HF4389

HF4389 (Legislative Session 94 (2025-2026))

Nonprofit limited liability companies allowed to apply for a license to be a child-placing agency; child care background study timing modified; and foster care, child placement, and child maltreatment provisions modified.

Related bill: SF4520

AI Generated Summary

Purpose

This bill aims to update Minnesota laws about caring for children in foster and adoptive settings. It adds new licensing options for child-placing work, tweaks background-check rules for child care providers, strengthens processes around adoptions and birth records, expands kinship and relative placement options, and sets new rules for how caseworkers visit and monitor children in foster care.

Main Provisions

Licensing and organization of child-placing work
- Allows nonprofit limited liability companies (LLCs) to apply for a license to operate as a child-placing agency.
Adoption agency requirements
- Adoption agencies must be organized as a nonprofit corporation or nonprofit LLC.
- Agencies must file a disclosure form and obtain a bond to cover the cost of transferring and storing records if the agency ceases operations.
- Agencies must submit an annual financial review when renewing licenses.
Background checks and background-study processes
- Expands who must undergo background studies for various child-care and licensing contexts.
- Requires fingerprinting and a national criminal history check for applicable individuals.
- Uses NETStudy 2.0 for submitting background-study requests and tracking the results.
- Sets renewal timelines (background studies must be repeated within five years for many settings; some re-checks occur at license renewal).
- Clarifies processes when individuals change positions, affiliates, or return after a gap in direct-contact duties.
- Defines who must share information (county agencies, license holders, etc.) and how information is verified and transmitted.
- Recognizes continuous affiliation for certain licensed professionals (physicians, NPs, PAs) once the health or human services background results are received.
Adoption information and birth records
- Agencies must provide information and assist with searches related to birth parents, adopted persons, and their rights.
- Adopted persons 18+ may access their original birth records; birth-parents have a right to file a contact preference form with the state registrar.
- Agencies must share required information with birth parents when making or supervising an adoptive placement.
Relative and kinship permanency
- Reinforces a preference for permanency with a relative when possible, especially for African American or disproportionately represented children.
- If feasible, transfers permanent legal and physical custody to a noncustodial parent or a willing and able relative, following defined legal processes.
- Agencies must inform relatives about Northstar kinship assistance benefits and eligibility.
Placement practices and colocating with a parent in treatment
- Allows colocating a child with a parent who is receiving licensed residential substance use disorder treatment for up to 12 months.
- Maintains agency access to relevant information and services for both the parent and child.
- Agencies may remove a child to foster care if needed to protect health, safety, or welfare, potentially without a prior court order.
Foster care caseworker visits
- Reaffirms monthly in-person (or, for youth 18+, video-conferenced with consent) caseworker visits to the child, primarily at the child’s residence.
- Defines who can conduct visits and ensures visits address safety, permanency, well-being, and schooling.
- Requires documentation when visits occur with others present (e.g., parents, foster parents, facility staff) and explains why this is necessary in certain situations.

Significant Changes to Existing Law

Licensing changes
- A nonprofit LLC can now apply for a license to operate as a child-placing agency (expanding the types of entities that can place children).
Expanded and standardized background checks
- Background-study requirements broaden to more license types and child care settings, with mandatory fingerprints, national checks, and NETStudy 2.0 integration.
- Rechecks are required at set intervals and upon changes in affiliation or license status, with specific rules for substitutes and reactivation after absences.
Adoption and records provisions
- Tighter requirements around adoption agency finances (bonding, annual financial reviews) and disclosure obligations.
- Clearer rights and processes around access to original birth records and contact preferences for adopted persons and their birth families.
Kinship and relative placement emphasis
- Stronger preference for relative/kinship placements when possible, including explicit steps to inform relatives about benefits and eligibility (Northstar kinship assistance).
Placement and service delivery changes
- Permitment of colocating a child with a parent in a residential substance-use-treatment context for up to a year, with ongoing access to services and information.
- New or clarified rules about monthly caseworker visits and how those visits are conducted and documented.
Indian child protections
- Maintains explicit protections under the Indian Child Welfare Act and Minnesota’s related acts, ensuring these protections apply within the broader changes.

Terminology to Note (Key Terms Embedded in the Proposal)

childplacing agency
foster care
adoption
adoption agency
background study
fingerprinting
national criminal history record check
NETStudy 2.0
nonprofit corporation (chapter 317A)
nonprofit limited liability company (chapter 322C)
bond (for records transfer/storage)
financial review
family child care
licensed child care provider
legal nonlicensed child care provider
important friend
related (including relatives and important friends)
Indian Child Welfare Act of 1978
Minnesota Indian Family Preservation Act
Northstar kinship assistance
permanency placement
relative placement
colocate with parent in treatment
substance use disorder treatment
month caseworker visits
case plan / out-of-home placement plan

Relevant Terms childplacing agency; foster care; adoption; background study; fingerprinting; NETStudy 2.0; national criminal history; nonprofit corporation; nonprofit LLC; bond; financial review; important friend; related; Indian Child Welfare Act; Minnesota Indian Family Preservation Act; Northstar kinship assistance; permanency; relative; kinship; placement; colocate; substance use disorder; monthly caseworker visit; case plan.

Bill text versions

Introduction PDF PDF file

Upcoming committee meetings

Children and Families Finance and Policy on: March 25, 2026 15:00

Actions

Date	Chamber	Where	Type	Name	Committee Name
March 16, 2026	House		Action	Introduction and first reading, referred to	Children and Families Finance and Policy

Citations

[
  {
    "analysis": {
      "added": [
        "Adds 'Important friend' as a related individual for foster care/adoption purposes.",
        "Explicitly references protections under the Indian Child Welfare Act and the Minnesota Indian Family Preservation Act."
      ],
      "removed": [],
      "summary": "Amends Minnesota Statutes 2025 Supplement section 142B.01 subdivision 15 to redefine \"Individual who is related\" in the context of family foster care, including new relationships and safeguards related to ICWA and the Minnesota Indian Family Preservation Act.",
      "modified": [
        "Expands the definition of 'related' to include broader personal relationships in foster care/adoption contexts."
      ]
    },
    "citation": "142B.01",
    "subdivision": "subdivision 15"
  },
  {
    "analysis": {
      "added": [
        "Requires incorporation as a nonprofit corporation under chapter 317A or a nonprofit LLC under chapter 322C.",
        "Requires a copy of the disclosure form under section 259.37 subdivision 2 with the licensure application.",
        "Requires a bond to cover transfer and storage of records if the applicant ceases operation.",
        "Requires a yearly financial review by an accountant as part of license renewal under 142B.05 subdivision 1."
      ],
      "removed": [],
      "summary": "Amends Minnesota Statutes 2024 section 142B.10 subdivision 18 to specify additional licensing requirements for adoption agencies.",
      "modified": [
        "Adds financial and organizational prerequisites for adoption agencies seeking licensure."
      ]
    },
    "citation": "142B.10",
    "subdivision": "subdivision 18"
  },
  {
    "analysis": {
      "added": [
        "Broadens background study scope for license types, including fingerprints and NETStudy 2.0 submission.",
        "Introduces periodic background study requirements at reauthorization or new affiliation with various care settings."
      ],
      "removed": [],
      "summary": "Amends Minnesota Statutes 2024 section 245C.04 subdivision 1 to overhaul background study requirements for child care providers.",
      "modified": [
        "Integrates comprehensive background study processes across different license types and care settings, with emphasis on fingerprinting and NETStudy 2.0."
      ]
    },
    "citation": "245C.04",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Specifies background study requirements including initial license application for all license types."
      ],
      "removed": [],
      "summary": "Addresses background study requirements for individuals under 245C.03 subdivision 1 as referenced in the amended 245C.04.",
      "modified": [
        "Harmonizes background study obligations with the expanded provisions in 245C.04."
      ]
    },
    "citation": "245C.03",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cites the definition of a family child care program background study subject under 245C.02 subdivision 6a as part of the background study framework.",
      "modified": [
        "Codifies the subject definition for background studies within various care contexts."
      ]
    },
    "citation": "245C.02",
    "subdivision": "subdivision 6a"
  },
  {
    "analysis": {
      "added": [
        "Specifies required information to be provided for background studies."
      ],
      "removed": [],
      "summary": "Outlines background study information required under 245C.05 subdivision 1 as part of the background check process.",
      "modified": [
        "Integrates with NETStudy 2.0 processes and related background study workflows."
      ]
    },
    "citation": "245C.05",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Further background study requirements under 245C.05 subdivision 5.",
      "modified": [
        "Complements subdivision 1 by detailing additional background study data collection or verification requirements."
      ]
    },
    "citation": "245C.05",
    "subdivision": "subdivision 5"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References to background study information in 245C.08 as part of the overall background study framework.",
      "modified": [
        "Ensures background study information reviewed under 245C.08 is incorporated into NETStudy and related processes."
      ]
    },
    "citation": "245C.08",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Requires information under 245C.05 subdivisions 1 and 5, fingerprinting, and photographing for NETStudy 2.0 processing."
      ],
      "removed": [],
      "summary": "Uses 142E.16 subdivision 2 to address background study needs for legal nonlicensed child care providers affiliated with a background study.",
      "modified": [
        "Aligns background study requirements with 142E.16 processes when new background studies are needed for certain providers."
      ]
    },
    "citation": "142E.16",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [
        "Requires disclosure form handling and background study submission to NETStudy 2.0 for applicable providers."
      ],
      "removed": [],
      "summary": "Incorporates 259.37 subdivision 2 into licensure and background study workflows.",
      "modified": [
        "Integrates with the overall background study framework for licensed programs."
      ]
    },
    "citation": "259.37",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [
        "Clarifies agency responsibilities for information requests and timelines regarding adoptee birth records and contact preferences."
      ],
      "removed": [],
      "summary": "Maintains and clarifies adoption information services and search processes under 259.83 subdivision 1.",
      "modified": [
        "Strengthens processes for handling requests and informing relevant parties."
      ]
    },
    "citation": "259.83",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Adds duty to inform relatives about Northstar kinship assistance benefits and eligibility."
      ],
      "removed": [],
      "summary": "Preserves and expands relative permanency placement considerations under 260.67 subdivision 1.",
      "modified": [
        "Enhances relative placement options and informs relatives about benefit programs."
      ]
    },
    "citation": "260.67",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Allows colocating a child with a parent in certain treatment contexts for up to 12 months."
      ],
      "removed": [],
      "summary": "Addresses placement arrangements and inter-relationships between placement and services under 260C.190 subdivision 1.",
      "modified": [
        "Defines placement dynamics and access to information for families under treatment programs."
      ]
    },
    "citation": "260C.190",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "Specifies monthly visit requirements, visit definitions, and who may constitute 'another person' for visits."
      ],
      "removed": [],
      "summary": "Defines monthly caseworker visits and related terminology under 260C.212 subdivision 4a.",
      "modified": [
        "Establishes visitation standards and clarifies exceptions for youth 18 or older."
      ]
    },
    "citation": "260C.212",
    "subdivision": "subdivision 4a"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Notes exempt status for some background study requirements under 123B.03 in certain licensed programs.",
      "modified": [
        "Exempts specific employees from background study requirements under certain conditions."
      ]
    },
    "citation": "123B.03",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Outlines adoptees' rights to request and obtain birth records at specified ages and circumstances."
      ],
      "removed": [],
      "summary": "Establishes rights related to birth records and contact preferences for adoptees under 144.2253.",
      "modified": [
        "Supports information sharing and contact preferences as part of adoption processes."
      ]
    },
    "citation": "144.2253",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Describes birth parents' rights to be informed about adoptee birth records and contact options."
      ],
      "removed": [],
      "summary": "Addresses rights of birth parents and notification protocols under 144.2252.",
      "modified": [
        "Reinforces processes for managing birth records and contact preferences."
      ]
    },
    "citation": "144.2252",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Feeds into the kinship benefits eligibility and application process described in 260.67 and related sections."
      ],
      "removed": [],
      "summary": "References Northstar Kinship Assistance within the Minnesota Kinship care framework (256N).",
      "modified": [
        "Links kinship assistance provisions to placement decisions and eligibility."
      ]
    },
    "citation": "256N",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Outlines processes and conditions for relative custody transfers and related notifications."
      ],
      "removed": [],
      "summary": "Addresses transfer of permanent legal and physical custody to relatives under 260C.515 subdivision 4.",
      "modified": [
        "Clarifies requirements before transferring custody to a relative."
      ]
    },
    "citation": "260C.515",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References the Minnesota Indian Family Preservation Act (MIFPA) provisions, sections 260.751 to 260.836.",
      "modified": [
        "Ensures alignment with MIFPA protections and kinship provisions in foster care and placement decisions."
      ]
    },
    "citation": "260.751 to 260.836",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Federal ICWA protections referenced in the bill.",
      "modified": [
        "Acknowledges supremacy of ICWA in related definitions and foster care/adoption contexts."
      ]
    },
    "citation": "U.S.C. Title 25 sections 1901 to 1963",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Chapter 317A (Minnesota nonprofit corporations) referenced for adoption agency incorporation.",
      "modified": [
        "Uses 317A for nonprofit corporate formation as part of licensure requirements."
      ]
    },
    "citation": "317A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Chapter 322C (Minnesota nonprofit limited liability companies) referenced for adoption agency incorporation.",
      "modified": [
        "Uses 322C for nonprofit LLC formation as part of licensure requirements."
      ]
    },
    "citation": "322C",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Additional reference reiterating 142B.01 Subd 15 in the amended text.",
      "modified": [
        "Reinforces expanded definition of related in context of family foster care."
      ]
    },
    "citation": "142B.01",
    "subdivision": "subdivision 15 (additional note)"
  }
]

Progress through the legislative process

17%

In Committee