and training service provider for participation in employment 
        and training services; 
           (2) identify to the employment and training service 
        provider the target group of which the referred caretaker is a 
        member, if any, and whether the person's participation is 
        mandatory or voluntary; 
           (3) provide all caretakers with an orientation which meets 
        the requirements in subdivisions 10a and 10b; 
           (4) work with the employment and training service provider 
        to encourage voluntary participation by caretakers in the target 
        groups in employment and training services; 
           (5) work with the employment and training service provider 
        to collect data as required by the commissioner; 
           (6) to the extent permissible under federal law, require 
        all caretakers coming into the AFDC program to attend 
        orientation; 
           (7) encourage nontarget caretakers to develop a plan to 
        obtain self-sufficiency; 
           (8) notify the commissioner of the caretakers required to 
        who participate in employment and training services; 
           (9) inform appropriate caretakers of opportunities 
        available through the head start program and encourage 
        caretakers to have their children screened for enrollment in the 
        program where appropriate; 
           (10) provide transportation assistance using available 
        funds to caretakers who participate in employment and training 
        programs; 
           (11) ensure that the required services of orientation, job 
        search, services to custodial parents under the age of 20 who 
        have not completed high school or an equivalent program, job 
        search, educational activities, and work experience for AFDC-UP 
        two-parent families, and case management services are made 
        available to appropriate caretakers under this section, except 
        that payment for case management services is governed by 
        subdivision 13 and that services are provided to volunteer 
        caretakers to the extent resources permit; 
           (12) explain in its local service unit plan under section 
        268.88 how it will ensure that target caretakers determined to 
        be in need of social services are provided with such social 
        services.  The plan must specify how the case manager and the 
        county social service workers will ensure delivery of needed 
        services; 
           (13) to the extent allowed by federal laws and regulations, 
        provide a job search program as defined in subdivision 14, a 
        community work experience program as defined in section 256.737, 
        grant diversion as defined in section 256.739, and on-the-job 
        training as defined in section 256.738.  A county may also 
        provide another work and training program approved by the 
        commissioner and the secretary of the United States Department 
        of Health and Human Services.  Planning and approval for 
        employment and training services listed in this clause must be 
        obtained through submission of the local service unit plan as 
        specified under section 268.88.  A county is not required to 
        provide a community work experience program if the county agency 
        is successful in placing at least 40 60 percent of the monthly 
        average of all caretakers who are subject to the job search 
        requirements of subdivision 14 in grant diversion or on-the-job 
        training program; 
           (14) prior to participation, provide an assessment of each 
        AFDC recipient who is required or volunteers to participate in 
        an approved employment and training service.  The assessment 
        must include an evaluation of the participant's (i) educational, 
        child care, and other supportive service needs; (ii) skills and 
        prior work experience; and (iii) ability to secure and retain a 
        job which, when wages are added to child support, will support 
        the participant's family.  The assessment must also include a 
        review of the results of the early and periodic screening, 
        diagnosis and treatment (EPSDT) screening and preschool 
        screening under chapter 123, if available; the participant's 
        family circumstances; and, in the case of a custodial parent 
        under the age of 18, a review of the effect of a child's 
        development and educational needs on the parent's ability to 
        participate in the program; 
           (15) develop an employability development plan for each 
        recipient for whom an assessment is required under clause (14) 
        which: 
           (i) reflects the assessment required by clause (14); 
           (ii) takes into consideration the recipient's physical 
        capacity, skills, experience, health and safety, family 
        responsibilities, place of residence, proficiency, child care 
        and other supportive service needs; 
           (iii) is based on available resources and local employment 
        opportunities; 
           (iv) specifies the services to be provided by the 
        employment and training service provider; 
           (v) specifies the activities the recipient will participate 
        in, including the worksite to which the caretaker will be 
        assigned, if the caretaker is subject to the requirements of 
        section 256.737, subdivision 2; 
           (vi) specifies necessary supportive services such as child 
        care; 
           (vii) reflects the effort to arrange mandatory activities 
        so that the activities do not interfere with access to available 
        English as a second language classes and to the extent possible, 
        reflects the preferences of the participant; 
           (viii) includes a written agreement between the county 
        agency and the caretaker that outlines a reasonable schedule for 
        completing the plan, including specific completion deadlines, 
        and confirms that 
           (A) there is a market for full-time employees with this 
        education or training where the caretaker will or is willing to 
        reside upon completion of the program; 
           (B) the average wage level for employees with this 
        education or training is greater than the caretaker can earn 
        without this education or training; 
           (C) the caretaker has the academic ability to successfully 
        complete the program; and 
           (D) there is a reasonable expectation that the caretaker 
        will complete the training program based on such factors as the 
        caretaker's previous education, training, work history, current 
        motivation, and changes in previous circumstances; and 
           (ix) specifies the recipient's long-term employment goal 
        which shall lead to self-sufficiency.  Caretakers shall be 
        counseled to set realistic attainable goals, taking into account 
        the long-term needs of the caretaker and the caretaker's family; 
           (16) provide written notification to and obtain the written 
        concurrence of the appropriate exclusive bargaining 
        representatives with respect to job duties covered under 
        collective bargaining agreements and assure that no work 
        assignment under this section or sections 256.737, 256.738, and 
        256.739, or the Minnesota parent's fair share mandatory 
        community work experience program results in:  (i) termination, 
        layoff, or reduction of the work hours of an employee for the 
        purpose of hiring an individual under this section or sections 
        256.737, 256.738, and 256.739; (ii) the hiring of an individual 
        if any other person is on layoff from the same or a 
        substantially equivalent job; (iii) any infringement of the 
        promotional opportunities of any currently employed individual; 
        (iv) the impairment of existing contracts for services or 
        collective bargaining agreements; or (v) except for on-the-job 
        training under section 256.738, a participant filling an 
        established unfilled position vacancy.  If an exclusive 
        bargaining representative and a county or public service 
        employer disagree regarding whether job duties are covered under 
        a collective bargaining agreement, the exclusive bargaining 
        representative or the county or public service employer may 
        petition the bureau of mediation services, and the bureau shall 
        determine if the job duties are covered by a collective 
        bargaining agreement; and 
           (17) assess each caretaker in an AFDC-UP a two-parent 
        family who is under age 25, has not completed high school or a 
        high school equivalency program, and who would otherwise be 
        required to participate in a work experience placement under 
        section 256.737 to determine if an appropriate secondary 
        education option is available for the caretaker.  If an 
        appropriate secondary education option is determined to be 
        available for the caretaker, the caretaker must, in lieu of 
        participating in work experience, enroll in and meet the 
        educational program's participation and attendance 
        requirements.  "Secondary education" for this paragraph means 
        high school education or education designed to prepare a person 
        to qualify for a high school equivalency certificate, basic and 
        remedial education, and English as a second language education.  
        A caretaker required to participate in secondary education who, 
        without good cause, fails to participate shall be subject to the 
        provisions of subdivision 4a and the sanction provisions of 
        subdivision 4, clause (6).  For purposes of this clause, "good 
        cause" means the inability to obtain licensed or legal 
        nonlicensed child care services needed to enable the caretaker 
        to attend, inability to obtain transportation needed to attend, 
        illness or incapacity of the caretaker or another member of the 
        household which requires the caretaker to be present in the 
        home, or being employed for more than 30 hours per week; and 
           (18) provide counseling and other personal follow-up 
        support as needed for up to six months after the participant 
        loses AFDC eligibility to assist the person to maintain 
        employment or to secure new employment. 
           (b) Funds available under this subdivision may not be used 
        to assist, promote, or deter union organizing. 
           (c) A county board may provide other employment and 
        training services that it considers necessary to help caretakers 
        obtain self-sufficiency. 
           (d) Notwithstanding section 256G.07, when a target 
        caretaker relocates to another county to implement the 
        provisions of the caretaker's case management contract or other 
        written employability development plan approved by the county 
        human service agency, its case manager or its employment and 
        training service provider, the county that approved the plan is 
        responsible for the costs of case management and other services 
        required to carry out the plan, including employment and 
        training services.  The county agency's responsibility for the 
        costs ends when all plan obligations have been met, when the 
        caretaker loses AFDC eligibility for at least 30 days, or when 
        approval of the plan is withdrawn for a reason stated in the 
        plan, whichever occurs first.  Responsibility for the costs of 
        child care must be determined under chapter 256H.  A county 
        human service agency may pay for the costs of case management, 
        child care, and other services required in an approved 
        employability development plan when the nontarget caretaker 
        relocates to another county or when a target caretaker again 
        becomes eligible for AFDC after having been ineligible for at 
        least 30 days. 
           Sec. 20.  Minnesota Statutes 1995 Supplement, section 
        256.736, subdivision 10a, is amended to read: 
           Subd. 10a.  [ORIENTATION.] (a) Each county agency must 
        provide an orientation to all caretakers within its jurisdiction 
        in the time limits described in this paragraph:  
           (1) within 60 days of being determined eligible for AFDC 
        for caretakers with a continued absence or incapacitated parent 
        basis of eligibility who are permitted to volunteer for services 
        under subdivision 3a; or 
           (2) within 30 days of being determined eligible for AFDC 
        for caretakers with an unemployed parent basis of eligibility 
        who are required to participate in services under subdivision 3a.
           (b) Caretakers are required to attend an in-person 
        orientation if the caretaker is a member of one of the groups 
        listed in subdivision 3a, paragraph (a), unless the caretaker is 
        exempt from registration under subdivision 3 and the caretaker's 
        exemption basis will not expire within 60 days of being 
        determined eligible for AFDC, or the caretaker is enrolled at 
        least half time in any recognized school, training program, or 
        institution of higher learning and the in-person orientation 
        cannot be scheduled at a time that does not interfere with the 
        caretaker's school or training schedule.  The county agency 
        shall require attendance at orientation of caretakers described 
        in subdivision 3a, paragraph (b) or (c), if the commissioner 
        determines that the groups are eligible for participation in 
        employment and training services. 
           (c) The orientation must consist of a presentation that 
        informs caretakers of: 
           (1) the identity, location, and phone numbers of employment 
        and training and support services available in the county; 
           (2) the types and locations of child care services 
        available through the county agency that are accessible to 
        enable a caretaker to participate in educational programs or 
        employment and training services; 
           (3) the child care resource and referral program designated 
        by the commissioner providing education and assistance to select 
        child care services and a referral to the child care resource 
        and referral when assistance is requested; 
           (4) the obligations of the county agency and service 
        providers under contract to the county agency; 
           (5) the rights, responsibilities, and obligations of 
        participants; 
           (6) the grounds for exemption from mandatory employment and 
        training services or educational requirements; 
           (7) the consequences for failure to participate in 
        mandatory services or requirements, including the requirement 
        that volunteer participants comply with their employability 
        development plan; 
           (8) the method of entering educational programs or 
        employment and training services available through the county; 
           (9) the availability and the benefits of the early and 
        periodic, screening, diagnosis and treatment (EPSDT) program and 
        preschool screening under chapter 123; 
           (10) their eligibility for transition year child care 
        assistance when they lose eligibility for AFDC due to their 
        earnings; 
           (11) their eligibility for extended medical assistance when 
        they lose eligibility for AFDC due to their earnings; and 
           (12) the availability of the federal earned income tax 
        credits and the state working family tax credits; and 
           (13) the availability and benefits of the Head Start 
        program. 
           (d) All orientation programs should provide information to 
        caretakers on parenting, nutrition, household management, food 
        preparation, and other subjects relevant to promoting family 
        integration and self-sufficiency and provide detailed 
        information on community resources available for training 
        sessions on these topics. 
           (e) Orientation must encourage recipients to view AFDC as a 
        temporary program providing grants and services to individuals 
        who set goals and develop strategies for supporting their 
        families without AFDC assistance.  The content of the 
        orientation must not imply that a recipient's eligibility for 
        AFDC is time limited.  Orientation may be provided through 
        audio-visual methods, but the caretaker must be given an 
        opportunity for face-to-face interaction with staff of the 
        county agency or the entity providing the orientation, and an 
        opportunity to express the desire to participate in educational 
        programs and employment and training services offered through 
        the county agency. 
           (f) County agencies shall not require caretakers to attend 
        orientation for more than three hours during any period of 12 
        continuous months.  The county agency shall also arrange for or 
        provide needed transportation and child care to enable 
        caretakers to attend. 
           The county or, under contract, the county's employment and 
        training service provider shall mail written orientation 
        materials containing the information specified in paragraph (c), 
        clauses (1) to (3) and (8) to (12) (13), to each caretaker 
        exempt from attending an in-person orientation or who has good 
        cause for failure to attend after at least two dates for their 
        orientation have been scheduled.  The county or the county's 
        employment and training service provider shall follow up with a 
        phone call or in writing within two weeks after mailing the 
        material. 
           (g) Persons required to attend orientation must be informed 
        of the penalties for failure to attend orientation, support 
        services to enable the person to attend, what constitutes good 
        cause for failure to attend, and rights to appeal.  Persons 
        required to attend orientation must be offered a choice of at 
        least two dates for their first scheduled orientation.  No 
        person may be sanctioned for failure to attend orientation until 
        after a second failure to attend. 
           (h) Good cause for failure to attend an in-person 
        orientation exists when a caretaker cannot attend because of:  
           (1) temporary illness or injury of the caretaker or of a 
        member of the caretaker's family that prevents the caretaker 
        from attending an orientation during the hours when the 
        orientation is offered; 
           (2) a judicial proceeding that requires the caretaker's 
        presence in court during the hours when orientation is 
        scheduled; or 
           (3) a nonmedical emergency that prevents the caretaker from 
        attending an orientation during the hours when orientation is 
        offered.  "Emergency" for the purposes of this paragraph means a 
        sudden, unexpected occurrence or situation of a serious or 
        urgent nature that requires immediate action.  
           (i) Caretakers must receive a second orientation only when: 
           (1) there has been a 30-day break in AFDC eligibility; and 
           (2) the caretaker has not attended an orientation within 
        the previous 12-month period, excluding the month of 
        reapplication for AFDC. 
           Sec. 21.  Minnesota Statutes 1994, section 256.736, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CASE MANAGERS EMPLOYMENT AND TRAINING SERVICE 
        PROVISION.] (a) Counties may directly employ case managers to 
        provide the employment and training services in this section if 
        the county is certified as an employment and training service 
        provider under section 268.0122, or may contract for case 
        management services with a certified employment and training 
        service provider.  Uncertified counties and contracting agencies 
        may provide case management services only if they demonstrate 
        the ability to coordinate employment, training, education, and 
        support services.  The commissioner of economic security shall 
        determine whether or not an uncertified county or agency has 
        demonstrated such ability. 
           (b) Counties that employ case managers must ensure that the 
        case managers have the skills and knowledge necessary to perform 
        the variety of tasks described in subdivision 11 this section.  
        Counties that contract with another agency for case management 
        services must specify in the contract the skills and knowledge 
        needed by the case managers.  At a minimum, case managers must: 
           (1) have a thorough knowledge of training, education, and 
        employment opportunities; 
           (2) have training or experience in understanding the needs 
        of AFDC clients and their families; and 
           (3) be able to formulate creative individualized contracts 
        employability development plans. 
           Sec. 22.  Minnesota Statutes 1995 Supplement, section 
        256.736, subdivision 14, is amended to read: 
           Subd. 14.  [JOB SEARCH.] (a) Each county agency must 
        establish and operate a job search program as provided under 
        this section.  Unless all caretakers in the household are 
        exempt, one nonexempt caretaker in each AFDC-UP two-parent AFDC 
        household must be referred to and begin participation in the job 
        search program within 30 days of being determined eligible for 
        AFDC.  If the assistance unit contains more than one nonexempt 
        caretaker, the caretakers may determine which caretaker shall 
        participate.  The designation may be changed only once annually 
        at the annual redetermination of eligibility.  If no designation 
        is made or if the caretakers cannot agree, the county agency 
        shall designate the caretaker having earned the greater of the 
        incomes, including in-kind income, during the 24-month period 
        immediately preceding the month of application for AFDC benefits 
        as the caretaker that must participate.  When no designation is 
        made or the caretakers cannot agree and neither caretaker had 
        earnings or the earnings were identical for each caretaker, then 
        the county agency shall designate the caretaker who must 
        participate.  A caretaker is exempt from job search 
        participation if: 
           (1) the caretaker is exempt from registration under 
        subdivision 3, except that the second caretaker cannot be exempt 
        to provide child care or care to an ill or incapacitated 
        household member if the first caretaker is sanctioned for 
        failure to comply or is exempt under any other exemption 
        category, provided the first caretaker is capable of providing 
        the needed care; or 
           (2) the caretaker is under age 25, has not completed a high 
        school diploma or an equivalent program, and is participating in 
        a secondary education program as defined in subdivision 10, 
        paragraph (a), clause (17), which is approved by the employment 
        and training service provider in the employability development 
        plan. 
           (b) The job search program must provide four consecutive 
        weeks of job search activities for no less than 20 hours per 
        week but not more than 32 hours per week.  The employment and 
        training service provider shall specify for each participating 
        caretaker the number of weeks and hours of job search to be 
        conducted and shall report to the county agency if the caretaker 
        fails to cooperate with the job search requirement.  A person 
        for whom lack of proficiency in English, as determined by an 
        appropriate evaluation, is a barrier to employment, can choose 
        to attend an available intensive, functional work literacy 
        program for a minimum of 20 hours in place of the 20 hours of 
        job search activities.  The caretaker's employability 
        development plan must include the length of time needed in the 
        program, specific outcomes, attendance requirements, completion 
        dates, and employment goals as they pertain to the intensive 
        literacy program. 
           (c) The job search program may provide services to 
        non-AFDC-UP caretakers who are not in two-parent families. 
           (d) After completion of job search requirements in this 
        section, if the caretaker is not employed, nonexempt caretakers 
        shall be placed in and must participate in and cooperate with 
        the work experience program under section 256.737, the 
        on-the-job training program under section 256.738, or the grant 
        diversion program under section 256.739.  Caretakers must be 
        offered placement in a grant diversion or on-the-job training 
        program, if either such employment is available, before being 
        required to participate in a community work experience program 
        under section 256.737.  When a nonexempt caretaker fails to 
        cooperate with the job search program, the work experience 
        program, the on-the-job training program, or the community work 
        experience program and is subject to the sanction provisions of 
        subdivision 4, the second caretaker in the assistance unit, 
        unless exempt, must also be removed from the grant unless that 
        second caretaker has been referred to and has started 
        participating in the job search program and subsequently in the 
        work experience program, the on-the-job training program, or the 
        community work experience program prior to the date the sanction 
        begins for the first caretaker.  The second caretaker is 
        ineligible for AFDC until the first caretaker's sanction ends or 
        the second caretaker cooperates with the requirements. 
           (e) The commissioner may require that, to the extent of 
        available resources and provided the second caretaker is 
        proficient in English, both caretakers in a two-parent AFDC 
        family where all children are over age six and are not in 
        kindergarten participate in job search and work experience.  A 
        caretaker shall be determined proficient in English if the 
        county agency, or its employment and training service provider, 
        determines that the person has sufficient English language 
        capabilities to become suitably employed.  
           If, as of July 1, 1996, the second caretaker is enrolled in 
        a post-secondary education or training program that is limited 
        to one year and can reasonably be expected to lead to 
        employment, the second caretaker is exempt from job search and 
        work experience for a period of one year or until the caretaker 
        stops attending the post-secondary program, whichever is shorter.
           Sec. 23.  Minnesota Statutes 1995 Supplement, section 
        256.736, subdivision 16, is amended to read: 
           Subd. 16.  [ALLOCATION AND USE OF MONEY.] (a) State money 
        appropriated for employment and training services under this 
        section must be allocated to counties as specified in paragraphs 
        (b) to (l). 
           (b) For purposes of this subdivision, "targeted caretaker" 
        means a recipient who: 
           (1) is a custodial parent under the age of 24 who:  (i) has 
        not completed a high school education and at the time of 
        application for AFDC is not enrolled in high school or in a high 
        school equivalency program; or (ii) had little or no work 
        experience in the preceding year; 
           (2) is a member of a family in which the youngest child is 
        within two years of being ineligible for AFDC due to age; or 
           (3) has received 36 months or more of AFDC over the last 60 
        months. 
           (c) One hundred percent of the money appropriated for case 
        management services as described in subdivision 11 must be 
        allocated to counties based on the average number of cases in 
        each county described in clause (1).  Money appropriated for 
        employment and training services as described in subdivision 1a, 
        paragraph (d), other than case management services, must be 
        allocated to counties as follows: 
           (1) Forty percent of the state money must be allocated 
        based on the average number of cases receiving AFDC in the 
        county which either have been open for 36 or more consecutive 
        months or have a caretaker who is under age 24 and who has no 
        high school or general equivalency diploma.  The average number 
        of cases must be based on counts of these cases as of March 31, 
        June 30, September 30, and December 31 of the previous year. 
           (2) Twenty percent of the state money must be allocated 
        based on the average number of cases receiving AFDC in the 
        county which are not counted under clause (1).  The average 
        number of cases must be based on counts of cases as of March 31, 
        June 30, September 30, and December 31 of the previous year.  
           (3) Twenty-five percent of the state money must be 
        allocated based on the average monthly number of assistance 
        units in the county receiving AFDC-UP for the period ending 
        December 31 of the previous year. 
           (4) Fifteen percent of the state money must be allocated at 
        the discretion of the commissioner based on participation levels 
        for target group members in each county. 
           (d) No more than 15 percent of the money allocated under 
        paragraph (b) and no more than 15 percent of the money allocated 
        under paragraph (c) may be used for administrative activities. 
           (e) At least 55 percent of the money allocated to counties 
        under paragraph (c) must be used for employment and training 
        services for caretakers in the target groups, and up to 45 
        percent of the money may be used for employment and training 
        services for nontarget caretakers.  One hundred percent of the 
        money allocated to counties for case management services must be 
        used to provide those services to caretakers in the target 
        groups. 
           (f) Money appropriated to cover the nonfederal share of 
        costs for bilingual case management services to refugees for the 
        employment and training programs under this section are 
        allocated to counties based on each county's proportion of the 
        total statewide number of AFDC refugee cases.  However, counties 
        with less than one percent of the statewide number of AFDC 
        refugee cases do not receive an allocation.  
           (g) Counties, the department of economic security, and 
        entities under contract with either the department of economic 
        security or the department of human services for provision of 
        STRIDE related services shall bill the commissioner of human 
        services for any expenditures incurred by the county, the 
        county's employment and training service provider, or the 
        department of economic security that may be reimbursed by 
        federal money.  The commissioner of human services shall bill 
        the United States Department of Health and Human Services and 
        the United States Department of Agriculture for the 
        reimbursement and appropriate the reimbursed money to the 
        county, the department of economic security, or employment and 
        training service provider that submitted the original bill.  The 
        reimbursed money must be used to expand employment and training 
        services. 
           (h) The commissioner of human services shall review county 
        expenditures of case management and employment and training 
        block grant money at the end of the third quarter of the 
        biennium and each quarter after that, and may reallocate 
        unencumbered or unexpended money allocated under this section to 
        those counties that can demonstrate a need for additional 
        money.  Reallocation of funds must be based on the formula set 
        forth in paragraph (a), excluding the counties that have not 
        demonstrated a need for additional funds. 
           (i) The county agency may continue to provide case 
        management and supportive services to a participant for up to 90 
        days after the participant loses AFDC eligibility and may 
        continue providing a specific employment and training service 
        for the duration of that service to a participant if funds for 
        the service are obligated or expended prior to the participant 
        losing AFDC eligibility. 
           (j) One hundred percent of the money appropriated for an 
        unemployed parent work experience program under section 256.737 
        must be allocated to counties based on the average monthly 
        number of assistance units in the county receiving AFDC-UP for 
        the period ending December 31 of the previous year. 
           (k) The commissioner may waive the requirement of paragraph 
        (e) that case management funds be spent only on case management 
        services in order to permit the development of a unified STRIDE 
        funding allocation for each county agency.  The unified 
        allocation may be expended by the county agency for case 
        management and employment and training activities in the 
        proportion determined necessary to streamline administrative 
        procedures and enhance program performance.  The commissioner, 
        in consultation with the commissioner of economic security, may 
        also grant a waiver from program spending limits in paragraphs 
        (d) and (e) to any county which can demonstrate increased 
        program effectiveness through a written request to the 
        department.  Counties which request a waiver of the spending 
        limits in paragraphs (d) and (e) shall amend their local service 
        unit plans and receive approval of the plans prior to commencing 
        the waiver.  The commissioners of human services and economic 
        security shall annually evaluate the effectiveness of all 
        waivers approved under this subdivision. 
           (l) Effective July 1, 1995, the commissioner of human 
        services shall begin developing a performance model for the 
        purpose of analyzing each county's performance in the provision 
        of STRIDE employment and training services.  Beginning February 
        1, 1997, and each year thereafter, the commissioner of human 
        services shall inform each county of the county's performance 
        based upon the following measures: 
           (1) employment rate at termination of STRIDE eligibility; 
           (2) wage rate at termination of STRIDE eligibility; 
           (3) average annual cost per placement calculated by 
        dividing the total STRIDE expenditures by the number of 
        participants placed in unsubsidized employment; 
           (4) AFDC-UP participation rate; 
           (5) percentage of 18- and 19-year-old custodial parents 
        subject to secondary education requirements of subdivision 3b 
        who complete secondary education or equivalent course of study; 
        and 
           (6) achievement of federally mandated JOBS participation 
        rate. 
           Performance measures (1), (2), and (3) shall be adjusted to 
        reflect local conditions. 
           County agencies must take the results of these performance 
        measures into consideration when selecting employment and 
        training service providers. 
           Sec. 24.  Minnesota Statutes 1995 Supplement, section 
        256.737, subdivision 7, is amended to read: 
           Subd. 7.  [INJURY PROTECTION FOR WORK EXPERIENCE 
        PARTICIPANTS.] (a) Payment of any claims resulting from an 
        alleged injury or death of a recipient participating in a 
        community work experience program established and operated by a 
        county or a tribal JOBS program pursuant to this section shall 
        be determined in accordance with this section.  This 
        determination method applies to work experience programs 
        established under aid to families with dependent children, work 
        readiness, Minnesota parent's fair share, and to obligors 
        participating in community services pursuant to section 518.551, 
        subdivision 5a, in a county with an approved community 
        investment program. 
           (b) Claims that are subject to this section shall be 
        investigated by the county agency or the tribal JOBS program 
        responsible for supervising the work to determine whether the 
        claimed injury occurred, whether the claimed medical expenses 
        are reasonable, and whether the loss is covered by the 
        claimant's insurance.  If insurance coverage is established, the 
        county agency or tribal JOBS program shall submit the claim to 
        the appropriate insurance entity for payment.  The investigating 
        county agency or tribal JOBS program shall submit all valid 
        claims, in the amount net of any insurance payments, to the 
        department of human services.  
           (c) The department of human services shall submit all 
        claims for impairment compensation to the commissioner of labor 
        and industry.  The commissioner of labor and industry shall 
        review all submitted claims and recommend to the department of 
        human services an amount of compensation comparable to that 
        which would be provided under the impairment compensation 
        schedule of section 176.101, subdivision 3b. 
           (d) The department of human services shall approve a claim 
        of $1,000 or less for payment if appropriated funds are 
        available, if the county agency or tribal JOBS program 
        responsible for supervising the work has made the determinations 
        required by this section, and if the work program was operated 
        in compliance with the safety provisions of this section.  The 
        department shall pay the portion of an approved claim of $1,000 
        or less that is not covered by the claimant's insurance within 
        three months of the date of submission.  On or before February 1 
        of each legislative session, the department shall submit to the 
        appropriate committees of the senate and the house of 
        representatives a list of claims of $1,000 or less paid during 
        the preceding calendar year and shall be reimbursed by 
        legislative appropriation for any claims that exceed the 
        original appropriation provided to the department to operate 
        this program.  Any unspent money from this appropriation shall 
        carry over to the second year of the biennium, and any unspent 
        money remaining at the end of the second year shall be returned 
        to the state general fund. 
           On or before February 1 of each year, the department shall 
        submit to the appropriate committees of the senate and the house 
        of representatives a list of claims in excess of $1,000 and a 
        list of claims of $1,000 or less that were submitted to but not 
        paid by the department of human services, together with any 
        recommendations of appropriate compensation.  These claims shall 
        be heard and determined by the appropriate committees of the 
        senate and house of representatives and, if approved, shall be 
        paid under the legislative claims procedure. 
           (e) Compensation paid under this section is limited to 
        reimbursement for reasonable medical expenses and impairment 
        compensation for disability in like amounts as allowed in 
        section 176.101, subdivision 3b.  Compensation for injuries 
        resulting in death shall include reasonable medical expenses and 
        burial expenses in addition to payment to the participant's 
        estate in an amount up to $200,000.  No compensation shall be 
        paid under this section for pain and suffering, lost wages, or 
        other benefits provided in chapter 176.  Payments made under 
        this section shall be reduced by any proceeds received by the 
        claimant from any insurance policy covering the loss.  For the 
        purposes of this section, "insurance policy" does not include 
        the medical assistance program authorized under chapter 256B or 
        the general assistance medical care program authorized under 
        chapter 256D. 
           (f) The procedure established by this section is exclusive 
        of all other legal, equitable, and statutory remedies against 
        the state, its political subdivisions, or employees of the state 
        or its political subdivisions.  The claimant shall not be 
        entitled to seek damages from any state or, county, tribal, or 
        reservation insurance policy or self-insurance program. 
           (g) A claim is not valid for purposes of this subdivision 
        if the local agency responsible for supervising the work cannot 
        verify to the department of human services: 
           (1) that appropriate safety training and information is 
        provided to all persons being supervised by the agency under 
        this subdivision; and 
           (2) that all programs involving work by those persons 
        comply with federal Occupational Safety and Health 
        Administration and state department of labor and industry safety 
        standards.  A claim that is not valid because of failure to 
        verify safety training or compliance with safety standards will 
        not be paid by the department of human services or through the 
        legislative claims process and must be heard, decided, and paid, 
        if appropriate, by the local government unit or tribal JOBS 
        program responsible for supervising the work of the claimant. 
           (h) This program is effective July 1, 1995.  Claims may be 
        submitted on or after November 1, 1995. 
           Sec. 25.  Minnesota Statutes 1995 Supplement, section 
        256.76, subdivision 1, is amended to read: 
           Subdivision 1.  Upon the completion of the investigation 
        the county agency shall decide whether the child is eligible for 
        assistance under the provisions of sections 256.72 to 256.87 and 
        determine the amount of the assistance and the date on which the 
        assistance begins.  A decision on an application for assistance 
        must be made as promptly as possible and no more than 30 days 
        from the date of application.  Notwithstanding section 393.07, 
        the county agency shall not delay approval or issuance of 
        assistance pending formal action of the county board of 
        commissioners.  The first month's grant shall be based upon that 
        portion of the month from the date of application, or from the 
        date that the applicant meets all eligibility factors, whichever 
        occurs later, provided that on the date that assistance is first 
        requested, the county agency shall inquire and determine whether 
        the person requesting assistance is in immediate need of food, 
        shelter, clothing, or other emergency assistance.  If an 
        emergency need is found to exist, the applicant shall be granted 
        assistance pursuant to section 256.871 within a reasonable 
        period of time.  It The county shall make a grant of assistance 
        which shall be binding upon the county and be complied with by 
        the county until the grant is modified or vacated.  The county 
        agency shall notify the applicant of its decision in writing.  
        The assistance shall be paid monthly to the applicant or to the 
        vendor of medical care upon order of the county agency from 
        funds appropriated to the county agency for this purpose.  
           Sec. 26.  Minnesota Statutes 1995 Supplement, section 
        256.81, is amended to read: 
           256.81 [COUNTY AGENCY, DUTIES.] 
           (1) The county agency shall keep such records, accounts, 
        and statistics in relation to aid to families with dependent 
        children as the state agency shall prescribe.  
           (2) Each grant of aid to families with dependent children 
        shall be paid to the recipient by the county agency unless paid 
        by the state agency.  Payment must be by check or electronic 
        means in the form of a warrant immediately redeemable in cash, 
        electronic benefits transfer, or by direct deposit into the 
        recipient's account in a financial institution, except in those 
        instances in which the county agency, subject to the rules of 
        the state agency, determines that payments for care shall be 
        made to an individual other than the parent or relative with 
        whom the dependent child is living or to vendors of goods and 
        services for the benefit of the child because such parent or 
        relative is unable to properly manage the funds in the best 
        interests and welfare of the child.  There is a presumption of 
        mismanagement of funds whenever a recipient is more than 30 days 
        in arrears on payment of rent, except when the recipient has 
        withheld rent to enforce the recipient's right to withhold the 
        rent in accordance with federal, state, or local housing laws.  
        In cases of mismanagement based solely on failure to pay rent, 
        the county may vendor the rent payments to the landlord.  At the 
        request of a recipient, the state or county may make payments 
        directly to vendors of goods and services, but only for goods 
        and services appropriate to maintain the health and safety of 
        the child, as determined by the county.  
           (3) The state or county may ask the recipient to give 
        written consent authorizing the state or county to provide 
        advance notice to a vendor before vendor payments of rent are 
        reduced or terminated.  Whenever possible under state and 
        federal laws and regulations and if the recipient consents, the 
        state or county shall provide at least 30 days notice to vendors 
        before vendor payments of rent are reduced or terminated.  If 30 
        days notice cannot be given, the state or county shall notify 
        the vendor within three working days after the date the state or 
        county becomes aware that vendor payments of rent will be 
        reduced or terminated.  When the county notifies a vendor that 
        vendor payments of rent will be reduced or terminated, the 
        county shall include in the notice that it is illegal to 
        discriminate on the grounds that a person is receiving public 
        assistance and the penalties for violation.  The county shall 
        also notify the recipient that it is illegal to discriminate on 
        the grounds that a person is receiving public assistance and the 
        procedures for filing a complaint.  The county agency may 
        develop procedures, including using the MAXIS system, to 
        implement vendor notice and may charge vendors a fee not 
        exceeding $5 to cover notification costs. 
           (4) A vendor payment arrangement is not a guarantee that a 
        vendor will be paid by the state or county for rent, goods, or 
        services furnished to a recipient, and the state and county are 
        not liable for any damages claimed by a vendor due to failure of 
        the state or county to pay or to notify the vendor on behalf of 
        a recipient, except under a specific written agreement between 
        the state or county and the vendor or when the state or county 
        has provided a voucher guaranteeing payment under certain 
        conditions.  
           (5) The county shall be paid from state and federal funds 
        available therefor the amount provided for in section 256.82.  
           (6) Federal funds available for administrative purposes 
        shall be distributed between the state and the counties in the 
        same proportion that expenditures were made except as provided 
        for in section 256.017. 
           (7) The affected county may require that assistance paid 
        under the AFDC emergency assistance program in the form of a 
        rental unit damage deposit, less any amount retained by the 
        landlord to remedy a tenant's default in payment of rent or 
        other funds due to the landlord pursuant to a rental agreement, 
        or to restore the premises to the condition at the commencement 
        of the tenancy, ordinary wear and tear excepted, be returned to 
        the county when the individual vacates the premises or paid to 
        the recipient's new landlord as a vendor payment.  The vendor 
        payment of returned funds shall not be considered a new use of 
        emergency assistance. 
           Sec. 27.  [256.9831] [BENEFITS; GAMBLING ESTABLISHMENTS.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section 
        "gambling establishment" means a bingo hall licensed under 
        section 349.164, a racetrack licensed under section 240.06 or 
        240.09, a casino operated under a tribal-state compact under 
        section 3.9221, or any other establishment that receives at 
        least 50 percent of its gross revenue from the conduct of 
        gambling. 
           Subd. 2.  [FINANCIAL TRANSACTION CARDS.] The commissioner 
        shall take all actions necessary to insure that no person may 
        obtain benefits under chapter 256 or 256D through the use of a 
        financial transaction card, as defined in section 609.821, 
        subdivision 1, paragraph (a), at a terminal located in or 
        attached to a gambling establishment. 
           Subd. 3.  [WARRANTS.] The commissioner shall take all 
        actions necessary to insure that warrants issued to pay benefits 
        under chapter 256 or 256D bear a restrictive endorsement that 
        prevents their being cashed in a gambling establishment. 
           Sec. 28.  Minnesota Statutes 1995 Supplement, section 
        256D.02, subdivision 12a, is amended to read: 
           Subd. 12a.  [RESIDENT.] (a) For purposes of eligibility for 
        general assistance under section 256D.05, and payments under 
        section 256D.051 and general assistance medical care, a 
        "resident" is a person living in the state for at least 30 days 
        with the intention of making the person's home here and not for 
        any temporary purpose.  All applicants for these programs are 
        required to demonstrate the requisite intent and can do so in 
        any of the following ways: 
           (1) by showing that the applicant maintains a residence at 
        a verified address, other than a place of public accommodation.  
        An applicant may verify a residence address by presenting a 
        valid state driver's license, a state identification card, a 
        voter registration card, a rent receipt, a statement by the 
        landlord, apartment manager, or homeowner verifying that the 
        individual is residing at the address, or other form of 
        verification approved by the commissioner; or 
           (2) by providing written documentation verifying residence 
        in accordance with Minnesota Rules, part 9500.1219, subpart 3, 
        item (c). 
           (b) An applicant who has been in the state for less than 30 
        days shall be considered a resident if the applicant can provide 
        documentation: 
           (1) that the applicant came to was born in the state in 
        response to an offer of employment; 
           (3) by providing verification (2) that the applicant has 
        been a long-time resident of the state or was formerly a 
        resident of the state for at least 365 days and is returning to 
        the state from a temporary absence, as those terms are defined 
        in rules to be adopted by the commissioner; 
           (3) that the applicant has come to the state to join a 
        close relative which, for purposes of this subdivision, means a 
        parent, grandparent, brother, sister, spouse, or child; or 
           (4) by providing other persuasive evidence to show that the 
        applicant is a resident of the state, according to rules adopted 
        by the commissioner that the applicant has come to this state to 
        accept a bona fide offer of employment for which the applicant 
        is eligible.  
           A county agency shall waive the 30-day residency 
        requirement in cases of emergencies, including medical 
        emergencies, or where unusual hardship would result from denial 
        of general assistance medical care.  A county may waive the 
        30-day residency requirement in cases of emergencies, including 
        medical emergencies, or where unusual hardship would result from 
        denial of general assistance.  The county agency must report to 
        the commissioner within 30 days on any waiver granted under this 
        section.  The county shall not deny an application solely 
        because the applicant does not meet at least one of the criteria 
        in this subdivision, but shall continue to process the 
        application and leave the application pending until the 
        residency requirement is met or until eligibility or 
        ineligibility is established. 
           Sec. 29.  Minnesota Statutes 1995 Supplement, section 
        256D.03, subdivision 2, is amended to read: 
           Subd. 2.  After December 31, 1980, state aid shall be paid 
        for 75 percent of all general assistance and grants up to the 
        standards of sections section 256D.01, subdivision 1a, and 
        256D.051, and according to procedures established by the 
        commissioner, except as provided for under section 256.017.  
        Benefits shall be issued to recipients by the state or county 
        and funded according to section 256.025, subdivision 3.  
           Beginning July 1, 1991, the state will reimburse counties 
        according to the payment schedule in section 256.025 for the 
        county share of county agency expenditures made under this 
        subdivision from January 1, 1991, on.  Payment to counties under 
        this subdivision is subject to the provisions of section 256.017.
           Sec. 30.  Minnesota Statutes 1995 Supplement, section 
        256D.03, subdivision 2a, is amended to read: 
           Subd. 2a.  [COUNTY AGENCY OPTIONS.] Any county agency may, 
        from its own resources, make payments of general assistance:  
        (a) at a standard higher than that established by the 
        commissioner without reference to the standards of section 
        256D.01, subdivision 1; or (b) to persons not meeting the 
        eligibility standards set forth in section 256D.05, subdivision 
        1, or 256D.051 but for whom the aid would further the purposes 
        established in the general assistance program in accordance with 
        rules adopted by the commissioner pursuant to the administrative 
        procedure act.  The Minnesota department of human services may 
        maintain client records and issue these payments, providing the 
        cost of benefits is paid by the counties to the department of 
        human services in accordance with sections 256.01 and 256.025, 
        subdivision 3. 
           Sec. 31.  Minnesota Statutes 1995 Supplement, section 
        256D.03, subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
        (a) General assistance medical care may be paid for any person 
        who is not eligible for medical assistance under chapter 256B, 
        including eligibility for medical assistance based on a 
        spenddown of excess income according to section 256B.056, 
        subdivision 5, and: 
           (1) who is receiving assistance under section 256D.05 or 
        256D.051, or who is having a payment made on the person's behalf 
        under sections 256I.01 to 256I.06; or 
           (2)(i) who is a resident of Minnesota; and whose equity in 
        assets is not in excess of $1,000 per assistance unit.  No asset 
        test shall be applied to children and their parents living in 
        the same household.  Exempt assets, the reduction of excess 
        assets, and the waiver of excess assets must conform to the 
        medical assistance program in chapter 256B, with the following 
        exception:  the maximum amount of undistributed funds in a trust 
        that could be distributed to or on behalf of the beneficiary by 
        the trustee, assuming the full exercise of the trustee's 
        discretion under the terms of the trust, must be applied toward 
        the asset maximum; and 
           (ii) who has countable income not in excess of the 
        assistance standards established in section 256B.056, 
        subdivision 4, or whose excess income is spent down pursuant to 
        section 256B.056, subdivision 5, using a six-month budget 
        period, except that a one-month budget period must be used for 
        recipients residing in a long-term care facility.  The method 
        for calculating earned income disregards and deductions for a 
        person who resides with a dependent child under age 21 shall be 
        as specified in section 256.74, subdivision 1.  However, if a 
        disregard of $30 and one-third of the remainder described in 
        section 256.74, subdivision 1, clause (4), has been applied to 
        the wage earner's income, the disregard shall not be applied 
        again until the wage earner's income has not been considered in 
        an eligibility determination for general assistance, general 
        assistance medical care, medical assistance, or aid to families 
        with dependent children for 12 consecutive months.  The earned 
        income and work expense deductions for a person who does not 
        reside with a dependent child under age 21 shall be the same as 
        the method used to determine eligibility for a person under 
        section 256D.06, subdivision 1, except the disregard of the 
        first $50 of earned income is not allowed; or 
           (3) who would be eligible for medical assistance except 
        that the person resides in a facility that is determined by the 
        commissioner or the federal health care financing administration 
        to be an institution for mental diseases. 
           (b) Eligibility is available for the month of application, 
        and for three months prior to application if the person was 
        eligible in those prior months.  A redetermination of 
        eligibility must occur every 12 months. 
           (c) General assistance medical care is not available for a 
        person in a correctional facility unless the person is detained 
        by law for less than one year in a county correctional or 
        detention facility as a person accused or convicted of a crime, 
        or admitted as an inpatient to a hospital on a criminal hold 
        order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (d) General assistance medical care is not available for 
        applicants or recipients who do not cooperate with the county 
        agency to meet the requirements of medical assistance. 
           (e) In determining the amount of assets of an individual, 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (f)(1) Beginning October 1, 1993, an undocumented alien or 
        a nonimmigrant is ineligible for general assistance medical care 
        other than emergency services.  For purposes of this 
        subdivision, a nonimmigrant is an individual in one or more of 
        the classes listed in United States Code, title 8, section 
        1101(a)(15), and an undocumented alien is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           (2) This subdivision does not apply to a child under age 
        18, to a Cuban or Haitian entrant as defined in Public Law 
        Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
        is aged, blind, or disabled as defined in United States Code, 
        title 42, section 1382c(a)(1). 
           (3) For purposes of paragraph (f), "emergency services" has 
        the meaning given in Code of Federal Regulations, title 42, 
        section 440.255(b)(1), except that it also means services 
        rendered because of suspected or actual pesticide poisoning. 
           Sec. 32.  Minnesota Statutes 1995 Supplement, section 
        256D.05, subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) Each person or family 
        whose income and resources are less than the standard of 
        assistance established by the commissioner and who is a resident 
        of the state shall be eligible for and entitled to general 
        assistance if the person or family is: 
           (1) a person who is suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment; 
           (2) a person whose presence in the home on a substantially 
        continuous basis is required because of the professionally 
        certified illness, injury, incapacity, or the age of another 
        member of the household; 
           (3) a person who has been placed in, and is residing in, a 
        licensed or certified facility for purposes of physical or 
        mental health or rehabilitation, or in an approved chemical 
        dependency domiciliary facility, if the placement is based on 
        illness or incapacity and is pursuant to a plan developed or 
        approved by the county agency through its director or designated 
        representative; 
           (4) a person who resides in a shelter facility described in 
        subdivision 3; 
           (5) a person not described in clause (1) or (3) who is 
        diagnosed by a licensed physician, psychological practitioner, 
        or other qualified professional, as mentally retarded or 
        mentally ill, and that condition prevents the person from 
        obtaining or retaining employment; 
           (6) a person who has an application pending for, or is 
        appealing termination of benefits from, the social security 
        disability program or the program of supplemental security 
        income for the aged, blind, and disabled, provided the person 
        has a professionally certified permanent or temporary illness, 
        injury, or incapacity which is expected to continue for more 
        than 30 days and which prevents the person from obtaining or 
        retaining employment; 
           (7) a person who is unable to obtain or retain employment 
        because advanced age significantly affects the person's ability 
        to seek or engage in substantial work; 
           (8) a person who has been assessed by a vocational 
        specialist and, in consultation with the county agency, has been 
        determined to be unemployable for purposes of this item, a 
        person is considered employable if there exist positions of 
        employment in the local labor market, regardless of the current 
        availability of openings for those positions, that the person is 
        capable of performing.  The person's eligibility under this 
        category must be reassessed at least annually.  The county 
        agency must provide notice to the person not later than 30 days 
        before annual eligibility under this item ends, informing the 
        person of the date annual eligibility will end and the need for 
        vocational assessment if the person wishes to continue 
        eligibility under this clause.  For purposes of establishing 
        eligibility under this clause, it is the applicant's or 
        recipient's duty to obtain any needed vocational assessment; 
           (9) a person who is determined by the county agency, in 
        accordance with permanent rules adopted by the commissioner, to 
        be learning disabled, provided that if a rehabilitation plan for 
        the person is developed or approved by the county agency, the 
        person is following the plan; 
           (10) a child under the age of 18 who is not living with a 
        parent, stepparent, or legal custodian, but only if:  the child 
        is legally emancipated or living with an adult with the consent 
        of an agency acting as a legal custodian; the child is at least 
        16 years of age and the general assistance grant is approved by 
        the director of the county agency or a designated representative 
        as a component of a social services case plan for the child; or 
        the child is living with an adult with the consent of the 
        child's legal custodian and the county agency.  For purposes of 
        this clause, "legally emancipated" means a person under the age 
        of 18 years who:  (i) has been married; (ii) is on active duty 
        in the uniformed services of the United States; (iii) has been 
        emancipated by a court of competent jurisdiction; or (iv) is 
        otherwise considered emancipated under Minnesota law, and for 
        whom county social services has not determined that a social 
        services case plan is necessary, for reasons other than that the 
        child has failed or refuses to cooperate with the county agency 
        in developing the plan; 
           (11) a woman in the last trimester of pregnancy who does 
        not qualify for aid to families with dependent children.  A 
        woman who is in the last trimester of pregnancy who is currently 
        receiving aid to families with dependent children may be granted 
        emergency general assistance to meet emergency needs; 
           (12) a person who is eligible for displaced homemaker 
        services, programs, or assistance under section 268.96, but only 
        if that person is enrolled as a full-time student; 
           (13) a person who lives more than two hours round-trip 
        traveling time from any potential suitable employment; 
           (14) a person who is involved with protective or 
        court-ordered services that prevent the applicant or recipient 
        from working at least four hours per day; 
           (15)(i) a family as defined in section 256D.02, subdivision 
        5, which is ineligible for the aid to families with dependent 
        children program. 
           (ii) unless all adults in the family are exempt under 
        section 256D.051, subdivision 3a, one each adult in the family 
        unit must participate in and cooperate with the food stamp 
        employment and training program under section 256D.051 each 
        month that the family unit receives general assistance 
        benefits.  If the household contains more than one nonexempt 
        adult, the adults may determine which adult must participate.  
        The designation may be changed once annually at the annual 
        redetermination of eligibility.  If no designation is made or if 
        the adults cannot agree, the county agency shall designate the 
        adult having earned the greater of the incomes, including 
        in-kind income, during the 24-month period immediately preceding 
        the month of application for general assistance, as the adult 
        that must participate.  When there are no earnings or when 
        earnings are identical for each adult, the county agency shall 
        designate which adult must participate.  The recipient's 
        participation must begin on no later than the first day of the 
        first full month following the determination of eligibility for 
        general assistance benefits.  To the extent of available 
        resources, and with the county agency's consent, the recipient 
        may voluntarily continue to participate in food stamp employment 
        and training services for up to three additional consecutive 
        months immediately following termination of general assistance 
        benefits in order to complete the provisions of the recipient's 
        employability development plan.  If the an adult member fails 
        without good cause to participate in or cooperate with the food 
        stamp employment and training program, the county agency shall 
        concurrently terminate that person's eligibility for general 
        assistance and food stamps for two months or until compliance is 
        achieved, whichever is shorter, using the notice, good cause, 
        conciliation and termination procedures specified in section 
        256D.051; or 
           (16) a person over age 18 whose primary language is not 
        English and who is attending high school at least half time. 
           (b) Persons or families who are not state residents but who 
        are otherwise eligible for general assistance may receive 
        emergency general assistance to meet emergency needs. 
           (c) As a condition of eligibility under paragraph (a), 
        clauses (1), (3), (5), (8), and (9), the recipient must complete 
        an interim assistance agreement and must apply for other 
        maintenance benefits as specified in section 256D.06, 
        subdivision 5, and must comply with efforts to determine the 
        recipient's eligibility for those other maintenance benefits.  
           (d) The burden of providing documentation for a county 
        agency to use to verify eligibility for general assistance or 
        for exemption from the food stamp employment and training 
        program is upon the applicant or recipient.  The county agency 
        shall use documents already in its possession to verify 
        eligibility, and shall help the applicant or recipient obtain 
        other existing verification necessary to determine eligibility 
        which the applicant or recipient does not have and is unable to 
        obtain. 
           Sec. 33.  Minnesota Statutes 1995 Supplement, section 
        256D.051, subdivision 1, is amended to read: 
           Subdivision 1.  [FOOD STAMP EMPLOYMENT AND TRAINING 
        PROGRAM.] The commissioner shall implement a food stamp 
        employment and training program in order to meet the food stamp 
        employment and training participation requirements of the United 
        States Department of Agriculture.  Unless all adult members of 
        the food stamp household are exempt under subdivision 3a, one 
        nonexempt each adult recipient in each household the unit must 
        participate in the food stamp employment and training program 
        each month that the household person is eligible for food stamps 
        , up to a maximum period of six calendar months during any 12 
        consecutive calendar month period.  If the household contains 
        more than one nonexempt adult, the adults may determine which 
        adult must participate.  The designation may be changed only 
        once annually at the annual redetermination of eligibility.  If 
        no designation is made or if the adults cannot agree, the county 
        agency shall designate the adult having earned the greater of 
        the incomes, including in-kind income, during the 24-month 
        period immediately preceding the month of application for food 
        stamp benefits, as the adult that must participate.  When there 
        are no earnings or when earnings are identical for each adult, 
        the county agency shall designate the adult that must 
        participate.  The person's participation in food stamp 
        employment and training services must begin on no later than the 
        first day of the calendar month following the date determination 
        of eligibility for food stamps.  With the county agency's 
        consent, and to the extent of available resources, the person 
        may voluntarily continue to participate in food stamp employment 
        and training services for up to three additional consecutive 
        months immediately following the end of the six-month mandatory 
        participation period termination of food stamp benefits in order 
        to complete the provisions of the person's employability 
        development plan.  
           Sec. 34.  Minnesota Statutes 1995 Supplement, section 
        256D.051, subdivision 6, is amended to read: 
           Subd. 6.  [SERVICE COSTS.] Within the limits of available 
        resources, the commissioner shall reimburse county agency 
        expenditures for providing food stamp employment and training 
        services including direct participation expenses and 
        administrative costs.  State food stamp employment and training 
        funds shall be used only to pay the county agency's and food 
        stamp employment and training service provider's actual costs of 
        providing participant support services, direct program services, 
        and program administrative costs for persons who participate in 
        such employment and training services.  The average annual 
        reimbursable cost for providing food stamp employment and 
        training services to a recipient for whom an individualized 
        employability development plan is not completed must not exceed 
        $60 for the food stamp employment and training services, and 
        $240 $340 for necessary recipient support services such as 
        transportation or child care needed to participate in food stamp 
        employment and training program.  If an individualized 
        employability development plan has been completed, the average 
        annual reimbursable cost for providing food stamp employment and 
        training services must not exceed $300 $400 for all services and 
        costs necessary to implement the plan, including the costs of 
        training, employment search assistance, placement, work 
        experience, on-the-job training, other appropriate activities, 
        the administrative and program costs incurred in providing these 
        services, and necessary recipient support services such as 
        tools, clothing, and transportation needed to participate in 
        food stamp employment and training services.  The county agency 
        may expend additional county funds over and above the dollar 
        limits of this subdivision without state reimbursement.  
           Sec. 35.  Minnesota Statutes 1995 Supplement, section 
        256D.055, is amended to read: 
           256D.055 [COUNTY DESIGN; WORK FOCUSED PROGRAM.] 
           The commissioner of human services shall issue a request 
        for proposals from counties to submit a plan for developing and 
        implementing a county-designed program.  The plan shall be for 
        first-time applicants for aid to families with dependent 
        children (AFDC) and family general assistance (FGA) and must 
        emphasize the importance of becoming employed and oriented into 
        the work force in order to become self-sufficient.  The plan 
        must target public assistance applicants who are most likely to 
        become self-sufficient quickly with short-term assistance or 
        services such as child care, child support enforcement, or 
        employment and training services.  
           The plan may include vendor payments, mandatory job search, 
        refocusing existing county or provider efforts, or other program 
        features.  The commissioner may approve a county plan which 
        allows a county to use other program funding for the county work 
        focus program in a more flexible manner.  Nothing in this 
        section shall allow payments made to the public assistance 
        applicant to be less than the amount the applicant would have 
        received if the program had not been implemented, or reduce or 
        eliminate a category of eligible participants from the program 
        without legislative approval.  
           The commissioner shall not approve a county plan that would 
        have an adverse impact on the Minnesota family investment plan 
        demonstration.  If the plan is approved by the commissioner, the 
        county may implement the plan.  If the plan is approved by the 
        commissioner, but a federal waiver is necessary to implement the 
        plan, the commissioner shall apply for the necessary federal 
        waivers.  If by July 1, 1996, at least four counties have not 
        proposed a work focused plan, the commissioner of human services 
        may pursue the work first plan as provided under sections 
        256.7351 to 256.7359.  However, a county with a work focus plan 
        that has been approved under this section may implement the plan.
           Sec. 36.  Minnesota Statutes 1994, section 256D.06, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [RECOVERY OF ATM ERRORS.] For recipients 
        receiving benefits via electronic benefit transfer, if the 
        recipient is overpaid as a result of an automated teller machine 
        (ATM) dispensing funds in error to the recipient, the agency may 
        recover the ATM error by immediately withdrawing funds from the 
        recipient's electronic benefit transfer account, up to the 
        amount of the error. 
           Sec. 37.  Minnesota Statutes 1995 Supplement, section 
        256D.09, subdivision 1, is amended to read: 
           Subdivision 1.  [PRESUMPTIVE ELIGIBILITY; VENDOR PAYMENTS.] 
        Until the county agency has determined the initial eligibility 
        of the applicant in accordance with section 256D.07 or 256D.051, 
        grants for emergency general assistance must be in the form of 
        vouchers or vendor payments unless the county agency determines 
        that a cash grant will best resolve the applicant's need for 
        emergency assistance.  Thereafter, grants of general assistance 
        must be paid in cash, by electronic benefit transfer, or by 
        direct deposit into the recipient's account in a financial 
        institution, on the first day of the month, except as allowed in 
        this section. 
           Sec. 38.  Minnesota Statutes 1994, section 256D.10, is 
        amended to read: 
           256D.10 [HEARINGS PRIOR TO REDUCTION; TERMINATION; 
        SUSPENSION OF GENERAL ASSISTANCE GRANTS.] 
           No grant of general assistance except one made pursuant to 
        section 256D.06, subdivision 2; 256D.051, subdivisions 1, 
        paragraph (d), and 1a, paragraph (b); or 256D.08, subdivision 2, 
        shall be reduced, terminated or suspended unless the recipient 
        receives notice and is afforded an opportunity to be heard prior 
        to any action by the county agency. 
           Nothing herein shall deprive a recipient of the right to 
        full administrative and judicial review of an order or 
        determination of a county agency as provided for in section 
        256.045 subsequent to any action taken by a county agency after 
        a prior hearing. 
           Sec. 39.  Minnesota Statutes 1994, section 256D.49, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OVERPAYMENT OF MONTHLY GRANTS AND RECOVERY OF 
        ATM ERRORS.] When the county agency determines that an 
        overpayment of the recipient's monthly payment of Minnesota 
        supplemental aid has occurred, it shall issue a notice of 
        overpayment to the recipient.  If the person is no longer 
        receiving Minnesota supplemental aid, the county agency may 
        request voluntary repayment or pursue civil recovery.  If the 
        person is receiving Minnesota supplemental aid, the county 
        agency shall recover the overpayment by withholding an amount 
        equal to three percent of the standard of assistance for the 
        recipient or the total amount of the monthly grant, whichever is 
        less.  For recipients receiving benefits via electronic benefit 
        transfer, if the overpayment is a result of an automated teller 
        machine (ATM) dispensing funds in error to the recipient, the 
        agency may recover the ATM error by immediately withdrawing 
        funds from the recipient's electronic benefit transfer account, 
        up to the amount of the error.  Residents of nursing homes, 
        regional treatment centers, and facilities with negotiated rates 
        shall not have overpayments recovered from their personal needs 
        allowance. 
           Sec. 40.  Minnesota Statutes 1994, section 256E.08, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPORTING BY COUNTIES.] Beginning in calendar 
        year 1980 each county shall submit to the commissioner of human 
        services a financial accounting of the county's community social 
        services fund, and other data required by the commissioner under 
        section 256E.05, subdivision 3, paragraph (g), shall include:  
           (a) A detailed statement of income and expenses 
        attributable to the fund in the preceding quarter; and 
           (b) A statement of the source and application of all money 
        used for social services programs by the county during the 
        preceding quarter, including the number of clients served and 
        expenditures for each service provided, as required by the 
        commissioner of human services.  
           In addition, each county shall submit to the commissioner 
        of human services no later than February 15 of each year, a 
        detailed balance sheet of the community social development fund 
        for the preceding calendar year.  
           If county boards have joined or designated human service 
        boards for purposes of providing community social services 
        programs, the county boards may submit a joint statement or the 
        human service board shall submit the statement, as applicable.  
           Sec. 41.  Minnesota Statutes 1994, section 336.3-206, is 
        amended to read: 
           336.3-206 [RESTRICTIVE ENDORSEMENT.] 
           (a) An endorsement limiting payment to a particular person 
        or otherwise prohibiting further transfer or negotiation of the 
        instrument is not effective to prevent further transfer or 
        negotiation of the instrument. 
           (b) An endorsement stating a condition to the right of the 
        endorsee to receive payment does not affect the right of the 
        endorsee to enforce the instrument.  A person paying the 
        instrument or taking it for value or collection may disregard 
        the condition, and the rights and liabilities of that person are 
        not affected by whether the condition has been fulfilled. 
           (c) If an instrument bears an endorsement (i) described in 
        section 336.4-201(b), or (ii) in blank or to a particular bank 
        using the words "for deposit," "for collection," or other words 
        indicating a purpose of having the instrument collected by a 
        bank for the endorser or for a particular account, the following 
        rules apply: 
           (1) A person, other than a bank, who purchases the 
        instrument when so endorsed converts the instrument unless the 
        amount paid for the instrument is received by the endorser or 
        applied consistently with the endorsement.  
           (2) A depositary bank that purchases the instrument or 
        takes it for collection when so endorsed converts the instrument 
        unless the amount paid by the bank with respect to the 
        instrument is received by the endorser or applied consistently 
        with the endorsement.  
           (3) A payor bank that is also the depositary bank or that 
        takes the instrument for immediate payment over the counter from 
        a person other than a collecting bank converts the instrument 
        unless the proceeds of the instrument are received by the 
        endorser or applied consistently with the endorsement.  
           (4) Except as otherwise provided in paragraph (3), a payor 
        bank or intermediary bank may disregard the endorsement and is 
        not liable if the proceeds of the instrument are not received by 
        the endorser or applied consistently with the endorsement.  
           (d) Except for an endorsement covered by subsection (c), if 
        an instrument bears an endorsement using words to the effect 
        that payment is to be made to the endorsee as agent, trustee, or 
        other fiduciary for the benefit of the endorser or another 
        person, the following rules apply: 
           (1) Unless there is notice of breach of fiduciary duty as 
        provided in section 336.3-307, a person who purchases the 
        instrument from the endorsee or takes the instrument from the 
        endorsee for collection or payment may pay the proceeds of 
        payment or the value given for the instrument to the endorsee 
        without regard to whether the endorsee violates a fiduciary duty 
        to the endorser. 
           (2) A subsequent transferee of the instrument or person who 
        pays the instrument is neither given notice nor otherwise 
        affected by the restriction in the endorsement unless the 
        transferee or payor knows that the fiduciary dealt with the 
        instrument or its proceeds in breach of fiduciary duty. 
           (e) The presence on an instrument of an endorsement to 
        which this section applies does not prevent a purchaser of the 
        instrument from becoming a holder in due course of the 
        instrument unless the purchaser is a converter under subsection 
        (c) or has notice or knowledge of breach of fiduciary duty as 
        stated in subsection (d). 
           (f) In an action to enforce the obligation of a party to 
        pay the instrument, the obligor has a defense if payment would 
        violate an endorsement to which this section applies and the 
        payment is not permitted by this section.  
           (g) Nothing in this section prohibits or limits the 
        effectiveness of a restrictive endorsement made under section 
        256.9831, subdivision 3. 
           Sec. 42.  [WAIVER AUTHORITY.] 
           The commissioner of human services shall seek federal 
        waivers as necessary to implement sections 12 and 14. 
           Sec. 43.  [SEVERABILITY.] 
           If any provision of sections 12, 14, or 28 is found to be 
        unconstitutional or void by a court of competent jurisdiction, 
        all remaining provisions of the law shall remain valid and shall 
        be given full effect. 
           Sec. 44.  [APPROPRIATION.] 
           $450,000 is appropriated from the general fund to the 
        commissioner of human services for the fiscal year ending June 
        30, 1997, to be added to the AFDC child care entitlement fund to 
        provide child care for two-parent families that are mandatory 
        participants under Minnesota Statutes, chapter 256. 
           Sec. 45.  [REPEALER.] 
           Minnesota Statutes 1994, section 256.736, subdivisions 10b 
        and 11; Minnesota Statutes 1995 Supplement, section 256.736, 
        subdivision 13, are repealed. 
           Sec. 46.  [EFFECTIVE DATE.] 
           Sections 29 to 31 and 38 are retroactive to July 1, 1995. 
                                   ARTICLE 4
                                   CHILD CARE
           Section 1.  [APPROPRIATION.] 
           $5,000,000 is appropriated from the general fund to the 
        commissioner of children, families, and learning for purposes of 
        increasing the funding to the basic sliding fee child care 
        program under Minnesota Statutes, section 256H.03, to be 
        available for the fiscal year ending June 30, 1997.  
                                   ARTICLE 5 
                             HEALTH PLAN PROVISIONS 
           Section 1.  Minnesota Statutes 1994, section 62A.047, is 
        amended to read: 
           62A.047 [CHILDREN'S HEALTH SUPERVISION SERVICES AND 
        PRENATAL CARE SERVICES.] 
           A policy of individual or group health and accident 
        insurance regulated under this chapter, or individual or group 
        subscriber contract regulated under chapter 62C, health 
        maintenance contract regulated under chapter 62D, or health 
        benefit certificate regulated under chapter 64B, issued, 
        renewed, or continued to provide coverage to a Minnesota 
        resident, must provide coverage for child health supervision 
        services and prenatal care services.  The policy, contract, or 
        certificate must specifically exempt reasonable and customary 
        charges for child health supervision services and prenatal care 
        services from a deductible, copayment, or other coinsurance or 
        dollar limitation requirement.  This section does not prohibit 
        the use of policy waiting periods or preexisting condition 
        limitations for these services.  Minimum benefits may be limited 
        to one visit payable to one provider for all of the services 
        provided at each visit cited in this section subject to the 
        schedule set forth in this section.  Nothing in this section 
        applies to a commercial health insurance policy issued as a 
        companion to a health maintenance organization contract, a 
        policy designed primarily to provide coverage payable on a per 
        diem, fixed indemnity, or nonexpense incurred basis, or a policy 
        that provides only accident coverage. 
           "Child health supervision services" means pediatric 
        preventive services, appropriate immunizations, developmental 
        assessments, and laboratory services appropriate to the age of a 
        child from birth to age six, and appropriate immunizations from 
        ages six to 18, as defined by Standards of Child Health Care 
        issued by the American Academy of Pediatrics.  Reimbursement 
        must be made for at least five child health supervision visits 
        from birth to 12 months, three child health supervision visits 
        from 12 months to 24 months, once a year from 24 months to 72 
        months. 
           "Prenatal care services" means the comprehensive package of 
        medical and psychosocial support provided throughout the 
        pregnancy, including risk assessment, serial surveillance, 
        prenatal education, and use of specialized skills and 
        technology, when needed, as defined by Standards for 
        Obstetric-Gynecologic Services issued by the American College of 
        Obstetricians and Gynecologists. 
           Sec. 2.  [62A.265] [COVERAGE FOR LYME DISEASE.] 
           Subdivision 1.  [REQUIRED COVERAGE.] Every health plan, 
        including a plan providing the coverage specified in section 
        62A.011, subdivision 3, clause (10), must cover treatment for 
        diagnosed Lyme disease.  
           Subd. 2.  [SPECIAL RESTRICTIONS PROHIBITED.] No health plan 
        included in subdivision 1 may impose a special deductible, 
        copayment, waiting period, or other special restriction on 
        treatment for Lyme disease that the health plan does not apply 
        to nonpreventive treatment in general. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective August 1, 1996, and apply 
        to all health plans providing coverage to a Minnesota resident, 
        issued, renewed, or continued on or after that date. 
           Presented to the governor April 4, 1996 
           Signed by the governor April 15, 1996, 1:15 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569