>> Eric: AS MINNESOTA CONTINUES TO ADDRESS ITS CHILDCARE CRISIS THE NUMBER OF IN-HOME CHILDCARE PROVIDERS IS STILL SHRINKING.

STATE PAYMENTS THAT REPLACED PANDEMIC AID HAVE HELPED SOME TO SURVIVE AMID RISING COSTS.

REPORTER KAOMI LEE REPORTS THAT SOME CHALLENGES THAT REMAIN, ESPECIALLY WITH FAMILY CHILDCARE AND THE WAY THEY ARE LICENSED.

>> NORTH MINNEAPOLIS CHILDCARE PROVIDER TANIA PETERS LOVES WHAT SHE DOES.

>> I'VE BEEN DOING DAYCARE LICENSED FOR 24 YEARS BUT WATCHING CHILDREN FOR OVER 30.

>> PETERS FILED HER PAPERWORK WITH HENNEPIN COUNTY IN JANUARY.

HER SITE VISIT WAS IN FEBRUARY.

SHE THOUGHT ALL WAS FINE, UNTIL A FEW WEEKS AGO.

>> THEY SHUT ME DOWN BECAUSE THEY SAID MY LICENSE CHILDCARE NAME HAD EEN DEACTIVATED.

>> PETERS WAS ALSO TOLD SHE NEEDED AN ADDITIONAL FORM BECAUSE SHE HAD MOVED OFFSITE.

SHE COMPLETED ALL THE PAPERWORK MARCH 9TH.

BUT IN A LETTER DATED APRIL 2ND HENNEPIN COUNTY SAID SHE WAS INELIGIBLE FOR CHILDCARE ASSISTANCE PAYMENTS.

THE REASON?

BECAUSE HER LICENSE WAS SUSPENDED.

IN REALITY, HER LICENSE HAD ACTUALLY EXPIRED IN FEBRUARY.

HER LICENSOR NOT ONLY FAILED TO IT TELL HER, BUT APPEARS TO HAVE CAUSED MUCH OF THE DELAYS.

>> I WAS SHUT DOWN FOR A WEEK.

I WAS AN EMOTIONAL MESS BECAUSE I COULDN'T FIGURE OUT WHY THEY SHUT ME DOWN.

I LOST A SET OF PARENTS.

I HAD A FAMILY OF FIVE GOING TO START HERE THAT WEEK, AND UNFORTUNATELY I HAD TO TURN THEM AWAY BECAUSE MY LICENSE WAS SUSPENDED WITHOUT ME EVEN KNOWING WHY.

>> XCESSIVE PAPERWORK AND REGULATIONS ALMOST DROVE TANYA OUT OF BUSINESS.

THAT'S ANOTHER FAMILY CHILDCARE PROVIDER THE STATE CAN ILL AFFORD TO LOSE.

ACCORDING TO THE STATE OMBUDS, MORE THAN 700 FAMILY CHILDCARE PROGRAMS CLOSED LAST YEAR.

THAT'S AN OVERALL YEAR OVER YEAR DIFFERENCE OF 258 FEWER PROGRAMS.

MOST OF THE CLOSURES WERE VOLUNTARY BUT 30 LICENSES WERE REVOKED AND ANOTHER 14 SUSPENDED.

AND PERHAPS MOST SIGNIFICANTLY, 84 PROGRAMS, OR 17%, CLOSED IN THEIR FIRST YEAR.

>> CONSISTENTLY THE CALLS THAT I GET FROM LICENSE HOLDERS HAVE NOT TO DO WITH THE RULES IN PLACE, BUT THE APPLICATION OF THOSE RULES.

>> LISA THOMPSON IS THE STATE OMBUDS FOR FAMILY CHILDCARE PROVIDERS.

LAWMAKERS CREATED HER POSITION IN 2021.

SHE PROVIDES ADVOCACY AND RETENTION SUPPORT.

>> THERE REMAINS SOME WHAT I CALL GRAY AREAS IN THE LAW THAT ARE OPEN TO INTERPRETATION BY THE LICENSOR.

FOR A LICENSE HOLDER, THEY MAY BELIEVE THAT THEY ARE 100% COMPLIANT WITH HE RULES AND REGULATIONS, AND THEN THE LICENSOR HAS A DIFFERENT INTERPRETATION OF A RULE AND THEY CAN GET SANCTIONED FOR THAT.

>> CHILDCARE CENTERS ARE LICENSED BY DHS, BUT IT DELEGATES LICENSING FOR FAMILY CHILDCARE PROVIDERS TO THE COUNTIES, AND THAT'S WHERE SOME OF THE PROBLEMS ARISE.

>> LAST YEAR I HELPED A PROVIDER WHO WAS BEING SANCTIONED BECAUSE A SHEET ON A CRIB WAS NOT TIGHT ENOUGH.

ONE PULLED UP A LITTLE BIT FURTHER THAN THE OTHER.

- SHE WAS SANCTIONED ONLY FOR THE ONE THAT THE SHEET PULLED UP ON, AND IT WAS A $200 FINE.

>> THOMPSON ULTIMATELY INTERVENED TO THE STATE DEPARTMENT OF HUMAN SERVICES AND GOT PETERS' LICENSE BACK-DATED.

WHEN ASKED ABOUT HER CASE, HENNEPIN COUNTY SAID WE ASSIST PROVIDERS WITH REGISTRATION AND REAUTHORIZATION IN PROGRAMS THAT SUPPORT THEIR BUSINESSES AND THE FAMILIES THEY SERVE.

HOWEVER, MANY PROGRAMS ARE ADMINISTERED BY OTHER AGENCIES.

BUT PETERS' EXPERIENCE IS NOT THE EXCEPTION.

ALISSA DODSON IS THE DEPUTY INSPECTOR GENERAL FOR LICENSING AT DHS.

>> FAMILY CHILDCARE IS AT THAT LOCAL LEVEL WHERE THE LICENSING IS DELEGATED TO THOSE COUNTIES AND WE HAVE HEARD OVER TIME THAT THAT CAN DRIVE SOME INCONSISTENCY.

>> DHS IS MIDWAY IN OVERHAULING ITS ENTIRE PROCESS FROM LICENSING TO REGULATIONS.

LEGISLATION FOR THIS WORK WAS PASSED IN 2021.

>> I THINK OUR MODERNIZATION PROJECT AS WELL AS OUR, SOME OF OUR SYSTEMS ORK THAT WE'RE DOING IS GOING TO CREATE A MORE UNIFIED PROCESS FOR FAMILY CHILDCARE PROVIDERS.

>> FIRST SHE SAYS THERE WILL BE A WEIGHTED RISK SYSTEM, CORRECTIVE ACTION WOULD BE ASSIGNED DIFFERENTLY BASED ON THE VIOLATION'S RISK TO CHILD SAFETY.

SECOND, ABBREVIATED ANNUAL INSPECTIONS.

A GOOD TRACK RECORD COULD SPEED UP THE SITE VISIT.

AND THIRD, A COMPLETE OVERHAUL OF THE DEPARTMENT'S LICENSING STANDARDS.

>> A LOT OF OUR LICENSING STANDARDS, THE MAJORITY OF THEM FOR CHILDCARE WERE ORIGINALLY WRITTEN IN THE EARLY 1980S.

OVER THE LAST 40 YEARS A LOT HAS CHANGED.

>> A DRAFT HAS JUST BEEN RELEASED TO THE PUBLIC FOR FEEDBACK AND SOON DHS WILL ROLL OUT AN ONLINE PROVIDER HUB ON MOBILE OR COMPUTER APP.

BUT STATE MBUDS LISA THOMPSON SAYS, AN ALL-DIGITAL SYSTEM COULD HAVE UNINTENDED CONSEQUENCES.

>> ALMOST 27% OF CURRENTLY LICENSED PEOPLE HAVE BEEN LICENSED FOR MORE THAN 25 YEARS.

AND THIS IS A GROUP OF PEOPLE THAT MAY NOT HAVE THE SAME COMPUTER LITERACY OR COMFORT WITH TECHNOLOGY.

SO I HAVE HEARD FROM SOME PEOPLE WHO JUST SAY I'M GOING TO QUIT.

>> TANYA PETERS HOPES THINGS GET BETTER.

SHE'S STILL WONDERING HOW SHE'LL MAKE UP THE LOST INCOME.

>> THEY COULD SUT ME DOWN AT ANY TIME FOR ANY REASON EVEN THOUGH IT'S NOT EVEN VALID LIKE THEY JUST DID