Fund established to upgrade county human services program technology

Minnesota is among a shrinking number of states that administer their human services programs at the county level.

In recent years, urgency has grown to upgrade the information technology used to administer those programs — some of which has not been updated in decades — especially since federal mandates were signed into law in 2025 requiring states to develop more stringent oversight of human services programs.

A new law taking effect July 1, 2026, establishes a state fund to modernize the IT systems used by state agencies, counties and tribal nations to administer human services programs. It also creates a Human Services Modernization Advisory Council and a Legislative Commission on Human Services Systems.

The law includes General Fund or new modernization fund appropriations in Fiscal Year 2027 of:

• $27.94 million to the Department of Children, Youth, and Families;

• $15 million to advance fraud prevention and detection;

• $11.46 million to the Department of Human Services;

• $11.42 million to Minnesota IT Services; and

• $10 million for priority upgrades to the IT systems that counties use to administer state human services programs.

Minnesota Management and Budget officials must also transfer just under $50 million in Fiscal Year 2027 from the General Fund to the Human Services Systems Modernization Fund, and must transfer money to the new fund if its balance at the end of a biennium is less than $50 million.

A Human Services Systems Modernization Fund will be established to provide a funding source for multiyear modernization of human services systems. Funding sources include money appropriated or transferred to the fund by law; money transferred to the fund under an interagency agreement or other lawful agreement; federal financial participation; and gifts, grants, donations and other contributions.

Dollars may only be distributed in consultation with the Human Services Systems Modernization Advisory Council.

The funds must be used only for eligible multiyear modernization activities that replace,

modernize, consolidate, integrate, migrate, or substantially enhance legacy human services systems and shared technology infrastructure used by the Department of Human Services; the Department of Children, Youth and Families; counties; federally recognized Indian Tribes located in Minnesota; providers; beneficiaries; and other program partners.

Minnesota IT Services must develop a preliminary multiyear modernization plan by March 1, 2027, and — beginning Feb. 1, 2027, and annually thereafter — submit a report to the Human Services Systems Modernization Advisory Council and the Legislative Commission on Human Services Systems.

The Human Services Systems Modernization Advisory Council is tasked with providing recommendations on the planning, prioritization, governance, financing, development, implementation, integration, replacement and modernization of current and future human services systems. Its work will be supported by a $3.9 million Fiscal Year 2027 appropriation.

The council must consist of the commissioners (or their designees) from the Department of Human Services, Department of Children, Youth, and Families, and Minnesota IT Services, as well as two members appointed by the Association of Minnesota Counties; two members appointed by the Minnesota Association of County Social Service Administrators; and one member appointed by the Minnesota Indian Affairs Council.

Beginning Feb. 1, 2027, the council must annually submit a report to the Legislative Commission on Human Services Systems.

To provide legislative oversight, monitoring and recommendations regarding the planning, financing, procurement, development, implementation, operation and modernization of human services systems a Legislative Commission on Human Services Systems is established. Its Fiscal Year 2027 appropriation is $559,000.

Comprised of four members of the House of Representatives and four members of the Senate, each chamber represented by two members from each party, the commission must annually, beginning Feb. 15, 2028, provide a report to the Legislature.

Initial appointments for both the advisory council and the commission must be made by Aug. 15, 2026, and the first meeting must be convened by Sept. 15, 2026.

HF744/SF334*/CH120

SF0334* / HF0744 / CH120