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1997 Minnesota Session Laws

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                              CHAPTER 85-S.F.No. 1 
                  An act relating to welfare reform; establishing the 
                  Minnesota family investment program-statewide and work 
                  first program pilot projects; making changes to public 
                  assistance programs; making technical changes; making 
                  program integrity initiatives; amending Minnesota 
                  Statutes 1996, sections 13.46, subdivisions 1 and 2; 
                  13.82, subdivision 1; 84.98, subdivision 3; 136A.125, 
                  subdivision 2; 196.27; 237.70, subdivision 4a; 
                  254B.02, subdivision 1; 256.01, subdivisions 2 and 4a; 
                  256.017, subdivisions 1, 2, and 4; 256.019; 256.031, 
                  subdivision 5, and by adding a subdivision; 256.033, 
                  subdivisions 1 and 1a; 256.045, subdivision 3; 
                  256.046; 256.736, subdivision 3a; 256.74, subdivision 
                  1, and by adding a subdivision; 256.81; 256.82, 
                  subdivision 2; 256.935, subdivision 1; 256.9354, by 
                  adding a subdivision; 256.98, subdivisions 1, 4, and 
                  8; 256.981; 256.983, subdivisions 1 and 4; 256.984, 
                  subdivision 1; 256.986; 256.9861, subdivisions 1, 2, 
                  4, and 5; 256B.055, subdivisions 3, 5, and by adding a 
                  subdivision; 256B.056, subdivisions 1a, 3, and 4; 
                  256B.057, subdivisions 1, 1b, and 2b; 256B.06, 
                  subdivision 4, and by adding a subdivision; 256B.062; 
                  256D.01, subdivisions 1, 1a, and 1e; 256D.02, 
                  subdivisions 6 and 12a; 256D.03, subdivision 3; 
                  256D.05, subdivisions 1, 2, 5, 7, and 8; 256D.051, 
                  subdivisions 1a, 2a, 3a, and by adding a subdivision; 
                  256D.055; 256D.06, subdivision 2; 256D.08, 
                  subdivisions 1 and 2; 256D.09, subdivision 6, and by 
                  adding a subdivision; 256D.435, subdivision 3; 
                  256D.44, subdivision 5; 256E.03, subdivision 2; 
                  256E.06, subdivisions 1 and 3; 256E.07, subdivision 1; 
                  256E.08, subdivision 3; 256F.05, subdivision 5; 
                  256G.01, subdivision 4; 256G.03, subdivision 2; 
                  256G.05, subdivision 2; 257.3573, subdivision 2; 
                  259.67, subdivision 4; 260.38; 268.0111, subdivisions 
                  5 and 7; 268.0122, subdivision 3; 268.552, subdivision 
                  5; 268.6751, subdivision 1; 268.676, subdivision 1; 
                  268.86, subdivision 2; 268.871, subdivision 1; 268.90, 
                  subdivision 2; 268.916; 268.95, subdivision 4; 
                  270A.03, subdivision 5; 388.23, subdivision 1; 393.07, 
                  subdivisions 6 and 10; 477A.0122, subdivision 2; and 
                  550.37, subdivision 14; proposing coding for new law 
                  in Minnesota Statutes, chapters 256; 256B; and 256D; 
                  proposing coding for new law as Minnesota Statutes, 
                  chapters 256J; and 256K; repealing Minnesota Statutes 
                  1996, sections 256.12, subdivisions 9, 10, 14, 15, 19, 
                  20, 21, 22, and 23; 256.72; 256.73, subdivisions 1, 
                  1a, 1b, 2, 3a, 3b, 5, 5a, 6, 8, 8a, 9, 10, and 11; 
                  256.7341; 256.7351; 256.7352; 256.7353; 256.7354; 
                  256.7355; 256.7356; 256.7357; 256.7358; 256.7359; 
                  256.736, subdivisions 16 and 18; 256.7365, 
                  subdivisions 1, 2, 3, 4, 5, 6, 7, and 9; 256.7366; 
                  256.737; 256.738; 256.7381; 256.7382; 256.7383; 
                  256.7384; 256.7385; 256.7386; 256.7387; 256.7388; 
                  256.739; 256.74, subdivisions 1, 1a, 1b, 2, and 6; 
                  256.745; 256.75; 256.76, subdivision 1; 256.78; 
                  256.80; 256.81; 256.84; 256.85; 256.86; 256.863; 
                  256.871; 256.8711; 256.879; 256D.02, subdivision 5; 
                  256D.0511; and 256D.065. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                 MINNESOTA FAMILY INVESTMENT PROGRAM-STATEWIDE 
           Section 1.  [256J.01] [ESTABLISHING MINNESOTA FAMILY 
        INVESTMENT PROGRAM-STATEWIDE.] 
           Subdivision 1.  [IMPLEMENTATION OF MINNESOTA FAMILY 
        INVESTMENT PROGRAM-STATEWIDE (MFIP-S).] This chapter and chapter 
        256K may be cited as the Minnesota family investment 
        program-statewide (MFIP-S).  MFIP-S is the statewide 
        implementation of components of the Minnesota family investment 
        plan (MFIP) authorized under section 256.031 and Minnesota 
        family investment plan-Ramsey county (MFIP-R) in section 256.047.
           Subd. 2.  [IMPLEMENTATION OF TEMPORARY ASSISTANCE FOR NEEDY 
        FAMILIES (TANF).] The Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, Public Law Number 
        104-193, eliminates the entitlement program of aid to families 
        with dependent children (AFDC) and replaces it with block grants 
        to states for temporary assistance for needy families (TANF).  
        TANF provides cash assistance for a limited time to families 
        with children and to pregnant women.  Minnesota's TANF 
        assistance will be provided through a statewide expansion of 
        MFIP.  The modifications specified in this chapter are necessary 
        to comply with the new federal law and to improve MFIP.  
        Eligible applicants and recipients of AFDC, family general 
        assistance, and food stamps will be converted to the MFIP-S 
        program.  Effective January 1, 1998, any new application 
        received for family cash assistance will be processed under the 
        rules of chapter 256J.  Case maintenance conversion for existing 
        AFDC and FGA cases to MFIP-S as described in chapter 256J will 
        begin January 1, 1998, and continue through March 31, 1998.  
           Subd. 3.  [RELATIONSHIP TO OTHER STATUTES AND 
        RULES.] MFIP-S replaces eligibility for families with children 
        and pregnant women under the general assistance program, 
        governed by sections 256D.01 to 256D.21 and Minnesota Rules, 
        parts 9500.1200 to 9500.1270.  
           Subd. 4.  [CHANGES TO WAIVERS.] The commissioner of human 
        services may negotiate and obtain changes in the federal waivers 
        and terms and conditions contained in MFIP, MFIP-R, and MFIP-S.  
        The commissioner may also terminate federal waivers by directing 
        so in the applicable state plan. 
           Subd. 5.  [COMPLIANCE SYSTEM.] The commissioner shall 
        administer a compliance system for the state's temporary 
        assistance for needy families (TANF) program, the food stamp 
        program, emergency assistance, general assistance, medical 
        assistance, general assistance medical care, emergency general 
        assistance, Minnesota supplemental aid, preadmission screening, 
        child support program, and alternative care grants under the 
        powers and authorities named in section 256.01, subdivision 2.  
        The purpose of the compliance system is to permit the 
        commissioner to supervise the administration of public 
        assistance programs and to enforce timely and accurate 
        distribution of benefits, completeness of service and efficient 
        and effective program management and operations, to increase 
        uniformity and consistency in the administration and delivery of 
        public assistance programs throughout the state, and to reduce 
        the possibility of sanction and fiscal disallowances for 
        noncompliance with federal regulations and state statutes. 
           Sec. 2.  [256J.02] [FEDERAL TEMPORARY ASSISTANCE FOR NEEDY 
        FAMILIES BLOCK GRANT.] 
           Subdivision 1.  [COMMISSIONER'S AUTHORITY TO ADMINISTER 
        BLOCK GRANT FUNDS.] The commissioner of human services is 
        authorized to receive, administer, and expend funds available 
        under the TANF block grant authorized under title I of Public 
        Law Number 104-193, the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996. 
           Subd. 2.  [USE OF MONEY.] State money appropriated for 
        purposes of this section and TANF block grant money must be used 
        for: 
           (1) financial assistance to or on behalf of any minor child 
        who is a resident of this state under section 256J.12; 
           (2) employment and training services under this chapter or 
        chapter 256K; 
           (3) emergency financial assistance and services under 
        section 256J.48; 
           (4) diversionary assistance under section 256J.47; and 
           (5) program administration under this chapter. 
           Subd. 3.  [CARRY FORWARD OF FEDERAL MONEY.] Temporary 
        assistance for needy families block grant money must be 
        appropriated for the purposes in this section and is available 
        until expended. 
           Subd. 4.  [AUTHORITY TO TRANSFER.] Subject to limitations 
        of title I of Public Law Number 104-193, the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        the legislature may transfer money from the TANF block grant to 
        the child care fund under chapter 119B, or the Title XX block 
        grant under section 256E.07. 
           Subd. 5.  [INDIRECT COST LIABILITY.] Notwithstanding the 
        provisions of section 16A.127, the statewide and agency indirect 
        cost liability identified as part of the TANF grant for any 
        current fiscal year shall be limited to no more than the amount 
        received in fiscal year 1996. 
           Sec. 3.  [256J.06] [COMMUNITY INVOLVEMENT.] 
           The MFIP-S 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, program participants, labor unions, and neighborhood 
        associations are involved. 
           Sec. 4.  [256J.08] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE OF DEFINITIONS.] The terms used in 
        this chapter have the following meanings unless otherwise 
        provided for by text. 
           Subd. 2.  [ABSENT PARENT.] "Absent parent" means a minor 
        child's parent who does not live in the same home as the child. 
           Subd. 3.  [AGENCY ERROR.] "Agency error" means an error 
        that results in an overpayment or underpayment to an assistance 
        unit and is not caused by an applicant's or participant's 
        failure to provide adequate, correct, or timely information 
        about income, property, household composition, or other 
        circumstances. 
           Subd. 4.  [APPEAL.] "Appeal" means a written statement from 
        an applicant or participant who requests a hearing under section 
        256J.31.  
           Subd. 5.  [APPLICANT.] "Applicant" means a person who has 
        submitted to a county agency an application and whose 
        application has not been acted upon, denied, or voluntarily 
        withdrawn. 
           Subd. 6.  [APPLICATION.] "Application" means the submission 
        by or on behalf of a family to a county agency of a completed, 
        signed, and dated form, prescribed by the commissioner, that 
        indicates the desire to receive assistance. 
           Subd. 7.  [ASSISTANCE UNIT OR MFIP-S ASSISTANCE 
        UNIT.] "Assistance unit" or "MFIP-S assistance unit" means a 
        group of mandatory or optional people receiving or applying for 
        MFIP-S benefits together. 
           Subd. 8.  [AUTHORIZED REPRESENTATIVE.] "Authorized 
        representative" means a person who is authorized, in writing, by 
        an applicant or participant to act on the applicant's or 
        participant's behalf in matters involving the application for 
        assistance or participation in MFIP-S. 
           Subd. 9.  [BASIC NEEDS.] "Basic needs" means the minimum 
        personal requirements of subsistence and is restricted to food, 
        clothing, shelter, utilities, and other items for which the 
        loss, or lack of basic needs, is determined by the county agency 
        to pose a direct, immediate threat to the physical health or 
        safety of the applicant or participant. 
           Subd. 10.  [BUDGET MONTH.] "Budget month" means the 
        calendar month which the county agency uses to determine the 
        income or circumstances of an assistance unit to calculate the 
        amount of the assistance payment in the payment month. 
           Subd. 11.  [CAREGIVER.] "Caregiver" means a minor child's 
        natural or adoptive parent or parents who live in the home with 
        the minor child.  For purposes of determining eligibility for 
        this program, caregiver also means any of the following 
        individuals, if adults, who live with and provide care and 
        support to a minor child when the minor child's natural or 
        adoptive parent or parents do not reside in the same home:  
        legal custodians, grandfather, grandmother, brother, sister, 
        stepfather, stepmother, stepbrother, stepsister, uncle, aunt, 
        first cousin, nephew, niece, person of preceding generation as 
        denoted by prefixes of "great," "great-great," or 
        "great-great-great," or a spouse of any person named in the 
        above groups even after the marriage ends by death or divorce. 
           Subd. 12.  [CLIENT ERROR.] "Client error" means an error 
        that results in an overpayment or underpayment and is due to an 
        applicant's or participant's failure to provide adequate, 
        correct, or timely information concerning income, property, 
        household composition, or other circumstances. 
           Subd. 13.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of human services or the commissioner's designated 
        representative. 
           Subd. 14.  [CORRECTIVE PAYMENT.] "Corrective payment" means 
        an assistance payment that is made to correct an underpayment. 
           Subd. 15.  [COUNTABLE INCOME.] "Countable income" means 
        earned and unearned income that is not excluded under section 
        256J.21, subdivision 2, or disregarded under section 256J.21, 
        subdivision 3. 
           Subd. 16.  [COUNTED EARNINGS.] "Counted earnings" means the 
        earned income that remains after applicable disregards under 
        section 256J.21, subdivision 4, have been subtracted from gross 
        earned income. 
           Subd. 17.  [COUNTY AGENCY.] "County agency" means the 
        agency designated by the county board to implement financial 
        assistance for current programs and for MFIP-S and the agency 
        responsible for enforcement of child support collection, and a 
        county or multicounty agency that is authorized under sections 
        393.01, subdivision 7, and 393.07, subdivision 2, to administer 
        MFIP-S. 
           Subd. 18.  [COUNTY BOARD.] "County board" means a board of 
        commissioners, a local services agency as defined in chapter 
        393, a board established under the Joint Powers Act, section 
        471.59, or a human services board under chapter 402. 
           Subd. 19.  [COUNTY OF FINANCIAL RESPONSIBILITY.] "County of 
        financial responsibility" means the county that has financial 
        responsibility for providing public assistance as specified in 
        chapter 256G. 
           Subd. 20.  [COUNTY OF RESIDENCE.] "County of residence" 
        means the county where the caregiver has established a home. 
           Subd. 21.  [DATE OF APPLICATION.] "Date of application" 
        means the date on which the county agency receives an 
        applicant's signed application. 
           Subd. 22.  [DEEM.] "Deem" means to treat all or part of the 
        income of an individual who is not in the assistance unit, but 
        who is financially responsible for members of the assistance 
        unit, as if it were income available to the assistance unit. 
           Subd. 23.  [DEPARTMENT.] "Department" means the Minnesota 
        department of human services. 
           Subd. 24.  [DISREGARD.] "Disregard" means earned income 
        that is not counted when determining initial eligibility or 
        ongoing eligibility and calculating the amount of the assistance 
        payment for participants. 
           Subd. 25.  [DOCUMENTATION.] "Documentation" means a written 
        statement or record that substantiates or validates an assertion 
        made by a person or an action taken by a person, agency, or 
        entity. 
           Subd. 26.  [EARNED INCOME.] "Earned income" means cash or 
        in-kind income earned through the receipt of wages, salary, 
        commissions, profit from employment activities, net profit from 
        self-employment activities, payments made by an employer for 
        regularly accrued vacation or sick leave, and any other profit 
        from activity earned through effort or labor. 
           Subd. 27.  [EARNED INCOME TAX CREDIT.] "Earned income tax 
        credit" means the payment which can be obtained by a qualified 
        person from an employer or from the Internal Revenue Service as 
        provided by section 290.0671 and United States Code, title 26, 
        subtitle A, chapter 1, subchapter A, part 4, subpart C, section 
        32. 
           Subd. 28.  [EMERGENCY.] "Emergency" means a situation or a 
        set of circumstances that causes or threatens to cause 
        destitution to a minor child.  
           Subd. 29.  [EQUITY VALUE.] "Equity value" means the amount 
        of equity in real or personal property owned by a person and is 
        determined by subtracting any outstanding encumbrances from the 
        fair market value. 
           Subd. 30.  [EXCLUDED TIME.] "Excluded time" has the meaning 
        given in section 256G.02. 
           Subd. 31.  [EXPEDITED ISSUANCE OF THE FOOD STAMP 
        PORTION.] "Expedited issuance of the food stamp portion" means 
        the issuance of the food stamp portion to eligible assistance 
        units on the day of application as provided in section 393.07, 
        subdivision 10a. 
           Subd. 32.  [FAIR HEARING OR HEARING.] "Fair hearing" or 
        "hearing" means the evidentiary hearing conducted by the 
        department appeals referee to resolve disputes as specified in 
        section 256J.40, or if not applicable, section 256.045. 
           Subd. 33.  [FAIR MARKET VALUE.] "Fair market value" means 
        the price that an item of a particular make, model, size, 
        material, or condition would sell for on the open market in the 
        particular geographic area. 
           Subd. 34.  [FAMILY.] "Family" includes: 
           (1) the following individuals who live together:  a minor 
        child or a group of minor children related to each other as 
        siblings, half siblings, stepsiblings, or adoptive siblings, 
        together with their natural, adoptive parents, stepparents, or 
        caregiver as defined in subdivision 11; and 
           (2) a pregnant woman with no other children. 
           Subd. 35.  [FAMILY WAGE LEVEL.] "Family wage level" means 
        110 percent of the transitional standard. 
           Subd. 36.  [FEDERAL INSURANCE CONTRIBUTION ACT OR 
        FICA.] "Federal Insurance Contribution Act" or "FICA" means the 
        federal law under United States Code, title 26, subtitle C, 
        chapter 21, subchapter A, sections 3101 to 3126, that requires 
        withholding or direct payment from earned income. 
           Subd. 37.  [FINANCIAL CASE RECORD.] "Financial case record" 
        means an assistance unit's financial eligibility file. 
           Subd. 38.  [FULL-TIME STUDENT.] "Full-time student" means a 
        person who is enrolled in a graded or ungraded primary, 
        intermediate, secondary, GED preparatory, trade, technical, 
        vocational, or post-secondary school, and who meets the school's 
        standard for full-time attendance. 
           Subd. 39.  [GENERAL EDUCATIONAL DEVELOPMENT OR 
        GED.] "General educational development" or "GED" means the 
        general educational development certification issued by the 
        Minnesota board of education as an equivalent to a secondary 
        school diploma under Minnesota Rules, part 3500.3100, subpart 4. 
           Subd. 40.  [GROSS EARNED INCOME.] "Gross earned income" 
        means earned income from employment before mandatory and 
        voluntary payroll deductions.  Gross earned income includes 
        salaries, wages, tips, gratuities, commissions, incentive 
        payments from work or training programs, payments made by an 
        employer for regularly accrued vacation or sick leave, and 
        profits from other activity earned by an individual's effort or 
        labor.  Gross earned income includes uniform and meal allowances 
        if federal income tax is deducted from the allowance.  Gross 
        earned income includes flexible work benefits received from an 
        employer if the employee has the option of receiving the benefit 
        or benefits in cash. 
           Subd. 41.  [GROSS INCOME.] "Gross income" is the sum of 
        gross earned income and unearned income. 
           Subd. 42.  [GROSS RECEIPTS.] "Gross receipts" means the 
        money received by a business before the expenses of the business 
        are deducted. 
           Subd. 43.  [HALF-TIME STUDENT.] "Half-time student" means a 
        person who is enrolled in a graded or ungraded primary, 
        intermediate, secondary, GED preparatory, trade, technical, 
        vocational, or post-secondary school, and who meets the school's 
        standard of half-time attendance. 
           Subd. 44.  [HOME.] "Home" means the primary place of 
        residence used by a person as the base for day-to-day living and 
        does not include locations used as mail drops. 
           Subd. 45.  [HOMESTEAD.] "Homestead" means the home that is 
        owned by, and is the usual residence of, the assistance unit 
        together with the surrounding property which is not separated 
        from the home by intervening property owned by others.  Public 
        rights-of-way, such as roads which run through the surrounding 
        property and separate it from the home, do not affect the 
        exemption of the property.  Homestead includes an asset that is 
        not real property that the assistance unit uses as a home, such 
        as a vehicle. 
           Subd. 46.  [HOUSEHOLD.] "Household" means a group of 
        persons who live together. 
           Subd. 47.  [INCOME.] "Income" means cash or in-kind 
        benefit, whether earned or unearned, received by or available to 
        an applicant or participant that is not an asset under section 
        256J.20. 
           Subd. 48.  [INITIAL ELIGIBILITY.] "Initial eligibility" 
        means the determination of eligibility for an MFIP-S applicant. 
           Subd. 49.  [IN-KIND INCOME.] "In-kind income" means income, 
        benefits, or payments which are provided in a form other than 
        money or liquid assets, including the forms of goods, produce, 
        services, privileges, or payments made on behalf of an applicant 
        or participant by a third party. 
           Subd. 50.  [INQUIRY.] "Inquiry" means a communication to a 
        county agency through mail, telephone, or in person, by which a 
        person or authorized representative requests information about 
        public assistance.  The county agency shall also treat as an 
        inquiry any communication in which a person requesting 
        assistance offers information about the person's family 
        circumstances that indicates that eligibility for public 
        assistance may exist. 
           Subd. 51.  [LEGALLY AVAILABLE.] "Legally available" means a 
        person's right under the law to secure, possess, dispose of, or 
        control income or property. 
           Subd. 52.  [LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM OR 
        LIHEAP.] "Low-income home energy assistance program" or "LIHEAP" 
        means the program authorized under United States Code, title 42, 
        chapter 94, subchapter II, sections 8621 to 8629, and 
        administered by the Minnesota department of economic security. 
           Subd. 53.  [LUMP SUM.] "Lump sum" means nonrecurring income 
        that is not excluded in section 256J.21. 
           Subd. 54.  [MEDICAL ASSISTANCE.] "Medical assistance" means 
        the program established under chapter 256B and Title XIX of the 
        Social Security Act. 
           Subd. 55.  [MFIP-S HOUSEHOLD REPORT FORM.] "MFIP-S 
        household report form" means a form prescribed by the 
        commissioner that a participant uses to report information to a 
        county agency about changes in income and other circumstances. 
           Subd. 56.  [MIGRANT WORKER.] "Migrant worker" means a 
        person who travels away from home on a regular basis, usually 
        with a group of other laborers, to seek employment in an 
        agriculturally related activity. 
           Subd. 57.  [MINNESOTA FAMILY INVESTMENT PROGRAM-STATEWIDE 
        OR MFIP-S.] "Minnesota family investment program-statewide" or 
        "MFIP-S" means the assistance program authorized in this chapter 
        and chapter 256K. 
           Subd. 58.  [MINNESOTA SUPPLEMENTAL AID OR MSA.] "Minnesota 
        supplemental aid" or "MSA" means the program established under 
        sections 256D.33 to 256D.54. 
           Subd. 59.  [MINOR CAREGIVER.] "Minor caregiver" means a 
        person who: 
           (1) is under the age of 18; 
           (2) has never been married or otherwise legally 
        emancipated; and 
           (3) is either the natural parent of a minor child living in 
        the same household or is eligible for assistance paid to a 
        pregnant woman. 
           Subd. 60.  [MINOR CHILD.] "Minor child" means a child who 
        is living in the same home of a parent or other caregiver, is 
        either less than 18 years of age or is under the age of 19 years 
        and is regularly attending as a full-time student and is 
        expected to complete a high school or a secondary level course 
        of vocational or technical training designed to fit students for 
        gainful employment before reaching age 19. 
           Subd. 61.  [MONTHLY INCOME TEST.] "Monthly income test" 
        means the test used to determine ongoing eligibility and the 
        assistance payment amount according to section 256J.21. 
           Subd. 62.  [NONRECURRING INCOME.] "Nonrecurring income" 
        means a form of income which is received: 
           (1) only one time or is not of a continuous nature; or 
           (2) in a prospective payment month but is no longer 
        received in the corresponding retrospective payment month. 
           Subd. 63.  [OVERPAYMENT.] "Overpayment" means the portion 
        of an assistance payment issued by the county agency that is 
        greater than the amount for which the assistance unit is 
        eligible. 
           Subd. 64.  [PARENT.] "Parent" means a child's biological or 
        adoptive parent who is legally obligated to support that child. 
           Subd. 65.  [PARTICIPANT.] "Participant" means a person who 
        is currently receiving cash assistance and the food portion 
        available through MFIP-S as funded by TANF and the food stamp 
        program.  A person who fails to withdraw or access 
        electronically any portion of his or her cash assistance payment 
        by the end of the payment month or who returns any uncashed 
        assistance check and withdraws from the program is not a 
        participant.  A person who withdraws a cash assistance payment 
        by electronic transfer or receives and cashes a cash assistance 
        check and is subsequently determined to be ineligible for 
        assistance for that period of time is a participant, regardless 
        whether that assistance is repaid.  The term "participant" 
        includes the caregiver relative and the minor child whose needs 
        are included in the assistance payment.  A person in an 
        assistance unit who does not receive a cash assistance payment 
        because he or she has been suspended from MFIP-S or because his 
        or her need falls below the $10 minimum payment level is a 
        participant. 
           Subd. 66.  [PAYEE.] "Payee" means a person to whom an 
        assistance payment is made payable. 
           Subd. 67.  [PAYMENT MONTH.] "Payment month" means the 
        calendar month for which the assistance payment is paid. 
           Subd. 68.  [PERSONAL PROPERTY.] "Personal property" means 
        an item of value that is not real property, including the value 
        of a contract for deed held by a seller, assets held in trust on 
        behalf of members of an assistance unit, cash surrender value of 
        life insurance, value of a prepaid burial, savings account, 
        value of stocks and bonds, and value of retirement accounts. 
           Subd. 69.  [PROBABLE FRAUD.] "Probable fraud" means the 
        level of evidence that, if proven as fact, would establish that 
        assistance has been wrongfully obtained. 
           Subd. 70.  [PROFESSIONAL CERTIFICATION.] "Professional 
        certification" means: 
           (1) a statement about a person's illness, injury, or 
        incapacity that is signed by a licensed physician, psychological 
        practitioner, or licensed psychologist, qualified by 
        professional training and experience to diagnose and certify the 
        person's condition; or 
           (2) a statement about an incapacity involving a spinal 
        subluxation condition that is signed by a licensed chiropractor 
        qualified by professional training and experience to diagnose 
        and certify the condition. 
           Subd. 71.  [PROSPECTIVE BUDGETING.] "Prospective budgeting" 
        means a method of determining the amount of the assistance 
        payment in which the budget month and payment month are the same.
           Subd. 72.  [PROTECTIVE PAYEE.] "Protective payee" means a 
        person other than the caregiver of an assistance unit who 
        receives the monthly assistance payment on behalf of an 
        assistance unit and is responsible to provide for the basic 
        needs of the assistance unit to the extent of that payment. 
           Subd. 73.  [QUALIFIED NONCITIZEN.] "Qualified noncitizen" 
        means a person: 
           (1) who was lawfully admitted for permanent residence 
        pursuant to United States Code, title 8; 
           (2) who was admitted to the United States as a refugee 
        pursuant to United States Code, title 8; section 1157; 
           (3) whose deportation is being withheld pursuant to United 
        States Code, title 8, section 1253(h); 
           (4) who was paroled for a period of at least one year 
        pursuant to United States Code, title 8, section 1182(d)(5); 
           (5) who was granted conditional entry pursuant to United 
        State Code, title 8, section 1153(a)(7); 
           (6) who was granted asylum pursuant to United States Code, 
        title 8, section 1158; or 
           (7) determined to be a battered noncitizen by the United 
        States Attorney General according to the Illegal Immigration 
        Reform and Immigrant Responsibility Act of 1996, Title V of the 
        Omnibus Consolidated Appropriations Bill, Public Law Number 
        104-208. 
           Subd. 74.  [REAL PROPERTY.] "Real property" means land and 
        all buildings, structures, and improvements, or other fixtures 
        on the land, belonging or appertaining to the land, and all 
        mines, minerals, fossils, and trees on or under the land. 
           Subd. 75.  [REASONABLE COMPENSATION.] "Reasonable 
        compensation" means the value received in exchange for property 
        transferred to another owner that is consistent with fair market 
        value and equals or exceeds the seller's equity in the property, 
        reduced by costs incurred in the sale. 
           Subd. 76.  [RECERTIFICATION.] "Recertification" means the 
        periodic review of eligibility factors to determine an 
        assistance unit's continued eligibility. 
           Subd. 77.  [RECOUPMENT.] "Recoupment" means the action of 
        the county agency to reduce a family's monthly assistance 
        payment to recover overpayments caused by client or agency error 
        and overpayments received while an appeal is pending. 
           Subd. 78.  [RECOVERY.] "Recovery" means actions taken by a 
        county agency to reclaim the value of overpayments through 
        voluntary repayment, recoupment from the assistance payment, 
        court action, revenue recapture, or federal tax refund offset 
        program (FTROP). 
           Subd. 79.  [RECURRING INCOME.] "Recurring income" means a 
        form of income which is: 
           (1) received periodically, and may be received irregularly 
        when receipt can be anticipated even though the date of receipt 
        cannot be predicted; and 
           (2) from the same source or of the same type that is 
        received and budgeted in a prospective month and is received in 
        one or both of the first two retrospective months. 
           Subd. 80.  [REEMPLOYMENT INSURANCE.] "Reemployment 
        insurance" means the insurance benefit paid to an unemployed 
        worker under sections 268.03 to 268.23. 
           Subd. 81.  [RETROSPECTIVE BUDGETING.] "Retrospective 
        budgeting" means a method of determining the amount of the 
        assistance payment in which the payment month is the second 
        month after the budget month. 
           Subd. 82.  [SANCTION.] "Sanction" means the reduction of a 
        family's assistance payment by a specified percentage of the 
        applicable transitional standard because:  a nonexempt 
        participant fails to comply with the requirements of sections 
        256J.52 to 256J.55; a parental caregiver fails without good 
        cause to cooperate with the child support enforcement 
        requirements; or a participant fails to comply with the 
        insurance, tort liability, or other requirements of this chapter.
           Subd. 83.  [SIGNIFICANT CHANGE.] "Significant change" means 
        a decline in gross income of 35 percent or more from the income 
        used to determine the grant for the current month. 
           Subd. 84.  [SUPPLEMENTAL SECURITY INCOME OR 
        SSI.] "Supplemental Security Income" or "SSI" means the program 
        authorized under title XVI of the Social Security Act. 
           Subd. 85.  [TRANSITIONAL STANDARD.] "Transitional standard" 
        means the basic standard for a family with no other income or a 
        nonworking family and is a combination of the cash assistance 
        needs and food assistance needs for a family of that size. 
           Subd. 86.  [UNEARNED INCOME.] "Unearned income" means 
        income received by a person that does not meet the definition of 
        earned income.  Unearned income includes income from a contract 
        for deed, interest, dividends, reemployment insurance, 
        disability insurance payments, veterans benefits, pension 
        payments, return on capital investment, insurance payments or 
        settlements, severance payments, and payments for illness or 
        disability whether the premium payments are made in whole or in 
        part by an employer or participant. 
           Subd. 87.  [VENDOR.] "Vendor" means a provider of goods or 
        services. 
           Subd. 88.  [VENDOR PAYMENT.] "Vendor payment" means a 
        payment authorized by a county agency to a vendor. 
           Subd. 89.  [VERIFICATION.] "Verification" means the process 
        a county agency uses to establish the accuracy or completeness 
        of information from an applicant, participant, third party, or 
        other source as that information relates to program eligibility 
        or an assistance payment. 
           Sec. 5.  [256J.09] [APPLYING FOR ASSISTANCE.] 
           Subdivision 1.  [WHERE TO APPLY.] A person must apply for 
        assistance at the county agency in the county where that person 
        lives. 
           Subd. 2.  [COUNTY AGENCY RESPONSIBILITY TO PROVIDE 
        INFORMATION.] A county agency must inform a person who inquires 
        about assistance about eligibility requirements for assistance 
        and how to apply for assistance, including diversionary 
        assistance and emergency assistance.  A county agency must offer 
        the person brochures developed or approved by the commissioner 
        that describe how to apply for assistance. 
           Subd. 3.  [SUBMITTING THE APPLICATION FORM.] A county 
        agency must offer, in person or by mail, the application forms 
        prescribed by the commissioner as soon as a person makes a 
        written or oral inquiry.  At that time, the county agency must 
        inform the person that assistance begins with the date the 
        signed application is received by the county agency or the date 
        all eligibility criteria are met, whichever is later.  The 
        county agency must inform the applicant that any delay in 
        submitting the application will reduce the amount of assistance 
        paid for the month of application.  A county agency must inform 
        a person that the person may submit the application before an 
        interview appointment.  To apply for assistance, a person must 
        submit a signed application to the county agency.  Upon receipt 
        of a signed application, the county agency must stamp the date 
        of receipt on the face of the application.  The county agency 
        must process the application within the time period required 
        under subdivision 5.  An applicant may withdraw the application 
        at any time by giving written or oral notice to the county 
        agency.  The county agency must issue a written notice 
        confirming the withdrawal.  The notice must inform the applicant 
        of the county agency's understanding that the applicant has 
        withdrawn the application and no longer wants to pursue it.  
        When, within ten days of the date of the agency's notice, an 
        applicant informs a county agency, in writing, that the 
        applicant does not wish to withdraw the application, the county 
        agency must reinstate the application and finish processing the 
        application. 
           Subd. 4.  [VERIFICATION OF INFORMATION ON APPLICATION.] A 
        county agency must verify information provided by an applicant 
        as required in section 256J.32. 
           Subd. 5.  [PROCESSING APPLICATIONS.] Upon receiving an 
        application, a county agency must determine the applicant's 
        eligibility, approve or deny the application, inform the 
        applicant of its decision according to the notice provisions in 
        section 256J.31, and, if eligible, issue the assistance payment 
        to the applicant.  When a county agency is unable to process an 
        application within 30 days, the county agency must inform the 
        applicant of the reason for the delay in writing.  When an 
        applicant establishes the inability to provide required 
        verification within the 30-day processing period, the county 
        agency may not use the expiration of that period as the basis 
        for denial. 
           Subd. 6.  [INVALID REASON FOR DELAY.] A county agency must 
        not delay a decision on eligibility or delay issuing the 
        assistance payment except to establish state residence by: 
           (1) treating the 30-day processing period as a waiting 
        period; 
           (2) delaying approval or issuance of the assistance payment 
        pending the decision of the county board; or 
           (3) awaiting the result of a referral to a county agency in 
        another county when the county receiving the application does 
        not believe it is the county of financial responsibility. 
           Subd. 7.  [CHANGES IN RESIDENCE DURING APPLICATION.] The 
        requirements in subdivisions 5 and 6 apply without regard to the 
        length of time that an applicant remains, or intends to remain, 
        a resident of the county in which the application is made.  When 
        an applicant leaves the county where application was made but 
        remains in the state, section 256J.75 applies and the county 
        agency may request additional information from the applicant 
        about changes in circumstances related to the move. 
           Subd. 8.  [ADDITIONAL APPLICATIONS.] Until a county agency 
        issues notice of approval or denial, additional applications 
        submitted by an applicant are void.  However, an application for 
        monthly assistance and an application for emergency assistance 
        or emergency general assistance may exist concurrently.  More 
        than one application for monthly assistance, emergency 
        assistance, or emergency general assistance may exist 
        concurrently when the county agency decisions on one or more 
        earlier applications have been appealed to the commissioner, and 
        the applicant asserts that a change in circumstances has 
        occurred that would allow eligibility.  A county agency must 
        require additional application forms or supplemental forms as 
        prescribed by the commissioner when a payee's name changes, or 
        when a caregiver requests the addition of another person to the 
        assistance unit.  
           Subd. 9.  [ADDENDUM TO AN EXISTING APPLICATION.] An 
        addendum to an existing application must be used to add persons 
        to an assistance unit regardless of whether the persons being 
        added are required to be in the assistance unit.  When a person 
        is added by addendum to an assistance unit, eligibility for that 
        person begins on the first of the month the addendum was filed 
        except as provided in section 256J.74, subdivision 2, clause (1).
           Subd. 10.  [APPLICANTS WHO DO NOT MEET ELIGIBILITY 
        REQUIREMENTS FOR MFIP-S.] When an applicant is not eligible for 
        MFIP-S because the applicant does not meet eligibility 
        requirements, the county agency must determine whether the 
        applicant is eligible for food stamps, medical assistance, 
        diversionary assistance, or has a need for emergency assistance 
        when the applicant meets the eligibility requirements for those 
        programs. 
           Sec. 6.  [256J.10] [MFIP-S ELIGIBILITY REQUIREMENTS.] 
           To be eligible for MFIP-S, applicants must meet the general 
        eligibility requirements in sections 256J.11 to 256J.15, the 
        property limitations in section 256J.20, and the income 
        limitations in section 256J.21. 
           Sec. 7.  [256J.11] [CITIZENSHIP.] 
           Subdivision 1.  [GENERAL CITIZENSHIP REQUIREMENTS.] (a) To 
        be eligible for AFDC or MFIP-S, whichever is in effect, a member 
        of the assistance unit must be a citizen of the United States, a 
        qualified noncitizen as defined in section 256J.08, or a 
        noncitizen who is otherwise residing lawfully in the United 
        States. 
           (b) A qualified noncitizen who entered the United States on 
        or after August 22, 1996, is eligible for MFIP-S.  However, TANF 
        dollars cannot be used to fund the MFIP-S benefits for an 
        individual under this paragraph for a period of five years after 
        the date of entry unless the qualified noncitizen meets one of 
        the following criteria: 
           (1) was admitted to the United States as a refugee under 
        United States Code, title 8, section 1157; 
           (2) was granted asylum under United States Code, title 8, 
        section 1158; 
           (3) was granted withholding of deportation under the United 
        States Code, title 8, section 1253(h); 
           (4) is a veteran of the United States Armed Forces with an 
        honorable discharge for a reason other than noncitizen status, 
        or is a spouse or unmarried minor dependent child of the same; 
        or 
           (5) is an individual on active duty in the United States 
        Armed Forces, other than for training, or is a spouse or 
        unmarried minor dependent child of the same. 
           (c) A person who is not a qualified noncitizen but who is 
        otherwise residing lawfully in the United States is eligible for 
        MFIP-S.  However, TANF dollars cannot be used to fund the MFIP-S 
        benefits for an individual under this paragraph. 
           (d) For purposes of this subdivision, a nonimmigrant in one 
        or more of the classes listed in United States Code, title 8, 
        section 1101(a)(15), or an undocumented immigrant who resides in 
        the United States without the approval or acquiescence of the 
        Immigration and Naturalization Service, is not eligible for 
        MFIP-S. 
           Subd. 2.  [NONCITIZENS; MFIP-S FOOD PORTION.] For the 
        period January 1, 1998, to June 30, 1998, noncitizens who do not 
        meet one of the exemptions in section 412 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        but were residing in this state as of July 1, 1997, are eligible 
        for the food portion of MFIP-S.  However, federal food stamp 
        dollars cannot be used to fund the food portion of MFIP-S 
        benefits for an individual under this subdivision. 
           Subd. 3.  [BENEFITS FUNDED WITH STATE MONEY.] Legal adult 
        noncitizens who have resided in the country for four years or 
        more, whose benefits are funded entirely with state money, and 
        who are under 70 years of age, must, as a condition of 
        eligibility: 
           (1) be enrolled in a literacy class, English as a second 
        language class, or a citizen class; 
           (2) be applying for admission to a literacy class, English 
        as a second language class, and is on a waiting list; 
           (3) be in the process of applying for a waiver from the 
        Immigration and Naturalization Service of the English language 
        or civics requirements of the citizenship test; 
           (4) have submitted an application for citizenship to the 
        Immigration and Naturalization Service and is waiting for a 
        testing date or a subsequent swearing in ceremony; or 
           (5) have been denied citizenship due to a failure to pass 
        the test after two attempts or because of an inability to 
        understand the rights and responsibilities of becoming a United 
        States citizen, as documented by the Immigration and 
        Naturalization Service or the county. 
           If the county social service agency determines that a legal 
        noncitizen subject to the requirements of this subdivision will 
        require more than one year of English language training, then 
        the requirements of clause (1) or (2) shall be imposed after the 
        legal noncitizen has resided in the country for three years.  
        Individuals who reside in a facility licensed under chapter 
        144A, 144D, 245A, or 256I are exempt from the requirements of 
        this subdivision. 
           Sec. 8.  [256J.12] [MINNESOTA RESIDENCE.] 
           Subdivision 1.  [SIMPLE RESIDENCY.] To be eligible for AFDC 
        or MFIP-S, whichever is in effect, a family must have 
        established residency in this state which means the family is 
        present in the state and intends to remain here. 
           Subd. 1a.  [30-DAY RESIDENCY REQUIREMENT.] A family is 
        considered to have established residency in this state only when 
        a child or caregiver has resided in this state for at least 30 
        days with the intention of making the person's home here and not 
        for any temporary purpose.  Time spent in a shelter for battered 
        women shall count toward satisfying the 30 day residency 
        requirement. 
           Subd. 2.  [EXCEPTIONS.] (a) A county shall waive the 30-day 
        residency requirement where unusual hardship would result from 
        denial of assistance. 
           (b) For purposes of this section, unusual hardship means a 
        family: 
           (1) is without alternative shelter; or 
           (2) is without available resources for food. 
           (c) For purposes of this subdivision, the following 
        definitions apply (1) "metropolitan statistical area" is as 
        defined by the U.S. Census Bureau; (2) "alternative shelter" 
        includes any shelter that is located within the metropolitan 
        statistical area containing the county and for which the family 
        is eligible, provided the family does not have to travel more 
        than 20 miles to reach the shelter and has access to 
        transportation to the shelter.  Clause (2) does not apply to 
        counties in the Minneapolis-St. Paul metropolitan statistical 
        area. 
           (d) Migrant workers, as defined in section 256J.08, and 
        their immediate families are exempt from the 30-day residency 
        requirement, provided the migrant worker provides verification 
        that the migrant family worked in this state within the last 12 
        months and earned at least $1,000 in gross wages during the time 
        the migrant worker worked in this state. 
           Subd. 3.  [PAYMENT PLAN FOR NEW RESIDENTS.] Assistance paid 
        to an eligible family in which all members have resided in this 
        state for fewer than 12 consecutive calendar months immediately 
        preceding the date of application shall be at the standard and 
        in the form specified in section 256J.43. 
           Subd. 4.  [SEVERABILITY CLAUSE.] If any subdivision in this 
        section is enjoined from implementation or found 
        unconstitutional by any court of competent jurisdiction, the 
        remaining subdivisions shall remain valid and shall be given 
        full effect. 
           Sec. 9.  [256J.13] [MINOR CHILD IN ASSISTANCE UNIT; 
        PHYSICAL PRESENCE.] 
           Subdivision 1.  [MINOR CHILD OR PREGNANT WOMAN.] The 
        assistance unit must include at least one minor child or a 
        pregnant woman.  If a minor child is a recipient of Supplemental 
        Security Income or Minnesota supplemental aid, the assistance 
        unit is eligible for MFIP-S, but the needs of the minor child 
        receiving Supplemental Security Income or Minnesota supplemental 
        aid must not be taken into account when the county agency 
        determines the amount of the assistance payment to be paid to 
        the assistance unit. 
           Subd. 2.  [PHYSICAL PRESENCE.] A minor child and a 
        caregiver must live together except as provided in the following 
        paragraphs. 
           (a) The physical presence requirement is met when a minor 
        child is required to live away from the caregiver's home to meet 
        the need for educational curricula that cannot be met by, but is 
        approved by, the local public school district, the home is 
        maintained for the minor child's return during periodic school 
        vacations, and the caregiver continues to maintain 
        responsibility for the support and care of the minor child. 
           (b) The physical presence requirement is met when an 
        applicant caregiver or applicant minor child is away from the 
        home due to illness or hospitalization, when the home is 
        maintained for the return of the absent family member, the 
        absence is not expected to last more than six months beyond the 
        month of departure, and the conditions of clause (1), (2), or 
        (3) apply: 
           (1) when the minor child and caregiver lived together 
        immediately prior to the absence, the caregiver continues to 
        maintain responsibility for the support and care of the minor 
        child, and the absence is reported at the time of application; 
           (2) when the pregnant mother is hospitalized or out of the 
        home due to the pregnancy; or 
           (3) when the newborn child and mother are hospitalized at 
        the time of birth. 
           (c) The absence of a caregiver or minor child does not 
        affect eligibility for the month of departure when the caregiver 
        or minor child received assistance for that month and lived 
        together immediately prior to the absence.  Eligibility also 
        exists in the following month when the absence ends on or before 
        the tenth day of that month.  A temporary absence of a caregiver 
        or a minor child which continues beyond the month of departure 
        must not affect eligibility when the home is maintained for the 
        return of the absent family member, the caregiver continues to 
        maintain responsibility for the support and care of the minor 
        child, and one of clauses (1) to (7) applies: 
           (1) a participant caregiver or participant child is absent 
        due to illness or hospitalization, and the absence is expected 
        to last no more than six months beyond the month of departure; 
           (2) a participant child is out of the home due to placement 
        in foster care as defined in section 260.015, subdivision 7, 
        when the placement will not be paid under title IV-E of the 
        Social Security Act, and when the absence is expected to last no 
        more than six months beyond the month of departure; 
           (3) a participant minor child is out of the home for a 
        vacation, the vacation is not with an absent parent, and the 
        absence is expected to last no more than two months beyond the 
        month of departure; 
           (4) a participant minor child is out of the home due to a 
        visit or vacation with an absent parent, the home of the minor 
        child remains with the caregiver, the absence meets the 
        conditions of this paragraph and the absence is expected to last 
        no more than two months beyond the month of departure; 
           (5) a participant caregiver is out of the home due to a 
        death or illness of a relative, incarceration, training, or 
        employment search and suitable arrangements have been made for 
        the care of the minor child, or a participant minor child is out 
        of the home due to incarceration, and the absence is expected to 
        last no more than two months beyond the month of departure; 
           (6) a participant caregiver and a participant minor child 
        are both absent from Minnesota due to a situation described in 
        clause (5), except for incarceration, and the absence is 
        expected to last no more than one month beyond the month of the 
        departure; or 
           (7) a participant minor child has run away from home, and 
        another person has not made application for that minor child, 
        assistance must continue for no more than two months following 
        the month of departure. 
           Sec. 10.  [256J.14] [ELIGIBILITY FOR PARENTING OR PREGNANT 
        MINORS.] 
           (a) The definitions in this paragraph only apply to this 
        subdivision. 
           (1) "Household of a parent, legal guardian, or other adult 
        relative" means the place of residence of: 
           (i) a natural or adoptive parent; 
           (ii) a legal guardian according to appointment or 
        acceptance under section 260.242, 525.615, or 525.6165, and 
        related laws; or 
           (iii) a caregiver. 
           (2) "Adult-supervised supportive living arrangement" means 
        a private family setting which assumes responsibility for the 
        care and control of the minor parent and minor child, or other 
        living arrangement, not including a public institution, licensed 
        by the commissioner of human services which ensures that the 
        minor parent receives adult supervision and supportive services, 
        such as counseling, guidance, independent living skills 
        training, or supervision. 
           (b) A minor parent and the minor child who is in the care 
        of the minor parent must reside in the household of a parent, 
        legal guardian, other appropriate adult relative, or other 
        caregiver, or in an adult-supervised supportive living 
        arrangement in order to receive MFIP-S unless: 
           (1) the minor parent has no living parent, other 
        appropriate adult relative, or legal guardian whose whereabouts 
        is known; 
           (2) no living parent, other appropriate adult relative, or 
        legal guardian of the minor parent allows the minor parent to 
        live in the parent's, appropriate adult relative's, or legal 
        guardian's home; 
           (3) the minor parent lived apart from the minor parent's 
        own parent or legal guardian for a period of at least one year 
        before either the birth of the minor child or the minor parent's 
        application for MFIP-S; 
           (4) the physical or emotional health or safety of the minor 
        parent or minor child would be jeopardized if the minor parent 
        and the minor child resided in the same residence with the minor 
        parent's parent, other appropriate adult relative, or legal 
        guardian; or 
           (5) an adult supervised supportive living arrangement is 
        not available for the minor parent and the dependent child in 
        the county in which the minor currently resides.  If an adult 
        supervised supportive living arrangement becomes available 
        within the county, the minor parent and child must reside in 
        that arrangement. 
           (c) Minor applicants must be informed orally and in writing 
        about the eligibility requirements and their rights and 
        obligations under the MFIP-S program.  The county must advise 
        the minor of the possible exemptions and specifically ask 
        whether one or more of these exemptions is applicable.  If the 
        minor alleges one or more of these exemptions, then the county 
        must assist the minor in obtaining the necessary verifications 
        to determine whether or not these exemptions apply. 
           (d) If the county worker has reason to suspect that the 
        physical or emotional health or safety of the minor parent or 
        minor child would be jeopardized if they resided with the minor 
        parent's parent or legal guardian, then the county worker must 
        make a referral to child protective services to determine if 
        paragraph (b), clause (4), applies.  A new determination by the 
        county worker is not necessary if one has been made within the 
        last six months, unless there has been a significant change in 
        circumstances which justifies a new referral and determination. 
           (e) If a minor parent is not living with a parent or legal 
        guardian due to paragraph (b), clause (1), (2), or (4), the 
        minor parent must reside, when possible, in a living arrangement 
        that meets the standards of paragraph (a), clause (2). 
           (f) When a minor parent and minor child live with another 
        adult relative, or in an adult-supervised supportive living 
        arrangement, MFIP-S must be paid, when possible, in the form of 
        a protective payment on behalf of the minor parent and minor 
        child in accordance with section 256J.39, subdivisions 2 to 4. 
           Sec. 11.  [256J.15] [OTHER ELIGIBILITY CONDITIONS.] 
           Subdivision 1.  [ELIGIBILITY WHEN THERE IS SHARED, COURT 
        ORDERED, AND OTHER CUSTODY ARRANGEMENTS.] The language of a 
        court order that specifies joint legal or physical custody does 
        not preclude a determination that a parent is absent.  Absence 
        must be determined based on the actual facts of the absence 
        according to paragraphs (a) to (c).  
           (a) When a minor child spends time in each of the parents' 
        homes within a payment month, the minor child's home shall be 
        considered the home in which the majority of the minor child's 
        time is spent.  When this time is exactly equal within a payment 
        month, or when the parents alternately live in the minor child's 
        home within a payment month, the minor child's home shall be 
        with that parent who is applying for MFIP-S, unless the minor 
        child's needs for the full payment month have already been met 
        through the provision of assistance to the other parent for that 
        month.  
           (b) When the physical custody of a minor child alternates 
        between parents for periods of at least one payment month, each 
        parent shall be eligible for assistance for any full payment 
        months the minor child's home is with that parent, except under 
        the conditions in paragraph (c).  
           (c) When a minor child's home is with one parent for the 
        majority of time in each month for at least nine consecutive 
        calendar months, and that minor child visits or vacations with 
        the other parent under section 256J.13, the minor child's home 
        remains with the first parent even when the stay with the second 
        parent is for all or the majority of the months in the period of 
        the temporary absence. 
           Subd. 2.  [ELIGIBILITY DURING LABOR DISPUTES.] To receive 
        assistance under MFIP-S, a member of an assistance unit who is 
        on strike must have been an MFIP-S participant on the day before 
        the strike, or have been eligible for MFIP-S on the day before 
        the strike. 
           The county agency must count the striker's prestrike 
        earnings as current earnings.  When a member of an assistance 
        unit who is not in the bargaining unit that voted for the strike 
        does not cross the picket line for fear of personal injury, the 
        assistance unit member is not a striker.  Except for a member of 
        an assistance unit who is not in the bargaining unit that voted 
        for the strike and who does not cross the picket line for fear 
        of personal injury, a significant change cannot be invoked as a 
        result of a labor dispute. 
           Sec. 12.  [256J.20] [PROPERTY LIMITATIONS.] 
           Subdivision 1.  [PROPERTY OWNERSHIP PROVISIONS.] The county 
        agency must apply paragraphs (a) to (d) to real and personal 
        property.  The county agency must use the equity value of 
        legally available real and personal property, except property 
        excluded in subdivisions 2 and 3, to determine whether an 
        applicant or participant is eligible for assistance. 
           (a) When real or personal property is jointly owned by two 
        or more persons, the county agency shall assume that each person 
        owns an equal share, except that either person owns the entire 
        sum of a joint personal checking or savings account.  When an 
        applicant or participant documents greater or lesser ownership, 
        the county agency must use that greater or lesser share to 
        determine the equity value held by the applicant or 
        participant.  Other types of ownership must be evaluated 
        according to law. 
           (b) Real or personal property owned by the applicant or 
        participant must be presumed legally available to the applicant 
        or participant unless the applicant or participant documents 
        that the property is not legally available to the applicant or 
        participant.  When real or personal property is not legally 
        available, its equity value must not be applied against the 
        limits of subdivisions 2 and 3. 
           (c) An applicant must disclose whether the applicant has 
        transferred real or personal property valued in excess of the 
        property limits in subdivisions 2 and 3 for which reasonable 
        compensation was not received within one year prior to 
        application.  A participant must disclose all transfers of 
        property valued in excess of these limits, according to the 
        reporting requirements in section 256J.30, subdivision 9.  When 
        a transfer of real or personal property without reasonable 
        compensation has occurred: 
           (1) the person who transferred the property must provide 
        the property's description, information needed to determine the 
        property's equity value, the names of the persons who received 
        the property, and the circumstances of and reasons for the 
        transfer; and 
           (2) when the transferred property can be reasonably 
        reacquired, or when reasonable compensation can be secured, the 
        property is presumed legally available to the applicant or 
        participant. 
           (d) A participant may build the equity value of real and 
        personal property to the limits in subdivisions 2 and 3. 
           Subd. 2.  [REAL PROPERTY LIMITATIONS.] Ownership of real 
        property by an applicant or participant is subject to the 
        limitations in paragraphs (a) and (b). 
           (a) A county agency shall exclude the homestead of an 
        applicant or participant according to clauses (1) to (4): 
           (1) an applicant or participant who is purchasing real 
        property through a contract for deed and using that property as 
        a home is considered the owner of real property; 
           (2) the total amount of land that can be excluded under 
        this subdivision is limited to surrounding property which is not 
        separated from the home by intervening property owned by 
        others.  Additional property must be assessed as to its legal 
        and actual availability according to subdivision 1; 
           (3) when real property that has been used as a home by a 
        participant is sold, the county agency must treat the cash 
        proceeds from the sale as excluded property for six months when 
        the participant intends to reinvest the proceeds in another home 
        and maintains those proceeds, unused for other purposes, in a 
        separate account; and 
           (4) when the homestead is jointly owned, but the client 
        does not reside in it because of legal separation, pending 
        divorce, or battering or abuse by the spouse or partner, the 
        homestead is excluded. 
           (b) The equity value of real property that is not excluded 
        under paragraph (a) and which is legally available must be 
        applied against the limits in subdivision 3.  When the equity 
        value of the real property exceeds the limits under subdivision 
        3, the applicant or participant may qualify to receive 
        assistance when the applicant or participant continues to make a 
        good faith effort to sell the property and signs a legally 
        binding agreement to repay the amount of assistance, less child 
        support collected by the agency.  Repayment must be made within 
        five working days after the property is sold.  Repayment to the 
        county agency must be in the amount of assistance received or 
        the proceeds of the sale, whichever is less. 
           Subd. 3.  [OTHER PROPERTY LIMITATIONS.] To be eligible for 
        MFIP-S, the equity value of all nonexcluded real and personal 
        property of the assistance unit must not exceed $2,000 for 
        applicants and $5,000 for ongoing recipients.  The value of 
        clauses (1) to (18) must be excluded when determining the equity 
        value of real and personal property: 
           (1) licensed vehicles up to a total market value of less 
        than or equal to $7,500.  The county agency shall apply any 
        excess market value to the asset limit described in this 
        section.  If the assistance unit owns more than one licensed 
        vehicle, the county agency shall determine the vehicle with the 
        highest market value and count only the market value over 
        $7,500.  The county agency shall count the market value of all 
        other vehicles and apply this amount to the asset limit 
        described in this section.  The value of special equipment for a 
        handicapped member of the assistance unit is excluded.  To 
        establish the market value of vehicles, a county agency must use 
        the N.A.D.A. Official Used Car Guide, Midwest Edition, for newer 
        model cars.  The N.A.D.A. Official Used Car Guide, Midwest 
        Edition, is incorporated by reference.  When a vehicle is not 
        listed in the guidebook, or when the applicant or participant 
        disputes the value listed in the guidebook as unreasonable given 
        the condition of the particular vehicle, the county agency may 
        require the applicant or participant to document the value by 
        securing a written statement from a motor vehicle dealer 
        licensed under section 168.27, stating the amount that the 
        dealer would pay to purchase the vehicle.  The county agency 
        shall reimburse the applicant or participant for the cost of a 
        written statement that documents a lower value; 
           (2) the value of life insurance policies for members of the 
        assistance unit; 
           (3) one burial plot per member of an assistance unit; 
           (4) the value of personal property needed to produce earned 
        income, including tools, implements, farm animals, inventory, 
        business loans, business checking and savings accounts used 
        exclusively for the operation of a self-employment business, and 
        any motor vehicles if the vehicles are essential for the 
        self-employment business; 
           (5) the value of personal property not otherwise specified 
        which is commonly used by household members in day-to-day living 
        such as clothing, necessary household furniture, equipment, and 
        other basic maintenance items essential for daily living; 
           (6) the value of real and personal property owned by a 
        recipient of Social Security Income or Minnesota supplemental 
        aid; 
           (7) the value of corrective payments, but only for the 
        month in which the payment is received and for the following 
        month; 
           (8) a mobile home used by an applicant or participant as 
        the applicant's or participant's home; 
           (9) money in a separate escrow account that is needed to 
        pay real estate taxes or insurance and that is used for this 
        purpose; 
           (10) money held in escrow to cover employee FICA, employee 
        tax withholding, sales tax withholding, employee worker 
        compensation, business insurance, property rental, property 
        taxes, and other costs that are paid at least annually, but less 
        often than monthly; 
           (11) monthly assistance and emergency assistance payments 
        for the current month's needs; 
           (12) the value of school loans, grants, or scholarships for 
        the period they are intended to cover; 
           (13) payments listed in section 256J.21, subdivision 2, 
        clause (9), which are held in escrow for a period not to exceed 
        three months to replace or repair personal or real property; 
           (14) income received in a budget month through the end of 
        the budget month; 
           (15) savings of a minor child or a minor parent that are 
        set aside in a separate account designated specifically for 
        future education or employment costs; 
           (16) the earned income tax credit and Minnesota working 
        family credit in the month received and the following month; 
           (17) payments excluded under federal law as long as those 
        payments are held in a separate account from any nonexcluded 
        funds; and 
           (18) money received by a participant of the corps to career 
        program under section 84.0887, subdivision 2, paragraph (b), as 
        a postservice benefit under the federal Americorps Act. 
           Sec. 13.  [256J.21] [INCOME LIMITATIONS.] 
           Subdivision 1.  [INCOME INCLUSIONS.] To determine MFIP-S 
        eligibility, the county agency must evaluate income received by 
        members of an assistance unit, or by other persons whose income 
        is considered available to the assistance unit.  All payments, 
        unless specifically excluded in subdivision 2, must be counted 
        as income. 
           Subd. 2.  [INCOME EXCLUSIONS.] (a) The following must be 
        excluded in determining a family's available income: 
           (1) payments for basic care, difficulty of care, and 
        clothing allowances received for providing family foster care to 
        children or adults under Minnesota Rules, parts 9545.0010 to 
        9545.0260 and 9555.5050 to 9555.6265, and payments received and 
        used for care and maintenance of a third-party beneficiary who 
        is not a household member; 
           (2) reimbursements for employment training received through 
        the Job Training Partnership Act, United States Code, title 29, 
        chapter 19, sections 1501 to 1792b; 
           (3) reimbursement for out-of-pocket expenses incurred while 
        performing volunteer services, jury duty, or employment; 
           (4) all educational assistance, except the county agency 
        must count graduate student teaching assistantships, 
        fellowships, and other similar paid work as earned income and, 
        after allowing deductions for any unmet and necessary 
        educational expenses, shall count scholarships or grants awarded 
        to graduate students that do not require teaching or research as 
        unearned income; 
           (5) loans, regardless of purpose, from public or private 
        lending institutions, governmental lending institutions, or 
        governmental agencies; 
           (6) loans from private individuals, regardless of purpose, 
        provided an applicant or participant documents that the lender 
        expects repayment; 
           (7) state and federal income tax refunds; 
           (8) state and federal earned income credits; 
           (9) funds received for reimbursement, replacement, or 
        rebate of personal or real property when these payments are made 
        by public agencies, awarded by a court, solicited through public 
        appeal, or made as a grant by a federal agency, state or local 
        government, or disaster assistance organizations, subsequent to 
        a presidential declaration of disaster; 
           (10) the portion of an insurance settlement that is used to 
        pay medical, funeral, and burial expenses, or to repair or 
        replace insured property; 
           (11) reimbursements for medical expenses that cannot be 
        paid by medical assistance; 
           (12) payments by a vocational rehabilitation program 
        administered by the state under chapter 268A, except those 
        payments that are for current living expenses; 
           (13) in-kind income, including any payments directly made 
        by a third party to a provider of goods and services; 
           (14) assistance payments to correct underpayments, but only 
        for the month in which the payment is received; 
           (15) emergency assistance payments; 
           (16) funeral and cemetery payments as provided by section 
        256.935; 
           (17) nonrecurring cash gifts of $30 or less, not exceeding 
        $30 per participant in a calendar month; 
           (18) any form of energy assistance payment made through 
        Public Law Number 97-35, Low-Income Home Energy Assistance Act 
        of 1981, payments made directly to energy providers by other 
        public and private agencies, and any form of credit or rebate 
        payment issued by energy providers; 
           (19) Supplemental Security Income, including retroactive 
        payments; 
           (20) Minnesota supplemental aid, including retroactive 
        payments; 
           (21) proceeds from the sale of real or personal property; 
           (22) adoption assistance payments under section 259.67; 
           (23) state-funded family subsidy program payments made 
        under section 252.32 to help families care for children with 
        mental retardation or related conditions; 
           (24) interest payments and dividends from property that is 
        not excluded from and that does not exceed the asset limit; 
           (25) rent rebates; 
           (26) income earned by a minor caregiver or minor child who 
        is at least a half-time student; 
           (27) income earned by a caregiver under age 20 who is at 
        least a half-time student in an approved secondary education 
        program; 
           (28) MFIP-S child care payments under section 119B.05; 
           (29) all other payments made through MFIP-S to support a 
        caregiver's pursuit of greater self-support; 
           (30) income a participant receives related to shared living 
        expenses; 
           (31) reverse mortgages; 
           (32) benefits provided by the Child Nutrition Act of 1966, 
        United States Code, title 42, chapter 13A, sections 1771 to 
        1790; 
           (33) benefits provided by the women, infants, and children 
        (WIC) nutrition program, United States Code, title 42, chapter 
        13A, section 1786; 
           (34) benefits from the National School Lunch Act, United 
        States Code, title 42, chapter 13, sections 1751 to 1769e; 
           (35) relocation assistance for displaced persons under the 
        Uniform Relocation Assistance and Real Property Acquisition 
        Policies Act of 1970, United States Code, title 42, chapter 61, 
        subchapter II, section 4636, or the National Housing Act, United 
        States Code, title 12, chapter 13, sections 1701 to 1750jj; 
           (36) benefits from the Trade Act of 1974, United States 
        Code, title 19, chapter 12, part 2, sections 2271 to 2322; 
           (37) war reparations payments to Japanese Americans and 
        Aleuts under United States Code, title 50, sections 1989 to 
        1989d; 
           (38) payments to veterans or their dependents as a result 
        of legal settlements regarding Agent Orange or other chemical 
        exposure under Public Law Number 101-239, section 10405, 
        paragraph (a)(2)(E); 
           (39) income that is otherwise specifically excluded from 
        the MFIP-S program consideration in federal law, state law, or 
        federal regulation; 
           (40) security and utility deposit refunds; 
           (41) American Indian tribal land settlements excluded under 
        Public Law Numbers 98-123, 98-124, and 99-377 to the Mississippi 
        Band Chippewa Indians of White Earth, Leech Lake, and Mille Lacs 
        reservations and payments to members of the White Earth Band, 
        under United States Code, title 25, chapter 9, section 331, and 
        chapter 16, section 1407; 
           (42) all income of the minor parent's parent when 
        determining the grant for the minor parent in households that 
        include a minor parent living with a parent on MFIP-S with other 
        dependent children; and 
           (43) income of the minor parent's parent equal to 200 
        percent of the federal poverty guideline for a family size not 
        including the minor parent and the minor parent's child in 
        households that include a minor parent living with a parent not 
        on MFIP-S when determining the grant for the minor parent.  The 
        remainder of income is deemed as specified in section 256J.37, 
        subdivision 1. 
           Subd. 3.  [INITIAL INCOME TEST.] The county agency shall 
        determine initial eligibility by considering all earned and 
        unearned income that is not excluded under subdivision 2.  To be 
        eligible for MFIP-S, the assistance unit's countable income 
        minus the disregards in paragraphs (a) and (b) must be below the 
        transitional standard of assistance according to section 256J.24 
        for that size assistance unit. 
           (a) The initial eligibility determination must disregard 
        the following items: 
           (1) the employment disregard is 18 percent of the gross 
        earned income whether or not the member is working full time or 
        part time; 
           (2) dependent care costs must be deducted from gross earned 
        income for the actual amount paid for dependent care up to the 
        maximum disregard allowed under this chapter and chapter 119B; 
        and 
           (3) all payments made according to a court order for the 
        support of children not living in the assistance unit's 
        household shall be disregarded from the income of the person 
        with the legal obligation to pay support, provided that, if 
        there has been a change in the financial circumstances of the 
        person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the support 
        order. 
           (b) Notwithstanding paragraph (a), when determining initial 
        eligibility for applicants who have received AFDC, family 
        general assistance, MFIP, MFIP-R, work first, or MFIP-S in this 
        state within four months of the most recent application for 
        MFIP-S, the employment disregard is 36 percent of the gross 
        earned income. 
           After initial eligibility is established, the assistance 
        payment calculation is based on the monthly income test. 
           Subd. 4.  [MONTHLY INCOME TEST AND DETERMINATION OF 
        ASSISTANCE PAYMENT.] The county agency shall determine ongoing 
        eligibility and the assistance payment amount according to the 
        monthly income test.  To be eligible for MFIP-S, the result of 
        the computations in paragraphs (a) to (e) must be at least $1. 
           (a) Apply a 36 percent income disregard to gross earnings 
        and subtract this amount from the family wage level.  If the 
        difference is equal to or greater than the transitional 
        standard, the assistance payment is equal to the transitional 
        standard.  If the difference is less than the transitional 
        standard, the assistance payment is equal to the difference.  
        The employment disregard in this paragraph must be deducted 
        every month there is earned income. 
           (b) All payments made according to a court order for the 
        support of children not living in the assistance unit's 
        household must be disregarded from the income of the person with 
        the legal obligation to pay support, provided that, if there has 
        been a change in the financial circumstances of the person with 
        the legal obligation to pay support since the support order was 
        entered, the person with the legal obligation to pay support has 
        petitioned for a modification of the court order. 
           (c) Subtract unearned income dollar for dollar from the 
        transitional standard to determine the assistance payment amount.
           (d) When income is both earned and unearned, the amount of 
        the assistance payment must be determined by first treating 
        gross earned income as specified in paragraph (a).  After 
        determining the amount of the assistance payment under paragraph 
        (a), unearned income must be subtracted from that amount dollar 
        for dollar to determine the assistance payment amount. 
           (e) When the monthly income is greater than the 
        transitional or family wage level standard after applicable 
        deductions and the income will only exceed the standard for one 
        month, the county agency must suspend the assistance payment for 
        the payment month. 
           Subd. 5.  [DISTRIBUTION OF INCOME.] The income of all 
        members of the assistance unit must be counted.  Income may also 
        be deemed from ineligible persons to the assistance unit.  
        Income must be attributed to the person who earns it or to the 
        assistance unit according to paragraphs (a) to (c). 
           (a) Funds distributed from a trust, whether from the 
        principal holdings or sale of trust property or from the 
        interest and other earnings of the trust holdings, must be 
        considered income when the income is legally available to an 
        applicant or participant.  Trusts are presumed legally available 
        unless an applicant or participant can document that the trust 
        is not legally available. 
           (b) Income from jointly owned property must be divided 
        equally among property owners unless the terms of ownership 
        provide for a different distribution. 
           (c) Deductions are not allowed from the gross income of a 
        financially responsible household member or by the members of an 
        assistance unit to meet a current or prior debt. 
           Sec. 14.  [256J.24] [FAMILY COMPOSITION AND ASSISTANCE 
        STANDARDS.] 
           Subdivision 1.  [MFIP-S ASSISTANCE UNIT.] An MFIP-S 
        assistance unit is either a group of individuals with at least 
        one minor child who live together whose needs, assets, and 
        income are considered together and who receive MFIP-S 
        assistance, or a pregnant woman who receives MFIP-S assistance.  
        Individuals identified in subdivision 2 must be included in the 
        MFIP-S assistance unit.  Individuals identified in subdivision 3 
        must be excluded from the assistance unit.  Individuals 
        identified in subdivision 4 may be included in the assistance 
        unit at their option.  Individuals not included in the 
        assistance unit who are identified in section 256J.37, 
        subdivision 1 or 2, must have their income considered when 
        determining eligibility and benefits for an MFIP-S assistance 
        unit.  All assistance unit members, whether mandatory or 
        elective, who live together and for whom one caregiver or two 
        caregivers apply must be included in a single assistance unit. 
           Subd. 2.  [MANDATORY ASSISTANCE UNIT COMPOSITION.] Except 
        for minor caregivers who are in a separate assistance unit, when 
        the following individuals live together, they must be included 
        in the assistance unit: 
           (1) a minor child; 
           (2) the minor child's siblings, half-siblings, and 
        step-siblings; and 
           (3) the minor child's natural, adoptive parents, and 
        stepparents. 
           Subd. 3.  [INDIVIDUALS WHO MUST BE EXCLUDED FROM AN 
        ASSISTANCE UNIT.] The following individuals must be excluded 
        from an assistance unit: 
           (1) individuals receiving Supplemental Security Income or 
        Minnesota supplemental aid; 
           (2) individuals living at home while performing 
        court-imposed, unpaid community service work due to a criminal 
        conviction; 
           (3) individuals disqualified from the food stamp program or 
        MFIP-S, until the disqualification ends; 
           (4) children on whose behalf foster care payments under 
        title IV-E of the Social Security Act are made, except as 
        provided in section 256J.74, subdivision 2; and 
           (5) children receiving ongoing monthly adoption assistance 
        payments under section 269.67. 
           Subd. 4.  [INDIVIDUALS WHO MAY ELECT TO BE INCLUDED IN THE 
        ASSISTANCE UNIT.] The minor child's eligible caregiver may 
        choose to be in the assistance unit, if the caregiver is not 
        required to be in the assistance unit under subdivision 2.  If 
        the relative caregiver chooses to be in the assistance unit, 
        that person's spouse must also be in the unit. 
           Subd. 5.  [MFIP-S TRANSITIONAL STANDARD.] The following 
        table represents the MFIP-S transitional standard table when all 
        members of the assistance unit are eligible for both food and 
        cash assistance. 
             Number of Eligible People          Standard 
                           1                      $351
                           2                      $609
                           3                      $763
                           4                      $903
                           5                    $1,025
                           6                    $1,165
                           7                    $1,273
                           8                    $1,403
                           9                    $1,530
                          10                    $1,653
                     over 10          add $121 per additional member. 
           The commissioner shall annually publish in the State 
        Register the transitional standard for an assistance unit sizes 
        1 to 10. 
           Subd. 6.  [APPLICATION OF ASSISTANCE STANDARDS.] The 
        standards apply to the number of eligible persons in the 
        assistance unit. 
           Subd. 7.  [FAMILY WAGE LEVEL STANDARD.] The family wage 
        level standard is 110 percent of the transitional standard under 
        subdivision 5 and is the standard used when there is earned 
        income in the assistance unit.  As specified in section 256J.21, 
        earned income is subtracted from the family wage level to 
        determine the amount of the assistance payment.  Assistance 
        payments may not exceed the transitional standard for the 
        assistance unit. 
           Sec. 15.  [256J.25] [RETURN OF UTILITY DEPOSIT.] 
           A county may require that assistance paid under MFIP-S in 
        the form of a utility deposit less any amount retained to 
        satisfy outstanding utility costs be returned to the county when 
        the person vacates the premises or be paid for the person's new 
        housing unit as a vendor payment. 
           Sec. 16.  [256J.26] [PERSONS INELIGIBLE; VENDOR PAYMENTS.] 
           Subdivision 1.  [PERSON CONVICTED OF DRUG OFFENSES.] (a) 
        Applicants who have been convicted of a drug offense after July 
        1, 1997, may, if otherwise eligible, receive AFDC or MFIP-S 
        benefits subject to the following conditions: 
           (1) benefits for the entire assistance unit must be paid in 
        vendor form for shelter and utilities during any time the 
        applicant is part of the assistance unit; 
           (2) the convicted applicant shall be subject to random drug 
        testing as a condition of continued eligibility and is subject 
        to sanctions under section 256J.46 following any positive test 
        for an illegal controlled substance. 
           This subdivision also applies to persons who receive food 
        stamps under section 115 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996.  
           (b) For the purposes of this subdivision, "drug offense" 
        means a conviction that occurred after July 1, 1997, of sections 
        152.021 to 152.025, 152.0261, or 152.096.  Drug offense also 
        means a conviction in another jurisdiction of the possession, 
        use, or distribution of a controlled substance, or conspiracy to 
        commit any of these offenses, if the offense occurred after July 
        1, 1997, and the conviction is a felony offense in that 
        jurisdiction, or in the case of New Jersey, a high misdemeanor. 
           Subd. 2.  [PAROLE VIOLATORS.] An individual violating a 
        condition of probation or parole or supervised release imposed 
        under federal law or the law of any state is ineligible to 
        receive AFDC or MFIP-S. 
           Subd. 3.  [FLEEING FELONS.] An individual who is fleeing to 
        avoid prosecution, or custody, or confinement after conviction 
        for a crime that is a felony under the laws of the jurisdiction 
        from which the individual flees, or in the case of New Jersey, 
        is a high misdemeanor, is ineligible to receive AFDC or MFIP-S. 
           Subd. 4.  [DENIAL OF ASSISTANCE FOR TEN YEARS TO A PERSON 
        FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCY.] An 
        individual who is convicted in federal or state court of having 
        made a fraudulent statement or representation with respect to 
        the place of residence of the individual in order to receive 
        assistance simultaneously from two or more states is ineligible 
        to receive AFDC or MFIP-S for ten years beginning on the date of 
        the conviction. 
           Sec. 17.  [256J.28] [PROVISIONS RELATED SPECIFICALLY TO 
        FOOD STAMP ASSISTANCE.] 
           Subdivision 1.  [EXPEDITED ISSUANCE OF FOOD STAMP 
        ASSISTANCE.] The following households are entitled to expedited 
        issuance of food stamp assistance: 
           (1) households with less than $150 in monthly gross income 
        provided their liquid assets do not exceed $100; 
           (2) migrant or seasonal farm worker households who are 
        destitute as defined in Code of Federal Regulations, title 7, 
        subtitle B, chapter 2, subchapter C, part 273, section 273.10, 
        paragraph (e)(3), provided their liquid assets do not exceed 
        $100; and 
           (3) eligible households whose combined monthly gross income 
        and liquid resources are less than the household's monthly rent 
        or mortgage and utilities. 
           The benefits issued through expedited issuance of food 
        stamp assistance must be deducted from the amount of the full 
        monthly MFIP-S assistance payment and a supplemental payment for 
        the difference must be issued. 
           Subd. 2.  [FOOD STAMPS FOR HOUSEHOLD MEMBERS NOT IN THE 
        ASSISTANCE UNIT.] (a) For household members who purchase and 
        prepare food with the MFIP-S assistance unit but are not part of 
        the assistance unit, the county agency must determine a separate 
        food stamp benefit based on regulations agreed upon with the 
        United States department of agriculture. 
           (b) This subdivision does not apply to optional members who 
        have chosen not to be in the assistance unit. 
           (c) Fair hearing requirements for persons who receive food 
        stamps under this subdivision are governed by section 256.045, 
        and Code of Federal Regulations, title 7, subtitle B, chapter 
        II, part 273, section 273.15. 
           Subd. 3.  [INCOME DISREGARD FOR CERTAIN PROGRAMS, FOOD 
        ASSISTANCE PORTION OF ASSISTANCE PAYMENT.] The portion of the 
        MFIP-S assistance payment that is designated by the commissioner 
        as the food assistance portion of the assistance payment must be 
        disregarded as income in the following programs: 
           (1) housing subsidy programs; 
           (2) low-income home energy assistance program; 
           (3) Supplemental Security Income, when determining interim 
        assistance amount; and 
           (4) other programs that do not count food stamps as income. 
           For the purposes of this subdivision, the food assistance 
        portion of the assistance payment means a predetermined portion 
        of the MFIP-S assistance payment that may be received in 
        point-of-purchase sites or as food stamps.  The predetermined 
        portion of the assistance payment will vary by family profile, 
        which is based on family size. 
           Subd. 4.  [FOOD PORTION OF MFIP-S ASSISTANCE GRANT.] (a) 
        The MFIP-S assistance grant must be reduced in an amount equal 
        to the food portion of the transitional standard for an 
        assistance unit when a relative caregiver chooses not to be part 
        of the assistance unit and is exempt from work activities under 
        this chapter. 
           (b) The food portion of the MFIP-S grant must be reduced by 
        $30 for MFIP-S recipients who are also recipients of public 
        housing subsidies. 
           Sec. 18.  [256J.30] [APPLICANT AND PARTICIPANT REQUIREMENTS 
        AND RESPONSIBILITIES.] 
           Subdivision 1.  [APPLICANT REPORTING REQUIREMENTS.] An 
        applicant must provide information on an application form and 
        supplemental forms about the applicant's circumstances which 
        affect MFIP-S eligibility or the assistance payment.  An 
        applicant must report changes identified in subdivision 9 while 
        the application is pending.  When an applicant does not 
        accurately report information on an application, both an 
        overpayment and a referral for a fraud investigation may 
        result.  When an applicant does not provide information or 
        documentation, the receipt of the assistance payment may be 
        delayed or the application may be denied depending on the type 
        of information required and its effect on eligibility. 
           Subd. 2.  [REQUIREMENT TO APPLY FOR OTHER BENEFITS.] An 
        applicant or participant must apply for and follow through with 
        appealing any denials of eligibility for benefits from other 
        programs for which the applicant or participant is potentially 
        eligible and which would, if received, offset assistance 
        payments.  An applicant's or participant's failure to complete 
        application for these benefits without good cause results in 
        denial or termination of assistance.  Good cause for failure to 
        apply for these benefits is allowed when circumstances beyond 
        the control of the applicant or participant prevent the 
        applicant or participant from making an application. 
           Subd. 3.  [RESPONSIBILITY TO INQUIRE.] An applicant or 
        participant who does not know or is unsure whether a given 
        change in circumstances will affect the applicant's or 
        participant's MFIP-S eligibility or assistance payment must 
        contact the county agency for information.  
           Subd. 4.  [PARTICIPANT'S COMPLETION OF RECERTIFICATION OF 
        ELIGIBILITY FORM.] A participant must complete forms prescribed 
        by the commissioner which are required for recertification of 
        eligibility according to section 256J.32, subdivision 6. 
           Subd. 5.  [MONTHLY MFIP-S HOUSEHOLD REPORTS.] Each 
        assistance unit with a member who has earned income or a recent 
        work history, and each assistance unit that has income deemed to 
        it from a financially responsible person must complete a monthly 
        MFIP-S household report form.  "Recent work history" means the 
        individual received earned income in the report month or any of 
        the previous three calendar months even if the earnings are 
        excluded.  To be complete, the MFIP-S household report form must 
        be signed and dated by the caregivers no earlier than the last 
        day of the reporting period.  All questions required to 
        determine assistance payment eligibility must be answered, and 
        documentation of earned income must be included. 
           Subd. 6.  [SIX-MONTH MFIP-S HOUSEHOLD REPORT.] Assistance 
        units that are not required to report monthly under subdivision 
        5 must complete an MFIP-S household report form every six 
        months.  To be complete, the MFIP-S household report form must 
        be signed and dated by the caregiver or caregivers no earlier 
        than the last day of the reporting period.  All questions 
        required to determine assistance payment eligibility must be 
        answered and documentation of earned income must be included. 
           Subd. 7.  [DUE DATE OF MFIP-S HOUSEHOLD REPORT.] An MFIP-S 
        household report form must be received by the county agency by 
        the eighth calendar day of the month following the reporting 
        period covered by the form.  When the eighth calendar day of the 
        month falls on a weekend or holiday, the MFIP-S household report 
        form must be received by the county agency the first working day 
        that follows the eighth calendar day.  The county agency must 
        send a notice of termination because of a late or incomplete 
        MFIP-S household report form. 
           Subd. 8.  [LATE MFIP-S HOUSEHOLD REPORT FORMS.] Paragraphs 
        (a) to (d) apply to the reporting requirements in subdivision 7. 
           (a) When a caregiver submits an incomplete MFIP-S household 
        report form before the last working day of the month on which a 
        ten-day notice of termination can be issued, the county agency 
        must return the incomplete form on or before the ten-day notice 
        deadline or any previously sent ten-day notice of termination is 
        invalid. 
           (b) When a complete MFIP-S household report form is not 
        received by a county agency before the last ten days of the 
        month in which the form is due, the county agency must send a 
        notice of proposed termination of assistance.  When a caregiver 
        submits an incomplete form on or after the date a notice of 
        proposed termination has been sent, the termination is valid 
        unless the caregiver submits a complete form before the end of 
        the month. 
           (c) An assistance unit required to submit an MFIP-S 
        household report form is considered to have continued its 
        application for assistance if a complete MFIP-S household report 
        form is received within a calendar month after the month in 
        which assistance was received and assistance shall be paid for 
        the period beginning with the first day of the month in which 
        the report was due. 
           (d) A county agency must allow good cause exemptions from 
        the reporting requirements under subdivisions 5 and 6 when any 
        of the following factors cause a caregiver to fail to provide 
        the county agency with a completed MFIP-S household report form 
        before the end of the month in which the form is due: 
           (1) an employer delays completion of employment 
        verification; 
           (2) a county agency does not help a caregiver complete the 
        MFIP-S household report form when the caregiver asks for help; 
           (3) a caregiver does not receive an MFIP-S household report 
        form due to mistake on the part of the department or the county 
        agency or due to a reported change in address; 
           (4) a caregiver is ill, or physically or mentally 
        incapacitated; or 
           (5) some other circumstance occurs that a caregiver could 
        not avoid with reasonable care which prevents the caregiver from 
        providing a completed MFIP-S household report form before the 
        end of the month in which the form is due. 
           Subd. 9.  [CHANGES THAT MUST BE REPORTED.] A caregiver must 
        report the changes or anticipated changes specified in clauses 
        (1) to (16) within ten days of the date they occur, within ten 
        days of the date the caregiver learns that the change will 
        occur, at the time of the periodic recertification of 
        eligibility under section 256J.32, subdivision 6, or within 
        eight calendar days of a reporting period as in subdivision 5 or 
        6, whichever occurs first.  A caregiver must report other 
        changes at the time of the periodic recertification of 
        eligibility under section 256J.32, subdivision 6, or at the end 
        of a reporting period under subdivision 5 or 6, as applicable.  
        A caregiver must make these reports in writing to the county 
        agency.  When a county agency could have reduced or terminated 
        assistance for one or more payment months if a delay in 
        reporting a change specified under clauses (1) to (16) had not 
        occurred, the county agency must determine whether a timely 
        notice under section 256J.31, subdivision 4, could have been 
        issued on the day that the change occurred.  When a timely 
        notice could have been issued, each month's overpayment 
        subsequent to that notice must be considered a client error 
        overpayment under section 256J.38.  Changes in circumstances 
        which must be reported within ten days must also be reported on 
        the MFIP-S household report form for the reporting period in 
        which those changes occurred.  Within ten days, a caregiver must 
        report: 
           (1) a change in initial employment; 
           (2) a change in initial receipt of unearned income; 
           (3) a recurring change in unearned income; 
           (4) a nonrecurring change of unearned income that exceeds 
        $30; 
           (5) the receipt of a lump sum; 
           (6) an increase in assets that may cause the assistance 
        unit to exceed asset limits; 
           (7) a change in the physical or mental status of an 
        incapacitated member of the assistance unit if the physical or 
        mental status is the basis of exemption from an MFIP-S work and 
        training program; 
           (8) a change in employment status; 
           (9) a change in household composition, including births, 
        returns to and departures from the home of assistance unit 
        members and financially responsible persons, or a change in the 
        custody of a minor child; 
           (10) a change in health insurance coverage; 
           (11) the marriage or divorce of an assistance unit member; 
           (12) the death of a parent, minor child, or financially 
        responsible person; 
           (13) a change in address or living quarters of the 
        assistance unit; 
           (14) the sale, purchase, or other transfer of property; 
           (15) a change in school attendance of a custodial parent or 
        an employed child; and 
           (16) filing a lawsuit, a workers' compensation claim, or a 
        monetary claim against a third party. 
           Subd. 10.  [COOPERATION WITH HEALTH CARE BENEFITS.] (a) The 
        caregiver of a minor child must cooperate with the county agency 
        to identify and provide information to assist the county agency 
        in pursuing third-party liability for medical services. 
           (b) A caregiver must assign to the department any rights to 
        health insurance policy benefits the caregiver has during the 
        period of MFIP-S eligibility. 
           (c) A caregiver must identify any third party who may be 
        liable for care and services available under the medical 
        assistance program on behalf of the applicant or participant and 
        all other assistance unit members. 
           (d) When a participant refuses to identify any third party 
        who may be liable for care and services, the recipient must be 
        sanctioned as provided in section 256J.46, subdivision 1.  The 
        recipient is also ineligible for medical assistance for a 
        minimum of one month and until the recipient cooperates with the 
        requirements of this subdivision. 
           Subd. 11.  [REQUIREMENT TO ASSIGN SUPPORT AND MAINTENANCE 
        RIGHTS.] To be eligible for MFIP-S, the caregiver must assign 
        all rights to child support and spousal maintenance benefits 
        according to section 256.74, subdivision 5, and section 256.741, 
        if enacted. 
           Subd. 12.  [REQUIREMENT TO PROVIDE SOCIAL SECURITY 
        NUMBERS.] Each member of the assistance unit must provide the 
        member's social security number to the county agency, except for 
        members in the assistance unit who are qualified noncitizens who 
        are victims of domestic violence as defined under section 
        256J.08, subdivision 73, clause (7).  When a social security 
        number is not provided to the county agency for verification, 
        this requirement is satisfied when each member of the assistance 
        unit cooperates with the procedures for verification of numbers, 
        issuance of duplicate cards, and issuance of new numbers which 
        have been established jointly between the Social Security 
        Administration and the commissioner. 
           Sec. 19.  [256J.31] [APPLICANT AND PARTICIPANT RIGHTS AND 
        COUNTY AGENCY RESPONSIBILITIES.] 
           Subdivision 1.  [RIGHT TO INFORMATION.] An applicant or 
        participant has the right to obtain from the county agency 
        information about the benefits, requirements, restrictions, and 
        appeal provisions of public assistance programs. 
           Subd. 2.  [RIGHT TO AUTHORIZED REPRESENTATIVE.] An 
        applicant or participant has the right to designate an 
        authorized representative to act on the applicant's or 
        participant's behalf.  An applicant or participant has the right 
        to be assisted or represented by an authorized representative in 
        eligibility determinations, recertification, conciliation 
        conferences, the fair hearing process, and any other contacts 
        with the county agency or the department.  When a county agency 
        determines that it is necessary for a person to assist an 
        applicant or participant, the county agency must designate a 
        staff member to assist the applicant or participant.  Upon a 
        request from an applicant or participant, a county agency must 
        provide addresses and telephone numbers of organizations that 
        provide legal services at low cost or no cost to low-income 
        persons. 
           Subd. 3.  [RIGHT OF APPLICANT TO NOTICE.] A county agency 
        must notify an applicant of the disposition of the applicant's 
        application.  The notice must be in writing and on forms 
        prescribed by the commissioner.  The county agency must mail the 
        notice to the last known mailing address provided by the 
        applicant.  When an application is denied, the county agency 
        must notify the applicant in writing of the reasons for the 
        denial, of the right to appeal, and of the right to reapply for 
        assistance. 
           Subd. 4.  [PARTICIPANT'S RIGHT TO NOTICE.] A county agency 
        must give a participant written notice of all adverse actions 
        affecting the participant including payment reductions, 
        suspensions, terminations, and use of protective, vendor, or 
        two-party payments.  The notice of adverse action must be on a 
        form prescribed or approved by the commissioner and must be 
        mailed to the last known mailing address provided by the 
        participant.  The county agency must state on the notice of 
        adverse action the action it intends to take, the reasons for 
        the action, the participant's right to appeal the action, the 
        conditions under which assistance can be continued pending an 
        appeal decision, and the related consequences of the action. 
           Subd. 5.  [MAILING OF NOTICE.] The notice of adverse action 
        shall be issued according to paragraphs (a) to (c). 
           (a) A county agency shall mail a notice of adverse action 
        at least ten days before the effective date of the adverse 
        action, except as provided in paragraphs (b) and (c). 
           (b) A county agency must mail a notice of adverse action at 
        least five days before the effective date of the adverse action 
        when the county agency has factual information that requires an 
        action to reduce, suspend, or terminate assistance based on 
        probable fraud. 
           (c) A county agency shall mail a notice of adverse action 
        before or on the effective date of the adverse action when the 
        county agency: 
           (1) receives the caregiver's signed monthly MFIP-S 
        household report form that includes information that requires 
        payment reduction, suspension, or termination; 
           (2) is informed of the death of a participant or the payee; 
           (3) receives a signed statement from the caregiver that 
        assistance is no longer wanted; 
           (4) receives a signed statement from the caregiver that 
        provides information that requires the termination or reduction 
        of assistance; 
           (5) verifies that a member of the assistance unit is absent 
        from the home and does not meet temporary absence provisions in 
        section 256J.13; 
           (6) verifies that a member of the assistance unit has 
        entered a regional treatment center or a licensed residential 
        facility for medical or psychological treatment or 
        rehabilitation; 
           (7) verifies that a member of an assistance unit has been 
        placed in foster care, and the provisions of section 256J.13, 
        subdivision 2, paragraph (b), do not apply; 
           (8) verifies that a member of an assistance unit has been 
        approved to receive assistance by another state; or 
           (9) cannot locate a caregiver. 
           Subd. 6.  [APPEAL RIGHTS.] An applicant, participant, or 
        former participant has the right to request a fair hearing when 
        aggrieved by an action or inaction of a county agency.  A 
        request for a fair hearing and rights pending a fair hearing are 
        set as specified in section 256J.40. 
           Subd. 7.  [CASE RECORDS AVAILABLE.] A county agency must 
        make financial case records available to the participant or 
        former participant as soon as possible but no later than the 
        fifth business day following the date of the request.  When the 
        participant or former participant asks for photocopies of 
        material from the financial case record, the county agency must 
        provide one copy of each page at no cost. 
           Subd. 8.  [RIGHT TO MANAGE AFFAIRS.] Except for protective 
        payment provisions authorized under section 256J.39, 
        participants have the right to manage their own affairs. 
           Subd. 9.  [RIGHT TO PROTECTION.] Minor caregivers have the 
        right to protection.  The county agency must refer a minor 
        caregiver to the social service unit within 30 days of the date 
        the application is approved.  The social service unit must 
        assist the caregiver who is less than 18 years of age to develop 
        a plan as specified in section 256J.54. 
           Subd. 10.  [PROTECTION FROM GARNISHMENT.] MFIP-S grants or 
        earnings of a caregiver while participating in full or part-time 
        employment or training shall be protected from garnishment.  
        This protection for earnings shall extend for a period of six 
        months from the date of termination from MFIP-S. 
           Subd. 11.  [RESPONSIBILITY TO RETAIN CASE RECORDS.] The 
        county agency must retain financial case records and employment 
        and training service records for MFIP-S cases according to 
        chapter 13. 
           Sec. 20.  [256J.315] [COUNTY AND TRIBAL COOPERATION.] 
           The county agency must cooperate with tribal governments in 
        the implementation of MFIP-S to ensure that the program meets 
        the special needs of persons living on Indian reservations.  
        This cooperation must include, but is not limited to, the 
        sharing of MFIP-S duties including initial screening, 
        orientation, assessments, and provision of employment and 
        training services.  The county agency shall encourage tribal 
        governments to assume duties related to MFIP-S and shall work 
        cooperatively with tribes that have assumed responsibility for a 
        portion of the MFIP-S program to expand tribal responsibilities, 
        if that expansion is requested by the tribe. 
           Sec. 21.  [256J.32] [DOCUMENTING, VERIFYING, AND 
        RECERTIFYING ELIGIBILITY.] 
           Subdivision 1.  [VERIFICATION OF INFORMATION.] A county 
        agency must only require verification of information necessary 
        to determine MFIP-S eligibility and the amount of the assistance 
        payment. 
           Subd. 2.  [DOCUMENTATION.] The applicant or participant 
        must document the information required under subdivisions 4 to 6 
        or authorize the county agency to verify the information.  The 
        applicant or participant has the burden of providing documentary 
        evidence to verify eligibility.  The county agency shall assist 
        the applicant or participant in obtaining required documents 
        when the applicant or participant is unable to do so.  When an 
        applicant or participant and the county agency are unable to 
        obtain documents needed to verify information, the county agency 
        may accept an affidavit from an applicant or participant as 
        sufficient documentation. 
           Subd. 3.  [CONTACTING THIRD PARTIES.] A county agency must 
        not request information about an applicant or participant that 
        is not of public record from a source other than county 
        agencies, the department, or the United States Department of 
        Health and Human Services without the person's prior written 
        consent.  An applicant's signature on an application form 
        constitutes consent for contact with the sources specified on 
        the application.  A county agency may use a single consent form 
        to contact a group of similar sources, such as banks or 
        insurance agencies, but the sources to be contacted must be 
        identified by the county agency prior to requesting an 
        applicant's consent. 
           Subd. 4.  [FACTORS TO BE VERIFIED.] The county agency shall 
        verify the following at application: 
           (1) identity of adults; 
           (2) presence of the minor child in the home, if 
        questionable; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; 
           (4) age, if necessary to determine MFIP-S eligibility; 
           (5) immigration status; 
           (6) social security number in accordance with the 
        requirements of section 256J.30, subdivision 12; 
           (7) income; 
           (8) self-employment expenses used as a deduction; 
           (9) source and purpose of deposits and withdrawals from 
        business accounts; 
           (10) spousal support and child support payments made to 
        persons outside the household; 
           (11) real property; 
           (12) vehicles; 
           (13) checking and savings accounts; 
           (14) savings certificates, savings bonds, stocks, and 
        individual retirement accounts; 
           (15) pregnancy, if related to eligibility; 
           (16) inconsistent information, if related to eligibility; 
           (17) medical insurance; 
           (18) anticipated graduation date of an 18-year-old; 
           (19) burial accounts; 
           (20) school attendance, if related to eligibility; and 
           (21) residence. 
           Subd. 5.  [VERIFICATION OF IMMIGRATION STATUS.] An 
        applicant's written authorization is required before the county 
        agency contacts the Immigration and Naturalization Service to 
        verify immigration status under subdivision 4, clause (5).  
        However, refusal to provide such authorization is grounds for a 
        finding of ineligibility if the applicant fails to produce proof 
        of eligible immigration status.  
           Subd. 5a.  [INCONSISTENT INFORMATION.] When the county 
        agency verifies inconsistent information under subdivision 4, 
        clause (16), or under subdivision 6, clause (4), the reason for 
        verifying the information must be documented in the financial 
        case record. 
           Subd. 6.  [RECERTIFICATION.] The county agency shall 
        recertify eligibility in an annual face-to-face interview with 
        the participant and verify the following: 
           (1) presence of the minor child in the home, if 
        questionable; 
           (2) income, including self-employment expenses used as a 
        deduction or deposits or withdrawals from business accounts; 
           (3) assets when the value is within $200 of the asset 
        limit; and 
           (4) inconsistent information, if related to eligibility.  
           Sec. 22.  [256J.33] [PROSPECTIVE AND RETROSPECTIVE 
        DETERMINATION OF MFIP-S ELIGIBILITY.] 
           Subdivision 1.  [DETERMINATION OF ELIGIBILITY.] A county 
        agency must determine MFIP-S eligibility prospectively for a 
        payment month based on retrospectively assessing income and the 
        county agency's best estimate of the circumstances that will 
        exist in the payment month. 
           Except as described in section 256J.34, subdivision 1, when 
        prospective eligibility exists, a county agency must calculate 
        the amount of the assistance payment using retrospective 
        budgeting.  To determine MFIP-S eligibility and the assistance 
        payment amount, a county agency must apply countable income, 
        described in section 256J.37, subdivisions 3 to 10, received by 
        members of an assistance unit or by other persons whose income 
        is counted for the assistance unit, described under sections 
        256J.21 and 256J.37, subdivisions 1 and 2. 
           This income must be applied to the transitional standard or 
        family wage standard subject to this section and sections 
        256J.34 to 256J.36.  Income received in a calendar month and not 
        otherwise excluded under section 256J.21, subdivision 2, must be 
        applied to the needs of an assistance unit. 
           Subd. 2.  [PROSPECTIVE ELIGIBILITY.] A county agency must 
        determine whether the eligibility requirements that pertain to 
        an assistance unit, including those in sections 256J.11 to 
        256J.15 and 256J.20, will be met prospectively for the payment 
        month.  Except for the provisions in section 256J.34, 
        subdivision 1, the income test will be applied retrospectively. 
           Subd. 3.  [RETROSPECTIVE ELIGIBILITY.] After the first two 
        months of MFIP-S eligibility, a county agency must continue to 
        determine whether an assistance unit is prospectively eligible 
        for the payment month by looking at all factors other than 
        income and then determine whether the assistance unit is 
        retrospectively income eligible by applying the monthly income 
        test to the income from the budget month.  When the monthly 
        income test is not satisfied, the assistance payment must be 
        suspended when ineligibility exists for one month or ended when 
        ineligibility exists for more than one month. 
           Subd. 4.  [MONTHLY INCOME TEST.] A county agency must apply 
        the monthly income test retrospectively for each month of MFIP-S 
        eligibility.  An assistance unit is not eligible when the 
        countable income equals or exceeds the transitional standard or 
        the family wage level for the assistance unit.  The income 
        applied against the monthly income test must include: 
           (1) gross earned income from employment, prior to mandatory 
        payroll deductions, voluntary payroll deductions, wage 
        authorizations, and after the disregards in section 256J.21, 
        subdivision 3, and the allocations in section 256J.36, unless 
        the employment income is specifically excluded under section 
        256J.21, subdivision 2; 
           (2) gross earned income from self-employment less 
        deductions for self-employment expenses in section 256J.37, 
        subdivision 5, but prior to any reductions for personal or 
        business state and federal income taxes, personal FICA, personal 
        health and life insurance, and after the disregards in section 
        256J.21, subdivision 3, and the allocations in section 256J.36; 
           (3) unearned income after deductions for allowable expenses 
        in section 256J.37, subdivision 9, and allocations in section 
        256J.36, unless the income has been specifically excluded in 
        section 256J.21, subdivision 2; 
           (4) gross earned income from employment as determined under 
        clause (1) which is received by a member of an assistance unit 
        who is a minor child or minor caregiver and less than a 
        half-time student; 
           (5) child support and spousal support received or 
        anticipated to be received by an assistance unit; 
           (6) the income of a parent when that parent is not included 
        in the assistance unit; 
           (7) the income of an eligible relative and spouse who seek 
        to be included in the assistance unit; and 
           (8) the unearned income of a minor child included in the 
        assistance unit. 
           Subd. 5.  [WHEN TO TERMINATE ASSISTANCE.] When an 
        assistance unit is ineligible for MFIP-S assistance for two 
        consecutive months, the county agency must terminate MFIP-S 
        assistance. 
           Sec. 23.  [256J.34] [CALCULATING PAYMENTS; SIGNIFICANT 
        CHANGE; INCOME AVERAGING.] 
           Subdivision 1.  [PROSPECTIVE BUDGETING.] A county agency 
        must use prospective budgeting to calculate the assistance 
        payment amount for the first two months for an applicant who has 
        not received assistance in this state for at least one payment 
        month preceding the first month of payment under a current 
        application.  Prospective budgeting is not subject to 
        overpayments or underpayments unless fraud is determined under 
        section 256.98. 
           (a) The county agency must apply the income received or 
        anticipated in the first month of MFIP-S eligibility against the 
        need of the first month.  The county agency must apply the 
        income received or anticipated in the second month against the 
        need of the second month. 
           (b) When the assistance payment for any part of the first 
        two months is based on anticipated income, the county agency 
        must base the initial assistance payment amount on the 
        information available at the time the initial assistance payment 
        is made. 
           (c) The county agency must determine the assistance payment 
        amount for the first two months of MFIP-S eligibility by 
        budgeting both recurring and nonrecurring income for those two 
        months. 
           (d) The county agency must budget the child support income 
        received or anticipated to be received by an assistance unit to 
        determine the assistance payment amount from the month of 
        application through the date in which MFIP-S eligibility is 
        determined and assistance is authorized.  Child support income 
        which has been budgeted to determine the assistance payment in 
        the initial two months is considered nonrecurring income.  An 
        assistance unit must forward any payment of child support to the 
        child support enforcement unit of the county agency following 
        the date in which assistance is authorized. 
           Subd. 2.  [RETROSPECTIVE BUDGETING.] The county agency must 
        use retrospective budgeting to calculate the monthly assistance 
        payment amount after the payment for the first two months has 
        been made under subdivision 1. 
           Subd. 3.  [ADDITIONAL USES OF RETROSPECTIVE 
        BUDGETING.] Notwithstanding subdivision 1, the county agency 
        must use retrospective budgeting to calculate the monthly 
        assistance payment amount for the first two months under 
        paragraphs (a) and (b). 
           (a) The county agency must use retrospective budgeting to 
        determine the amount of the assistance payment in the first two 
        months of MFIP-S eligibility: 
           (1) when an assistance unit applies for assistance for the 
        same month for which assistance has been interrupted, the 
        interruption in eligibility is less than one payment month, the 
        assistance payment for the preceding month was issued in this 
        state, and the assistance payment for the immediately preceding 
        month was determined retrospectively; or 
           (2) when a person applies in order to be added to an 
        assistance unit, that assistance unit has received assistance in 
        this state for at least the two preceding months, and that 
        person has been living with and has been financially responsible 
        for one or more members of that assistance unit for at least the 
        two preceding months. 
           (b) Except as provided in clauses (1) to (4), the county 
        agency must use retrospective budgeting and apply income 
        received in the budget month by an assistance unit and by a 
        financially responsible household member who is not included in 
        the assistance unit against the appropriate transitional or 
        family wage level standard to determine the assistance payment 
        to be issued for the payment month. 
           (1) When a source of income ends prior to the third payment 
        month, that income is not considered in calculating the 
        assistance payment for that month.  When a source of income ends 
        prior to the fourth payment month, that income is not considered 
        when determining the assistance payment for that month. 
           (2) When a member of an assistance unit or a financially 
        responsible household member leaves the household of the 
        assistance unit, the income of that departed household member is 
        not budgeted retrospectively for any full payment month in which 
        that household member does not live with that household and is 
        not included in the assistance unit. 
           (3) When an individual is removed from an assistance unit 
        because the individual is no longer a minor child, the income of 
        that individual is not budgeted retrospectively for payment 
        months in which that individual is not a member of the 
        assistance unit, except that income of an ineligible child in 
        the household must continue to be budgeted retrospectively 
        against the child's needs when the parent or parents of that 
        child request allocation of their income against any unmet needs 
        of that ineligible child. 
           (4) When a person ceases to have financial responsibility 
        for one or more members of an assistance unit, the income of 
        that person is not budgeted retrospectively for the payment 
        months which follow the month in which financial responsibility 
        ends. 
           Subd. 4.  [SIGNIFICANT CHANGE IN GROSS INCOME.] The county 
        agency must recalculate the assistance payment when an 
        assistance unit experiences a significant change, as defined in 
        section 256J.08, resulting in a reduction in the gross income 
        received in the payment month from the gross income received in 
        the budget month.  The county agency must issue a supplemental 
        assistance payment based on the county agency's best estimate of 
        the assistance unit's income and circumstances for the payment 
        month.  Budget adjustments that result from significant changes 
        are limited to two in a 12-month period regardless of the reason 
        for the change.  Budget adjustments due to a significant change 
        in the amount of direct support received must not be made after 
        the date the assistance unit is required to forward support to 
        the child support enforcement unit under subdivision 1, 
        paragraph (d). 
           Subd. 5.  [INCOME AVERAGING FOR PARTICIPANTS PAID WEEKLY OR 
        BIWEEKLY.] For the purposes of stabilizing assistance payments, 
        the county agency may average income for participants paid 
        weekly or biweekly.  Monthly income may be computed by adding 
        income from all paychecks, dividing the sum by the number of 
        paychecks, and multiplying the results by 4.3 if paychecks are 
        weekly or 2.16 if paychecks are biweekly.  The county agency may 
        not use income averaging unless discussed with the participant 
        and requested by the participant. 
           Sec. 24.  [256J.35] [AMOUNT OF ASSISTANCE PAYMENT.] 
           Except as provided in paragraphs (a) to (c), the amount of 
        an assistance payment is equal to the difference between the 
        transitional standard or the family wage level in section 
        256J.24 and countable income. 
           (a) When MFIP-S eligibility exists for the month of 
        application, the amount of the assistance payment for the month 
        of application must be prorated from the date of application or 
        the date all other eligibility factors are met for that 
        applicant, whichever is later.  This provision applies when an 
        applicant loses at least one day of MFIP-S eligibility. 
           (b) MFIP-S overpayments to an assistance unit must be 
        recouped according to section 256J.38, subdivision 4. 
           (c) An initial assistance payment must not be made to an 
        applicant who is not eligible on the date payment is made. 
           Sec. 25.  [256J.36] [ALLOCATION FOR UNMET NEED OF OTHER 
        HOUSEHOLD MEMBERS.] 
           Except as prohibited in paragraphs (a) and (b), an 
        allocation of income is allowed to meet the unmet need of an 
        ineligible spouse or an ineligible child under the age of 21 for 
        whom the caregiver is financially responsible who also lives 
        with the caregiver.  An allocation is allowed from the 
        caregiver's income to meet the need of an ineligible or excluded 
        person.  That allocation is allowed in an amount up to the 
        difference between the MFIP-S family allowance for the 
        assistance unit when that excluded or ineligible person is 
        included in the assistance unit and the MFIP-S family allowance 
        for the assistance unit when the excluded or ineligible person 
        is not included in the assistance unit.  These allocations must 
        be deducted from the caregiver's counted earnings and from 
        unearned income subject to paragraphs (a) and (b). 
           (a) Income of a minor child in the assistance unit must not 
        be allocated to meet the need of a person who is not a member of 
        the assistance unit, including the child's parent, even when 
        that parent is the payee of the child's income. 
           (b) Income of an assistance unit must not be allocated to 
        meet the needs of a person ineligible for failure to cooperate 
        with program requirements including child support requirements, 
        a person ineligible due to fraud, or a relative caregiver and 
        the caregiver's spouse who opt out of the assistance unit. 
           Sec. 26.  [256J.37] [TREATMENT OF INCOME AND LUMP SUMS.] 
           Subdivision 1.  [DEEMED INCOME FROM INELIGIBLE HOUSEHOLD 
        MEMBERS.] The income of ineligible household members must be 
        deemed after allowing the following disregards: 
           (1) the first 18 percent of the excluded family member's 
        gross earned income; 
           (2) amounts the ineligible person actually paid to 
        individuals not living in the same household but whom the 
        ineligible person claims as dependents for determining federal 
        personal income tax liability; 
           (3) child or spousal support paid to a person who lives 
        outside of the household; and 
           (4) an amount for the needs of other persons who live in 
        the household but are not included in the assistance unit and 
        are or could be claimed by an ineligible person as dependents 
        for determining federal personal income tax liability.  This 
        amount is equal to the difference between the MFIP-S need 
        standard when the excluded person is included in the assistance 
        unit and the MFIP-S need standard when the excluded person is 
        not included in the assistance unit. 
           Subd. 2.  [DEEMED INCOME AND ASSETS OF SPONSOR OF 
        NONCITIZENS.] All income and assets of a sponsor, or sponsor's 
        spouse, who executed an affidavit of support for a noncitizen 
        must be deemed to be unearned income of the noncitizen as 
        specified in the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 and subsequently set out in federal 
        rules. 
           Subd. 3.  [EARNED INCOME OF WAGE, SALARY, AND CONTRACTUAL 
        EMPLOYEES.] The county agency must include gross earned income 
        less any disregards in the initial and monthly income test.  
        Gross earned income received by persons employed on a 
        contractual basis must be prorated over the period covered by 
        the contract even when payments are received over a lesser 
        period of time. 
           Subd. 4.  [SELF-EMPLOYMENT.] Self-employed individuals are 
        those who are responsible for their own work schedule and do not 
        have coverage under an employer's liability insurance or 
        workers' compensation.  Self-employed individuals generally work 
        for themselves rather than an employer.  However, individuals 
        employed in some types of services may be self-employed even if 
        they have an employer or work out of another's business 
        location.  For example, real estate sales people, individuals 
        who work for commission sales, manufacturer's representatives, 
        and independent contractors may be self-employed.  Self-employed 
        individuals may or may not have FICA deducted from the check 
        issued to them by an employer or another party. 
           Self-employed individuals may own a business singularly or 
        in partnership.  Individuals operating more than one 
        self-employment business may use the loss from one business to 
        offset self-employment income from another business.  A loss 
        from a self-employment business may not offset income earned 
        under subdivision 3. 
           Subd. 5.  [SELF-EMPLOYMENT EARNINGS.] The county agency 
        must determine self-employment income according to the following:
           (a) Subtract allowable business expenses from total gross 
        receipts.  Allowable business expenses include: 
           (1) interest on mortgages and loans; 
           (2) employee wages, except for persons who are part of the 
        assistance unit or whose income is deemed to the participant; 
           (3) FICA funds paid on employees' wages, payment of 
        employee workers' compensation, and reemployment insurance; 
           (4) livestock and veterinary or breeding fees; 
           (5) raw material; 
           (6) seed and fertilizer; 
           (7) maintenance and repairs that are not capital 
        expenditures; 
           (8) tax return preparation fees; 
           (9) license fees, professional fees, franchise fees, and 
        professional dues; 
           (10) tools and supplies that are not capital expenditures; 
           (11) fuel and transportation expenses other than fuel costs 
        covered by the flat rate transportation deduction; 
           (12) advertising costs; 
           (13) meals eaten when required to be away from the local 
        work site; 
           (14) property expenses such as rent, insurance, taxes, and 
        utilities; 
           (15) postage; 
           (16) purchase cost of inventory at time of sale; 
           (17) loss from another self-employment business; 
           (18) attorney fees allowed by the Internal Revenue Service; 
        and 
           (19) tuition for classes necessary to maintain or improve 
        job skills or required by law to maintain job status or salary 
        as allowed by the Internal Revenue Service. 
           (b) The county agency shall not allow a deduction for the 
        following expenses: 
           (1) purchases of capital assets; 
           (2) payments on the principals of loans for capital assets; 
           (3) depreciation; 
           (4) amortization; 
           (5) the wholesale costs of items purchased, processed, or 
        manufactured which are unsold inventory; 
           (6) transportation costs that exceed the maximum standard 
        mileage rate allowed for use of a personal car in the Internal 
        Revenue Code; 
           (7) costs, in any amount, for mileage between an 
        applicant's or participant's home and place of employment; 
           (8) salaries and other employment deductions made for 
        members of an assistance unit or persons who live in the 
        household for whom an employer is legally responsible; 
           (9) monthly expenses in excess of $71 for each roomer; 
           (10) monthly expenses in excess of the Thrifty Food Plan 
        amount for one person for each boarder.  For purposes of this 
        clause and clause (11), "Thrifty Food Plan" has the meaning 
        given it in Code of Federal Regulations; 
           (11) monthly expenses in excess of the roomer rate plus the 
        Thrifty Food Plan amount for one person for each 
        roomer-boarder.  If there is more than one boarder or 
        roomer-boarder, use the total number of boarders as the unit 
        size to determine the Thrifty Food Plan amount; 
           (12) an amount greater than actual expenses or two percent 
        of the estimated market value on a county tax assessment form, 
        whichever is greater, as a deduction for upkeep and repair 
        against rental income; 
           (13) expenses not allowed by the Internal Revenue Code; 
           (14) expenses in excess of 60 percent of gross receipts for 
        in-home child care unless a higher amount can be documented; and 
           (15) expenses that are reimbursed under the child and adult 
        care food program as authorized under the National School Lunch 
        Act, United States Code, title 42. 
           Subd. 6.  [SELF-EMPLOYMENT BUDGET PERIOD.] The 
        self-employment budget period begins in the month of application 
        or in the first month of self-employment.  Gross receipts must 
        be budgeted in the month received.  Expenses must be budgeted 
        against gross receipts in the month the expenses are paid, 
        except for paragraphs (a) to (c). 
           (a) The purchase cost of inventory items, including 
        materials which are processed or manufactured, must be deducted 
        as an expense at the time payment is received for the sale of 
        the inventory items. 
           (b) A 12-month rolling average based on clauses (1) to (3) 
        must be used to budget monthly income. 
           (1) For a business in operation for at least 12 months, the 
        county agency shall use the average monthly self-employment 
        income from the most current income tax report for the 12 months 
        before the month of application.  The county agency shall 
        determine a new monthly average by adding in the actual 
        self-employment income and expenses from the previous month and 
        dropping the first month from the averaging period. 
           (2) For a business in operation for less than 12 months, 
        the county agency shall compute the average for the number of 
        months the business has been in operation to determine a monthly 
        average.  When data are available for 12 or more months, average 
        monthly self-employment income is determined under clause (1). 
           (3) If the business undergoes a major change, the county 
        agency shall compute a new rolling average beginning with the 
        first month of the major change.  For the purpose of this 
        clause, major change means a change that affects the nature and 
        scale of the business and is not merely the result of normal 
        business fluctuations. 
           (c) For seasonal self-employment, the caregiver may choose 
        whether to use actual income in the month of receipt and 
        expenses in the month incurred or the rolling average method of 
        computation.  The choice must be made once per year at the time 
        of application or recertification.  For the purpose of this 
        paragraph, seasonal means working six or less months per year. 
           Subd. 7.  [FARM INCOME.] Farm income is the difference 
        between gross receipts and operating expenses.  The county 
        agency must not allow a deduction for expenses listed in 
        subdivision 5, paragraph (b).  Gross receipts include sales, 
        rents, subsidies, soil conservation payments, production derived 
        from livestock, and income from home-produced food.  
           Subd. 8.  [RENTAL INCOME.] The county agency must treat 
        income from rental property as earned or unearned income.  
        Income from rental property is unearned income unless the 
        assistance unit spends an average of ten hours per week on 
        maintenance or management of the property.  When the owner 
        spends more than ten hours per week on maintenance or repairs, 
        the earnings are considered self-employment earnings.  An amount 
        must be deducted for upkeep and repairs, as specified in 
        subdivision 5, paragraph (b), clause (12), real estate taxes, 
        insurance, utilities, and interest on principal payments.  When 
        the applicant or participant lives on the rental property, 
        expenses for upkeep, taxes, insurance, utilities, and interest 
        must be divided by the number of rooms to determine expense per 
        room and expenses deducted must be deducted only for the number 
        of rooms rented. 
           Subd. 9.  [UNEARNED INCOME.] (a) The county agency must 
        apply unearned income, including housing subsidies as in 
        paragraph (b), to the transitional standard.  When determining 
        the amount of unearned income, the county agency must deduct the 
        costs necessary to secure payments of unearned income.  These 
        costs include legal fees, medical fees, and mandatory deductions 
        such as federal and state income taxes. 
           (b) Effective July 1, 1998, the county agency shall count 
        $100 of the value of public and assisted rental subsidies 
        provided through the Department of Housing and Urban Development 
        (HUD) as unearned income.  The full amount of the subsidy must 
        be counted as unearned income when the subsidy is less than $100.
           Subd. 10.  [TREATMENT OF LUMP SUMS.] (a) The county agency 
        must treat lump-sum payments as earned or unearned income.  If 
        the lump-sum payment is included in the category of income 
        identified in subdivision 9, it must be treated as unearned 
        income.  A lump sum is counted as income in the month received 
        and budgeted either prospectively or retrospectively depending 
        on the budget cycle at the time of receipt.  When an individual 
        receives a lump-sum payment, that lump sum must be combined with 
        all other earned and unearned income received in the same budget 
        month, and it must be applied according to paragraphs (a) to (c).
        A lump sum may not be carried over into subsequent months.  Any 
        funds that remain in the third month after the month of receipt 
        are counted in the asset limit. 
           (b) For a lump sum received by an applicant during the 
        first two months, prospective budgeting is used to determine the 
        payment and the lump sum must be combined with other earned or 
        unearned income received and budgeted in that prospective month. 
           (c) For a lump sum received by a participant after the 
        first two months of MFIP-S eligibility, the lump sum must be 
        combined with other income received in that budget month, and 
        the combined amount must be applied retrospectively against the 
        applicable payment month. 
           (d) When a lump sum, combined with other income under 
        paragraphs (b) and (c), is less than the transitional standard 
        for the applicable payment month, the assistance payment must be 
        reduced according to the amount of the countable income.  When 
        the countable income is greater than the transitional standard 
        or the family wage standard, the assistance payment must be 
        suspended for the payment month. 
           Sec. 27.  [256J.38] [CORRECTION OF OVERPAYMENTS AND 
        UNDERPAYMENTS.] 
           Subdivision 1.  [SCOPE OF OVERPAYMENT.] When a participant 
        or former participant receives an overpayment due to agency, 
        client, or ATM error, or due to assistance received while an 
        appeal is pending and the participant or former participant is 
        determined ineligible for assistance or for less assistance than 
        was received, the county agency must recoup or recover the 
        overpayment under the conditions of this section. 
           Subd. 2.  [NOTICE OF OVERPAYMENT.] When a county agency 
        discovers that a participant or former participant has received 
        an overpayment for one or more months, the county agency must 
        notify the participant or former participant of the overpayment 
        in writing.  A notice of overpayment must specify the reason for 
        the overpayment, the authority for citing the overpayment, the 
        time period in which the overpayment occurred, the amount of the 
        overpayment, and the participant's or former participant's right 
        to appeal.  No limit applies to the period in which the county 
        agency is required to recoup or recover an overpayment according 
        to subdivisions 3 and 4. 
           Subd. 3.  [RECOVERING OVERPAYMENTS FROM FORMER 
        PARTICIPANTS.] A county agency must initiate efforts to recover 
        overpayments paid to a former participant.  Adults and minor 
        caregivers of an assistance unit at the time an overpayment 
        occurs, whether receiving assistance or not, are jointly and 
        individually liable for repayment of the overpayment.  The 
        county agency must request repayment from the former 
        participants.  When an agreement for repayment is not completed 
        within six months of the date of discovery or when there is a 
        default on an agreement for repayment after six months, the 
        county agency must initiate recovery consistent with chapter 
        270A, or section 541.05.  When a person has been convicted of 
        fraud under section 256.98, recovery must be sought regardless 
        of the amount of overpayment.  When an overpayment is less than 
        $35, and is not the result of a fraud conviction under section 
        256.98, the county agency must not seek recovery under this 
        subdivision.  The county agency must retain information about 
        all overpayments regardless of the amount.  When an adult or 
        minor caregiver reapplies for assistance, the overpayment must 
        be recouped under subdivision 4. 
           Subd. 4.  [RECOUPING OVERPAYMENTS FROM PARTICIPANTS.] A 
        participant may voluntarily repay, in part or in full, an 
        overpayment even if assistance is reduced under this 
        subdivision, until the total amount of the overpayment is 
        repaid.  When an overpayment occurs due to fraud, the county 
        agency must recover ten percent of the transitional standard or 
        the amount of the monthly assistance payment, whichever is 
        less.  When a nonfraud overpayment occurs, the county agency 
        must recover three percent of the transitional standard or the 
        amount of the monthly assistance payment, whichever is less.  
           Subd. 5.  [RECOVERING AUTOMATIC TELLER MACHINE ERRORS.] For 
        recipients receiving benefits via electronic benefit transfer, 
        if the overpayment is a result of an 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. 
           Subd. 6.  [SCOPE OF UNDERPAYMENTS.] A county agency must 
        issue a corrective payment for underpayments made to a 
        participant or to a person who would be a participant if an 
        agency or client error causing the underpayment had not occurred.
        The county agency must issue the corrective payment according to 
        subdivision 8. 
           Subd. 7.  [IDENTIFYING THE UNDERPAYMENT.] An underpayment 
        may be identified by a county agency, by a participant, by a 
        former participant, or by a person who would be a participant 
        except for agency or client error. 
           Subd. 8.  [ISSUING CORRECTIVE PAYMENTS.] A county agency 
        must correct an underpayment within seven calendar days after 
        the underpayment has been identified, by adding the corrective 
        payment amount to the monthly assistance payment of the 
        participant or by issuing a separate payment to a participant or 
        former participant, or by reducing an existing overpayment 
        balance.  When an underpayment occurs in a payment month and is 
        not identified until the next payment month or later, the county 
        agency must first subtract the underpayment from any overpayment 
        balance before issuing the corrective payment.  The county 
        agency must not apply an underpayment in a current payment month 
        against an overpayment balance.  When an underpayment in the 
        current payment month is identified, the corrective payment must 
        be issued within seven calendar days after the underpayment is 
        identified. 
           Subd. 9.  [APPEALS.] A participant may appeal an 
        underpayment, an overpayment, and a reduction in an assistance 
        payment made to recoup the overpayment under subdivision 4.  The 
        participant's appeal of each issue must be timely under section 
        256.045.  When an appeal based on the notice issued under 
        subdivision 2 is not timely, the fact or the amount of that 
        overpayment must not be considered as a part of a later appeal, 
        including an appeal of a reduction in an assistance payment to 
        recoup that overpayment. 
           Sec. 28.  [256J.39] [PAYMENT PROVISIONS; VENDOR PAYMENTS.] 
           Subdivision 1.  [PAYMENT POLICY.] The following policies 
        apply to monthly assistance payments and corrective payments: 
           (1) 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. 
           (2) The commissioner shall mail assistance payment checks 
        to the address where a caregiver lives unless the county agency 
        approves an alternate arrangement. 
           (3) The commissioner shall mail monthly assistance payment 
        checks within time to allow postal service delivery to occur no 
        later than the first day of each month.  Monthly assistance 
        payment checks must be dated the first day of the month.  The 
        commissioner shall issue electronic benefits transfer payments 
        so that caregivers have access to the payments no later than the 
        first of the month.  
           (4) The commissioner shall issue replacement checks 
        promptly, but no later than seven calendar days after the 
        provisions of sections 16A.46; 256.01, subdivision 11; and 
        471.415 have been met. 
           Subd. 2.  [PROTECTIVE AND VENDOR PAYMENTS.] Alternatives to 
        paying assistance directly to a participant may be used when: 
           (1) a county agency determines that a vendor payment is the 
        most effective way to resolve an emergency situation pertaining 
        to basic needs; 
           (2) a caregiver makes a written request to the county 
        agency asking that part or all of the assistance payment be 
        issued by protective or vendor payments for shelter and utility 
        service only.  The caregiver may withdraw this request in 
        writing at any time; 
           (3) a caregiver has exhibited a continuing pattern of 
        mismanaging funds as determined by the county agency; 
           (4) the vendor payment is part of a sanction under section 
        256J.46, subdivision 2; or 
           (5) the vendor payment is required under section 256J.24 or 
        256J.43. 
           The director of a county agency must approve a proposal for 
        protective or vendor payment for money mismanagement.  During 
        the time a protective or vendor payment is being made, the 
        county agency must provide services designed to alleviate the 
        causes of the mismanagement. 
           The continuing need for and method of payment must be 
        documented and reviewed every 12 months.  The director of a 
        county agency must approve the continuation of protective or 
        vendor payments. 
           When it appears that the need for protective or vendor 
        payments will continue or is likely to continue beyond two years 
        because the county agency's efforts have not resulted in 
        sufficiently improved use of assistance on behalf of the minor 
        child, judicial appointment of a legal guardian or other legal 
        representative must be sought by the county agency.  
           Subd. 3.  [CHOOSING PAYEES FOR PROTECTIVE OR VENDOR 
        PAYMENTS.] A county agency shall consult with a caregiver 
        regarding the selection of the form of payment, the selection of 
        a protective payee, and the distribution of the assistance 
        payment to meet the various costs incurred by the assistance 
        unit.  When choosing a protective payee, the county agency shall 
        notify the caregiver of a consultation date.  If the caregiver 
        fails to respond to the county agency's request for consultation 
        by the effective date on the notice, the county agency must 
        choose a protective payee for that payment month and subsequent 
        payment months until the caregiver responds to the agency's 
        request for consultation.  The county agency must notify the 
        caregiver of the right to appeal the determination that a 
        protective or vendor payment should be made or continued and to 
        appeal the selection of the payee.  If a county agency is not 
        able to find another protective payee, a county agency staff 
        member may serve as a protective payee.  The following persons 
        may not serve as protective payees:  a member of the county 
        board of commissioners; the county agency staff member 
        determining financial eligibility for the family; special 
        investigative or resource staff; the staff member handling 
        accounting or fiscal processes related to the participant; or a 
        landlord, grocer, or other vendor dealing directly with the 
        participant. 
           Subd. 4.  [DISCONTINUING PROTECTIVE OR VENDOR PAYMENTS.] A 
        county agency shall discontinue protective or vendor payments in 
        two years or in the month following the county agency's failure 
        to grant six-month approval to a money management plan, 
        whichever occurs first.  At least once every 12 months, a county 
        agency shall review the performance of a protective payee acting 
        under subdivision 2, clause (3), to determine whether a new 
        payee should be selected.  When a participant complains about 
        the performance of a protective payee, a review shall occur 
        within 30 calendar days. 
           Sec. 29.  [256J.395] [VENDOR PAYMENT OF RENT AND 
        UTILITIES.] 
           (a) Effective July 1, 1997, when a county is required to 
        provide assistance to a recipient in vendor form for rent and 
        utilities under chapter 256, 256D, 256J, or 256K, the cost of 
        utilities for a given family may be assumed to be: 
           (1) the average of the actual monthly cost of utilities for 
        that family for the prior 12 months at the family's current 
        residence, if applicable; 
           (2) the monthly plan amount, if any, set by the local 
        utilities for that family at the family's current residence; or 
           (3) the estimated monthly utility costs for the dwelling in 
        which the family currently resides. 
           (b) For purposes of this section, "utility" means any of 
        the following:  municipal water and sewer service; electric, 
        gas, or heating fuel service; or wood, if that is the heating 
        source. 
           (c) In any instance where a vendor payment for rent is 
        directed to a landlord not legally entitled to the payment, the 
        county social services agency shall immediately institute 
        proceedings to collect the amount of the vendored rent payment, 
        which shall be considered a debt under section 270A.03, 
        subdivision 5. 
           Sec. 30.  [256J.396] [SUPPORT FROM PARENTS OF MINOR 
        CAREGIVERS LIVING APART.] 
           Subdivision 1.  [GENERAL PROVISIONS.] A minor caregiver and 
        the minor's dependent child living outside of the home of the 
        adult parent must meet the criteria in section 256J.14, to be 
        eligible for assistance in the MFIP-S program.  A parent who 
        lives outside the home of a minor child who is an unemancipated 
        minor caregiver of an assistance unit is financially responsible 
        for that minor caregiver unless the parent is a recipient of 
        public assistance, SSI, MSA, medical assistance, general 
        assistance, or general assistance medical care, and a court 
        order does not otherwise provide a support obligation. 
           Subd. 2.  [AMOUNT OF SUPPORT PAYMENT.] The amount of 
        support to be paid by a parent, except a parent specified in 
        subdivision 4, must be determined according to paragraphs (a) to 
        (f). 
           (a) A minor caregiver must provide information required by 
        the county agency to identify the whereabouts of the minor 
        caregiver's absent parent or parents. 
           (b) A county agency must notify an absent parent of the 
        parent's legal responsibility to support a minor caregiver and 
        shall request that the absent parent provide the following: 
           (1) the amount of the parent's earned and unearned income 
        for the previous tax year; 
           (2) the amount of the parent's earned and unearned income 
        for the current month; 
           (3) the number and names of dependents who are claimed or 
        could be claimed by the parent on federal income tax forms; 
           (4) the amount of annual medical bills paid by the parent; 
           (5) the amount of annual housing costs paid by the parent; 
           (6) the costs for utilities and repairs to the home which 
        are paid by the parent; and 
           (7) the amount of annual educational costs for family 
        members paid by the parent. 
           (c) When a parent of a minor caregiver does not provide the 
        information requested under paragraph (b), the county agency 
        must refer the matter to the county attorney.  Assistance to the 
        minor caregiver must not be denied, delayed, reduced, or ended 
        because of the lack of cooperation of the minor caregiver's 
        parent. 
           (d) When the information requested under paragraph (b) is 
        received by a county agency, the county agency must compare the 
        parent's income against the scale set forth below using the 
        conditions and procedures specified in paragraph (e). 
                  Size of Family            Federal Poverty Guideline
                        1                          $ 9,288
                        2                           12,432
                        3                           15,576
                        4                           18,720
                        5                           21,864
        For each additional family member add $3,144. 
           (e) The parent's income is the parent's gross earned income 
        plus unearned income, determined by the methods in section 
        256J.21.  To determine family size, each person claimed or who 
        could be claimed by a parent as a dependent on federal income 
        tax forms, exclusive of the minor caregiver, must be included.  
        A deduction from income must be allowed for the amount that 
        medical, educational, and housing costs together exceed 30 
        percent of the parent's income.  When the amount of income, 
        after the allowable deduction, exceeds the annual income level 
        in paragraph (d), a parent is liable to pay one-third of the 
        excess for the annual support of the minor caregiver.  These 
        payments must be paid monthly to the minor caregiver or to the 
        county agency on behalf of the minor caregiver. 
           (f) A county agency must notify the parents of the minor 
        caregiver that they are liable for the amount of support 
        determined by the county agency as specified in paragraph (e).  
        When the support payment is received by the minor caregiver, it 
        must be treated as unearned income of the assistance unit.  When 
        the support payment is not received, or a lesser amount is 
        received in any payment month, the county agency must refer the 
        matter to the county attorney. 
           Subd. 3.  [REVIEWS.] A county agency must review financial 
        responsibility every 12 months until minor caregivers reach the 
        age of 18 or are otherwise emancipated.  When a parent reports a 
        change in circumstances, the county agency must review the 
        required amount of payment within ten calendar days. 
           Subd. 4.  [PARENTS UNDER COURT ORDER FOR SUPPORT.] A parent 
        who is required under an existing court order issued under some 
        other authority in state or federal law to pay child support for 
        a minor caregiver is subject to the conditions of that order in 
        lieu of the requirements and contribution levels in subdivision 
        2. 
           Sec. 31.  [256J.40] [FAIR HEARINGS.] 
           Caregivers receiving a notice of intent to sanction or a 
        notice of adverse action that includes a sanction, reduction in 
        benefits, suspension of benefits, denial of benefits, or 
        termination of benefits may request a fair hearing.  A request 
        for a fair hearing must be submitted in writing to the county 
        agency or to the commissioner and must be mailed within 30 days 
        after a participant or former participant receives written 
        notice of the agency's action or within 90 days when a 
        participant or former participant shows good cause for not 
        submitting the request within 30 days.  A former participant who 
        receives a notice of adverse action due to an overpayment may 
        appeal the adverse action according to the requirements in this 
        section.  Issues that may be appealed are: 
           (1) the amount of the assistance payment; 
           (2) a suspension, reduction, denial, or termination of 
        assistance; 
           (3) the basis for an overpayment, the calculated amount of 
        an overpayment, and the level of recoupment; 
           (4) the eligibility for an assistance payment; and 
           (5) the use of protective or vendor payments under section 
        256J.39, subdivision 2, clauses (1) to (3). 
           A county agency must not reduce, suspend, or terminate 
        payment when an aggrieved participant requests a fair hearing 
        prior to the effective date of the adverse action or within ten 
        days of the mailing of the notice of adverse action, whichever 
        is later, unless the participant requests in writing not to 
        receive continued assistance pending a hearing decision.  
        Assistance issued pending a fair hearing is subject to recovery 
        under section 256J.38 when as a result of the fair hearing 
        decision the participant is determined ineligible for assistance 
        or the amount of the assistance received.  A county agency may 
        increase or reduce an assistance payment while an appeal is 
        pending when the circumstances of the participant change and are 
        not related to the issue on appeal.  The commissioner's order is 
        binding on a county agency.  No additional notice is required to 
        enforce the commissioner's order. 
           A county agency shall reimburse appellants for reasonable 
        and necessary expenses of attendance at the hearing, such as 
        child care and transportation costs and for the transportation 
        expenses of the appellant's witnesses and representatives to and 
        from the hearing.  Reasonable and necessary expenses do not 
        include legal fees.  Fair hearings must be conducted at a 
        reasonable time and date by an impartial referee employed by the 
        department.  The hearing may be conducted by telephone or at a 
        site that is readily accessible to persons with disabilities. 
           The appellant may introduce new or additional evidence 
        relevant to the issues on appeal.  Recommendations of the 
        appeals referee and decisions of the commissioner must be based 
        on evidence in the hearing record and are not limited to a 
        review of the county agency action.  
           Sec. 32.  [256J.42] [60-MONTH TIME LIMIT.] 
           Subdivision 1.  [TIME LIMIT.] (a) An assistance unit in 
        which any adult caregiver has received 60 months of cash 
        assistance funded in whole or in part by the TANF block grant, 
        MFIP-S, AFDC, or family general assistance, funded in whole or 
        in part by state appropriations, is ineligible to receive MFIP-S.
        Any cash assistance funded with TANF dollars, or MFIP-S 
        assistance funded in whole or in part by state appropriations, 
        that was received by the unit on or after the date TANF was 
        implemented, including any assistance received in states of 
        prior residence, counts toward the 60-month limitation.  The 
        60-month limit applies to a minor who is the head of a household 
        or who is married to the head of a household.  The 60-month time 
        period does not need to be consecutive months for this provision 
        to apply.  
           (b) Months before July 1998 in which individuals receive 
        assistance as part of an MFIP, MFIP-R, or MFIP or MFIP-R 
        comparison group family under sections 256.031 to 256.0361 or 
        sections 256.047 to 256.048 are not included in the 60-month 
        time limit. 
           Subd. 2.  [ASSISTANCE FROM ANOTHER STATE.] An individual 
        whose needs have been otherwise provided for in another state, 
        in whole or in part by the TANF block grant during a month, is 
        ineligible to receive MFIP-S for the month. 
           Subd. 3.  [ADULTS LIVING ON AN INDIAN RESERVATION.] In 
        determining the number of months for which an adult has received 
        assistance under MFIP-S, the county agency must disregard any 
        month during which the adult lived on an Indian reservation if, 
        during the month:  
           (1) at least 1,000 individuals were living on the 
        reservation; and 
           (2) at least 50 percent of the adults living on the 
        reservation were unemployed. 
           Subd. 4.  [VICTIMS OF DOMESTIC VIOLENCE.] Any cash 
        assistance received by an assistance unit in a month when a 
        caregiver is complying with a safety plan under the MFIP-S 
        employment and training component does not count toward the 
        60-month limitation on assistance. 
           Subd. 5.  [EXEMPTION FOR CERTAIN FAMILIES.] (a) Any cash 
        assistance received by an assistance unit does not count toward 
        the 60-month limit on assistance during a month in which the 
        parental caregiver is in the category in section 256J.56, clause 
        (1).  The exemption applies for the period of time the caregiver 
        belongs to one of the categories specified in this subdivision. 
           (b) Any cash assistance received by a caregiver who is 
        complying with the requirements of sections 256J.14 and 256J.54, 
        if applicable, does not count towards the 60-month limit on 
        assistance. 
           Sec. 33.  [256J.43] [INTERSTATE PAYMENT STANDARDS.] 
           (a) Effective July 1, 1997, the amount of assistance paid 
        to an eligible family in which all members have resided in this 
        state for fewer than 12 calendar months immediately preceding 
        the date of application shall be the lesser of either the 
        payment standard that would have been received by the family 
        from the state of immediate prior residence, or the amount 
        calculated in accordance with AFDC or MFIP-S standards.  The 
        lesser payment must continue until the family meets the 12-month 
        requirement.  Payment must be calculated by applying this 
        state's budgeting policies, and the unit's net income must be 
        deducted from the payment standard in the other state or in this 
        state, whichever is lower.  Payment shall be made in vendor form 
        for rent and utilities, up to the limit of the grant amount, and 
        residual amounts, if any, shall be paid directly to the 
        assistance unit. 
           (b) During the first 12 months a family resides in this 
        state, the number of months that a family is eligible to receive 
        AFDC or MFIP-S benefits is limited to the number of months the 
        family would have been eligible to receive similar benefits in 
        the state of immediate prior residence. 
           (c) This policy applies whether or not the family received 
        similar benefits while residing in the state of previous 
        residence. 
           (d) When a family moves to this state from another state 
        where the family has exhausted that state's time limit for 
        receiving benefits under that state's TANF program, the family 
        will not be eligible to receive any AFDC or MFIP-S benefits in 
        this state for 12 months from the date the family moves here. 
           (e) For the purposes of this section, "state of immediate 
        prior residence" means: 
           (1) the state in which the applicant declares the applicant 
        spent the most time in the 30 days prior to moving to this 
        state; or 
           (2) the state in which an applicant who is a migrant worker 
        maintains a home. 
           (f) The commissioner shall annually verify and update all 
        other states' payment standards as they are to be in effect in 
        July of each year. 
           (g) Applicants must provide verification of their state of 
        immediate prior residence, in the form of tax statements, a 
        driver's license, automobile registration, rent receipts, or 
        other forms of verification approved by the commissioner. 
           (h) Migrant workers, as defined in section 256J.08, and 
        their immediate families are exempt from this section, provided 
        the migrant worker provides verification that the migrant family 
        worked in this state within the last 12 months and earned at 
        least $1,000 in gross wages during the time the migrant worker 
        worked in this state. 
           Sec. 34.  [256J.44] [INITIAL SCREENING OF MFIP-S 
        APPLICANT.] 
           Subdivision 1.  [SCREENING.] The county agency, or at 
        county option, the county's employment and training service 
        provider as defined in section 256J.49, must screen each 
        applicant to determine immediate needs and to determine if the 
        applicant may be eligible for: 
           (1) another program that is not partially funded through 
        the federal temporary assistance to needy families block grant 
        under title I of Public Law Number 104-193, including the 
        expedited issuance of food stamps under section 256J.28, 
        subdivision 1.  If the applicant may be eligible for another 
        program, a county caseworker must provide the appropriate 
        referral to the program; 
           (2) the diversionary assistance program under section 
        256J.47; or 
           (3) the emergency assistance program under section 256J.48. 
           The applicant is required to attend the screening.  If the 
        applicant is not diverted from applying for MFIP-S under clauses 
        (1) to (3), and if the applicant meets the MFIP-S eligibility 
        requirements, then an orientation under section 256J.45 and an 
        initial assessment under section 256J.52 must be completed; or, 
        in the case of caregivers who are under the age of 20, a plan 
        under section 256J.54 must be completed. 
           Subd. 2.  [SUPPORT SERVICES TO ATTEND SCREENING AND 
        ORIENTATION.] Upon a caregiver's request, the county agency must 
        arrange for transportation and child care or reimburse 
        caregivers for transportation and child care expenses necessary 
        to enable caregivers to attend the initial screening under this 
        section and orientation under section 256J.51 if scheduled on a 
        day other than when the caregiver makes application for 
        assistance. 
           Sec. 35.  [256J.45] [ORIENTATION.] 
           Subdivision 1.  [COUNTY AGENCY TO PROVIDE ORIENTATION.] A 
        county agency must provide each MFIP-S caregiver with a 
        face-to-face orientation.  The caregiver must attend the 
        orientation.  The county agency must inform the caregiver that 
        failure to attend the orientation is considered a first 
        occurrence of noncompliance with program requirements, and will 
        result in the imposition of a sanction under section 256J.46. 
           Subd. 2.  [GENERAL INFORMATION.] The MFIP-S orientation 
        must consist of a presentation that informs caregivers of: 
           (1) the necessity to obtain immediate employment; 
           (2) the work incentives under MFIP-S; 
           (3) the requirement to comply with the employment plan and 
        other requirements of the employment and training services 
        component of MFIP-S; 
           (4) the consequences for failing to comply with the 
        employment plan and other program requirements; 
           (5) the rights, responsibilities, and obligations of 
        participants; 
           (6) the types and locations of child care services 
        available through the county agency; 
           (7) the availability and the benefits of the early 
        childhood health and developmental screening under sections 
        123.701 to 123.74; 
           (8) the caregiver's eligibility for transition year child 
        care assistance under section 119B.05; 
           (9) the caregiver's eligibility for extended medical 
        assistance when the caregiver loses eligibility for MFIP-S due 
        to increased earnings or increased child or spousal support; and 
           (10) the caregiver's option to choose an employment and 
        training provider and information about each provider, including 
        but not limited to, services offered, program components, job 
        placement rates, job placement wages, and job retention rates. 
           Sec. 36.  [256J.46] [SANCTIONS.] 
           Subdivision 1.  [SANCTIONS FOR PARTICIPANTS NOT COMPLYING 
        WITH PROGRAM REQUIREMENTS.] (a) A participant who fails without 
        good cause to comply with the requirements of this chapter, and 
        who is not subject to sanction under subdivision 2, shall be 
        subject to a sanction as provided in this subdivision.  A 
        sanction under this subdivision becomes effective ten days after 
        the required notice is given.  For purposes of this subdivision, 
        each month that a participant fails to comply with a requirement 
        of this chapter shall be considered a separate occurrence of 
        noncompliance.  A participant who has had one or more sanctions 
        imposed must remain in compliance with the provisions of this 
        chapter for six months in order for a subsequent occurrence of 
        noncompliance to be considered a first occurrence.  
           (b) Sanctions for noncompliance shall be imposed as follows:
           (1) For the first occurrence of noncompliance, the 
        participant's grant shall be reduced by ten percent of the 
        applicable transitional standard.  The reduction in the grant 
        amount must be in effect for a minimum of one month, and shall 
        be removed in the month following the month that the participant 
        returns to compliance. 
           (2) For a second or subsequent occurrence of noncompliance, 
        the participant's rent shall be vendor paid up to the amount of 
        the MFIP-S grant for which the participant's assistance unit is 
        eligible.  At county option, the participant's utilities may 
        also be vendor paid up to the amount of the MFIP-S grant 
        remaining after vendor payment of the participant's rent.  The 
        vendor payment of rent and, if in effect, utilities, must be in 
        effect for six months from the date that a sanction is imposed 
        under this clause.  The residual amount of the grant after 
        vendor payment, if any, must be reduced by an amount equal to 30 
        percent of the applicable transitional standard before the 
        residual is paid to the participant.  The reduction in the grant 
        amount must be in effect for a minimum of one month, and shall 
        be removed in the month following the month that the participant 
        returns to compliance.  The vendor payment of rent and, if 
        applicable, utilities, shall be removed six months after the 
        month in which the participant returns to compliance. 
           (c) No later than during the second month that a sanction 
        under paragraph (b), clause (2) is in effect, the participant's 
        case file must be reviewed to determine if: 
           (i) the continued noncompliance can be explained and 
        mitigated by providing a needed preemployment activity, as 
        defined in section 256J.49, subdivision 13, clause 16; 
           (ii) the participant qualifies for a good cause exception 
        under 256J.57; or 
           (iii) the participant qualifies for an exemption under 
        256J.56. 
           If the lack of an identified activity can explain the 
        noncompliance, the county must work with the participant to 
        provide the identified activity, and the county must restore the 
        participant's grant amount to the full amount for which the 
        assistance unit is eligible.  The grant must be restored 
        retroactively to the first day of the month in which the 
        participant was found to lack preemployment activities, or to 
        qualify for an exemption or good cause exception. 
           If the participant is found to qualify for a good cause 
        exception or an exemption, the county must restore the 
        participant's grant to the full amount for which the assistance 
        unit is eligible.  If the participant's grant is restored under 
        this paragraph, the vendor payment of rent and if applicable, 
        utilities, shall be removed six months after the month in which 
        the sanction was imposed and the county must consider a 
        subsequent occurrence of noncompliance to be a first occurrence. 
           Subd. 1a.  [TRANSITIONAL RULE; SANCTIONS FOR AFDC, FAMILY 
        GA, STRIDE, ACCESS, MFIP, OR MFIP-R RECIPIENTS.] For purposes of 
        determining a sanction under subdivision 1, for the first 
        occurrence of noncompliance with a provision of this chapter or 
        with section 256.741, if enacted, a recipient of assistance 
        under AFDC, family general assistance, STRIDE, ACCESS, MFIP, or 
        MFIP-R who was under a sanction in the month immediately 
        preceding the receipt of assistance under MFIP-S shall be 
        subject to sanction as provided in subdivision 1, paragraph (b), 
        clause (1).  The reduction in grant amount must be in effect for 
        a minimum of one month.  For a second or subsequent occurrence 
        of noncompliance, the sanction shall be as provided in 
        subdivision 1, paragraph (b), clause (2). 
           Subd. 2.  [SANCTIONS FOR REFUSAL TO COOPERATE WITH SUPPORT 
        REQUIREMENTS.] The grant of an MFIP-S caregiver who refuses to 
        cooperate, as determined by the child support enforcement 
        agency, with support requirements under section 256.741, if 
        enacted, shall be subject to sanction as specified in this 
        subdivision.  The assistance unit's grant must be reduced by 25 
        percent of the applicable transitional standard.  The residual 
        amount of the grant, if any, must be paid to the caregiver.  A 
        sanction under this subdivision becomes effective ten days after 
        the required notice is given.  The sanction must be in effect 
        for a minimum of one month, and shall be removed only when the 
        caregiver cooperates with the support requirements.  
           Subd. 2a.  [DUAL SANCTIONS.] (a) Notwithstanding the 
        provisions of subdivisions 1 and 2, for a participant subject to 
        a sanction for refusal to comply with child support requirements 
        under subdivision 2 and subject to a concurrent sanction for 
        refusal to cooperate with other program requirements under 
        subdivision 1, sanctions shall be imposed in the manner 
        prescribed in this subdivision. 
           A participant who has had one or more sanctions imposed 
        under this subdivision must remain in compliance with the 
        provisions of this chapter for six months in order for a 
        subsequent occurrence of noncompliance to be considered a first 
        occurrence.  Any vendor payment of rent or utilities under this 
        subdivision must remain in effect for six months after the month 
        in which the participant is no longer subject to sanction under 
        subdivision 1. 
           (b) If the participant was subject to sanction for: 
           (i) noncompliance under subdivision 1 before being subject 
        to sanction for noncooperation under subdivision 2; or 
           (ii) noncooperation under subdivision 2 before being 
        subject to sanction for noncompliance under subdivision 1; 
        the participant shall be sanctioned as provided in subdivision 
        1, paragraph (b), clause (2), and the requirement that the 
        county conduct a review as specified in subdivision 1, paragraph 
        (c), remains in effect. 
           (c) A participant who first becomes subject to sanction 
        under both subdivisions 1 and 2 in the same month is subject to 
        sanction as follows: 
           (i) in the first month of noncompliance and noncooperation, 
        the participant's grant must be reduced by 25 percent of the 
        applicable transitional standard, with any residual amount paid 
        to the participant; 
           (ii) in the second and subsequent months of noncompliance 
        and noncooperation, the participant shall be sanctioned as 
        provided in subdivision 1, paragraph (b), clause (2). 
           The requirement that the county conduct a review as 
        specified in subdivision 1, paragraph (c), remains in effect. 
           (d) A participant remains subject to sanction under 
        subdivision 2 if the participant: 
           (i) returns to compliance and is no longer subject to 
        sanction under subdivision 1; or 
           (ii) has the sanction under subdivision 1, paragraph (b), 
        removed upon completion of the review under subdivision 1, 
        paragraph (c). 
           A participant remains subject to sanction under subdivision 
        1, paragraph (b), if the participant cooperates and is no longer 
        subject to sanction under subdivision 2.  
           Sec. 37.  [256J.47] [DIVERSIONARY ASSISTANCE PROGRAM.] 
           Subdivision 1.  [ELIGIBILITY.] A family is eligible to 
        receive diversionary assistance once every 36 months if: 
           (1) a family member has resided in this state for at least 
        30 days; 
           (2) the caregiver provides verification that the caregiver 
        has either experienced an unexpected occurrence that makes it 
        impossible to retain or obtain employment or the caregiver has a 
        temporary loss of income, which is not due to refusing to accept 
        or terminating suitable employment as defined in section 
        256J.49, without good cause under section 256J.57, resulting in 
        an emergency; 
           (3) the caregiver is at risk of MFIP-S eligibility if 
        diversionary assistance is not provided and household income is 
        below 140 percent of the federal poverty guidelines; and 
           (4) the diversionary assistance will resolve the emergency 
        and divert the family from applying for MFIP-S. 
           For purposes of this section, diversionary assistance means 
        a one-time lump-sum payment to an individual or third-party 
        vendor to prevent long-term receipt of public assistance. 
           Subd. 2.  [COUNTY AGENCY DUTIES.] County agencies shall: 
           (1) thoroughly explain to the caregiver the consequences of 
        receiving diversionary assistance, specifically the resulting 
        period of ineligibility under subdivision 4 for other assistance 
        programs; and 
           (2) determine eligibility for diversionary assistance 
        within five working days of the receipt of the verification that 
        substantiates eligibility or ineligibility.  Verification means 
        client declaration and the best determination of the county 
        agency. 
           Subd. 3.  [MAXIMUM AMOUNT OF ASSISTANCE.] The maximum 
        amount of diversionary assistance that may be provided to a 
        family is equal to the amount of the MFIP-S transitional 
        standard for the same family size and composition for four 
        months.  The assistance provided under this program must be 
        based on the immediate needs of the family.  Counties must 
        strive to provide the most cost-effective solution to the 
        one-time emergency.  Diversionary assistance is not cost 
        effective if the family's anticipated income added to the 
        diversion payment will not be sufficient to cover the family's 
        immediate needs for the period of ineligibility under 
        subdivision 4, beginning with the month of application, or 
        another emergency can reasonably be anticipated within the 
        period of ineligibility. 
           Subd. 4.  [INELIGIBILITY FOR MFIP-S; EMERGENCY ASSISTANCE; 
        AND EMERGENCY GENERAL ASSISTANCE.] Upon receipt of diversionary 
        assistance, the family is ineligible for MFIP-S, emergency 
        assistance, and emergency general assistance for a period of 
        time.  To determine the period of ineligibility, the county 
        shall use the following formula:  regardless of household 
        changes, the county agency must calculate the number of days of 
        ineligibility by dividing the diversionary assistance issued by 
        the transitional standard a family of the same size and 
        composition would have received under MFIP-S, multiplied by 30, 
        truncating the result.  The ineligibility period begins the date 
        the diversionary assistance is issued. 
           Subd. 5.  [DIVERSIONARY ASSISTANCE GRANT; FUNDING.] The 
        commissioner shall distribute diversionary assistance grants to 
        counties.  The commissioner may use federal block grant funding 
        or state funding for the grants. 
           Sec. 38.  [256J.48] [EMERGENCY ASSISTANCE (EA).] 
           Subdivision 1.  [EMERGENCY FINANCIAL ASSISTANCE.] County 
        human service agencies shall grant emergency financial 
        assistance to any needy pregnant woman or needy family with a 
        child under the age of 21 who is or was within six months prior 
        to application living with an eligible caregiver relative 
        specified in section 256J.08. 
           Except for ongoing special diets, emergency assistance is 
        available to a family during one 30-day period in a consecutive 
        12-month period.  A county shall issue assistance for needs that 
        accrue before that 30-day period only when it is necessary to 
        resolve emergencies arising or continuing during the 30-day 
        period of eligibility.  When emergency needs continue, a county 
        may issue assistance for up to 30 days beyond the initial 30-day 
        period of eligibility, but only when assistance is authorized 
        during the initial period. 
           Subd. 2.  [ELIGIBILITY.] Notwithstanding other eligibility 
        provisions of this chapter, any family without resources 
        immediately available to meet emergency needs identified in 
        subdivision 3 shall be eligible for an emergency grant under the 
        following conditions: 
           (1) a family member has resided in this state for at least 
        30 days; 
           (2) the family is without resources immediately available 
        to meet emergency needs; 
           (3) assistance is necessary to avoid destitution or provide 
        emergency shelter arrangements; and 
           (4) the family's destitution or need for shelter or 
        utilities did not arise because the child or relative caregiver 
        refused without good cause under section 256J.57 to accept 
        employment or training for employment in this state or another 
        state. 
           Subd. 3.  [EMERGENCY NEEDS.] Emergency needs are limited to 
        the following: 
           (a) [RENT.] A county agency may deny assistance to prevent 
        eviction from rented or leased shelter of an otherwise eligible 
        applicant when the county agency determines that an applicant's 
        anticipated income will not cover continued payment for shelter, 
        subject to conditions in clauses (1) to (3): 
           (1) a county agency must not deny assistance when an 
        applicant can document that the applicant is unable to locate 
        habitable shelter, unless the county agency can document that 
        one or more habitable shelters are available in the community 
        that will result in at least a 20 percent reduction in monthly 
        expense for shelter and that this shelter will be cost-effective 
        for the applicant; 
           (2) when no alternative shelter can be identified by either 
        the applicant or the county agency, the county agency shall not 
        deny assistance because anticipated income will not cover rental 
        obligation; and 
           (3) when cost-effective alternative shelter is identified, 
        the county agency shall issue assistance for moving expenses as 
        provided in paragraph (d). 
           (b) [DEFINITIONS.] For purposes of paragraph (a), the 
        following definitions apply (1) "metropolitan statistical area" 
        is as defined by the U.S. Census Bureau; (2) "alternative 
        shelter" includes any shelter that is located within the 
        metropolitan statistical area containing the county and for 
        which the applicant is eligible, provided the applicant does not 
        have to travel more than 20 miles to reach the shelter and has 
        access to transportation to the shelter.  Clause (2) does not 
        apply to counties in the Minneapolis-St. Paul metropolitan 
        statistical area. 
           (c) [MORTGAGE AND CONTRACT FOR DEED ARREARAGES.] A county 
        agency shall issue assistance for mortgage or contract for deed 
        arrearages on behalf of an otherwise eligible applicant 
        according to clauses (1) to (4): 
           (1) assistance for arrearages must be issued only when a 
        home is owned, occupied, and maintained by the applicant; 
           (2) assistance for arrearages must be issued only when no 
        subsequent foreclosure action is expected within the 12 months 
        following the issuance; 
           (3) assistance for arrearages must be issued only when an 
        applicant has been refused refinancing through a bank or other 
        lending institution and the amount payable, when combined with 
        any payments made by the applicant, will be accepted by the 
        creditor as full payment of the arrearage; 
           (4) costs paid by a family which are counted toward the 
        payment requirements in this clause are:  principle and interest 
        payments on mortgages or contracts for deed, balloon payments, 
        homeowner's insurance payments, manufactured home lot rental 
        payments, and tax or special assessment payments related to the 
        homestead.  Costs which are not counted include closing costs 
        related to the sale or purchase of real property. 
           To be eligible for assistance for costs specified in clause 
        (4) which are outstanding at the time of foreclosure, an 
        applicant must have paid at least 40 percent of the family's 
        gross income toward these costs in the month of application and 
        the 11-month period immediately preceding the month of 
        application. 
           When an applicant is eligible under clause (4), a county 
        agency shall issue assistance up to a maximum of four times the 
        MFIP-S transitional standard for a comparable assistance unit. 
           (d) [DAMAGE OR UTILITY DEPOSITS.] A county agency shall 
        issue assistance for damage or utility deposits when necessary 
        to alleviate the emergency.  The county may require that 
        assistance paid in the form of a damage deposit or a utility 
        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 under 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 be 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. 
           (e) [MOVING EXPENSES.] A county agency shall issue 
        assistance for expenses incurred when a family must move to a 
        different shelter according to clauses (1) to (4): 
           (1) moving expenses include the cost to transport personal 
        property belonging to a family, the cost for utility connection, 
        and the cost for securing different shelter; 
           (2) moving expenses must be paid only when the county 
        agency determines that a move is cost-effective; 
           (3) moving expenses must be paid at the request of an 
        applicant, but only when destitution or threatened destitution 
        exists; and 
           (4) moving expenses must be paid when a county agency 
        denies assistance to prevent an eviction because the county 
        agency has determined that an applicant's anticipated income 
        will not cover continued shelter obligation in paragraph (a). 
           (f) [HOME REPAIRS.] A county agency shall pay for repairs 
        to the roof, foundation, wiring, heating system, chimney, and 
        water and sewer system of a home that is owned and lived in by 
        an applicant. 
           The applicant shall document, and the county agency shall 
        verify the need for and method of repair. 
           The payment must be cost-effective in relation to the 
        overall condition of the home and in relation to the cost and 
        availability of alternative housing. 
           (g) [UTILITY COSTS.] Assistance for utility costs must be 
        made when an otherwise eligible family has had a termination or 
        is threatened with a termination of municipal water and sewer 
        service, electric, gas or heating fuel service, or lacks wood 
        when that is the heating source, subject to the conditions in 
        clauses (1) and (2): 
           (1) a county agency must not issue assistance unless the 
        county agency receives confirmation from the utility provider 
        that assistance combined with payment by the applicant will 
        continue or restore the utility; and 
           (2) a county agency shall not issue assistance for utility 
        costs unless a family paid at least eight percent of the 
        family's gross income toward utility costs due during the 
        preceding 12 months. 
           Clauses (1) and (2) must not be construed to prevent the 
        issuance of assistance when a county agency must take immediate 
        and temporary action necessary to protect the life or health of 
        a child. 
           (h) [SPECIAL DIETS.] A county shall pay for special diets 
        or dietary items.  The need for special diets or dietary items 
        must be prescribed by a licensed physician.  Costs for special 
        diets shall be determined as percentages of the allotment for a 
        one-person household under the Thrifty Food Plan as defined by 
        the United States Department of Agriculture.  The types of diets 
        and the percentages of the Thrifty Food Plan that are covered 
        are as follows: 
           (1) high protein diet, at least 80 grams daily, 25 percent 
        of Thrifty Food Plan; 
           (2) controlled protein diet, 40 to 60 grams and requires 
        special products, 100 percent of Thrifty Food Plan; 
           (3) controlled protein diet, less than 40 grams and 
        requires special products, 125 percent of Thrifty Food Plan; 
           (4) low cholesterol diet, 25 percent of Thrifty Food Plan; 
           (5) high residue diet, 20 percent of Thrifty Food Plan; 
           (6) pregnancy and lactation diet, 35 percent of Thrifty 
        Food Plan; 
           (7) gluten-free diet, 25 percent of Thrifty Food Plan; 
           (8) lactose-free diet, 25 percent of Thrifty Food Plan; 
           (9) antidumping diet, 15 percent of Thrifty Food Plan; 
           (10) hypoglycemic diet, 15 percent of Thrifty Food Plan; or 
           (11) ketogenic diet, 25 percent of Thrifty Food Plan. 
           Subd. 4.  [VENDOR PAYMENTS FOR SHELTER OR UTILITY 
        COSTS.] An ongoing MFIP-S grant may, at county board option, be 
        in the form of vendor payments if application for emergency 
        assistance is for shelter or utility costs. 
           Sec. 39.  [256J.49] [EMPLOYMENT AND TRAINING SERVICES; 
        DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] The terms used in sections 256J.50 
        to 256J.72 have the meanings given them in this section. 
           Subd. 2.  [DOMESTIC VIOLENCE.] "Domestic violence" means: 
           (1) physical acts that result, or threaten to result in, 
        physical injury to an individual; 
           (2) sexual abuse; 
           (3) sexual activity involving a minor child; 
           (4) being forced as the caregiver of a minor child to 
        engage in nonconsensual sexual acts or activities; 
           (5) threats of, or attempts at, physical or sexual abuse; 
           (6) mental abuse; or 
           (7) neglect or deprivation of medical care. 
           Subd. 3.  [EMPLOYMENT AND TRAINING SERVICES.] "Employment 
        and training services" means programs, activities and services 
        that are designed to assist participants in obtaining and 
        retaining employment. 
           Subd. 4.  [EMPLOYMENT AND TRAINING SERVICE 
        PROVIDER.] "Employment and training service provider" means: 
           (1) a public, private, or nonprofit employment and training 
        agency certified by the commissioner of economic security under 
        sections 268.0122, subdivision 3, and 268.871, subdivision 1, or 
        is approved under section 256J.51 and is included in the county 
        plan submitted under section 256J.50, subdivision 7; 
           (2) a public, private, or nonprofit agency that is not 
        certified by the commissioner under clause (1), but with which a 
        county has contracted to provide employment and training 
        services and which is included in the county's plan submitted 
        under section 256J.50, subdivision 7; or 
           (3) a county agency, if the county has opted to provide 
        employment and training services and the county has indicated 
        that fact in the plan submitted under section 256J.50, 
        subdivision 7. 
           Notwithstanding section 268.871, an employment and training 
        services provider meeting this definition may deliver employment 
        and training services under this chapter. 
           Subd. 5.  [EMPLOYMENT PLAN.] "Employment plan" means a plan 
        developed by the job counselor and the participant which 
        identifies the participant's most direct path to unsubsidized 
        employment, lists the specific steps that the caregiver will 
        take on that path, and includes a timetable for the completion 
        of each step. 
           Subd. 6.  [FEDERAL PARTICIPATION STANDARDS.] "Federal 
        participation standards" means the work participation standards 
        as specified in title I of Public Law No. 104-193, the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996. 
           Subd. 7.  [INTENSIVE ENGLISH AS A SECOND LANGUAGE 
        PROGRAM.] "Intensive English as a second language program" means 
        an English as a second language program that offers at least 20 
        hours of class per week. 
           Subd. 8.  [JOB COUNSELOR.] "Job counselor" means a staff 
        person employed by or under contract with the employment and 
        training services provider who delivers services as specified in 
        sections 256J.50 to 256J.55. 
           Subd. 9.  [PARTICIPANT.] "Participant" means a recipient of 
        MFIP-S assistance who participates or is required to participate 
        in employment and training services. 
           Subd. 10.  [PROVIDER.] "Provider" means an employment and 
        training service provider. 
           Subd. 11.  [SAFETY PLAN.] "Safety plan" means a plan 
        developed by a victim of domestic violence or a person 
        continuing to be at risk of domestic violence with the 
        assistance of a public agency or a private nonprofit agency, 
        including agencies that receive designation by the department of 
        corrections to provide emergency shelter services or support 
        services under section 611A.32.  A safety plan shall not include 
        a provision that automatically requires a domestic violence 
        victim to seek an order of protection, or to attend counseling, 
        as part of the safety plan. 
           Subd. 12.  [SUITABLE EMPLOYMENT.] "Suitable employment" 
        means employment that: 
           (1) is within the participant's physical and mental 
        abilities; 
           (2) pays hourly gross wages of not less than the applicable 
        state or federal minimum wage; 
           (3) meets health and safety standards set by federal, state 
        and county agencies; and 
           (4) complies with federal, state, and local 
        antidiscrimination laws. 
           Subd. 13.  [WORK ACTIVITY.] "Work activity" means any 
        activity in a participant's approved employment plan that is 
        tied to the participant's employment goal.  For purposes of the 
        MFIP-S program, any activity that is included in a participant's 
        approved employment plan meets the definition of work activity 
        as counted under the federal participation standards.  Work 
        activity includes, but is not limited to: 
           (1) unsubsidized employment; 
           (2) subsidized private sector or public sector employment, 
        including grant diversion as specified in section 256J.69; 
           (3) work experience, including CWEP as specified in section 
        256J.67, and including work associated with the refurbishing of 
        publicly assisted housing if sufficient private sector 
        employment is not available; 
           (4) on-the-job training as specified in section 256J.66; 
           (5) job search, either supervised or unsupervised; 
           (6) job readiness assistance; 
           (7) job clubs, including job search workshops; 
           (8) job placement; 
           (9) job development; 
           (10) job-related counseling; 
           (11) job coaching; 
           (12) job retention services; 
           (13) job-specific training or education ; 
           (14) job skills training directly related to employment; 
           (15) the self-employment investment demonstration (SEID), 
        as specified in section 256J.65; 
           (16) preemployment activities, based on availability and 
        resources, such as volunteer work, literacy programs and related 
        activities, citizenship and English as a second language 
        classes, or participation in dislocated worker services, 
        chemical dependency treatment, mental health services, peer 
        group networks, displaced homemaker programs, strength-based 
        resiliency training, parenting education, or other programs 
        designed to help families reach their employment goals and 
        enhance their ability to care for their children; 
           (17) community service programs; 
           (18) vocational educational training or educational 
        programs that can reasonably be expected to lead to employment, 
        as limited by the provisions of section 256J.53; 
           (19) apprenticeships; 
           (20) satisfactory attendance in general educational 
        development diploma classes or an adult diploma program; 
           (21) satisfactory attendance at secondary school, if the 
        participant has not received a high school diploma; 
           (22) adult basic education classes; 
           (23) internships; 
           (24) bilingual employment and training services; 
           (25) providing child care services to a participant who is 
        working in a community service program; and 
           (26) activities included in a safety plan that is developed 
        under section 256J.52, subdivision 6. 
           Sec. 40.  [256J.50] [COUNTY DUTIES.] 
           Subdivision 1.  [EMPLOYMENT AND TRAINING SERVICES COMPONENT 
        OF MFIP-S.] (a) By January 1, 1998, each county must develop and 
        implement an employment and training services component of 
        MFIP-S which is designed to put participants on the most direct 
        path to unsubsidized employment.  Participation in these 
        services is mandatory for all MFIP-S caregivers, unless the 
        caregiver is exempt under section 256J.56. 
           (b) A county may provide employment and training services 
        to MFIP-S caregivers who are exempt from the employment and 
        training services component but volunteer for the services. 
           Subd. 2.  [PILOT PROGRAMS.] In counties selected for the 
        work first or work focused pilot programs, first-time applicants 
        for assistance must meet the requirements of those programs in 
        place of the requirements of the MFIP-S program.  A county may, 
        at its option, discontinue a work first or work focused pilot 
        program. 
           Subd. 3.  [TRANSITIONAL RULE; MFIP OR MFIP-R 
        PARTICIPANT.] A caregiver who was enrolled in MFIP or MFIP-R on 
        the date the county implements the employment and training 
        services component of MFIP-S and was making satisfactory 
        progress toward the objectives specified in the caregiver's 
        employment plan, may continue with the existing employment plan 
        for up to two years with the approval of a job counselor.  The 
        job counselor may require changes to the plan in order to be 
        consistent with this two-year time limit. 
           Subd. 3a.  [TRANSITIONAL RULE; STRIDE, ACCESS.] (a) A 
        county agency that is not a participant in the MFIP or MFIP-R 
        field trials under sections 256.031 to 256.0361 shall not enroll 
        a recipient into project STRIDE or ACCESS after the date that 
        MFIP-S is implemented in the county.  
           (b) A caregiver who: 
           (i) was enrolled in project STRIDE or ACCESS continuously 
        since March 1, 1997; 
           (ii) is not a part of an MFIP or MFIP-R comparison group; 
        and 
           (iii) who is making satisfactory progress toward the 
        objectives specified in the caregiver's employment plan, may, 
        with the approval of the job counselor, continue with the 
        existing employment plan for up to two years after the caregiver 
        is enrolled in MFIP-S.  For purposes of the federal 
        participation standards, the activities in the caregiver's 
        employment plan are work activities, as that term is defined in 
        section 256J.49, subdivision 13. 
           (c) Notwithstanding contrary provisions of section 256.736, 
        the employability plan of a caregiver who is enrolled in project 
        STRIDE or ACCESS on or after July 1, 1997, must meet the 
        requirements of section 256J.53. 
           Subd. 4.  [SERVICE PROVIDING AGENCIES.] Unless the 
        provisions of subdivision 8 apply, a county must select at least 
        two employment and training service providers.  A county may opt 
        to provide services on its own as one of these providers. 
           Subd. 5.  [PARTICIPATION REQUIREMENTS FOR SINGLE-PARENT AND 
        TWO-PARENT CASES.] A county must establish a uniform schedule 
        for requiring participation by single parents.  Mandatory 
        participation must be required within six months of eligibility 
        for cash assistance.  For two-parent cases, participation is 
        required concurrent with the receipt of MFIP-S cash assistance. 
           Subd. 6.  [EXPLANATORY MATERIALS REQUIRED.] The county must:
           (1) explain to applicants and recipients and provide 
        explanatory materials regarding the relationship between the 
        60-month time limit on assistance funded with TANF dollars and 
        the receipt of various benefits, including cash assistance, food 
        stamps, medical assistance, and child care assistance; and 
           (2) provide assistance to applicants and recipients to 
        enable them to minimize the use of their 60 allowable months of 
        TANF-funded assistance.  
           Subd. 7.  [LOCAL SERVICE UNIT PLAN.] Each local or county 
        service unit shall prepare and submit a plan as specified in 
        section 268.88. 
           Subd. 8.  [COUNTY DUTY TO ENSURE EMPLOYMENT AND TRAINING 
        CHOICES FOR PARTICIPANTS.] Each county, or group of counties 
        working cooperatively, shall make available to participants the 
        choice of at least two employment and training service providers 
        as defined under section 256J.49, subdivision 4, except in 
        counties utilizing workforce centers that use multiple 
        employment and training services, offer multiple services 
        options under a collaborative effort and can document that 
        participants have choice among employment and training services 
        designed to meet specialized needs. 
           Subd. 9.  [EXCEPTION; FINANCIAL HARDSHIP.] Notwithstanding 
        subdivision 8, a county that explains in the plan required under 
        subdivision 7 that the provision of alternative employment and 
        training service providers would result in financial hardship 
        for the county is not required to make available more than one 
        employment and training provider. 
           Sec. 41.  [256J.51] [EMPLOYMENT AND TRAINING SERVICE 
        PROVIDER; ALTERNATE APPROVAL PROCESS.] 
           Subdivision 1.  [PROVIDER APPLICATION.] An employment and 
        training service provider that is not included in a county's 
        plan under section 256J.50, subdivision 7, because the county 
        has demonstrated financial hardship under subdivision 9 of that 
        section, may appeal its exclusion to the commissioner of 
        economic security under this section. 
           Subd. 2.  [APPEAL; ALTERNATE APPROVAL.] (a) An employment 
        and training service provider that is not included by a county 
        agency in the plan under section 256J.50, subdivision 7, and 
        that meets the criteria in paragraph (b), may appeal its 
        exclusion to the commissioner of economic security, and may 
        request alternative approval by the commissioner of economic 
        security to provide services in the county.  
           (b) An employment and training services provider that is 
        requesting alternative approval must demonstrate to the 
        commissioner that the provider meets the standards specified in 
        section 268.871, subdivision 1, paragraph (b), except that the 
        provider's past experience may be in services and programs 
        similar to those specified in section 268.871, subdivision 1, 
        paragraph (b). 
           Subd. 3.  [COMMISSIONER'S REVIEW.] (a) The commissioner 
        must act on a request for alternative approval under this 
        section within 30 days of the receipt of the request.  If after 
        reviewing the provider's request, and the county's plan 
        submitted under section 256J.50, subdivision 7, the commissioner 
        determines that the provider meets the criteria under 
        subdivision 2, paragraph (b), and that approval of the provider 
        would not cause financial hardship to the county, the county 
        must submit a revised plan under subdivision 4 that includes the 
        approved provider.  
           (b) If the commissioner determines that the approval of the 
        provider would cause financial hardship to the county, the 
        commissioner must notify the provider and the county of this 
        determination.  The alternate approval process under this 
        section shall be closed to other requests for alternate approval 
        to provide employment and training services in the county for up 
        to 12 months from the date that the commissioner makes a 
        determination under this paragraph. 
           Subd. 4.  [REVISED PLAN REQUIRED.] The commissioner of 
        economic security must notify the county agency when the 
        commissioner grants an alternative approval to an employment and 
        training service provider under subdivision 2.  Upon receipt of 
        the notice, the county agency must submit a revised plan under 
        section 256J.50, subdivision 7, that includes the approved 
        provider.  The county has 90 days from the receipt of the 
        commissioner's notice to submit the revised plan. 
           Subd. 5.  [REVIEW NOT REQUIRED.] Notwithstanding 
        subdivision 3, once a county meets the requirements of section 
        256J.50, subdivision 8, the commissioner may, but is not 
        required to, act on a request by an employment and training 
        services provider for alternative approval in that county. 
           Sec. 42.  [256J.515] [OVERVIEW OF EMPLOYMENT AND TRAINING 
        SERVICES.] 
           During the first meeting with participants, job counselors 
        must ensure that an overview of employment and training services 
        is provided that stresses the necessity and opportunity of 
        immediate employment, outlines the job search resources offered, 
        explains the requirements to comply with an employment plan and 
        the consequences for failing to comply, and explains the 
        services that are available to support job search and work. 
           Sec. 43.  [256J.52] [ASSESSMENTS; PLANS.] 
           Subdivision 1.  [APPLICATION LIMITED TO CERTAIN 
        PARTICIPANTS.] This section applies to participants receiving 
        MFIP-S assistance who are not exempt under section 256J.56, and 
        to caregivers who volunteer for employment and training services 
        under section 256J.50. 
           Subd. 2.  [INITIAL ASSESSMENT.] (a) The job counselor must, 
        with the cooperation of the participant, assess the 
        participant's ability to obtain and retain employment.  This 
        initial assessment must include a review of the participant's 
        education level, prior employment or work experience, 
        transferable work skills, and existing job markets. 
           (b) In assessing the participant, the job counselor must 
        determine if the participant needs refresher courses for 
        professional certification or licensure, in which case, the job 
        search plan under subdivision 3 must include the courses 
        necessary to obtain the certification or licensure, in addition 
        to other work activities, provided the combination of the 
        courses and other work activities are at least for 40 hours per 
        week.  
           (c) If a participant can demonstrate to the satisfaction of 
        the county agency that lack of proficiency in English is a 
        barrier to obtaining suitable employment, the job counselor must 
        include participation in an intensive English as a second 
        language program if available or otherwise a regular English as 
        a second language program in the individual's employment plan 
        under subdivision 5.  Lack of proficiency in English is not 
        necessarily a barrier to employment.  
           (d) The job counselor may approve an education or training 
        plan, and postpone the job search requirement, if the 
        participant has a proposal for an education program which: 
           (1) can be completed within 12 months; 
           (2) meets the criteria of section 256J.53, subdivisions 2, 
        3, and 5; and 
           (3) is likely, without additional training, to lead to 
        monthly employment earnings which, after subtraction of the 
        earnings disregard under section 256J.21, equal or exceed the 
        family wage level for the participant's assistance unit. 
           (e) A participant who, at the time of the initial 
        assessment, presents a plan that includes farming as a 
        self-employed work activity must have an employment plan 
        developed under subdivision 5 that includes the farming as an 
        approved work activity. 
           Subd. 3.  [JOB SEARCH; JOB SEARCH SUPPORT PLAN.] (a) If, 
        after the initial assessment, the job counselor determines that 
        the participant possesses sufficient skills that the participant 
        is likely to succeed in obtaining suitable employment, the 
        participant must conduct job search for a period of up to eight 
        weeks, for at least 30 hours per week.  The participant must 
        accept any offer of suitable employment.  The job counselor and 
        participant must develop a job search support plan which 
        specifies, at a minimum:  whether the job search is to be 
        supervised or unsupervised; support services that will be 
        provided while the participant conducts job search activities; 
        the courses necessary to obtain certification or licensure, if 
        applicable, and after obtaining the license or certificate, the 
        client must comply with subdivision 5; and how frequently the 
        participant must report to the job counselor on the status of 
        the participant's job search activities.  
           (b) During the eight-week job search period, either the job 
        counselor or the participant may request a review of the 
        participant's job search plan and progress towards obtaining 
        suitable employment.  If a review is requested by the 
        participant, the job counselor must concur that the review is 
        appropriate for the participant at that time.  If a review is 
        conducted, the job counselor may make a determination to conduct 
        a secondary assessment prior to the conclusion of the job search.
           (c) Failure to conduct the required job search, to accept 
        any offer of suitable employment, to develop or comply with a 
        job search support plan, or voluntarily quitting suitable 
        employment without good cause results in the imposition of a 
        sanction under section 256J.46.  If at the end of eight weeks 
        the participant has not obtained suitable employment, the job 
        counselor must conduct a secondary assessment of the participant 
        under subdivision 3. 
           Subd. 4.  [SECONDARY ASSESSMENT.] (a) The job counselor 
        must conduct a secondary assessment for those participants who: 
           (1) in the judgment of the job counselor, have barriers to 
        obtaining employment that will not be overcome with a job search 
        support plan under subdivision 3; 
           (2) have completed eight weeks of job search under 
        subdivision 3 without obtaining suitable employment; or 
           (3) have not received a secondary assessment, are working 
        at least 20 hours per week, and the participant, job counselor, 
        or county agency requests a secondary assessment. 
           (b) In the secondary assessment the job counselor must 
        evaluate the participant's skills and prior work experience, 
        family circumstances, interests and abilities, need for 
        preemployment activities, supportive, or educational services, 
        and the extent of any barriers to employment.  The job counselor 
        must use the information gathered through the secondary 
        assessment to develop an employment plan under subdivision 5. 
           Subd. 5.  [EMPLOYMENT PLAN; CONTENTS.] Based on the 
        secondary assessment under subdivision 4, the job counselor and 
        the participant must develop an employment plan for the 
        participant that includes specific activities that are tied to 
        an employment goal and a plan for long-term self-sufficiency, 
        and that is designed to move the participant along the most 
        direct path to unsubsidized employment.  The employment plan 
        must list the specific steps that will be taken to obtain 
        employment and a timetable for completion of each of the steps.  
        The job counselor and the participant must sign the developed 
        plan to indicate agreement between the job counselor and the 
        participant on the contents of the plan.  
           Subd. 6.  [SAFETY PLAN.] Notwithstanding subdivisions 1 to 
        5, a participant who is a victim of domestic violence and who 
        agrees to develop or has developed a safety plan meeting the 
        definition under section 256J.49, subdivision 11, is deferred 
        from the requirements of this section, section 256J.54, and 
        section 256J.55 for a period of three months from the date the 
        safety plan is approved.  A participant deferred under this 
        subdivision must submit a safety plan status report to the 
        county agency on a quarterly basis.  Based on a review of the 
        status report, the county agency may approve or renew the 
        participant's deferral each quarter, provided the personal 
        safety of the participant is still at risk and the participant 
        is complying with the plan.  A participant who is deferred under 
        this subdivision may be deferred for a total of 12 months under 
        a safety plan, provided the individual is complying with the 
        terms of the plan. 
           Subd. 7.  [REVISION OF PLAN.] If the employee has lost or 
        quit a job with good cause, the job counselor must ascertain the 
        reason for the job loss and work with the participant to amend 
        the job search support plan or employment plan, whichever is in 
        effect, as necessary to address the problem.  If a job search 
        support plan is in effect, the participant, county agency, or 
        job counselor may request a secondary assessment at this time. 
           Sec. 44.  [256J.53] [POST-SECONDARY EDUCATION; LIMITATIONS 
        ON APPROVAL, JOB SEARCH REQUIREMENT.] 
           Subdivision 1.  [LENGTH OF PROGRAM.] In order for a 
        post-secondary education or training program to be approved work 
        activity as defined in section 256J.49, subdivision 13, clause 
        (18), it must be a program lasting 12 months or less, and the 
        participant must meet the requirements of subdivisions 2 and 3.  
        A program lasting up to 24 months may be approved on an 
        exception basis if the conditions specified in subdivisions 2 to 
        4 are met.  A participant may not be approved for more than a 
        total of 24 months of post-secondary education or training. 
           Subd. 2.  [DOCUMENTATION SUPPORTING PROGRAM.] In order for 
        a post-secondary education or training program to be an approved 
        activity in a participant's employment plan, the participant or 
        the employment and training service provider must provide 
        documentation that: 
           (1) the participant's employment plan identifies specific 
        goals that can only be met with the additional education or 
        training; 
           (2) there are suitable employment opportunities that 
        requires the specific education or training in the area in which 
        the participant resides or is willing to reside; 
           (3) the education or training will result in significantly 
        higher wages for the participant than the participant could earn 
        without the education or training; 
           (4) the participant can meet the requirements for admission 
        into the program; and 
           (5) there is a reasonable expectation that the participant 
        will complete the training program based on such factors as the 
        participant's MFIP-S assessment, previous education, training, 
        and work history; current motivation; and changes in previous 
        circumstances. 
           Subd. 3.  [SATISFACTORY PROGRESS REQUIRED.] In order for a 
        post-secondary education or training program to be an approved 
        activity in a participant's employment plan, the participant 
        must maintain satisfactory progress in the program.  
        "Satisfactory progress" in an education or training program 
        means (1) the participant remains in good standing while the 
        participant is enrolled in the program, as defined by the 
        education or training institution, or (2) the participant makes 
        satisfactory progress as the term is defined in the 
        participant's employment plan. 
           Subd. 4.  [REPAYMENT OF EMPLOYMENT AND TRAINING 
        ASSISTANCE.] In order for a post-secondary education or training 
        program lasting between 13 and 24 months to be an approved 
        activity in a participant's employment plan, the participant 
        must agree to repay the amount of employment and training funds 
        paid by the county to support the individual's participation in 
        each month of an education or training program after the 12th 
        month of the program.  Assistance obtained by the participant 
        through the federal Pell grant program or other federal or state 
        programs of higher education assistance must be excluded from 
        the amount to be repaid by the participant.  The participant and 
        the county agency must develop a mutually acceptable repayment 
        plan.  The repayment plan must not assess any interest charges 
        on the cost of the funds to be repaid.  The loan is considered 
        to be in repayment status when: 
           (1) the participant completes the program and obtains 
        suitable employment that pays annual gross wages of at least 150 
        percent of the federal poverty level; or 
           (2) the participant leaves the program before completion of 
        the program and obtains suitable employment that pays annual 
        gross wages of at least 150 percent of the federal poverty level.
           Subd. 5.  [JOB SEARCH AFTER COMPLETION OF WORK 
        ACTIVITY.] If a participant's employment plan includes a 
        post-secondary educational or training program, the plan must 
        include an anticipated completion date for those activities.  At 
        the time the education or training is completed, the participant 
        must participate in job search.  If, after three months of job 
        search, the participant does not find a job that is consistent 
        with the participant's employment goal, the participant must 
        accept any offer of suitable employment. 
           Sec. 45.  [256J.54] [MINOR PARENTS; EMPLOYMENT PLAN.] 
           Subdivision 1.  [ASSESSMENT OF EDUCATIONAL PROGRESS AND 
        NEEDS.] The county agency must document the educational level of 
        each MFIP-S caregiver who is under the age of 20 and determine 
        if the caregiver has obtained a high school diploma or its 
        equivalent.  If the caregiver has not obtained a high school 
        diploma or its equivalent, and is not exempt from the 
        requirement to attend school under subdivision 5, the county 
        agency must complete an individual assessment for the 
        caregiver.  The assessment must be performed as soon as possible 
        but within 30 days of determining MFIP-S eligibility for the 
        caregiver.  The assessment must provide an initial examination 
        of the caregiver's educational progress and needs, literacy 
        level, child care and supportive service needs, family 
        circumstances, skills, and work experience.  In the case of a 
        caregiver under the age of 18, the assessment must also consider 
        the results of either the caregiver's or the caregiver's minor 
        child's child and teen checkup under Minnesota Rules, parts 
        9505.0275 and 9505.1693 to 9505.1748, if available, and the 
        effect of a child's development and educational needs on the 
        caregiver's ability to participate in the program.  The county 
        agency must advise the caregiver that the caregiver's first goal 
        must be to complete an appropriate educational option if one is 
        identified for the caregiver through the assessment and, in 
        consultation with educational agencies, must review the various 
        school completion options with the caregiver and assist in 
        selecting the most appropriate option.  
           Subd. 2.  [RESPONSIBILITY FOR ASSESSMENT AND EMPLOYMENT 
        PLAN.] For caregivers who are under age 18, the assessment under 
        subdivision 1 and the employment plan under subdivision 3 must 
        be completed by the social services agency under section 
        257.33.  For caregivers who are age 18 or 19, the assessment 
        under subdivision 1 and the employment plan under subdivision 3 
        must be completed by the job counselor.  The social services 
        agency or the job counselor shall consult with representatives 
        of educational agencies that are required to assist in 
        developing educational plans under section 126.235. 
           Subd. 3.  [EDUCATIONAL OPTION DEVELOPED.] If the job 
        counselor or county social services agency identifies an 
        appropriate educational option, it must develop an employment 
        plan which reflects the identified option.  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 caregiver will take part in, including child care and 
        supportive services, the consequences to the caregiver for 
        failing to participate or comply with the specified 
        requirements, and the right to appeal any adverse action.  The 
        employment plan must, to the extent possible, reflect the 
        preferences of the caregiver. 
           Subd. 4.  [NO APPROPRIATE EDUCATIONAL OPTION.] If the job 
        counselor determines that there is no appropriate educational 
        option for a caregiver who is age 18 or 19, the job counselor 
        must develop an employment plan, as defined in section 256J.49, 
        subdivision 5, for the caregiver.  If the county social services 
        agency determines that school attendance is not appropriate for 
        a caregiver under age 18, the county agency shall refer the 
        caregiver to social services for services as provided in section 
        257.33. 
           Subd. 5.  [SCHOOL ATTENDANCE REQUIRED.] (a) Notwithstanding 
        the provisions of section 256J.56, minor parents, or 18- or 
        19-year-old parents without a high school diploma or its 
        equivalent must attend school unless: 
           (1) transportation services needed to enable the caregiver 
        to attend school are not available; 
           (2) appropriate child care services needed to enable the 
        caregiver to attend school are not available; 
           (3) the caregiver is ill or incapacitated seriously enough 
        to prevent attendance at school; or 
           (4) the caregiver is needed in the home because of the 
        illness or incapacity of another member of the household.  This 
        includes a caregiver of a child who is younger than six weeks of 
        age. 
           (b) The caregiver must be enrolled in a secondary school 
        and meeting the school's attendance requirements.  An enrolled 
        caregiver is considered to be meeting the attendance 
        requirements when the school is not in regular session, 
        including during holiday and summer breaks. 
           Sec. 46.  [256J.55] [PARTICIPANT REQUIREMENTS, RIGHTS, AND 
        EXPECTATIONS.] 
           Subdivision 1.  [COMPLIANCE WITH JOB SEARCH OR EMPLOYMENT 
        PLAN; SUITABLE EMPLOYMENT.] (a) Each MFIP-S participant must 
        comply with the terms of the participant's job search support 
        plan or employment plan.  When the participant has completed the 
        steps listed in the employment plan, the participant must comply 
        with section 256J.53, subdivision 5, if applicable, and then the 
        participant must not refuse any offer of suitable employment.  
        The participant may choose to accept an offer of suitable 
        employment before the participant has completed the steps of the 
        employment plan. 
           (b) For a participant under the age of 20 who is without a 
        high school diploma or general educational development diploma, 
        the requirement to comply with the terms of the employment plan 
        means the participant must meet the requirements of section 
        256J.54. 
           (c) Failure to develop or comply with a job search support 
        plan or an employment plan, or quitting suitable employment 
        without good cause, shall result in the imposition of a sanction 
        as specified in sections 256J.57 and 256J.46. 
           Subd. 2.  [DUTY TO REPORT.] The participant must inform the 
        job counselor within three working days regarding any changes 
        related to the participant's employment status. 
           Subd. 3.  [MOVE TO A DIFFERENT COUNTY.] MFIP-S applicants 
        or recipients who move to a different county in Minnesota and 
        are required to participate in employment and training services 
        are subject to the requirements of the destination county.  An 
        employment plan that was developed in the county of origin may 
        be continued in the destination county if both the destination 
        county and the participant agree to do so. 
           Subd. 4.  [CHOICE OF PROVIDER.] A participant must be able 
        to choose from at least two employment and training service 
        providers, unless the county has demonstrated to the 
        commissioner that the provision of multiple employment and 
        training service providers would result in financial hardship 
        for the county, or the county is utilizing a workforce center as 
        specified in section 256J.50, subdivision 8. 
           Subd. 5.  [OPTION TO UTILIZE EXISTING PLAN.] With job 
        counselor approval, if a participant is already complying with a 
        job search support or employment plan that was developed for a 
        different program, the participant may utilize that plan and 
        that program's services, subject to the requirements of 
        subdivision 3, to be in compliance with sections 256J.52 to 
        256J.57 so long as the plan meets, or is modified to meet, the 
        requirements of those sections. 
           Sec. 47.  [256J.56] [EMPLOYMENT AND TRAINING SERVICES 
        COMPONENT; EXEMPTIONS.] 
           An MFIP-S caregiver is exempt from the requirements of 
        sections 256J.52 to 256J.55 if the caregiver belongs to any of 
        the following groups: 
           (1) individuals who are age 60 or older; 
           (2) 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.  
        Persons in this category with a temporary illness, injury, or 
        incapacity must be reevaluated at least quarterly; 
           (3) caregivers whose presence in the home is required 
        because of the professionally certified illness or incapacity of 
        another member in the household; 
           (4) women who are pregnant, if the pregnancy has resulted 
        in a professionally certified incapacity that prevents the woman 
        from obtaining or retaining employment; 
           (5) caregivers of a child under the age of one year who 
        personally provide full-time care for the child.  This exemption 
        may be used for only 12 months in a lifetime.  In two-parent 
        households, only one parent or other relative may qualify for 
        this exemption; 
           (6) individuals employed at least 40 hours per week or at 
        least 30 hours per week and engaged in job search for at least 
        an additional ten hours per week; 
           (7) individuals experiencing a personal or family crisis 
        that makes them incapable of participating in the program, as 
        determined by the county agency.  If the participant does not 
        agree with the county agency's determination, the participant 
        may seek professional certification, as defined in section 
        256J.08, that the participant is incapable of participating in 
        the program. 
           Persons in this exemption category must be reevaluated 
        every 60 days; or 
           (8) second parents in two-parent families, provided the 
        second parent is employed for 20 or more hours per week. 
           A caregiver who is exempt under clause (5) must enroll in 
        and attend an early childhood and family education class, a 
        parenting class, or some similar activity, if available, during 
        the period of time the caregiver is exempt under this section.  
        Notwithstanding section 256J.46, failure to attend the required 
        activity shall not result in the imposition of a sanction. 
           Sec. 48.  [256J.57] [GOOD CAUSE; FAILURE TO COMPLY; NOTICE; 
        CONCILIATION CONFERENCE.] 
           Subdivision 1.  [GOOD CAUSE FOR FAILURE TO COMPLY.] The 
        county agency shall not impose the sanction under section 
        256J.46 if it determines that the participant has good cause for 
        failing to comply with the requirements of section 256J.45 or 
        sections 256J.52 to 256J.55.  Good cause exists when: 
           (1) appropriate child care is not available; 
           (2) the job does not meet the definition of suitable 
        employment; 
           (3) the participant is ill or injured; 
           (4) a family member is ill and needs care by the 
        participant that prevents the participant from complying with 
        the job search support plan or employment plan; 
           (5) the parental caregiver is unable to secure necessary 
        transportation; 
           (6) the parental caregiver is in an emergency situation 
        that prevents compliance with the job search support plan or 
        employment plan; 
           (7) the schedule of compliance with the job search support 
        plan or employment plan conflicts with judicial proceedings; 
           (8) the parental caregiver is already participating in 
        acceptable work activities; 
           (9) the employment plan requires an educational program for 
        a caregiver under age 20, but the educational program is not 
        available; 
           (10) activities identified in the job search support plan 
        or employment plan are not available; 
           (11) the parental caregiver is willing to accept suitable 
        employment, but suitable employment is not available; or 
           (12) the parental caregiver documents other verifiable 
        impediments to compliance with the job search support plan or 
        employment plan beyond the parental caregiver's control. 
           Subd. 2.  [NOTICE OF INTENT TO SANCTION.] (a) When a 
        participant fails without good cause to comply with the 
        requirements of sections 256J.52 to 256J.55, the job counselor 
        or the county agency must provide a notice of intent to sanction 
        to the participant specifying the program requirements that were 
        not complied with, informing the participant that the county 
        agency will impose the sanctions specified in section 256J.46, 
        and informing the participant of the opportunity to request a 
        conciliation conference as specified in paragraph (b).  The 
        notice must also state that the participant's continuing 
        noncompliance with the specified requirements will result in 
        additional sanctions under section 256J.46, without the need for 
        additional notices or conciliation conferences under this 
        subdivision.  If the participant does not request a conciliation 
        conference within ten calendar days of the mailing of the notice 
        of intent to sanction, the job counselor must notify the county 
        agency that the assistance payment should be reduced.  The 
        county must then send a notice of adverse action to the 
        participant informing the participant of the sanction that will 
        be imposed, the reasons for the sanction, the effective date of 
        the sanction, and the participant's right to have a fair hearing 
        under section 256J.40. 
           (b) The participant may request a conciliation conference 
        by sending a written request, by making a telephone request, or 
        by making an in-person request.  The request must be received 
        within ten calendar days of the date the county agency mailed 
        the ten-day notice of intent to sanction.  If a timely request 
        for a conciliation is received, the county agency's service 
        provider must conduct the conference within five days of the 
        request.  The job counselor's supervisor, or a designee of the 
        supervisor, must review the outcome of the conciliation 
        conference.  If the conciliation conference resolves the 
        noncompliance, the job counselor must promptly inform the county 
        agency and request withdrawal of the sanction notice. 
           (c) Upon receiving a sanction notice, the participant may 
        request a fair hearing under section 256J.40, without exercising 
        the option of a conciliation conference.  In such cases, the 
        county agency shall not require the participant to engage in a 
        conciliation conference prior to the fair hearing. 
           (d) If the participant requests a fair hearing or a 
        conciliation conference, sanctions will not be imposed until 
        there is a determination of noncompliance.  Sanctions must be 
        imposed as provided in section 256J.46. 
           Sec. 49.  [256J.61] [REPORTING REQUIREMENTS.] 
           The commissioner of human services, in cooperation with the 
        commissioner of economic security, shall develop reporting 
        requirements for county agencies and employment and training 
        service providers according to section 256.01, subdivision 2, 
        paragraph (17).  Reporting requirements must, to the extent 
        possible, use existing client tracking systems and must be 
        within the limits of funds available.  The requirements must 
        include summary information necessary for state agencies and the 
        legislature to evaluate the effectiveness of the services. 
           Sec. 50.  [256J.62] [ALLOCATION OF COUNTY EMPLOYMENT AND 
        TRAINING SERVICES BLOCK GRANT.] 
           Subdivision 1.  [ALLOCATION.] Money appropriated for MFIP-S 
        employment and training services must be allocated to counties 
        as specified in this section. 
           Subd. 2.  [GUARANTEED FLOOR.] Money shall be allocated to 
        counties in an amount equal to the county's guaranteed floor.  
        The county's guaranteed allocation floor shall be calculated as 
        follows: 
           (1) for fiscal 1998, the guaranteed allocation floor shall 
        be calculated by multiplying the county's STRIDE allocation 
        received for state fiscal year 1997 by 90 percent; 
           (2) for each subsequent fiscal year, the guaranteed 
        allocation floor shall be calculated by multiplying the county's 
        MFIP-S employment and training services allocation received the 
        previous state fiscal year by 90 percent; and 
           (3) if the amount of funds available for allocation is less 
        than the amount allocated to all counties for the previous 
        fiscal year, each county's previous year allocation shall be 
        reduced in proportion to the reduction in statewide funding for 
        the purpose of establishing the guaranteed floor. 
           Subd. 3.  [ALLOCATION OF BALANCE OF FUNDS.] If there remain 
        funds to allocate after establishing each county's guaranteed 
        floor under the provisions in subdivision 2, the balance of 
        funds shall be allocated as follows: 
           (1) for state fiscal year 1998, the remaining funds shall 
        be allocated based on the county's average number of AFDC and 
        family general assistance cases as compared to the statewide 
        total number of cases.  The average number of cases shall be 
        based on counts of AFDC and family general assistance cases as 
        of March 31, June 30, September 30, and December 31 of calendar 
        year 1996; 
           (2) for state fiscal year 1999, the remaining funds shall 
        be allocated based on the county's average number of AFDC, 
        family general assistance, MFIP-R, MFIP, and MFIP-S cases as 
        compared to the statewide total number of cases.  The average 
        number of cases shall be based on counts of AFDC, family general 
        assistance, MFIP-R, MFIP, and MFIP-S cases as of March 31, June 
        30, September 30, and December 31 of calendar year 1997; and 
           (3) for all subsequent state fiscal years, the remaining 
        funds shall be allocated based on the county's average number of 
        MFIP-S cases as compared to the statewide total number of 
        cases.  The average number of cases must be based on counts of 
        MFIP-S cases as of March 31, June 30, September 30, and December 
        31 of the previous calendar year. 
           Subd. 4.  [ADMINISTRATIVE ACTIVITIES LIMIT.] No more than 
        15 percent of the money allocated under this section may be used 
        for administrative activities. 
           Subd. 4a.  [STRIDE ALLOCATION.] Funds allocated for STRIDE 
        services for state fiscal year 1998 are allocated to county 
        agencies based on the provisions of statute in effect on June 
        30, 1997.  At the time that the AFDC program is replaced by the 
        Temporary Assistance for Needy Families program under title I of 
        Public Law Number 104-193 of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996, any unexpended 
        balance of a county's STRIDE allocation for that fiscal year 
        remains available to the county for operation of MFIP-S 
        employment and training services and for the operation of the 
        STRIDE program for the MFIP and MFIP-R field trial counties for 
        the balance of the fiscal year.  These STRIDE funds shall be 
        included in the calculation of the next year's MFIP-S employment 
        and training allocation under the provisions of subdivision 2. 
           Subd. 5.  [BILINGUAL EMPLOYMENT AND TRAINING SERVICES TO 
        REFUGEES.] Funds appropriated to cover the costs of bilingual 
        employment and training services to refugees shall be allocated 
        to county agencies as follows: 
           (1) for state fiscal year 1998, the allocation shall be 
        based on the county's proportion of the total statewide number 
        of AFDC refugee cases in the previous fiscal year.  Counties 
        with less than one percent of the statewide number of AFDC, 
        MFIP-R, or MFIP refugee cases shall not receive an allocation of 
        bilingual employment and training services funds; and 
           (2) for each subsequent fiscal year, the allocation shall 
        be based on the county's proportion of the total statewide 
        number of MFIP-S refugee cases in the previous fiscal year.  
        Counties with less than one percent of the statewide number of 
        MFIP-S refugee cases shall not receive an allocation of 
        bilingual employment and training services funds. 
           Subd. 6.  [WORK LITERACY LANGUAGE PROGRAMS.] Funds 
        appropriated to cover the costs of work literacy language 
        programs to non-English speaking recipients shall be allocated 
        to county agencies as follows: 
           (1) for state fiscal year 1998, the allocation shall be 
        based on the county's proportion of the total statewide number 
        of AFDC or MFIP cases in the previous fiscal year where the lack 
        of English is a barrier to employment.  Counties with less than 
        two percent of the statewide number of AFDC or MFIP cases where 
        the lack of English is a barrier to employment shall not receive 
        an allocation of the work literacy language program funds; and 
           (2) for each subsequent fiscal year, the allocation shall 
        be based on the county's proportion of the total statewide 
        number of MFIP-S cases in the previous fiscal year where the 
        lack of English is a barrier to employment.  Counties with less 
        than two percent of the statewide number of MFIP-S cases where 
        the lack of English is a barrier to employment shall not receive 
        an allocation of the work literacy language program funds. 
           Subd. 7.  [REALLOCATION.] The commissioner of human 
        services shall review county agency expenditures of MFIP-S 
        employment and training services funds at the end of the third 
        quarter of the first year of the biennium and each quarter after 
        that and may reallocate unencumbered or unexpended money 
        appropriated under this section to those county agencies that 
        can demonstrate a need for additional money. 
           Subd. 8.  [CONTINUATION OF CERTAIN SERVICES.] At the 
        request of the caregiver, the county may continue to provide 
        case management, counseling or other support services to a 
        participant following the participant's achievement of the 
        employment goal, for up to six months following termination of 
        the participant's eligibility for MFIP-S. 
           A county may expend funds for a specific employment and 
        training service for the duration of that service to a 
        participant if the funds are obligated or expended prior to the 
        participant losing MFIP-S eligibility. 
           Sec. 51.  [256J.645] [INDIAN TRIBE MFIP-S EMPLOYMENT AND 
        TRAINING.] 
           Subdivision 1.  [AUTHORIZATION TO ENTER INTO 
        AGREEMENTS.] Effective July 1, 1997, the commissioner may enter 
        into agreements with federally recognized Indian tribes with a 
        reservation in the state to provide MFIP-S employment and 
        training services to members of the Indian tribe and to other 
        caregivers who are a part of the tribal member's MFIP-S 
        assistance unit.  For purposes of this section, "Indian tribe" 
        means a tribe, band, nation, or other federally recognized group 
        or community of Indians.  The commissioner may also enter into 
        an agreement with a consortium of Indian tribes providing the 
        governing body of each Indian tribe in the consortium complies 
        with the provisions of this section. 
           Subd. 2.  [TRIBAL REQUIREMENTS.] The Indian tribe must: 
           (1) agree to fulfill the responsibilities provided under 
        the employment and training component of MFIP-S regarding 
        operation of MFIP-S employment and training services, as 
        designated by the commissioner; 
           (2) operate its employment and training services program 
        within a geographic service area not to exceed the counties 
        within which a border of the reservation falls; 
           (3) operate its program in conformity with section 13.46 
        and any applicable federal regulations in the use of data about 
        MFIP-S recipients; 
           (4) coordinate operation of its program with the county 
        agency, Job Training Partnership Act programs, and other support 
        services or employment-related programs in the counties in which 
        the tribal unit's program operates; 
           (5) provide financial and program participant activity 
        recordkeeping and reporting in the manner and using the forms 
        and procedures specified by the commissioner and permit 
        inspection of its program and records by representatives of the 
        state; and 
           (6) have the Indian tribe's employment and training service 
        provider certified by the commissioner of economic security, or 
        approved by the county. 
           Subd. 3.  [FUNDING.] If the commissioner and an Indian 
        tribe are parties to an agreement under this subdivision, the 
        agreement may annually provide to the Indian tribe the funding 
        amount in clause (1) or (2): 
           (1) if the Indian tribe operated a tribal STRIDE program 
        during state fiscal year 1997, the amount to be provided is the 
        amount the Indian tribe received from the state for operation of 
        its tribal STRIDE program in state fiscal year 1997, except that 
        the amount provided for a fiscal year may increase or decrease 
        in the same proportion that the total amount of state funds 
        available for MFIP-S employment and training services increased 
        or decreased that fiscal year; or 
           (2) if the Indian tribe did not operate a tribal STRIDE 
        program during state fiscal year 1997, the commissioner may 
        provide to the Indian tribe for the first year of operations the 
        amount determined by multiplying the state allocation for MFIP-S 
        employment and training services to each county agency in the 
        Indian tribe's service delivery area by the percentage of MFIP-S 
        recipients in that county who were members of the Indian tribe 
        during the previous state fiscal year.  The resulting amount 
        shall also be the amount that the commissioner may provide to 
        the Indian tribe annually thereafter through an agreement under 
        this subdivision, except that the amount provided for a fiscal 
        year may increase or decrease in the same proportion that the 
        total amount of state funds available for MFIP-S employment and 
        training services increased or decreased that fiscal year.  
           Subd. 4.  [COUNTY AGENCY REQUIREMENT.] Indian tribal 
        members receiving MFIP-S benefits and residing in the service 
        area of an Indian tribe operating employment and training 
        services under an agreement with the commissioner must be 
        referred by county agencies in the service area to the Indian 
        tribe for employment and training services. 
           Sec. 52.  [256J.65] [THE SELF-EMPLOYMENT INVESTMENT 
        DEMONSTRATION PROGRAM (SEID).] 
           (a) A caregiver who enrolls and participates in the SEID 
        program as specified in section 268.95, may, at county option, 
        be exempted from other employment and training participation 
        requirements for a period of up to 24 months, except for the 
        school attendance requirements as specified in section 256J.54.  
           (b) The following income and resource considerations apply 
        to SEID participants:  
           (1) an unencumbered cash reserve fund, composed of proceeds 
        from a SEID business, is not counted against the grant if those 
        funds are reinvested in the business and the value of the 
        business does not exceed $3,000.  The value of the business is 
        determined by deducting outstanding encumbrances from retained 
        business profit; and 
           (2) the purchase of capital equipment and durable goods of 
        an amount up to $3,000 during a 24-month project period is 
        allowed as a business expense. 
           (c) SEID participants with a county-approved employment 
        plan are also eligible for employment and training services, 
        including child care and transportation. 
           Sec. 53.  [256J.66] [ON-THE-JOB TRAINING.] 
           Subdivision 1.  [ESTABLISHING THE ON-THE-JOB TRAINING 
        PROGRAM.] (a) County agencies may develop on-the-job training 
        programs for MFIP-S caregivers who are participating in 
        employment and training services.  A county agency that chooses 
        to provide on-the-job training may make payments to employers 
        for on-the-job training costs that, during the period of the 
        training, must not exceed 50 percent of the wages paid by the 
        employer to the participant.  The payments are deemed to be in 
        compensation for the extraordinary costs associated with 
        training participants under this section and in compensation for 
        the costs associated with the lower productivity of the 
        participants during training. 
           (b) Provision of an on-the-job training program under the 
        Job Training Partnership Act, in and of itself, does not qualify 
        as an on-the-job training program under this section. 
           (c) Participants in on-the-job training shall be 
        compensated by the employer at the same rates, including 
        periodic increases, as similarly situated employees or trainees 
        and in accordance with applicable law, but in no event less than 
        the federal or applicable state minimum wage, whichever is 
        higher. 
           Subd. 2.  [TRAINING AND PLACEMENT.] (a) County agencies 
        shall limit the length of training based on the complexity of 
        the job and the caregiver's previous experience and training.  
        Placement in an on-the-job training position with an employer is 
        for the purpose of training and employment with the same 
        employer who has agreed to retain the person upon satisfactory 
        completion of training. 
           (b) Placement of any participant in an on-the-job training 
        position must be compatible with the participant's assessment 
        and employment plan under section 256J.52. 
           Sec. 54.  [256J.67] [COMMUNITY WORK EXPERIENCE.] 
           Subdivision 1.  [ESTABLISHING THE COMMUNITY WORK EXPERIENCE 
        PROGRAM.] To the extent of available resources, each county 
        agency may establish and operate a work experience component for 
        MFIP-S caregivers who are participating in employment and 
        training services.  This option for county agencies supersedes 
        the requirement in section 402(a)(1)(B)(iv) of the Social 
        Security Act that caregivers who have received assistance for 
        two months and who are not exempt from work requirements must 
        participate in a work experience program.  The purpose of the 
        work experience component is to enhance the caregiver's 
        employability and self-sufficiency and to provide meaningful, 
        productive work activities.  The county shall use this program 
        for an individual after exhausting all other employment 
        opportunities.  The county agency shall not require a caregiver 
        to participate in the community work experience program unless 
        the caregiver has been given an opportunity to participate in 
        other work activities.  
           Subd. 2.  [COMMISSIONER'S DUTIES.] The commissioner shall 
        assist counties in the design and implementation of these 
        components.  
           Subd. 3.  [EMPLOYMENT OPTIONS.] (a) Work sites developed 
        under this section are limited to projects that serve a useful 
        public service such as:  health, social service, environmental 
        protection, education, urban and rural development and 
        redevelopment, welfare, recreation, public facilities, public 
        safety, community service, services to aged or disabled 
        citizens, and child care.  To the extent possible, the prior 
        training, skills, and experience of a caregiver must be 
        considered in making appropriate work experience assignments. 
           (b) Structured, supervised volunteer work with an agency or 
        organization, which is monitored by the county service provider, 
        may, with the approval of the county agency, be used as a work 
        experience placement. 
           (c) As a condition of placing a caregiver in a program 
        under this section, the county agency shall first provide the 
        caregiver the opportunity: 
           (1) for placement in suitable subsidized or unsubsidized 
        employment through participation in a job search; or 
           (2) for placement in suitable employment through 
        participation in on-the-job training, if such employment is 
        available. 
           Subd. 4.  [EMPLOYMENT PLAN.] (a) The caretaker's employment 
        plan must include the length of time needed in the work 
        experience program, the need to continue job-seeking activities 
        while participating in work experience, and the caregiver's 
        employment goals. 
           (b) After each six months of a caregiver's participation in 
        a work experience job placement, and at the conclusion of each 
        work experience assignment under this section, the county agency 
        shall reassess and revise, as appropriate, the caregiver's 
        employment plan. 
           (c) A caregiver may claim good cause under section 256J.57, 
        subdivision 1, for failure to cooperate with a work experience 
        job placement.  
           (d) The county agency shall limit the maximum number of 
        hours any participant may work under this section to the amount 
        of the transitional standard divided by the federal or 
        applicable state minimum wage, whichever is higher.  After a 
        participant has been assigned to a position for nine months, the 
        participant may not continue in that assignment unless the 
        maximum number of hours a participant works is no greater than 
        the amount of the transitional standard divided by the rate of 
        pay for individuals employed in the same or similar occupations 
        by the same employer at the same site.  This limit does not 
        apply if it would prevent a participant from counting toward the 
        federal work participation rate. 
           Sec. 55.  [256J.68] [INJURY PROTECTION FOR WORK EXPERIENCE 
        PARTICIPANTS.] 
           Subdivision 1.  [APPLICABILITY.] (a) This section must be 
        used to determine payment of any claims resulting from an 
        alleged injury or death of a person participating in a county or 
        a tribal community work experience program that is approved by 
        the commissioner and is operated by: 
           (i) the county agency; 
           (ii) the tribe; 
           (iii) a department of the state; or 
           (iv) a community-based organization under contract, prior 
        to April 1, 1997, with a county agency to provide a community 
        work experience program or a food stamp community work 
        experience program, provided the organization has not 
        experienced any individual injury loss or claim greater than 
        $1,000. 
           (b) This determination method is available to the 
        community-based organization under clause (iv) only for claims 
        incurred by participants in the community work experience 
        program or the food stamp community work experience program. 
           (c) This determination method applies to work experience 
        programs authorized by the commissioner for persons applying for 
        or receiving cash assistance and food stamps, and to the 
        Minnesota parent's fair share program and the community service 
        program under section 518.551, subdivision 5a, in a county with 
        an approved community investment program for obligors. 
           Subd. 2.  [INVESTIGATION OF THE CLAIM.] Claims that are 
        subject to this section must be investigated by the county 
        agency or the tribal 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 program 
        shall submit the claim to the appropriate insurance entity for 
        payment.  The investigating county agency or tribal program 
        shall submit all valid claims, in the amount net of any 
        insurance payments, to the department of human services. 
           Subd. 3.  [SUBMISSION OF CLAIM.] The commissioner shall 
        submit all claims for permanent partial disability 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 permanent partial disability compensation schedule of 
        section 176.101, subdivision 2a. 
           Subd. 4.  [CLAIMS LESS THAN $1,000.] The commissioner shall 
        approve a claim of $1,000 or less for payment if appropriated 
        funds are available, if the county agency or tribal 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 
        commissioner 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 year, the commissioner 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 commissioner 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. 
           Subd. 5.  [CLAIMS MORE THAN $1,000.] On or before February 
        1 of each year, the commissioner 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 commissioner, 
        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, must be paid under the legislative claims procedure. 
           Subd. 6.  [COMPENSATION FOR CERTAIN COSTS.] Compensation 
        paid under this section is limited to reimbursement for 
        reasonable medical expenses and permanent partial disability 
        compensation for disability in like amounts as allowed in 
        section 176.101, subdivision 2a.  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. 
           Subd. 7.  [EXCLUSIVE PROCEDURE.] 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, county, tribal, or reservation insurance 
        policy or self-insurance program. 
           Subd. 8.  [INVALID CLAIMS.] A claim is not valid for 
        purposes of this section if the county agency responsible for 
        supervising the work cannot verify to the commissioner: 
           (1) that appropriate safety training and information is 
        provided to all persons being supervised by the agency under 
        this section; 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 program 
        responsible for supervising the work of the claimant. 
           Sec. 56.  [256J.69] [GRANT DIVERSION.] 
           Subdivision 1.  [ESTABLISHING THE GRANT DIVERSION 
        PROGRAM.] (a) County agencies may develop grant diversion 
        programs for MFIP-S participants participating in employment and 
        training services.  A county agency that chooses to provide 
        grant diversion may divert to an employer part or all of the 
        MFIP-S cash payment for the participant's assistance unit, in 
        compliance with federal regulations and laws.  Such payments to 
        an employer are to subsidize employment for MFIP-S participants 
        as an alternative to public assistance payments. 
           (b) In addition to diverting the MFIP-S grant to the 
        employer, employment and training funds may be used to subsidize 
        the grant diversion placement. 
           (c) Participants in grant diversion shall be compensated by 
        the employer at the same rates, including periodic increases, as 
        similarly situated employees or trainees and in accordance with 
        applicable law, but in no event less than the federal or 
        applicable state minimum wage, whichever is higher. 
           Subd. 2.  [TRAINING AND PLACEMENT.] (a) County agencies 
        shall limit the length of training to nine months.  Placement in 
        a grant diversion training position with an employer is for the 
        purpose of training and employment with the same employer who 
        has agreed to retain the person upon satisfactory completion of 
        training. 
           (b) Placement of any participant in a grant diversion 
        subsidized training position must be compatible with the 
        assessment and employment plan or employability development plan 
        established for the recipient under section 256J.52 or 256K.03, 
        subdivision 8. 
           Sec. 57.  [256J.72] [NONDISPLACEMENT IN WORK ACTIVITIES.] 
           Subdivision 1.  [NONDISPLACEMENT PROTECTION.] For job 
        assignments under jobs programs established under this chapter 
        or chapter 256, 256D, or 256K, the county agency must 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 ensure that no work assignment under this chapter 
        or chapter 256, 256D, or 256K results in: 
           (1) termination, layoff, or reduction of the work hours of 
        an employee for the purpose of hiring an individual under this 
        section; 
           (2) the hiring of an individual if any other person is on 
        layoff, including seasonal layoff, from the same or a 
        substantially equivalent job; 
           (3) any infringement of the promotional opportunities of 
        any currently employed individual; 
           (4) the impairment of existing contract for services of 
        collective bargaining agreements; or 
           (5) a participant filling an established unfilled position 
        vacancy, except for on-the-job training. 
           The written notification must be provided to the 
        appropriate exclusive bargaining representatives at least 14 
        days in advance of placing recipients in temporary public 
        service employment.  The notice must include the number of 
        individuals involved, their work locations and anticipated hours 
        of work, a summary of the tasks to be performed, and a 
        description of how the individuals will be trained and 
        supervised. 
           Subd. 2.  [DISPUTE RESOLUTION.] (a) If there is a dispute 
        between an exclusive bargaining representative and a county 
        provider or employer over whether job duties are within the 
        scope of a collective bargaining unit, the exclusive bargaining 
        representative, the county, the provider, or the employer may 
        petition the bureau of mediation services to determine if the 
        job duties are within the scope of a collective bargaining unit, 
        and the bureau shall render a binding decision. 
           (b) In the event of a dispute under this section, the 
        parties may: 
           (1) use a grievance and arbitration procedure of an 
        existing collective bargaining agreement to process a dispute 
        over whether a violation of the nondisplacement provisions has 
        occurred; or 
           (2) if no grievance and arbitration procedure is in place, 
        either party may submit the dispute to the bureau.  The 
        commissioner of the bureau of mediation services shall establish 
        a procedure for a neutral, binding resolution of the dispute. 
           Subd. 3.  [STATUS OF PARTICIPANT.] A participant may not 
        work in a temporary public service or community service job for 
        a public employer for more than 67 working days or 536 hours, 
        whichever is greater, as part of a work program established 
        under chapter 256, 256D, 256J, or 256K.  A participant who 
        exceeds the time limits in this subdivision is a public 
        employee, as that term is used in chapter 179A.  Upon the 
        written request of the exclusive bargaining representative, a 
        county or public service employer shall make available to the 
        affected exclusive bargaining representative a report of hours 
        worked by participants in temporary public service or community 
        service jobs. 
           Sec. 58.  [256J.74] [RELATIONSHIP TO OTHER PROGRAMS.] 
           Subdivision 1.  [SOCIAL SERVICES.] The county agency shall 
        refer a participant for social services that are offered in the 
        county of financial responsibility according to the criteria 
        established by that county agency under Minnesota Rules, parts 
        9550.0010 to 9550.0092.  A payment issued from federal funds 
        under title XX of the Social Security Act, state funds under the 
        Community Social Services Act, federal or state child welfare 
        funds, or county funds in a payment month must not restrict 
        MFIP-S eligibility or reduce the monthly assistance payment for 
        that participant. 
           Subd. 2.  [CONCURRENT ELIGIBILITY, LIMITATIONS.] A county 
        agency must not count an applicant or participant as a member of 
        more than one assistance unit in a given payment month, except 
        as provided in clauses (1) and (2). 
           (1) A participant who is a member of an assistance unit in 
        this state is eligible to be included in a second assistance 
        unit in the first full month that the participant leaves the 
        first assistance unit and lives with a second assistance unit. 
           (2) An applicant whose needs are met through foster care 
        that is reimbursed under title IV-E of the Social Security Act 
        for the first part of an application month is eligible to 
        receive assistance for the remaining part of the month in which 
        the applicant returns home.  Title IV-E payments and adoption 
        assistance payments must be considered prorated payments rather 
        than a duplication of MFIP-S need. 
           Subd. 3.  [EMERGENCY ASSISTANCE, ASSISTANCE UNIT WITH A 
        MINOR CHILD.] An MFIP-S assistance unit with a minor child or a 
        pregnant woman without a minor child is eligible for emergency 
        assistance when the assistance unit meets the requirements in 
        section 256J.48, subdivision 2. 
           Subd. 4.  [MEDICAL ASSISTANCE.] Medical assistance 
        eligibility for MFIP-S participants shall be determined as 
        described in chapter 256B. 
           Sec. 59.  [256J.75] [COUNTY OF FINANCIAL RESPONSIBILITY 
        POLICIES.] 
           Subdivision 1.  [COUNTY OF FINANCIAL RESPONSIBILITY.] The 
        county of financial responsibility is the county in which a 
        minor child or pregnant woman lives on the date the application 
        is signed, unless subdivision 4 applies.  When more than one 
        county is financially responsible for the members of an 
        assistance unit, financial responsibility must be assigned to a 
        single county beginning the first day of the calendar month 
        after the assistance unit members are required to be in a single 
        assistance unit.  Financial responsibility must be assigned to 
        the county that was initially responsible for the assistance 
        unit member with the earliest date of application.  The county 
        in which the assistance unit is currently residing becomes 
        financially responsible for the entire assistance unit beginning 
        two full calendar months after the month in which financial 
        responsibility was consolidated in one county. 
           Subd. 2.  [CHANGE IN RESIDENCE.] (a) When an assistance 
        unit moves from one county to another and continues to receive 
        assistance, the new county of residence becomes the county of 
        financial responsibility when that assistance unit has lived in 
        that county in nonexcluded status for two full calendar months.  
        "Nonexcluded status" means the period of residence that is not 
        considered excluded time under section 256G.02, subdivision 6.  
        When a minor child moves from one county to another to reside 
        with a different caregiver, the caregiver in the former county 
        is eligible to receive assistance for that child only through 
        the last day of the month of the move.  The caregiver in the new 
        county becomes eligible to receive assistance for the child the 
        first day of the month following the move or the date of 
        application, whichever is later. 
           (b) When an applicant moves from one county to another 
        while the application is pending, the county where application 
        first occurred is the county of financial responsibility until 
        the applicant has lived in the new county for two full calendar 
        months, unless the applicant's move is covered under section 
        256G.02, subdivision 6. 
           Subd. 3.  [RESPONSIBILITY FOR INCORRECT ASSISTANCE 
        PAYMENTS.] A county of residence, when different from the county 
        of financial responsibility, will be charged by the commissioner 
        for the value of incorrect assistance payments and medical 
        assistance paid to or on behalf of a person who was not eligible 
        to receive that amount.  Incorrect payments include payments to 
        an ineligible person or family resulting from decisions, 
        failures to act, miscalculations, or overdue recertification.  
        However, financial responsibility does not accrue for a county 
        when the recertification is overdue at the time the referral is 
        received by the county of residence or when the county of 
        financial responsibility does not act on the recommendation of 
        the county of residence.  When federal or state law requires 
        that medical assistance continue after assistance ends, this 
        subdivision also governs financial responsibility for the 
        extended medical assistance. 
           Subd. 4.  [EXCLUDED TIME.] When an applicant or participant 
        resides in an excluded time facility as described in section 
        256G.02, subdivision 6, the county that is financially 
        responsible for the applicant or participant is the county in 
        which the applicant or participant last resided outside such a 
        facility immediately before entering the facility.  When an 
        applicant or participant has not resided in this state for any 
        time other than excluded time as defined in section 256G.02, 
        subdivision 6, the county that is financially responsible for 
        the applicant or participant is the county in which the 
        applicant or participant resides on the date the application is 
        signed. 
           Sec. 60.  [256J.76] [COUNTY ADMINISTRATIVE AID.] 
           Subdivision 1.  [ADMINISTRATIVE FUNCTIONS.] Beginning July 
        1, 1997, counties will receive federal funds from the TANF block 
        grant for use in supporting eligibility, fraud control, and 
        other related administrative functions.  The federal funds 
        available for distribution, as determined by the commissioner, 
        must be an amount equal to federal administrative aid 
        distributed for fiscal year 1996 under titles IV-A and IV-F of 
        the Social Security Act in effect prior to October 1, 1996.  
        This amount must include the amount paid for local 
        collaboratives under sections 245.4932 and 256F.13, but must not 
        include administrative aid associated with child care under 
        section 119B.05, with emergency assistance intensive family 
        preservation services under section 256.8711, with 
        administrative activities as part of the employment and training 
        services under section 256.736, or with fraud prevention 
        investigation activities under section 256.983. 
           Subd. 2.  [ALLOCATION OF COUNTY FUNDS.] The commissioner 
        shall determine and allocate the funds available to each county, 
        on a calendar year basis, proportional to the amount paid to 
        each county for fiscal year 1996, excluding the amount paid for 
        local collaboratives under sections 245.4932 and 256F.13.  For 
        the period beginning July 1, 1997, and ending December 31, 1998, 
        each county shall receive 150 percent of its base year 
        allocation. 
           Subd. 3.  [MONTHLY PAYMENTS TO COUNTIES.] The commissioner 
        shall pay counties monthly as federal funds are available.  The 
        commissioner may certify the payments for the first three months 
        of a calendar year. 
           Subd. 4.  [REPORTING REQUIREMENT.] The commissioner shall 
        specify requirements for reporting according to section 256.01, 
        subdivision 2, paragraph (17).  Each county shall be reimbursed 
        at a rate of 50 percent of eligible expenditures up to the limit 
        of its allocation. 
           Sec. 61.  [NOTICE AND REFERRAL PROCEDURES FOR DOMESTIC 
        VIOLENCE VICTIMS.] 
           The commissioner of human services shall develop procedures 
        for the county agencies and their contractors to identify 
        victims of domestic violence.  The procedures must provide, at a 
        minimum, universal notification to all applicants and recipients 
        of MFIP-S that: 
           (1) referrals to counseling and supportive services are 
        available for victims of domestic violence; 
           (2) nonpermanent resident battered individuals married to 
        U.S. citizens or permanent residents may be eligible to petition 
        for permanent residency under the Violence Against Women Act, 
        and that referrals to appropriate legal services are available; 
        and 
           (3) victims of domestic violence are exempt from the 
        60-month limit on assistance while the individual is complying 
        with an approved safety plan, as defined in section 256J.49, 
        subdivision 11. 
           Notification must be in writing and orally at the time of 
        application and recertification, when the individual is referred 
        to the title IV-D child support agency, and at the beginning of 
        any job training or work placement assistance program. 
           Sec. 62.  [DISCONTINUATION OF WAIVERS.] 
           If the federal government refuses to continue waivers 
        granted on or before August 11, 1996, or if the federal 
        government refuses to modify such waivers as requested by the 
        department of human services, then the department of human 
        services may implement the MFIP-S program in compliance with the 
        federal mandate until the end of the next legislative session.  
        The department of human services shall publish its decision to 
        implement the federal mandate in the State Register and propose 
        legislation to address the conflict in the next legislative 
        session. 
           Sec. 63.  [COUNTY PERFORMANCE STANDARDS.] 
           (a) Beginning July 1, 1998, and each quarter thereafter, 
        the commissioner of human services shall inform all counties of 
        each county's performance on the following measures: 
           (1) MFIP-S caseload reduction; 
           (2) average placement wage rate; 
           (3) rate of job retention after three months; 
           (4) placement rate into unsubsidized jobs; 
           (5) federal participation requirements as specified in 
        title 1 of Public Law Number 104-193 of the Personal 
        Responsibility and Work Opportunity Act of 1996; 
           (6) the average length of time an individual receives 
        public assistance, beginning with new MFIP-S applicants, and the 
        rate of recidivism; and 
           (7) the cost per placement of an individual in unsubsidized 
        employment. 
           (b) By January 1, 1998, the counties and the commissioner 
        shall establish performance standards for each of the measures 
        in paragraph (a). 
           (c) By July 1, 1998, the counties and the commissioner 
        shall develop a plan to allocate, if such sanctions occur, 
        federal sanctions between the state and counties resulting from 
        a failure to meet the performance standards specified in title 1 
        of Public Law Number 104-193 of the Personal Responsibility and 
        Work Opportunity Act of 1996. 
           (d) The commissioner shall report the plan to the 
        legislature by October 1, 1998. 
           Sec. 64.  [FINDINGS; CONTINGENT BENEFIT STANDARDS.] 
           Subdivision 1.  [FINDINGS.] For purposes of Minnesota 
        Statutes, sections 256J.12 and 256J.43, the legislature makes 
        the following findings: 
           (1) the legislature is statutorily required to balance the 
        state budget, and, in balancing the state budget, faces 
        competing funding priorities with limited resources; 
           (2) the legislature expects that federal financial support 
        for state-administered welfare programs, including the Minnesota 
        family investment program, will decrease in the wake of the 
        federal welfare reform legislation; 
           (3) many states are using the flexibility given to them 
        under the federal welfare reform legislation to enact more 
        restrictive welfare programs than Minnesota; 
           (4) despite likely weaker federal financial support and the 
        trend in other states toward more restrictive welfare programs, 
        the legislature wishes to continue to reform the state's welfare 
        system and manage funds appropriated for the Minnesota family 
        investment program so that the state may provide meaningful 
        assistance for all needy Minnesota families and their children; 
           (5) the legislature intends to provide a safety net for 
        recent interstate migrants and to encourage their 
        self-sufficiency; 
           (6) Minnesota county human service agencies have reported 
        to the commissioner of human services verified cases of 
        individuals from other states to this state at least in part 
        because this state has higher cash assistance benefits; 
           (7) the legislature anticipates that, as other states 
        further restrict their welfare programs, migration to this state 
        by families seeking higher welfare benefits will increase 
        significantly and may cause expenditures in excess of the funds 
        appropriated for this program; 
           (8) the policy of the state of Minnesota is to make welfare 
        benefits a neutral factor in a family's decision to move to 
        Minnesota, which is required for the state to continue its 
        commitment to reform its welfare system and to provide 
        meaningful assistance for needy Minnesota families and their 
        children; 
           (9) if new residents experience any harm under Minnesota 
        Statutes, sections 256J.12 and 256J.43, such harm is mitigated, 
        since new residents, if eligible, can receive benefits 
        immediately under a hardship exemption; and in all cases, if 
        eligible, can receive cash assistance after 30 days; if 
        eligible, they will receive the cash assistance based on the 
        assistance standard they would have received in their previous 
        state of residence for families of the same size; 
           (10) without Minnesota Statutes, sections 256J.12 and 
        256J.43, the hardship to the state and its needy families and 
        children would be great because significant reductions in 
        welfare benefits will likely occur; and 
           (11) Minnesota Statutes, sections 256J.12 and 256J.43, 
        advance the public interest of continuing to provide meaningful 
        assistance to needy Minnesota families and their children while 
        providing a safety net for recent interstate migrants. 
           Subd. 2.  [REDUCTION IF COURT ENJOINMENT.] In the event a 
        court enjoins enforcement of Minnesota Statutes, section 256J.12 
        or 256J.43, this subdivision shall apply.  Beginning July 1, 
        1997, the commissioner of human services shall monitor the 
        number of individual applicants for AFDC under Minnesota 
        Statutes, chapter 256, and for public assistance under this 
        chapter who have lived in this state for less than 12 
        consecutive months and shall implement clauses (1) to (3) when 
        the commissioner determines that the cumulative number of such 
        applicants since July 1, 1997, has reached at least 1,500.  The 
        commissioner shall: 
           (1) reduce the assistance standards for the AFDC program 
        and the transitional standards for the MFIP-S program under this 
        chapter for all recipients but only in an amount sufficient to 
        remain within the forecasted budgets for those programs; 
        reductions shall take effect beginning with payments made at the 
        start of the second calendar month following the commissioner's 
        determination that the conditions specified in this paragraph 
        have occurred; make caregivers who have lived in this state for 
        less than 12 consecutive months ineligible for child care 
        assistance provided through the AFDC, MFIP-S, MFIP-R, and MFIP 
        programs, and the basic sliding fee child care program.  
        Education and training are not work activities for purposes of 
        caregivers who have lived in this state for less than 12 
        months.  These caregivers shall immediately comply with job 
        search requirements until there is an offer of suitable 
        employment, and the caregiver shall accept any offer of suitable 
        employment; 
           (2) notify the fiscal and policy chairs of the house and 
        senate human services committees that the reductions have taken 
        place; and 
           (3) formulate a plan to be presented to the next 
        legislative session. 
           Sec. 65.  [TRANSFER FUNDING.] 
           Effective July 1, 1997, all funding related to the child 
        care assistance programs under Minnesota Statutes, section 
        256.035, subdivision 8, is transferred to the commissioner of 
        children, families, and learning. 
           Sec. 66.  [TRIBAL EMPLOYMENT AND TRAINING PROGRAM; REPORT.] 
           Subdivision 1.  [AUTHORITY.] Effective July 1, 1997, the 
        commissioner of human services, in conjunction with Indian 
        tribes in the state, shall develop and present to the 
        legislature a plan for providing state funds in support of a 
        family assistance program administered by Indian tribes that 
        have a reservation in this state and have federal approval to 
        operate a tribal program.  This plan must identify the primary 
        arrangements needed to effect tribal administration and needed 
        funding, including agreements with a consortium of tribes, that 
        accurately reflect the state funding levels for Indian people as 
        would otherwise be available to MFIP-S program recipients.  This 
        plan must be developed consistent with the requirements set 
        forth in the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, Public Law Number 104-193, section 
        412(b)(1)(B).  For purposes of this section, "Indian tribe" 
        means a tribe, band, nation, or other federally recognized group 
        or community of Indians. 
           Subd. 2.  [REPORT TO THE LEGISLATURE.] The plan referred to 
        in subdivision 1 and any resulting proposal for legislation must 
        be presented to the legislature by December 15, 1997. 
           Subd. 3.  [TRIBAL AGREEMENTS.] Once the plan in subdivision 
        1 is presented to and approved by the legislature and signed 
        into law, the commissioner is authorized to enter into 
        agreements with Indian tribes or consortia of tribes consistent 
        with the plan. 
           Subd. 4.  [TRIBAL AND STATE COORDINATION.] The commissioner 
        shall consult with Indian tribes in the state when formulating 
        general policies regarding the implementation of the state's 
        public assistance program operated under title IV-A of the 
        Social Security Act.  The commissioner shall take into 
        consideration circumstances affecting Indians, including 
        circumstances identified by Indian tribes, when designing the 
        state's program.  The state shall provide Indians with equitable 
        access to assistance as provided in the Personal Responsibility 
        and Work Opportunity Reconciliation Act of 1996, Public Law 
        Number 104-193, section 402(a)(5). 
           Subd. 5.  [EMPLOYMENT TRAINING.] Nothing in this section 
        precludes any Indian tribe in this state from participating in 
        employment and training or child care programs otherwise 
        available by law to Indian tribes under: 
           (1) the MFIP program under Minnesota Statutes, sections 
        256.031 to 256.0361, or its successor program; 
           (2) project STRIDE under Minnesota Statutes, section 
        256.736, or its successor program; 
           (3) child care programs for tribal program participants; 
        and 
           (4) the Minnesota injury protection program. 
           Subd. 6.  [TRIBAL SOVEREIGN STATUS.] Nothing in this 
        section shall be construed to waive, modify, expand, or diminish 
        the sovereignty of federally recognized Indian tribes, nor shall 
        any Indian tribes be required in any way to deny their 
        sovereignty or waive their immunities except as mandated by 
        federal law as a requirement of entering into an agreement with 
        the state under this section. 
           Subd. 7.  [PLANNING.] The commissioner of human services 
        shall assist tribes, in a collaborative effort, with the 
        development of the plan under subdivision 1 and efforts 
        associated with such development.  Such efforts shall include, 
        but not be limited to, data collection regarding:  receipt of 
        public assistance by Indians, unemployment rates within tribal 
        service delivery areas, and dissemination of information and 
        research.  The commissioner shall provide technical assistance 
        to tribal welfare reform task force members and tribes regarding 
        the implementation and operation of public assistance programs 
        and assistance to tribes to develop the plan under subdivision 1.
           Sec. 67.  [FORECASTING FUNDS.] 
           The MFIP-S program is not an entitlement.  For the 
        assistance to families grants part of the budget, the 
        commissioner of human services shall not expend more funds than 
        the appropriations made available by the legislature.  
        Appropriations made available must include the state 
        appropriated funds and federal funds specified for this purpose 
        and other available funds transferred from other accounts as 
        allowed by Minnesota law.  Regardless of this limitation on 
        expenditures, the total projected costs of this program must be 
        forecasted and recognized in the fund balance. 
           Sec. 68.  [STUDY; NONCUSTODIAL MINOR PARENTS.] 
           The commissioner shall study and report back to the 
        legislature by February 1, 1998, with recommendations for 
        legislative changes related to minor parents and the obligations 
        of noncustodial minor parents and their parents to cover the 
        cost of caring for the custodial parent and child who are living 
        in households specified in Minnesota Statutes, section 256J.14, 
        subdivision 1, paragraph (a), or in other adult-supervised 
        living arrangements. 
           Sec. 69.  [ADMINISTRATIVE RULES.] 
           The commissioner of human services may adopt rules to 
        implement Minnesota Statutes, chapters 256J and 256K.  Because 
        of the need for flexible and swift means of implementing this 
        program statewide, the rules adopted by the commissioner to 
        implement this program are exempted from Minnesota Statutes, 
        chapter 14, until February 28, 1999.  The commissioner shall 
        prepare legislation for submission to the legislature in 1998 
        incorporating the substance of any rules adopted under this 
        section and repealing those rules. 
           Sec. 70.  [STUDY OF WORKING FAMILIES EXCEPTION TO 60-MONTH 
        LIMIT.] 
           The commissioner of human services shall report to the 
        legislature by January 15, 1998, on the feasibility of 
        establishing an exception to the 60-month lifetime limit on 
        TANF-funded assistance for families in which the caregiver or 
        caregivers are employed for a substantial number of hours each 
        week or are both employed and attending an educational program.  
           Sec. 71.  [TOTAL HOUSEHOLD INCOME COUNTED.] 
           Effective January 1, 1999, notwithstanding any provision of 
        Minnesota Statutes, chapter 256J, to the contrary, eligibility 
        for assistance under Minnesota Statutes, chapter 256J, the 
        Minnesota family investment program-statewide, must count income 
        from all unrelated individuals living in the household in order 
        to qualify for MFIP-S assistance. 
           Sec. 72.  [REPAYMENT OF POST-SECONDARY EDUCATION FUNDS; 
        PROPOSAL REQUIRED.] 
           By February 15, 1998, the commissioner of human services, 
        in consultation with representatives of county agencies, must 
        develop and submit to the legislature a proposal that specifies 
        a methodology for the repayment of funds under Minnesota 
        Statutes 1996, section 256J.53, subdivision 4.  The 
        commissioner's proposal must not apply the methodology 
        retroactively to participants who had a post-secondary education 
        or training program approved under that section before the date 
        that the commissioner's proposal, if enacted, becomes effective. 
           Sec. 73.  [SEVERABILITY CLAUSE.] 
           If any provision of this act is enjoined from 
        implementation or found unconstitutional by any court of 
        competent jurisdiction, the remaining provisions shall remain 
        valid and shall be given full effect. 
           Sec. 74.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 256.12, subdivisions 
        9, 10, 14, 15, 19, 20, 21, 22, and 23; 256.72; 256.73, 
        subdivisions 1, 1a, 1b, 2, 3a, 3b, 5, 5a, 6, 8, 8a, 9, 10, and 
        11; 256.7341; 256.7365, subdivisions 1, 2, 3, 4, 5, 6, 7, and 9; 
        256.7366; 256.737; 256.738; 256.7381; 256.7382; 256.7383; 
        256.7384; 256.7385; 256.7386; 256.7387; 256.7388; 256.739; 
        256.74, subdivisions 1, 1a, 1b, 2, and 6; 256.745; 256.75; 
        256.76, subdivision 1; 256.78; 256.80; 256.81; 256.84; 256.85; 
        256.86; 256.863; 256.871; and 256.879, are repealed effective 
        July 1, 1998. 
           (b) Minnesota Statutes 1996, section 256.736, subdivisions 
        16 and 18, are repealed effective June 30, 1997. 
           (c) From January 1, 1998, to March 31, 1998, the statutory 
        sections listed in paragraph (a) apply only in counties that 
        operate an MFIP field trial and that continue to provide project 
        STRIDE services to members of the MFIP comparison group, and in 
        those counties that have not completed conversion to MFIP-S 
        employment and training services. 
           (d) From April 1, 1998, through June 30, 1998, the sections 
        listed in paragraph (a) are effective only in counties that 
        operate an MFIP field trial and that continue to provide project 
        STRIDE services to members of the comparison group. 
           Sec. 75.  [EFFECTIVE DATE.] 
           (a) Sections 2, 7, 8, 16, 32, 33, 60, 61, and 64 are 
        effective July 1, 1997.  
           (b) The remaining provisions of this article are effective 
        January 1, 1998, unless otherwise specified in the section. 
                                   ARTICLE 2 
                       WORK FIRST PROGRAM PILOT PROJECTS 
           Section 1.  [256K.01] [WORK FIRST PROGRAM.] 
           Subdivision 1.  [CITATION.] Sections 256K.01 to 256K.09 may 
        be cited as the work first program. 
           Subd. 2.  [DEFINITIONS.] As used in sections 256K.01 to 
        256K.09, the following words have the meanings given them. 
           (a) "Applicant" means an individual who has submitted a 
        request for assistance and has never received an AFDC, MFIP-S or 
        a family general assistance grant through the MAXIS computer 
        system as a caregiver, or an applicant whose AFDC, MFIP-S or 
        family general assistance application was denied or benefits 
        were terminated due to noncompliance with work first 
        requirements. 
           (b) "Application date" means the date any Minnesota county 
        agency receives a signed and dated combined application form 
        Part I. 
           (c) "CAF" means a combined application form on which people 
        apply for multiple assistance programs, including:  cash 
        assistance, refugee cash assistance, Minnesota supplemental aid, 
        food stamps, medical assistance, general assistance medical 
        care, emergency assistance, emergency medical assistance, and 
        emergency general assistance medical care. 
           (d) "Caregiver" means a parent or eligible adult, including 
        a pregnant woman, who is part of the assistance unit that has 
        applied for or is receiving an AFDC, MFIP-S, or family general 
        assistance grant.  In a two-parent family, both parents are 
        caregivers. 
           (e) "Child support" means a voluntary or court-ordered 
        payment by absent parents in an assistance unit. 
           (f) "Commissioner" means the commissioner of human services.
           (g) "Department" means the department of human services. 
           (h) "Employability development plan" or "EDP" means a plan 
        developed by the applicant, 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. 
           (i) "EDP status report form" means a program form on which 
        deferred participants indicate what has been achieved in the 
        participant's employability development plan and the types of 
        problems encountered. 
           (j) "Employment advisor" means a program staff member 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. 
           (k) "Financial specialist" means a program staff member who 
        is trained to explain the benefits offered under the program, 
        determine eligibility for different assistance programs, and 
        broker other resources from employers and the community. 
           (l) "Job network" means individuals that a person may 
        contact to learn more about particular companies, inquire about 
        job leads, or discuss occupational interests and expertise. 
           (m) "Job search allowance" means the amount of financial 
        assistance needed to support job search. 
           (n) "Job search plan" or "JSP" means the specific plan 
        developed by the applicant, with advice from the employment 
        advisor, to secure a job as soon as possible, and focus the 
        scope of the job search process and other activities.  
           (o) "JSP status report form" means a program form on which 
        participants indicate the number of submitted job applications, 
        job interviews held, jobs offered, other outcomes achieved, 
        problems encountered, and the total number of hours spent on job 
        search per week. 
           (p) "Participant" means a recipient who is required to 
        participate in the work first program. 
           (q) "Program" means the work first program. 
           (r) "Provider" means an employment and training agency 
        certified by the commissioner of economic security under section 
        268.871, subdivision 1. 
           (s) "Self-employment" means employment where people work 
        for themselves rather than an employer, are responsible for 
        their own work schedule, and do not have taxes or FICA withheld 
        by an employer. 
           (t) "Self-sufficiency agreement" means the agreement 
        between the county or its representative and the applicant that 
        describes the activities that the applicant must conduct and the 
        necessary services and aid to be furnished by the county to 
        enable the individual to meet the purpose of either the job 
        search plan or employability development plan. 
           (u) "Subsidized job" means a job that is partly reimbursed 
        by the provider for cost of wages for participants in the 
        program. 
           Subd. 3.  [ESTABLISHING WORK FIRST PROGRAM.] The 
        commissioners of human services and economic security may 
        develop and establish pilot projects which require applicants 
        for aid under AFDC, MFIP-S or family general assistance to meet 
        the requirements of the work first program.  The purpose of the 
        program is to: 
           (1) ensure that the participant is working as early as 
        possible; 
           (2) promote 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.  [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 neighborhood 
        associations are involved. 
           Subd. 5.  [PROGRAM DESIGN.] The program shall meet the 
        following principles: 
           (1) work is the primary means of economic support; 
           (2) the individual's potential is reviewed during the 
        application process to determine how to approach the job market 
        aggressively; 
           (3) public aid such as cash and medical assistance, child 
        care, child support assurance, 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. 6.  [DUTIES OF COMMISSIONER.] In addition to any 
        other duties imposed by law, the commissioner shall: 
           (1) establish the program according to sections 256K.01 to 
        256K.09 and allocate money as appropriate to pilot counties 
        participating in the program; 
           (2) provide systems development and staff training; 
           (3) accept and supervise the disbursement of any funds that 
        may be provided from other sources for use in the demonstration 
        program; and 
           (4) direct a study to safeguard the interests of children. 
           Subd. 7.  [DUTIES OF COUNTY AGENCY.] The county agency 
        shall: 
           (1) collaborate with the commissioners of human services 
        and economic security and other agencies to develop, implement, 
        and evaluate the demonstration of the work first program; 
           (2) operate the work first program in partnership with 
        private and public employers, local industry councils, labor 
        unions, and employment, educational, and social service 
        agencies, according to subdivision 4; and 
           (3) ensure that program components such as client 
        orientation, immediate job search, job development, creation of 
        temporary public service jobs, job placements, and postplacement 
        follow-up are implemented according to the work first program. 
           Subd. 8.  [DUTIES OF PARTICIPANT.] To be eligible for an 
        AFDC, MFIP-S or family general assistance benefit, a participant 
        shall cooperate with the county agency, the provider, and the 
        participant's employer in all aspects of the program. 
           Sec. 2.  [256K.015] [ELIGIBILITY FOR WORK FIRST.] 
           To be eligible for work first, an applicant must meet the 
        eligibility requirements of AFDC or MFIP-S, whichever is in 
        effect in the county, to the extent that those requirements are 
        not inconsistent with this chapter. 
           Sec. 3.  [256K.02] [PROGRAM PARTICIPANTS; PROGRAM 
        EXPECTATIONS.] 
           All applicants selected for participation are expected to 
        meet the requirements under the work first program.  Payments 
        for rent and utilities up to the AFDC, MFIP-S, or family general 
        assistance program benefits to which the assistance unit is 
        entitled will be vendor paid for as many months as the applicant 
        is eligible or six months, whichever comes first.  The residual 
        amount after vendor payment, if any, will be paid to the 
        recipient, unless it is used as a wage subsidy under section 
        256K.04, subdivision 2. 
           Sec. 4.  [256K.03] [PROGRAM REQUIREMENTS.] 
           Subdivision 1.  [NOTIFICATION OF PROGRAM.] Except for the 
        provisions in this section, the provisions for the AFDC, MFIP-S, 
        and family general assistance application process shall be 
        followed.  Within two days after receipt of a completed combined 
        application form, the county agency must refer to the provider 
        the applicant who meets the conditions under section 256K.02, 
        and notify the applicant in writing of the program including the 
        following provisions: 
           (1) notification that, as part of the application process, 
        applicants are required to attend orientation, to be followed 
        immediately by a 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; and 
           (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.
           Subd. 2.  [PROGRAM ORIENTATION.] The county must give a 
        face-to-face orientation regarding the program to the applicant 
        within five days after the date of application.  The orientation 
        must be designed to inform the applicant of: 
           (1) the importance of locating and obtaining a job as soon 
        as possible; 
           (2) benefits to be provided to support work; 
           (3) the manner by which benefits shall be paid; 
           (4) 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; 
           (5) the consequences for failure without good cause to 
        comply with program requirements; and 
           (6) the appeal process. 
           Subd. 3.  [JOB SEARCH PLAN; EMPLOYMENT ADVISOR; FINANCIAL 
        SPECIALIST.] At the end of orientation, the provider must assign 
        an employment advisor and a financial specialist to the 
        applicant.  With advice from the employment advisor, the 
        applicant must develop a job search plan based on existing job 
        markets, prior employment, work experience, and transferable 
        work skills, unless exempt under subdivision 5.  A job search 
        must be planned and conducted for a period of up to eight 
        consecutive weeks from the date of application and for at least 
        32 hours per week.  The types of and target number of job 
        openings to be pursued per week must be written in the job 
        search plan.  The following activities may be included in the 
        job search plan: 
           (1) motivational counseling; 
           (2) job networking or training on how to locate job 
        openings; 
           (3) development of a personal resume; and 
           (4) information on how to conduct job interviews and 
        establish a personal job network. 
           Following the development of the job search plan or the 
        employability development plan under subdivision 8, the 
        financial specialist must interview the applicant to determine 
        eligibility for and the extent of benefits under sections 
        256K.06 and 256K.07 to support the job search or employability 
        development plan.  The provider must attach to the appropriate 
        plan the summary of the necessary enabling services and benefits 
        to be furnished by the provider.  The provider or its 
        representative and the applicant must sign the plan, with its 
        attachment, to indicate a self-sufficiency agreement between the 
        provider and the participant. 
           Subd. 4.  [IMMEDIATE JOB SEARCH.] An applicant must be 
        required to begin job search within seven days after the date of 
        application for at least 32 hours per week for up to eight 
        weeks, unless exempt under subdivision 5 or deferred under 
        subdivision 8.  For an applicant who is working at least 20 
        hours per week, job search shall consist of 12 hours per week 
        for up to eight weeks.  Within the first five days of job 
        search, the applicant is required to initiate informational 
        contacts with prospective employers, generate additional job 
        leads from the job network, review references and experiences 
        from previous employment, and carry out the other activities 
        under the job search plan developed under subdivision 3. 
           Subd. 5.  [EXEMPTION CATEGORIES.] (a) The applicant will be 
        exempt from the job search requirements and development of a job 
        search plan and an employability development plan under 
        subdivisions 3, 4, and 8 if the applicant belongs to any of the 
        following groups: 
           (1) caregivers under age 20 who have not completed a high 
        school education and are attending high school on a full-time 
        basis; 
           (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) caregivers 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) caregivers or other caregiver relatives of a child 
        under the age of three who personally provide full-time care for 
        the child; 
           (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) individuals for whom lack of proficiency in English is 
        a barrier to employment, provided such individuals are 
        participating in an intensive program which lasts no longer than 
        six months and is designed to remedy their language deficiency; 
           (10) individuals who, because of advanced age or lack of 
        ability, are incapable of gaining proficiency in English, as 
        determined by the county social worker, shall continue to be 
        exempt under this subdivision and are not subject to the 
        requirement that they be participating in a language program; 
           (11) individuals under such duress that they are incapable 
        of participating in the program, as determined by the county 
        social worker; or 
           (12) individuals in need of refresher courses for purposes 
        of obtaining professional certification or licensure. 
           (b) In a two-parent family, only one caregiver may be 
        exempted under paragraph (a), clauses (4) and (6). 
           Subd. 6.  [COUNTY DUTIES.] The county must act on the 
        application within 30 days of the application date.  If the 
        applicant is not eligible, the application will be denied and 
        the county must notify the applicant of the denial in writing.  
        An applicant whose application has been denied may be allowed to 
        complete the job search plan; however, supportive services will 
        not be provided. 
           Subd. 7.  [JOB SEARCH PLAN STATUS REPORT.] The applicant or 
        participant must submit a completed job search plan status 
        report form to the employment advisor every two weeks during the 
        job search process, with the first completed form due 21 days 
        after the date of application. 
           Subd. 8.  [EMPLOYABILITY DEVELOPMENT PLAN.] At the 
        discretion and approval of the employment advisor, the applicant 
        may be deferred from the requirement to conduct at least 32 
        hours of job search per week for up to eight consecutive weeks, 
        if during the development of the job search plan, the applicant 
        is determined to: 
           (1) not have worked within the past 12 months and not have 
        a high school or a general equivalency diploma provided the 
        applicant agrees to develop and carry out an employability 
        development plan instead of job search, and concurrently work 
        for at least 16 hours per week in a temporary public service 
        job.  The employability development plan must include the 
        employment goals and specific outcomes the participant must 
        achieve; 
           (2) be within six months of completing any post-secondary 
        training program, provided that the applicant agrees to develop 
        and carry out an employability development plan instead of a job 
        search, and concurrently work for a minimum number of hours per 
        week in a temporary public service job.  The employability 
        development plan must include the employment goal and specific 
        outcomes that the participant must achieve.  The applicant that 
        is deferred under this subdivision may choose to work in a job 
        other than a public service job for a minimum number of hours 
        per week rather than in a temporary public service job.  For 
        individuals who are participating in an educational program 
        under this clause, and who are attending school full time as 
        determined by the institution, there is no work requirement.  
        For individuals participating in an educational program on a 
        part-time basis as determined by the institution, the minimum 
        number of hours that a participant must work shall be decreased 
        as the participant increases the number of credit hours taken, 
        except that the participant shall not be required to work more 
        than eight hours per week. 
           During vacation periods of one month or more, the 16-hour 
        per week minimum work requirement shall apply.  The applicant 
        may be deferred for up to six months.  At the end of the 
        deferment period, the participant must develop a job search plan 
        and conduct at least 32 hours of job search per week for up to 
        eight consecutive weeks, and submit reports as required under 
        subdivisions 3 and 4; or 
           (3) be in treatment for chemical dependency, be a victim of 
        domestic abuse, or be homeless, provided that the applicant 
        agrees to develop an employability development plan instead of a 
        job search plan, and immediately follow through with the 
        activities in the employability development plan.  The 
        employability development plan must include specific outcomes 
        that the applicant must achieve for the duration of the 
        employability development plan and activities which are needed 
        to address the issues identified.  Under this clause, the 
        applicant may be deferred for up to eight weeks. 
           Subd. 9.  [EDP STATUS REPORT.] The participant who is 
        deferred from job search under subdivision 8 must submit a 
        completed employability development plan status report form to 
        the employment advisor every 14 days as long as the participant 
        continues to be deferred, with the first completed form due 21 
        days after the date of application. 
           Subd. 10.  [JOB OFFER.] The participant must not refuse any 
        job offer, provided that the job is within the participant's 
        physical and mental abilities, pays hourly gross wages of not 
        less than the applicable state or federal minimum wage, and 
        meets health and safety standards set by federal, state, and 
        county agencies.  If a job is offered, the participant must 
        inform the provider immediately to redetermine eligibility for 
        and extent of benefits and services to support work.  To enhance 
        job retention, the provider may provide services such as 
        motivational counseling or on-site problem solving for up to six 
        months.  The participant who has completed at least six months 
        of work in a nonsubsidized job shall be encouraged to 
        participate in a training program that would improve the 
        participant's ability to obtain a job that pays a higher wage. 
           Subd. 11.  [DUTY TO REPORT.] The participant must 
        immediately inform the provider regarding any changes related to 
        the participant's employment status. 
           Subd. 12.  [REQUIREMENT TO WORK IN A TEMPORARY PUBLIC 
        SERVICE JOB.] (a) If after the completion of the maximum eight 
        weeks of job search the participant has failed to secure a 
        nonsubsidized or a subsidized job for at least 32 hours per 
        week, or does not earn a net income from self-employment that is 
        equal to at least the AFDC, MFIP-S or family general assistance 
        monthly grant for the household size, whichever is applicable, 
        the participant is required to work in a temporary public 
        service job for up to 67 working days for (1) at least 32 hours 
        per week, or (2) a period equivalent to the result of dividing 
        the monthly grant amount which the participant would otherwise 
        receive, by the federal hourly minimum wage, or applicable 
        hourly state minimum wage, or the hourly rate of pay for 
        individuals employed in the same occupation at the site, 
        whichever is highest.  If the result is more than 128 hours per 
        month, the participant's requirement to work in a temporary 
        public service job shall not be more than 32 hours per week. 
           (b) Within seven days from the date of application, the 
        participant who is deferred under subdivision 8, clause (1) or 
        (2), and is participating in an educational program on a 
        part-time basis must work in a temporary public service job as 
        required under subdivision 8, clause (2). 
           (c) The provider shall strive to match the profile of the 
        participant with the needs of the employers that are 
        participating in a temporary jobs program under section 256K.05. 
           Sec. 5.  [256K.04] [JOB DEVELOPMENT AND SUBSIDY.] 
           Subdivision 1.  [JOB INVENTORY.] The provider must develop 
        an inventory of job openings including full-time, part-time, 
        permanent, temporary or seasonal, and training positions in 
        partnership with private and public employers, local industry 
        councils, and employment agencies.  To the extent possible, the 
        inventory must include specific information regarding job 
        openings, must be updated on a weekly basis, and must be 
        available to all participants on a daily basis. 
           Subd. 2.  [JOB SUBSIDY.] The county may use all or part of 
        the AFDC, MFIP-S or family general assistance benefit as a 
        subsidy to employers for the purpose of providing work 
        experience or training to the participant who has completed the 
        job search plan, provided that: 
           (1) the job to be subsidized is permanent and full time, 
        and pays an hourly rate of at least $6 per hour; 
           (2) the employer agrees to retain the participant after 
        satisfactory completion of the work experience or training 
        period; and 
           (3) the participant has first tried to secure a 
        nonsubsidized job by following the job search plan.  
           The subsidy may be available for up to six months. 
           Sec. 6.  [256K.05] [TEMPORARY JOBS PROGRAM.] 
           Subdivision 1.  [PROGRAM ESTABLISHED.] The provider must 
        establish and operate a program to provide temporary jobs to 
        participants who, after eight weeks of job search, are not hired 
        into a nonsubsidized or a subsidized job, or are deferred under 
        section 256K.03, subdivision 8.  The temporary jobs to be 
        created under this section must be public service jobs that 
        serve a useful public service such as:  health, social service, 
        environmental protection, education, urban and rural development 
        and redevelopment, welfare, recreation, public facilities, 
        public safety, community service, services to the aged or 
        disabled citizens, and child care. 
           Subd. 2.  [ASSIGNMENT TO TEMPORARY PUBLIC SERVICE 
        JOBS.] The provider must assign the participant who (1) is 
        within completion of the required eight weeks of job search and 
        has failed to secure a nonsubsidized or a subsidized job for at 
        least 32 hours per week, or (2) does not earn a net income from 
        self-employment that is equal to at least the AFDC, MFIP-S or 
        family general assistance monthly grant for the household size, 
        whichever is applicable, to a temporary public service job.  The 
        assignment must be made seven days before the end of the job 
        search and be based on section 256K.03, subdivision 12.  The 
        participant that is deferred under section 256K.03, subdivision 
        8, will be assigned by the provider to a temporary public 
        service job within seven days after the application. 
           Subd. 3.  [PARTICIPANT'S STATUS.] The participant who is 
        working in a temporary public service job under this section is 
        not considered an employee for the purposes of unemployment 
        insurance compensation, retirement, or civil service laws, and 
        shall not perform work ordinarily performed by a public employee.
           Subd. 4.  [CONTINUOUS JOB SEARCH REQUIREMENT.] At the 
        discretion of the provider, the participant who is working in a 
        temporary public service job under section 256K.03, subdivision 
        12, may be required to continue to look for a job for up to 
        eight hours per week in addition to working.  The participant 
        who is working at least 20 hours per week but less than 32 hours 
        per week in a nonsubsidized or subsidized job may be required to 
        look for a job for up to 20 hours per week in lieu of work in 
        the temporary public service job so that the total hours of work 
        and job search is not more than 40 hours per week. 
           Subd. 5.  [EXCUSED ABSENCES.] The participant who is 
        working in a temporary public service job may be allowed excused 
        absences from the assigned temporary job site up to eight hours 
        per month.  For purposes of this subdivision, "excused absence" 
        means absence due to temporary illness or injury of the 
        caregiver or a member of the caregiver's family, the 
        unavailability of appropriate child care or unavailability of 
        transportation needed to go to and from the work site, a job 
        interview, or a nonmedical emergency.  For purposes of this 
        subdivision, "emergency" means a sudden, unexpected occurrence 
        or situation of a serious or urgent nature that requires action. 
           Subd. 6.  [MOVE TO A DIFFERENT COUNTY.] If the applicant or 
        recipient who is required to participate in the work first 
        program moves to a different county in this state, the benefits 
        and enabling services agreed upon in the self-sufficiency 
        agreement shall be provided by the pilot county where the 
        applicant or recipient originated, provided the move was part of 
        the job search or employability development plan.  If the 
        applicant or recipient is moving to a different county for 
        failure to comply with the requirements of the work first 
        program, the applicant or recipient will not be eligible for 
        MFIP-S in this state for at least six months from the date of 
        the move. 
           Sec. 7.  [256K.06] [TRANSITIONAL BENEFITS TO SUPPORT WORK; 
        RENT AND UTILITIES VENDOR PAYMENT.] 
           Payments for rent and utilities up to the amount of AFDC, 
        MFIP-S, or family general assistance benefits to which the 
        assistance unit is entitled shall be provided in the form of 
        vendor payments for as many months as the applicant is eligible 
        or six months, whichever comes first.  The residual amount after 
        vendor payment, if any, will be paid to the AFDC, MFIP-S, or 
        family general assistance recipient, unless it is used as a wage 
        subsidy under section 256K.04, subdivision 2.  This provision 
        shall apply to all applicants including those meeting the 
        exemption categories under section 256K.03, subdivision 5, or 
        deferral categories under section 256K.03, subdivision 8.  To 
        the extent needed, a job search allowance shall be provided for 
        up to eight weeks to cover expenses related to the job search.  
        Before the job search allowance is issued, it must be approved 
        by the employment advisor and financial specialist, and clearly 
        described in the job search plan. 
           Sec. 8.  [256K.07] [ELIGIBILITY FOR FOOD STAMPS, MEDICAL 
        ASSISTANCE, AND CHILD CARE.] 
           The participant shall be treated as an AFDC, MFIP-S or 
        family general assistance recipient, whichever is applicable, 
        for food stamps, medical assistance, and child care eligibility 
        purposes.  The participant who leaves the program as a result of 
        increased earnings from employment shall be eligible for 
        transitional Medical Assistance and child care without regard to 
        AFDC, MFIP-S or family general assistance receipt in three of 
        the six months preceding ineligibility. 
           Sec. 9.  [256K.08] [SANCTIONS AND APPEAL PROCESS.] 
           Subdivision 1.  [GOOD CAUSE.] (a) For purposes of this 
        subdivision, "good cause" means absence due to temporary illness 
        or injury of the participant or a member of the participant's 
        family, the unavailability of appropriate child care or 
        unavailability of transportation needed to attend orientation or 
        conduct job search, or a nonmedical emergency as defined under 
        section 256K.05, subdivision 5. 
           (b) The applicant who is required, but fails, without good 
        cause, to participate in orientation, complete the job search 
        plan or employability development plan, and comply with the job 
        search requirements under section 256K.03, prior to being 
        eligible for AFDC, MFIP-S or family general assistance shall be 
        denied benefits.  The applicant will not be eligible for 
        benefits in this state for at least six months. 
           (c) If, after receiving a written warning from the county, 
        the participant fails, without good cause, to conduct at least 
        32 hours of job search per week in any given two-week period, 
        the participant will be immediately required to work for at 
        least 16 hours per week in a temporary public service job.  The 
        required 32 hours per week of job search will be reduced to 16 
        hours. 
           (d) If the participant who is deferred under section 
        256K.03, subdivision 8, fails to comply with the activities 
        described in the employability development plan, the participant 
        will lose the deferment status, provided that the participant 
        has received at least two written warnings from the provider. 
           (e) If the participant refuses to work in a temporary 
        public service job, or is terminated from a temporary public 
        service job for failure to work, benefits to the assistance unit 
        shall be terminated and the participant shall not be eligible 
        for aid under the MFIP-S program for at least six months from 
        the date of refusal or termination.  If the participant, before 
        completing at least four consecutive months of employment, 
        voluntarily quits or is terminated from a nonsubsidized or a 
        subsidized job, the participant shall immediately be assigned to 
        work in a temporary public service job for at least 32 hours per 
        week for up to 67 working days unless the participant is hired 
        or rehired into a nonsubsidized or subsidized job. 
           Subd. 2.  [NOTICE OF SANCTIONS.] If the county determines 
        that the participant has failed or refused without good cause, 
        as defined in subdivision 1, to cooperate with the program 
        requirements, the county shall inform the participant in writing 
        of its intent to impose an applicable sanction listed under 
        subdivision 1 and the opportunity to have a conciliation 
        conference upon request and within five days of the notice 
        before a sanction is imposed. 
           Sec. 10.  [256K.09] [FUNDING.] 
           Subdivision 1.  [LEVERAGING GRANT AMOUNT TO SECURE OTHER 
        FUNDS.] The county agency or the provider, in cooperation with 
        the department, 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. 
           Subd. 2.  [EMPLOYER REIMBURSEMENT.] The employer shall be 
        reimbursed for wages paid to participants under Minnesota 
        Statutes, section 256K.04, subdivision 2. 
           Sec. 11.  [REPEALER.] 
           Minnesota Statutes 1996, sections 256.7351; 256.7352; 
        256.7353; 256.7354; 256.7355; 256.7356; 256.7357; 256.7358; and 
        256.7359, are repealed. 
           Sec. 12.  [EFFECTIVE DATE.] 
           Article 2 is effective July 1, 1997. 
                                   ARTICLE 3
                           ASSISTANCE PROGRAM CHANGES
           Section 1.  Minnesota Statutes 1996, section 256.031, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [END OF FIELD TRIALS.] Upon agreement with the 
        federal government, the field trials of the Minnesota family 
        investment plan will end June 30, 1998.  Families in the 
        comparison group under subdivision 3, paragraph (d), clause (i), 
        receiving aid to families with dependent children under sections 
        256.72 to 256.87, and STRIDE services under section 256.736 will 
        continue in those programs until June 30, 1998.  After June 30, 
        1998, families who cease receiving assistance under the 
        Minnesota family investment plan and comparison group families 
        who cease receiving assistance under AFDC and STRIDE who are 
        eligible for the Minnesota family investment program-statewide 
        (MFIP-S), medical assistance, general assistance medical care, 
        or the food stamp program shall be placed with their consent on 
        the programs for which they are eligible. 
           Sec. 2.  Minnesota Statutes 1996, section 256.033, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY CONDITIONS.] (a) A family is 
        entitled to assistance under the Minnesota family investment 
        plan if the family is assigned to a test group in the evaluation 
        as provided in section 256.031, subdivision 3, paragraph (d), 
        and: 
           (1) the family meets the definition of assistance unit 
        under section 256.032, subdivision 1a; 
           (2) the family's resources not excluded under subdivision 3 
        do not exceed $2,000; 
           (3) the family can verify citizenship or lawful resident 
        alien status; and 
           (4) the family provides or applies for a social security 
        number for each member of the family receiving assistance under 
        the family investment plan. 
           (b) A family is eligible for the family investment plan if 
        the net income is less than the transitional standard as defined 
        in section 256.032, subdivision 13, for that size and 
        composition of family.  In determining available net income, the 
        provisions in subdivision 2 shall apply. 
           (c) Upon application, a family is initially eligible for 
        the family investment plan if the family's gross income does not 
        exceed the applicable transitional standard of assistance for 
        that family as defined under section 256.032, subdivision 13, 
        after deducting: 
           (1) 18 percent to cover taxes; and 
           (2) actual dependent care costs up to the maximum 
        disregarded under United States Code, title 42, section 
        602(a)(8)(A)(iii); and 
           (3) $50 of child support collected in that month. 
           (d) A family can remain eligible for the program if: 
           (1) it meets the conditions in subdivision 1a; and 
           (2) its income is below the transitional standard in 
        section 256.032, subdivision 13, allowing for income exclusions 
        in subdivision 2 and after applying the family investment plan 
        treatment of earnings under subdivision 1a. 
           Sec. 3.  Minnesota Statutes 1996, section 256.033, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [TREATMENT OF INCOME FOR THE PURPOSES OF 
        CONTINUED ELIGIBILITY.] To help families during their transition 
        from the Minnesota family investment plan to self-sufficiency, 
        the following income supports are available: 
           (a) The $30 and one-third and $90 disregards allowed under 
        section 256.74, subdivision 1, and the 20 percent earned income 
        deduction allowed under the federal Food Stamp Act of 1977, as 
        amended, are replaced with a single disregard of not less than 
        35 percent of gross earned income to cover taxes and other 
        work-related expenses and to reward the earning of income.  This 
        single disregard is available for the entire time a family 
        receives assistance through the Minnesota family investment plan.
           (b) The dependent care deduction, as prescribed under 
        section 256.74, subdivision 1, and United States Code, title 7, 
        section 2014(e), is replaced for families with earned income who 
        need assistance with dependent care with an entitlement to a 
        dependent care subsidy from money appropriated for the Minnesota 
        family investment plan. 
           (c) The family wage level, as defined in section 256.032, 
        subdivision 8, allows families to supplement earned income with 
        assistance received through the Minnesota family investment 
        plan.  If, after earnings are adjusted according to the 
        disregard described in paragraph (a), earnings have raised 
        family income to a level equal to or greater than the family 
        wage level, the amount of assistance received through the 
        Minnesota family investment plan must be reduced. 
           (d) The first $50 of any timely support payment for a month 
        received by the public agency responsible for child support 
        enforcement shall be paid to the family and disregarded in 
        determining eligibility and the amount of assistance in 
        accordance with United States Code, title 42, sections 
        602(a)(8)(A)(vi) and 657(b)(1).  This paragraph applies 
        regardless of whether the caregiver is in transitional status, 
        is exempt from developing or complying with the terms of a 
        family support agreement, or has had a sanction imposed under 
        subdivision 3.  
           Sec. 4.  Minnesota Statutes 1996, section 256.736, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PARTICIPATION.] (a) Except as provided under 
        paragraphs (b) and (c), Participation in employment and training 
        services under this section is limited to the following 
        recipients:  
           (1) caretakers who are required to participate in a job 
        search under subdivision 14; 
           (2) custodial parents who are subject to the school 
        attendance or case management participation requirements under 
        subdivision 3b; 
           (3) caretakers whose participation in employment and 
        training services began prior to May 1, 1990, if the caretaker's 
        AFDC eligibility has not been interrupted for 30 days or more 
        and the caretaker's employability development plan has not been 
        completed; 
           (4) recipients who are members of a family in which the 
        youngest child is within two years of being ineligible for AFDC 
        due to age; 
           (5) custodial parents under the age of 24 who:  (i) have 
        not completed a high school education and who, at the time of 
        application for AFDC, were not enrolled in high school or in a 
        high school equivalency program; or (ii) have had little or no 
        work experience in the preceding year; 
           (6) recipients who have received AFDC for 36 or more months 
        out of the last 60 months; 
           (7) recipients who are participants in the self-employment 
        investment demonstration project under section 268.95; and 
           (8) recipients who participate in the new chance research 
        and demonstration project under contract with the department of 
        human services and 
           (3) after the county agency assures the availability of 
        employment and training services for recipients identified under 
        clauses (1) and (2), and to the extent of available resources, 
        any other AFDC recipient. 
           (b) If the commissioner determines that participation of 
        persons listed in paragraph (a) in employment and training 
        services is insufficient either to meet federal performance 
        targets or to fully utilize funds appropriated under this 
        section, the commissioner may, after notifying the chairs of the 
        senate family services committee, the house health and human 
        services committee, the family services division of the senate 
        family services and health care committees, and the human 
        services division of the house health and human services 
        committee, permit additional groups of recipients to participate 
        until the next meeting of the legislative advisory commission, 
        after which the additional groups may continue to enroll for 
        participation unless the legislative advisory commission 
        disapproves the continued enrollment.  The commissioner shall 
        allow participation of additional groups in the following order 
        only as needed to meet performance targets or fully utilize 
        funding for employment and training services under this section: 
           (1) recipients who have received 24 or more months of AFDC 
        out of the previous 48 months; and 
           (2) recipients who have not completed a high school 
        education or a high school equivalency program. 
           (c) To the extent of money appropriated specifically for 
        this paragraph, the commissioner may permit AFDC caretakers who 
        are not eligible for participation in employment and training 
        services under the provisions of paragraph (a) or (b) to 
        participate.  Money must be allocated to county agencies based 
        on the county's percentage of participants statewide in services 
        under this section in the prior calendar year.  Caretakers must 
        be selected on a first-come, first-served basis from a waiting 
        list of caretakers who volunteer to participate.  The 
        commissioner may, on a quarterly basis, reallocate unused 
        allocations to county agencies that have sufficient volunteers.  
        If funding under this paragraph is discontinued in future fiscal 
        years, caretakers who began participating under this paragraph 
        must be deemed eligible under paragraph (a), clause (3). 
           (d) Participants who are eligible and enroll in the STRIDE 
        program under one of the categories of this subdivision are 
        required to cooperate with the assessment and employability plan 
        development and to meet the terms of their employability plan.  
        Failure to comply, without good cause, shall result in the 
        imposition of sanctions as specified in subdivision 4, clause 
        (6). 
           Sec. 5.  Minnesota Statutes 1996, section 256.74, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMOUNT.] The amount of assistance which 
        shall be granted to or on behalf of any dependent child and 
        parent or other needy eligible relative caring for the dependent 
        child shall be determined by the county agency in accordance 
        with according to rules promulgated by the commissioner and 
        shall be sufficient, when added to all other income and support 
        available to the child, to provide the child with a reasonable 
        subsistence compatible with decency and health.  To the extent 
        permissible under federal law, an eligible relative caretaker or 
        parent shall have the option to include in the assistance unit 
        the needs, income, and resources of the following essential 
        persons who are not otherwise eligible for AFDC because they do 
        not qualify as a caretaker or as a dependent child: 
           (1) a parent or relative caretaker's spouse and 
        stepchildren; or 
           (2) blood or legally adopted relatives who are under the 
        age of 18 or under the age of 19 years who are regularly 
        attending as a full-time student, and are expected to complete 
        before or during the month of their 19th birthday, a high school 
        or secondary level course of vocational or technical training 
        designed to prepare students for gainful employment.  The amount 
        shall be based on the method of budgeting required in Public Law 
        Number 97-35, section 2315, United States Code, title 42, 
        section 602, as amended and federal regulations at Code of 
        Federal Regulations, title 45, section 233.  Nonrecurring lump 
        sum income received by an AFDC family must be budgeted in the 
        normal retrospective cycle.  When the family's income, after 
        application of the applicable disregards, exceeds the need 
        standard for the family because of receipt of earned or unearned 
        lump sum income, the family will be ineligible for the full 
        number of months derived by dividing the sum of the lump sum 
        income and other income by the monthly need standard for a 
        family of that size.  Any income remaining from this calculation 
        is income in the first month following the period of 
        ineligibility.  The first month of ineligibility is the payment 
        month that corresponds with the budget month in which the lump 
        sum income was received.  For purposes of applying the lump sum 
        provision, family includes those persons defined in the Code of 
        Federal Regulations, title 45, section 233.20(a)(3)(ii)(F).  A 
        period of ineligibility must be shortened when the standard of 
        need increases and the amount the family would have received 
        also changes, an amount is documented as stolen, an amount is 
        unavailable because a member of the family left the household 
        with that amount and has not returned, an amount is paid by the 
        family during the period of ineligibility to cover a cost that 
        would otherwise qualify for emergency assistance, or the family 
        incurs and pays for medical expenses which would have been 
        covered by medical assistance if eligibility existed.  In making 
        its determination the county agency shall disregard the 
        following from family income:  
           (1) all the earned income of each dependent child applying 
        for AFDC if the child is a full-time student and all of the 
        earned income of each dependent child receiving AFDC who is a 
        full-time student or is a part-time student who is not a 
        full-time employee.  A student is one who is attending a school, 
        college, or university, or a course of vocational or technical 
        training designed to fit students for gainful employment and 
        includes a participant in the Job Corps program under the Job 
        Training Partnership Act (JTPA).  The county agency shall also 
        disregard all income of each dependent child applying for or 
        receiving AFDC when the income is derived from a program carried 
        out under JTPA, except that disregard of earned income may not 
        exceed six months per calendar year; 
           (2) all educational assistance, except the county agency 
        shall count graduate student teaching assistantships, 
        fellowships, and other similar paid work as earned income and, 
        after allowing deductions for any unmet and necessary 
        educational expenses, shall count scholarships or grants awarded 
        to graduate students that do not require teaching or research as 
        unearned income; 
           (3) the first $90 of each individual's earned income.  For 
        self-employed persons, the expenses directly related to 
        producing goods and services and without which the goods and 
        services could not be produced shall be disregarded 
        pursuant according to rules promulgated by the commissioner; 
           (4) thirty dollars plus one-third of each individual's 
        earned income for individuals found otherwise eligible to 
        receive aid or who have received aid in one of the four months 
        before the month of application.  With respect to any month, the 
        county welfare agency shall not disregard under this clause any 
        earned income of any person who has:  (a) reduced earned income 
        without good cause within 30 days preceding any month in which 
        an assistance payment is made; (b) refused without good cause to 
        accept an offer of suitable employment; (c) left employment or 
        reduced earnings without good cause and applied for assistance 
        so as to be able later to return to employment with the 
        advantage of the income disregard; or (d) (c) failed without 
        good cause to make a timely report of earned income in 
        accordance with according to rules promulgated by the 
        commissioner of human services.  Persons who are already 
        employed and who apply for assistance shall have their needs 
        computed with full account taken of their earned and other 
        income.  If earned and other income of the family is less than 
        need, as determined on the basis of public assistance standards, 
        the county agency shall determine the amount of the grant by 
        applying the disregard of income provisions.  The county agency 
        shall not disregard earned income for persons in a family if the 
        total monthly earned and other income exceeds their needs, 
        unless for any one of the four preceding months their needs were 
        met in whole or in part by a grant payment.  The disregard of 
        $30 and one-third of earned income in this clause shall be 
        applied to the individual's income for a period not to exceed 
        four consecutive months.  Any month in which the individual 
        loses this disregard because of the provisions of subclauses (a) 
        to (d) shall be considered as one of the four months.  An 
        additional $30 work incentive must be available for an 
        eight-month period beginning in the month following the last 
        month of the combined $30 and one-third work incentive.  This 
        period must be in effect whether or not the person has earned 
        income or is eligible for AFDC.  To again qualify for the earned 
        income disregards under this clause, the individual must not be 
        a recipient of aid for a period of 12 consecutive months.  When 
        an assistance unit becomes ineligible for aid due to the fact 
        that these disregards are no longer applied to income, the 
        assistance unit shall be eligible for medical assistance 
        benefits for a 12-month period beginning with the first month of 
        AFDC ineligibility; 
           (5) an amount equal to the actual expenditures for the care 
        of each dependent child or incapacitated individual living in 
        the same home and receiving aid, not to exceed:  (a) $175 for 
        each individual age two and older, and $200 for each individual 
        under the age of two.  The dependent care disregard must be 
        applied after all other disregards under this subdivision have 
        been applied; 
           (6) the first $50 per assistance unit of the monthly 
        support obligation collected by the support and recovery (IV-D) 
        unit.  The first $50 of periodic support payments collected by 
        the public authority responsible for child support enforcement 
        from a person with a legal obligation to pay support for a 
        member of the assistance unit must be paid to the assistance 
        unit within 15 days after the end of the month in which the 
        collection of the periodic support payments occurred and must be 
        disregarded when determining the amount of assistance.  A review 
        of a payment decision under this clause must be requested within 
        30 days after receiving the notice of collection of assigned 
        support or within 90 days after receiving the notice if good 
        cause can be shown for not making the request within the 30-day 
        limit; 
           (7) that portion of an insurance settlement earmarked and 
        used to pay medical expenses, funeral and burial costs, or to 
        repair or replace insured property; and 
           (8) (7) all earned income tax credit payments received by 
        the family as a refund of federal income taxes or made as 
        advance payments by an employer.  
           All payments made pursuant according to a court order for 
        the support of children not living in the assistance unit's 
        household shall be disregarded from the income of the person 
        with the legal obligation to pay support, provided that, if 
        there has been a change in the financial circumstances of the 
        person with the legal obligation to pay support since the 
        support order was entered, the person with the legal obligation 
        to pay support has petitioned for a modification of the support 
        order. 
           Sec. 6.  Minnesota Statutes 1996, section 256.74, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [MFIP AND MFIP-R COMPARISON GROUP 
        FAMILIES.] Notwithstanding subdivision 1, the limitations of 
        this subdivision apply to MFIP and MFIP-R comparison group 
        families under sections 256.031 to 256.0361.  The disregard of 
        thirty dollars plus one-third of earned income in this 
        subdivision shall be applied to the individual's income for a 
        period not to exceed four consecutive months.  Any month in 
        which the individual loses this disregard because of the 
        provisions of subclauses (a) to (c) of subdivision 1 shall be 
        considered as one of the four months.  An additional $30 work 
        incentive must be available for an eight month period beginning 
        in the month following the last month of the combined $30 and 
        one-third work incentive.  This period must be in effect whether 
        or not the person has earned income or is eligible for AFDC.  To 
        again qualify for the earned income disregards under this 
        subdivision, the individual must not be a recipient of and for a 
        period of 12 consecutive months.  When an assistance unit 
        becomes ineligible for aid due to the fact that these disregards 
        are no longer applied to income, the assistance unit shall be 
        eligible for medical assistance benefits for a 12 month period 
        beginning with the first month of AFDC ineligibility. 
           Sec. 7.  Minnesota Statutes 1996, 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 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 
        utility deposit or 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. 8.  Minnesota Statutes 1996, section 256.82, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FOSTER CARE MAINTENANCE PAYMENTS.] 
        Notwithstanding subdivision 1, for the purposes of foster care 
        maintenance payments under Title IV-E of the federal Social 
        Security Act, United States Code, title 42, sections 670 to 676, 
        during the period beginning July 1, 1985, and ending December 
        31, 1985, the county paying the maintenance costs shall be 
        reimbursed for the costs from those federal funds available for 
        that purpose together with an amount of state funds equal to a 
        percentage of the difference between the total cost and the 
        federal funds made available for payment.  This percentage shall 
        not exceed the percentage specified in subdivision 1 for the aid 
        to families with dependent children program.  In the event that 
        the state appropriation for this purpose is less than the state 
        percentage set in subdivision 1, the reimbursement shall be 
        ratably reduced to the county.  Beginning January 1, 1986, for 
        the purpose of foster care maintenance payments under Title IV-E 
        of the Social Security Act, United States Code, title 42, 
        sections 670 to 676, the county paying the maintenance costs 
        must be reimbursed for the costs from the federal money 
        available for the purpose.  Beginning July 1, 1997, for the 
        purposes of determining a child's eligibility under title IV-E 
        of the Social Security Act, the placing agency shall use AFDC 
        requirements in effect on June 1, 1995.  
           Sec. 9.  Minnesota Statutes 1996, section 256.9354, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [SPONSOR'S INCOME AND RESOURCES DEEMED 
        AVAILABLE.] When determining eligibility for any federal or 
        state benefits under sections 256.9351 to 256.9363 and 256.9366 
        to 256.9369, the income and resources of all noncitizens whose 
        sponsor signed an affidavit of support as defined under the 
        United State Code, title 8, section 1183a shall be deemed to 
        include their sponsors' income and resources as defined in the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996, title IV, Public Law Number 104-193, sections 421 and 
        422. 
           Sec. 10.  Minnesota Statutes 1996, section 256B.055, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AFDC FAMILIES.] Until March 31, 1998, medical 
        assistance may be paid for a person who is eligible for or 
        receiving, or who would be eligible for, except for excess 
        income or assets, public assistance under the aid to families 
        with dependent children program in effect as of July 16, 1996, 
        as required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193.  
           Sec. 11.  Minnesota Statutes 1996, section 256B.055, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [MFIP-S FAMILIES; FAMILIES ELIGIBLE UNDER PRIOR 
        AFDC RULES.] (a) Beginning January 1, 1998, or on the date that 
        MFIP-S is implemented in counties, medical assistance may be 
        paid for a person receiving public assistance under the MFIP-S 
        program. 
           (b) Beginning January 1, 1998, medical assistance may be 
        paid for a person who would have been eligible for public 
        assistance under the income and resource standards and 
        deprivation requirements, or who would have been eligible but 
        for excess income or assets, under the state's AFDC plan in 
        effect as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193. 
           Sec. 12.  Minnesota Statutes 1996, section 256B.055, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PREGNANT WOMEN; DEPENDENT UNBORN CHILD.] Medical 
        assistance may be paid for a pregnant woman who has written 
        verification of a positive pregnancy test from a physician or 
        licensed registered nurse, who meets the other eligibility 
        criteria of this section and who would be categorically eligible 
        for assistance under the aid to families with dependent children 
        program state's AFDC plan in effect as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        if the child had been born and was living with the woman.  For 
        purposes of this subdivision, a woman is considered pregnant for 
        60 days postpartum. 
           Sec. 13.  Minnesota Statutes 1996, section 256B.056, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
        specifically required by state law or rule or federal law or 
        regulation, the methodologies used in counting income and assets 
        to determine eligibility for medical assistance for persons 
        whose eligibility category is based on blindness, disability, or 
        age of 65 or more years, the methodologies for the supplemental 
        security income program shall be used, except that payments made 
        pursuant according to a court order for the support of children 
        shall be excluded from income in an amount not to exceed the 
        difference between the applicable income standard used in the 
        state's medical assistance program for aged, blind, and disabled 
        persons and the applicable income standard used in the state's 
        medical assistance program for families with children.  
        Exclusion of court-ordered child support payments is subject to 
        the condition that if there has been a change in the financial 
        circumstances of the person with the legal obligation to pay 
        support since the support order was entered, the person with the 
        legal obligation to pay support has petitioned for modification 
        of the support order.  For families and children, which includes 
        all other eligibility categories, the methodologies for the aid 
        to families with dependent children program under section 256.73 
        under the state's AFDC plan in effect as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        shall be used.  Effective upon federal approval, in-kind 
        contributions to, and payments made on behalf of, a recipient, 
        by an obligor, in satisfaction of or in addition to a temporary 
        or permanent order for child support or maintenance, shall be 
        considered income to the recipient.  For these purposes, a 
        "methodology" does not include an asset or income standard, or 
        accounting method, or method of determining effective dates. 
           Sec. 14.  Minnesota Statutes 1996, section 256B.056, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
        assistance, a person must not individually own more than $3,000 
        in assets, or if a member of a household with two family 
        members, (husband and wife, or parent and child), the household 
        must not own more than $6,000 in assets, plus $200 for each 
        additional legal dependent.  In addition to these maximum 
        amounts, an eligible individual or family may accrue interest on 
        these amounts, but they must be reduced to the maximum at the 
        time of an eligibility redetermination.  The accumulation of the 
        clothing and personal needs allowance pursuant according to 
        section 256B.35 must also be reduced to the maximum at the time 
        of the eligibility redetermination.  The value of assets that 
        are not considered in determining eligibility for medical 
        assistance is the value of those assets that are excluded by the 
        aid to families with dependent children program excluded under 
        the AFDC state plan as of July 16, 1996, as required by the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (PRWORA), Public Law Number 104-193, for families and 
        children, and the supplemental security income program for aged, 
        blind, and disabled persons, with the following exceptions: 
           (a) Household goods and personal effects are not considered.
           (b) Capital and operating assets of a trade or business 
        that the local agency determines are necessary to the person's 
        ability to earn an income are not considered. 
           (c) Motor vehicles are excluded to the same extent excluded 
        by the supplemental security income program. 
           (d) Assets designated as burial expenses are excluded to 
        the same extent excluded by the supplemental security income 
        program. 
           Sec. 15.  Minnesota Statutes 1996, section 256B.056, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INCOME.] To be eligible for medical assistance, 
        a person must not have, or anticipate receiving, semiannual 
        income in excess of 120 percent of the income standards by 
        family size used in under the aid to families with dependent 
        children program state plan as of July 16, 1996, as required by 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (PRWORA), Public Law Number 104-193, except that 
        families and children may have an income up to 133-1/3 percent 
        of the AFDC income standard.  In computing income to determine 
        eligibility of persons who are not residents of long-term care 
        facilities, the commissioner shall disregard increases in income 
        as required by Public Law Numbers 94-566, section 503; 99-272; 
        and 99-509.  Veterans aid and attendance benefits are considered 
        income to the recipient. 
           Sec. 16.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] (a) An infant 
        less than one year of age or a pregnant woman who has written 
        verification of a positive pregnancy test from a physician or 
        licensed registered nurse, is eligible for medical assistance if 
        countable family income is equal to or less than 275 percent of 
        the federal poverty guideline for the same family size.  For 
        purposes of this subdivision, "countable family income" means 
        the amount of income considered available using the methodology 
        of the AFDC program under the state's AFDC plan as of July 16, 
        1996, as required by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
        Number 104-193, except for the earned income disregard and 
        employment deductions.  An amount equal to the amount of earned 
        income exceeding 275 percent of the federal poverty guideline, 
        up to a maximum of the amount by which the combined total of 185 
        percent of the federal poverty guideline plus the earned income 
        disregards and deductions of the AFDC program under the state's 
        AFDC plan as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193, exceeds 275 percent of the 
        federal poverty guideline will be deducted for pregnant women 
        and infants less than one year of age.  Eligibility for a 
        pregnant woman or infant less than one year of age under this 
        subdivision must be determined without regard to asset standards 
        established in section 256B.056, subdivision 3.  
           (b) An infant born on or after January 1, 1991, to a woman 
        who was eligible for and receiving medical assistance on the 
        date of the child's birth shall continue to be eligible for 
        medical assistance without redetermination until the child's 
        first birthday, as long as the child remains in the woman's 
        household. 
           Sec. 17.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [PREGNANT WOMEN AND INFANTS; EXPANSION.] (a) 
        This subdivision supersedes subdivision 1 as long as the 
        Minnesota health care reform waiver remains in effect.  When the 
        waiver expires, the commissioner of human services shall publish 
        a notice in the State Register and notify the revisor of 
        statutes.  An infant less than two years of age or a pregnant 
        woman who has written verification of a positive pregnancy test 
        from a physician or licensed registered nurse, is eligible for 
        medical assistance if countable family income is equal to or 
        less than 275 percent of the federal poverty guideline for the 
        same family size.  For purposes of this subdivision, "countable 
        family income" means the amount of income considered available 
        using the methodology of the AFDC program under the state's AFDC 
        plan as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193, except for the earned 
        income disregard and employment deductions.  An amount equal to 
        the amount of earned income exceeding 275 percent of the federal 
        poverty guideline, up to a maximum of the amount by which the 
        combined total of 185 percent of the federal poverty guideline 
        plus the earned income disregards and deductions of the AFDC 
        program under the state's AFDC plan as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        exceeds 275 percent of the federal poverty guideline will be 
        deducted for pregnant women and infants less than two years of 
        age.  Eligibility for a pregnant woman or infant less than two 
        years of age under this subdivision must be determined without 
        regard to asset standards established in section 256B.056, 
        subdivision 3.  
           (b) An infant born on or after January 1, 1991, to a woman 
        who was eligible for and receiving medical assistance on the 
        date of the child's birth shall continue to be eligible for 
        medical assistance without redetermination until the child's 
        second birthday, as long as the child remains in the woman's 
        household. 
           Sec. 18.  Minnesota Statutes 1996, section 256B.057, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [NO ASSET TEST FOR CHILDREN AND THEIR PARENTS; 
        EXPANSION.] This subdivision supersedes subdivision 2a as long 
        as the Minnesota health care reform waiver remains in effect.  
        When the waiver expires, this subdivision expires and the 
        commissioner of human services shall publish a notice in the 
        State Register and notify the revisor of statutes.  Eligibility 
        for medical assistance for a person under age 21, and the 
        person's parents or relative caretakers as defined in the aid to 
        families with dependent children program according to chapter 
        256, who are eligible under section 256B.055, subdivision 
        3 under the state's AFDC plan in effect as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        and who live in the same household as the person eligible under 
        age 21, must be determined without regard to asset standards 
        established in section 256B.056. 
           Sec. 19.  Minnesota Statutes 1996, section 256B.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CITIZENSHIP REQUIREMENTS.] (a) Eligibility for 
        medical assistance is limited to citizens of the United 
        States and aliens lawfully admitted for permanent residence or 
        otherwise permanently residing in the United States under the 
        color of law.  Aliens who are seeking legalization under the 
        Immigration Reform and Control Act of 1986, Public Law Number 
        99-603, who are under age 18, over age 65, blind, disabled, or 
        Cuban or Haitian, and who meet the eligibility requirements of 
        medical assistance under subdivision 1 and sections 256B.055 to 
        256B.062 are eligible to receive medical assistance.  Pregnant 
        women who are aliens seeking legalization under the Immigration 
        Reform and Control Act of 1986, Public Law Number 99-603, and 
        who meet the eligibility requirements of medical assistance 
        under subdivision 1 are eligible for payment of care and 
        services through the period of pregnancy and six weeks 
        postpartum.  Payment shall also be made for care and services 
        that are furnished to an alien, regardless of immigration 
        status, who otherwise meets the eligibility requirements of this 
        section if such care and services are necessary for the 
        treatment of an emergency medical condition, except for organ 
        transplants and related care and services.  For purposes of this 
        subdivision, the term "emergency medical condition" means a 
        medical condition, including labor and delivery, that if not 
        immediately treated could cause a person physical or mental 
        disability, continuation of severe pain, or death., qualified 
        noncitizens as defined in this subdivision, and other persons 
        residing lawfully in the United States. 
           (b) "Qualified noncitizen" means a person who meets one of 
        the following immigration criteria: 
           (1) admitted for lawful permanent residence according to 
        United States Code, title 8; 
           (2) admitted to the United States as a refugee according to 
        United States Code, title 8, section 1157; 
           (3) granted asylum according to United States Code, title 
        8, section 1158; 
           (4) granted withholding of deportation according to United 
        States Code, title 8, section 1253(h); 
           (5) paroled for a period of at least one year according to 
        United States Code, title 8, section 1182(d)(5); 
           (6) granted conditional entrant status according to United 
        States Code, title 8, section 1153(a)(7); or 
           (7) determined to be a battered noncitizen by the United 
        States Attorney General according to the Illegal Immigration 
        Reform and Immigrant Responsibility Act of 1996, title V of the 
        Omnibus Consolidated Appropriations Bill, Public Law Number 
        104-200. 
           (c) All qualified noncitizens who were residing in the 
        United States before August 22, 1996, who otherwise meet the 
        eligibility requirements of chapter 256B, are eligible for 
        medical assistance with federal financial participation. 
           (d) All qualified noncitizens who entered the United States 
        on or after August 22, 1996, and who otherwise meet the 
        eligibility requirements of chapter 256B, are eligible for 
        medical assistance with federal financial participation through 
        November 30, 1996. 
           Beginning December 1, 1996, qualified noncitizens who 
        entered the United States on or after August 22, 1996, and who 
        otherwise meet the eligibility requirements of chapter 256B are 
        eligible for medical assistance with federal participation for 
        five years if they meet one of the following criteria: 
           (i) refugees admitted to the United States according to 
        United States Code, title 8, section 1157; 
           (ii) persons granted asylum according to United States 
        Code, title 8, section 1158; 
           (iii) persons granted withholding of deportation according 
        to United States code, title 8, section 1253(h); 
           (iv) veterans of the United States Armed Forces with an 
        honorable discharge for a reason other than noncitizen status, 
        their spouses and unmarried minor dependent children; or 
           (v) persons on active duty in the United States Armed 
        Forces, other than for training, their spouses and unmarried 
        minor dependent children. 
           Beginning December 1, 1996, qualified noncitizens who do 
        not meet one of the criteria in items (i) to (v) are eligible 
        for medical assistance without federal financial participation 
        as described in paragraph (j). 
           (e) Noncitizens who are not qualified noncitizens as 
        defined in paragraph (b), who are lawfully residing in the 
        United States and who otherwise meet the eligibility 
        requirements of chapter 256B, are eligible for medical 
        assistance under clauses (1) to (3).  These individuals must 
        cooperate with the Immigration and Naturalization Service to 
        pursue any applicable immigration status, including citizenship, 
        that would qualify them for medical assistance with federal 
        financial participation. 
           (1) Persons who were medical assistance recipients on 
        August 22, 1996, are eligible for medical assistance with 
        federal financial participation through December 31, 1996. 
           (2) Beginning January 1, 1997, persons described in clause 
        (1) are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (3) Beginning December 1, 1996, persons residing in the 
        United States prior to August 22, 1996, who were not receiving 
        medical assistance and persons who arrived on or after August 
        22, 1996, are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (f) Nonimmigrants who otherwise meet the eligibility 
        requirements of chapter 256B are eligible for the benefits as 
        provided in paragraphs (g) to (i).  For purposes of this 
        subdivision, a "nonimmigrant" is a person in one of the classes 
        listed in United States Code, title 8, section 1101(a)(15). 
           (g) Payment shall also be made for care and services that 
        are furnished to noncitizens, regardless of immigration status, 
        who otherwise meet the eligibility requirements of chapter 256B, 
        if such care and services are necessary for the treatment of an 
        emergency medical condition, except for organ transplants and 
        related care and services and routine prenatal care.  
           (h) For purposes of this subdivision, the term "emergency 
        medical condition" means a medical condition that meets the 
        requirements of United States Code, title 42, section 1396b(v). 
           (i) Pregnant noncitizens who are undocumented or 
        nonimmigrants, who otherwise meet the eligibility requirements 
        of chapter 256B, are eligible for medical assistance payment 
        without federal financial participation for care and services 
        through the period of pregnancy, and 60 days postpartum, except 
        for labor and delivery.  
           (j) Qualified noncitizens as described in paragraph (d), 
        and all other noncitizens lawfully residing in the United States 
        as described in paragraph (e), who are ineligible for medical 
        assistance with federal financial participation and who 
        otherwise meet the eligibility requirements of chapter 256B and 
        of this paragraph, are eligible for medical assistance without 
        federal financial participation.  Qualified noncitizens as 
        described in paragraph (d) are only eligible for medical 
        assistance without federal financial participation for five 
        years from their date of entry into the United States.  
           (k) The commissioner shall submit to the legislature by 
        December 31, 1998, a report on the number of recipients and cost 
        of coverage of care and services made according to paragraphs 
        (i) and (j). 
           Sec. 20.  Minnesota Statutes 1996, section 256B.06, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [DEEMING OF SPONSOR INCOME AND RESOURCES.] When 
        determining eligibility for any federal or state funded medical 
        assistance under this section, the income and resources of all 
        noncitizens shall be deemed to include their sponsors' income 
        and resources as required under the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996, title IV, Public 
        Law Number 104-193, sections 421 and 422.  This section is 
        effective the day following final enactment. 
           Sec. 21.  Minnesota Statutes 1996, section 256B.062, is 
        amended to read: 
           256B.062 [CONTINUED ELIGIBILITY.] 
           Medical assistance may be paid for persons who received aid 
        to families with dependent children in at least three of the six 
        months preceding the month in which the person became ineligible 
        for aid to families with dependent children, if the 
        ineligibility was due to an increase in hours of employment or 
        employment income or due to the loss of an earned income 
        disregard.  A person who is eligible for extended medical 
        assistance is entitled to six months of assistance without 
        reapplication, unless the assistance unit ceases to include a 
        dependent child.  For a person under 21 years of age, medical 
        assistance may not be discontinued within the six-month period 
        of extended eligibility until it has been determined that the 
        person is not otherwise eligible for medical assistance.  
        Medical assistance may be continued for an additional six months 
        if the person meets all requirements for the additional six 
        months, according to Title XIX of the Social Security Act, as 
        amended by section 303 of the Family Support Act of 1988, Public 
        Law Number 100-485.  This section is repealed effective March 
        31, 1998.  
           Sec. 22.  [256B.0635] [CONTINUED ELIGIBILITY IN SPECIAL 
        CIRCUMSTANCES.] 
           Subdivision 1.  [INCREASED EMPLOYMENT.] Beginning January 
        1, 1998, medical assistance may be paid for persons who received 
        MFIP-S or medical assistance for families and children in at 
        least three of six months preceding the month in which the 
        person became ineligible for MFIP-S or medical assistance, if 
        the ineligibility was due to an increase in hours of employment 
        or employment income or due to the loss of an earned income 
        disregard.  In addition, to receive continued assistance under 
        this section, persons who received medical assistance for 
        families and children but did not receive MFIP-S must have had 
        income less than or equal to the assistance standard for their 
        family size under the state's AFDC plan in effect as of July 16, 
        1996, as required by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 
        Number 104-193, at the time medical assistance eligibility 
        began.  A person who is eligible for extended medical assistance 
        is entitled to six months of assistance without reapplication, 
        unless the assistance unit ceases to include a dependent child.  
        For a person under 21 years of age, medical assistance may not 
        be discontinued within the six-month period of extended 
        eligibility until it has been determined that the person is not 
        otherwise eligible for medical assistance.  Medical assistance 
        may be continued for an additional six months if the person 
        meets all requirements for the additional six months, according 
        to Title XIX of the Social Security Act, as amended by section 
        303 of the Family Support Act of 1988, Public Law Number 100-485.
           Subd. 2.  [INCREASED CHILD OR SPOUSAL SUPPORT.] Beginning 
        January 1, 1998, medical assistance may be paid for persons who 
        received MFIP-S or medical assistance for families and children 
        in at least three of the six months preceding the month in which 
        the person became ineligible for MFIP-S or medical assistance, 
        if the ineligibility was the result of the collection of child 
        or spousal support under part D of title IV.  In addition, to 
        receive continued assistance under this section, persons who 
        received medical assistance for families and children but did 
        not receive MFIP-S must have had income less than or equal to 
        the assistance standard for their family size under the state's 
        AFDC plan in effect as of July 16, 1996, as required by the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (PRWORA), Public Law Number 104-193, at the time medical 
        assistance eligibility began.  A person who is eligible for 
        extended medical assistance under this subdivision is entitled 
        to four months of assistance without reapplication, unless the 
        assistance unit ceases to include a dependent child.  For a 
        person under 21 years of age, medical assistance may not be 
        discontinued within the four-month period of extended 
        eligibility until it has been determined that the person is not 
        otherwise eligible for medical assistance. 
           Sec. 23.  Minnesota Statutes 1996, section 256D.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POLICY.] The objectives of sections 
        256D.01 to 256D.21 are to provide a sound administrative 
        structure for public assistance programs; to maximize the use of 
        federal money for public assistance purposes; to provide an 
        integrated public assistance program for all persons eligible 
        households in the state without adequate income or resources to 
        maintain a subsistence reasonably compatible with decency and 
        health; and to provide services to help employable and 
        potentially employable persons prepare for and attain 
        self-sufficiency and obtain permanent work. 
           It is declared to be the policy of this state that persons 
        eligible households unable to provide for themselves and not 
        otherwise provided for by law and who meet the eligibility 
        requirements of sections 256D.01 to 256D.21 are entitled to 
        receive grants of general assistance necessary to maintain a 
        subsistence reasonably compatible with decency and health.  
        Providing this assistance is a matter of public concern and a 
        necessity in promoting the public health and welfare. 
           Sec. 24.  Minnesota Statutes 1996, section 256D.01, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [STANDARDS.] (a) A principal objective in 
        providing general assistance is to provide for persons single 
        adults, childless couples, or children as defined in section 
        256D.02, subdivision 6, ineligible for federal programs who are 
        unable to provide for themselves.  The minimum standard of 
        assistance determines the total amount of the general assistance 
        grant without separate standards for shelter, utilities, or 
        other needs. 
           (b) The commissioner shall set the standard of assistance 
        for an assistance unit consisting of an adult recipient who is 
        childless and unmarried or living apart from children and spouse 
        and who does not live with a parent or parents or a legal 
        custodian.  When the other standards specified in this 
        subdivision increase, this standard must also be increased by 
        the same percentage. 
           (c) For an assistance unit consisting of a single adult who 
        lives with a parent or parents, the general assistance standard 
        of assistance is the amount that the aid to families with 
        dependent children standard of assistance, in effect on July 16, 
        1996, would increase if the recipient were added as an 
        additional minor child to an assistance unit consisting of the 
        recipient's parent and all of that parent's family members, 
        except that the standard may not exceed the standard for a 
        general assistance recipient living alone.  Benefits received by 
        a responsible relative of the assistance unit under the 
        supplemental security income program, a workers' compensation 
        program, the Minnesota supplemental aid program, or any other 
        program based on the responsible relative's disability, and any 
        benefits received by a responsible relative of the assistance 
        unit under the social security retirement program, may not be 
        counted in the determination of eligibility or benefit level for 
        the assistance unit.  Except as provided below, the assistance 
        unit is ineligible for general assistance if the available 
        resources or the countable income of the assistance unit and the 
        parent or parents with whom the assistance unit lives are such 
        that a family consisting of the assistance unit's parent or 
        parents, the parent or parents' other family members and the 
        assistance unit as the only or additional minor child would be 
        financially ineligible for general assistance.  For the purposes 
        of calculating the countable income of the assistance unit's 
        parent or parents, the calculation methods, income deductions, 
        exclusions, and disregards used when calculating the countable 
        income for a single adult or childless couple must be used. 
           (d) For an assistance unit consisting of a childless 
        couple, the standards of assistance are the same as the first 
        and second adult standards of the aid to families with dependent 
        children program in effect on July 16, 1996.  If one member of 
        the couple is not included in the general assistance grant, the 
        standard of assistance for the other is the second adult 
        standard of the aid to families with dependent children program. 
           (e) For an assistance unit consisting of all members of a 
        family, the standards of assistance are the same as the 
        standards of assistance that apply to a family under the aid to 
        families with dependent children program if that family had the 
        same number of parents and children as the assistance unit under 
        general assistance and if all members of that family were 
        eligible for the aid to families with dependent children 
        program.  If one or more members of the family are not included 
        in the assistance unit for general assistance, the standards of 
        assistance for the remaining members are the same as the 
        standards of assistance that apply to an assistance unit 
        composed of the entire family, less the standards of assistance 
        for a family of the same number of parents and children as those 
        members of the family who are not in the assistance unit for 
        general assistance.  In no case shall the standard for family 
        members who are in the assistance unit for general assistance, 
        when combined with the standard for family members who are not 
        in the general assistance unit, total more than the standard for 
        the entire family if all members were in an AFDC assistance 
        unit.  A child may not be excluded from the assistance unit 
        unless income intended for its benefit is received from a 
        federally aided categorical assistance program or supplemental 
        security income.  The income of a child who is excluded from the 
        assistance unit may not be counted in the determination of 
        eligibility or benefit level for the assistance unit. 
           (f) An assistance unit consisting of one or more members of 
        a family must have its grant determined using the policies and 
        procedures of the aid to families with dependent children 
        program, except that, until June 30, 1995, in cases where a 
        county agency has developed or approved a case plan that 
        includes reunification with the children, foster care 
        maintenance payments made under state or local law for a child 
        who is temporarily absent from the assistance unit must not be 
        considered income to the child and the payments must not be 
        counted in the determination of the eligibility or benefit level 
        of the assistance unit.  Otherwise, the standard of assistance 
        must be determined according to paragraph (e); the first $50 of 
        total child support received by an assistance unit in a month 
        must be excluded and the balance counted as unearned income. 
           Sec. 25.  Minnesota Statutes 1996, section 256D.01, 
        subdivision 1e, is amended to read: 
           Subd. 1e.  [RULES REGARDING EMERGENCY ASSISTANCE.] In order 
        to maximize the use of federal funds, The commissioner shall 
        adopt rules, to the extent permitted by federal law, for 
        eligibility for the emergency assistance program under aid to 
        families with dependent children, and under the terms of 
        sections 256D.01 to 256D.21 for general assistance, to require 
        use of the emergency program under aid to families with 
        dependent children or MFIP-S as the primary financial resource 
        when available.  The commissioner shall adopt rules for 
        eligibility for general assistance of persons with seasonal 
        income and may attribute seasonal income to other periods not in 
        excess of one year from receipt by an applicant or recipient.  
        General assistance payments may not be made for foster care, 
        child welfare services, or other social services.  Vendor 
        payments and vouchers may be issued only as authorized in 
        sections 256D.05, subdivision 6, and 256D.09. 
           Sec. 26.  Minnesota Statutes 1996, section 256D.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  "Child" means an adult or minor child, a person 
        who qualifies for assistance under section 256D.05, subdivision 
        1, paragraph (a), clause (10), or until March 31, 1998, the 
        minor child of an individual. 
           Sec. 27.  Minnesota Statutes 1996, section 256D.02, 
        subdivision 12a, is amended to read: 
           Subd. 12a.  [RESIDENT.] (a) For purposes of eligibility for 
        general assistance and general assistance medical care, a person 
        must be a resident of this state.  
           (b) 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.  Time spent in a shelter 
        for battered women shall count toward satisfying the 30-day 
        residency requirement.  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 verifying residence in accordance with according to 
        Minnesota Rules, part 9500.1219, subpart 3, item C. 
           (b) (c) 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 was born in the state; 
           (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 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) that the applicant has come to this state to accept a 
        bona fide offer of employment for which the applicant is 
        eligible.  
           For general assistance medical care, 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.  For 
        general assistance, a county may 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.  For purposes of this subdivision, 
        "unusual hardship" means the applicant is without shelter or is 
        without available resources for food. 
           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. 
           (d) For purposes of paragraph (c), the following 
        definitions apply (1) "metropolitan statistical area" is as 
        defined by the U.S. Census Bureau; (2) "shelter" includes any 
        shelter that is located within the metropolitan statistical area 
        containing the county and for which the applicant is eligible, 
        provided the applicant does not have to travel more than 20 
        miles to reach the shelter and has access to transportation to 
        the shelter.  Clause (2) does not apply to counties in the 
        Minneapolis-St. Paul metropolitan statistical area. 
           (e) Migrant workers as defined in section 256J.08 and, 
        until March 31, 1998, their immediate families are exempt from 
        the 30-day residency requirement, provided the migrant worker 
        provides verification that the migrant family worked in this 
        state within the last 12 months and earned at least $1,000 in 
        gross wages during the time the migrant worker worked in this 
        state. 
           (f) For purposes of eligibility for emergency general 
        assistance, the 30-day residency requirement in paragraph (b) 
        shall not be waived. 
           (g) If any provision of this subdivision is enjoined from 
        implementation or found unconstitutional by any court of 
        competent jurisdiction, the remaining provisions shall remain 
        valid and shall be given full effect. 
           Sec. 28.  [256D.024] [PERSONS PROHIBITED FROM RECEIVING 
        GENERAL ASSISTANCE, GENERAL ASSISTANCE MEDICAL CARE, MINNESOTA 
        SUPPLEMENTAL AID.] 
           Subdivision 1.  [PERSON CONVICTED OF DRUG OFFENSES.] (a) If 
        an applicant has been convicted of a drug offense after July 1, 
        1997, the assistance unit is ineligible for benefits under this 
        chapter until five years after the applicant has completed terms 
        of the court-ordered sentence, unless the person is 
        participating in a drug treatment program, has successfully 
        completed a drug treatment program, or has been assessed by the 
        county and determined not to be in need of a drug treatment 
        program.  Persons subject to the limitations of this subdivision 
        who become eligible for assistance under this chapter shall be 
        subject to random drug testing as a condition of continued 
        eligibility and shall lose eligibility for benefits for five 
        years beginning the month following: 
           (1) any positive test result for an illegal controlled 
        substance; or (2) discharge of sentence after conviction for 
        another drug felony. 
           (b) For the purposes of this subdivision, "drug offense" 
        means a conviction that occurred after July 1, 1997, of sections 
        152.021 to 152.025, 152.0261, or 152.096.  Drug offense also 
        means a conviction in another jurisdiction of the possession, 
        use, or distribution of a controlled substance, or conspiracy to 
        commit any of these offenses, if the offense occurred after July 
        1, 1997, and the conviction is a felony offense in that 
        jurisdiction, or in the case of New Jersey, a high misdemeanor. 
           Subd. 2.  [PAROLE VIOLATORS.] An individual violating a 
        condition of probation or parole or supervised release imposed 
        under federal law or the law of any state is ineligible to 
        receive benefits under this chapter. 
           Subd. 3.  [FLEEING FELONS.] An individual who is fleeing to 
        avoid prosecution, or custody, or confinement after conviction 
        for a crime that is a felony under the laws of the jurisdiction 
        from which the individual flees, or in the case of New Jersey, 
        is a high misdemeanor, is ineligible to receive benefits under 
        this chapter. 
           Subd. 4.  [DENIAL OF ASSISTANCE FOR TEN YEARS TO A PERSON 
        FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCY.] An 
        individual who is convicted in federal or state court of having 
        made a fraudulent statement or representation with respect to 
        the place of residence of the individual in order to receive 
        assistance simultaneously from two or more states is ineligible 
        to receive benefits under this chapter for ten years beginning 
        on the date of the conviction. 
           Sec. 29.  Minnesota Statutes 1996, 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 
        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 
        according 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 follow 
        section 256B.056.  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 or MFIP-S 
        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) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        Number 104-193, sections 421 and 422. 
           (f) (g)(1) Beginning October 1, 1993, An undocumented alien 
        noncitizen 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 noncitizen is 
        an individual who resides in the United States without the 
        approval or acquiescence of the Immigration and Naturalization 
        Service. 
           (2) This subdivision paragraph 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 a 
        noncitizen who is aged, blind, or disabled as defined in United 
        States Code, title 42, section 1382c(a)(1) Code of Federal 
        Regulations, title 42, sections 435.520, 435.530, 435.531, 
        435.540, and 435.541, who cooperates with the Immigration and 
        Naturalization Service to pursue any applicable immigration 
        status, including citizenship, that would qualify the individual 
        for medical assistance with federal financial participation. 
           (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. 
           (4) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           Sec. 30.  Minnesota Statutes 1996, section 256D.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) Each person or family 
        whose assistance unit with income and resources are less than 
        the standard of assistance established by the commissioner 
        and with a member who is a resident of the state shall be 
        eligible for and entitled to general assistance if the person or 
        family assistance unit 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 according 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, clause; 
        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 according to 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 and 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) until March 31, 1998, 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 four 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) until March 31, 1998, a family as defined in 
        section 256D.02, subdivision 5, which is ineligible for the aid 
        to families with dependent children program. 
           (ii) unless exempt under section 256D.051, subdivision 3a, 
        each adult in the unit must participate in and cooperate with 
        the food stamp employment and training program under section 
        256D.051 each month that the unit receives general assistance 
        benefits.  The recipient's participation must begin 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 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; 
           (17) a person whose alcohol and drug addiction is a 
        material factor that contributes to the person's disability; 
        applicants who assert this clause as a basis for eligibility 
        must be assessed by the county agency to determine if they are 
        amenable to treatment; if the applicant is determined to be not 
        amenable to treatment, but is otherwise eligible for benefits, 
        then general assistance must be paid in vendor form, up to the 
        limit of the individual's shelter costs; if the applicant is 
        determined to be amenable to treatment, then in order to receive 
        benefits, the applicant must be in a treatment program or on a 
        waiting list and the benefits must be paid in vendor form, up to 
        the limit of the individual's shelter costs. 
           (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) (c) 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. 31.  Minnesota Statutes 1996, section 256D.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USE OF FEDERAL FUNDS.] Effective March 31, 1998, 
        notwithstanding any law to the contrary, if any person a single 
        adult or childless couple otherwise eligible for general 
        assistance would, but for state statutory restriction or 
        limitation, be eligible for a funded federally aided assistance 
        program providing benefits equal to or greater than those of 
        general assistance, the person single adult or childless couple 
        shall be eligible for that federally aided program and 
        ineligible for general assistance; provided, however, that (a) 
        nothing in this section shall be construed to extend eligibility 
        for federally aided programs to persons not otherwise eligible 
        for general assistance; (b) this section shall not be effective 
        to the extent that federal law or regulation require new 
        eligibility for federal programs to persons not otherwise 
        eligible for general assistance; and (c) nothing in this section 
        shall deny general assistance to a person otherwise eligible who 
        is determined ineligible for a substitute federally aided 
        program. 
           Sec. 32.  Minnesota Statutes 1996, section 256D.05, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TRANSFERS OF PROPERTY.] The equity value of real 
        and personal property transferred without reasonable 
        compensation within 12 months preceding the date of application 
        for general assistance must be included in determining the 
        resources of an assistance unit in the same manner as in the aid 
        to families with dependent children program under chapter 256 or 
        MFIP-S under chapter 256J. 
           Sec. 33.  Minnesota Statutes 1996, section 256D.05, 
        subdivision 7, is amended to read: 
           Subd. 7.  [INELIGIBILITY FOR GENERAL ASSISTANCE.] No person 
        single adult or childless couple shall be eligible for general 
        assistance during a period of disqualification because of 
        sanctions, from any federally aided assistance program; or if 
        the person could be considered an essential person under section 
        256.74, subdivision 1.  
           Sec. 34.  Minnesota Statutes 1996, section 256D.05, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PERSONS INELIGIBLE CITIZENSHIP.] (a) Beginning 
        October 1, 1993, an undocumented alien or a nonimmigrant is 
        ineligible for general assistance benefits.  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. 
           (b) 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). (a) Effective July 1, 1997, 
        citizenship requirements for applicants and recipients under 
        sections 256D.01 to 256D.03, subdivision 2, and 256D.04 to 
        256D.21 shall be determined the same as under section 256J.11, 
        except that legal noncitizens who are applicants or recipients 
        must have been residents of Minnesota on March 1, 1997.  Legal 
        noncitizens who arrive in Minnesota after March 1, 1997, and 
        become elderly or disabled after that date, and are otherwise 
        eligible for general assistance can receive benefits under this 
        section.  The income and assets of sponsors of noncitizens shall 
        be deemed available to general assistance applicants and 
        recipients according to the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, Public Law Number 
        104-193, Title IV, sections 421 and 422. 
           (b) As a condition of eligibility, each legal adult 
        noncitizen in the assistance unit who has resided in the country 
        for four years or more and who is under 70 years of age must: 
           (1) be enrolled in a literacy class, English as a second 
        language class, or a citizen class; 
           (2) be applying for admission to a literacy class, English 
        as a second language class, and is on a waiting list; 
           (3) be in the process of applying for a waiver from the 
        Immigration and Naturalization Service of the English language 
        or civics requirements of the citizenship test; 
           (4) have submitted an application for citizenship to the 
        Immigration and Naturalization Service and is waiting for a 
        testing date or a subsequent swearing in ceremony; or 
           (5) have been denied citizenship due to a failure to pass 
        the test after two attempts or because of an inability to 
        understand the rights and responsibilities of becoming a United 
        States citizen, as documented by the Immigration and 
        Naturalization Service or the county. 
           Sec. 35.  Minnesota Statutes 1996, section 256D.051, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [NOTICES; CONCILIATION CONFERENCE; AND 
        SANCTIONS.] (a) At the time the county agency notifies the 
        household that it is eligible for food stamps, the county agency 
        must inform all mandatory employment and training services 
        participants as identified in subdivision 1 in the household 
        that they must comply with all food stamp employment and 
        training program requirements each month, including the 
        requirement to attend an initial orientation to the food stamp 
        employment and training program and that food stamp eligibility 
        will end unless the participants comply with the requirements 
        specified in the notice.  
           (b) A participant who fails without good cause to comply 
        with food stamp employment and training program requirements of 
        this section, including attendance at orientation, will lose 
        food stamp eligibility for two months or until the county agency 
        determines that the participant has complied with the program 
        requirements, whichever is shorter. the following periods: 
           (1) for the first occurrence, for one month or until the 
        person complies with the requirements not previously complied 
        with, whichever is longer; 
           (2) for the second occurrence, for three months or until 
        the person complies with the requirements not previously 
        complied with, whichever is longer; or 
           (3) for the third and any subsequent occurrence, for six 
        months or until the person complies with the requirements not 
        previously complied with, whichever is longer. 
           If the participant is not the food stamp head of household, 
        the person shall be considered an ineligible household member 
        for food stamp purposes.  If the participant is the food stamp 
        head of household, the entire household is ineligible for food 
        stamps as provided in Code of Federal Regulations, title 7, 
        section 273.7(g).  "Good cause" means circumstances beyond the 
        control of the participant, such as illness or injury, illness 
        or injury of another household member requiring the 
        participant's presence, a household emergency, or the inability 
        to obtain child care for children between the ages of six and 12 
        or to obtain transportation needed in order for the participant 
        to meet the food stamp employment and training program 
        participation requirements. 
           (c) The county agency shall mail or hand deliver a notice 
        to the participant not later than five days after determining 
        that the participant has failed without good cause to comply 
        with food stamp employment and training program requirements 
        which specifies the requirements that were not complied with, 
        the factual basis for the determination of noncompliance, and 
        the right to reinstate eligibility upon a showing of good 
        cause or the for failure to meet the requirements,.  The notice 
        must ask the reason for the noncompliance, and must identify the 
        participant's appeal rights.  The notice must request that the 
        participant inform the county agency if the participant believes 
        that good cause existed for the failure to comply, must offer 
        the participant a conciliation conference as provided in 
        paragraph (d), and must state that the county agency intends to 
        terminate eligibility for food stamp benefits due to failure to 
        comply with food stamp employment and training program 
        requirements. 
           (d) The county agency must offer a conciliation conference 
        to participants who have failed to comply with food stamp 
        employment and training program requirements.  The purpose of 
        the conference is to determine the cause for noncompliance, to 
        attempt to resolve the problem causing the noncompliance so that 
        all requirements are complied with, and to determine if good 
        cause for noncompliance was present.  The conciliation period 
        shall run for ten working days from the date of the notice 
        required in paragraph (c).  Information about how to request a 
        conciliation conference must be specified in the notice required 
        in paragraph (c).  If the county agency determines that the 
        participant, during the conciliation period, complied with all 
        food stamp employment and training program requirements that the 
        recipient was required to comply with prior to and during the 
        conciliation period, or if the county agency determines that 
        good cause for failing to comply with the requirements was 
        present, a sanction on the participant's or household's food 
        stamp eligibility shall not be imposed. 
           (e) If the county agency determines that the participant 
        did not comply during the conciliation period month with all 
        food stamp employment and training program requirements that 
        were in effect prior to and during the conciliation period, and 
        if the county agency determines that good cause was not present, 
        the county must provide a ten-day notice of termination of food 
        stamp benefits.  The termination notice must be issued following 
        the last day of the conciliation period.  The amount of food 
        stamps that are withheld from the household and determination of 
        the impact of the sanction on other household members is 
        governed by Code of Federal Regulations, title 7, section 273.7. 
           (f) (e) The participant may appeal the termination of food 
        stamp benefits under the provisions of section 256.045. 
           Sec. 36.  Minnesota Statutes 1996, section 256D.051, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DUTIES OF COMMISSIONER.] In addition to any 
        other duties imposed by law, the commissioner shall: 
           (1) based on this section and section 256D.052 and Code of 
        Federal Regulations, title 7, section 273.7, supervise the 
        administration of food stamp employment and training services to 
        county agencies; 
           (2) disburse money appropriated for food stamp employment 
        and training services to county agencies based upon the county's 
        costs as specified in section 256D.06; 
           (3) accept and supervise the disbursement of any funds that 
        may be provided by the federal government or from other sources 
        for use in this state for food stamp employment and training 
        services; and 
           (4) cooperate with other agencies including any agency of 
        the United States or of another state in all matters concerning 
        the powers and duties of the commissioner under this section and 
        section 256D.052; and 
           (5) in cooperation with the commissioner of economic 
        security, ensure that each component of an employment and 
        training program carried out under this section is delivered 
        through a statewide workforce development system, unless the 
        component is not available locally through such a system. 
           Sec. 37.  Minnesota Statutes 1996, section 256D.051, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PERSONS REQUIRED TO REGISTER FOR AND 
        PARTICIPATE IN THE FOOD STAMP EMPLOYMENT AND TRAINING PROGRAM.] 
        (a) To the extent required under Code of Federal Regulations, 
        title 7, section 273.7(a), each applicant for and recipient of 
        food stamps is required to register for work as a condition of 
        eligibility for food stamp benefits.  Applicants and recipients 
        are registered by signing an application or annual reapplication 
        for food stamps, and must be informed that they are registering 
        for work by signing the form.  
           (b) The commissioner shall determine, within federal 
        requirements, persons required to participate in the food stamp 
        employment and training (FSET) program. 
           (c) The following food stamp recipients are exempt from 
        mandatory participation in food stamp employment and training 
        services: 
           (1) recipients of benefits under the AFDC program, the 
        MFIP-S, MFIP, and MFIP-R programs, Minnesota supplemental aid 
        program, or the general assistance program, except that an adult 
        who receives general assistance under section 256D.05, 
        subdivision 1, paragraph (b), is not exempt unless that person 
        qualifies under one of the remaining exemption provisions in 
        this paragraph; 
           (2) a child; 
           (3) a recipient over age 55; 
           (4) a recipient who has a mental or physical illness, 
        injury, or incapacity which is expected to continue for at least 
        30 days and which impairs the recipient's ability to obtain or 
        retain employment as evidenced by professional certification or 
        the receipt of temporary or permanent disability benefits issued 
        by a private or government source; 
           (5) a parent or other household member responsible for the 
        care of either a dependent child in the household who is under 
        age six or a person in the household who is professionally 
        certified as having a physical or mental illness, injury, or 
        incapacity.  Only one parent or other household member may claim 
        exemption under this provision; 
           (6) a recipient receiving unemployment compensation or who 
        has applied for unemployment compensation and has been required 
        to register for work with the department of economic security as 
        part of the unemployment compensation application process; 
           (7) a recipient participating each week in a drug addiction 
        or alcohol abuse treatment and rehabilitation program, provided 
        the operators of the treatment and rehabilitation program, in 
        consultation with the county agency, recommend that the 
        recipient not participate in the food stamp employment and 
        training program; 
           (8) a recipient employed or self-employed for 30 or more 
        hours per week at employment paying at least minimum wage, or 
        who earns wages from employment equal to or exceeding 30 hours 
        multiplied by the federal minimum wage; or 
           (9) a student enrolled at least half time in any school, 
        training program, or institution of higher education.  When 
        determining if a student meets this criteria, the school's, 
        program's or institution's criteria for being enrolled half time 
        shall be used. 
           Sec. 38.  Minnesota Statutes 1996, section 256D.051, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [WORK EXPERIENCE PLACEMENTS.] (a) To the extent 
        of available resources, each county agency must establish and 
        operate a work experience component in the food stamp employment 
        and training program for recipients who are subject to a federal 
        limit of three months of food stamp eligibility in any 36-month 
        period.  The purpose of the work experience component is to 
        enhance the participant's employability, self-sufficiency, and 
        to provide meaningful, productive work activities. 
           (b) The commissioner shall assist counties in the design 
        and implementation of these components.  The commissioner must 
        ensure that job placements under a work experience component 
        comply with section 256J.72.  Written or oral concurrence with 
        job duties of persons placed under the community work experience 
        program shall be obtained from the appropriate exclusive 
        bargaining representative. 
           (c) Worksites developed under this section are limited to 
        projects that serve a useful public service such as health, 
        social service, environmental protection, education, urban and 
        rural development and redevelopment, welfare, recreation, public 
        facilities, public safety, community service, services to aged 
        or disabled citizens, and child care.  To the extent possible, 
        the prior training, skills, and experience of a recipient must 
        be used in making appropriate work experience assignments. 
           (d) Structured, supervised volunteer work with an agency or 
        organization that is monitored by the county service provider 
        may, with the approval of the county agency, be used as a work 
        experience placement. 
           (e) As a condition of placing a person receiving food 
        stamps in a program under this subdivision, the county agency 
        shall first provide the recipient the opportunity: 
           (1) for placement in suitable subsidized or unsubsidized 
        employment through participation in job search under section 
        256D.051; or 
           (2) for placement in suitable employment through 
        participation in on-the-job training, if such employment is 
        available. 
           (f) The county agency shall limit the maximum monthly 
        number of hours that any participant may work in a work 
        experience placement to a number equal to the amount of the 
        family's monthly food stamp allotment divided by the greater of 
        the federal minimum wage or the applicable state minimum wage.  
           After a participant has been assigned to a position for 
        nine months, the participant may not continue in that assignment 
        unless the maximum number of hours a participant works is no 
        greater than the amount of the food stamp benefit divided by the 
        rate of pay for individuals employed in the same or similar 
        occupations by the same employer at the same site. 
           (g) The participant's employability development plan must 
        include the length of time needed in the work experience 
        program, the need to continue job seeking activities while 
        participating in work experience, and the participant's 
        employment goals. 
           (h) After each six months of a recipient's participation in 
        a work experience job placement, and at the conclusion of each 
        work experience assignment under this section, the county agency 
        shall reassess and revise, as appropriate, the participant's 
        employability development plan. 
           (i) A participant has good cause for failure to cooperate 
        with a work experience job placement if, in the judgment of the 
        employment and training service provider, the reason for failure 
        is reasonable and justified.  Good cause for purposes of this 
        section is defined in subdivision 1a, paragraph (b). 
           (j) A recipient who has failed without good cause to 
        participate in or comply with the work experience job placement 
        shall be terminated from participation in work experience job 
        activities.  If the recipient is not exempt from mandatory food 
        stamp employment and training program participation under 
        subdivision 3a, the recipient will be assigned to other 
        mandatory program activities.  If the recipient is exempt from 
        mandatory participation but is participating as a volunteer, the 
        person shall be terminated from the food stamp employment and 
        training program. 
           Sec. 39.  [256D.0510] [FEDERAL WAIVER.] 
           The commissioner shall exercise the authority granted by 
        Public Law Number 104-193, Title VIII, section 824, and request 
        the secretary of the United States Department of Agriculture to 
        grant waivers of the federal food stamp work requirements of 
        section 824, for every county and reservation in which: 
           (1) the county or reservation has an unemployment rate over 
        ten percent; or 
           (2) the county or reservation does not have a sufficient 
        number of jobs to provide employment for individuals. 
           Sec. 40.  [256D.0512] [BUDGETING LUMP SUMS.] 
           Effective January 1, 1998, nonrecurring lump-sum income 
        received by a recipient of general assistance must be budgeted 
        in the normal retrospective cycle. 
           Sec. 41.  Minnesota Statutes 1996, 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) Minnesota 
        family investment program-statewide (MFIP-S) and, until March 
        31, 1998, aid to families with dependent children and family 
        general assistance 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.  
           Sec. 42.  [256D.057] [SUPPLEMENT FOR CERTAIN NONCITIZENS.] 
           (a) For the period from July 1, 1997, to June 30, 1998, for 
        an assistance unit that contains an adult or a minor legal 
        noncitizen who was residing in this state as of July 1, 1997, 
        and lost eligibility for the federal food stamp and Supplemental 
        Security Income programs under the provisions of title IV of 
        Public Law Number 104-193, the standard is $87 for each legal 
        noncitizen under this section.  To be eligible for benefits 
        under this section, each legal adult noncitizen in the 
        assistance unit who has resided in the country for four years or 
        more and is under 70 years of age must: 
           (1) be enrolled in a literacy class, English as a second 
        language class, or a citizenship class; 
           (2) be applying for admission to a literacy class, English 
        as a second language class, or a citizenship class, and is 
        enrolled within 60 days of receiving the increased grant amount 
        under this paragraph; 
           (3) be in the process of applying for a waiver from the 
        Immigration and Naturalization Service of the English language 
        or civics requirement of the citizenship test; 
           (4) have submitted an application for citizenship to the 
        Immigration and Naturalization Service and is waiting for a 
        testing date or a subsequent swearing in ceremony; or 
           (5) have been denied citizenship due to a failure to pass 
        the test after two attempts or due to a denial of the 
        application for naturalization because of an inability to 
        understand the rights and responsibilities of becoming a citizen.
           If the county social service agency determines that a legal 
        noncitizen subject to the requirements of this subdivision will 
        require more than one year of English language training, then 
        the requirements of clause (1) or (2) shall be imposed after the 
        legal noncitizen has resided in the country for three years.  
        Individuals who reside in a facility licensed under chapter 
        144A, 144D, 245A, or 256I are exempt from the requirements of 
        this section. 
           (b) The assistance provided under this section, which is 
        designated as a supplement to replace lost benefits under the 
        food stamp program, must be disregarded as income in federal and 
        state housing subsidy programs, low-income home energy 
        assistance programs, and other programs that do not count food 
        stamps as income. 
           Sec. 43.  Minnesota Statutes 1996, section 256D.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  Notwithstanding the provisions of subdivision 1, 
        a grant of general assistance shall be made to an eligible 
        individual, single adult, married couple, or family for an 
        emergency need, as defined in rules promulgated by the 
        commissioner, where the recipient requests temporary assistance 
        not exceeding 30 days if an emergency situation appears to exist 
        and (a) until March 31, 1998, the individual is ineligible for 
        the program of emergency assistance under aid to families with 
        dependent children and is not a recipient of aid to families 
        with dependent children at the time of application hereunder; or 
        (b) the individual or family is (i) ineligible for MFIP-S or is 
        not a participant of MFIP-S; and (ii) is ineligible for 
        emergency assistance under section 256J.48.  If an applicant or 
        recipient relates facts to the county agency which may be 
        sufficient to constitute an emergency situation, the county 
        agency shall advise the person of the procedure for applying for 
        assistance pursuant according to this subdivision.  
           Sec. 44.  [256D.066] [INTERSTATE PAYMENT STANDARDS.] 
           (a) Effective July 1, 1997, the amount of assistance paid 
        to an eligible assistance unit in which all members have resided 
        in this state for less than 12 consecutive calendar months 
        immediately preceding the date of application shall be the 
        lesser of either the payment standard that would have been 
        received by the assistance unit from the state of immediate 
        prior residence, or the amount calculated in accordance with 
        this chapter.  The lesser payment shall continue until the 
        assistance unit meets the 12-month requirement.  Payment shall 
        be calculated by applying this state's budgeting policies and 
        the unit's net income shall be deducted from the payment 
        standard in the other state or in this state, whichever is 
        lower.  At county option, payment shall be made in vendor form 
        for rent and utilities, up to the limit of the grant amount, and 
        residual amounts, if any, shall be paid directly to the 
        assistance unit. 
           (b) During the first 12 months an assistance unit resides 
        in this state, the number of months that the unit is eligible to 
        receive general assistance benefits is limited to the number of 
        months the unit would have been eligible to receive similar 
        benefits in the state of immediate prior residence. 
           (c) This policy applies whether or not the unit received 
        similar benefits while residing in the state of previous 
        residence. 
           (d) When a unit moves to this state from another state 
        where the unit has exhausted that state's time limit for 
        receiving similar benefits, the unit will not be eligible to 
        receive any general assistance benefits in this state for 12 
        months from the date the unit moves here. 
           (e) Applicants must provide verification of their state of 
        immediate prior residence, in the form of tax statements, a 
        driver's license, automobile registration, rent receipts, or 
        other forms of verification approved by the commissioner. 
           (f) For the purposes of this subdivision, "state of 
        immediate prior residence" means: 
           (i) the state in which the applicant declares the applicant 
        spent the most time in the 30 days prior to moving to this 
        state; or 
           (ii) the applicant is in the migrant work stream and the 
        applicant maintains a home in another state. 
           (g) Migrant workers as defined in section 256J.08 and until 
        March 31, 1998, their immediate families are exempt from this 
        section, provided the migrant worker provides verification that 
        the migrant family worked in this state within the last 12 
        months and earned at least $1,000 in gross wages during the time 
        the migrant worker worked in this state. 
           Sec. 45.  Minnesota Statutes 1996, section 256D.08, 
        subdivision 1, is amended to read: 
           Subdivision 1.  In determining eligibility of a family, 
        married couple, or individual there shall be excluded an 
        assistance unit, the following resources shall be excluded: 
           (1) real or personal property or liquid assets which do not 
        exceed those permitted under the federally aided assistance 
        program known as aid to families with dependent children $1,000; 
        and 
           (2) other property which has been determined, in accordance 
        with and subject according to limitations contained in rules 
        promulgated by the commissioner, to be essential to the family 
        or individual the assistance unit as a means of self-support or 
        self-care or which is producing income that is being used for 
        the support of the individual or family assistance unit.  The 
        commissioner shall further provide by rule the conditions for 
        those situations in which property not excluded under this 
        subdivision may be retained by the family or individual 
        assistance unit where there is a reasonable probability that in 
        the foreseeable future the property will be used for the 
        self-support of the individual or family assistance unit; and 
           (3) payments, made pursuant according to litigation and 
        subsequent appropriation by the United States Congress, of funds 
        to compensate members of Indian tribes for the taking of tribal 
        land by the federal government. 
           Sec. 46.  Minnesota Statutes 1996, section 256D.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  Notwithstanding any other provision of sections 
        256D.01 to 256D.21, the commissioner shall provide by rule for 
        the exclusion of property from the determination of eligibility 
        for general assistance when it appears likely that the need for 
        general assistance will not exceed 30 days or an undue hardship 
        would be imposed on an individual or family an assistance unit 
        by the forced disposal of the property.  
           Sec. 47.  Minnesota Statutes 1996, section 256D.09, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [DISABILITY VERIFICATION; DRUG OR ALCOHOL 
        DEPENDENCY.] If at any time there is verification that the 
        client's disability is dependent upon the client's continued 
        drug addiction or alcoholism, general assistance for rent and 
        utilities must be made in the form of vendor payments. 
           Verification of drug addiction or alcoholism can be 
        received from: 
           (1) denial of social security benefits based on drug 
        addiction or alcoholism; 
           (2) a statement from the state medical review team that the 
        person's disability is dependent upon continued drug addiction 
        or alcoholism; or 
           (3) a doctor's statement that the person's disability is 
        dependent upon continued drug addiction or alcoholism. 
           Sec. 48.  Minnesota Statutes 1996, section 256D.435, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATION FOR FEDERALLY FUNDED BENEFITS.] 
        Persons who live with the applicant or recipient, who have unmet 
        needs and for whom the applicant or recipient has financial 
        responsibility, must apply for and, if eligible, accept AFDC and 
        any other federally funded benefits, including MFIP-S.  
           Sec. 49.  Minnesota Statutes 1996, section 256D.44, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL NEEDS.] In addition to the state 
        standards of assistance established in subdivisions 1 to 4, 
        payments are allowed for the following special needs of 
        recipients of Minnesota supplemental aid who are not residents 
        of a nursing home, a regional treatment center, or a group 
        residential housing facility:. 
           (a) The county agency shall pay a monthly allowance for 
        medically prescribed diets payable under the AFDC program or the 
        Minnesota family investment program-statewide if the cost of 
        those additional dietary needs cannot be met through some other 
        maintenance benefit.  
           (b) Payment for nonrecurring special needs must be allowed 
        for necessary home repairs or necessary repairs or replacement 
        of household furniture and appliances using the payment standard 
        of the AFDC program in effect on July 16, 1996, for these 
        expenses, as long as other funding sources are not available.  
           (c) A fee for guardian or conservator service is allowed at 
        a reasonable rate negotiated by the county or approved by the 
        court.  This rate shall not exceed five percent of the 
        assistance unit's gross monthly income up to a maximum of $100 
        per month.  If the guardian or conservator is a member of the 
        county agency staff, no fee is allowed. 
           (d) The county agency shall continue to pay a monthly 
        allowance of $68 for restaurant meals for a person who was 
        receiving a restaurant meal allowance on June 1, 1990, and who 
        eats two or more meals in a restaurant daily.  The allowance 
        must continue until the person has not received Minnesota 
        supplemental aid for one full calendar month or until the 
        person's living arrangement changes and the person no longer 
        meets the criteria for the restaurant meal allowance, whichever 
        occurs first. 
           (e) A fee of ten percent of the recipient's gross income or 
        $25, whichever is less, is allowed for representative payee 
        services provided by an agency that meets the requirements under 
        SSI regulations to charge a fee for representative payee 
        services.  This special need is available to all recipients of 
        Minnesota supplemental aid regardless of their living 
        arrangement. 
           Sec. 50.  Minnesota Statutes 1996, section 256G.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NO DURATIONAL TEST.] Except as otherwise 
        provided in sections 256.73, subdivisions 1 and 1b; 256B.056, 
        subdivision 1; and 256D.02, subdivision 12a, and 256J.12 for 
        purposes of this chapter, no waiting period is required before 
        securing county or state residence.  A person cannot, however, 
        gain residence while physically present in an excluded time 
        facility unless otherwise specified in this chapter or in a 
        federal regulation controlling a federally funded human service 
        program.  Interstate migrants who enter a shelter for battered 
        women directly from another state can gain residency while in 
        the facility provided the person can provide documentation that 
        the person is a victim of domestic abuse as defined in section 
        256J.49, subdivision 2, and the county determines that the 
        placement is appropriate; and the commissioner of human services 
        is authorized to make per diem payments under section 256D.05, 
        subdivision 3, on behalf of such individuals. 
           Sec. 51.  Minnesota Statutes 1996, section 256G.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NON-MINNESOTA RESIDENTS.] State residence is not 
        required for receiving emergency assistance in the general 
        assistance, general assistance medical care, and Minnesota 
        supplemental aid programs only.  The receipt of emergency 
        assistance must not be used as a factor in determining county or 
        state residence. 
           Sec. 52.  Minnesota Statutes 1996, section 259.67, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY CONDITIONS.] (a) The placing agency 
        shall determine use the AFDC requirements as specified in 
        federal law, when determining the child's eligibility for 
        adoption assistance under title IV-E of the Social Security 
        Act.  If the child does not qualify, the placing agency shall 
        certify a child as eligible for state funded adoption assistance 
        only if the following criteria are met:  
           (1) Due to the child's characteristics or circumstances it 
        would be difficult to provide the child an adoptive home without 
        adoption assistance.  
           (2)(i) A placement agency has made reasonable efforts to 
        place the child for adoption without adoption assistance, but 
        has been unsuccessful; or 
           (ii) the child's licensed foster parents desire to adopt 
        the child and it is determined by the placing agency that the 
        adoption is in the best interest of the child. 
           (3) The child has been a ward of the commissioner or a 
        Minnesota-licensed child-placing agency.  
           (b) For purposes of this subdivision, the characteristics 
        or circumstances that may be considered in determining whether a 
        child is a child with special needs under United States Code, 
        title 42, chapter 7, subchapter IV, part E, or meets the 
        requirements of paragraph (a), clause (1), are the following: 
           (1) The child is a member of a sibling group to be placed 
        as one unit in which at least one sibling is older than 15 
        months of age or is described in clause (2) or (3). 
           (2) The child has documented physical, mental, emotional, 
        or behavioral disabilities. 
           (3) The child has a high risk of developing physical, 
        mental, emotional, or behavioral disabilities. 
           (c) When a child's eligibility for adoption assistance is 
        based upon the high risk of developing physical, mental, 
        emotional, or behavioral disabilities, payments shall not be 
        made under the adoption assistance agreement unless and until 
        the potential disability manifests itself as documented by an 
        appropriate health care professional. 
           Sec. 53.  [TRANSFER OF RESPONSIBILITIES FOR PROVIDING 
        SECURE CRISIS SHELTER.] 
           In state fiscal year 2000, all of the powers, duties, and 
        functions of the commissioner of human services relating to the 
        operation and funding of shelters for battered women are 
        transferred to the commissioner of corrections in accordance 
        with Minnesota Statutes, section 15.039, except for personnel 
        transfers under Minnesota Statutes, section 15.039, subdivision 
        7. 
           Sec. 54.  [FINDINGS; CONTINGENT BENEFIT STANDARDS.] 
           Subdivision 1.  [FINDINGS.] For purposes of Minnesota 
        Statutes, sections 256D.02, subdivision 12a, and 256D.066, the 
        legislature makes the following findings: 
           (1) the legislature is statutorily required to balance the 
        state budget, and, in balancing the state budget, faces 
        competing funding priorities with limited resources; 
           (2) many states have more restrictive or nonexistent state 
        welfare programs to aid needy individuals without children; 
           (3) despite likely weaker federal financial support and the 
        trend in other states toward more restrictive welfare programs, 
        the legislature wishes to continue to manage funds appropriated 
        for the general assistance program so that the state may provide 
        meaningful assistance for needy Minnesotans without children; 
           (4) the legislature intends to provide a safety net for 
        recent interstate migrants; 
           (5) Minnesota county human service agencies have reported 
        to the commissioner of human services verified cases of 
        individuals from other states to this state at least in part 
        because this state has higher cash assistance benefits; 
           (6) the legislature anticipates that, as other states 
        further restrict their welfare programs, migration to this state 
        by individuals seeking higher welfare benefits will increase 
        significantly and may cause expenditures in excess of the funds 
        appropriated for this program; 
           (7) the policy of the state of Minnesota is to make welfare 
        benefits a neutral factor in an individual's decision to move to 
        Minnesota, which is required for the state to continue its 
        commitment to provide meaningful assistance for needy 
        Minnesotans without children; 
           (8) if new residents experience any harm under Minnesota 
        Statutes, sections 256D.02, subdivision 12a, and 256D.066, such 
        harm is mitigated, since new residents, if eligible, can receive 
        benefits immediately under a hardship exemption; and in all 
        cases, if eligible, can receive cash assistance after 30 days; 
        if eligible, they will receive cash assistance based on the 
        assistance standard they would have received in their previous 
        state of residence for individuals without children; 
           (9) without Minnesota Statutes, sections 256D.02, 
        subdivision 12a, and 256D.066, the hardship to the state and its 
        needy individuals would be great because significant reductions 
        in welfare benefits will likely occur; and 
           (10) Minnesota Statutes, sections 256D.02, subdivision 12a, 
        and 256D.066, advance the public interest of continuing to 
        provide meaningful assistance to needy Minnesotans without 
        children while providing a safety net for recent interstate 
        migrants. 
           Subd. 2.  [REDUCTION IF COURT ENJOINMENT.] In the event a 
        court enjoins enforcement of Minnesota Statutes, section 
        256D.02, subdivision 12a, or 256D.066, this subdivision shall 
        apply.  Beginning July 1, 1997, the commissioner of human 
        services shall monitor the number of individual applicants for 
        general assistance under this chapter who have lived in this 
        state for less than 12 consecutive months and shall implement 
        clauses (1) to (3) when the commissioner determines that the 
        cumulative number of such applicants since July 1, 1997, has 
        reached at least 3,000.  The commissioner shall: 
           (1) reduce the assistance standards for general assistance 
        program under this chapter for all recipients but only in an 
        amount sufficient to remain within the forecasted budgets for 
        the program; reductions shall take effect beginning with 
        payments made at the start of the second calendar month 
        following the commissioner's determination that the conditions 
        specified in this clause have occurred; 
           (2) notify the fiscal and policy chairs of the house and 
        senate human services committees that the reductions have taken 
        place; and 
           (3) formulate a plan to be presented to the next 
        legislative session. 
           Sec. 55.  [TOTAL HOUSEHOLD INCOME COUNTED.] 
           Effective January 1, 1999, notwithstanding any provision of 
        law to the contrary, eligibility for public assistance, 
        including, but not limited to, AFDC, family general assistance, 
        MFIP and MFIP-S, and general assistance must count income from 
        all unrelated individuals living in the household in order to 
        qualify for any of these public assistance programs. 
           Sec. 56.  [REPEALER.] 
           (a) Minnesota Statutes 1996, sections 256.8711; and 
        256D.065, are repealed July 1, 1997.  
           (b) Minnesota Statutes 1996, sections 256D.02, subdivision 
        5; and 256D.0511, are repealed March 31, 1998. 
           Sec. 57.  [EFFECTIVE DATES.] 
           Section 20 is effective the day following final enactment.  
        Sections 33 and 45 are effective March 31, 1998.  The remaining 
        sections in this article are effective July 1, 1997, unless 
        specified otherwise in the section. 
                                   ARTICLE 4
                      TECHNICAL CHANGES; CROSS REFERENCES 
           Section 1.  Minnesota Statutes 1996, section 13.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] As used in this section: 
           (a) "Individual" means an individual pursuant according to 
        section 13.02, subdivision 8, but does not include a vendor of 
        services. 
           (b) "Program" includes all programs for which authority is 
        vested in a component of the welfare system pursuant according 
        to statute or federal law, including, but not limited to, aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, medical assistance, general assistance, work 
        readiness, general assistance medical care, and child support 
        collections.  
           (c) "Welfare system" includes the department of human 
        services, local social services agencies, county welfare 
        agencies, the public authority responsible for child support 
        enforcement, human services boards, community mental health 
        center boards, state hospitals, state nursing homes, the 
        ombudsman for mental health and mental retardation, and persons, 
        agencies, institutions, organizations, and other entities under 
        contract to any of the above agencies to the extent specified in 
        the contract. 
           (d) "Mental health data" means data on individual clients 
        and patients of community mental health centers, established 
        under section 245.62, mental health divisions of counties and 
        other providers under contract to deliver mental health 
        services, or the ombudsman for mental health and mental 
        retardation. 
           (e) "Fugitive felon" means a person who has been convicted 
        of a felony and who has escaped from confinement or violated the 
        terms of probation or parole for that offense. 
           Sec. 2.  Minnesota Statutes 1996, section 13.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL.] (a) Unless the data is summary data or 
        a statute specifically provides a different classification, data 
        on individuals collected, maintained, used, or disseminated by 
        the welfare system is private data on individuals, and shall not 
        be disclosed except:  
           (1) pursuant according to section 13.05; 
           (2) pursuant according to court order; 
           (3) pursuant according to a statute specifically 
        authorizing access to the private data; 
           (4) to an agent of the welfare system, including a law 
        enforcement person, attorney, or investigator acting for it in 
        the investigation or prosecution of a criminal or civil 
        proceeding relating to the administration of a program; 
           (5) to personnel of the welfare system who require the data 
        to determine eligibility, amount of assistance, and the need to 
        provide services of additional programs to the individual; 
           (6) to administer federal funds or programs; 
           (7) between personnel of the welfare system working in the 
        same program; 
           (8) the amounts of cash public assistance and relief paid 
        to welfare recipients in this state, including their names, 
        social security numbers, income, addresses, and other data as 
        required, upon request by the department of revenue to 
        administer the property tax refund law, supplemental housing 
        allowance, early refund of refundable tax credits, and the 
        income tax.  "Refundable tax credits" means the dependent care 
        credit under section 290.067, the Minnesota working family 
        credit under section 290.0671, the property tax refund under 
        section 290A.04, and, if the required federal waiver or waivers 
        are granted, the federal earned income tax credit under section 
        32 of the Internal Revenue Code; 
           (9) to the Minnesota department of economic security for 
        the purpose of monitoring the eligibility of the data subject 
        for reemployment insurance, for any employment or training 
        program administered, supervised, or certified by that agency, 
        or for the purpose of administering any rehabilitation program, 
        whether alone or in conjunction with the welfare system, and to 
        verify receipt of energy assistance for the telephone assistance 
        plan; 
           (10) to appropriate parties in connection with an emergency 
        if knowledge of the information is necessary to protect the 
        health or safety of the individual or other individuals or 
        persons; 
           (11) data maintained by residential programs as defined in 
        section 245A.02 may be disclosed to the protection and advocacy 
        system established in this state pursuant according to Part C of 
        Public Law Number 98-527 to protect the legal and human rights 
        of persons with mental retardation or other related conditions 
        who live in residential facilities for these persons if the 
        protection and advocacy system receives a complaint by or on 
        behalf of that person and the person does not have a legal 
        guardian or the state or a designee of the state is the legal 
        guardian of the person; 
           (12) to the county medical examiner or the county coroner 
        for identifying or locating relatives or friends of a deceased 
        person; 
           (13) data on a child support obligor who makes payments to 
        the public agency may be disclosed to the higher education 
        services office to the extent necessary to determine eligibility 
        under section 136A.121, subdivision 2, clause (5); 
           (14) participant social security numbers and names 
        collected by the telephone assistance program may be disclosed 
        to the department of revenue to conduct an electronic data match 
        with the property tax refund database to determine eligibility 
        under section 237.70, subdivision 4a; 
           (15) the current address of a recipient of aid to families 
        with dependent children or Minnesota family investment 
        program-statewide may be disclosed to law enforcement officers 
        who provide the name and social security number of the recipient 
        and satisfactorily demonstrate that:  (i) the recipient is a 
        fugitive felon, including the grounds for this determination; 
        (ii) the location or apprehension of the felon is within the law 
        enforcement officer's official duties; and (iii) the request is 
        made in writing and in the proper exercise of those duties; 
           (16) the current address of a recipient of general 
        assistance, work readiness, or general assistance medical care 
        may be disclosed to probation officers and corrections agents 
        who are supervising the recipient, and to law enforcement 
        officers who are investigating the recipient in connection with 
        a felony level offense; 
           (17) information obtained from food stamp applicant or 
        recipient households may be disclosed to local, state, or 
        federal law enforcement officials, upon their written request, 
        for the purpose of investigating an alleged violation of the 
        food stamp act, in accordance with according to Code of Federal 
        Regulations, title 7, section 272.1(c); 
           (18) data on a child support obligor who is in arrears may 
        be disclosed for purposes of publishing the data pursuant 
        according to section 518.575; 
           (19) data on child support payments made by a child support 
        obligor may be disclosed to the obligee; 
           (20) data in the work reporting system may be disclosed 
        under section 256.998, subdivision 7; 
           (21) to the department of children, families, and learning 
        for the purpose of matching department of children, families, 
        and learning student data with public assistance data to 
        determine students eligible for free and reduced price meals, 
        meal supplements, and free milk pursuant according to United 
        States Code, title 42, sections 1758, 1761, 1766, 1766a, 1772, 
        and 1773; to produce accurate numbers of students receiving aid 
        to families with dependent children or Minnesota family 
        investment program-statewide as required by section 124.175; and 
        to allocate federal and state funds that are distributed based 
        on income of the student's family; or 
           (22) the current address and telephone number of program 
        recipients and emergency contacts may be released to the 
        commissioner of health or a local board of health as defined in 
        section 145A.02, subdivision 2, when the commissioner or local 
        board of health has reason to believe that a program recipient 
        is a disease case, carrier, suspect case, or at risk of illness, 
        and the data are necessary to locate the person. 
           (b) Information on persons who have been treated for drug 
        or alcohol abuse may only be disclosed in accordance with 
        according to the requirements of Code of Federal Regulations, 
        title 42, sections 2.1 to 2.67. 
           (c) Data provided to law enforcement agencies under 
        paragraph (a), clause (15), (16), or (17), or paragraph (b), are 
        investigative data and are confidential or protected nonpublic 
        while the investigation is active.  The data are private after 
        the investigation becomes inactive under section 13.82, 
        subdivision 5, paragraph (a) or (b). 
           (d) Mental health data shall be treated as provided in 
        subdivisions 7, 8, and 9, but is not subject to the access 
        provisions of subdivision 10, paragraph (b). 
           Sec. 3.  Minnesota Statutes 1996, section 84.98, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CRITERIA FOR DETERMINING ECONOMIC, SOCIAL, 
        PHYSICAL, OR EDUCATIONAL DISADVANTAGE.] (a) The criteria for 
        determining economic, social, physical, or educational 
        disadvantage shall be determined as provided in this subdivision.
           (b) Economically disadvantaged are persons who meet the 
        criteria for disadvantaged established by the department of 
        economic security or persons receiving services provided by the 
        department of human services such as welfare payments, food 
        stamps, and aid to families with dependent children or Minnesota 
        family investment program-statewide.  
           (c) Socially disadvantaged are persons who have been 
        classified as persons in need of supervision by the court system.
           (d) Physically disadvantaged are persons who have been 
        identified as having special needs by public agencies that deal 
        with employment for the disabled. 
           (e) Educationally disadvantaged are persons who have 
        dropped out of school or are at risk of dropping out of school 
        and persons with learning disabilities or in need of special 
        education classes.  
           Sec. 4.  Minnesota Statutes 1996, section 136A.125, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBLE STUDENTS.] An applicant is eligible for 
        a child care grant if the applicant: 
           (1) is a resident of the state of Minnesota; 
           (2) has a child 12 years of age or younger, or 14 years of 
        age or younger who is handicapped as defined in section 120.03, 
        and who is receiving or will receive care on a regular basis 
        from a licensed or legal, nonlicensed caregiver; 
           (3) is income eligible as determined by the office's 
        policies and rules, but is not a recipient of assistance from 
        either aid to families with dependent children or Minnesota 
        family investment program-statewide; 
           (4) has not earned a baccalaureate degree and has been 
        enrolled full time less than eight semesters, 12 quarters, or 
        the equivalent; 
           (5) is pursuing a nonsectarian program or course of study 
        that applies to an undergraduate degree, diploma, or 
        certificate; 
           (6) is enrolled at least half time in an eligible 
        institution; and 
           (7) is in good academic standing and making satisfactory 
        academic progress. 
           Sec. 5.  Minnesota Statutes 1996, section 196.27, is 
        amended to read: 
           196.27 [AGENT ORANGE SETTLEMENT PAYMENTS.] 
           (a) Payments received by veterans or their dependents 
        because of settlements between them and the manufacturers of 
        Agent Orange or other chemical agents, as defined in section 
        196.21, must not be treated as income (or an available resource) 
        of the veterans or their dependents for the purposes of any 
        program of public assistance or benefit program administered by 
        the department of veterans affairs, the department of human 
        services, or other agencies of the state or political 
        subdivisions of the state, except as provided in paragraph (b). 
           (b) The income and resource exclusion in paragraph (a) does 
        not apply to the medical assistance, food stamps, or aid to 
        families with dependent children or Minnesota family investment 
        program-statewide programs until the commissioner of human 
        services receives formal approval from the United States 
        Department of Health and Human Services, for the medical 
        assistance and, aid to families with dependent children or 
        Minnesota family investment program-statewide programs, and from 
        the United States Department of Agriculture, for the food stamps 
        program.  The income exclusion does not apply to the Minnesota 
        supplemental aid program until the commissioner receives formal 
        federal approval of the exclusion for the medical assistance 
        program. 
           Sec. 6.  Minnesota Statutes 1996, section 237.70, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [HOUSEHOLDS ELIGIBLE FOR CREDITS.] The telephone 
        assistance plan must provide telephone assistance credit for a 
        residential household in Minnesota that meets each of the 
        following criteria: 
           (1) has a household member who: 
           (i) subscribes to local exchange service; and 
           (ii) is either disabled or 65 years of age or older; 
           (2) whose household income is 150 percent or less of 
        federal poverty guidelines or is currently eligible for: 
           (i) aid to families with dependent children or Minnesota 
        family investment program-statewide; 
           (ii) medical assistance; 
           (iii) general assistance; 
           (iv) Minnesota supplemental aid; 
           (v) food stamps; 
           (vi) refugee cash assistance or refugee medical assistance; 
           (vii) energy assistance; or 
           (viii) supplemental security income; and 
           (3) who has been certified as eligible for telephone 
        assistance plan credits. 
           Sec. 7.  Minnesota Statutes 1996, section 254B.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CHEMICAL DEPENDENCY TREATMENT ALLOCATION.] 
        The chemical dependency funds appropriated for allocation shall 
        be placed in a special revenue account.  For the fiscal year 
        beginning July 1, 1987, funds shall be transferred to operate 
        the vendor payment, invoice processing, and collections system 
        for one year.  The commissioner shall annually transfer funds 
        from the chemical dependency fund to pay for operation of the 
        drug and alcohol abuse normative evaluation system and to pay 
        for all costs incurred by adding two positions for licensing of 
        chemical dependency treatment and rehabilitation programs 
        located in hospitals for which funds are not otherwise 
        appropriated.  The commissioner shall annually divide the money 
        available in the chemical dependency fund that is not held in 
        reserve by counties from a previous allocation.  Twelve percent 
        of the remaining money must be reserved for treatment of 
        American Indians by eligible vendors under section 254B.05.  The 
        remainder of the money must be allocated among the counties 
        according to the following formula, using state demographer data 
        and other data sources determined by the commissioner: 
           (a) For purposes of this formula, American Indians and 
        children under age 14 are subtracted from the population of each 
        county to determine the restricted population. 
           (b) The amount of chemical dependency fund expenditures for 
        entitled persons for services not covered by prepaid plans 
        governed by section 256B.69 in the previous year is divided by 
        the amount of chemical dependency fund expenditures for entitled 
        persons for all services to determine the proportion of exempt 
        service expenditures for each county. 
           (c) The prepaid plan months of eligibility is multiplied by 
        the proportion of exempt service expenditures to determine the 
        adjusted prepaid plan months of eligibility for each county. 
           (d) The adjusted prepaid plan months of eligibility is 
        added to the number of restricted population fee for service 
        months of eligibility for aid to families with dependent 
        children, Minnesota family investment program-statewide, general 
        assistance, and medical assistance and divided by the county 
        restricted population to determine county per capita months of 
        covered service eligibility. 
           (e) The number of adjusted prepaid plan months of 
        eligibility for the state is added to the number of fee for 
        service months of eligibility for aid to families with dependent 
        children, Minnesota family investment program-statewide, general 
        assistance, and medical assistance for the state restricted 
        population and divided by the state restricted population to 
        determine state per capita months of covered service eligibility.
           (f) The county per capita months of covered service 
        eligibility is divided by the state per capita months of covered 
        service eligibility to determine the county welfare caseload 
        factor. 
           (g) The median married couple income for the most recent 
        three-year period available for the state is divided by the 
        median married couple income for the same period for each county 
        to determine the income factor for each county. 
           (h) The county restricted population is multiplied by the 
        sum of the county welfare caseload factor and the county income 
        factor to determine the adjusted population. 
           (i) $15,000 shall be allocated to each county.  
           (j) The remaining funds shall be allocated proportional to 
        the county adjusted population. 
           Sec. 8.  Minnesota Statutes 1996, section 256.01, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [TECHNICAL ASSISTANCE FOR IMMUNIZATION 
        REMINDERS.] The state agency shall provide appropriate technical 
        assistance to county agencies to develop methods to have county 
        financial workers remind and encourage recipients of aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, the Minnesota family investment plan, medical 
        assistance, family general assistance, or food stamps whose 
        assistance unit includes at least one child under the age of 
        five to have each young child immunized against childhood 
        diseases.  The state agency must examine the feasibility of 
        utilizing the capacity of a statewide computer system to assist 
        county agency financial workers in performing this function at 
        appropriate intervals. 
           Sec. 9.  Minnesota Statutes 1996, section 256.017, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY AND PURPOSE.] The commissioner 
        shall administer a compliance system for aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, the food stamp program, emergency assistance, 
        general assistance, work readiness, medical assistance, general 
        assistance medical care, emergency general assistance, Minnesota 
        supplemental assistance, preadmission screening, and alternative 
        care grants under the powers and authorities named in section 
        256.01, subdivision 2.  The purpose of the compliance system is 
        to permit the commissioner to supervise the administration of 
        public assistance programs and to enforce timely and accurate 
        distribution of benefits, completeness of service and efficient 
        and effective program management and operations, to increase 
        uniformity and consistency in the administration and delivery of 
        public assistance programs throughout the state, and to reduce 
        the possibility of sanctions and fiscal disallowances for 
        noncompliance with federal regulations and state statutes. 
           The commissioner shall utilize training, technical 
        assistance, and monitoring activities, as specified in section 
        256.01, subdivision 2, to encourage county agency compliance 
        with written policies and procedures. 
           Sec. 10.  Minnesota Statutes 1996, section 256.017, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DETERMINING THE AMOUNT OF THE QUALITY CONTROL 
        CASE PENALTY.] (a) The amount of the quality control case 
        penalty is limited to the amount of the dollar error for the 
        quality control sample month in a reviewed case as determined by 
        the state quality control review procedures for the aid to 
        families with dependent children, Minnesota family investment 
        program-statewide and food stamp programs or for any other 
        income transfer program for which the commissioner develops a 
        quality control program. 
           (b) Payment errors in medical assistance or any other 
        medical services program for which the department develops a 
        quality control program are subject to set rate penalties based 
        on the average cost of the specific quality control error 
        element for a sample review month for that household size and 
        status of institutionalization and as determined from state 
        quality control data in the preceding fiscal year for the 
        corresponding program. 
           (c) Errors identified in negative action cases, such as 
        incorrect terminations or denials of assistance are subject to 
        set rate penalties based on the average benefit cost of that 
        household size as determined from state quality control data in 
        the preceding fiscal year for the corresponding program. 
           Sec. 11.  Minnesota Statutes 1996, section 256.031, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEDERAL WAIVERS.] In accordance with According 
        to sections 256.031 to 256.0361 and federal laws authorizing the 
        program, the commissioner shall seek waivers of federal 
        requirements of:  United States Code, title 42, section 601 et 
        seq., and United States Code, title 7, section 2011 et seq., 
        needed to implement the Minnesota family investment plan in a 
        manner consistent with the goals and objectives of the program.  
        The commissioner shall seek terms from the federal government 
        that are consistent with the goals of the Minnesota family 
        investment plan.  The commissioner shall also seek terms from 
        the federal government that will maximize federal financial 
        participation so that the extra costs to the state of 
        implementing the program are minimized, to the extent that those 
        terms are consistent with the goals of the Minnesota family 
        investment plan.  An agreement with the federal government under 
        this section shall provide that the agreements may be canceled 
        by the state or federal government upon 180 days' notice or 
        immediately upon mutual agreement.  If the agreement is 
        canceled, families which cease receiving assistance under the 
        Minnesota family investment plan who are eligible for the aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, general assistance, medical assistance, 
        general assistance medical care, or the food stamp program must 
        be placed with their consent on the programs for which they are 
        eligible. 
           Sec. 12.  Minnesota Statutes 1996, section 256.046, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEARING AUTHORITY.] A local agency may 
        initiate an administrative fraud disqualification hearing for 
        individuals accused of wrongfully obtaining assistance or 
        intentional program violations in the aid to families with 
        dependent children, Minnesota family investment 
        program-statewide or food stamp programs.  The hearing is 
        subject to the requirements of section 256.045 and the 
        requirements in Code of Federal Regulations, title 7, section 
        273.16, for the food stamp program and title 45, section 
        235.112, for the aid to families with dependent children program.
           Sec. 13.  Minnesota Statutes 1996, section 256.935, 
        subdivision 1, is amended to read: 
           Subdivision 1.  On the death of any person receiving public 
        assistance through aid to dependent children or MFIP-S, the 
        county agency shall pay an amount for funeral expenses not 
        exceeding the amount paid for comparable services under section 
        261.035 plus actual cemetery charges.  No funeral expenses shall 
        be paid if the estate of the deceased is sufficient to pay such 
        expenses or if the spouse, who was legally responsible for the 
        support of the deceased while living, is able to pay such 
        expenses; provided, that the additional payment or donation of 
        the cost of cemetery lot, interment, religious service, or for 
        the transportation of the body into or out of the community in 
        which the deceased resided, shall not limit payment by the 
        county agency as herein authorized.  Freedom of choice in the 
        selection of a funeral director shall be granted to persons 
        lawfully authorized to make arrangements for the burial of any 
        such deceased recipient.  In determining the sufficiency of such 
        estate, due regard shall be had for the nature and marketability 
        of the assets of the estate.  The county agency may grant 
        funeral expenses where the sale would cause undue loss to the 
        estate.  Any amount paid for funeral expenses shall be a prior 
        claim against the estate, as provided in section 524.3-805, and 
        any amount recovered shall be reimbursed to the agency which 
        paid the expenses.  The commissioner shall specify requirements 
        for reports, including fiscal reports, according to section 
        256.01, subdivision 2, paragraph (17).  The state share of 
        county agency expenditures shall be 50 percent and the county 
        share shall be 50 percent.  Benefits shall be issued to 
        recipients by the state or county and funded according to 
        section 256.025, subdivision 3, subject to provisions of section 
        256.017. 
           Beginning July 1, 1991, the state will reimburse counties 
        according to the payment schedule set forth in section 256.025 
        for the county share of county agency expenditures made under 
        this subdivision from January 1, 1991, on.  Payment under this 
        subdivision is subject to the provisions of section 256.017. 
           Sec. 14.  Minnesota Statutes 1996, section 256.981, is 
        amended to read: 
           256.981 [TRAINING OF WELFARE FRAUD PROSECUTORS.] 
           The commissioner of human services shall, to the extent an 
        appropriation is provided for this purpose, contract with the 
        county attorney's council or other public or private entity 
        experienced in providing training for prosecutors to conduct 
        quarterly workshops and seminars focusing on current aid to 
        families with dependent children and Minnesota family investment 
        program-statewide program issues, other income maintenance 
        program changes, recovery issues, alternative sentencing 
        methods, use of technical aids for interviews and 
        interrogations, and other matters affecting prosecution of 
        welfare fraud cases. 
           Sec. 15.  Minnesota Statutes 1996, section 256E.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  (a) "Community social services" means services 
        provided or arranged for by county boards to fulfill the 
        responsibilities prescribed in section 256E.08, subdivision 1, 
        to the following groups of persons: 
           (1) families with children under age 18, who are 
        experiencing child dependency, neglect or abuse, and also 
        pregnant adolescents, adolescent parents under the age of 18, 
        and their children; 
           (2) persons who are under the guardianship of the 
        commissioner of human services as dependent and neglected wards; 
           (3) adults who are in need of protection and vulnerable as 
        defined in section 626.5572; 
           (4) persons age 60 and over who are experiencing difficulty 
        living independently and are unable to provide for their own 
        needs; 
           (5) emotionally disturbed children and adolescents, 
        chronically and acutely mentally ill persons who are unable to 
        provide for their own needs or to independently engage in 
        ordinary community activities; 
           (6) persons with mental retardation as defined in section 
        252A.02, subdivision 2, or with related conditions as defined in 
        section 252.27, subdivision 1a, who are unable to provide for 
        their own needs or to independently engage in ordinary community 
        activities; 
           (7) drug dependent and intoxicated persons as defined in 
        section 254A.02, subdivisions 5 and 7, and persons at risk of 
        harm to self or others due to the ingestion of alcohol or other 
        drugs; 
           (8) parents whose income is at or below 70 percent of the 
        state median income and who are in need of child care services 
        in order to secure or retain employment or to obtain the 
        training or education necessary to secure employment; and 
           (9) other groups of persons who, in the judgment of the 
        county board, are in need of social services. 
           (b) Except as provided in section 256E.08, subdivision 5, 
        community social services do not include public assistance 
        programs known as aid to families with dependent children, 
        Minnesota family investment program-statewide, Minnesota 
        supplemental aid, medical assistance, general assistance, 
        general assistance medical care, or community health services 
        authorized by sections 145A.09 to 145A.13.  
           Sec. 16.  Minnesota Statutes 1996, section 256E.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FORMULA.] The commissioner of human 
        services shall distribute community social service aids to each 
        county board in an amount determined according to the following 
        formula: 
           In calendar year 1982 and thereafter: 
           (a) One-third shall be distributed on the basis of the 
        average unduplicated number of persons who receive AFDC, 
        Minnesota family investment program-statewide, general 
        assistance, and medical assistance per month in the calendar 
        year two years prior to the year for which funds are being 
        distributed as reported in the average monthly caseload reports 
        required under sections 256.01, 256B.04 and 256D.04, and 
        certified by the commissioner of human services; and 
           (b) One-third shall be distributed on the basis of the 
        number of persons residing in the county as determined by the 
        most recent data of the state demographer; 
           (c) One-third shall be distributed on the basis of the 
        number of persons residing in the county who are 65 years old or 
        older as determined by the most recent data of the state 
        demographer. 
           Sec. 17.  Minnesota Statutes 1996, section 256E.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS TO COUNTIES.] The commissioner of human 
        services shall make payments for community social services to 
        each county in four installments per year.  The commissioner of 
        human services may certify the payments for the first three 
        months of a calendar year based on estimates of the unduplicated 
        number of persons receiving AFDC, Minnesota family investment 
        program-statewide, general assistance and medical assistance for 
        the prior year.  The following three payments shall be adjusted 
        to reflect the actual unduplicated number of persons who 
        received AFDC, Minnesota family investment program-statewide, 
        general assistance and medical assistance as required by 
        subdivision 1.  The commissioner shall ensure that the pertinent 
        payment of the allotment for that quarter is made to each county 
        on the first working day after the end of each quarter of the 
        calendar year, except for the last quarter of the calendar 
        year.  The commissioner shall ensure that each county receives 
        its payment of the allotment for that quarter no later than the 
        last working day of that quarter.  This scheduling of payments 
        does not require compliance with subdivision 10.  
           Sec. 18.  Minnesota Statutes 1996, section 256E.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FORMULA.] In federal fiscal year 1985 and 
        subsequent years, money for social services that is received 
        from the federal government to reimburse counties for social 
        service expenditures pursuant according to title XX of the 
        Social Security Act shall be allocated to each county according 
        to the following formula:  
           (a) Two-thirds shall be allocated on the basis of the 
        annual average number of unduplicated active monthly caseloads 
        in each county in the following programs:  aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, medical assistance, general assistance, 
        supplementary security income, and Minnesota supplemental aid.  
           (b) One-third shall be allocated on the basis of the number 
        of persons residing in the county as determined by the most 
        recent estimate of the state demographer.  
           (c) The commissioner shall allocate to the counties 
        pursuant according to this section the total money received from 
        the federal government for social services pursuant according to 
        title XX of the Social Security Act, except that portion of the 
        state's allocation which the legislature authorizes for 
        administrative purposes and for migrant day care. 
           Sec. 19.  Minnesota Statutes 1996, section 256E.08, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION OF INCOME MAINTENANCE PROGRAMS.] 
        The county board may designate itself, a human services board, 
        or a local social services agency to perform the functions of 
        local social services agencies as prescribed in chapter 393 and 
        assigned to county agencies in other law which pertains to the 
        administration of income maintenance programs known as aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, general assistance, Minnesota supplemental 
        aid, medical assistance, general assistance medical care, and 
        emergency assistance.  
           Sec. 20.  Minnesota Statutes 1996, section 256F.05, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INAPPROPRIATE EXPENDITURES.] Family preservation 
        fund basic, placement earnings, and development grant money must 
        not be used for: 
           (1) child day care necessary solely because of the 
        employment or training to prepare for employment, of a parent or 
        other relative with whom the child is living; 
           (2) residential facility payments; 
           (3) adoption assistance payments; 
           (4) public assistance payments for aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, supplemental aid, medical assistance, general 
        assistance, general assistance medical care, or community health 
        services authorized by sections 145A.09 to 145A.13; or 
           (5) administrative costs for local social services agency 
        public assistance staff.  
           Sec. 21.  Minnesota Statutes 1996, section 256G.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADDITIONAL COVERAGE.] The provisions in sections 
        256G.02, subdivision 4, paragraphs (a) to (d); 256G.02, 
        subdivisions 5 to 8; 256G.03; 256G.04; 256G.05; and 256G.07, 
        subdivisions 1 to 3, apply to the following programs:  aid to 
        families with dependent children, Minnesota family investment 
        program-statewide; medical assistance; general assistance; 
        family general assistance; general assistance medical care; and 
        Minnesota supplemental aid. 
           Sec. 22.  Minnesota Statutes 1996, section 257.3573, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INAPPROPRIATE EXPENDITURES.] Indian child 
        welfare grant money must not be used for: 
           (1) child day care necessary solely because of employment 
        or training for employment of a parent or other relative with 
        whom the child is living; 
           (2) foster care maintenance or difficulty of care payments; 
           (3) residential facility payments; 
           (4) adoption assistance payments; 
           (5) public assistance payments for aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, supplemental aid, medical assistance, general 
        assistance, general assistance medical care, or community health 
        services authorized by sections 145A.01 to 145A.14; or 
           (6) administrative costs for income maintenance staff.  
           Sec. 23.  Minnesota Statutes 1996, section 260.38, is 
        amended to read: 
           260.38 [COST, PAYMENT.] 
           In addition to the usual care and services given by public 
        and private agencies, the necessary cost incurred by the 
        commissioner of human services in providing care for such child 
        shall be paid by the county committing such child which, subject 
        to uniform rules established by the commissioner of human 
        services, may receive a reimbursement not exceeding one-half of 
        such costs from funds made available for this purpose by the 
        legislature during the period beginning July 1, 1985, and ending 
        December 31, 1985.  Beginning January 1, 1986, the necessary 
        cost incurred by the commissioner of human services in providing 
        care for the child must be paid by the county committing the 
        child.  Where such child is eligible to receive a grant of aid 
        to families with dependent children, Minnesota family investment 
        program-statewide or supplemental security income for the aged, 
        blind, and disabled, or a foster care maintenance payment under 
        Title IV-E of the Social Security Act, United States Code, title 
        42, sections 670 to 676, the child's needs shall be met through 
        these programs.  
           Sec. 24.  Minnesota Statutes 1996, section 268.0111, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INCOME MAINTENANCE AND SUPPORT SERVICES.] 
        "Income maintenance and support services" means programs through 
        which the state or its subdivisions provide direct financial or 
        in-kind support to unemployed or underemployed persons, 
        including reemployment insurance, aid to families with dependent 
        children, Minnesota family investment program-statewide, general 
        assistance, work readiness assistance, food stamps, energy 
        assistance, disability determinations, and child care.  Income 
        maintenance and support services do not include medical 
        assistance, aging services, social services, community social 
        services, mental health services, or services for the 
        emotionally disturbed, the mentally retarded, or residents of 
        nursing homes. 
           Sec. 25.  Minnesota Statutes 1996, section 268.0111, 
        subdivision 7, is amended to read: 
           Subd. 7.  [PUBLIC ASSISTANCE.] "Public assistance" means 
        aid to families with dependent children, Minnesota family 
        investment program-statewide and general assistance, and work 
        readiness.  
           Sec. 26.  Minnesota Statutes 1996, section 268.0122, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DUTIES AS A STATE AGENCY.] The commissioner 
        shall: 
           (1) administer the unemployment insurance laws and related 
        programs; 
           (2) administer the aspects of aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, general assistance, work readiness, and food 
        stamps that relate to employment and training services, subject 
        to the contract under section 268.86, subdivision 2; 
           (3) administer wage subsidies and the discretionary 
        employment and training fund; 
           (4) administer a national system of public employment 
        offices as prescribed by United States Code, title 29, chapter 
        4B, the Wagner-Peyser Act, and other federal employment and 
        training programs; 
           (5) cooperate with the federal government and its 
        employment and training agencies in any reasonable manner as 
        necessary to qualify for federal aid for employment and training 
        services and money; 
           (6) enter into agreements with other departments of the 
        state and local units of government as necessary; 
           (7) certify employment and training service providers and 
        decertify service providers that fail to comply with performance 
        criteria according to standards established by the commissioner; 
           (8) provide consistent, integrated employment and training 
        services across the state; 
           (9) establish the standards for all employment and training 
        services administered under this chapter; 
           (10) develop standards for the contents and structure of 
        the local service unit plans and plans for Indian tribe 
        employment and training services; 
           (11) provide current state and substate labor market 
        information and forecasts, in cooperation with other agencies; 
           (12) identify underserved populations, unmet service needs, 
        and funding requirements; 
           (13) consult with the council for the blind on matters 
        pertaining to programs and services for the blind and visually 
        impaired; and 
           (14) enter into agreements with Indian tribes as necessary 
        to provide employment and training services as funds become 
        available. 
           Sec. 27.  Minnesota Statutes 1996, section 268.552, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ALLOCATION TO APPLICANTS.] Priority for 
        subsidies shall be in the following order: 
           (1) applicants living in households with no other income 
        source; 
           (2) applicants whose incomes and resources are less than 
        the standard for eligibility for general assistance or work 
        readiness; and 
           (3) applicants who are eligible for aid to families with 
        dependent children or Minnesota family investment 
        program-statewide. 
           Sec. 28.  Minnesota Statutes 1996, section 268.6751, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WAGE SUBSIDIES.] Wage subsidy money must 
        be allocated to local service units in the following manner: 
           (a) The commissioner shall allocate 87.5 percent of the 
        funds available for allocation to local service units for wage 
        subsidy programs as follows:  the proportion of the wage subsidy 
        money available to each local service unit must be based on the 
        number of unemployed persons in the local service unit for the 
        most recent six-month period and the number of work readiness 
        assistance cases and aid to families with dependent children and 
        Minnesota family investment program-statewide cases in the local 
        service unit for the most recent six-month period. 
           (b) Five percent of the money available for wage subsidy 
        programs must be allocated at the discretion of the commissioner.
           (c) Seven and one-half percent of the money available for 
        wage subsidy programs must be allocated at the discretion of the 
        commissioner to provide jobs for residents of federally 
        recognized Indian reservations.  
           (d) By December 31 of each fiscal year, providers and local 
        service units receiving wage subsidy money shall report to the 
        commissioner on the use of allocated funds.  The commissioner 
        shall reallocate uncommitted funds for each fiscal year 
        according to the formula in paragraph (a). 
           Sec. 29.  Minnesota Statutes 1996, section 268.676, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AMONG JOB APPLICANTS.] At least 80 percent 
        of funds allocated among eligible job applicants statewide must 
        be allocated to: 
           (1) applicants living in households with no other income 
        source; 
           (2) applicants whose incomes and resources are less than 
        the standards for eligibility for general assistance or work 
        readiness; 
           (3) applicants who are eligible for aid to families with 
        dependent children or Minnesota family investment 
        program-statewide; and 
           (4) applicants who live in a farm household who demonstrate 
        severe household financial need. 
           Sec. 30.  Minnesota Statutes 1996, section 268.86, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INTERAGENCY AGREEMENTS.] By October 1, 1987, the 
        commissioner and the commissioner of human services shall enter 
        into a written contract for the design, delivery, and 
        administration of employment and training services for 
        applicants for or recipients of food stamps or, aid to families 
        with dependent children and work readiness or Minnesota family 
        investment program-statewide, including AFDC and MFIP-S 
        employment and training programs, and general assistance or work 
        readiness grant diversion.  The contract must address: 
           (1) specific roles and responsibilities of each department; 
           (2) assignment and supervision of staff for interagency 
        activities including any necessary interagency employee mobility 
        agreements under the administrative procedures of the department 
        of employee relations; 
           (3) mechanisms for determining the conditions under which 
        individuals participate in services, their rights and 
        responsibilities while participating, and the standards by which 
        the services must be administered; 
           (4) procedures for providing technical assistance to local 
        service units, Indian tribes, and employment and training 
        service providers; 
           (5) access to appropriate staff for ongoing development and 
        interpretation of policy, rules, and program standards; 
           (6) procedures for reimbursing appropriate agencies for 
        administrative expenses; and 
           (7) procedures for accessing available federal funds. 
           Sec. 31.  Minnesota Statutes 1996, section 268.871, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESPONSIBILITY AND CERTIFICATION.] (a) 
        Unless prohibited by federal law or otherwise determined by 
        state law, a local service unit is responsible for the delivery 
        of employment and training services.  After February 1, 1988, 
        employment and training services must be delivered by certified 
        employment and training service providers.  
           (b) The local service unit's employment and training 
        service provider must meet the certification standards in this 
        subdivision in order to be certified to deliver any of the 
        following employment and training services and programs:  wage 
        subsidies; work readiness; work readiness and general assistance 
        grant diversion; food stamp employment and training programs; 
        community work experience programs; AFDC or MFIP-S job search; 
        AFDC or MFIP-S grant diversion; AFDC or MFIP-S on-the-job 
        training; and AFDC or MFIP-S case management.  
           (c) The commissioner shall certify a local service unit's 
        service provider to provide these employment and training 
        services and programs if the commissioner determines that the 
        provider has:  
           (1) past experience in direct delivery of the programs 
        specified in paragraph (b); 
           (2) staff capabilities and qualifications, including 
        adequate staff to provide timely and effective services to 
        clients, and proven staff experience in providing specific 
        services such as assessments, career planning, job development, 
        job placement, support services, and knowledge of community 
        services and educational resources; 
           (3) demonstrated effectiveness in providing services to 
        public assistance recipients and other economically 
        disadvantaged clients; and 
           (4) demonstrated administrative capabilities, including 
        adequate fiscal and accounting procedures, financial management 
        systems, participant data systems, and record retention 
        procedures. 
           (d) When the only service provider that meets the criterion 
        in paragraph (c), clause (1), has been decertified, pursuant 
        according to subdivision 1a, in that local service unit, the 
        following criteria shall be substituted:  past experience in 
        direct delivery of multiple, coordinated, nonduplicative 
        services, including outreach, assessments, identification of 
        client barriers, employability development plans, and provision 
        or referral to support services. 
           (e) The commissioner shall certify providers of the 
        Minnesota family investment plan case management services as 
        defined in section 256.032, subdivision 3.  Providers must meet 
        the standards defined in paragraph (c), except that past 
        experience under paragraph (c), clause (1), must be in services 
        and programs similar to those specified in section 256.032, 
        subdivision 3.  
           Employment and training service providers shall be 
        certified by the commissioner for two fiscal years beginning 
        July 1, 1991, and every second year thereafter. 
           Sec. 32.  Minnesota Statutes 1996, section 268.90, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYMENT CONDITIONS.] (a) An eligible 
        nonprofit or public employer may not terminate, lay off, or 
        reduce the regular working hours of an employee for the purpose 
        of hiring an individual with money available under this 
        program.  An eligible employer may not hire an individual with 
        money available through this program if any other person is on 
        layoff from the same or a substantially equivalent job. 
           (b) Community investment program participants are employees 
        of the project employer within the meaning of workers' 
        compensation laws, personal income tax, and the federal 
        insurance contribution act, but not retirement or civil service 
        laws. 
           (c) Each project and job must comply with all applicable 
        affirmative action, fair labor, health, safety, and 
        environmental standards. 
           (d) Individuals employed under the community investment 
        program must be paid a wage at the same wage rates as work site 
        or employees doing comparable work in that locality, unless 
        otherwise specified in law. 
           (e) Recipients of aid to families with dependent 
        children or Minnesota family investment program-statewide who 
        are eligible on the basis of an unemployed parent may not have 
        available more than 100 hours a month.  All employees are 
        limited to 32 hours or four days a week, so that they can 
        continue to seek full-time private sector employment, unless 
        otherwise specified in law. 
           (f) The commissioner shall establish, by rule, the terms 
        and conditions governing the participation of appropriate public 
        assistance recipients.  The rules must, at a minimum, establish 
        the procedures by which the minimum and maximum number of work 
        hours and maximum allowable travel distances are determined, the 
        amounts and methods by which work expenses will be paid, and the 
        manner in which support services will be provided.  The rules 
        must also provide for periodic reviews of clients continuing 
        employment in community investment programs. 
           (g) Participation in a community investment program by a 
        recipient of aid to families with dependent children, Minnesota 
        family investment program-statewide or general assistance is 
        voluntary; however, work readiness registrants may be required 
        to participate.  
           Sec. 33.  Minnesota Statutes 1996, section 268.916, is 
        amended to read: 
           268.916 [REPORTS.] 
           Each grantee shall submit an annual report to the 
        commissioner on the format designated by the commissioner, 
        including program information report data.  By January 1 of each 
        year, the commissioner shall prepare an annual report to the 
        health and human services committee of the house of 
        representatives and the family services committee of the senate 
        concerning the uses and impact of head start supplemental 
        funding, including a summary of innovative programs and the 
        results of innovative programs and an evaluation of the 
        coordination of head start programs with employment and training 
        services provided to AFDC and MFIP-S recipients. 
           Sec. 34.  Minnesota Statutes 1996, section 268.95, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PILOT PROGRAM.] The commissioner shall develop a 
        pilot program, in cooperation with the commissioners of trade 
        and economic development and human services, to enable 
        low-income persons to start or expand self-employment 
        opportunities or home-based businesses that are designed to make 
        the individual entrepreneurs economically independent.  The 
        commissioner of human services shall seek necessary waivers from 
        federal regulations to allow recipients of aid to families with 
        dependent children or Minnesota family investment 
        program-statewide to participate and retain eligibility while 
        establishing a business. 
           Sec. 35.  Minnesota Statutes 1996, section 393.07, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PURCHASE OF EQUIPMENT TO AID WELFARE 
        RECIPIENTS.] Every local social services agency authorizing 
        braces, crutches, trusses, wheel chairs and hearing aids for use 
        by recipients of supplemental security income for the aged, 
        blind and disabled, aid to families with dependent children or 
        Minnesota family investment program-statewide and relief shall 
        secure such devices at the lowest cost obtainable conducive to 
        the well being of the recipient and fix the recipient's grant in 
        an amount to cover the cost of the device providing it will be 
        purchased at the lowest cost obtainable, or may make payment for 
        the device directly to the vendor. 
           Sec. 36.  Minnesota Statutes 1996, section 477A.0122, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following definitions apply: 
           (a) "Children in out-of-home placement" means the total 
        unduplicated number of children in out-of-home care as reported 
        pursuant according to section 257.0725. 
           (b) "Family preservation programs" means family-based 
        services as defined in section 256F.03, subdivision 5, families 
        first services, parent and child education programs, and day 
        treatment services provided in cooperation with a school 
        district or other programs as defined by the commissioner of 
        human services. 
           (c) "Income maintenance caseload" means average monthly 
        number of AFDC or Minnesota family investment program-statewide 
        cases for the calendar year. 
           By July 1, 1994, the commissioner of human services shall 
        certify to the commissioner of revenue the number of children in 
        out-of-home placement in 1991 and 1992 for each county and the 
        income maintenance caseload for each county for the most recent 
        year available.  By July 1 of each subsequent year, the 
        commissioner of human services shall certify to the commissioner 
        of revenue the income maintenance caseload for each county for 
        the most recent calendar year available. 
           Sec. 37.  Minnesota Statutes 1996, section 550.37, 
        subdivision 14, is amended to read: 
           Subd. 14.  [PUBLIC ASSISTANCE.] All relief based on need, 
        and the earnings or salary of a person who is a recipient of 
        relief based on need, shall be exempt from all claims of 
        creditors including any contractual setoff or security interest 
        asserted by a financial institution.  For the purposes of this 
        chapter, relief based on need includes AFDC, MFIP, MFIP-R, 
        MFIP-S, Work First, general assistance medical care, 
        supplemental security income, medical assistance, Minnesota 
        supplemental assistance, and general assistance.  The salary or 
        earnings of any debtor who is or has been an eligible recipient 
        of relief based on need, or an inmate of a correctional 
        institution shall, upon the debtor's return to private 
        employment or farming after having been an eligible recipient of 
        relief based on need, or an inmate of a correctional 
        institution, be exempt from attachment, garnishment, or levy of 
        execution for a period of six months after the debtor's return 
        to employment or farming and after all public assistance for 
        which eligibility existed has been terminated.  The exemption 
        provisions contained in this subdivision also apply for 60 days 
        after deposit in any financial institution, whether in a single 
        or joint account.  In tracing the funds, the first-in first-out 
        method of accounting shall be used.  The burden of establishing 
        that funds are exempt rests upon the debtor.  Agencies 
        distributing relief and the correctional institutions shall, at 
        the request of creditors, inform them whether or not any debtor 
        has been an eligible recipient of relief based on need, or an 
        inmate of a correctional institution, within the preceding six 
        months. 
           Sec. 38.  [REVISOR INSTRUCTION.] 
           The revisor of statutes shall identify in Minnesota 
        Statutes and Minnesota Rules all references to aid to families 
        with dependent children, AFDC, aid to dependent children, family 
        general assistance, and FGA, and to Minnesota Statutes, section 
        256.12, or any of the sections of Minnesota Statutes from 
        sections 256.72 to 256.87.  
           The revisor shall prepare a report by January 1, 1998, for 
        the 1998 legislature showing where these references are located. 
           Sec. 39.  [EFFECTIVE DATE.] 
           This article is effective July 1, 1997. 
                                   ARTICLE 5 
                         PROGRAM INTEGRITY INITIATIVES 
           Section 1.  Minnesota Statutes 1996, section 13.82, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION.] This section shall apply to 
        agencies which carry on a law enforcement function, including 
        but not limited to municipal police departments, county sheriff 
        departments, fire departments, the bureau of criminal 
        apprehension, the Minnesota state patrol, the board of peace 
        officer standards and training, the department of commerce, and 
        the department of labor and industry fraud investigation unit, 
        the program integrity section of, and county human service 
        agency client and provider fraud prevention and control units 
        operated or supervised by the department of human services.  
           Sec. 2.  Minnesota Statutes 1996, section 256.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall: 
           (1) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (a) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (d) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (e) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; and 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds. 
           (2) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (3) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting handicapped, 
        dependent, neglected and delinquent children, and children born 
        to mothers who were not married to the children's fathers at the 
        times of the conception nor at the births of the children; 
        license and supervise child-caring and child-placing agencies 
        and institutions; supervise the care of children in boarding and 
        foster homes or in private institutions; and generally perform 
        all functions relating to the field of child welfare now vested 
        in the state board of control. 
           (4) Administer and supervise all noninstitutional service 
        to handicapped persons, including those who are visually 
        impaired, hearing impaired, or physically impaired or otherwise 
        handicapped.  The commissioner may provide and contract for the 
        care and treatment of qualified indigent children in facilities 
        other than those located and available at state hospitals when 
        it is not feasible to provide the service in state hospitals. 
           (5) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (6) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  
           (9) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (10) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) The proposed comprehensive plan, including estimated 
        project costs and the proposed order establishing the waiver, 
        shall be filed with the secretary of the senate and chief clerk 
        of the house of representatives at least 60 days prior to its 
        effective date. 
           (b) The secretary of health, education, and welfare of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (c) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) In accordance with According to federal requirements, 
        establish procedures to be followed by local welfare boards in 
        creating citizen advisory committees, including procedures for 
        selection of committee members. 
           (14) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children, Minnesota family investment 
        program-statewide, medical assistance, or food stamp program in 
        the following manner:  
           (a) One-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance, MFIP-S, and AFDC 
        programs, disallowances shall be shared by each county board in 
        the same proportion as that county's expenditures for the 
        sanctioned program are to the total of all counties' 
        expenditures for the AFDC, MFIP-S, and medical assistance 
        programs.  For the food stamp program, sanctions shall be shared 
        by each county board, with 50 percent of the sanction being 
        distributed to each county in the same proportion as that 
        county's administrative costs for food stamps are to the total 
        of all food stamp administrative costs for all counties, and 50 
        percent of the sanctions being distributed to each county in the 
        same proportion as that county's value of food stamp benefits 
        issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due. 
           (b) Notwithstanding the provisions of paragraph (a), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in paragraph (a), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a).  
           (15) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        pursuant according to section 256D.05, subdivision 3.  Upon the 
        written request of a shelter facility that has been denied 
        payments under section 256D.05, subdivision 3, the commissioner 
        shall review all relevant evidence and make a determination 
        within 30 days of the request for review regarding issuance of 
        direct payments to the shelter facility.  Failure to act within 
        30 days shall be considered a determination not to issue direct 
        payments. 
           (17) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) The commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced. 
           (b) The county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.  
           (c) If the required reports are not received by the 
        deadlines established in clause (b), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received.  
           (d) A county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of noncompliance.
           (e) The final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period. 
           (f) The commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) or (e) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under paragraph (c) or (e), the county board may appeal the 
        action according to sections 14.57 to 14.69. 
           (g) Counties subject to withholding of funds under 
        paragraph (c) or forfeiture or repayment of funds under 
        paragraph (e) shall not reduce or withhold benefits or services 
        to clients to cover costs incurred due to actions taken by the 
        commissioner under paragraph (c) or (e). 
           (18) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (20) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           Sec. 3.  Minnesota Statutes 1996, section 256.017, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] The following terms have the 
        meanings given for the purpose purposes of this section. 
           (a) "Administrative penalty" means an adjustment against 
        the county agency's state and federal benefit and federal 
        administrative reimbursement when the commissioner determines 
        that the county agency is not in compliance with the policies 
        and procedures established by the commissioner. 
           (b) "Quality control case penalty" means an adjustment 
        against the county agency's federal administrative reimbursement 
        and state and federal benefit reimbursement when the 
        commissioner determines through a quality control review that 
        the county agency has made incorrect payments, terminations, or 
        denials of benefits as determined by state quality control 
        procedures for the aid to families with dependent children, 
        Minnesota family investment program-statewide, food stamp, or 
        medical assistance programs, or any other programs for which the 
        commissioner has developed a quality control system.  Quality 
        control case penalties apply only to agency errors as defined by 
        state quality control procedures. 
           (c) "Quality control control/quality assurance" means a 
        review system of a statewide random sample of cases, designed to 
        provide data on program outcomes and the accuracy with which 
        state and federal policies are being applied in issuing benefits 
        and as a fiscal audit to ensure the accuracy of expenditures.  
        The quality control control/quality assurance system is 
        administered by the department.  For the aid to families with 
        dependent children, Minnesota family investment 
        program-statewide, food stamp, and medical assistance programs, 
        the quality control system is that required by federal 
        regulation, or those developed by the commissioner. 
           Sec. 4.  Minnesota Statutes 1996, section 256.019, is 
        amended to read: 
           256.019 [RECOVERY OF MONEY; APPORTIONMENT.] 
           When an amount is recovered from any source for assistance 
        given under the provisions governing public assistance programs 
        including aid to families with dependent children, MFIP-S, 
        general assistance medical care, emergency assistance, general 
        assistance, work readiness, and Minnesota supplemental aid, 
        there shall be paid to the United States the amount due under 
        the terms of the Social Security Act and the balance must be 
        paid into the treasury of the state or county in accordance with 
        current rates of financial participation; except the county may 
        keep one-half of recovery made by the county agency using any 
        method other than recoupment.  For medical assistance, if the 
        recovery is made by a county agency using any method other than 
        recoupment, the county may keep one-half of the nonfederal share 
        of the recovery.  This does not apply to recoveries from medical 
        providers or to recoveries begun by the department of human 
        services' surveillance and utilization review division, state 
        hospital collections unit, and the benefit recoveries division 
        or, by the attorney general's office, or child support 
        collections.  In the food stamp program, the nonfederal share of 
        recoveries in the federal tax refund offset program (FTROP) only 
        will be divided equally between the state agency and the 
        involved county agency. 
           Sec. 5.  Minnesota Statutes 1996, section 256.045, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STATE AGENCY HEARINGS.] (a) State agency 
        hearings are available for the following:  (1) any person 
        applying for, receiving or having received public assistance, 
        medical care, or a program of social services granted by the 
        state agency or a county agency under sections 252.32, 256.031 
        to 256.036, and 256.72 to 256.879, chapters 256B, 256D, 256E, 
        261, or the federal Food Stamp Act whose application for 
        assistance is denied, not acted upon with reasonable promptness, 
        or whose assistance is suspended, reduced, terminated, or 
        claimed to have been incorrectly paid; (2) any patient or 
        relative aggrieved by an order of the commissioner under section 
        252.27; (3) a party aggrieved by a ruling of a prepaid health 
        plan; (4) any individual or facility determined by a lead agency 
        to have maltreated a vulnerable adult under section 626.557 
        after they have exercised their right to administrative 
        reconsideration under section 626.557; (5) any person whose 
        claim for foster care payment pursuant according to a placement 
        of the child resulting from a child protection assessment under 
        section 626.556 is denied or not acted upon with reasonable 
        promptness, regardless of funding source; (6) any person to whom 
        a right of appeal pursuant according to this section is given by 
        other provision of law; or (7) an applicant aggrieved by an 
        adverse decision to an application for a hardship waiver under 
        section 256B.15.  The failure to exercise the right to an 
        administrative reconsideration shall not be a bar to a hearing 
        under this section if federal law provides an individual the 
        right to a hearing to dispute a finding of maltreatment.  
        Individuals and organizations specified in this section may 
        contest the specified action, decision, or final disposition 
        before the state agency by submitting a written request for a 
        hearing to the state agency within 30 days after receiving 
        written notice of the action, decision, or final disposition, or 
        within 90 days of such written notice if the applicant, 
        recipient, patient, or relative shows good cause why the request 
        was not submitted within the 30-day time limit. 
           The hearing for an individual or facility under clause (4) 
        is the only administrative appeal to the final lead agency 
        disposition specifically, including a challenge to the accuracy 
        and completeness of data under section 13.04.  Hearings 
        requested under clause (4) apply only to incidents of 
        maltreatment that occur on or after October 1, 1995.  Hearings 
        requested by nursing assistants in nursing homes alleged to have 
        maltreated a resident prior to October 1, 1995, shall be held as 
        a contested case proceeding under the provisions of chapter 14. 
           For purposes of this section, bargaining unit grievance 
        procedures are not an administrative appeal. 
           The scope of hearings involving claims to foster care 
        payments under clause (5) shall be limited to the issue of 
        whether the county is legally responsible for a child's 
        placement under court order or voluntary placement agreement 
        and, if so, the correct amount of foster care payment to be made 
        on the child's behalf and shall not include review of the 
        propriety of the county's child protection determination or 
        child placement decision. 
           (b) Except for a prepaid health plan, a vendor of medical 
        care as defined in section 256B.02, subdivision 7, or a vendor 
        under contract with a county agency to provide social services 
        under section 256E.08, subdivision 4, is not a party and may not 
        request a hearing under this section, except if assisting a 
        recipient as provided in subdivision 4. 
           (c) An applicant or recipient is not entitled to receive 
        social services beyond the services included in the amended 
        community social services plan developed under section 256E.081, 
        subdivision 3, if the county agency has met the requirements in 
        section 256E.081. 
           (d) The commissioner may summarily affirm the county or 
        state agency's proposed action without a hearing when the sole 
        issue is an automatic change due to a change in state or federal 
        law. 
           Sec. 6.  Minnesota Statutes 1996, section 256.046, is 
        amended to read: 
           256.046 [ADMINISTRATIVE FRAUD DISQUALIFICATION HEARINGS.] 
           Subdivision 1.  [HEARING AUTHORITY.] A local agency may 
        shall initiate an administrative fraud disqualification hearing 
        for individuals accused of wrongfully obtaining assistance or 
        intentional program violations, in lieu of a criminal action, in 
        the aid to families with dependent children, MFIP-S, child care, 
        general assistance, family general assistance, Minnesota 
        supplemental aid, medical care, or food stamp programs.  The 
        hearing is subject to the requirements of section 256.045 and 
        the requirements in Code of Federal Regulations, title 7, 
        section 273.16, for the food stamp program and title 45, section 
        235.112, as of September 30, 1995, for the aid to families with 
        dependent children program cash grant and medical care programs. 
           Subd. 2.  [COMBINED HEARING.] The referee may combine a 
        fair hearing and administrative fraud disqualification hearing 
        into a single hearing if the factual issues arise out of the 
        same, or related, circumstances and the individual receives 
        prior notice that the hearings will be combined.  If the 
        administrative fraud disqualification hearing and fair hearing 
        are combined, the time frames for administrative fraud 
        disqualification hearings set forth specified in Code of Federal 
        Regulations, title 7, section 273.16, and title 45, section 
        235.112, as of September 30, 1995, apply.  If the individual 
        accused of wrongfully obtaining assistance is charged under 
        section 256.98 for the same act or acts which are the subject of 
        the hearing, the individual may request that the hearing be 
        delayed until the criminal charge is decided by the court or 
        withdrawn. 
           Sec. 7.  [256.0471] [OVERPAYMENTS BECOME JUDGMENTS BY 
        OPERATION OF LAW.] 
           Subdivision 1.  [QUALIFYING OVERPAYMENT.] Any overpayment 
        for assistance granted under sections 256.031 to 256.0361, 
        256.72 to 256.871, and 256H.05; chapters 256B, 256D, 256I, 256J, 
        and 256K; and the food stamp program, except agency error 
        claims, become a judgment by operation of law 90 days after the 
        notice of overpayment is personally served upon the recipient in 
        a manner that is sufficient under rule 4.03(a) of the Rules of 
        Civil Procedure for district courts, or by certified mail, 
        return receipt requested.  This judgment shall be entitled to 
        full faith and credit in this and any other state. 
           Subd. 2.  [OVERPAYMENTS INCLUDED.] This section is limited 
        to overpayments for which notification is issued within the time 
        period specified under section 541.05. 
           Subd. 3.  [NOTIFICATION REQUIREMENTS.] A judgment is only 
        obtained after: 
           (1) a notice of overpayment has been personally served on 
        the recipient or former recipient in a manner sufficient under 
        rule 4.03(a) of the Rules of Civil Procedure for district 
        courts, or mailed to the recipient or former recipient certified 
        mail return receipt requested; and 
           (2) the time period under section 256.045, subdivision 3, 
        has elapsed without a request for a hearing, or a hearing 
        decision has been rendered under section 256.045 or 256.046 
        which concludes the existence of an overpayment that meets the 
        requirements of this section. 
           Subd. 4.  [NOTICE OF OVERPAYMENT.] The notice of 
        overpayment shall include the amount and cause of the 
        overpayment, appeal rights, and an explanation of the 
        consequences of the judgment that will be established if an 
        appeal is not filed timely or if the administrative hearing 
        decision establishes that there is an overpayment which 
        qualifies for judgment. 
           Subd. 5.  [JUDGMENTS ENTERED AND DOCKETED.] A judgment 
        shall be entered and docketed under section 548.09 only after at 
        least three months have elapsed since: 
           (1) the notice of overpayment was served on the recipient 
        pursuant to subdivision 3; and 
           (2) the last time a monthly recoupment was applied to the 
        overpayment. 
           Subd. 6.  [DOCKETING OF OVERPAYMENTS.] On or after the date 
        an unpaid overpayment becomes a judgment by operation of law 
        under subdivision 1, the agency or public authority may file 
        with the court administrator: 
           (1) a statement identifying, or a copy of, the overpayment 
        notice which provides for an appeal process and requires payment 
        of the overpayment; 
           (2) proof of service of the notice of overpayment; 
           (3) an affidavit of default, stating the full name, 
        occupation, place of residence, and last known post office 
        address of the debtor; the name and post office address of the 
        agency or public authority; the date or dates the overpayment 
        was incurred; the program that was overpaid; and the total 
        amount of the judgment; and 
           (4) an affidavit of service of a notice of entry of 
        judgment shall be made by first class mail at the address where 
        the debtor was served with the notice of overpayment.  Service 
        is completed upon mailing in the manner designated. 
           Subd. 7.  [DOES NOT IMPEDE OTHER METHODS.] Nothing in this 
        section shall be construed to impede or restrict alternative 
        recovery methods for these overpayments or overpayments which do 
        not meet the requirements of this section. 
           Sec. 8.  Minnesota Statutes 1996, section 256.98, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WRONGFULLY OBTAINING ASSISTANCE.] A person 
        who commits any of the following acts or omissions is guilty of 
        theft and shall be sentenced under section 609.52, subdivision 
        3, clauses (1) to (5): 
           (1) obtains, or attempts to obtain, or aids or abets any 
        person to obtain by means of a willfully false statement or 
        representation, by intentional concealment of a any material 
        fact, or by impersonation or other fraudulent device, assistance 
        or the continued receipt of assistance, to include child care or 
        vouchers produced according to sections 145.891 to 145.897 and 
        MinnesotaCare services according to sections 256.9351 to 
        256.966, to which the person is not entitled or assistance 
        greater than that to which the person is entitled, or who; 
           (2) knowingly aids or abets in buying or in any way 
        disposing of the property of a recipient or applicant of 
        assistance without the consent of the county agency with intent 
        to defeat the purposes of sections 145.891 to 145.897, 256.12, 
        256.031 to 256.0361, 256.72 to 256.871, and 256.9351 to 256.966, 
        child care, the MFIP-S, chapter 256B, 256D, 256J, or 256K, or 
        all of these sections is guilty of theft and shall be sentenced 
        pursuant to section 609.52, subdivision 3, clauses (2), (3)(a) 
        and (c), (4), and (5).  
           The continued receipt of assistance to which the person is 
        not entitled or greater than that to which the person is 
        entitled as a result of any of the acts, failure to act, or 
        concealment described in this subdivision shall be deemed to be 
        continuing offenses from the date that the first act or failure 
        to act occurred. 
           Sec. 9.  Minnesota Statutes 1996, section 256.98, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOVERY OF ASSISTANCE.] The amount of 
        assistance determined to have been incorrectly paid is 
        recoverable from: 
           (1) the recipient or the recipient's estate by the county 
        or the state as a debt due the county or the state or both in 
        proportion to the contribution of each.; and 
           (2) any person found to have taken independent action to 
        establish eligibility for, conspired with, or aided and abetted, 
        any recipient of public assistance found to have been 
        incorrectly paid. 
           The obligations established under this subdivision shall be 
        joint and several and shall extend to all cases involving client 
        error as well as cases involving wrongfully obtained assistance. 
           Sec. 10.  Minnesota Statutes 1996, section 256.98, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] Any person found 
        to be guilty of wrongfully obtaining assistance by a federal or 
        state court or by an administrative hearing determination, or 
        waiver thereof, through a disqualification consent agreement, or 
        as part of any approved diversion plan under section 401.065, or 
        any court-ordered stay which carries with it any probationary or 
        other conditions, in the aid to families with dependent children 
        program, the Minnesota family assistance program-statewide, the 
        food stamp program, the Minnesota family investment plan, child 
        care program, the general assistance or family general 
        assistance program, or the Minnesota supplemental aid program, 
        or the work readiness program shall be disqualified from that 
        program.  The needs of that individual shall not be taken into 
        consideration in determining the grant level for that assistance 
        unit:  
           (1) for six months one year after the first offense; 
           (2) for 12 months two years after the second offense; and 
           (3) permanently after the third or subsequent offense.  
           The period of program disqualification shall begin on the 
        date stipulated on the advance notice of disqualification 
        without possibility of postponement for administrative stay or 
        administrative hearing and shall continue through completion 
        unless and until the findings upon which the sanctions were 
        imposed are reversed by a court of competent jurisdiction.  The 
        period for which sanctions are imposed is not subject to 
        review.  The sanctions provided under this subdivision are in 
        addition to, and not in substitution for, any other sanctions 
        that may be provided for by law for the offense involved.  A 
        disqualification established through hearing or waiver shall 
        result in the disqualification period beginning immediately 
        unless the person has become otherwise ineligible for 
        assistance.  If the person is ineligible for assistance, the 
        disqualification period begins when the person again meets the 
        eligibility criteria of the program from which they were 
        disqualified and makes application for that program. 
           Sec. 11.  Minnesota Statutes 1996, section 256.983, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAMS ESTABLISHED.] Within the limits 
        of available appropriations, and to the extent required or 
        authorized by applicable federal regulations, the commissioner 
        of human services shall require the establishment maintenance of 
        budget neutral fraud prevention investigation programs in the 
        seven counties participating in the fraud prevention 
        investigation pilot project established under this section, and 
        in 11 additional Minnesota counties with the largest aid to 
        families with dependent children program caseloads as of July 1, 
        1991.  If funds are sufficient, the commissioner may also extend 
        fraud prevention investigation programs to:  (1) other 
        counties that have welfare fraud control programs already in 
        place based on enhanced funding contracts covering the fraud 
        investigation function; and (2) counties that have the largest 
        AFDC caseloads as of July 1, 1994, and are not currently 
        participating in the fraud prevention investigation pilot 
        project.  The pilot project may be expanded provided the 
        expansion is budget neutral to the state. 
           Sec. 12.  Minnesota Statutes 1996, section 256.983, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FUNDING.] (a) Every involved county agency shall 
        either have in place or obtain an approved contract which meets 
        all federal requirements necessary to obtain enhanced federal 
        funding for its welfare fraud control and fraud prevention 
        investigation programs.  County agency reimbursement shall be 
        made through the settlement provisions applicable to the aid to 
        families with dependent children and program, food stamp 
        programs program, Minnesota family investment program-statewide, 
        and medical assistance program and other federal and 
        state-funded programs. 
           (b) After allowing an opportunity to establish compliance, 
        The commissioner will deny administrative reimbursement maintain 
        program compliance if for any three-month three consecutive 
        month period during any grant year, a county agency fails to 
        comply with fraud prevention investigation program guidelines, 
        or fails to meet the cost-effectiveness standards developed by 
        the commissioner.  This result is contingent on the commissioner 
        providing written notice, including an offer of technical 
        assistance, within 30 days of the end of the third or subsequent 
        month of noncompliance.  The county agency shall be required to 
        submit a corrective action plan to the commissioner within 30 
        days of receipt of a notice of noncompliance.  Failure to submit 
        a corrective action plan or, continued deviation from standards 
        of more than ten percent after submission of a corrective action 
        plan, will result in denial of funding for each subsequent month 
        during the grant year, or billing the county agency for fraud 
        prevention investigation (FPI) service provided by the 
        commissioner, or reallocation of program grant funds, or 
        investigative resources, or both, to other counties.  The denial 
        of funding shall apply to the general settlement received by the 
        county agency on a quarterly basis and shall not reduce the 
        grant amount applicable to the FPI project.  
           Sec. 13.  Minnesota Statutes 1996, section 256.984, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DECLARATION.] Every application for public 
        assistance under this chapter and/or chapters 256B, 256D, 256K, 
        MFIP-S program, and food stamps under chapter 393 shall be in 
        writing or reduced to writing as prescribed by the state agency 
        and shall contain the following declaration which shall be 
        signed by the applicant: 
           "I declare under the penalties of perjury that this 
           application has been examined by me and to the best of my 
           knowledge is a true and correct statement of every material 
           point.  I understand that a person convicted of perjury may 
           be sentenced to imprisonment of not more than five years or 
           to payment of a fine of not more than $10,000, or both." 
           Sec. 14.  Minnesota Statutes 1996, section 256.986, is 
        amended to read: 
           256.986 [COUNTY COORDINATION OF FRAUD CONTROL ACTIVITIES.] 
           (a) The county agency shall prepare and submit to the 
        commissioner of human services by January 1 April 30 of each 
        state fiscal year a plan to coordinate county duties related to 
        the prevention, investigation, and prosecution of fraud in 
        public assistance programs.  Plans may be submitted on a 
        voluntary basis prior to January 1, 1996.  Each county must 
        submit its first annual plan prior to January 1, 1997 April 30, 
        1998. 
           (b) Within the limits of appropriations specifically made 
        available for this purpose, the commissioner may make grants to 
        counties submitting plans under paragraph (a) to implement 
        coordination activities. 
           Sec. 15.  Minnesota Statutes 1996, section 256.9861, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM ESTABLISHED.] Within the limits of 
        available state and federal appropriations, and to the extent 
        required or authorized by applicable federal regulations, the 
        commissioner of human services shall make funding available to 
        county agencies for the establishment of program integrity 
        reinvestment initiatives.  The project shall initially be 
        limited to those county agencies participating in federally 
        funded optional fraud control programs as of January 1, 
        1995 fraud control efforts and require the maintenance of county 
        efforts and financial contribution that were in place during 
        fiscal year 1996.  
           Sec. 16.  Minnesota Statutes 1996, section 256.9861, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COUNTY PROPOSALS.] Each included county shall 
        develop and submit annual funding, staffing, and operating grant 
        proposals to the commissioner no later than April 30 of each 
        year for the purpose of allocating federal and state funding and 
        appropriations.  For the first operating year only, the proposal 
        shall be submitted no later than October 30.  Each proposal 
        shall provide information on: 
           (1) the staffing and funding of the fraud investigation and 
        prosecution operations; 
           (2) job descriptions for agency fraud control staff; 
           (3) contracts covering outside investigative agencies; 
           (4) operational methods to integrate the use of fraud 
        prevention investigation techniques; and 
           (5) implementation and utilization of administrative 
        disqualification hearings and diversions into by the existing 
        county fraud control and prosecution procedures.  
           Sec. 17.  Minnesota Statutes 1996, section 256.9861, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STANDARDS.] The commissioner shall, after 
        consultation with the involved counties, establish standards 
        governing the performance levels of involved county 
        investigative units based on grant agreements negotiated with 
        the involved county agencies.  The standards shall take into 
        consideration and may include investigative caseloads, grant 
        savings levels, the comparison of fraud prevention and 
        prosecution directed investigations, utilization levels of 
        administrative disqualification hearings, the timely reporting 
        and implementation of disqualifications, and the timeliness 
        of the submission of statistical reports received from 
        prosecutors.  
           Sec. 18.  Minnesota Statutes 1996, section 256.9861, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FUNDING.] (a) Grant funds are intended to help 
        offset the reduction in federal financial participation to 50 
        percent and may be apportioned to the participating counties 
        whenever feasible, and within the commissioner's discretion, to 
        achieve this goal.  State funding shall be made available 
        contingent on counties submitting a plan that is approved by the 
        department of human services.  Failure or delay in obtaining 
        that approval shall not, however, eliminate the obligation to 
        maintain fraud control efforts at the January 1, 1995 June 30, 
        1996, level.  Additional counties may be added to the project to 
        the extent that funds are subsequently made available.  Every 
        involved county must meet all federal requirements necessary to 
        obtain federal funding for its welfare fraud control and 
        prevention programs.  County agency reimbursement shall be made 
        through the settlement provisions applicable to the AFDC and, 
        MFIP-S, food stamp, and medical assistance programs.  
           (b) Should a county agency fail to comply with the 
        standards set, or fail to meet cost-effectiveness standards 
        developed by the commissioner for three months during any grant 
        year any three-month period, the commissioner shall deny 
        reimbursement or administrative costs, after allowing an 
        opportunity to establish compliance.  
           (c) Any denial of reimbursement under paragraph (b) is 
        contingent on the commissioner providing written notice, 
        including an offer of technical assistance, within 30 days of 
        the end of the third or subsequent months of noncompliance.  The 
        county agency shall be required to submit a corrective action 
        plan to the commissioner within 30 days of receipt of a notice 
        of noncompliance.  Failure to submit a corrective action plan or 
        continued deviation from standards of more than ten percent 
        after submission of corrective action plan, will result in 
        denial of funding for each such month during the grant year, or 
        billing of the county agency for program integrity reinvestment 
        project services provided by the commissioner or reallocation of 
        grant funds to other counties.  The denial of funding shall 
        apply to the general settlement received by the county agency on 
        a quarterly basis and shall not reduce the grant amount 
        applicable to the program integrity reinvestment project. 
           Sec. 19.  [256.9863] [ASSISTANCE TRANSACTION CARD; 
        PRESUMPTION OF RECEIPT OF BENEFITS.] 
           Any person in whose name an assistance transaction card has 
        been issued shall be presumed to have received the benefit of 
        all transactions involving that card.  This presumption applies 
        in all situations unless the card in question has been reported 
        lost or stolen by the cardholder.  This presumption may be 
        overcome by a preponderance of evidence indicating that the card 
        was neither used by nor with the consent of the cardholder.  
        Overcoming this presumption does not create any new or 
        additional payment obligation not otherwise established in law, 
        rule, or regulation. 
           Sec. 20.  [256.9864] [REPORTS BY RECIPIENT.] 
           (a) An assistance unit with a recent work history or with 
        earned income shall report monthly to the county agency on 
        income received and other circumstances affecting eligibility or 
        assistance amounts.  All other assistance units shall report on 
        income and other circumstances affecting eligibility and 
        assistance amounts, as specified by the state agency. 
           (b) An assistance unit required to submit a report on the 
        form designated by the commissioner and within ten days of the 
        due date or the date of the significant change, whichever is 
        later, or otherwise report significant changes which would 
        affect eligibility or assistance amounts, is considered to have 
        continued its application for assistance effective the date the 
        required report is received by the county agency, if a complete 
        report is received within a calendar month in which assistance 
        was received, except that no assistance shall be paid for the 
        period beginning with the end of the month in which the report 
        was due and ending with the date the report was received by the 
        county agency. 
           Sec. 21.  [256.9865] [RECOVERY OF OVERPAYMENTS AND ATM 
        ERRORS.] 
           Subdivision 1.  [OBLIGATION TO RECOVER.] If an amount of 
        MFIP-S assistance is paid to a recipient in excess of the 
        payment due, it shall be recoverable by the county agency.  This 
        recovery authority also extends to preexisting claims or newly 
        discovered claims established under the AFDC program in effect 
        on January 1, 1997.  The agency shall give written notice to the 
        recipient of its intention to recover the overpayment.  County 
        agency efforts and financial contributions shall be maintained 
        at the level in place during fiscal year 1996. 
           Subd. 2.  [RECOUPMENT.] 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 in nonfraud cases and ten percent where fraud 
        has occurred.  For recipients receiving benefits via electronic 
        benefits 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.  In cases where 
        there is both an overpayment and underpayment, the county agency 
        shall offset one against the other in correcting the payment. 
           Subd. 3.  [VOLUNTARY REPAYMENTS.] Overpayments may also be 
        voluntarily repaid, in part or in full, by the individual, in 
        addition to the aid reductions in subdivision 2, to include 
        further voluntary reductions in the grant level agreed to in 
        writing by the individual, until the total amount of the 
        overpayment is repaid. 
           Subd. 4.  [CLOSED CASE RECOVERIES.] The county agency shall 
        make reasonable efforts to recover overpayments to persons no 
        longer on assistance according to standards adopted by 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 unless the individual has 
        been convicted of fraud under section 256.98. 
           Sec. 22.  [256.9866] [COMMUNITY SERVICE AS A COUNTY 
        OBLIGATION.] 
           Community service shall be an acceptable sentencing option 
        but shall not reduce the state or federal share of any amount to 
        be repaid or any subsequent recovery.  Any reduction or offset 
        of any such amount ordered by a court shall be treated as 
        follows: 
           (1) any reduction in an overpayment amount, to include the 
        amount ordered as restitution, shall not reduce the underlying 
        amount established as an overpayment by the state or county 
        agency; 
           (2) total overpayments shall continue as a debt owed and 
        may be recovered by any civil or administrative means otherwise 
        available to the state or county agency; and 
           (3) any amount ordered to be offset against any overpayment 
        shall be deducted from the county share only of any recovery and 
        shall be based on the prevailing state minimum wage.  To the 
        extent that any deduction is in fact made against any state or 
        county share, it shall be reimbursed from the county share of 
        payments to be made under section 256.025. 
           Sec. 23.  Minnesota Statutes 1996, section 256D.09, 
        subdivision 6, is amended to read: 
           Subd. 6.  [RECOVERY OF OVERPAYMENTS.] (a) If an amount of 
        general assistance or family general 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 in nonfraud 
        cases and ten percent where fraud has occurred, or the amount of 
        the monthly payment, whichever is less, for all overpayments. 
        whether or not the overpayment is due solely to agency error.  
        The amount of this reduction is ten percent, if the overpayment 
        is due solely to having wrongfully obtained assistance, whether 
        based on: 
           (1) a court order; 
           (2) the finding of an administrative fraud disqualification 
        hearing or the waiver of such a hearing; or 
           (3) a confession or judgment containing an admission of an 
        intentional program violation. 
           (c) In cases when there is both an overpayment and 
        underpayment, the county agency shall offset one against the 
        other in correcting the payment. 
           (d) Overpayments may also be voluntarily repaid, in part or 
        in full, by the individual, in addition to the aid reductions 
        provided in this subdivision, to include further voluntary 
        reductions in the grant level agreed to in writing by the 
        individual, until the total amount of the overpayment is repaid. 
           (e) The county agency shall make reasonable efforts to 
        recover overpayments to persons no longer on assistance under 
        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 
        violating section 256.98. 
           Sec. 24.  Minnesota Statutes 1996, section 270A.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
        natural person to pay a fixed and certain amount of money, which 
        equals or exceeds $25 and which is due and payable to a claimant 
        agency.  The term includes criminal fines imposed under section 
        609.10 or 609.125 and restitution.  A debt may arise under a 
        contractual or statutory obligation, a court order, or other 
        legal obligation, but need not have been reduced to judgment.  
           A debt does not include includes any legal obligation of a 
        current recipient of assistance which is based on overpayment of 
        an assistance grant where that payment is based on a client 
        waiver or an administrative or judicial finding of an 
        intentional program violation; or where the debt is owed to a 
        program wherein the debtor is not a client at the time 
        notification is provided to initiate recovery under this chapter 
        and the debtor is not a current recipient of food stamps, 
        transitional child care, or transitional medical assistance. 
           A debt does not include any legal obligation to pay a 
        claimant agency for medical care, including hospitalization if 
        the income of the debtor at the time when the medical care was 
        rendered does not exceed the following amount: 
           (1) for an unmarried debtor, an income of $6,400 or less; 
           (2) for a debtor with one dependent, an income of $8,200 or 
        less; 
           (3) for a debtor with two dependents, an income of $9,700 
        or less; 
           (4) for a debtor with three dependents, an income of 
        $11,000 or less; 
           (5) for a debtor with four dependents, an income of $11,600 
        or less; and 
           (6) for a debtor with five or more dependents, an income of 
        $12,100 or less.  
           The income amounts in this subdivision shall be adjusted 
        for inflation for debts incurred in calendar years 1991 and 
        thereafter.  The dollar amount of each income level that applied 
        to debts incurred in the prior year shall be increased in the 
        same manner as provided in section 290.06, subdivision 2d, for 
        the expansion of the tax rate brackets. 
           Sec. 25.  Minnesota Statutes 1996, section 388.23, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY.] The county attorney, or any 
        deputy or assistant county attorney whom the county attorney 
        authorizes in writing, has the authority to subpoena and require 
        the production of any records of telephone companies, cellular 
        phone companies, paging companies, electric companies, gas 
        companies, water utilities, chemical suppliers, hotels and 
        motels, pawn shops, airlines, buses, taxis, and other entities 
        engaged in the business of transporting people, and freight 
        companies, warehousing companies, self-service storage 
        facilities, package delivery companies, and other entities 
        engaged in the businesses of transport, storage, or delivery, 
        and records of the existence of safe deposit box account numbers 
        and customer savings and checking account numbers maintained by 
        financial institutions and safe deposit companies, insurance 
        records relating to the monetary payment or settlement of 
        claims, and wage and employment records of an applicant or 
        recipient of public assistance who is the subject of a welfare 
        fraud investigation relating to eligibility information for 
        public assistance programs.  Subpoenas may only be issued for 
        records that are relevant to an ongoing legitimate law 
        enforcement investigation.  Administrative subpoenas may only be 
        issued in welfare fraud cases if there is probable cause to 
        believe a crime has been committed.  This provision applies only 
        to the records of business entities and does not extend to 
        private individuals or their dwellings.  Subpoenas may only be 
        served by peace officers as defined by section 626.84, 
        subdivision 1, paragraph (c). 
           Sec. 26.  Minnesota Statutes 1996, section 393.07, 
        subdivision 10, is amended to read: 
           Subd. 10.  [FEDERAL FOOD STAMP PROGRAM AND THE MATERNAL AND 
        CHILD NUTRITION ACT.] (a) The local social services agency shall 
        establish and administer the food stamp program pursuant 
        according to rules of the commissioner of human services, the 
        supervision of the commissioner as specified in section 256.01, 
        and all federal laws and regulations.  The commissioner of human 
        services shall monitor food stamp program delivery on an ongoing 
        basis to ensure that each county complies with federal laws and 
        regulations.  Program requirements to be monitored include, but 
        are not limited to, number of applications, number of approvals, 
        number of cases pending, length of time required to process each 
        application and deliver benefits, number of applicants eligible 
        for expedited issuance, length of time required to process and 
        deliver expedited issuance, number of terminations and reasons 
        for terminations, client profiles by age, household composition 
        and income level and sources, and the use of phone certification 
        and home visits.  The commissioner shall determine the 
        county-by-county and statewide participation rate.  
           (b) On July 1 of each year, the commissioner of human 
        services shall determine a statewide and county-by-county food 
        stamp program participation rate.  The commissioner may 
        designate a different agency to administer the food stamp 
        program in a county if the agency administering the program 
        fails to increase the food stamp program participation rate 
        among families or eligible individuals, or comply with all 
        federal laws and regulations governing the food stamp program.  
        The commissioner shall review agency performance annually to 
        determine compliance with this paragraph. 
           (c) A person who commits any of the following acts has 
        violated section 256.98 or 609.821, or both, and is subject to 
        both the criminal and civil penalties provided under those 
        sections: 
           (1) obtains or attempts to obtain, or aids or abets any 
        person to obtain by means of a willfully false willful statement 
        or representation misrepresentation, or intentional concealment 
        of a material fact, food stamps or vouchers issued according to 
        sections 145.891 to 145.897 to which the person is not entitled 
        or in an amount greater than that to which that person is 
        entitled or which specify nutritional supplements to which that 
        person is not entitled; or 
           (2) presents or causes to be presented, coupons or vouchers 
        issued according to sections 145.891 to 145.897 for payment or 
        redemption knowing them to have been received, transferred or 
        used in a manner contrary to existing state or federal law; or 
           (3) willfully uses, possesses, or transfers food stamp 
        coupons or, authorization to purchase cards or vouchers issued 
        according to sections 145.891 to 145.897 in any manner contrary 
        to existing state or federal law, rules, or regulations; or 
           (4) buys or sells food stamp coupons, authorization to 
        purchase cards or, other assistance transaction devices, 
        vouchers issued according to sections 145.891 to 145.897, or any 
        food obtained through the redemption of vouchers issued 
        according to sections 145.891 to 145.897 for cash or 
        consideration other than eligible food. 
           (d) A peace officer or welfare fraud investigator may 
        confiscate food stamps, authorization to purchase cards, or 
        other assistance transaction devices found in the possession of 
        any person who is neither a recipient of the food stamp program 
        nor otherwise authorized to possess and use such materials.  
        Confiscated property shall be disposed of as the commissioner 
        may direct and consistent with state and federal food stamp 
        law.  The confiscated property must be retained for a period of 
        not less than 30 days to allow any affected person to appeal the 
        confiscation under section 256.045. 
           (e) Food stamp overpayment claims which are due in whole or 
        in part to client error shall be established by the county 
        agency for a period of six years from the date of any resultant 
        overpayment.  
           (f) With regard to the federal tax revenue offset program 
        only, recovery incentives authorized by the federal food and 
        consumer service shall be retained at the rate of 50 percent by 
        the state agency and 50 percent by the certifying county agency. 
           (g) A peace officer, welfare fraud investigator, federal 
        law enforcement official, or the commissioner of health may 
        confiscate vouchers found in the possession of any person who is 
        neither issued vouchers under sections 145.891 to 145.897, nor 
        otherwise authorized to possess and use such vouchers.  
        Confiscated property shall be disposed of as the commissioner of 
        health may direct and consistent with state and federal law.  
        The confiscated property must be retained for a period of not 
        less than 30 days. 
           Sec. 27.  [FUNDING AVAILABILITY.] 
           Unexpended funds appropriated for the provision of program 
        integrity activities for fiscal year 1998 will also be available 
        to the commissioner to fund fraud prevention and control 
        initiatives and do not cancel but are available to the 
        commissioner for these purposes for fiscal year 1999.  
        Unexpended funds may be transferred between the fraud prevention 
        investigation program and fraud control programs to promote the 
        provisions of sections 256.983 and 256.9861. 
           Sec. 28.  [EFFECTIVE DATE.] 
           Sections 1 to 27 are effective July 1, 1997. 
           Presented to the governor April 29, 1997 
           Signed by the governor April 30, 1997, 2:12 p.m.

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