The 2026 legislative session has gotten off to a fast start this week. One of the first orders of business? Formally deleting a fraud-riddled program from Minnesota’s state law books.
On Wednesday, lawmakers in the Human Services Committee of the Minnesota House of Representatives heard HF 3379, a bill repealing the Housing Stabilization Services (HSS) program. HSS is one of the many examples of how bad fraud has gotten in Minnesota.
Before it was shut down by the Minnesota Department of Human Services (HSS) last year, the HSS program reimbursed businesses for helping “people with disabilities, including mental illness and substance use disorder, and seniors find and keep housing.”
In 2021, the housing assistance program cost $20 million. By 2024, program costs had ballooned to over $100 million. The program, which was funded with federal dollars, was shuttered last August after DHS determined HSS had been pillaged by fraudsters.
DHS closed the HSS program after seeking and obtaining approval to end the Medicaid-funded program from the federal government.
Federal prosecutors have brought charges against multiple people who allegedly defrauded the HSS program. HSS was one of 14 state-run, Medicaid-funded programs that are now considered at “high-risk” for fraudulent activity.
Authored by Republican State Rep. Joe Schomacker, HF 3379 would formally remove the HSS program from state law. By removing the program from the law books, Schomacker’s bill would ensure the program cannot be rebooted without legislative input.
Explaining his bill to the Human Services Committee, Schomacker said the intent of his bill was to strip the HSS program from state law so that when it is recreated, the Minnesota Legislature will have a say in how the new version of the program works.
During discussion of the bill, DFL State Rep. Mohammed Noor offered an amendment to HF 3379 that would keep DHS from ending a program like HSS without legislative approval.
In turn, Schomacker offered an amendment to Noor’s amendment which stipulated that DHS can end programs like HSS if there are “credible allegations of fraud.”
DFL State Rep. Brion Curran criticized Schomacker’s amendment, saying it would codify DHS’ ability to unilaterally shut down programs established in law. She also said DHS “royally screwed this process up by just deciding to terminate programs.”
Curran criticized the Walz Administration for working with the federal government to shut down HSS.
Ultimately, Noor withdrew his amendment, saying he wanted to have more conversations about the matter. That withdrawal meant Schomacker’s amendment was void. As such, HF 3379 would still accomplish its originally-intended purpose of repealing the HSS program.
In a voice vote, HF 3379 was advanced by the committee and sent to the general register of the Minnesota House. The general register is typically the last stop for legislation before it is taken up by the full House.
Luke Sprinkel
Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
