1.1 A bill for an act
1.2 relating to child care; establishing the rural child care stabilization and support
1.3 payment program; requiring a report; appropriating money; proposing coding for
1.4 new law in Minnesota Statutes, chapter 142D.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [142D.211] RURAL CHILD CARE STABILIZATION AND SUPPORT
1.7PAYMENTS.
1.8 Subdivision 1.Establishment.The commissioner of children, youth, and families must
1.9establish and administer the rural child care stabilization and support payments program to
1.10provide eligible child care and early learning programs with payments to improve access
1.11to early care and learning in Minnesota and strengthen the ability of programs to recruit and
1.12retain early educators.
1.13 Subd. 2.Eligible programs.(a) The following programs are eligible to receive payments
1.14under this section:
1.15 (1) family day care and group family day care homes licensed under Minnesota Rules,
1.16chapter 9502;
1.17 (2) child care centers licensed under Minnesota Rules, chapter 9503;
1.18 (3) certified license-exempt child care centers under chapter 142C;
1.19 (4) Tribally licensed child care programs; and
1.20 (5) other programs as determined by the commissioner.
1Section 1.
REVISOR DTT/BM 25-0358102/18/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2732
NINETY-FOURTH SESSION
Authored by Pursell and Hicks03/24/2025
The bill was read for the first time and referred to the Committee on Children and Families Finance and Policy 2.1 (b) To be eligible, a program must be located in a statutory or home rule charter city or
2.2town with a population of 2,500 or fewer.
2.3 (c) To be eligible, a program must not be:
2.4 (1) the subject of a finding of fraud for which the program is currently serving a penalty
2.5or exclusion;
2.6 (2) the subject of suspended, denied, or terminated payments to a provider under section
2.7142E.17, subdivision 9, paragraph (d), clauses (1) and (2); 142E.51, subdivision 7, paragraph
2.8(c), clause (4); or 256.98, subdivision 1, regardless of whether the action is under appeal;
2.9 (3) prohibited from receiving public funds under section 142A.12, regardless of whether
2.10the action is under appeal; or
2.11 (4) under license revocation, suspension, temporary immediate suspension, or
2.12decertification, regardless of whether the action is under appeal.
2.13 Subd. 3.Requirements.(a) As a condition of payment under this section, a program
2.14must:
2.15 (1) complete an application developed by the commissioner for each payment period
2.16for which the program applies for funding;
2.17 (2) submit data on child enrollment and attendance to the commissioner in the form and
2.18manner specified by the commissioner; and
2.19 (3) attest and agree in writing that the program was open and operating and served a
2.20minimum number of children, as determined by the commissioner, during the funding
2.21period, with the exceptions of:
2.22 (i) service disruptions that were necessary to protect the safety and health of children
2.23and child care programs based on public health guidance issued by the Centers for Disease
2.24Control and Prevention; the commissioner of health; the commissioner of children, youth,
2.25and families; or a local public health agency; and
2.26 (ii) planned temporary closures for provider vacations and holidays during each payment
2.27period. The commissioner must establish the maximum allowed duration for vacations and
2.28holidays.
2.29 (b) A program must expend money received under this section no later than six months
2.30after the date the payment was received.
2Section 1.
REVISOR DTT/BM 25-0358102/18/25 3.1 (c) A program that receives a payment under this section must comply with all
3.2requirements listed in the application. The commissioner must establish methods to determine
3.3that the application requirements have been met.
3.4 Subd. 4.Record retention.(a) A program that receives a payment under this section
3.5must keep accurate and legible records of the following:
3.6 (1) use of money;
3.7 (2) staff employment, compensation, and benefits, which must include time sheets or
3.8other records of daily hours worked; documentation of compensation and benefits;
3.9documentation of written changes to employees' rate or rates of pay and basis thereof as a
3.10result of payments received under this section, as required under section 181.032, paragraphs
3.11(d) to (f); and any other records required to be maintained under section 177.30; and
3.12 (3) attendance. Daily attendance records must be completed every day and must include
3.13the date, the first and last name of each child in attendance, and the time each child is dropped
3.14off at and picked up from the program. To the extent possible, the person dropping off or
3.15picking up the child must enter the times.
3.16 (b) The requirement to document compensation and benefits under paragraph (a), clause
3.17(2), applies to family day care and group family day care homes only if a payment received
3.18under this section is used for employee compensation or benefits.
3.19 (c) Records identified in paragraph (a) must be retained at the site where services are
3.20delivered for six years after the date of receipt of payment and must be made immediately
3.21available to the commissioner upon request. Any records not provided to the commissioner
3.22at the date and time of request are deemed inadmissible if offered as evidence by a program
3.23in any proceeding to contest an overpayment or disqualification of the program.
3.24 Subd. 5.Enforcement.A program that receives a payment under this section that fails
3.25to meet the requirements of this section is subject to discontinuation of future installment
3.26payments, recovery of overpayments, and actions under sections 142E.50 to 142E.58. Except
3.27when based on a finding of fraud, actions to establish an overpayment must be made within
3.28six years of receipt of the payments. Once an overpayment is established, collection may
3.29continue until money has been repaid in full. The appeal process under section 142E.18
3.30applies to actions taken for failure to meet the requirements of this section.
3.31 Subd. 6.Payments.(a) The commissioner shall provide payments under this section to
3.32all eligible programs on a noncompetitive basis. The payment amounts shall be based on
3Section 1.
REVISOR DTT/BM 25-0358102/18/25 4.1the number of full-time equivalent staff who regularly care for children in the program,
4.2including any employees, sole proprietors, or independent contractors.
4.3 (b) For purposes of this section, "one full-time equivalent" means an individual caring
4.4for children 32 hours per week. An individual can count as more or less than one full-time
4.5equivalent staff, but as no more than two full-time equivalent staff.
4.6 (c) The commissioner must establish an amount to award per full-time equivalent
4.7individual who regularly cares for children in the program.
4.8 (d) Payments must be increased by ten percent for programs receiving child care
4.9assistance payments under section 142E.08 or 142E.17, early learning scholarships under
4.10section 142D.25, or for programs located in a child care access equity area. The commissioner
4.11must develop a method for establishing child care access equity areas. For purposes of this
4.12section, "child care access equity area" means an area with low access to child care, high
4.13poverty rates, high unemployment rates, low homeownership rates, and low median
4.14household incomes.
4.15 (e) The commissioner shall establish the form, frequency, and manner for making
4.16payments under this section.
4.17 Subd. 7.Eligible uses of money.(a) Child care centers licensed under Minnesota Rules,
4.18chapter 9503, certified license-exempt child care centers under chapter 142C, and Tribally
4.19licensed child care centers must use money received under this section for the following
4.20purposes:
4.21 (1) paying rent, including rent under a lease agreement;
4.22 (2) purchasing or updating equipment, supplies, goods, or services;
4.23 (3) purchasing training or other professional development; or
4.24 (4) paying for increases in compensation, benefits, premium pay, or additional federal
4.25taxes assessed on the compensation of employees as a result of paying increased
4.26compensation or premium pay to all paid employees or independent contractors regularly
4.27caring for children.
4.28 (b) Family day care and group family day care homes licensed under Minnesota Rules,
4.29chapter 9502, and Tribally licensed family child care homes must use money received under
4.30this section for one or more of the following purposes:
4Section 1.
REVISOR DTT/BM 25-0358102/18/25 5.1 (1) paying personnel costs, such as payroll, salaries, or similar compensation; employee
5.2benefits; premium pay; or financial incentives for recruitment and retention for an employee,
5.3a sole proprietor, or an independent contractor;
5.4 (2) paying rent, including rent under a lease agreement, or making payments on any
5.5mortgage obligation, utilities, facility maintenance or improvements, property taxes, or
5.6insurance;
5.7 (3) purchasing or updating equipment, supplies, goods, or services;
5.8 (4) providing mental health supports for children; or
5.9 (5) purchasing training or other professional development products or services.
5.10 Subd. 8.Legal nonlicensed child care provider payments.(a) Legal nonlicensed child
5.11care providers, as defined in section 142E.01, subdivision 19, are eligible to apply for a
5.12payment of up to $500 for costs incurred before the first month when payments from the
5.13child care assistance program are issued.
5.14 (b) A payment received under this subdivision must be used for one or more of the
5.15following activities:
5.16 (1) purchasing or updating equipment, supplies, goods, or services; or
5.17 (2) purchasing training or other professional development products or services.
5.18 (c) The commissioner shall determine the form and manner of the application for a
5.19payment under this subdivision.
5.20 Subd. 9.Report.By January 1 each year, the commissioner must report to the chairs
5.21and ranking minority members of the legislative committees with jurisdiction over child
5.22care and early learning the number of payments provided to programs and related outcomes
5.23since the last report. This subdivision expires January 31, 2035.
5.24 Sec. 2. APPROPRIATION; RURAL CHILD CARE STABILIZATION AND
5.25SUPPORT PAYMENTS.
5.26 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
5.27fund to the commissioner of children, youth, and families for the rural child care stabilization
5.28and support payments program under Minnesota Statutes, section 142D.211.
5Sec. 2.
REVISOR DTT/BM 25-0358102/18/25