SF4858

Purpose

• To adjust Minnesota’s licensing moratorium on child foster care and certain residential settings, add specific exceptions, strengthen how capacity and need are determined, and require more information and oversight for license actions. The bill aims to better align licensing decisions with federal requirements (Family First Prevention Services Act), governing capacity in foster care and related settings, and to provide a data-driven framework for expanding or reducing licensed beds when appropriate. It also seeks to improve planning around transitions of residents to community settings and to ensure license status reflects the license holder’s primary residence.

Main Provisions

• Licensing moratorium scope and primary residence rule

  • The commissioner may not issue an initial license for child foster care settings (under certain Minnesota Rules) or for adult foster care (under others) if the location will not be the license holder’s primary residence for the full licensure period.
  • If a setting loses its Family First Prevention Services Act certification or if the license holder changes the license holder’s primary residence away from the location, the license can be revoked.

• Exceptions to the moratorium

  • Exemption 1: Licenses for settings not the primary residence of the license holder, where at least 80% of residents are 55 years of age or older.
  • Exemption 2: New licenses replacing existing licenses that were in place on specific past dates (May 15, 2009; December 31, 2013) and determined needed by the commissioner.
  • Exemption 3: New licenses needed for the closure of nursing facilities, ICF/DDs, or for restructuring of state-operated services that reduce capacity, enabling movement to the community for those who no longer require state-operated care.
  • Exemption 4: New licenses for hospital-level care.
  • Exemption 5: New community residential setting licenses deemed necessary by the commissioner for people affected by the closure of small homes (five or six beds) previously licensed as supervised living facilities but not designated as ICFs. This exemption is available through June 30, 2025.

• Determinations of need and capacity management

  • The commissioner will determine the need for newly licensed foster care homes or community residential settings and must consider: (i) overall foster care capacity in the area, (ii) results of the local county board’s recommendations, and (iii) the availability of beds. The determination is final and not subject to appeal, and a change of ownership at the same address does not require a new determination of need.
  • When an adult resident moves out of a foster home that is not the primary residence, counties must inform the DHS Licensing Division, and the department may reduce statewide licensed capacity for adult foster care settings.
  • Settings that would otherwise face reduced capacity may be exempt if the resident’s primary diagnosis is mental illness and the license holder is certified under specific state requirements.
  • A state-level resource need determination process (using data from 144A.351 and other sources) will guide where reduced capacity should be implemented. The commissioner must consult stakeholders and use various methods to align capacity with informed long-term decisions and funding constraints.

• Application, licensure, and reporting requirements

  • At initial licensure and reapplication, applicants and license holders must disclose whether the location is the license holder’s primary residence; if that changes, they must notify the commissioner. The license certificate will indicate whether the location is the primary residence.
  • License holders providing waiver-funded services (e.g., HCBS waivers) must inform the licensing division if those services are provided at the licensed setting.
  • The commissioner may adjust capacity to address identified needs, including approving new settings or delicensing existing ones, with delicensing handled through a specific process.
  • Licensees must be notified in writing of any reduction in licensed beds, with a right to request reconsideration within 20 calendar days of receipt.

• Children's residential treatment services

  • The commissioner shall not issue an initial license for children's residential treatment services that CMS would categorize as an institution for mental diseases (IMD), with private-pay-only programs exempt. The commissioner retains authority to manage statewide capacity related to the moratorium for these services and may issue an initial license if it would not increase the statewide capacity subject to the moratorium.

• Repeals and statutory updates

  • The bill includes amendments to several Minnesota Statutes and to sections in the 2025 Supplement, adding subdivisions and reorganizing certain license-related provisions. It also repeals certain 2024 sections related to licensure and capacity in specified contexts (subject to standard legislative procedures).

How this bill would change existing law

• Tightens the licensing moratorium by tying it to the license holder’s primary residence and by adding explicit exceptions, expanding the range of scenarios in which new licenses can be approved.
• Strengthens the linkage between licensure decisions and the Family First Act, capacity planning, and local county input.
• Introduces a formal, state-level process to determine where capacity should be increased or decreased, with a data-driven approach using 144A.351 and related data.
• Creates clearer notice and reconsideration rights for licensees facing bed reductions.
• Adds new reporting requirements for licensees involved in waiver-funded services and clarifies licensure expectations for settings not aligned with the primary residence rule.
• Addresses specific settings and care transitions, including nursing facility closures, hospital-level care needs, and small-group supervised living facility closures.

Implementation and Oversight

• Finality of certain capacity determinations: The commissioner’s determinations of need are final and not appealable.
• Notice and reconsideration: Licensee notices of bed reductions must include guidance for reconsideration, with a 20-day window to file.
• Data-driven oversight: The state will use capacity data, local recommendations, and annual assessments to guide licensing and transitions for long-term services within budget constraints.

Relevant Terms - licensing moratorium - child foster care - adult foster care - primary residence - Family First Prevention Services Act - foster care residence - community residential setting - resource need determination - capacity - delicense / delicensing - notice of reduction - reconsideration - hospital-level care - ICF/DD (intermediate care facility for individuals with developmental disabilities) - nursing facility closures - CMS IMD (institution for mental diseases) - waiver-funded services - Home and Community-Based Services waiver (HCBS) - 144A.351 data - county board - annual assessment and service plan review