SF4996

Purpose

• The bill requires the commissioner of human services to estimate and report the department’s required departmental earnings to ensure that activities funded through fees are fully covered by fee revenue, with no reliance on general fund money in the following year.

Main Provisions

• By January 15, 2027 and again by January 15, 2028, the commissioner must submit to the chairs and ranking minority members of the legislative committees with jurisdiction over human services an estimate of the department’s required departmental earnings.
• The estimates must show earnings needed to fully fund all fee-funded activities in the next fiscal year, meaning these activities should be financed entirely by fee revenue, not general fund dollars.
• The department must itemize the required departmental earnings by fee-funded activity. Activities listed include licensing activities, program integrity activities, background studies, criminal background checks, medical assistance provider enrollment activities, and provider compliance training.
• The estimates must include any costs that are currently or forecasted to be subsidized by general fund appropriations.
• If a cost allocation methodology is used to isolate and account for the earnings needed to fully fund each activity without relying on other money, the commissioner must describe that method.
• Each report must indicate any fee increases that would be necessary to meet the departmental earnings estimates.

Fiscal Provisions

• An appropriation in fiscal year 2026 is made to the commissioner of human services for the estimates of the required departmental earnings for the 2027 and 2028 fiscal years.

Significance and Potential Impacts

• Increases transparency around how much revenue is needed from fees to fund DHS activities and which activities rely on fees.
• Could influence fee setting or require fee increases to avoid using general fund subsidies.
• Establishes a formal, recurring reporting process to the legislature about the department’s fee-funded activities and related costs.

Implementation Timeline

• January 15, 2027: First required estimate due.
• January 15, 2028: Second required estimate due.
• The reports are submitted to the designated legislative chairs and ranking minority members on an ongoing basis, covering the next fiscal years.

Relevant Terms - departmental earnings - fee-funded activities - fee revenue - cost allocation methodology - general fund - licensing activities - program integrity activities - background studies - criminal background checks - medical assistance provider enrollment activities - provider compliance training - subsidy - appropriation - Minnesota Statutes section 16A.1285