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Minnesota Legislature

Division considers funding increases, changes to Child Care Assistance Program

The state’s Child Care Assistance Program has received ongoing criticism for issues ranging from fraud and bureaucratic inefficiencies, to federal noncompliance and inadequate funding.

Over the course of the session, the House Early Childhood Finance and Policy Division held informational overviews and hearings regarding the program and considered a variety of possible changes that could be implemented.   

The division’s omnibus health and human services bill, HF1801, as amended, includes dozens of provisions that would increase funding for the program, while also aiming to improve its integrity and bring it into federal compliance.

The proposal, sponsored by Rep. Dave Pinto (DFL-St. Paul), the division chair, was tabled Tuesday morning following a walkthrough by nonpartisan House Research Department staff. Testimony is scheduled for Tuesday evening. Amendments are expected to be offered and action taken on the bill Thursday.

The proposal includes the following appropriations in the 2020-21 biennium for the Child Care Assistance Program:

  • $25 million to eliminate the basic sliding fee waiting list;
  • $10.8 million to increase the maximum reimbursement rate;
  • $8.2 million for federal compliance and program improvements;
  • $2.1 million for strengthening oversight; and
  • $153,000 for provider registration and oversight.

Other 2020-21 biennium appropriations include:

  • $1 million for First Children’s Finance to fund day care facility improvements;
  • $500,000 for expansion of the state’s home visiting program;
  • $281,000 for background study of federal compliance;
  • $260,000 for food shelves to carry and distribute diapers; and
  • $200,000 for REETAIN grants to incentivize early childhood educators to stay in the profession.

Notable provisions related to Child Care Assistance Program integrity would:

  • require providers to deliver accurate, legible daily attendance records and other documents immediately upon request of the department or licensors;
  • require providers to properly bill for absent days and holidays, specifying that failure to do so will result in overpayment;
  • specify that a provider’s license is nontransferable;
  • grant civil and criminal immunity to persons who make a good faith report of fraud or abuse and ensure the identity of the reporter remains confidential;
  • allow welfare data that is collected as part of an enforcement investigation to be disclosed to other agents within the welfare system or to other government investigators; and
  • limit retroactive payments to three months from the date of application – the current limit is six months.

Other policy provisions would:

  • extend the Newborn Hearing Screening Advisory Committee to June 30, 2025 and add two members;
  • prohibit the Department of Human Services from issuing a correction order or negative licensing actions for violations not discussed in an exit interview, unless the provider chooses to not participate;
  • allow child care centers to provide drinking water to a child in a reusable water bottle; and
  • permit the use of a substitute caregiver for a family child care provider for up to 400 hours in a calendar year.

The following are selected bills that have been incorporated in part or in whole into the division report:

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