S.F. 538 establishes a new grant program to fund the development or improvement of child care facilities in greater Minnesota outside the metropolitan area.

To be eligible, grant applicants must use grant funds to increase child care capacity in the community they serve, satisfy all relevant state requirements for child care providers, and agree to achieve or maintain Parent Aware certification. Eligible grant projects include acquiring land and facility construction, renovation, and other improvements. Applications must at least include evidence of the need for the project, a description of the new or improved facility, estimated costs, and expected benefits to the area served.

Under the program, the commissioner of human services may make grants to provide up to 50% of the costs of eligible child care facility projects. For awards of less than 50% of an authorized project’s cost, the commissioner must provide a written explanation for awarding less than 50% to the relevant legislative committees. The maximum award amount is $500,000 per project, or $2,000,000 in two years for one or more projects in the same city or county. The commissioner has authority to cancel a grant award if a grantee cannot proceed with the approved project or has not expended or obligated the grant money within five years.

The bill appropriates $10,000,000 in fiscal year 2020 to fund the grant program.