S. F. No. 1151 and H. F. No. 1414, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

Leighton moved that S. F. No. 1151 be substituted for H. F. No. 1414 and that the House File be indefinitely postponed. The motion prevailed.

Solberg from the Committee on Ways and Means to which was referred:

S. F. No. 3345, A bill for an act relating to criminal justice; appropriating money for the judicial branch, public safety, corrections, criminal justice, crime prevention programs, and related purposes; modifying various fees, assessments, and surcharges; implementing, clarifying, and modifying certain criminal and juvenile provisions; prescribing, clarifying, and modifying certain penalty provisions; establishing, clarifying, expanding, and making permanent various pilot programs, grant programs, task forces, working groups, reports, and studies; providing for the collection, maintenance, and reporting of certain data; expanding, clarifying, and modifying the powers of the commissioner of corrections; making various changes to the 1997 omnibus criminal justice funding bill; providing for the coordination of services for disasters; clarifying and modifying certain laws involving public defenders; appropriating public defender reimbursements to the board of public defense; requesting the supreme court to amend the Rules of Criminal Procedure; accelerating the repeal of the automobile theft prevention program; limiting the entities that must have an affirmative action plan approved by the commissioner of human rights; conveying state land to the city of Faribault; amending Minnesota Statutes 1996, sections 3.739, subdivision 1; 12.09, by adding a subdivision; 13.99, by adding a subdivision; 168.042, subdivisions 12 and 15; 169.121, subdivision 5a; 171.16, subdivision 3; 241.01, subdivision 7, and by adding a subdivision; 242.32, subdivision 1; 244.05, subdivision 7; 299C.06; 299C.09; 299F.04, by adding a subdivision; 357.021, by adding subdivisions; 488A.03, subdivision 11; 588.01, subdivision 3; 609.3241; 611.14; 611.20, subdivision 3; 611.26, subdivisions 2 and 3; and 611.27, subdivisions 1 and 7; Minnesota Statutes 1997 Supplement, sections 97A.065, subdivision 2; 168.042, subdivision 11a; 171.29, subdivision 2; 241.277, subdivisions 6, 9, and by adding a subdivision; 357.021, subdivision 2; 363.073, subdivision 1; 401.13; 609.101, subdivision 5; 609.113, subdivision 3; and 611.25, subdivision 3; amending Laws 1996, chapter 408, article 2, section 16; and Laws 1997, chapter 239, article 1, sections 7 and 12; proposing coding for new law in Minnesota Statutes, chapters 169; 241; 299C; 609; and 611A; repealing Minnesota Statutes 1996, sections 609.101, subdivision 1; 609.563, subdivision 2; 611.216, subdivision 1a; 611.26, subdivision 9; 611.27, subdivision 2; and 626.861; Minnesota Statutes 1997 Supplement, section 611.27, subdivision 4.

Reported the same back with the following amendments to the unofficial engrossment:

Page 32, line 22, delete "7" and insert "6"

Page 32, delete line 24 and insert "24 is effective July 1, 1998. Sections 1 to 5, 7 to 23, and 25"

Page 68, line 34, delete "10" and insert "9"

Pages 77 and 78, delete subdivision 3 and insert:

"Subd. 3. [MANDATORY SENTENCE FOR DANGEROUS OFFENDER WHO COMMITS A SECOND VIOLENT FELONY.] (a) Unless a longer mandatory minimum sentence is otherwise required by law or the court imposes a longer aggravated durational departure under subdivision 2, a person who is convicted of a violent crime that is a felony must be committed to the commissioner of corrections if:

(1) the court determines on the record at the time of sentencing that the person has one or more prior felony convictions for violent crimes; and

Any person convicted and sentenced as required by this subdivision is not eligible for probation, parole, discharge, or work release, until that person has served the full term of imprisonment imposed by the court, notwithstanding sections 241.26, 242.19, 243.05, 244.04, 609.12, and 609.135.

(b) For purposes of this subdivision, "violent crime" does not include a violation of section 152.023 or 152.024."

Pages 132 and 133, delete section 18

Page 134, line 35, after "7," insert "8, and" and delete ", and 18"

Page 134, line 36, delete everything after the first comma, and insert "19, and 22, paragraph"

Page 148, line 15, strike the old language

Page 148, line 16, strike everything before the period

Page 152, line 3, delete "7, 8," and insert "1, 7, 8, 12,"

Page 152, line 4, delete the second comma and insert "to"

Renumber the sections in sequence and correct internal references

Amend the title accordingly

With the recommendation that when so amended the bill pass.

The report was adopted.

Dorn from the Committee on Health and Human Services to which was referred:

subdivisions; 256J.26, subdivisions 1, 2, 3, and 4; 256J.28, subdivisions 1, 2, and by adding a subdivision; 256J.30, subdivisions 10 and 11; 256J.31, subdivisions 5 and 10; 256J.32, subdivisions 4, 6, and by adding a subdivision; 256J.33, subdivisions 1 and 4; 256J.35; 256J.36; 256J.37, subdivisions 1, 2, 9, and by adding subdivisions; 256J.38, subdivision 1; 256J.39, subdivision 2; 256J.395; 256J.42; 256J.43; 256J.45, subdivisions 1, 2, and by adding a subdivision; 256J.46, subdivisions 1, 2, and 2a; 256J.47, subdivision 4; 256J.48, subdivisions 2, 3, and by adding a subdivision; 256J.49, subdivision 4; 256J.50, subdivision 5, and by adding a subdivision; 256J.52, subdivision 4; 256J.54, subdivisions 2, 3, 4, and 5; 256J.55, subdivision 5; 256J.56; 256J.57, subdivision 1; 256J.645, subdivision 3; 256J.74, subdivision 2, and by adding a subdivision; 256K.03, subdivision 5; 256L.01; 256L.02, subdivisions 2 and 3; 256L.03, subdivisions 1, 3, 4, 5, and by adding subdivisions; 256L.04, subdivisions 1, 2, 7, 8, 9, 10, and by adding subdivisions; 256L.05, subdivisions 2, 3, 4, and by adding subdivisions; 256L.06, subdivision 3; 256L.07; 256L.09, subdivisions 2, 4, and 6; 256L.11, subdivision 6; 256L.12, subdivision 5; 256L.15; 256L.17, by adding a subdivision; and 270A.03, subdivision 5; Laws 1994, chapter 633, article 7, section 3; Laws 1997, chapter 203, article 4, section 64; and article 9, section 21; chapter 207, section 7; chapter 225, article 2, section 64; and chapter 248, section 46, as amended; proposing coding for new law in Minnesota Statutes, chapters 144; 145; 245; 256; 256B; 256D; 256J; and 256L; repealing Minnesota Statutes 1996, sections 144.0721, subdivision 3a; 256.031, subdivisions 1, 2, 3, and 4; 256.032; 256.033, subdivisions 2, 3, 4, 5, and 6; 256.034; 256.035; 256.036; 256.0361; 256.047; 256.0475; 256.048; 256.049; and 256B.501, subdivision 3g; Minnesota Statutes 1997 Supplement, sections 62J.685; 144.0721, subdivision 3; 256.031, subdivisions 5 and 6; 256.033, subdivisions 1 and 1a; 256B.057, subdivision 1a; 256B.062; 256B.0913, subdivision 15; 256J.25; 256J.28, subdivision 4; 256J.32, subdivision 5; 256J.34, subdivision 5; 256J.76; 256L.04, subdivisions 3, 4, 5, and 6; 256L.06, subdivisions 1 and 2; 256L.08; 256L.09, subdivision 3; 256L.13; and 256L.14; Laws 1997, chapter 85, article 1, sections 61 and 71; and article 3, section 55; Minnesota Rules (Exempt), parts 9500.9100; 9500.9110; 9500.9120; 9500.9130; 9500.9140; 9500.9150; 9500.9160; 9500.9170; 9500.9180; 9500.9190; 9500.9200; 9500.9210; and 9500.9220.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [HEALTH AND HUMAN SERVICES APPROPRIATIONS.]

The sums in the columns headed "APPROPRIATIONS" are appropriated or reductions from appropriations from the general fund, or another named fund, to the agencies and for the purposes specified to be available for the fiscal years indicated for each purpose.

1998 1999

General $ (118,953,000)$ (122,813,000)

State Government Special Revenue Fund 113,000 90,000

Special Revenue Fund -0- 400,000

APPROPRIATIONS

Available for the Year

Ending June 30

1998 1999

Sec. 2. COMMISSIONER OF HUMAN SERVICES

Subdivision 1. Total Appropriation (112,337,000) (142,747,000)

1998 1999

General (118,953,000) (141,721,000)

Special Revenue Fund -0- 400,000

Health Care Access 6,616,000 (1,420,000)

Subd. 2. Children's Grants

General -0- 1,665,000

[TECHNICAL ASSISTANCE FOR CRISIS NURSERIES.] Of this appropriation, $200,000 in fiscal year 1999 is from the general fund for the commissioner to contract for technical assistance with counties that are interested in developing a crisis nursery program. The technical assistance must be designed to assist interested counties in building capacity to develop and maintain a crisis nursery program in the county. The grant amount to a county must range from $10,000 to $20,000. To be eligible to receive a grant under this program, the county must not have an existing crisis nursery program and must not be a metropolitan county, as that term is defined in Minnesota Statutes 1996, section 473.121. This appropriation shall not become part of the base for the 2000-2001 biennial budget.

[ADOPTION ASSISTANCE CARRYFORWARD.] Of the appropriation in Laws 1997, chapter 203, section 2, subdivision 3, for children's grants for fiscal year 1998, $600,000 of the amount appropriated for the adoption assistance program is available for the same purpose in fiscal year 1999. The amount carried forward shall become part of the base for the adoption assistance program in the 2000-2001 biennial budget.

[FAMILY PRESERVATION PROGRAM FUNDING.] $10,000,000 is transferred in fiscal year 1999 from the state's federal TANF block grant to the state's federal Title XX block grant. Notwithstanding the provisions of Minnesota Statutes 1997 Supplement, section 256E.07, in fiscal year 1999 the commissioner shall transfer $10,000,000 of the state's Title XX block grant funds to the family preservation program under Minnesota Statutes, chapter 256F. Of the total amount transferred, the commissioner shall allocate $8,800,000 to counties for the purposes of the child protection assessments or investigations community collaboration pilot program under Minnesota Statutes, section 626.5560. The commissioner shall allocate $750,000 to counties for the concurrent permanency planning pilot program under Minnesota Statutes, section 257.0711. The commissioner shall transfer $200,000 to the commissioner of health for the program under Minnesota Statutes, section 145A.15, that funds home visiting projects. The commissioner may retain up to $250,000 of the total amount transferred to conduct evaluations of these pilot programs. The commissioners shall ensure that money allocated to counties under this provision must be used in accordance with the requirements of the amendments to section 404(d)(3)(B) of Part A of Title IV of the Social Security Act in Public Law Number 104-193. This is a one-time appropriation that shall not be added to the base for the family preservation program for the 2000-2001 biennial budget.

Subd. 3. Children's Services Management

General -0- -0-

Special Revenue Fund -0- 400,000

Subd. 4. Basic Health Care Grants

General (74,679,000) (90,243,000)

Health Care Access 6,808,000 (4,278,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MinnesotaCare Grants

(b) MA Basic Health Care Grants; Families and Children

General (23,231,000)(38,644,000)

Of this appropriation, $100,000 in fiscal year 1999 is from the general fund to the commissioner for the post-kidney transplant drug program. This appropriation shall not cancel, but is available until expended.

[JANUARY 1, 1999 PROVIDER RATE INCREASE FOR CERTAIN SERVICES.] (a) Effective for services rendered on or after January 1, 1999, the commissioner shall increase reimbursement or allocation rates by five percent, and county boards shall adjust provider contracts as needed, for mental health services provided by community mental health centers under Minnesota Statutes, sections 245.62 and 256B.0625, subdivision 5, and for community support services for deaf and hard-of-hearing adults with mental illness who use or wish to use sign language as their primary means of communication. The commissioner shall also increase prepaid medical assistance program capitation rates as appropriate to reflect the rate increases in this provision. Section 10, sunset of uncodified language, does not apply to this provision.

(b) It is the intention of the legislature that the compensation packages of staff within each service be increased by five percent.

(c) MA Basic Health Care Grants; Elderly and Disabled

General (23,819,000)(41,964,000)

[REGION 10 COMMISSION CARRYOVER AUTHORITY.] Any unspent portion of the appropriation to the commissioner of human services in Laws 1997, chapter 203, article 1, section 2, subdivision 9, for the region 10 quality assurance commission for fiscal year 1998 shall not cancel but shall be available for the commission for fiscal year 1999.

[DD CRISIS INTERVENTION PROJECT.] Of this appropriation, $150,000 in fiscal year 1999 is from the general fund to the commissioner for start-up operating and training costs for the action, support, and prevention project of southeastern Minnesota. This appropriation is to provide crisis intervention through community-based services in the private sector to persons with developmental disabilities under Laws 1995, chapter 207, article 3, section 22.

under Minnesota Statutes, section 256.955, but shall implement a drug benefit in accordance with the approved waiver. Upon approval of this waiver, the total appropriation for the senior citizen drug program under Laws 1997, chapter 225, article 7, section 2, shall be transferred to the medical assistance account to fund the federally approved coverage for eligible persons for fiscal year 1999.

(b) The commissioner may seek approval for a higher copayment for eligible persons above 100 percent of the federal poverty guidelines.

(c) The commissioner shall report by October 15, 1998, to the chairs of the health and human services policy and fiscal committees of the house and senate whether the waiver referred to in paragraph (a) has been approved and will be implemented or whether the state senior citizen drug program will be implemented.

(d) If the commissioner does not receive federal waiver approval at or above the level of eligibility defined in paragraph (a), the commissioner shall implement the program under Minnesota Statutes, section 256.955.

(d) General Assistance Medical Care

General (27,629,000) (9,635,000)

Subd. 5. Basic Health Care Management

General -0- 261,000

Health Care Access (192,000) 1,774,000

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) Health Care Policy Administration

General -0- 173,000

Health Care Access (192,000) 37,000

[DELAY IN TRANSFERRING GAMC CLIENTS.] Due to delaying the transfer of GAMC clients to MinnesotaCare until January 1, 2000, $192,000 in fiscal year 1998 health care access fund administrative funds, appropriated in Laws 1997, chapter 225, article 7, section 2, subdivision 1, are canceled.

[HEALTH CARE MANUAL PRODUCTION COSTS.] For the biennium ending June 30, 1999, the money difference between the cost of producing and distributing the department of human services health care manual, and the fees paid by individuals and private entities on January 1, 1998, is appropriated to the commissioner to defray manual production and distribution costs. The commissioner must provide the health care manual to government agencies and nonprofit agencies serving the legal and social service needs of clients at no cost to those agencies.

(b) Health Care Operations

General -0- 88,000

Health Care Access -0- 1,737,000

Subd. 6. State-Operated Services

General -0- 700,000

The amounts that may be spent from this appropriation for each purpose are as follows:

RTC Facilities

General -0- 700,000

[LEAVE LIABILITIES.] The accrued leave liabilities of state employees transferred to state-operated community services programs may be paid from the appropriation for state-operated services in Laws 1997, chapter 203, article 1, section 2, subdivision 7, paragraph (a). Funds set aside for this purpose shall not exceed the amount of the actual leave liability calculated as of June 30, 1999, and shall be available until expended. This provision is effective the day following final enactment.

Subd. 7. Continuing Care and Community Support Grants

General (35,100,000)(24,527,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) Community Services Block Grant

General 130,000 -0-

(b) Mental Health Grants

General 300,000 2,144,000

[CHILDREN'S MENTAL HEALTH SERVICES.] (a) Of this appropriation, $200,000 in fiscal year 1999 is from the general fund for the commissioner to award grants to counties that have a relatively low net tax capacity to provide children's mental health services to children and families residing outside of a metropolitan statistical area, as that term is defined by the United States Census Bureau. Funds shall be used to provide services according to an individual family community support plan as described in Minnesota Statutes, section 245.4881, subdivision 4. The plan must be developed using a process that enhances consumer empowerment. Counties with an approved children's mental health collaborative may integrate funds appropriated for fiscal years 1998 and 1999 with existing funds to meet the needs identified in the child's individual family community support plan.

(b) In awarding grants to counties under this provision, the commissioner shall follow the process established in Minnesota Statutes, section 245.4886, subdivision 2. The commissioner shall give priority for funding to counties that continued to spend for mental health services specified in Minnesota Statutes, sections 245.461 to 245.486 and 245.487 to 245.4888, according to generally accepted accounting principles, in an amount equal to the total expenditures shown in the county's approved 1987 CSSA plan for services to persons with mental illness plus the comparable figure for facilities licensed under Minnesota Rules, chapter 9545, for target populations other than mental illness in the county's approved 1989 CSSA plan. The commissioner shall ensure that grant funds are not used to replace existing funds.

[PLANNING GRANT FOR PROSTITUTION RECOVERY CENTER.] Of this appropriation, $50,000 in fiscal year 1999 is from the general fund to the commissioner for a planning grant to enable an organization to develop a long-term treatment program for women escaping systems of prostitution.

[COMPULSIVE GAMBLING CARRYFORWARD.] Unexpended funds appropriated to the commissioner for compulsive gambling programs for fiscal year 1998 do not cancel but are available for these purposes for fiscal year 1999.

[FLOOD COSTS.] Of this appropriation, $300,000 in fiscal year 1998 and $1,000,000 in fiscal year 1999 is from the general fund to the commissioner for the purpose of continuing initiatives funded by Federal Emergency Management Agency (FEMA) mental health care grants beyond April 15, 1998. This appropriation is available until June 30, 1999. This provision is effective April 15, 1998, if FEMA does not extend these mental health care grants beyond April 15, 1998.

(c) Deaf and Hard-of-hearing Grants

[SERVICES TO DEAF PERSONS WITH MENTAL ILLNESS.] Of this appropriation, $65,000 in fiscal year 1999 is from the general fund to the commissioner for a grant to a nonprofit agency that currently serves deaf and hard-of-hearing adults with mental illness through residential programs and supported housing outreach activities. The grant must be used to continue or maintain community support services for deaf and hard-of-hearing adults with mental illness who use or wish to use sign language as their primary means of communication. This appropriation is in addition to the appropriation in Laws 1997, chapter 203, article 1, section 2, subdivision 8, paragraph (d), for a grant to this nonprofit agency.

(d) DD Community Support Grants

General -0- 41,000

(e) Aging and Adult Services

General -0- 100,000

(f) Medical Assistance Long-term Care Waivers and Home Care

General (8,463,000)(13,096,000)

(b) It is the intention of the legislature that the compensation packages of staff within each service be increased by 1.25 percent.

(g) Medical Assistance Long-term Care Facilities

General (18,272,000)(19,117,000)

[ICF/MR DISALLOWANCES.] Of this appropriation, $65,000 in fiscal year 1999 is from the general fund to the commissioner for the purpose of reimbursing a 12-bed ICF/MR in Stearns county and a 12-bed ICF/MR in Sherburne county for disallowances resulting from field audit findings. The commissioner shall exempt these facilities from the provisions of Minnesota Statutes, section 256B.501, subdivision 5b, paragraph (d), clause (6), for the rate years beginning October 1, 1997, and October 1, 1998. Section 10, sunset of uncodified language, does not apply to this provision.

[NURSING HOME MORATORIUM EXCEPTIONS.] Base level funding for medical assistance long-term care facilities is increased by $255,000 in fiscal year 2000 and by $278,000 in fiscal year 2001 for the additional medical assistance costs of the nursing home moratorium exceptions under Minnesota Statutes 1997 Supplement, section 144A.071, subdivision 4a, paragraphs (w) and (x). Notwithstanding the provisions of section 10, sunset of uncodified language, this provision shall not expire.

[ICFs/MR AND NURSING FACILITY FLOOD-RELATED REPORTING.] For the reporting year ending December 31, 1997, for ICFs/MR that temporarily admitted victims of the flood of 1997, the resident days related to those temporary placements (persons not formally admitted which continued to be billed under the evacuated facility's provider number) shall not be counted in the cost report submitted to calculate October 1, 1998, rates, and the additional expenditures shall be considered nonallowable.

For the reporting year ending September 30, 1997, for nursing facilities that temporarily admitted victims of the flood of 1997, the resident days related to those temporary placements (persons not formally admitted which continued to be billed under the evacuated facility's provider number) shall not be counted in the cost report submitted to calculate July 1, 1998, rates, and the additional expenditures shall be considered nonallowable.

(h) Alternative Care Grants

General -0- 21,666,000

(i) Group Residential Housing

(j) Chemical Dependency Entitlement Grants

General -0- (7,498,000)

(k) Chemical Dependency Nonentitlement Grants

General -0- 400,000

[MATCHING GRANT FOR YOUTH ALCOHOL TREATMENT.] Of this appropriation, $400,000 in fiscal year 1999 is from the general fund for the commissioner to provide a grant to the board of directors of the Minnesota Indian Primary Residential Treatment Center, Inc., to build a youth alcohol treatment wing at the Mash-Ka-Wisen Treatment Center. This appropriation is available only if matched by a $1,500,000 federal grant and a $100,000 grant from state Indian bands.

[MATCHING GRANT FOR PROJECT TURNABOUT.] If money is appropriated in fiscal year 1999 to the commissioner from the lottery prize fund, the money shall be used to provide a grant for capital improvements to Project Turnabout in Granite Falls. A local match is required before the commissioner may release this appropriation to the facility. The facility shall receive state funds equal to the amount of local matching funds provided, up to the limit of this appropriation.

Subd. 8. Economic Support Grants

General (9,174,000)(29,413,000)

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) Assistance to Families Grants

General -0-(20,343,000)

[TRANSFER OF STATE MONEY FROM TANF RESERVE.] For fiscal year 1999, $10,220,000 is appropriated from the state money in the TANF reserve to the commissioner for the purposes of funding the families-first distribution of child support arrearages under Minnesota Statutes, section 256.741, subdivision 2a; the Minnesota food assistance program under Minnesota Statutes, section 256D.053; and the MFIP-S noncitizen food portion under Minnesota Statutes, section 256J.11, subdivision 2.

(b) General Assistance

General (6,933,000) (6,321,000)

(c) Minnesota Supplemental Aid

General (2,241,000) (2,749,000)

Subd. 9. Economic Support Management

General -0- 35,000

Health Care Access -0- 1,084,000

[ASSESSMENT OF AFFORDABLE HOUSING SUPPLY.] The commissioner of human services shall assess the statewide supply of affordable housing for all MFIP-S and GA recipients, and report to the legislature by January 15, 1999, on the results of this assessment.

The amounts that may be spent from this appropriation for each purpose are as follows:

Economic Support Operations

General -0- 35,000

Health Care Access -0- 1,084,000

Sec. 3. COMMISSIONER OF HEALTH

Subdivision 1. Total Appropriation -0- 18,896,000

General -0- 18,896,000

State Government

Special Revenue -0- 7,000

Health Care Access -0- 259,000

Subd. 2. Health Systems and Special Populations -0- 13,759,000

General -0- 13,500,000

[FETAL ALCOHOL SYNDROME.] (a) Of this appropriation, $3,500,000 in fiscal year 1999 is from the general fund to the commissioner for the fetal alcohol syndrome/fetal alcohol effect (FAS/FAE) initiatives specified in paragraphs (b) to (k).

(b) Of the amount in paragraph (a), $100,000 is transferred to the commissioner of children, families, and learning for school-based pilot programs to identify and implement effective educational strategies for individuals with FAS/FAE.

(c) Of the amount in paragraph (a), $600,000 is for the public awareness campaign under Minnesota Statutes, section 145.9266, subdivision 1.

(d) Of the amount in paragraph (a), $300,000 is to develop a statewide network of regional FAS diagnostic clinics under Minnesota Statutes, section 145.9266, subdivision 2.

(e) Of the amount in paragraph (a), $150,000 is for professional training about FAS under Minnesota Statutes, section 145.9266, subdivision 3.

(f) Of the amount in paragraph (a), $200,000 is for the fetal alcohol coordinating board under Minnesota Statutes, section 145.9266, subdivision 6.

(g) Of the amount in paragraph (a), $500,000 is transferred to the commissioner of human services to expand the maternal and child health social service programs under Minnesota Statutes, section 254A.17, subdivision 1.

(h) Of the amount in paragraph (a), $200,000 is for the commissioner to study the extent of fetal alcohol syndrome in the state.

(i) Of the amount in paragraph (a), $300,000 is transferred to the commissioner of human services for the intervention and advocacy program under Minnesota Statutes, section 254A.17, subdivision 1b.

(j) Of the amount in paragraph (a), $700,000 is for the FAS community grant program under Minnesota Statutes, section 145.9266, subdivision 4.

(k) Of the amount in paragraph (a), $450,000 is transferred to the commissioner of human services to expand treatment services and halfway houses for pregnant women and women with children who abuse alcohol during pregnancy.

[GRANTS FROM HEALTH CARE ACCESS FUND.] Of any grants made from the health care access fund to the commissioner of health for purposes of Minnesota Statutes, section 145.925, priority shall be given for grants to entities providing natural family planning services that did not receive funding under Minnesota Statutes, section 145.925, in fiscal year 1998.

Subd. 3. Health Protection -0- 5,130,000

General -0- 5,130,000

State Government -0- 7,000

Special Revenue

[OCCUPATIONAL RESPIRATORY DISEASE INFORMATION SYSTEM.] Of the general fund appropriation, $300,000 in fiscal year 1999 is to design an occupational respiratory disease information system. This appropriation is available until expended. This appropriation is added to the base for the 2000-2001 biennial budget.

[INFECTION CONTROL.] Of the general fund appropriation, $300,000 in fiscal year 1999 is for infection control activities, including training and technical assistance of health care personnel to prevent and control disease outbreaks, and for hospital and public health laboratory testing and other activities to monitor trends in drug-resistant infections. Start-up costs shall not become part of the base for the 2000-2001 biennial budget.

[CANCER SCREENING.] Of the general fund appropriation, $989,000 in fiscal year 1999 is for increased cancer screening and diagnostic services for women, particularly underserved women, and to improve cancer screening rates for the general population. Of this amount, at least $665,000 is for grants to support local boards of health in providing outreach and coordination and to reimburse health care providers for screening and diagnostic tests, and up to $324,000 is for technical assistance, consultation, and outreach.

[SEXUALLY TRANSMITTED DISEASE PREVENTION INITIATIVES.] (a) Of this appropriation, $300,000 in fiscal year 1999 is from the general fund to the commissioner for the sexually transmitted disease prevention initiatives specified in paragraphs (b) to (d).

(c) $100,000 is for the commissioner to conduct research on the prevalence of sexually transmitted diseases among populations at highest risk for infection. The research may be done in collaboration with the University of Minnesota and nonprofit community health clinics. This appropriation shall not become part of the base level funding for this activity for the 2000-2001 biennial budget.

(d) $100,000 is for the commissioner to conduct laboratory screenings for sexually transmitted diseases and to overcome barriers to diagnostic screening and treatment services, particularly in populations at highest risk for acquiring a sexually transmitted disease.

Sec. 4. HEALTH-RELATED BOARDS

Subdivision 1. Total Appropriation 113,000 83,000

The appropriations in this section are from the state government special revenue fund.

Subd. 2. Board of Medical Practice 80,000 (110,000)

This appropriation is added to the appropriation in Laws 1997, chapter 203, article 1, section 5, subdivision 6, and is for the health professional services activity.

Subd. 3. Board of Physical Therapy -0- 160,000

Subd. 4. Board of Veterinary Medicine 33,000 33,000

This appropriation is added to the appropriation in Laws 1997, chapter 203, article 1, section 5, subdivision 14, and is for national examination costs.

Sec. 5. EMERGENCY MEDICAL SERVICES BOARD

General -0- 78,000

(b) The appropriation for this project shall be distributed through the emergency medical services system fund under Minnesota Statutes, section 144E.50, through a request-for-proposal process. The board must select a regional EMS program that receives at least 20 percent of its funding from nonstate sources to conduct the assessment. The request for proposals must be issued by August 1, 1998.

(c) A final report with recommendations shall be presented to the board and the legislature by July 1, 1999.

(d) This appropriation shall not become part of base level funding for the 2000-2001 biennium.

Sec. 6. OMBUDSMAN FOR MENTAL HEALTH AND MENTAL RETARDATION

General -0- 200,000

Sec. 7. Laws 1997, chapter 203, article 1, section 2, subdivision 5, is amended to read:

Subd. 5. Basic Health Care Grants

General 834,098,000938,504,000

The amounts that may be spent from this appropriation for each purpose are as follows:

(a) MA Basic Health Care Grants-Families and Children

General 322,970,000367,726,000

[NOTICE ON CHANGES IN ASSET TEST.] The commissioner shall provide a notice by July 15, 1997, to all recipients affected by the changes in this act in asset standards for families with children notifying them:

(1) what asset limits will apply to them;

(2) when the new limits will apply;

(3) what options they have to spenddown assets; and

(4) what options they have to enroll in MinnesotaCare, including an explanation of the MinnesotaCare premium structure.

(b) MA Basic Health Care Grants-Elderly & Disabled

[PUBLIC HEALTH NURSE ASSESSMENT.] The reimbursement for public health nurse visits relating to the provision of personal care services under Minnesota Statutes, sections 256B.0625, subdivision 19a, and 256B.0627, is $204.36 for the initial assessment visit and $102.18 for each reassessment visit.

[SURCHARGE COMPLIANCE.] In the event that federal financial participation in the Minnesota medical assistance program is reduced as a result of a determination that Minnesota is out of compliance with Public Law Number 102-234 or its implementing regulations or with any other federal law designed to restrict provider tax programs or intergovernmental transfers, the commissioner shall appeal the determination to the fullest extent permitted by law and may ratably reduce all medical assistance and general assistance medical care payments to providers other than the state of Minnesota in order to eliminate any shortfall resulting from the reduced federal funding. Any amount later recovered through the appeals process shall be used to reimburse providers for any ratable reductions taken.

[BLOOD PRODUCTS LITIGATION.] To the extent permitted by federal law, Minnesota Statutes, sections 256.015, 256B.042, 256B.056, and 256B.15 are waived as necessary for the limited purpose of resolving the state's claims in connection with In re Factor VIII or IX Concentrate Blood Products Litigation, MDL-986, No. 93-C7452 (N.D.III.).

[DISTRIBUTION TO MEDICAL ASSISTANCE PROVIDERS.] (a) Of the amount appropriated to the medical assistance account in fiscal year 1998, $5,000,000 plus the federal financial participation amount shall be distributed to medical assistance providers according to the distribution methodology of the medical education research trust fund established under Minnesota Statutes, section 62J.69.

(b) In fiscal year 1999, the prepaid medical assistance and prepaid general assistance medical care capitation rate reduction amounts under Minnesota Statutes, section 256B.69, subdivision 5c, and the federal financial participation amount associated with the medical assistance reduction, shall be distributed to medical assistance providers according to the distribution methodology of the trust fund.

[AUGMENTATIVE AND ALTERNATIVE COMMUNICATION SYSTEMS.] Augmentative and alternative communication systems and related components that are prior authorized by the department through pass through vendors during the period from January 1, 1997, until the augmentative and alternative communication system purchasing program or other alternatives are operational shall be paid under the medical assistance program at the actual price charged the pass through vendor plus 20 percent to cover administrative costs of prior authorization and billing and shipping charges.

(c) General Assistance Medical Care

[HEALTH CARE ACCESS TRANSFERS TO GENERAL FUND.] Funds shall be transferred from the health care access fund to the general fund in an amount equal to the projected savings to general assistance medical care (GAMC) that would result from the transition of GAMC parents and adults without children to MinnesotaCare. Based on this projection, for state fiscal year 1998, the amount transferred from the health care access fund to the general fund shall be $13,700,000. The amount of transfer, if any, necessary for state fiscal year 1999 shall be determined on a pro rata basis $2,659,000.

[TUBERCULOSIS COST OF CARE.] Of the general fund appropriation, $89,000 for the biennium is for the cost of care that is required to be paid by the commissioner under Minnesota Statutes, section 144.4872, to diagnose or treat tuberculosis carriers.

Sec. 8. Laws 1997, chapter 203, article 1, section 2, subdivision 12, is amended to read:

Subd. 12. Federal TANF Funds

[FEDERAL TANF FUNDS.] (a) Federal Temporary Assistance for Needy Families block grant funds authorized under title I of Public Law Number 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, are appropriated to the commissioner in amounts up to $276,741,000 $240,936,000 in fiscal year 1998 and $265,795,000 $272,083,000 in fiscal year 1999. Additional TANF funds may be expended, but only to the extent that an equal amount of state funds have been transferred to the TANF reserve under Minnesota Statutes 1997 Supplement, section 256J.03.

(b) The commissioner may use TANF reserve funds to offset any future reductions in the amount of the state's allocation of federal TANF block grant funds.

Sec. 9. [CARRYOVER LIMITATION.]

The appropriations in this article which are allowed to be carried forward from fiscal year 1998 to fiscal year 1999 shall not become part of the base level funding for the 2000-2001 biennial budget, unless specifically directed by the legislature.

Sec. 10. [SUNSET OF UNCODIFIED LANGUAGE.]

All uncodified language contained in this article expires on June 30, 1999, unless a different expiration date is specified.

Sec. 11. [EFFECTIVE DATE.]

The amendments to Laws 1997, chapter 203, article 1, section 2, subdivision 12, in section 8 are effective the day following final enactment.

Section 1. Minnesota Statutes 1997 Supplement, section 62D.11, subdivision 1, is amended to read:

services" includes, but is not limited to, questions of the scope of coverage, quality of care, and administrative operations. The health maintenance organization must inform enrollees that they may choose to use alternative dispute resolution arbitration to appeal a health maintenance organization's internal appeal decision. The health maintenance organization must also inform enrollees that they have the right to use arbitration to appeal a health maintenance organization's internal appeal decision not to certify an admission, procedure, service, or extension of stay under section 62M.06. If an enrollee chooses to use an alternative dispute resolution process arbitration, the health maintenance organization must participate.

Sec. 2. Minnesota Statutes 1997 Supplement, section 62J.70, subdivision 3, is amended to read:

Subd. 3. [HEALTH PLAN COMPANY.] "Health plan company" means a health plan company as defined in section 62Q.01, subdivision 4, the medical assistance program, the MinnesotaCare program, the general assistance medical care program, the state employee group insurance program, the public employees insurance program under section 43A.316, and coverage provided by political subdivisions under section 471.617.

Sec. 3. Minnesota Statutes 1997 Supplement, section 62J.71, subdivision 1, is amended to read:

Subdivision 1. [PROHIBITED AGREEMENTS AND DIRECTIVES.] The following types of agreements and directives are contrary to state public policy, are prohibited under this section, and are null and void:

(1) any agreement or directive that prohibits a health care provider from communicating with an enrollee with respect to the enrollee's health status, health care, or treatment options, if the health care provider is acting in good faith and within the provider's scope of practice as defined by law;

(2) any agreement or directive that prohibits a health care provider from making a recommendation regarding the suitability or desirability of a health plan company, health insurer, or health coverage plan for an enrollee, unless the provider has a financial conflict of interest in the enrollee's choice of health plan company, health insurer, or health coverage plan;

(3) any agreement or directive that prohibits a provider from providing testimony, supporting or opposing legislation, or making any other contact with state or federal legislators or legislative staff or with state and federal executive branch officers or staff;

(4) any agreement or directive that prohibits a health care provider from disclosing accurate information about whether services or treatment will be paid for by a patient's health plan company or health insurer or health coverage plan; and

(5) any agreement or directive that prohibits a health care provider from informing an enrollee about the nature of the reimbursement methodology used by an enrollee's health plan company, health insurer, or health coverage plan to pay the provider.

Sec. 4. Minnesota Statutes 1997 Supplement, section 62J.71, subdivision 3, is amended to read:

Subd. 3. [RETALIATION PROHIBITED.] No person, health plan company, or other organization may take retaliatory action against a health care provider solely on the grounds that the provider:

(1) refused to enter into an agreement or provide services or information in a manner that is prohibited under this section or took any of the actions listed in subdivision 1;

(2) disclosed accurate information about whether a health care service or treatment is covered by an enrollee's health plan company, health insurer, or health coverage plan; or

(3) discussed diagnostic, treatment, or referral options that are not covered or are limited by the enrollee's health plan company, health insurer, or health coverage plan;

(5) expressed personal disagreement with a decision made by a person, organization, or health care provider regarding treatment or coverage provided to a patient of the provider, or assisted or advocated for the patient in seeking reconsideration of such a decision, provided the health care provider makes it clear that the provider is acting in a personal capacity and not as a representative of or on behalf of the entity that made the decision.

Sec. 5. Minnesota Statutes 1997 Supplement, section 62J.71, subdivision 4, is amended to read:

Subd. 4. [EXCLUSION.] (a) Nothing in this section prohibits a health plan an entity that is subject to this section from taking action against a provider if the health plan entity has evidence that the provider's actions are illegal, constitute medical malpractice, or are contrary to accepted medical practices.

(b) Nothing in this section prohibits a contract provision or directive that requires any contracting party to keep confidential or to not use or disclose the specific amounts paid to a provider, provider fee schedules, provider salaries, and other similar provider-specific proprietary information of a specific health plan or health plan company entity that is subject to this section.

Sec. 6. Minnesota Statutes 1997 Supplement, section 62J.72, subdivision 1, is amended to read:

Subdivision 1. [WRITTEN DISCLOSURE.] (a) A health plan company, as defined under section 62J.70, subdivision 3, a health care network cooperative as defined under section 62R.04, subdivision 3, and a health care provider as defined under section 62J.70, subdivision 2, shall, during open enrollment, upon enrollment, and annually thereafter, provide enrollees with a description of the general nature of the reimbursement methodologies used by the health plan company, health insurer, or health coverage plan to pay providers. The description must explain clearly any aspect of the reimbursement methodology that in any way may tend to make it advantageous for the health care provider to minimize or restrict the health care provided to enrollees. This description may be incorporated into the member handbook, subscriber contract, certificate of coverage, or other written enrollee communication. The general reimbursement methodology shall be made available to employers at the time of open enrollment.

(b) Health plan companies, health care network cooperatives, and providers must, upon request, provide an enrollee with specific information regarding the reimbursement methodology, including, but not limited to, the following information:

(1) a concise written description of the provider payment plan, including any incentive plan applicable to the enrollee;

(2) a written description of any incentive to the provider relating to the provision of health care services to enrollees, including any compensation arrangement that is dependent on the amount of health coverage or health care services provided to the enrollee, or the number of referrals to or utilization of specialists; and

(3) a written description of any incentive plan that involves the transfer of financial risk to the health care provider.

(c) The disclosure statement describing the general nature of the reimbursement methodologies must comply with the Readability of Insurance Policies Act in chapter 72C. Notwithstanding any other law to the contrary, the disclosure statement may voluntarily be filed with the commissioner for approval and must be filed with and approved by the commissioner prior to its use.

(d) A disclosure statement that has voluntarily been filed with the commissioner for approval under chapter 72C or voluntarily filed with the commissioner for approval for purposes other than pursuant to chapter 72C paragraph (c) is deemed approved 30 days after the date of filing, unless approved or disapproved by the commissioner on or before the end of that 30-day period.

(f) Health plan companies and providers may enter into agreements to determine how to respond to enrollee requests received by either the provider or the health plan company. Health plan companies may also enter into agreements to determine how to respond to enrollee requests. This subdivision does not require disclosure of specific amounts paid to a provider, provider fee schedules, provider salaries, or other proprietary information of a specific health plan company or health insurer or health coverage plan or provider.

Sec. 7. [62J.77] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] For purposes of sections 62J.77 to 62J.80, the terms defined in this section have the meanings given them.

Subd. 2. [ENROLLEE.] "Enrollee" means a natural person covered by a health plan company, health insurance, or health coverage plan and includes an insured, policyholder, subscriber, contract holder, member, covered person, or certificate holder.

Subd. 3. [PATIENT.] "Patient" means a former, current, or prospective patient of a health care provider.

Sec. 8. [62J.78] [ESTABLISHMENT; ORGANIZATION.]

Subdivision 1. [GENERAL.] The office of health care consumer assistance, advocacy, and information is established to provide assistance, advocacy, and information to all health care consumers within the state. The office shall have no regulatory power or authority and shall not provide legal representation in a court of law.

Subd. 2. [EXECUTIVE DIRECTOR.] An executive director shall be appointed by the governor, in consultation with the consumer advisory board, for a three-year term and may be removed only for just cause. The executive director must be selected without regard to political affiliation and must be a person who has knowledge and experience concerning the needs and rights of health care consumers and must be qualified to analyze questions of law, administrative functions, and public policy. No person may serve as executive director while holding another public office. The director shall serve in the unclassified service.

Subd. 3. [STAFF.] The executive director shall appoint at least nine consumer advocates to discharge the responsibilities and duties of the office. The executive director and full-time staff shall be included in the Minnesota state retirement association.

Subd. 4. [DELEGATION.] The executive director may delegate to staff any of the authority or duties of the director, except the duty of formally making recommendations to the legislature.

Subd. 5. [TRAINING.] The executive director shall ensure that the consumer advocates are adequately trained.

Subd. 6. [STATEWIDE ADVOCACY.] The executive director shall assign a consumer advocate to represent each regional coordinating board's geographic area.

Subd. 7. [FINANCIAL INTEREST.] The executive director and staff must not have any direct personal financial interest in the health care system, except as an individual consumer of health care services.

Subd. 8. [ADMINISTRATION.] The office of the ombudsman for mental health and mental retardation shall coordinate and share administrative services with the office of health care consumer assistance, advocacy, and information. To the extent practical, all ombudsman offices with health care responsibilities shall have their telephone systems linked in order to facilitate immediate referrals.

Sec. 9. [62J.79] [DUTIES AND POWERS OF THE OFFICE OF HEALTH CARE CONSUMER ASSISTANCE, ADVOCACY, AND INFORMATION.]

Subdivision 1. [DUTIES.] (a) The executive director shall provide information and assistance to all health care consumers by:

(2) assisting enrollees in obtaining health care referrals under their health plan company, health insurance, or health coverage plan;

(3) assisting patients and enrollees in accessing the services of governmental agencies, regulatory boards, and other state consumer assistance programs, ombudsman, or advocacy services whenever appropriate so that the patient or enrollee can take full advantage of existing mechanisms for resolving complaints;

(4) referring patients and enrollees to governmental agencies and regulatory boards for the investigation of health care complaints and for enforcement action;

(5) educating and training enrollees about their health plan company, health insurance, or health coverage plan in order to enable them to assert their rights and to understand their responsibilities;

(6) assisting enrollees in receiving a timely resolution of their complaints;

(7) monitoring health care complaints addressed by the office to identify specific complaint patterns or areas of potential improvement;

(8) recommending to health plan companies ways to identify and remove any barriers that might delay or impede the health plan company's effort to resolve consumer complaints; and

(9) in performing the duties specified in clauses (1) to (8), taking into consideration the special situations of patients and enrollees who have unique culturally defined needs.

(b) The executive director shall prioritize the duties listed in this subdivision within the appropriations allocated.

Subd. 2. [COMMUNICATION.] The executive director shall meet at least six times per year with the consumer advisory board. The executive director shall share all public information obtained by the office of health care consumer assistance, advocacy, and information with the consumer advisory board in order to assist the consumer advisory board in its role of advising the commissioners of health and commerce and the legislature in accordance with section 62J.75.

Subd. 3. [REPORTS.] Beginning January 15, 1999, the executive director, on at least a quarterly basis, shall provide data from the health care complaints addressed by the office to the commissioners of health and commerce, the consumer advisory board, the Minnesota council of health plans, the Insurance Federation of Minnesota, and the information clearinghouse. Beginning January 15, 1999, the executive director must make an annual written report to the legislature regarding activities of the office, including recommendations on improving health care consumer assistance and complaint resolution processes.

Sec. 10. [62J.80] [RETALIATION.]

A health plan company or health care provider shall not retaliate or take adverse action against an enrollee or patient who, in good faith, makes a complaint against a health plan company or health care provider. If retaliation is suspected, the executive director may report it to the appropriate regulatory authority.

Sec. 11. Minnesota Statutes 1997 Supplement, section 62Q.105, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] Each health plan company shall establish and make available to enrollees, by July 1, 1998 1999, an informal complaint resolution process that meets the requirements of this section. A health plan company must make reasonable efforts to resolve enrollee complaints, and must inform complainants in writing of the company's decision within 30 days of receiving the complaint. The complaint resolution process must treat the complaint and information related to it as required under sections 72A.49 to 72A.505.

Sec. 12. [62Q.107] [PROHIBITED PROVISION; EFFECT OF DENIAL OF CLAIM.]

Sec. 13. Minnesota Statutes 1997 Supplement, section 62Q.30, is amended to read:

62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION PROCESS.]

The commissioner shall establish an expedited fact finding and dispute resolution process to assist enrollees of health plan companies with contested treatment, coverage, and service issues to be in effect July 1, 1998 1999. If the disputed issue relates to whether a service is appropriate and necessary, the commissioner shall issue an order only after consulting with appropriate experts knowledgeable, trained, and practicing in the area in dispute, reviewing pertinent literature, and considering the availability of satisfactory alternatives. The commissioner shall take steps including but not limited to fining, suspending, or revoking the license of a health plan company that is the subject of repeated orders by the commissioner that suggests a pattern of inappropriate underutilization.

Sec. 14. Minnesota Statutes 1997 Supplement, section 103I.208, subdivision 2, is amended to read:

Subd. 2. [PERMIT FEE.] The permit fee to be paid by a property owner is:

(1) for a well that is not in use under a maintenance permit, $100 annually;

(2) for construction of a monitoring well, $120, which includes the state core function fee;

(3) for a monitoring well that is unsealed under a maintenance permit, $100 annually;

(4) for monitoring wells used as a leak detection device at a single motor fuel retail outlet or, a single petroleum bulk storage site excluding tank farms, or a single agricultural chemical facility site, the construction permit fee is $120, which includes the state core function fee, per site regardless of the number of wells constructed on the site, and the annual fee for a maintenance permit for unsealed monitoring wells is $100 per site regardless of the number of monitoring wells located on site;

(5) for a groundwater thermal exchange device, in addition to the notification fee for wells, $120, which includes the state core function fee;

(6) for a vertical heat exchanger, $120;

(7) for a dewatering well that is unsealed under a maintenance permit, $100 annually for each well, except a dewatering project comprising more than five wells shall be issued a single permit for $500 annually for wells recorded on the permit; and

(8) for excavating holes for the purpose of installing elevator shafts, $120 for each hole.

Sec. 15. Minnesota Statutes 1997 Supplement, section 144.1494, subdivision 1, is amended to read:

Subdivision 1. [CREATION OF ACCOUNT.] A rural physician education account is established in the health care access fund. The commissioner shall use money from the account to establish a loan forgiveness program for medical residents agreeing to practice in designated rural areas, as defined by the commissioner. Appropriations made to this account do not cancel and are available until expended, except that at the end of each biennium the commissioner shall cancel to the health care access fund any remaining unobligated balance in this account.

Sec. 16. Minnesota Statutes 1996, section 144.701, subdivision 1, is amended to read:

Sec. 17. Minnesota Statutes 1996, section 144.701, subdivision 2, is amended to read:

Subd. 2. [DATA FOR POLICY MAKING.] The commissioner of health shall compile relevant financial and accounting, utilization, and services data concerning hospitals and outpatient surgical centers in order to have statistical information available for legislative policy making.

Sec. 18. Minnesota Statutes 1996, section 144.701, subdivision 4, is amended to read:

Subd. 4. [FILING FEES.] Each report which is required to be submitted to the commissioner of health under sections 144.695 to 144.703 and which is not submitted to a voluntary, nonprofit reporting organization in accordance with section 144.702 shall be accompanied by a filing fee in an amount prescribed by rule of the commissioner of health. Fees received pursuant to this subdivision shall be deposited in the general fund of the state treasury. Upon the withdrawal of approval of a reporting organization, or the decision of the commissioner to not renew a reporting organization, fees collected under section 144.702 shall be submitted to the commissioner and deposited in the general fund. Fees received under this subdivision shall be deposited in a revolving fund and are appropriated to the commissioner of health for the purposes of sections 144.695 to 144.703. The commissioner shall report the termination or nonrenewal of the voluntary reporting organization to the chair of the health and human services subdivision of the appropriations committee of the house of representatives, to the chair of the health and human services division of the finance committee of the senate, and the commissioner of finance.

Sec. 19. Minnesota Statutes 1996, section 144.702, subdivision 1, is amended to read:

Subdivision 1. [REPORTING THROUGH A REPORTING ORGANIZATION.] A hospital or outpatient surgical center may agree to submit its financial, utilization, and services reports to a voluntary, nonprofit reporting organization whose reporting procedures have been approved by the commissioner of health in accordance with this section. Each report submitted to the voluntary, nonprofit reporting organization under this section shall be accompanied by a filing fee.

Sec. 20. Minnesota Statutes 1996, section 144.702, subdivision 2, is amended to read:

Subd. 2. [APPROVAL OF ORGANIZATION'S REPORTING PROCEDURES.] The commissioner of health may approve voluntary reporting procedures consistent with written operating requirements for the voluntary, nonprofit reporting organization which shall be established annually by the commissioner. These written operating requirements shall specify reports, analyses, and other deliverables to be produced by the voluntary, nonprofit reporting organization, and the dates on which those deliverables must be submitted to the commissioner. These written operating requirements shall specify deliverable dates sufficient to enable the commissioner of health to process and report health care cost information system data to the commissioner of human services by August 15 of each year. The commissioner of health shall, by rule, prescribe standards for submission of data by hospitals and outpatient surgical centers to the voluntary, nonprofit reporting organization or to the commissioner. These standards shall provide for:

(a) The filing of appropriate financial, utilization, and services information with the reporting organization;

(b) Adequate analysis and verification of that financial, utilization, and services information; and

(c) Timely publication of the costs, revenues, and rates of individual hospitals and outpatient surgical centers prior to the effective date of any proposed rate increase. The commissioner of health shall annually review the procedures approved pursuant to this subdivision.

Sec. 21. Minnesota Statutes 1996, section 144.702, subdivision 8, is amended to read:

The commissioner may choose not to renew approval of a voluntary, nonprofit reporting organization if the organization has failed to perform its obligations satisfactorily under the written operating requirements under subdivision 2.

Sec. 22. [144.7022] [ADMINISTRATIVE PENALTY ORDERS FOR REPORTING ORGANIZATIONS.]

Subdivision 1. [AUTHORIZATION.] The commissioner may issue an order to the voluntary, nonprofit reporting organization requiring violations to be corrected and administratively assessing monetary penalties for violations of sections 144.695 to 144.703 or rules, written operating requirements, orders, stipulation agreements, settlements, or compliance agreements adopted, enforced, or issued by the commissioner.

Subd. 2. [CONTENTS OF ORDER.] An order assessing an administrative penalty under this section must include:

(1) a concise statement of the facts alleged to constitute a violation;

(2) a reference to the section of law, rule, written operating requirement, order, stipulation agreement, settlement, or compliance agreement that has been violated;

(3) a statement of the amount of the administrative penalty to be imposed and the factors upon which the penalty is based;

(4) a statement of the corrective actions necessary to correct the violation; and

(5) a statement of the right to request a hearing pursuant to sections 14.57 to 14.62.

Subd. 3. [CONCURRENT CORRECTIVE ORDER.] The commissioner may issue an order assessing an administrative penalty and requiring the violations cited in the order to be corrected within 30 calendar days from the date the order is received. Before the 31st day after the order was received, the voluntary, nonprofit reporting organization that is subject to the order shall provide the commissioner with information demonstrating that the violation has been corrected or that a corrective plan, acceptable to the commissioner, has been developed. The commissioner shall determine whether the violation has been corrected and notify the voluntary, nonprofit reporting organization of the commissioner's determination.

Subd. 4. [PENALTY.] If the commissioner determines that the violation has been corrected or an acceptable corrective plan has been developed, the penalty may be forgiven, except where there are repeated or serious violations, the commissioner may issue an order with a penalty that will not be forgiven after corrective action is taken. Unless there is a request for review of the order under subdivision 6 before the penalty is due, the penalty is due and payable:

(1) on the 31st calendar day after the order was received, if the voluntary, nonprofit reporting organization fails to provide information to the commissioner showing that the violation has been corrected or that appropriate steps have been taken toward correcting the violation;

(2) on the 20th day after the voluntary, nonprofit reporting organization receives the commissioner's determination that the information provided is not sufficient to show that either the violation has been corrected or that appropriate steps have been taken toward correcting the violation; or

(3) on the 31st day after the order was received where the penalty is for repeated or serious violations and according to the order issued, the penalty will not be forgiven after corrective action is taken.

All penalties due under this section are payable to the treasurer, state of Minnesota, and shall be deposited in the general fund.

Subd. 5. [AMOUNT OF PENALTY; CONSIDERATIONS.] (a) The maximum amount for an administrative penalty is $5,000 for each specific violation identified in an inspection, investigation, or compliance review, up to an annual maximum total for all violations of ten percent of the fees collected by the voluntary, nonprofit reporting organization under section 144.702, subdivision 1. The annual total is based upon the reporting year.

(b) In determining the amount of the administrative penalty, the commissioner shall consider the following:

(2) the gravity of the violation;

(3) the history of past violations;

(4) the number of violations;

(5) the economic benefit gained by the person allowing or committing the violation; and

(6) other factors as justice may require, if the commissioner specifically identifies the additional factors in the commissioner's order.

(c) In determining the amount of a penalty for a violation committed after an initial violation, the commissioner shall also consider:

(1) the similarity of the most recent previous violation and the current violation;

(2) the time elapsed since the last violation; and

(3) the response of the voluntary, nonprofit reporting organization to the most recent previous violation.

Subd. 6. [REQUEST FOR HEARING; HEARING; AND FINAL ORDER.] A request for hearing must be in writing, delivered to the commissioner by certified mail within 20 calendar days after the receipt of the order, and specifically state the reasons for seeking review of the order. The commissioner must initiate a hearing within 30 calendar days from the date of receipt of the written request for hearing. The hearing shall be conducted pursuant to the contested case procedures in sections 14.57 to 14.62. No earlier than ten calendar days after and within 30 calendar days of receipt of the presiding administrative law judge's report, the commissioner shall, based on all relevant facts, issue a final order modifying, vacating, or making the original order permanent. If, within 20 calendar days of receipt of the original order, the voluntary, nonprofit reporting organization fails to request a hearing in writing, the order becomes the final order of the commissioner.

Subd. 7. [REVIEW OF FINAL ORDER AND PAYMENT OF PENALTY.] Once the commissioner issues a final order, any penalty due under that order shall be paid within 30 calendar days after the date of the final order, unless review of the final order is requested. The final order of the commissioner may be appealed in the manner prescribed in sections 14.63 to 14.69. If the final order is reviewed and upheld, the penalty shall be paid 30 calendar days after the date of the decision of the reviewing court. Failure to request an administrative hearing pursuant to subdivision 6 shall constitute a waiver of the right to further agency or judicial review of the final order.

Subd. 8. [REINSPECTIONS AND EFFECT OF NONCOMPLIANCE.] If upon reinspection, or in the determination of the commissioner, it is found that any deficiency specified in the order has not been corrected or an acceptable corrective plan has not been developed, the voluntary, nonprofit reporting organization is in noncompliance. The commissioner shall issue a notice of noncompliance and may impose any additional remedy available under sections 144.695 to 144.703.

Subd. 9. [ENFORCEMENT.] The attorney general may proceed on behalf of the commissioner to enforce penalties that are due and payable under this section in any manner provided by law for the collection of debts.

Subd. 10. [TERMINATION OR NONRENEWAL OF REPORTING ORGANIZATION.] The commissioner may withdraw or not renew approval of any voluntary, nonprofit reporting organization for failure on the part of the voluntary, nonprofit reporting organization to pay penalties owed under this section.

Subd. 11. [CUMULATIVE REMEDY.] The authority of the commissioner to issue an administrative penalty order is in addition to other lawfully available remedies.

Sec. 23. Minnesota Statutes 1996, section 144.9501, subdivision 1, is amended to read:

Subdivision 1. [CITATION.] Sections 144.9501 to 144.9509 may be cited as the "childhood Lead Poisoning Prevention Act."

Sec. 24. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 4a. [ASSESSING AGENCY.] "Assessing agency" means the commissioner or a board of health with authority and responsibility to conduct lead risk assessments in response to reports of children or pregnant women with elevated blood lead levels.

Sec. 25. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 6b. [CLEARANCE INSPECTION.] "Clearance inspection" means a visual identification of deteriorated paint and bare soil and a resampling and analysis of interior dust lead concentrations in a residence to ensure that the lead standards established in rules adopted under section 144.9508 are not exceeded.

Sec. 26. Minnesota Statutes 1996, section 144.9501, subdivision 17, is amended to read:

Subd. 17. [LEAD HAZARD REDUCTION.] "Lead hazard reduction" means action undertaken in response to a lead order to make a residence, child care facility, school, or playground lead-safe by complying with the lead standards and methods adopted under section 144.9508, by:

(1) a property owner or lead contractor complying persons hired by the property owner to comply with a lead order issued under section 144.9504; or

(2) a swab team service provided in response to a lead order issued under section 144.9504; or

(3) a renter residing at a rental property or one or more volunteers to comply with a lead order issued under section 144.9504.

Sec. 27. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 17a. [LEAD HAZARD SCREEN.] "Lead hazard screen" means visual identification of the existence and location of any deteriorated paint, collection and analysis of dust samples, and visual identification of the existence and location of bare soil.

Sec. 28. Minnesota Statutes 1996, section 144.9501, subdivision 18, is amended to read:

Subd. 18. [LEAD INSPECTION.] "Lead inspection" means a qualitative or quantitative analytical inspection of a residence for deteriorated paint or bare soil and the collection of samples of deteriorated paint, bare soil, dust, or drinking water for analysis to determine if the lead concentrations in the samples exceed standards adopted under section 144.9508. Lead inspection includes the clearance inspection after the completion of a lead order measurement of the lead content of paint and a visual identification of the existence and location of bare soil.

Sec. 29. Minnesota Statutes 1996, section 144.9501, subdivision 20, is amended to read:

Subd. 20. [LEAD ORDER.] "Lead order" means a legal instrument to compel a property owner to engage in lead hazard reduction according to the specifications given by the inspecting assessing agency.

Sec. 30. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Sec. 31. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 20b. [LEAD RISK ASSESSMENT.] "Lead risk assessment" means a quantitative measurement of the lead content of paint, interior dust, and bare soil to determine compliance with the standards established under section 144.9508.

Sec. 32. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 20c. [LEAD RISK ASSESSOR.] "Lead risk assessor" means an individual who performs lead risk assessments or lead inspections and who has been licensed by the commissioner under section 144.9506.

Sec. 33. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 22a. [LEAD SUPERVISOR.] "Lead supervisor" means an individual who is responsible for the on-site performance of lead abatement or lead hazard reduction and who has been licensed by the commissioner under section 144.9505.

Sec. 34. Minnesota Statutes 1996, section 144.9501, subdivision 23, is amended to read:

Subd. 23. [LEAD WORKER.] "Lead worker" means any person who is certified an individual who performs lead abatement or lead hazard reduction and who has been licensed by the commissioner under section 144.9505.

Sec. 35. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 25a. [PLAY AREA.] "Play area" means any established area where children play, or on residential property, any established area where children play or bare soil is accessible to children.

Sec. 36. Minnesota Statutes 1996, section 144.9501, is amended by adding a subdivision to read:

Subd. 28a. [STANDARD.] "Standard" means a quantitative assessment of lead in any environmental media or consumer product or a work practice or method that reduces the likelihood of lead exposure.

Sec. 37. Minnesota Statutes 1996, section 144.9501, subdivision 30, is amended to read:

Subd. 30. [SWAB TEAM WORKER.] "Swab team worker" means a person who is certified an individual who performs swab team services and who has been licensed by the commissioner as a lead worker under section 144.9505.

Sec. 38. Minnesota Statutes 1996, section 144.9501, subdivision 32, is amended to read:

Subd. 32. [VOLUNTARY LEAD HAZARD REDUCTION.] "Voluntary lead hazard reduction" means action undertaken by a property owner with the intention to engage in lead hazard reduction or abatement lead hazard reduction activities defined in subdivision 17, but not undertaken in response to the issuance of a lead order.

Sec. 39. Minnesota Statutes 1996, section 144.9502, subdivision 3, is amended to read:

Subd. 3. [REPORTS OF BLOOD LEAD ANALYSIS REQUIRED.] (a) Every hospital, medical clinic, medical laboratory, or other facility, or individual performing blood lead analysis shall report the results after the analysis of each specimen analyzed, for both capillary and venous specimens, and epidemiologic information required in this section to the commissioner of health, within the time frames set forth in clauses (1) and (2):

(1) within two working days by telephone, fax, or electronic transmission, with written or electronic confirmation within one month, for a venous blood lead level equal to or greater than 15 micrograms of lead per deciliter of whole blood; or

(b) If a blood lead analysis is performed outside of Minnesota and the facility performing the analysis does not report the blood lead analysis results and epidemiological information required in this section to the commissioner, the provider who collected the blood specimen must satisfy the reporting requirements of this section. For purposes of this section, "provider" has the meaning given in section 62D.02, subdivision 9.

(c) The commissioner shall coordinate with hospitals, medical clinics, medical laboratories, and other facilities performing blood lead analysis to develop a universal reporting form and mechanism.

The reporting requirements of this subdivision shall expire on December 31, 1997. Beginning January 1, 1998, every hospital, medical clinic, medical laboratory, or other facility performing blood lead analysis shall report the results within two working days by telephone, fax, or electronic transmission, with written or electronic confirmation within one month, for capillary or venous blood lead level equal to the level for which reporting is recommended by the Center for Disease Control.

Sec. 40. Minnesota Statutes 1996, section 144.9502, subdivision 4, is amended to read:

Subd. 4. [BLOOD LEAD ANALYSES AND EPIDEMIOLOGIC INFORMATION.] The blood lead analysis reports required in this section must specify:

(1) whether the specimen was collected as a capillary or venous sample;

(2) the date the sample was collected;

(3) the results of the blood lead analysis;

(4) the date the sample was analyzed;

(5) the method of analysis used;

(6) the full name, address, and phone number of the laboratory performing the analysis;

(7) the full name, address, and phone number of the physician or facility requesting the analysis;

(8) the full name, address, and phone number of the person with the elevated blood lead level, and the person's birthdate, gender, and race.

Sec. 41. Minnesota Statutes 1996, section 144.9502, subdivision 9, is amended to read:

Subd. 9. [CLASSIFICATION OF DATA.] Notwithstanding any law to the contrary, including section 13.05, subdivision 9, data collected by the commissioner of health about persons with elevated blood lead levels, including analytic results from samples of paint, soil, dust, and drinking water taken from the individual's home and immediate property, shall be private and may only be used by the commissioner of health, the commissioner of labor and industry, authorized agents of Indian tribes, and authorized employees of local boards of health for the purposes set forth in this section.

Sec. 42. Minnesota Statutes 1996, section 144.9503, subdivision 4, is amended to read:

Subd. 4. [SWAB TEAM SERVICES.] Primary prevention must include the use of swab team services in census tracts identified at high risk for toxic lead exposure as identified by the commissioner under this section. The swab team services may be provided based on visual inspections lead hazard screens whenever possible and must at least include lead hazard management reduction for deteriorated interior lead-based paint, bare soil, and dust.

Sec. 43. Minnesota Statutes 1996, section 144.9503, subdivision 6, is amended to read:

licensed lead contractors by the commissioner under section 144.9505 or 144.9506. Renters and volunteers performing lead abatement or lead hazard reduction must be trained and licensed as lead supervisors or lead workers. If a property owner does not use a lead contractor hire a person for voluntary lead abatement or lead hazard reduction, the property owner shall provide the commissioner with a work plan for lead abatement or lead hazard reduction at least ten working days before beginning the lead abatement or lead hazard reduction. The work plan must include the details required in section 144.9505, and notice as to when lead abatement or lead hazard reduction activities will begin. Within the limits of appropriations, the commissioner shall review work plans and shall approve or disapprove them as to compliance with the requirements in section 144.9505. No penalty shall be assessed against a property owner for discontinuing voluntary lead hazard reduction before completion of the work plan, provided that the property owner discontinues the plan lead hazard reduction in a manner that leaves the property in a condition no more hazardous than its condition before the work plan implementation.

Sec. 44. Minnesota Statutes 1996, section 144.9503, subdivision 7, is amended to read:

Subd. 7. [LEAD-SAFE INFORMATIONAL DIRECTIVES.] (a) By July 1, 1995, and amended and updated as necessary, the commissioner shall develop in cooperation with the commissioner of administration provisions and procedures to define lead-safe informational directives for residential remodeling, renovation, installation, and rehabilitation activities that are not lead hazard reduction, but may disrupt lead-based paint surfaces.

(b) The provisions and procedures shall define lead-safe directives for nonlead hazard reduction activities including preparation, cleanup, and disposal procedures. The directives shall be based on the different levels and types of work involved and the potential for lead hazards. The directives shall address activities including painting; remodeling; weatherization; installation of cable, wire, plumbing, and gas; and replacement of doors and windows. The commissioners of health and administration shall consult with representatives of builders, weatherization providers, nonprofit rehabilitation organizations, each of the affected trades, and housing and redevelopment authorities in developing the directives and procedures. This group shall also make recommendations for consumer and contractor education and training. The commissioner of health shall report to the legislature by February 15, 1996, regarding development of the provisions required under this subdivision paragraph.

(c) By January 1, 1999, the commissioner, in cooperation with interested and informed persons and using the meeting structure and format developed in paragraph (b), shall develop lead-safe informational directives on the following topics:

(1) maintaining floors, walls, and ceilings;

(2) maintaining and repairing porches;

(3) conducting a risk evaluation for lead; and

(4) prohibited practices when working with lead.

The commissioner shall report to the legislature by January 1, 1999, regarding development of the provisions required under this paragraph.

Sec. 45. Minnesota Statutes 1996, section 144.9504, subdivision 1, is amended to read:

Subdivision 1. [JURISDICTION.] (a) A board of health serving cities of the first class must conduct lead inspections risk assessments for purposes of secondary prevention, according to the provisions of this section. A board of health not serving cities of the first class must conduct lead inspections risk assessments for the purposes of secondary prevention, unless they certify certified in writing to the commissioner by January 1, 1996, that they desire desired to relinquish these duties back to the commissioner. At the discretion of the commissioner, a board of health may relinquish the authority and duty to perform lead risk assessments for secondary prevention by so certifying in writing to the commissioner by December 31, 1999. At the discretion of the commissioner, a board of health may, upon written request to the commissioner, resume these duties.

(c) The commissioner may assist boards of health by providing technical expertise, equipment, and personnel to boards of health. The commissioner may provide laboratory or field lead-testing equipment to a board of health or may reimburse a board of health for direct costs associated with lead inspections risk assessments.

(d) The commissioner shall enforce the rules under section 144.9508 in cases of voluntary lead hazard reduction.

Sec. 46. Minnesota Statutes 1997 Supplement, section 144.9504, subdivision 2, is amended to read:

Subd. 2. [LEAD INSPECTION RISK ASSESSMENT.] (a) An inspecting assessing agency shall conduct a lead inspection risk assessment of a residence according to the venous blood lead level and time frame set forth in clauses (1) to (5) for purposes of secondary prevention:

(1) within 48 hours of a child or pregnant female in the residence being identified to the agency as having a venous blood lead level equal to or greater than 70 micrograms of lead per deciliter of whole blood;

(2) within five working days of a child or pregnant female in the residence being identified to the agency as having a venous blood lead level equal to or greater than 45 micrograms of lead per deciliter of whole blood;

(3) within ten working days of a child in the residence being identified to the agency as having a venous blood lead level equal to or greater than 20 micrograms of lead per deciliter of whole blood;

(4) within ten working days of a child in the residence being identified to the agency as having a venous blood lead level that persists in the range of 15 to 19 micrograms of lead per deciliter of whole blood for 90 days after initial identification; or

(5) within ten working days of a pregnant female in the residence being identified to the agency as having a venous blood lead level equal to or greater than ten micrograms of lead per deciliter of whole blood.

(b) Within the limits of available state and federal appropriations, an inspecting assessing agency may also conduct a lead inspection risk assessment for children with any elevated blood lead level.

(c) In a building with two or more dwelling units, an inspecting assessing agency shall inspect the individual unit in which the conditions of this section are met and shall also inspect all common areas. If a child visits one or more other sites such as another residence, or a residential or commercial child care facility, playground, or school, the inspecting assessing agency shall also inspect the other sites. The inspecting assessing agency shall have one additional day added to the time frame set forth in this subdivision to complete the lead inspection risk assessment for each additional site.

(d) Within the limits of appropriations, the inspecting assessing agency shall identify the known addresses for the previous 12 months of the child or pregnant female with venous blood lead levels of at least 20 micrograms per deciliter for the child or at least ten micrograms per deciliter for the pregnant female; notify the property owners, landlords, and tenants at those addresses that an elevated blood lead level was found in a person who resided at the property; and give them a copy of the lead inspection risk assessment guide. The inspecting assessing agency shall provide the notice required by this subdivision without identifying the child or pregnant female with the elevated blood lead level. The inspecting assessing agency is not required to obtain the consent of the child's parent or guardian or the consent of the pregnant female for purposes of this subdivision. This information shall be classified as private data on individuals as defined under section 13.02, subdivision 12.

to determine the lead content, except that deteriorated painted surfaces or bare soil need not be tested if the property owner agrees to engage in lead hazard reduction on those surfaces. The lead content of drinking water must be measured if a probable source of lead exposure is not identified by measurement of lead in paint, bare soil, or dust. Within a standard metropolitan statistical area, an assessing agency may order lead hazard reduction of bare soil without measuring the lead content of the bare soil if the property is in a census tract in which soil sampling has been performed according to rules established by the commissioner and at least 25 percent of the soil samples contain lead concentrations above the standard in section 144.9508.

(f) A lead inspector risk assessor shall notify the commissioner and the board of health of all violations of lead standards under section 144.9508, that are identified in a lead inspection risk assessment conducted under this section.

(g) Each inspecting assessing agency shall establish an administrative appeal procedure which allows a property owner to contest the nature and conditions of any lead order issued by the inspecting assessing agency. Inspecting Assessing agencies must consider appeals that propose lower cost methods that make the residence lead safe.

(h) Sections 144.9501 to 144.9509 neither authorize nor prohibit an inspecting assessing agency from charging a property owner for the cost of a lead inspection risk assessment.

Sec. 47. Minnesota Statutes 1996, section 144.9504, subdivision 3, is amended to read:

Subd. 3. [LEAD EDUCATION STRATEGY.] At the time of a lead inspection risk assessment or following a lead order, the inspecting assessing agency shall ensure that a family will receive a visit at their residence by a swab team worker or public health professional, such as a nurse, sanitarian, public health educator, or other public health professional. The swab team worker or public health professional shall inform the property owner, landlord, and the tenant of the health-related aspects of lead exposure; nutrition; safety measures to minimize exposure; methods to be followed before, during, and after the lead hazard reduction process; and community, legal, and housing resources. If a family moves to a temporary residence during the lead hazard reduction process, lead education services should be provided at the temporary residence whenever feasible.

Sec. 48. Minnesota Statutes 1996, section 144.9504, subdivision 4, is amended to read:

Subd. 4. [LEAD INSPECTION RISK ASSESSMENT GUIDES.] (a) The commissioner of health shall develop or purchase lead inspection risk assessment guides that enable parents and other caregivers to assess the possible lead sources present and that suggest lead hazard reduction actions. The guide must provide information on lead hazard reduction and disposal methods, sources of equipment, and telephone numbers for additional information to enable the persons to either select a lead contractor persons licensed by the commissioner under section 144.9505 or 144.9506 to perform lead hazard reduction or perform the lead hazard reduction themselves. The guides must explain:

(1) the requirements of this section and rules adopted under section 144.9508;

(2) information on the administrative appeal procedures required under this section;

(3) summary information on lead-safe directives;

(4) be understandable at an eighth grade reading level; and

(5) be translated for use by non-English-speaking persons.

(b) An inspecting assessing agency shall provide the lead inspection risk assessment guides at no cost to:

(1) parents and other caregivers of children who are identified as having blood lead levels of at least ten micrograms of lead per deciliter of whole blood;

(3) occupants of residences adjacent to the inspected property.

(c) An inspecting assessing agency shall provide the lead inspection risk assessment guides on request to owners or occupants of residential property, builders, contractors, inspectors, and the public within the jurisdiction of the inspecting assessing agency.

Sec. 49. Minnesota Statutes 1996, section 144.9504, subdivision 5, is amended to read:

Subd. 5. [LEAD ORDERS.] An inspecting assessing agency, after conducting a lead inspection risk assessment, shall order a property owner to perform lead hazard reduction on all lead sources that exceed a standard adopted according to section 144.9508. If lead inspections risk assessments and lead orders are conducted at times when weather or soil conditions do not permit the lead inspection risk assessment or lead hazard reduction, external surfaces and soil lead shall be inspected, and lead orders complied with, if necessary, at the first opportunity that weather and soil conditions allow. If the paint standard under section 144.9508 is violated, but the paint is intact, the inspecting assessing agency shall not order the paint to be removed unless the intact paint is a known source of actual lead exposure to a specific person. Before the inspecting assessing agency may order the intact paint to be removed, a reasonable effort must be made to protect the child and preserve the intact paint by the use of guards or other protective devices and methods. Whenever windows and doors or other components covered with deteriorated lead-based paint have sound substrate or are not rotting, those components should be repaired, sent out for stripping or be planed down to remove deteriorated lead-based paint or covered with protective guards instead of being replaced, provided that such an activity is the least cost method. However, a property owner who has been ordered to perform lead hazard reduction may choose any method to address deteriorated lead-based paint on windows, doors, or other components, provided that the method is approved in rules adopted under section 144.9508 and that it is appropriate to the specific property. Lead orders must require that any source of damage, such as leaking roofs, plumbing, and windows, be repaired or replaced, as needed, to prevent damage to lead-containing interior surfaces. The inspecting assessing agency is not required to pay for lead hazard reduction. Lead orders must be issued within 30 days of receiving the blood lead level analysis. The inspecting assessing agency shall enforce the lead orders issued to a property owner under this section. A copy of the lead order must be forwarded to the commissioner.

Sec. 50. Minnesota Statutes 1996, section 144.9504, subdivision 6, is amended to read:

Subd. 6. [SWAB TEAM SERVICES.] After a lead inspection risk assessment or after issuing lead orders, the inspecting assessing agency, within the limits of appropriations and availability, shall offer the property owner the services of a swab team free of charge and, if accepted, shall send a swab team within ten working days to the residence to perform swab team services as defined in section 144.9501. If the inspecting assessing agency provides swab team services after a lead inspection risk assessment, but before the issuance of a lead order, swab team services do not need to be repeated after the issuance of the lead order if the swab team services fulfilled the lead order. Swab team services are not considered completed until the clearance inspection required under this section shows that the property is lead safe.

Sec. 51. Minnesota Statutes 1996, section 144.9504, subdivision 7, is amended to read:

Subd. 7. [RELOCATION OF RESIDENTS.] (a) Within the limits of appropriations, the inspecting assessing agency shall ensure that residents are relocated from rooms or dwellings during a lead hazard reduction process that generates leaded dust, such as removal or disruption of lead-based paint or plaster that contains lead. Residents shall not remain in rooms or dwellings where the lead hazard reduction process is occurring. An inspecting assessing agency is not required to pay for relocation unless state or federal funding is available for this purpose. The inspecting assessing agency shall make an effort to assist the resident in locating resources that will provide assistance with relocation costs. Residents shall be allowed to return to the residence or dwelling after completion of the lead hazard reduction process. An inspecting assessing agency shall use grant funds under section 144.9507 if available, in cooperation with local housing agencies, to pay for moving costs and rent for a temporary residence for any low-income resident temporarily relocated during lead hazard reduction. For purposes of this section, "low-income resident" means any resident whose gross household income is at or below 185 percent of federal poverty level.

(b) A resident of rental property who is notified by an inspecting assessing agency to vacate the premises during lead hazard reduction, notwithstanding any rental agreement or lease provisions:

(2) may elect to immediately terminate the tenancy effective on the date the tenant vacates the premises due to lead hazard reduction; and

(3) shall not, if the tenancy is terminated, be liable for any further rent or other charges due under the terms of the tenancy.

(c) A landlord of rental property whose tenants vacate the premises during lead hazard reduction shall:

(1) allow a tenant to return to the dwelling unit after lead hazard reduction and clearance inspection, required under this section, is completed, unless the tenant has elected to terminate the tenancy as provided for in paragraph (b); and

(2) return any security deposit due under section 504.20 within five days of the date the tenant vacates the unit, to any tenant who terminates tenancy as provided for in paragraph (b).

Sec. 52. Minnesota Statutes 1996, section 144.9504, subdivision 8, is amended to read:

Subd. 8. [PROPERTY OWNER RESPONSIBILITY.] Property owners shall comply with lead orders issued under this section within 60 days or be subject to enforcement actions as provided under section 144.9509. For orders or portions of orders concerning external lead hazards, property owners shall comply within 60 days, or as soon thereafter as weather permits. If the property owner does not use a lead contractor hire a person licensed by the commissioner under section 144.9505 for compliance with the lead orders, the property owner shall submit a work plan to the inspecting assessing agency within 30 days after receiving the orders. The work plan must include the details required in section 144.9505 as to how the property owner intends to comply with the lead orders and notice as to when lead hazard reduction activities will begin. Within the limits of appropriations, the commissioner shall review plans and shall approve or disapprove them as to compliance with the requirements in section 144.9505, subdivision 5. Renters and volunteers performing lead abatement or lead hazard reduction must be trained and licensed as lead supervisors or lead workers under section 144.9505.

Sec. 53. Minnesota Statutes 1996, section 144.9504, subdivision 9, is amended to read:

Subd. 9. [CLEARANCE INSPECTION.] After completion of swab team services and compliance with the lead orders by the property owner, including any repairs ordered by a local housing or building inspector, the inspecting assessing agency shall conduct a clearance inspection by visually inspecting the residence for visual identification of deteriorated paint and bare soil and retest the dust lead concentration in the residence to assure that violations of the lead standards under section 144.9508 no longer exist. The inspecting assessing agency is not required to test a dwelling unit after lead hazard reduction that was not ordered by the inspecting assessing agency.

Sec. 54. Minnesota Statutes 1996, section 144.9504, subdivision 10, is amended to read:

Subd. 10. [CASE CLOSURE.] A lead inspection risk assessment is completed and the responsibility of the inspecting assessing agency ends when all of the following conditions are met:

(1) lead orders are written on all known sources of violations of lead standards under section 144.9508;

(2) compliance with all lead orders has been completed; and

(3) clearance inspections demonstrate that no deteriorated lead paint, bare soil, or lead dust levels exist that exceed the standards adopted under section 144.9508.

Sec. 55. Minnesota Statutes 1996, section 144.9505, subdivision 1, is amended to read:

training provided by the commissioner. Fees collected under this section shall be set in amounts to be determined by the commissioner to cover but not exceed the costs of adopting rules under section 144.9508, the costs of licensure, certification, and training, and the costs of enforcing licenses and certificates under this section. License fees shall be nonrefundable and must be submitted with each application in the amount of $50 for each lead supervisor, lead worker, or lead inspector and $100 for each lead project designer, lead risk assessor, or certified firm. All fees received shall be paid into the state treasury and credited to the lead abatement licensing and certification account and are appropriated to the commissioner to cover costs incurred under this section and section 144.9508.

(b) Contractors Persons shall not advertise or otherwise present themselves as lead contractors supervisors, lead workers, or lead project designers unless they have lead contractor licenses issued by the department of health commissioner under section 144.9505.

Sec. 56. Minnesota Statutes 1996, section 144.9505, subdivision 4, is amended to read:

Subd. 4. [NOTICE OF LEAD ABATEMENT OR LEAD HAZARD REDUCTION WORK.] (a) At least five working days before starting work at each lead abatement or lead hazard reduction worksite, the person performing the lead abatement or lead hazard reduction work shall give written notice and an approved work plan as required in this section to the commissioner and the appropriate board of health. Within the limits of appropriations, the commissioner shall review plans and shall approve or disapprove them as to compliance with the requirements in subdivision 5.

(b) This provision does not apply to swab team workers performing work under an order of an inspecting assessing agency.

Sec. 57. Minnesota Statutes 1996, section 144.9505, subdivision 5, is amended to read:

Subd. 5. [ABATEMENT OR LEAD HAZARD REDUCTION WORK PLANS.] (a) A lead contractor person who performs lead abatement or lead hazard reduction shall present a lead abatement or lead hazard reduction work plan to the property owner with each bid or estimate for lead abatement or lead hazard reduction work. The work plan does not replace or supersede more stringent contractual agreements. A written lead abatement or lead hazard reduction work plan must be prepared which describes the equipment and procedures to be used throughout the lead abatement or lead hazard reduction work project. At a minimum, the work plan must describe:

(1) the building area and building components to be worked on;

(2) the amount of lead-containing material to be removed, encapsulated, or enclosed;

(3) the schedule to be followed for each work stage;

(4) the workers' personal protection equipment and clothing;

(5) the dust suppression and debris containment methods;

(6) the lead abatement or lead hazard reduction methods to be used on each building component;

(7) cleaning methods;

(8) temporary, on-site waste storage, if any; and

(9) the methods for transporting waste material and its destination.

(c) A lead contractor The person performing the lead abatement or lead hazard reduction shall keep a copy of the work plan readily available at the worksite for the duration of the project and present it to the inspecting assessing agency on demand.

(d) A lead contractor The person performing the lead abatement or lead hazard reduction shall keep a copy of the work plan on record for one year after completion of the project and shall present it to the inspecting assessing agency on demand.

(e) This provision does not apply to swab team workers performing work under an order of an inspecting assessing agency or providing services at no cost to a property owner with funding under a state or federal grant.

Sec. 58. Minnesota Statutes 1997 Supplement, section 144.9506, subdivision 1, is amended to read:

Subdivision 1. [LICENSE REQUIRED.] (a) A lead inspector person shall obtain a license as a lead inspector or a lead risk assessor before performing lead inspections, lead hazard screens, or lead risk assessments and shall renew it annually as required in rules adopted under section 144.9508. The commissioner shall charge a fee and require annual refresher training, as specified in this section. A lead inspector or lead risk assessor shall have the lead inspector's license or lead risk assessor's license readily available at all times at an a lead inspection site or lead risk assessment site and make it available, on request, for inspection examination by the inspecting assessing agency with jurisdiction over the site. A license shall not be transferred. License fees shall be nonrefundable and must be submitted with each application in the amount of $50 for each lead inspector and $100 for each lead risk assessor.

(b) Individuals shall not advertise or otherwise present themselves as lead inspectors or lead risk assessors unless licensed by the commissioner.

(c) An individual may use sodium rhodizonate to test paint for the presence of lead without obtaining a lead inspector or lead risk assessor license, but must not represent the test as a lead inspection or lead risk assessment.

Sec. 59. Minnesota Statutes 1996, section 144.9506, subdivision 2, is amended to read:

Subd. 2. [LICENSE APPLICATION.] An application for a license or license renewal shall be on a form provided by the commissioner and shall include:

(1) a $50 nonrefundable fee, in a form approved by the commissioner; and

(2) evidence that the applicant has successfully completed a lead inspector training course approved under this section or from another state with which the commissioner has established reciprocity. The fee required in this section is waived for federal, state, or local government employees within Minnesota.

Sec. 60. Minnesota Statutes 1996, section 144.9507, subdivision 2, is amended to read:

Subd. 2. [LEAD INSPECTION RISK ASSESSMENT CONTRACTS.] The commissioner shall, within available federal or state appropriations, contract with boards of health to conduct lead inspections risk assessments to determine sources of lead contamination and to issue and enforce lead orders according to section 144.9504.

Sec. 61. Minnesota Statutes 1996, section 144.9507, subdivision 3, is amended to read:

Sec. 62. Minnesota Statutes 1996, section 144.9507, subdivision 4, is amended to read:

Subd. 4. [LEAD CLEANUP EQUIPMENT AND MATERIAL GRANTS TO NONPROFIT ORGANIZATIONS.] (a) The commissioner shall, within the limits of available state or federal appropriations, provide funds for lead cleanup equipment and materials under a grant program to nonprofit community-based organizations in areas at high risk for toxic lead exposure, as provided for in section 144.9503.

(b) Nonprofit community-based organizations in areas at high risk for toxic lead exposure may apply for grants from the commissioner to purchase lead cleanup equipment and materials and to pay for training for staff and volunteers for lead licensure under sections 144.9505 and 144.9506.

(c) For purposes of this section, lead cleanup equipment and materials means high efficiency particle accumulator (HEPA) and wet vacuum cleaners, wash water filters, mops, buckets, hoses, sponges, protective clothing, drop cloths, wet scraping equipment, secure containers, dust and particle containment material, and other cleanup and containment materials to remove loose paint and plaster, patch plaster, control household dust, wax floors, clean carpets and sidewalks, and cover bare soil.

(d) The grantee's staff and volunteers may make lead cleanup equipment and materials available to residents and property owners and instruct them on the proper use of the equipment. Lead cleanup equipment and materials must be made available to low-income households, as defined by federal guidelines, on a priority basis at no fee. Other households may be charged on a sliding fee scale.

(e) The grantee shall not charge a fee for services performed using the equipment or materials.

(f) Any funds appropriated for purposes of this subdivision that are not awarded, due to a lack of acceptable proposals for the full amount appropriated, may be used for any purpose authorized in this section.

Sec. 63. Minnesota Statutes 1996, section 144.9508, subdivision 1, is amended to read:

Subdivision 1. [SAMPLING AND ANALYSIS.] The commissioner shall adopt, by rule, visual inspection and sampling and analysis methods for:

(1) lead inspections under section 144.9504, lead hazard screens, lead risk assessments, and clearance inspections;

(2) environmental surveys of lead in paint, soil, dust, and drinking water to determine census tracts that are areas at high risk for toxic lead exposure;

(3) soil sampling for soil used as replacement soil; and

(4) drinking water sampling, which shall be done in accordance with lab certification requirements and analytical techniques specified by Code of Federal Regulations, title 40, section 141.89; and

(5) sampling to determine whether at least 25 percent of the soil samples collected from a census tract within a standard metropolitan statistical area contain lead in concentrations that exceed 100 parts per million.

Sec. 64. Minnesota Statutes 1996, section 144.9508, is amended by adding a subdivision to read:

Subd. 2a. [LEAD STANDARDS FOR EXTERIOR SURFACES AND STREET DUST.] The commissioner may, by rule, establish lead standards for exterior horizontal surfaces, concrete or other impervious surfaces, and street dust on residential property to protect the public health and the environment.

Sec. 65. Minnesota Statutes 1996, section 144.9508, subdivision 3, is amended to read:

also adopt rules requiring certification of firms that perform lead abatement, lead hazard reduction, lead hazard screens, or lead risk assessments. The commissioner shall require periodic renewal of licenses and certificates and shall establish the renewal periods.

Sec. 66. Minnesota Statutes 1996, section 144.9508, subdivision 4, is amended to read:

Subd. 4. [LEAD TRAINING COURSE.] The commissioner shall establish by rule a permit fee to be paid by a training course provider on application for a training course permit or renewal period for each lead-related training course required for certification or licensure. The commissioner shall establish criteria in rules for the content and presentation of training courses intended to qualify trainees for licensure under subdivision 3. Training course permit fees shall be nonrefundable and must be submitted with each application in the amount of $500 for an initial training course, $250 for renewal of a permit for an initial training course, $250 for a refresher training course, and $125 for renewal of a permit of a refresher training course.

Sec. 67. Minnesota Statutes 1996, section 144.9509, subdivision 2, is amended to read:

Subd. 2. [DISCRIMINATION.] A person who discriminates against or otherwise sanctions an employee who complains to or cooperates with the inspecting assessing agency in administering sections 144.9501 to 144.9509 is guilty of a petty misdemeanor.

Sec. 68. [144.9511] [LEAD-SAFE PROPERTY CERTIFICATION.]

Subdivision 1. [LEAD-SAFE PROPERTY CERTIFICATION PROGRAM ESTABLISHED.] (a) The commissioner shall establish, within the limits of available appropriations, a voluntary lead-safe property certification program for residential properties. This program shall involve an initial property certification process, a property condition report, and a lead-safe property certification booklet.

(b) The commissioner shall establish an initial property certification process composed of the following:

(1) a lead hazard screen, which shall include a visual evaluation of a residential property for both deteriorated paint and bare soil; and

(2) a quantitative measure of lead in dust within the structure and in common areas as determined by rule adopted under authority of section 144.9508.

(c) The commissioner shall establish forms and checklists for conducting a property condition report. A property condition report is an evaluation of property components, without regard to aesthetic considerations, to determine whether any of the following conditions are likely to occur within one year of the report:

(1) paint will become chipped, flaked, or cracked;

(2) structural defects in the roof, windows, or plumbing will fail and cause paint to deteriorate;

(3) window wells or window troughs will not be cleanable and washable;

(4) windows will generate dust due to friction;

(5) cabinet, room, and threshold doors will rub against casings or have repeated contact with painted surfaces;

(6) floors will not be smooth and cleanable and carpeted floors will not be cleanable;

(7) soil will not remain covered;

(9) parking areas will not remain covered by an impervious surface or gravel;

(10) covered soil will erode, particularly in play areas; and

(11) gutters and down spouts will not function correctly.

(d) The commissioner shall develop a lead-safe property certification booklet that contains the following:

(1) information on how property owners and their maintenance personnel can perform essential maintenance practices to correct any of the property component conditions listed in paragraph (c) that may occur;

(2) the lead-safe work practices fact sheets created under section 144.9503, subdivision 7;

(3) forms, checklists, and copies of recommended lead-safe property certification certificates; and

(4) an educational sheet for landlords to give to tenants on the importance of having tenants inform property owners or designated maintenance staff of one or more of the conditions listed in paragraph (c).

Subd. 2. [CONDITIONS FOR CERTIFICATION.] A property shall be certified as lead-safe only if the following conditions are met:

(1) the property passes the initial certification process in subdivision 1;

(2) the property owner agrees in writing to perform essential maintenance practices;

(3) the property owner agrees in writing to use lead-safe work practices, as provided for under section 144.9503, subdivision 7;

(4) the property owner performs essential maintenance as the need arises or uses maintenance personnel who have completed a United States Environmental Protection Agency- or Minnesota department of health-approved maintenance training program or course to perform essential maintenance;

(5) the lead-safe property certification booklet is distributed to the property owner, maintenance personnel, and tenants at the completion of the initial certification process; and

(6) a copy of the lead-safe property certificate is filed with the commissioner along with a $5 filing fee.

Subd. 3. [LEAD STANDARDS.] Lead standards used in this section shall be those approved by the commissioner under section 144.9508.

Subd. 4. [LEAD RISK ASSESSORS.] Lead-safe property certifications shall only be performed by lead risk assessors licensed by the commissioner under section 144.9506.

Subd. 5. [EXPIRATION.] Lead-safe property certificates are valid for one year.

Subd. 6. [LIST OF CERTIFIED PROPERTIES.] Within the limits of available appropriations, the commissioner shall maintain a list of all properties certified as lead-safe under this section and make it freely available to the public.

Sec. 69. Minnesota Statutes 1996, section 144.99, subdivision 1, is amended to read:

Subdivision 1. [REMEDIES AVAILABLE.] The provisions of chapters 103I and 157 and sections 115.71 to 115.77; 144.12, subdivision 1, paragraphs (1), (2), (5), (6), (10), (12), (13), (14), and (15); 144.121; 144.1222; 144.35; 144.381 to 144.385; 144.411 to 144.417; 144.491; 144.495; 144.71 to 144.74; 144.9501 to 144.9509; 144.992; 326.37 to 326.45; 326.57 to 326.785; 327.10 to 327.131; and 327.14 to 327.28 and all rules, orders, stipulation agreements, settlements, compliance agreements, licenses, registrations, certificates, and permits adopted or issued by the department or under any other law now in force or later enacted for the preservation of public health may, in addition to provisions in other statutes, be enforced under this section.

Sec. 70. Minnesota Statutes 1996, section 144A.44, subdivision 2, is amended to read:

Subd. 2. [INTERPRETATION AND ENFORCEMENT OF RIGHTS.] These rights are established for the benefit of persons who receive home care services. "Home care services" means home care services as defined in section 144A.43, subdivision 3. A home care provider may not require a person to surrender these rights as a condition of receiving services. A guardian or conservator or, when there is no guardian or conservator, a designated person, may seek to enforce these rights. This statement of rights does not replace or diminish other rights and liberties that may exist relative to persons receiving home care services, persons providing home care services, or providers licensed under Laws 1987, chapter 378. A copy of these rights must be provided to an individual at the time home care services are initiated. The copy shall also contain the address and phone number of the office of health facility complaints and the office of the ombudsman for older Minnesotans and a brief statement describing how to file a complaint with that office these offices. Information about how to contact the office of the ombudsman for older Minnesotans shall be included in notices of change in client fees and in notices where home care providers initiate transfer or discontinuation of services.

Sec. 71. Minnesota Statutes 1997 Supplement, section 144A.46, subdivision 2, is amended to read:

Subd. 2. [EXEMPTIONS.] The following individuals or organizations are exempt from the requirement to obtain a home care provider license:

(1) a person who is licensed as a registered nurse under sections 148.171 to 148.285 and who independently provides nursing services in the home without any contractual or employment relationship to a home care provider or other organization;

(2) a personal care assistant who provides services to only one individual under the medical assistance program as authorized under sections 256B.0625, subdivision 19, and 256B.04, subdivision 16;

(3) a person or organization that exclusively offers, provides, or arranges for personal care assistant services to only one individual under the medical assistance program as authorized under sections 256B.0625, subdivision 19, and 256B.04, subdivision 16;

(4) a person who is registered licensed under sections 148.65 to 148.78 and who independently provides physical therapy services in the home without any contractual or employment relationship to a home care provider or other organization;

(5) a provider that is licensed by the commissioner of human services to provide semi-independent living services under Minnesota Rules, parts 9525.0500 to 9525.0660 when providing home care services to a person with a developmental disability;

(6) a provider that is licensed by the commissioner of human services to provide home and community-based services under Minnesota Rules, parts 9525.2000 to 9525.2140 when providing home care services to a person with a developmental disability;

(8) a person who is licensed as a social worker under sections 148B.18 to 148B.289 and who provides social work services in the home independently and not through any contractual or employment relationship with a home care provider or other organization.

An exemption under this subdivision does not excuse the individual from complying with applicable provisions of the home care bill of rights.

Sec. 72. Minnesota Statutes 1997 Supplement, section 144A.4605, subdivision 4, is amended to read:

Subd. 4. [LICENSE REQUIRED.] (a) A housing with services establishment registered under chapter 144D that is required to obtain a home care license must obtain an assisted living home care license according to this section or a class A or class E license according to rule. A housing with services establishment that obtains a class E license under this subdivision remains subject to the payment limitations in sections 256B.0913, subdivision 5, paragraph (h), and 256B.0915, subdivision 3, paragraph (g).

(b) A board and lodging establishment registered for special services as of December 31, 1996, and also registered as a housing with services establishment under chapter 144D, must deliver home care services according to sections 144A.43 to 144A.49, and may apply for a waiver from requirements under Minnesota Rules, parts 4668.0002 to 4668.0240, to operate a licensed agency under the standards of section 157.17. Such waivers as may be granted by the department will expire upon promulgation of home care rules implementing section 144A.4605.

(c) An adult foster care provider licensed by the department of human services and registered under chapter 144D may continue to provide health-related services under its foster care license until the promulgation of home care rules implementing this section.

Sec. 73. Minnesota Statutes 1996, section 145.411, is amended by adding a subdivision to read:

Subd. 6. [COMMISSIONER.] "Commissioner" means the commissioner of health.

Sec. 74. [145.4131] [RECORDING AND REPORTING ABORTION DATA.]

Subdivision 1. [FORMS.] (a) Within 90 days of the effective date of this section, the commissioner shall prepare a reporting form for physicians performing abortions. A copy of this section shall be attached to the form. A physician performing an abortion shall obtain a form from the commissioner.

(b) The form shall require the following information:

(1) the number of abortions performed by the physician in the previous calendar year, reported by month;

(2) the method used for each abortion;

(3) the approximate gestational age of each child subject to abortion, expressed in one of the following increments:

(i) less than nine weeks;

(ii) nine to ten weeks;

(iii) 11 to 12 weeks;

(iv) 13 to 15 weeks;

(v) 16 to 20 weeks;

(vii) 25 to 30 weeks;

(viii) 31 to 36 weeks; or

(ix) 37 weeks to term;

(4) the age of the mother on whom the abortion was performed at the time the abortion was performed;

(5) the specific reason for the abortion, including, but not limited to, the following:

(i) the pregnancy was a result of rape;

(ii) the pregnancy was a result of incest;

(iii) the mother cannot afford the child;

(iv) the mother does not want the child;

(v) the mother's emotional health is at stake;

(vi) the mother will suffer substantial and irreversible impairment of a major bodily function if the pregnancy continues; or

(vii) other;

(6) the number of prior induced abortions;

(7) the number of prior spontaneous abortions;

(8) whether the abortion was paid for by:

(i) private insurance;

(ii) a public health plan; or

(iii) another form of payment;

(9) whether coverage was under:

(i) a fee-for-service insurance company;

(ii) a managed care company; or

(iii) another type of health carrier;

(10) complications, if any, for each abortion and for the aftermath of each abortion. Space for a description of any complications shall be available on the form;

(11) the fee collected for each abortion;

(12) the type of anesthetic used, if any, for each abortion;

(13) the method used to dispose of fetal tissue and remains;

(15) whether the physician performing the abortion has had a physician's license suspended or revoked or has had other professional sanctions in this or another state.

Subd. 2. [SUBMISSION.] A physician performing an abortion shall complete and submit the form to the commissioner no later than April 1 for abortions performed in the previous calendar year.

Subd. 3. [ADDITIONAL REPORTING.] Nothing in this section shall be construed to preclude the voluntary or required submission of other reports or forms regarding abortions.

Sec. 75. [145.4132] [RECORDING AND REPORTING ABORTION COMPLICATION DATA.]

Subdivision 1. [FORMS.] (a) Within 90 days of the effective date of this section, the commissioner shall prepare an abortion complication reporting form for all physicians licensed and practicing in the state. A copy of this section shall be attached to the form.

(b) The board of medical practice shall ensure that the abortion complication reporting form is distributed:

(1) to all physicians licensed to practice in the state, within 120 days after the effective date of this section and by December 1 of each subsequent year; and

(2) to a physician who is newly licensed to practice in the state, at the same time as official notification to the physician that the physician is so licensed.

Subd. 2. [REQUIRED REPORTING.] A physician licensed and practicing in the state who encounters an illness or injury that is related to an induced abortion shall complete and submit an abortion complication reporting form to the commissioner.

Subd. 3. [SUBMISSION.] A physician required to submit an abortion complication reporting form to the commissioner shall do so as soon as practicable after the encounter with the abortion related illness or injury, but in no case more than 60 days after the encounter.

Subd. 4. [ADDITIONAL REPORTING.] Nothing in this section shall be construed to preclude the voluntary or required submission of other reports or forms regarding abortion complications.

Sec. 76. [145.4133] [REPORTING OUT-OF-STATE ABORTIONS.]

The commissioner of human services shall report to the commissioner by April 1 each year the following information regarding abortions paid for with state funds and performed out of state in the previous calendar year:

(1) the total number of abortions performed out of state and partially or fully paid for with state funds through the medical assistance, general assistance medical care, or MinnesotaCare program, or any other program;

(2) the total amount of state funds used to pay for the abortions and expenses incidental to the abortions; and

(3) the gestational age of each unborn child at the time of abortion.

Sec. 77. [145.4134] [COMMISSIONER'S PUBLIC REPORT.]

(b) The commissioner may, by rules adopted under chapter 14, alter the submission dates established under sections 145.4131 to 145.4133 for administrative convenience, fiscal savings, or other valid reason, provided that physicians and the commissioner of health submit the required information once each year and the commissioner issues a report once each year.

Sec. 78. [145.4135] [ENFORCEMENT; PENALTIES.]

(a) A physician who fails to submit the required forms under sections 145.4131 and 145.4132 within 30 days following the due date is subject to a late fee of $500 for each 30-day period, or portion thereof, that the forms are overdue. A physician required to report under this section who does not submit a report, or submits only an incomplete report, more than one year following the due date, may be fined and, in an action brought by the commissioner, be directed by a court of competent jurisdiction to submit a complete report within a period stated by court order or be subject to sanctions for civil contempt.

(b) If the commissioner fails to issue the public report required under this section, or fails in any way to enforce this section, a group of ten or more citizens of the state may seek an injunction in a court of competent jurisdiction against the commissioner requiring that a complete report be issued within a period stated by court order or requiring that enforcement action be taken. Failure to abide by an injunction shall subject the commissioner to sanctions for civil contempt.

(c) A physician who knowingly or recklessly submits a false report under this section is guilty of a misdemeanor.

(d) The commissioner may take reasonable steps to ensure compliance with sections 145.4131 to 145.4133 and to verify data provided, including but not limited to, inspection of places where abortions are performed in accordance with chapter 14.

Sec. 79. [145.4136] [SEVERABILITY.]

If any one or more provision, section, subdivision, sentence, clause, phrase, or word in sections 145.4131 to 145.4135, or the application thereof to any person or circumstance is found to be unconstitutional, the same is hereby declared to be severable and the balance of sections 145.4131 to 145.4135 shall remain effective notwithstanding such unconstitutionality. The legislature hereby declares that it would have passed sections 145.4131 to 145.4135, and each provision, section, subdivision, sentence, clause, phrase, or word thereof, irrespective of the fact that any one or more provision, section, subdivision, sentence, clause, phrase, or word be declared unconstitutional.

Sec. 80. [145.4201] [PARTIAL-BIRTH ABORTION; DEFINITIONS.]

Subdivision 1. [TERMS.] As used in sections 145.4201 to 145.4206, the terms defined in this section have the meanings given them.

Subd. 2. [ABORTION.] "Abortion" means the use of any means to intentionally terminate the pregnancy of a female known to be pregnant with knowledge that the termination with those means will, with reasonable likelihood, cause the death of the fetus.

Subd. 3. [FETUS AND INFANT.] "Fetus" and "infant" are used interchangeably to refer to the biological offspring of human parents.

Subd. 4. [PARTIAL-BIRTH ABORTION.] "Partial-birth abortion" means an abortion in which the person performing the abortion partially vaginally delivers a living fetus before killing the fetus and completing the delivery.

Sec. 81. [145.4202] [PARTIAL-BIRTH ABORTIONS PROHIBITED.]

Sec. 82. [145.4203] [LIFE OF THE MOTHER EXCEPTION.]

The prohibition under section 145.4202 shall not apply to a partial-birth abortion that is necessary to save the life of the mother because her life is endangered by a physical disorder, physical illness, or physical injury, including a life-endangering condition caused by or arising from the pregnancy itself, provided that no other medical procedure would suffice for that purpose.

Sec. 83. [145.4204] [CIVIL REMEDIES.]

Subdivision 1. [STANDING.] The woman upon whom a partial-birth abortion has been performed in violation of section 145.4202, the father of the fetus or infant, and the maternal grandparents of the fetus or infant if the mother has not attained the age of 18 years at the time of the abortion, may obtain appropriate relief in a civil action, unless the pregnancy resulted from the plaintiff's criminal conduct or the plaintiff consented to the abortion.

Subd. 2. [TYPE OF RELIEF.] Relief shall include:

(1) money damages for all injuries, psychological and physical, occasioned by the violation of sections 145.4201 to 145.4206; and

(2) statutory damages equal to three times the cost of the partial-birth abortion.

Subd. 3. [ATTORNEY'S FEE.] If judgment is rendered in favor of the plaintiff in an action described in this section, the court shall also render judgment for a reasonable attorney's fee in favor of the plaintiff against the defendant. If the judgment is rendered in favor of the defendant and the court finds that the plaintiff's suit was frivolous and brought in bad faith, the court shall also render judgment for a reasonable attorney's fee in favor of the defendant against the plaintiff.

Sec. 84. [145.4205] [CRIMINAL PENALTY.]

Subdivision 1. [FELONY.] A person who performs a partial-birth abortion in knowing or reckless violation of sections 145.4201 to 145.4206 is guilty of a felony and may be sentenced to imprisonment for not more than 15 years or to payment of a fine of not more than $50,000.

Subd. 2. [PROSECUTION OF MOTHER PROHIBITED.] A woman upon whom a partial-birth abortion is performed may not be prosecuted under this section for violating sections 145.4201 to 145.4206, or any provision thereof, or for conspiracy to violate sections 145.4201 to 145.4206, or any provision thereof.

Sec. 85. [145.4206] [SEVERABILITY.]

(a) If any provision, word, phrase, or clause of section 145.4203, or the application thereof to any person or circumstance is found to be unconstitutional, the same is hereby declared to be inseverable.

(b) If any provision, section, subdivision, sentence, clause, phrase, or word in section 145.4201, 145.4202, 145.4204, 145.4205, or 145.4206 or the application thereof to any person or circumstance is found to be unconstitutional, the same is hereby declared to be severable and the balance of sections 145.4201 to 145.4206 shall remain effective notwithstanding such unconstitutionality. The legislature hereby declares that it would have passed sections 145.4201 to 145.4206, and each provision, section, subdivision, sentence, clause, phrase, or word thereto, with the exception of section 145.4203, irrespective of the fact that a provision, section, subdivision, sentence, clause, phrase, or word be declared unconstitutional.

Sec. 86. [145.9266] [FETAL ALCOHOL SYNDROME.]

Subd. 2. [STATEWIDE NETWORK OF FAS DIAGNOSTIC CLINICS.] A statewide network of regional fetal alcohol syndrome diagnostic clinics shall be developed between the department of health and the University of Minnesota. This collaboration shall be based on a statewide needs assessment and shall include involvement from consumers, providers, and payors. By the end of calendar year 1998, a plan shall be developed for the clinic network, and shall include a comprehensive evaluation component. Sites shall be established in calendar year 1999. The commissioner shall not access or collect individually identifiable data for the statewide network of regional fetal alcohol syndrome diagnostic clinics. Data collected at the clinics shall be maintained according to applicable data privacy laws, including section 144.335.

Subd. 3. [PROFESSIONAL TRAINING ABOUT FAS.] (a) The commissioner of health, in collaboration with the board of medical practice, the board of nursing, and other professional boards and state agencies, shall develop curricula and materials about fetal alcohol syndrome for professional training of health care providers, social service providers, educators, and judicial and corrections systems professionals. The training and curricula shall increase knowledge and develop practical skills of professionals to help them address the needs of at-risk pregnant women and the needs of individuals affected by fetal alcohol syndrome or fetal alcohol effects and their families.

(b) Training for health care providers shall focus on skill building for screening, counseling, referral, and follow-up for women using or at risk of using alcohol while pregnant. Training for health care professionals shall include methods for diagnosis and evaluation of fetal alcohol syndrome and fetal alcohol effects. Training for education, judicial, and corrections professionals shall involve effective education strategies, methods to identify the behaviors and learning styles of children with alcohol-related birth defects, and methods to identify available referral and community resources.

(c) Training for social service providers shall focus on resources for assessing, referring, and treating at-risk pregnant women, changes in the mandatory reporting and commitment laws, and resources for affected children and their families.

Subd. 4. [FAS COMMUNITY GRANT PROGRAM.] The commissioner of health shall administer a grant program to provide money to community organizations and coalitions to collaborate on fetal alcohol syndrome prevention and intervention strategies and activities. The commissioner shall disburse grant money through a request for proposal process or sole-source distribution where appropriate, and shall include at least one grant award for transitional skills and services for individuals with fetal alcohol syndrome or fetal alcohol effects.

Subd. 5. [SCHOOL PILOT PROGRAMS.] (a) The commissioner of children, families, and learning shall award up to four grants to schools for pilot programs to identify and implement effective educational strategies for individuals with fetal alcohol syndrome and other alcohol-related birth defects.

(b) One grant shall be awarded in each of the following age categories:

(1) birth to three years;

(2) three to five years;

(3) six to 12 years; and

(4) 13 to 18 years.

(c) Grant proposals must include an evaluation plan, demonstrate evidence of a collaborative or multisystem approach, provide parent education and support, and show evidence of a child- and family-focused approach consistent with research-based educational practices and other guidelines developed by the department of children, families, and learning.

(d) Children participating in the pilot program sites may be identified through child find activities or a diagnostic clinic. No identification activity may be undertaken without the consent of a child's parent or guardian.

Subd. 6. [FETAL ALCOHOL COORDINATING BOARD; DUTIES.] (a) The fetal alcohol coordinating board consists of:

(2) the director of the office of strategic and long-range planning;

(3) the chair of the maternal and child health advisory task force established by section 145.881, or the chair's designee;

(4) a representative of the University of Minnesota academic health center, appointed by the provost;

(5) five members from the general public appointed by the governor, one of whom must be a family member of an individual with fetal alcohol syndrome or fetal alcohol effect; and

(6) one member from the judiciary appointed by the chief justice of the supreme court.

Terms, compensation, removal, and filling of vacancies of appointed members are governed by section 15.0575. The board shall elect a chair from its membership to serve a one-year term. The commissioner of health shall provide staff and consultant support for the board. Support must be provided based on an annual budget and work plan developed by the board. The board shall contract with the department of health for necessary administrative services. Administrative services include personnel, budget, payroll, and contract administration. The board shall adopt an annual budget and work program.

(b) Board duties include:

(1) reviewing programs of state agencies that involve fetal alcohol syndrome and coordinating those that are interdepartmental in nature;

(2) providing an integrated and comprehensive approach to fetal alcohol syndrome prevention and intervention strategies both at a local and statewide level;

(3) approving on an annual basis the statewide public awareness campaign as designed and implemented by the commissioner of health under subdivision 1;

(4) reviewing fetal alcohol syndrome community grants administered by the commissioner of health under subdivision 4; and

(5) submitting a report to the governor on January 15 of each odd-numbered year summarizing board operations, activities, findings, and recommendations, and fetal alcohol syndrome activities throughout the state.

(c) The board expires on January 1, 2001.

Subd. 7. [FEDERAL FUNDS; CONTRACTS; DONATIONS.] The fetal alcohol coordinating board may apply for, receive, and disburse federal funds made available to the state by federal law or rules adopted for any purpose related to the powers and duties of the board. The board shall comply with any requirements of federal law, rules, and regulations in order to apply for, receive, and disburse funds. The board may contract with or provide grants to public and private nonprofit entities. The board may accept donations or grants from any public or private entity. Money received by the board must be deposited in a separate account in the state treasury and invested by the state board of investment. The amount deposited, including investment earnings, is appropriated to the board to carry out its duties. Money deposited in the state treasury shall not cancel.

Sec. 87. Minnesota Statutes 1996, section 145A.15, subdivision 2, is amended to read:

Subd. 2. [GRANT RECIPIENTS.] (a) The commissioner is authorized to award grants to programs that meet the requirements of subdivision 3 and include a strong child abuse and neglect prevention focus for families in need of services. Priority will be given to families considered to be in need of additional services. These families include, but are not limited to, families with:

(1) adolescent parents;

(3) a history of child abuse, domestic abuse, or other types of violence in the family of origin;

(4) a history of domestic abuse, rape, or other forms of victimization;

(5) reduced cognitive functioning;

(6) a lack of knowledge of child growth and development stages;

(7) low resiliency to adversities and environmental stresses; or

(8) lack of sufficient financial resources to meet their needs.

(b) Grants made under this section shall be used to fund existing home visiting programs and to establish new programs. The commissioner shall award grants to home visiting programs that meet the program requirements in subdivision 3, regardless of the number of years an existing program has received grant funds in the past.

Sec. 88. Minnesota Statutes 1996, section 148.66, is amended to read:

148.66 [STATE BOARD OF MEDICAL PRACTICE PHYSICAL THERAPY, DUTIES.]

The state board of medical practice, as now or hereafter constituted, hereinafter termed "the board," in the manner hereinafter provided, physical therapy established under section 148.67 shall administer the provisions of this law sections 148.65 to 148.78. As used in sections 148.65 to 148.78, "board" means the state board of physical therapy.

The board shall:

(1) adopt rules necessary to administer and enforce sections 148.65 to 148.78;

(2) administer, coordinate, and enforce sections 148.65 to 148.78;

(3) evaluate the qualifications of applicants;

(4) issue subpoenas, examine witnesses, and administer oaths;

(5) conduct hearings and keep records and minutes necessary to the orderly administration of sections 148.65 to 148.78;

(6) investigate persons engaging in practices that violate sections 148.65 to 148.78; and

(7) adopt rules under chapter 14 prescribing a code of ethics for licensees.

Sec. 89. Minnesota Statutes 1996, section 148.67, is amended to read:

148.67 [STATE BOARD OF PHYSICAL THERAPY COUNCIL; MEMBERSHIP APPOINTMENTS, VACANCIES, REMOVALS.]

immediately precede appointment. Membership terms, compensation of members, removal of members, filling of membership vacancies, and fiscal year and reporting requirements shall be as provided in sections 214.07 to 214.09. The provision of staff, administrative services, and office space; the review and processing of complaints; the setting of board fees; and other provisions relating to board operations shall be as provided in chapter 214. Each member of the board shall file with the secretary of state the constitutional oath of office before beginning the term of office.

Subd. 2. [REPLACEMENT OF PHYSICAL THERAPISTS AND PHYSICIAN MEMBERS.] When a member's term expires and the member is a licensed physical therapist, the governor may appoint a licensed physical therapist from a list submitted by the Minnesota chapter of the American Physical Therapy Association. When a member who is a licensed physical therapist leaves the board before the member's term expires, the governor may appoint a member for the remainder of the term from a list submitted by the Minnesota chapter of the American Physical Therapy Association. When a member who is a physician leaves the board before the member's term expires, the governor may appoint a member for the remainder of the term from lists submitted by the state board of medical practice or the Minnesota Medical Association.

Sec. 90. [148.691] [OFFICERS; EXECUTIVE DIRECTOR.]

Subdivision 1. [OFFICERS OF THE BOARD.] The board shall elect from its members a president, a vice-president, and a secretary-treasurer. Each shall serve for one year or until a successor is elected and qualifies. The board shall appoint and employ an executive secretary. A majority of the board, including one officer, constitutes a quorum at a meeting.

Subd. 2. [BOARD AUTHORITY TO HIRE.] The board may employ persons needed to carry out its work.

Sec. 91. Minnesota Statutes 1996, section 148.70, is amended to read:

148.70 [APPLICANTS, QUALIFICATIONS.]

It shall be the duty of The board of medical practice with the advice and assistance of the physical therapy council to pass upon physical therapy must:

(1) establish the qualifications of applicants for registration, licensing and continuing education requirements for reregistration, relicensing;

(2) provide for and conduct all examinations following satisfactory completion of all didactic requirements,;

(3) determine the applicants who successfully pass the examination,; and

(4) duly register such applicants license an applicant after the applicant has presented evidence satisfactory to the board that the applicant has completed a an accredited physical therapy educational program of education or continuing education approved by the board.

The passing score for examinations taken after July 1, 1995, shall be based on objective, numerical standards, as established by a nationally recognized board approved testing service.

Sec. 92. Minnesota Statutes 1996, section 148.705, is amended to read:

148.705 [APPLICATION.]

An applicant for registration licensing as a physical therapist shall file a written application on forms provided by the board together with a fee in the amount set by the board, no portion of which shall be returned. No portion of the fee is refundable.

An approved program for physical therapists shall include the following:

(b) (2) an accredited course in physical therapy education which has provided adequate instruction in the basic sciences, clinical sciences, and physical therapy theory and procedures, as determined by the board. In determining whether or not a course in physical therapy is approved, the board may take into consideration the accreditation of such schools by the appropriate council of the American Medical Association, the American Physical Therapy Association, or the Canadian Medical Association.

Sec. 93. Minnesota Statutes 1996, section 148.71, is amended to read:

148.71 [REGISTRATION LICENSING.]

Subdivision 1. [QUALIFIED APPLICANT.] The state board of medical practice physical therapy shall register license as a physical therapist and shall furnish a certificate of registration license to each an applicant who successfully passes an examination provided for in sections 148.65 to 148.78 for registration licensing as a physical therapist and who is otherwise qualified as required herein in sections 148.65 to 148.78.

Subd. 2. [TEMPORARY PERMIT.] (a) The board may, upon payment of a fee set by the board, issue a temporary permit to practice physical therapy under supervision to a physical therapist who is a graduate of an approved school of physical therapy and qualified for admission to examination for registration licensing as a physical therapist. A temporary permit to practice physical therapy under supervision may be issued only once and cannot be renewed. It expires 90 days after the next examination for registration licensing given by the board or on the date on which the board, after examination of the applicant, grants or denies the applicant a registration license to practice, whichever occurs first. A temporary permit expires on the first day the board begins its next examination for registration license after the permit is issued if the holder does not submit to examination on that date. The holder of a temporary permit to practice physical therapy under supervision may practice physical therapy as defined in section 148.65 if the entire practice is under the supervision of a person holding a valid registration license to practice physical therapy in this state. The supervision shall be direct, immediate, and on premises.

(b) A physical therapist from another state who is licensed or otherwise registered in good standing as a physical therapist by that state and meets the requirements for registration licensing under section 148.72 does not require supervision to practice physical therapy while holding a temporary permit in this state. The temporary permit remains valid only until the meeting of the board at which the application for registration licensing is considered.

Subd. 3. [FOREIGN-TRAINED PHYSICAL THERAPISTS; TEMPORARY PERMITS.] (a) The board of medical practice may issue a temporary permit to a foreign-trained physical therapist who:

(1) is enrolled in a supervised physical therapy traineeship that meets the requirements under paragraph (b);

(2) has completed a physical therapy education program equivalent to that under section 148.705 and Minnesota Rules, part 5601.0800, subpart 2;

(3) has achieved a score of at least 550 on the test of English as a foreign language or a score of at least 85 on the Minnesota battery test; and

(4) has paid a nonrefundable fee set by the board.

A foreign-trained physical therapist must have the temporary permit before beginning a traineeship.

(b) A supervised physical therapy traineeship must:

(1) be at least six months;

(2) be at a board-approved facility;

(4) be supervised by a physical therapist who has at least three years of clinical experience and is registered licensed under subdivision 1; and

(5) be approved by the board before the foreign-trained physical therapist begins the traineeship.

(c) A temporary permit is effective on the first day of a traineeship and expires 90 days after the next examination for registration licensing given by the board following successful completion of the traineeship or on the date on which the board, after examination of the applicant, grants or denies the applicant a registration license to practice, whichever occurs first.

(d) A foreign-trained physical therapist must successfully complete a traineeship to be registered licensed as a physical therapist under subdivision 1. The traineeship may be waived for a foreign-trained physical therapist who is licensed or otherwise registered in good standing in another state and has successfully practiced physical therapy in that state under the supervision of a licensed or registered physical therapist for at least six months at a facility that meets the requirements under paragraph (b), clauses (2) and (3).

(e) A temporary permit will not be issued to a foreign-trained applicant who has been issued a temporary permit for longer than six months in any other state.

Sec. 94. Minnesota Statutes 1996, section 148.72, subdivision 1, is amended to read:

Subdivision 1. [ISSUANCE OF REGISTRATION LICENSE WITHOUT EXAMINATION.] On payment to the board of a fee in the amount set by the board and on submission of a written application on forms provided by the board, the board shall issue registration a license without examination to a person who is licensed or otherwise registered as a physical therapist by another state of the United States of America, its possessions, or the District of Columbia, if the board determines that the requirements for licensure licensing or registration in the state, possession, or District are equal to, or greater than, the requirements set forth in sections 148.65 to 148.78.

Sec. 95. Minnesota Statutes 1996, section 148.72, subdivision 2, is amended to read:

Subd. 2. [CERTIFICATE OF REGISTRATION LICENSE.] The board may issue a certificate of registration to a physical therapist license without examination to an applicant who presents evidence satisfactory to the board of having passed an examination recognized by the board, if the board determines the standards of the other state or foreign country are determined by the board to be as high as equal to those of this state. At the time of making an Upon application, the applicant shall pay to the board a fee in the amount set by the board,. No portion of which shall be returned the fee is refundable.

Sec. 96. Minnesota Statutes 1996, section 148.72, subdivision 4, is amended to read:

Subd. 4. [ISSUANCE OF REGISTRATION LICENSE AFTER EXAMINATION.] The board shall issue a certificate of registration license to each an applicant who passes the examination in accordance with according to standards established by the board and who is not disqualified to receive registration a license under the provisions of section 148.75.

Sec. 97. Minnesota Statutes 1996, section 148.73, is amended to read:

148.73 [RENEWALS.]

Every registered licensed physical therapist shall, during each January, apply to the board for an extension of registration a license and pay a fee in the amount set by the board. The extension of registration the license is contingent upon demonstration that the continuing education requirements set by the board under section 148.70 have been satisfied.

Sec. 98. Minnesota Statutes 1996, section 148.74, is amended to read:

148.74 [RULES.]

the license, and the renewal thereof of the license. Any other interested person in the state may obtain a copy of such the list on request to the board upon payment of paying an amount as may be fixed by the board, which. The amount shall not exceed the cost of the list so furnished. The board shall provide blanks, books, certificates, and stationery and assistance as is necessary for the transaction of the to transact business of the board and the physical therapy council hereunder, and. All money received by the board under sections 148.65 to 148.78 shall be paid into the state treasury as provided for by law. The board shall set by rule the amounts of the application fee and the annual registration licensing fee. The fees collected by the board must be sufficient to cover the costs of administering sections 148.65 to 148.78.

Sec. 99. Minnesota Statutes 1996, section 148.75, is amended to read:

148.75 [CERTIFICATES LICENSES; DENIAL, SUSPENSION, REVOCATION.]

(a) The state board of medical practice physical therapy may refuse to grant registration a license to any physical therapist, or may suspend or revoke the registration license of any physical therapist for any of the following grounds:

(a) (1) using drugs or intoxicating liquors to an extent which affects professional competence;

(b) been convicted (2) conviction of a felony;

(c) (3) conviction for violating any state or federal narcotic law;

(d) procuring, aiding or abetting a criminal abortion;

(e) registration (4) obtaining a license or attempted registration attempting to obtain a license by fraud or deception;

(f) (5) conduct unbecoming a person registered licensed as a physical therapist or conduct detrimental to the best interests of the public;

(g) (6) gross negligence in the practice of physical therapy as a physical therapist;

(h) (7) treating human ailments by physical therapy after an initial 30-day period of patient admittance to treatment has lapsed, except by the order or referral of a person licensed in this state to in the practice of medicine as defined in section 147.081, the practice of chiropractic as defined in section 148.01, the practice of podiatry as defined in section 153.01, or the practice of dentistry as defined in section 150A.05 and whose license is in good standing; or when a previous diagnosis exists indicating an ongoing condition warranting physical therapy treatment, subject to periodic review defined by board of medical practice physical therapy rule;

(i) (8) treating human ailments, without referral, by physical therapy treatment without first having practiced one year under a physician's orders as verified by the board's records;

(j) failure (9) failing to consult with the patient's health care provider who prescribed the physical therapy treatment if the treatment is altered by the physical therapist from the original written order. The provision does not include written orders specifying orders to "evaluate and treat";

(k) (10) treating human ailments other than by physical therapy unless duly licensed or registered to do so under the laws of this state;

(l) (11) inappropriate delegation to a physical therapist assistant or inappropriate task assignment to an aide or inadequate supervision of either level of supportive personnel;

(m) treating human ailments other than by performing physical therapy procedures unless duly licensed or registered to do so under the laws of this state;

(o) failure (13) failing to comply with a reasonable request to obtain appropriate clearance for mental or physical conditions which that would interfere with the ability to practice physical therapy, and which that may be potentially harmful to patients;

(p) (14) dividing fees with, or paying or promising to pay a commission or part of the fee to, any person who contacts the physical therapist for consultation or sends patients to the physical therapist for treatment;

(q) (15) engaging in an incentive payment arrangement, other than that prohibited by clause (p) (14), that tends to promote physical therapy overutilization overuse, whereby that allows the referring person or person who controls the availability of physical therapy services to a client profits to profit unreasonably as a result of patient treatment;

(r) (16) practicing physical therapy and failing to refer to a licensed health care professional any a patient whose medical condition at the time of evaluation has been determined by the physical therapist to be beyond the scope of practice of a physical therapist; and

(s) failure (17) failing to report to the board other registered licensed physical therapists who violate this section.

(b) A certificate of registration license to practice as a physical therapist is suspended if (1) a guardian of the person of the physical therapist is appointed by order of a court pursuant to sections 525.54 to 525.61, for reasons other than the minority of the physical therapist; or (2) the physical therapist is committed by order of a court pursuant to chapter 253B. The certificate of registration license remains suspended until the physical therapist is restored to capacity by a court and, upon petition by the physical therapist, the suspension is terminated by the board of medical practice physical therapy after a hearing.

Sec. 100. Minnesota Statutes 1996, section 148.76, is amended to read:

148.76 [PROHIBITED CONDUCT.]

Subdivision 1. No person shall:

(a) (1) use the title of physical therapist without a certificate of registration license as a physical therapist issued pursuant to the provisions of under sections 148.65 to 148.78;

(b) (2) in any manner hold out as a physical therapist, or use in connection with the person's name the words or letters Physical Therapist, Physiotherapist, Physical Therapy Technician, Registered Physical Therapist, Licensed Physical Therapist, P.T., P.T.T., R.P.T., L.P.T., or any letters, words, abbreviations or insignia indicating or implying that the person is a physical therapist, without a certificate of registration license as a physical therapist issued pursuant to the provisions of under sections 148.65 to 148.78. To do so is a gross misdemeanor;

(c) (3) employ fraud or deception in applying for or securing a certificate of registration license as a physical therapist.

Nothing contained in sections 148.65 to 148.78 shall prohibit any prohibits a person licensed or registered in this state under another law from carrying out the therapy or practice for which the person is duly licensed or registered.

Subd. 2. No physical therapist shall:

(a) (1) treat human ailments by physical therapy after an initial 30-day period of patient admittance to treatment has lapsed, except by the order or referral of a person licensed in this state to practice medicine as defined in section 147.081, the practice of chiropractic as defined in section 148.01, the practice of podiatry as defined in section 153.01, or the practice of dentistry as defined in section 150A.05 and whose license is in good standing; or when a previous diagnosis exists indicating an ongoing condition warranting physical therapy treatment, subject to periodic review defined by board of medical practice physical therapy rule;

(c) utilize (3) use any chiropractic manipulative technique whose end is the chiropractic adjustment of an abnormal articulation of the body; and

(d) (4) treat human ailments other than by physical therapy unless duly licensed or registered to do so under the laws of this state.

Sec. 101. Minnesota Statutes 1996, section 148.78, is amended to read:

148.78 [PROSECUTION, ALLEGATIONS.]

In the prosecution of any person for violation of sections 148.65 to 148.78 as specified in section 148.76, it shall not be necessary to allege or prove want of a valid certificate of registration license as a physical therapist, but shall be a matter of defense to be established by the accused.

Sec. 102. Minnesota Statutes 1996, section 214.01, subdivision 2, is amended to read:

Subd. 2. [HEALTH-RELATED LICENSING BOARD.] "Health-related licensing board" means the board of examiners of nursing home administrators established pursuant to section 144A.19, the board of medical practice created pursuant to section 147.01, the board of nursing created pursuant to section 148.181, the board of chiropractic examiners established pursuant to section 148.02, the board of optometry established pursuant to section 148.52, the board of physical therapy established pursuant to section 148.67, the board of psychology established pursuant to section 148.90, the board of social work pursuant to section 148B.19, the board of marriage and family therapy pursuant to section 148B.30, the office of mental health practice established pursuant to section 148B.61, the alcohol and drug counselors licensing advisory council established pursuant to section 148C.02, the board of dietetics and nutrition practice established under section 148.622, the board of dentistry established pursuant to section 150A.02, the board of pharmacy established pursuant to section 151.02, the board of podiatric medicine established pursuant to section 153.02, and the board of veterinary medicine, established pursuant to section 156.01.

Sec. 103. Minnesota Statutes 1996, section 214.03, is amended to read:

214.03 [STANDARDIZED TESTS.]

Subdivision 1. [STANDARDIZED TESTS USED.] All state examining and licensing boards, other than the state board of law examiners, the state board of professional responsibility or any other board established by the supreme court to regulate the practice of law and judicial functions, shall use national standardized tests for the objective, nonpractical portion of any examination given to prospective licensees to the extent that such national standardized tests are appropriate, except when the subject matter of the examination relates to the application of Minnesota law to the profession or calling being licensed.

Subd. 2. [HEALTH-RELATED BOARDS; SPECIAL ACCOUNT.] There is established an account in the special revenue fund where a health-related licensing board may deposit applicants' payments for national or regional standardized tests. Money in the account is appropriated to each board that has deposited monies into the account, in an amount equal to the amount deposited by the board, to pay for the use of national or regional standardized tests.

Sec. 104. Minnesota Statutes 1997 Supplement, section 214.32, subdivision 1, is amended to read:

(b) The designated board, upon recommendation of the health professional services program committee, shall hire the program manager and employees and pay expenses of the program from funds appropriated for that purpose. The designated board may apply for grants to pay program expenses and may enter into contracts on behalf of the program to carry out the purposes of the program. The participating boards shall enter into written agreements with the designated board.

(c) An advisory committee is established to advise the program committee consisting of:

(1) one member appointed by each of the following: the Minnesota Academy of Physician Assistants, the Minnesota Dental Association, the Minnesota Chiropractic Association, the Minnesota Licensed Practical Nurse Association, the Minnesota Medical Association, the Minnesota Nurses Association, and the Minnesota Podiatric Medicine Association;

(2) one member appointed by each of the professional associations of the other professions regulated by a participating board not specified in clause (1); and

(3) two public members, as defined by section 214.02.

Members of the advisory committee shall be appointed for two years and members may be reappointed.

No more than half plus one of the members of the committee may be of one gender.

The advisory committee expires June 30, 2001.

Sec. 105. Minnesota Statutes 1996, section 254A.17, subdivision 1, is amended to read:

Subdivision 1. [MATERNAL AND CHILD SERVICE PROGRAMS.] (a) The commissioner shall fund maternal and child health and social service programs designed to improve the health and functioning of children born to mothers using alcohol and controlled substances. Comprehensive programs shall include immediate and ongoing intervention, treatment, and coordination of medical, educational, and social services through a child's preschool years. Programs shall also include research and evaluation to identify methods most effective in improving outcomes among this high-risk population. The commissioner shall ensure that the programs are available on a statewide basis to the extent possible with available funds.

(b) The commissioner of human services shall develop models for the treatment of children ages 6 to 12 who are in need of chemical dependency treatment. The commissioner shall fund at least two pilot projects with qualified providers to provide nonresidential treatment for children in this age group. Model programs must include a component to monitor and evaluate treatment outcomes.

Sec. 106. Minnesota Statutes 1996, section 254A.17, is amended by adding a subdivision to read:

Subd. 1b. [INTERVENTION AND ADVOCACY PROGRAM.] Within the limits of money available, the commissioner of human services shall fund voluntary hospital-based outreach programs targeted at women who deliver children affected by prenatal alcohol or drug use. The program shall help women obtain treatment, stay in recovery, and plan any future pregnancies. An advocate shall be assigned to each woman in the program to provide guidance and advice with respect to treatment programs, child safety and parenting, housing, family planning, and any other personal issues that are barriers to remaining free of chemical dependence. The commissioner shall develop an evaluation component and provide centralized coordination of the evaluation process.

Sec. 107. Minnesota Statutes 1997 Supplement, section 256B.692, subdivision 2, is amended to read:

provisions of chapter 62Q, including sections 62Q.07; 62Q.075; 62Q.105; 62Q.1055; 62Q.106; 62Q.11; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.30; 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; and 72A.201 will be met. All enforcement and rulemaking powers available under chapters 62D, 62J, and 62N are hereby granted to the commissioner of health with respect to counties that purchase medical assistance and general assistance medical care services under this section.

Sec. 108. Minnesota Statutes 1996, section 268.92, subdivision 4, is amended to read:

Subd. 4. [LEAD CONTRACTORS SUPERVISOR OR CERTIFIED FIRM.] (a) Eligible organizations and lead contractors supervisors or certified firms may participate in the swab team program. An eligible organization receiving a grant under this section must assure that all participating lead contractors supervisors or certified firms are licensed and that all swab team workers are certified by the department of health under section 144.9505. Eligible organizations and lead contractors supervisors or certified firms may distinguish between interior and exterior services in assigning duties and may participate in the program by:

(1) providing on-the-job training for swab team workers;

(2) providing swab team services to meet the requirements of sections 144.9503, subdivision 4, and 144.9504, subdivision 6;

(3) providing a removal and replacement component using skilled craft workers under subdivision 7;

(4) providing lead testing according to subdivision 7a;

(5) providing lead dust cleaning supplies, as described in section 144.9503 144.9507, subdivision 5 4, paragraph (b) (c), to residents; or

(6) having a swab team worker instruct residents and property owners on appropriate lead control techniques, including the lead-safe directives developed by the commissioner of health.

(b) Participating lead contractors supervisors or certified firms must:

(1) demonstrate proof of workers' compensation and general liability insurance coverage;

(2) be knowledgeable about lead abatement requirements established by the Department of Housing and Urban Development and the Occupational Safety and Health Administration and lead hazard reduction requirements and lead-safe directives of the commissioner of health;

(3) demonstrate experience with on-the-job training programs;

(4) demonstrate an ability to recruit employees from areas at high risk for toxic lead exposure; and

(5) demonstrate experience in working with low-income clients.

Sec. 109. [COMPLAINT PROCESS STUDY.]

Sec. 110. [RESIDENTIAL HOSPICE ADVISORY TASK FORCE.]

The commissioner of health shall convene an advisory task force to study issues related to the building codes and safety standards that residential hospice facilities must meet for licensure and to make recommendations on changes to these standards. Task force membership shall include representatives of residential hospices, pediatric residential hospices, the Minnesota hospice organization, the Minnesota department of health, and other interested parties. The task force is governed by Minnesota Statutes, section 15.059, subdivision 6. The task force shall submit recommendations and any draft legislation to the legislature by January 15, 1999.

Sec. 111. [TEMPORARY LICENSURE WAIVER FOR DIETITIANS.]

Until October 31, 1998, the board of dietetics and nutrition practice may waive the requirements for licensure as a dietitian established in Minnesota Statutes, section 148.624, subdivision 1, clause (1), and may issue a license to an applicant who meets the qualifications for licensure specified in Minnesota Statutes, section 148.627, subdivision 1. A waiver may be granted in cases in which unusual or extraordinary job-related circumstances prevented an applicant from applying for licensure during the transition period specified in Minnesota Statutes, section 148.627, subdivision 1. An applicant must request a waiver in writing and must explain the circumstances that prevented the applicant from applying for licensure during the transition period.

Sec. 112. [ADVICE AND RECOMMENDATIONS.]

The commissioners of health and commerce shall convene an ad hoc advisory panel of selected representatives of health plan companies, purchasers, and provider groups engaged in the practice of health care in Minnesota, and interested legislators. This advisory panel shall meet and assist the commissioners in developing measures to prevent discrimination against providers and provider groups in managed care in Minnesota and clarify the requirements of Minnesota Statutes, section 62Q.23, paragraph (c). Any such measures shall be reported to the legislature prior to November 15, 1998.

Sec. 113. [AGREEMENT AUTHORIZED.]

In order to have a comprehensive program to protect the public from radiation hazards, the governor may enter into an agreement with the United States Nuclear Regulatory Commission, under the Atomic Energy Act of 1954, United States Code, title 42, section 2021, paragraph (b). The agreement may allow the state to assume regulation over nonpower plant radiation hazards including certain by-product, source, and special nuclear materials not sufficient to form a critical mass.

Sec. 114. [HEALTH DEPARTMENT DESIGNATED LEAD.]

The department of health is designated as the lead agency to pursue an agreement on behalf of the governor, and for any assumption of specified licensing and regulatory authority from the Nuclear Regulatory Commission under an agreement. The department may enter into negotiations with the Nuclear Regulatory Commission for that purpose. The commissioner of health shall establish an advisory group to assist the department in preparing the state to meet the requirements for achieving an agreement.

Sec. 115. [RULES.]

The department of health may adopt rules for the state assumption of regulation under an agreement under this act, including the licensing and regulation of by-product, source, and special nuclear material not sufficient to form a critical mass.

Sec. 116. [TRANSITION.]

Sec. 117. [STUDY OF EXTENT OF FETAL ALCOHOL SYNDROME.]

The commissioner of health shall conduct a study of the incidence and prevalence of fetal alcohol syndrome in Minnesota. The commissioner shall not collect individually identifiable data for this study.

Sec. 118. [INITIAL APPOINTMENTS TO BOARD.]

Notwithstanding Minnesota Statutes, section 148.67, the first physical therapist members appointed to the board may be registered physical therapists.

Sec. 119. [SUNSET.]

An agreement entered into before August 2, 2002, shall remain in effect until terminated or suspended under the Atomic Energy Act of 1954, United States Code, title 42, section 2021, paragraph (j). The governor may not enter into an initial agreement with the Nuclear Regulatory Commission after August 1, 2002. If an agreement is not entered into, any rules adopted under this act are repealed on that date.

Sec. 120. [REPEALER.]

Minnesota Statutes 1996, sections 144.491; 144.9501, subdivisions 12, 14, and 16; and 144.9503, subdivisions 5, 8, and 9, are repealed.

Sec. 121. [EFFECTIVE DATES.]

Sections 23 to 37, 39 to 58, 60 to 69, 103 (214.03), 104 (214.32, subdivision 1), 111 (temporary licensure), 112 (advice and recommendations), and 120 (Repealer) are effective the day following final enactment.

Sections 1 and 7 to 10 are effective January 1, 1999, and apply to coverage issued, renewed, or continued as defined in section 60A.02, subdivision 2a, on or after that date.

Section 1. Minnesota Statutes 1996, section 144A.04, subdivision 5, is amended to read:

Sec. 2. Minnesota Statutes 1997 Supplement, section 144A.071, subdivision 4a, is amended to read:

Subd. 4a. [EXCEPTIONS FOR REPLACEMENT BEDS.] It is in the best interest of the state to ensure that nursing homes and boarding care homes continue to meet the physical plant licensing and certification requirements by permitting certain construction projects. Facilities should be maintained in condition to satisfy the physical and emotional needs of residents while allowing the state to maintain control over nursing home expenditure growth.

The commissioner of health in coordination with the commissioner of human services, may approve the renovation, replacement, upgrading, or relocation of a nursing home or boarding care home, under the following conditions:

(a) to license or certify beds in a new facility constructed to replace a facility or to make repairs in an existing facility that was destroyed or damaged after June 30, 1987, by fire, lightning, or other hazard provided:

(i) destruction was not caused by the intentional act of or at the direction of a controlling person of the facility;

(ii) at the time the facility was destroyed or damaged the controlling persons of the facility maintained insurance coverage for the type of hazard that occurred in an amount that a reasonable person would conclude was adequate;

(iii) the net proceeds from an insurance settlement for the damages caused by the hazard are applied to the cost of the new facility or repairs;

(iv) the new facility is constructed on the same site as the destroyed facility or on another site subject to the restrictions in section 144A.073, subdivision 5;

(v) the number of licensed and certified beds in the new facility does not exceed the number of licensed and certified beds in the destroyed facility; and

(vi) the commissioner determines that the replacement beds are needed to prevent an inadequate supply of beds.

Project construction costs incurred for repairs authorized under this clause shall not be considered in the dollar threshold amount defined in subdivision 2;

(b) to license or certify beds that are moved from one location to another within a nursing home facility, provided the total costs of remodeling performed in conjunction with the relocation of beds does not exceed $750,000;

(c) to license or certify beds in a project recommended for approval under section 144A.073;

(d) to license or certify beds that are moved from an existing state nursing home to a different state facility, provided there is no net increase in the number of state nursing home beds;

(e) to certify and license as nursing home beds boarding care beds in a certified boarding care facility if the beds meet the standards for nursing home licensure, or in a facility that was granted an exception to the moratorium under section 144A.073, and if the cost of any remodeling of the facility does not exceed $750,000. If boarding care beds are licensed as nursing home beds, the number of boarding care beds in the facility must not increase beyond the number remaining at the time of the upgrade in licensure. The provisions contained in section 144A.073 regarding the upgrading of the facilities do not apply to facilities that satisfy these requirements;

(g) to license and certify nursing home beds to replace currently licensed and certified boarding care beds which may be located either in a remodeled or renovated boarding care or nursing home facility or in a remodeled, renovated, newly constructed, or replacement nursing home facility within the identifiable complex of health care facilities in which the currently licensed boarding care beds are presently located, provided that the number of boarding care beds in the facility or complex are decreased by the number to be licensed as nursing home beds and further provided that, if the total costs of new construction, replacement, remodeling, or renovation exceed ten percent of the appraised value of the facility or $200,000, whichever is less, the facility makes a written commitment to the commissioner of human services that it will not seek to receive an increase in its property-related payment rate by reason of the new construction, replacement, remodeling, or renovation. The provisions contained in section 144A.073 regarding the upgrading of facilities do not apply to facilities that satisfy these requirements;

(h) to license as a nursing home and certify as a nursing facility a facility that is licensed as a boarding care facility but not certified under the medical assistance program, but only if the commissioner of human services certifies to the commissioner of health that licensing the facility as a nursing home and certifying the facility as a nursing facility will result in a net annual savings to the state general fund of $200,000 or more;

(i) to certify, after September 30, 1992, and prior to July 1, 1993, existing nursing home beds in a facility that was licensed and in operation prior to January 1, 1992;

(j) to license and certify new nursing home beds to replace beds in a facility condemned acquired by the Minneapolis community development agency as part of an economic redevelopment plan activities in a city of the first class, provided the new facility is located within one mile three miles of the site of the old facility. Operating and property costs for the new facility must be determined and allowed under existing reimbursement rules section 256B.431 or 256B.434;

(k) to license and certify up to 20 new nursing home beds in a community-operated hospital and attached convalescent and nursing care facility with 40 beds on April 21, 1991, that suspended operation of the hospital in April 1986. The commissioner of human services shall provide the facility with the same per diem property-related payment rate for each additional licensed and certified bed as it will receive for its existing 40 beds;

(l) to license or certify beds in renovation, replacement, or upgrading projects as defined in section 144A.073, subdivision 1, so long as the cumulative total costs of the facility's remodeling projects do not exceed $750,000;

(m) to license and certify beds that are moved from one location to another for the purposes of converting up to five four-bed wards to single or double occupancy rooms in a nursing home that, as of January 1, 1993, was county-owned and had a licensed capacity of 115 beds;

(n) to allow a facility that on April 16, 1993, was a 106-bed licensed and certified nursing facility located in Minneapolis to layaway all of its licensed and certified nursing home beds. These beds may be relicensed and recertified in a newly-constructed teaching nursing home facility affiliated with a teaching hospital upon approval by the legislature. The proposal must be developed in consultation with the interagency committee on long-term care planning. The beds on layaway status shall have the same status as voluntarily delicensed and decertified beds, except that beds on layaway status remain subject to the surcharge in section 256.9657. This layaway provision expires July 1, 1998;

(o) to allow a project which will be completed in conjunction with an approved moratorium exception project for a nursing home in southern Cass county and which is directly related to that portion of the facility that must be repaired, renovated, or replaced, to correct an emergency plumbing problem for which a state correction order has been issued and which must be corrected by August 31, 1993;

remain subject to the license application and renewal fees under section 144A.07 and shall be subject to a $100 per bed reactivation fee. In addition, at any time within three years of the effective date of the layaway, the beds on layaway status may be:

(1) relicensed and recertified upon relocation and reactivation of some or all of the beds to an existing licensed and certified facility or facilities located in Pine River, Brainerd, or International Falls; provided that the total project construction costs related to the relocation of beds from layaway status for any facility receiving relocated beds may not exceed the dollar threshold provided in subdivision 2 unless the construction project has been approved through the moratorium exception process under section 144A.073;

(2) relicensed and recertified, upon reactivation of some or all of the beds within the facility which placed the beds in layaway status, if the commissioner has determined a need for the reactivation of the beds on layaway status.

The property-related payment rate of a facility placing beds on layaway status must be adjusted by the incremental change in its rental per diem after recalculating the rental per diem as provided in section 256B.431, subdivision 3a, paragraph (d). The property-related payment rate for a facility relicensing and recertifying beds from layaway status must be adjusted by the incremental change in its rental per diem after recalculating its rental per diem using the number of beds after the relicensing to establish the facility's capacity day divisor, which shall be effective the first day of the month following the month in which the relicensing and recertification became effective. Any beds remaining on layaway status more than three years after the date the layaway status became effective must be removed from layaway status and immediately delicensed and decertified;

(q) to license and certify beds in a renovation and remodeling project to convert 12 four-bed wards into 24 two-bed rooms, expand space, and add improvements in a nursing home that, as of January 1, 1994, met the following conditions: the nursing home was located in Ramsey county; had a licensed capacity of 154 beds; and had been ranked among the top 15 applicants by the 1993 moratorium exceptions advisory review panel. The total project construction cost estimate for this project must not exceed the cost estimate submitted in connection with the 1993 moratorium exception process;

(r) to license and certify up to 117 beds that are relocated from a licensed and certified 138-bed nursing facility located in St. Paul to a hospital with 130 licensed hospital beds located in South St. Paul, provided that the nursing facility and hospital are owned by the same or a related organization and that prior to the date the relocation is completed the hospital ceases operation of its inpatient hospital services at that hospital. After relocation, the nursing facility's status under section 256B.431, subdivision 2j, shall be the same as it was prior to relocation. The nursing facility's property-related payment rate resulting from the project authorized in this paragraph shall become effective no earlier than April 1, 1996. For purposes of calculating the incremental change in the facility's rental per diem resulting from this project, the allowable appraised value of the nursing facility portion of the existing health care facility physical plant prior to the renovation and relocation may not exceed $2,490,000;

(s) to license and certify two beds in a facility to replace beds that were voluntarily delicensed and decertified on June 28, 1991;

(t) to allow 16 licensed and certified beds located on July 1, 1994, in a 142-bed nursing home and 21-bed boarding care home facility in Minneapolis, notwithstanding the licensure and certification after July 1, 1995, of the Minneapolis facility as a 147-bed nursing home facility after completion of a construction project approved in 1993 under section 144A.073, to be laid away upon 30 days' prior written notice to the commissioner. Beds on layaway status shall have the same status as voluntarily delicensed or decertified beds except that they shall remain subject to the surcharge in section 256.9657. The 16 beds on layaway status may be relicensed as nursing home beds and recertified at any time within five years of the effective date of the layaway upon relocation of some or all of the beds to a licensed and certified facility located in Watertown, provided that the total project construction costs related to the relocation of beds from layaway status for the Watertown facility may not exceed the dollar threshold provided in subdivision 2 unless the construction project has been approved through the moratorium exception process under section 144A.073.

be adjusted by the incremental change in its rental per diem after recalculating its rental per diem using the number of beds after the relicensing to establish the facility's capacity day divisor, which shall be effective the first day of the month following the month in which the relicensing and recertification became effective. Any beds remaining on layaway status more than five years after the date the layaway status became effective must be removed from layaway status and immediately delicensed and decertified;

(u) to license and certify beds that are moved within an existing area of a facility or to a newly constructed addition which is built for the purpose of eliminating three- and four-bed rooms and adding space for dining, lounge areas, bathing rooms, and ancillary service areas in a nursing home that, as of January 1, 1995, was located in Fridley and had a licensed capacity of 129 beds;

(v) to relocate 36 beds in Crow Wing county and four beds from Hennepin county to a 160-bed facility in Crow Wing county, provided all the affected beds are under common ownership;

(w) to license and certify a total replacement project of up to 49 beds located in Norman county that are relocated from a nursing home destroyed by flood and whose residents were relocated to other nursing homes. The operating cost payment rates for the new nursing facility shall be determined based on the interim and settle-up payment provisions of Minnesota Rules, part 9549.0057, and the reimbursement provisions of section 256B.431, except that subdivision 26, paragraphs (a) and (b), shall not apply until the second rate year after the settle-up cost report is filed. Property-related reimbursement rates shall be determined under section 256B.431, taking into account any federal or state flood-related loans or grants provided to the facility;

(x) to license and certify a total replacement project of up to 129 beds located in Polk county that are relocated from a nursing home destroyed by flood and whose residents were relocated to other nursing homes. The operating cost payment rates for the new nursing facility shall be determined based on the interim and settle-up payment provisions of Minnesota Rules, part 9549.0057, and the reimbursement provisions of section 256B.431, except that subdivision 26, paragraphs (a) and (b), shall not apply until the second rate year after the settle-up cost report is filed. Property-related reimbursement rates shall be determined under section 256B.431, taking into account any federal or state flood-related loans or grants provided to the facility; or

(y) to license and certify beds in a renovation and remodeling project to convert 13 three-bed wards into 13 two-bed rooms and 13 single-bed rooms, expand space, and add improvements in a nursing home that, as of January 1, 1994, met the following conditions: the nursing home was located in Ramsey county, was not owned by a hospital corporation, had a licensed capacity of 64 beds, and had been ranked among the top 15 applicants by the 1993 moratorium exceptions advisory review panel. The total project construction cost estimate for this project must not exceed the cost estimate submitted in connection with the 1993 moratorium exception process.;

(z) to allow a 285-bed nursing facility in St. Paul that provides for the special dietary needs of its residents under the requirements in section 31.651 to undertake a construction project that will improve some of the existing structures, create new buildings, and reduce the licensed and certified beds to 150; or

(aa) to allow the commissioner of human services to license an additional 36 beds to provide residential services for the physically handicapped under Minnesota Rules, parts 9570.2000 to 9570.3400, in a 198-bed nursing home located in Red Wing, provided that the total number of licensed and certified beds at the facility does not increase.

Sec. 3. Minnesota Statutes 1996, section 144A.09, subdivision 1, is amended to read:

Sec. 4. Minnesota Statutes 1997 Supplement, section 256B.0951, is amended by adding a subdivision to read:

Subd. 7. [WAIVER OF RULES.] The commissioner of health may exempt residents of intermediate care facilities for persons with mental retardation (ICFs/MR) who participate in the three-year quality assurance pilot project established in section 256B.095 from the requirements of Minnesota Rules, chapter 4665, upon approval by the federal government of a waiver of federal certification requirements for ICFs/MR. The commissioners of health and human services shall apply for any necessary waivers as soon as practicable and shall submit the concept paper to the federal government by June 1, 1998.

Sec. 5. Minnesota Statutes 1996, section 256B.431, subdivision 2i, is amended to read:

Subd. 2i. [OPERATING COSTS AFTER JULY 1, 1988.] (a) [OTHER OPERATING COST LIMITS.] For the rate year beginning July 1, 1988, the commissioner shall increase the other operating cost limits established in Minnesota Rules, part 9549.0055, subpart 2, item E, to 110 percent of the median of the array of allowable historical other operating cost per diems and index these limits as in Minnesota Rules, part 9549.0056, subparts 3 and 4. The limits must be established in accordance with subdivision 2b, paragraph (d). For rate years beginning on or after July 1, 1989, the adjusted other operating cost limits must be indexed as in Minnesota Rules, part 9549.0056, subparts 3 and 4. For the rate period beginning October 1, 1992, and for rate years beginning after June 30, 1993, the amount of the surcharge under section 256.9657, subdivision 1, shall be included in the plant operations and maintenance operating cost category. The surcharge shall be an allowable cost for the purpose of establishing the payment rate.

(b) [CARE-RELATED OPERATING COST LIMITS.] For the rate year beginning July 1, 1988, the commissioner shall increase the care-related operating cost limits established in Minnesota Rules, part 9549.0055, subpart 2, items A and B, to 125 percent of the median of the array of the allowable historical case mix operating cost standardized per diems and the allowable historical other care-related operating cost per diems and index those limits as in Minnesota Rules, part 9549.0056, subparts 1 and 2. The limits must be established in accordance with subdivision 2b, paragraph (d). For rate years beginning on or after July 1, 1989, the adjusted care-related limits must be indexed as in Minnesota Rules, part 9549.0056, subparts 1 and 2.

(c) [SALARY ADJUSTMENT PER DIEM.] For the rate period Effective October 1, 1988 1998, to June 30, 1990 2000, the commissioner, within the limits of available appropriations, shall add the appropriate make available the salary adjustment per diem calculated in clause (1) or (2) to the total operating cost payment rate of each nursing facility reimbursed under this section or section 256B.434. The salary adjustment per diem for each nursing facility must be determined as follows:

(1) for each nursing facility that reports salaries for registered nurses, licensed practical nurses, and aides, orderlies and attendants separately, the commissioner shall determine the salary adjustment per diem by multiplying the total salaries, payroll taxes, and fringe benefits allowed in each operating cost category, except management fees and administrator and central office salaries and the related payroll taxes and fringe benefits, by 3.5 5 percent and then dividing the resulting amount by the nursing facility's actual resident days; and

(2) for each nursing facility that does not report salaries for registered nurses, licensed practical nurses, aides, orderlies, and attendants separately, the salary adjustment per diem is the weighted average salary adjustment per diem increase determined under clause (1).

Each nursing facility that receives a salary adjustment per diem pursuant to this subdivision shall adjust nursing facility employee salaries by a minimum of the amount determined in clause (1) or (2). The commissioner shall review allowable salary costs, including payroll taxes and fringe benefits, for the reporting year ending September 30, 1989, to determine whether or not each nursing facility complied with this requirement. The commissioner shall report the extent to which each nursing facility complied with the legislative commission on long-term care by August 1, 1990.

(d) [NEW BASE YEAR.] The commissioner shall establish new base years for both the reporting year ending September 30, 1989, and the reporting year ending September 30, 1990. In establishing new base years, the commissioner must take into account:

(1) statutory changes made in geographic groups;

(2) redefinitions of cost categories; and

(3) reclassification, pass-through, or exemption of certain costs such as public employee retirement act contributions.

(e) [NEW BASE YEAR.] The commissioner shall establish a new base year for the reporting years ending September 30, 1991, and September 30, 1992. In establishing a new base year, the commissioner must take into account:

(1) statutory changes made in geographic groups;

(2) redefinitions of cost categories; and

(3) reclassification, pass-through, or exemption of certain costs.

Sec. 6. Minnesota Statutes 1996, section 256B.431, is amended by adding a subdivision to read:

Subd. 2s. [NONALLOWABLE COST.] Costs incurred for any activities which are directed at or are intended to influence or dissuade employees in the exercise of their legal rights to freely engage in the process of selecting an exclusive representative for the purpose of collective bargaining with their employer shall not be allowable for purposes of setting payment rates.

Sec. 7. Minnesota Statutes 1997 Supplement, section 256B.431, subdivision 3f, is amended to read:

Subd. 3f. [PROPERTY COSTS AFTER JULY 1, 1988.] (a) [ INVESTMENT PER BED LIMIT.] For the rate year beginning July 1, 1988, the replacement-cost-new per bed limit must be $32,571 per licensed bed in multiple bedrooms and $48,857 per licensed bed in a single bedroom. For the rate year beginning July 1, 1989, the replacement-cost-new per bed limit for a single bedroom must be $49,907 adjusted according to Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1). Beginning January 1, 1990, the replacement-cost-new per bed limits must be adjusted annually as specified in Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1). Beginning January 1, 1991, the replacement-cost-new per bed limits will be adjusted annually as specified in Minnesota Rules, part 9549.0060, subpart 4, item A, subitem (1), except that the index utilized will be the Bureau of the Census: Composite fixed-weighted price index as published in the C30 Report, Value of New Construction Put in Place.

(b) [RENTAL FACTOR.] For the rate year beginning July 1, 1988, the commissioner shall increase the rental factor as established in Minnesota Rules, part 9549.0060, subpart 8, item A, by 6.2 percent rounded to the nearest 100th percent for the purpose of reimbursing nursing facilities for soft costs and entrepreneurial profits not included in the cost valuation services used by the state's contracted appraisers. For rate years beginning on or after July 1, 1989, the rental factor is the amount determined under this paragraph for the rate year beginning July 1, 1988.

(c) [OCCUPANCY FACTOR.] For rate years beginning on or after July 1, 1988, in order to determine property-related payment rates under Minnesota Rules, part 9549.0060, for all nursing facilities except those whose average length of stay in a skilled level of care within a nursing facility is 180 days or less, the commissioner shall use 95 percent of capacity days. For a nursing facility whose average length of stay in a skilled level of care within a nursing facility is 180 days or less, the commissioner shall use the greater of resident days or 80 percent of capacity days but in no event shall the divisor exceed 95 percent of capacity days.

subpart 10, by ten cents per resident per day. For rate years beginning on or after July 1, 1991, the adjusted equipment allowance must be adjusted annually for inflation as in Minnesota Rules, part 9549.0060, subpart 10, item E. For the rate period beginning October 1, 1992, the equipment allowance for each nursing facility shall be increased by 28 percent. For rate years beginning after June 30, 1993, the allowance must be adjusted annually for inflation.

(e) [POST CHAPTER 199 RELATED-ORGANIZATION DEBTS AND INTEREST EXPENSE.] For rate years beginning on or after July 1, 1990, Minnesota Rules, part 9549.0060, subpart 5, item E, shall not apply to outstanding related organization debt incurred prior to May 23, 1983, provided that the debt was an allowable debt under Minnesota Rules, parts 9510.0010 to 9510.0480, the debt is subject to repayment through annual principal payments, and the nursing facility demonstrates to the commissioner's satisfaction that the interest rate on the debt was less than market interest rates for similar arms-length transactions at the time the debt was incurred. If the debt was incurred due to a sale between family members, the nursing facility must also demonstrate that the seller no longer participates in the management or operation of the nursing facility. Debts meeting the conditions of this paragraph are subject to all other provisions of Minnesota Rules, parts 9549.0010 to 9549.0080.

(f) [BUILDING CAPITAL ALLOWANCE FOR NURSING FACILITIES WITH OPERATING LEASES.] For rate years beginning on or after July 1, 1990, a nursing facility with operating lease costs incurred for the nursing facility's buildings shall receive its building capital allowance computed in accordance with Minnesota Rules, part 9549.0060, subpart 8. If an operating lease provides that the lessee's rent is adjusted to recognize improvements made by the lessor and related debt, the costs for capital improvements and related debt shall be allowed in the computation of the lessee's building capital allowance, provided that reimbursement for these costs under an operating lease shall not exceed the rate otherwise paid.

Sec. 8. Minnesota Statutes 1996, section 256B.431, subdivision 11, is amended to read:

Subd. 11. [SPECIAL PROPERTY RATE SETTING PROCEDURES FOR CERTAIN NURSING FACILITIES.] (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 13, item H, to the contrary, for the rate year beginning July 1, 1990, a nursing facility leased prior to January 1, 1986, and currently subject to adverse licensure action under section 144A.04, subdivision 4, paragraph (a), or section 144A.11, subdivision 2, and whose ownership changes prior to July 1, 1990, shall be allowed a property-related payment equal to the lesser of its current lease obligation divided by its capacity days as determined in Minnesota Rules, part 9549.0060, subpart 11, as modified by subdivision 3f, paragraph (c), or the frozen property-related payment rate in effect for the rate year beginning July 1, 1989. For rate years beginning on or after July 1, 1991, the property-related payment rate shall be its rental rate computed using the previous owner's allowable principal and interest expense as allowed by the department prior to that prior owner's sale and lease-back transaction of December 1985.

(b) Notwithstanding other provisions of applicable law, a nursing facility licensed for 122 beds on January 1, 1998, and located in Columbia Heights shall have its property-related payment rate set under this subdivision. The commissioner shall make a rate adjustment by adding $2.41 to the facility's July 1, 1997, property-related payment rate. The adjusted property-related payment rate shall be effective for rate years beginning on or after July 1, 1998. The adjustment in this paragraph shall remain in effect so long as the facility's rates are set under this section. If the facility participates in the alternative payment system under section 256B.434, the adjustment in this paragraph shall be included in the facility's contract payment rate. If historical rates or property costs recognized under this section become the basis for future medical assistance payments to the facility under a managed care, capitation, or other alternative payment system, the adjustment in this paragraph shall be included in the computation of the facility's payments.

Sec. 9. Minnesota Statutes 1997 Supplement, section 256B.431, subdivision 26, is amended to read:

Subd. 26. [CHANGES TO NURSING FACILITY REIMBURSEMENT BEGINNING JULY 1, 1997.] The nursing facility reimbursement changes in paragraphs (a) to (f) shall apply in the sequence specified in Minnesota Rules, parts 9549.0010 to 9549.0080, and this section, beginning July 1, 1997.

classification. A nonfreestanding nursing facility is a nursing facility whose other operating cost per diem is subject to the hospital attached, short length of stay, or the rule 80 limits. All other nursing facilities shall be considered freestanding nursing facilities. The commissioner shall then array all nursing facilities in each grouping by their allowable case mix A operating cost per diem. In calculating a nursing facility's operating cost per diem for this purpose, the commissioner shall exclude the raw food cost per diem related to providing special diets that are based on religious beliefs, as determined in subdivision 2b, paragraph (h). For those nursing facilities in each grouping whose case mix A operating cost per diem:

(1) is at or below the median of the array, the commissioner shall limit the nursing facility's allowable operating cost per diem for each case mix category to the lesser of the prior reporting year's allowable operating cost per diem as specified in Laws 1996, chapter 451, article 3, section 11, paragraph (h), plus the inflation factor as established in paragraph (d), clause (2), increased by two percentage points, or the current reporting year's corresponding allowable operating cost per diem; or

(2) is above the median of the array, the commissioner shall limit the nursing facility's allowable operating cost per diem for each case mix category to the lesser of the prior reporting year's allowable operating cost per diem as specified in Laws 1996, chapter 451, article 3, section 11, paragraph (h), plus the inflation factor as established in paragraph (d), clause (2), increased by one percentage point, or the current reporting year's corresponding allowable operating cost per diem.

For purposes of paragraph (a), for rate years beginning on or after July 1, 1998, if a nursing facility reports on its cost report a reduction in cost due to a refund or credit, the commissioner shall increase that facility's spend-up limit for the rate year following the current rate year by the amount of the cost reduction divided by its resident days for the reporting year preceding the rate year in which the adjustment is to be made.

(b) For rate years beginning on or after July 1, 1997, the commissioner shall limit the allowable operating cost per diem for high cost nursing facilities. After application of the limits in paragraph (a) to each nursing facility's operating cost per diem, the commissioner shall group nursing facilities into two groups, freestanding or nonfreestanding, within each geographic group. A nonfreestanding nursing facility is a nursing facility whose other operating cost per diem are subject to hospital attached, short length of stay, or rule 80 limits. All other nursing facilities shall be considered freestanding nursing facilities. The commissioner shall then array all nursing facilities within each grouping by their allowable case mix A operating cost per diem. In calculating a nursing facility's operating cost per diem for this purpose, the commissioner shall exclude the raw food cost per diem related to providing special diets that are based on religious beliefs, as determined in subdivision 2b, paragraph (h). For those nursing facilities in each grouping whose case mix A operating cost per diem exceeds 1.0 standard deviation above the median, the commissioner shall reduce their allowable operating cost per diem by three percent. For those nursing facilities in each grouping whose case mix A operating cost per diem exceeds 0.5 standard deviation above the median but is less than or equal to 1.0 standard deviation above the median, the commissioner shall reduce their allowable operating cost per diem by two percent. However, in no case shall a nursing facility's operating cost per diem be reduced below its grouping's limit established at 0.5 standard deviations above the median.

(c) For rate years beginning on or after July 1, 1997, the commissioner shall determine a nursing facility's efficiency incentive by first computing the allowable difference, which is the lesser of $4.50 or the amount by which the facility's other operating cost limit exceeds its nonadjusted other operating cost per diem for that rate year. The commissioner shall compute the efficiency incentive by:

(1) subtracting the allowable difference from $4.50 and dividing the result by $4.50;

(2) multiplying 0.20 by the ratio resulting from clause (1), and then;

(3) adding 0.50 to the result from clause (2); and

(4) multiplying the result from clause (3) times the allowable difference.

(d) For rate years beginning on or after July 1, 1997, the forecasted price index for a nursing facility's allowable operating cost per diem shall be determined under clauses (1) and (2) using the change in the Consumer Price Index-All Items (United States city average) (CPI-U) as forecasted by Data Resources, Inc. The commissioner shall use the indices as forecasted in the fourth quarter of the calendar year preceding the rate year, subject to subdivision 2l, paragraph (c).

(1) The CPI-U forecasted index for allowable operating cost per diem shall be based on the 21-month period from the midpoint of the nursing facility's reporting year to the midpoint of the rate year following the reporting year.

(2) For rate years beginning on or after July 1, 1997, the forecasted index for operating cost limits referred to in subdivision 21, paragraph (b), shall be based on the CPI-U for the 12-month period between the midpoints of the two reporting years preceding the rate year.

(e) After applying these provisions for the respective rate years, the commissioner shall index these allowable operating cost per diem by the inflation factor provided for in paragraph (d), clause (1), and add the nursing facility's efficiency incentive as computed in paragraph (c).

(f) For rate years beginning on or after July 1, 1997, the total operating cost payment rates for a nursing facility shall be the greater of the total operating cost payment rates determined under this section or the total operating cost payment rates in effect on June 30, 1997, subject to rate adjustments due to field audit or rate appeal resolution. This provision shall not apply to subsequent field audit adjustments of the nursing facility's operating cost rates for rate years beginning on or after July 1, 1997.

(g) For the rate years beginning on July 1, 1997, and July 1, 1998, and July 1, 1999, a nursing facility licensed for 40 beds effective May 1, 1992, with a subsequent increase of 20 Medicare/Medicaid certified beds, effective January 26, 1993, in accordance with an increase in licensure is exempt from paragraphs (a) and (b).

(h) For a nursing facility whose construction project was authorized according to section 144A.073, subdivision 5, paragraph (g), the operating cost payment rates for the third location shall be determined based on Minnesota Rules, part 9549.0057. Paragraphs (a) and (b) shall not apply until the second rate year after the settle-up cost report is filed. Notwithstanding subdivision 2b, paragraph (g), real estate taxes and special assessments payable by the third location, a 501(c)(3) nonprofit corporation, shall be included in the payment rates determined under this subdivision for all subsequent rate years.

(i) For the rate year beginning July 1, 1997, the commissioner shall compute the payment rate for a nursing facility licensed for 94 beds on September 30, 1996, that applied in October 1993 for approval of a total replacement under the moratorium exception process in section 144A.073, and completed the approved replacement in June 1995, with other operating cost spend-up limit under paragraph (a), increased by $3.98, and after computing the facility's payment rate according to this section, the commissioner shall make a one-year positive rate adjustment of $3.19 for operating costs related to the newly constructed total replacement, without application of paragraphs (a) and (b). The facility's per diem, before the $3.19 adjustment, shall be used as the prior reporting year's allowable operating cost per diem for payment rate calculation for the rate year beginning July 1, 1998. A facility described in this paragraph is exempt from paragraph (b) for the rate years beginning July 1, 1997, and July 1, 1998.

(j) For the purpose of applying the limit stated in paragraph (a), a nursing facility in Kandiyohi county licensed for 86 beds that was granted hospital-attached status on December 1, 1994, shall have the prior year's allowable care-related per diem increased by $3.207 and the prior year's other operating cost per diem increased by $4.777 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1997.

(k) For the purpose of applying the limit stated in paragraph (a), a 117 bed nursing facility located in Pine county shall have the prior year's allowable other operating cost per diem increased by $1.50 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1997.

(m) For the purpose of applying the limit stated in paragraph (a), a nursing facility in Hennepin county licensed for 181 beds on September 30, 1996, shall have the prior year's allowable care-related per diem increased by $1.455 and the prior year's other operating cost per diem increased by $0.439 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1998.

(n) For the purpose of applying the limit stated in paragraph (a), a nursing facility in Hennepin county licensed for 161 beds on September 30, 1996, shall have the prior year's allowable care-related per diem increased by $1.154 and the prior year's other operating cost per diem increased by $0.256 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1998.

(o) For the purpose of applying the limit stated in paragraph (a), a nursing facility in Ramsey county licensed for 176 beds on September 30, 1996, shall have the prior year's allowable care-related per diem increased by $0.803 and the prior year's other operating cost per diem increased by $0.272 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1998.

(p) For the purpose of applying the limit stated in paragraph (a), a nursing facility in Brown county licensed for 86 beds on September 30, 1996, shall have the prior year's allowable care-related per diem increased by $0.850 and the prior year's other operating cost per diem increased by $0.275 before adding the inflation in paragraph (d), clause (2), for the rate year beginning on July 1, 1998.

(q) For the rate year beginning July 1, 1998, the commissioner shall compute the payment rate for a nursing facility, which was licensed for 110 beds on May 1, 1997, was granted approval in January 1994 for a replacement and remodeling project under the moratorium exception process in section 144A.073, and completed the approved replacement and remodeling project on March 14, 1997, by increasing the other operating cost spend-up limit under paragraph (a) by $1.64. After computing the facility's payment rate for the rate year beginning July 1, 1998, according to this section, the commissioner shall make a one-year positive rate adjustment of 48 cents for increased real estate taxes resulting from completion of the moratorium exception project, without application of paragraphs (a) and (b).

Sec. 10. Minnesota Statutes 1996, section 256B.431, is amended by adding a subdivision to read:

Subd. 27. [RULE 80 LIMITED EXEMPTION.] For the rate year beginning July 1, 1998, the commissioner shall compute the payment rate for a nursing facility exempted from care-related limits under subdivision 2b, paragraph (d), clause (2), with a minimum of three-quarters of its beds licensed to provide residential services for the physically handicapped under Minnesota Rules, parts 9570.2000 to 9570.3400, with the care related spend-up limit under subdivision 26, paragraph (a), increased by $13.21 for the rate year beginning July 1, 1998, without application of subdivision 26, paragraph (b). For rate years beginning on or after July 1, 1999, the commissioner shall exclude that amount in calculating the facility's operating cost per diem for purposes of applying subdivision 26, paragraph (b).

Sec. 11. [256B.435] [NURSING FACILITY REIMBURSEMENT SYSTEM EFFECTIVE JULY 1, 2000.]

Subdivision 1. [IN GENERAL.] Effective July 1, 2000, the commissioner shall implement a performance-based contracting system to replace the current method of setting operating cost payment rates under sections 256B.431 and 256B.434 and Minnesota Rules, parts 9549.0010 to 9549.0080. A nursing facility in operation on May 1, 1998, with payment rates not established under section 256B.431 or 256B.434 on that date, is ineligible for this performance-based contracting system. In determining prospective payment rates of nursing facility services, the commissioner shall distinguish between operating costs and property-related costs. The operating cost portion of the payment rates shall be indexed annually by an inflation factor as specified in subdivision 3, and in accordance with section 256B.431, subdivision 21, paragraph (c). Property related payment rates, including real estate taxes and special assessments, shall be determined under section 256B.431 or 256B.434.

Subd. 2. [CONTRACT PROVISIONS.] (a) The performance-based contract with each nursing facility must include provisions that:

(2) monitor resident outcomes through various methods, such as quality indicators based on the minimum data set and other utilization and performance measures;

(3) require the establishment and use of a continuous quality improvement process that integrates information from quality indicators and regular resident and family satisfaction interviews;

(4) require annual reporting of facility statistical information, including resident days by case mix category, productive nursing hours, wages and benefits, and raw food costs for use by the commissioner in the development of facility profiles that include trends in payment and service utilization;

(5) require from each nursing facility an annual certified audited financial statement consisting of a balance sheet, income and expense statements, and an opinion from either a licensed or certified public accountant, if a certified audit was prepared, or unaudited financial statements if no certified audit was prepared; and

(6) establish additional requirements and penalties for nursing facilities not meeting the standards set forth in the performance-based contract.

(b) The commissioner may develop additional incentive-based payments for achieving outcomes specified in each contract. The specified facility-specific outcomes must be measurable and approved by the commissioner.

(c) The commissioner may also contract with nursing facilities in other ways through requests for proposals, including contracts on a risk or nonrisk basis, with nursing facilities or consortia of nursing facilities, to provide comprehensive long-term care coverage on a premium or capitated basis.

Subd. 3. [PAYMENT RATE PROVISIONS.] (a) For rate years beginning on or after July 1, 2000, the commissioner shall determine operating cost payment rates for each licensed and certified nursing facility by indexing its operating cost payment rates in effect on June 30, 2000, for inflation. The inflation factor to be used must be based on the change in the Consumer Price Index-All Items, United States city average (CPI-U) as forecasted by Data Resources, Inc. in the fourth quarter preceding the rate year. The CPI-U forecasted index for operating cost payment rates shall be based on the 12-month period from the midpoint of the nursing facility's prior rate year to the midpoint of the rate year for which the operating payment rate is being determined.

(b) Beginning July 1, 2000, each nursing facility subject to a performance-based contract under this section shall choose one of two methods of payment for property related costs:

(1) the method established in section 256B.434; or

(2) the method established in section 256B.431.

Once the nursing facility has made the election in paragraph (b), that election shall remain in effect for at least four years or until an alternative property payment system is developed.

Sec. 12. [256B.5011] [ICF/MR REIMBURSEMENT SYSTEM EFFECTIVE OCTOBER 1, 2000.]

Subdivision 1. [PERFORMANCE-BASED CONTRACTING SYSTEM.] (a) Effective October 1, 2000, the commissioner shall implement a performance-based contracting system to replace the current method of setting total cost payment rates under section 256B.501 and Minnesota Rules, parts 9553.0010 to 9553.0080. In determining prospective payment rates of intermediate care facilities for persons with mental retardation or related conditions, the commissioner shall index each facility's total payment rate by an inflation factor as described in subdivision 3. The commissioner of finance shall include annual inflation adjustments in operating costs for intermediate care facilities for persons with mental retardation and related conditions as a budget change request in each biennial detailed expenditure budget submitted to the legislature under section 16A.11.

Subd. 2. [CONTRACT PROVISIONS.] The performance-based contract with each intermediate care facility must include provisions for:

(2) monitoring service quality using performance indicators that measure consumer outcomes;

(3) the establishment and use of continuous quality improvement processes using the results attained through service quality monitoring;

(4) the annual reporting of facility statistical information on all supervisory personnel, direct care personnel, specialized support personnel, hours, wages and benefits, staff-to-consumer ratios, and staffing patterns;

(5) annual aggregate facility financial information or an annual certified audited financial statement, including a balance sheet and income and expense statements for each facility, if a certified audit was prepared; and

(6) additional requirements and penalties for intermediate care facilities not meeting the standards set forth in the performance-based contract.

Subd. 3. [PAYMENT RATE PROVISIONS.] For rate years beginning on or after October 1, 2000, the commissioner shall determine the total payment rate for each licensed and certified intermediate care facility by indexing the total payment rate in effect on September 30, 2000, for inflation. The inflation factor to be used must be based on the change in the Consumer Price Index-All Items, United States city average (CPI-U) as forecasted by Data Resources, Inc. in the first quarter of the calendar year during which the rate year begins. The CPI-U forecasted index for total payment rates shall be based on the 12-month period from the midpoint of the ICFs/MR prior rate year to the midpoint of the rate year for which the operating payment rate is being determined.

Sec. 13. [RECOMMENDATIONS TO IMPLEMENT NEW REIMBURSEMENT SYSTEM.]

(a) By January 15, 1999, the commissioner shall make recommendations to the chairs of the health and human services policy and fiscal committees on the repeal of specific statutes and rules as well as any other additional recommendations related to implementation of sections 11 and 12.

(b) In developing recommendations for nursing facility reimbursement, the commissioner shall consider making each nursing facility's total payment rates, both operating and property rate components, prospective. The commissioner shall involve nursing facility industry and consumer representatives in the development of these recommendations.

(c) In making recommendations for ICF/MR reimbursement, the commissioner may consider methods of establishing payment rates that take into account individual client costs and needs, include provisions to establish links between performance indicators and reimbursement and other performance incentives, and allow local control over resources necessary for local agencies to set rates and contract with ICF/MR facilities. In addition, the commissioner may establish methods that provide information to consumers regarding service quality as measured by performance indicators. The commissioner shall involve ICF/MR industry and consumer representatives in the development of these recommendations.

Sec. 14. [APPROVAL EXTENDED.]

Minnesota Statutes, section 144A.073, subdivision 3, notwithstanding, the commissioner of health shall grant an additional 18 months of approval for a proposed exception to the nursing home licensure and certification moratorium, if the proposal is to replace a 96-bed nursing home facility in Carlton county and if initial approval for the proposal was granted in November 1996.

Sec. 15. [EFFECTIVE DATE.]

Section 1. Minnesota Statutes 1997 Supplement, section 62J.69, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following definitions apply:

(a) "Medical education" means the accredited clinical training of physicians (medical students and residents), doctor of pharmacy practitioners, dentists, advanced practice nurses (clinical nurse specialist, certified registered nurse anesthetists, nurse practitioners, and certified nurse midwives), and physician assistants.

(b) "Clinical training" means accredited training for the health care practitioners listed in paragraph (a) that is funded and was historically funded in part by inpatient patient care revenues and that occurs in both either an inpatient and or ambulatory patient care settings training site.

(c) "Trainee" means students involved in an accredited clinical training program for medical education as defined in paragraph (a).

(d) "Eligible trainee" means a student involved in an accredited training program for medical education as defined in paragraph (a), which meets the definition of clinical training in paragraph (b), who is in a training site that is located in Minnesota and which has a medical assistance provider number.

(e) "Health care research" means approved clinical, outcomes, and health services investigations that are funded by patient out-of-pocket expenses or a third-party payer.

(e) (f) "Commissioner" means the commissioner of health.

(f) (g) "Teaching institutions" means any hospital, medical center, clinic, or other organization that currently sponsors or conducts accredited medical education programs or clinical research in Minnesota.

(h) "Accredited training" means training provided by a program that is accredited through an organization recognized by the department of education or the health care financing administration as the official accrediting body for that program.

(i) "Sponsoring institution" means a hospital, school, or consortium located in Minnesota that sponsors and maintains primary organizational and financial responsibility for an accredited medical education program in Minnesota and which is accountable to the accrediting body.

Sec. 2. Minnesota Statutes 1997 Supplement, section 62J.69, subdivision 2, is amended to read:

Subd. 2. [ALLOCATION AND FUNDING FOR MEDICAL EDUCATION AND RESEARCH.] (a) The commissioner may establish a trust fund for the purposes of funding medical education and research activities in the state of Minnesota.

(c) Eligible applicants for funds are accredited medical education teaching institutions, consortia, and programs operating in Minnesota. Applications must be submitted by the sponsoring institution on behalf of the teaching program, and must be received by September 30 of each year for distribution in January of the following year. An application for funds must include the following:

(1) the official name and address of the sponsoring institution and the official name and address of the facility or program programs on whose behalf the institution is applying for funding;

(2) the name, title, and business address of those persons responsible for administering the funds;

(3) the total number, type, and specialty orientation of eligible Minnesota-based trainees in for each accredited medical education program for which funds are being sought the type and specialty orientation of trainees in the program, the name, address, and medical assistance provider number of each training site used in the program, the total number of trainees at each site, and the total number of eligible trainees at each training site;

(4) audited clinical training costs per trainee for each medical education program where available or estimates of clinical training costs based on audited financial data;

(5) a description of current sources of funding for medical education costs including a description and dollar amount of all state and federal financial support, including Medicare direct and indirect payments;

(6) other revenue received for the purposes of clinical training; and

(7) a statement identifying unfunded costs; and

(8) other supporting information the commissioner, with advice from the advisory committee, determines is necessary for the equitable distribution of funds.

(d) The commissioner shall distribute medical education funds to all qualifying applicants based on the following basic criteria: (1) total medical education funds available; (2) total eligible trainees in each eligible education program; and (3) the statewide average cost per trainee, by type of trainee, in each medical education program. Funds distributed shall not be used to displace current funding appropriations from federal or state sources. Funds shall be distributed to the sponsoring institutions indicating the amount to be paid to each of the sponsor's medical education programs based on the criteria in this paragraph. Sponsoring institutions which receive funds from the trust fund must distribute approved funds to the medical education program according to the commissioner's approval letter. Further, programs must distribute funds among the sites of training based on the percentage of total program training performed at each site. as specified in the commissioner's approval letter. Any funds not distributed as directed by the commissioner's approval letter shall be returned to the medical education and research trust fund within 30 days of a notice from the commissioner. The commissioner shall distribute returned funds to the appropriate entities in accordance with the commissioner's approval letter.

(e) Medical education programs receiving funds from the trust fund must submit annual cost and program reports a medical education and research grant verification report (GVR) through the sponsoring institution based on criteria established by the commissioner. If the sponsoring institution fails to submit the GVR by the stated deadline, or to request and meet the deadline for an extension, the sponsoring institution is required to return the full amount of the medical education and research trust fund grant to the medical education and research trust fund within 30 days of a notice from the commissioner. The commissioner shall distribute returned funds to the appropriate entities in accordance with the commissioner's approval letter. The reports must include:

(1) the total number of eligible trainees in the program;

(2) the programs and residencies funded, the amounts of trust fund payments to each program, and within each program, the percentage dollar amount distributed to each training site; and

(4) other state or federal appropriations received for the purposes of clinical training;

(5) other revenue received for the purposes of clinical training; and

(6) other information the commissioner, with advice from the advisory committee, deems appropriate to evaluate the effectiveness of the use of funds for clinical training.

The commissioner, with advice from the advisory committee, will provide an annual summary report to the legislature on program implementation due February 15 of each year.

(f) The commissioner is authorized to distribute funds made available through:

(1) voluntary contributions by employers or other entities;

(2) allocations for the department of human services to support medical education and research; and

(3) other sources as identified and deemed appropriate by the legislature for inclusion in the trust fund.

(g) The advisory committee shall continue to study and make recommendations on:

(1) the funding of medical research consistent with work currently mandated by the legislature and under way at the department of health; and

(2) the costs and benefits associated with medical education and research.

Sec. 3. Minnesota Statutes 1997 Supplement, section 62J.69, is amended by adding a subdivision to read:

Subd. 4. [TRANSFERS FROM THE COMMISSIONER OF HUMAN SERVICES.] (a) The amount transferred according to section 256B.69, subdivision 5c, shall be distributed to qualifying applicants based on a distribution formula that reflects a summation of two factors:

(1) an education factor, which is determined by the total number of eligible trainees and the total statewide average costs per trainee, by type of trainee, in each program; and

(2) a public program volume factor, which is determined by the total volume of public program revenue received by each training site as a percentage of all public program revenue received by all training sites in the trust fund pool.

In this formula, the education factor shall be weighted at 50 percent and the public program volume factor shall be weighted at 50 percent.

(b) Public program revenue for the formula in paragraph (a) shall include revenue from medical assistance, prepaid medical assistance, general assistance medical care, and prepaid general assistance medical care.

(c) Training sites that receive no public program revenue shall be ineligible for payments from the prepaid medical assistance program transfer pool.

Sec. 4. Minnesota Statutes 1996, section 245.462, subdivision 4, is amended to read:

clinical supervision of the case manager's activities. Case managers with a bachelor's degree but without 2,000 hours of supervised experience in the delivery of services to adults with mental illness must complete 40 hours of training approved by the commissioner of human services in case management skills and in the characteristics and needs of adults with serious and persistent mental illness and must receive clinical supervision regarding individual service delivery from a mental health professional at least once each week until the requirement of 2,000 hours of supervised experience is met. Case managers without a bachelor's degree but with 6,000 hours of supervised experience in the delivery of services to adults with mental illness must complete 40 hours of training approved by the commissioner of human services in case management skills and in the characteristics and needs of adults with serious and persistent mental illness. Clinical supervision must be documented in the client record.

Until June 30, 1999, a refugee an immigrant who does not have the qualifications specified in this subdivision may provide case management services to adult refugees immigrants with serious and persistent mental illness who are members of the same ethnic group as the case manager if the person: (1) is actively pursuing credits toward the completion of a bachelor's degree in one of the behavioral sciences or a related field from an accredited college or university; (2) completes 40 hours of training as specified in this subdivision; and (3) receives clinical supervision at least once a week until the requirements of obtaining a bachelor's degree and 2,000 hours of supervised experience this subdivision are met.

Sec. 5. Minnesota Statutes 1996, section 245.462, subdivision 8, is amended to read:

Subd. 8. [DAY TREATMENT SERVICES.] "Day treatment," "day treatment services," or "day treatment program" means a structured program of treatment and care provided to an adult in or by: (1) a hospital accredited by the joint commission on accreditation of health organizations and licensed under sections 144.50 to 144.55; (2) a community mental health center under section 245.62; or (3) an entity that is under contract with the county board to operate a program that meets the requirements of section 245.4712, subdivision 2, and Minnesota Rules, parts 9505.0170 to 9505.0475. Day treatment consists of group psychotherapy and other intensive therapeutic services that are provided at least one day a week for a minimum three-hour time block by a multidisciplinary staff under the clinical supervision of a mental health professional. The services are aimed at stabilizing the adult's mental health status, providing mental health services, and developing and improving the adult's independent living and socialization skills. The goal of day treatment is to reduce or relieve mental illness and to enable the adult to live in the community. Day treatment services are not a part of inpatient or residential treatment services. Day treatment services are distinguished from day care by their structured therapeutic program of psychotherapy services. The commissioner may limit medical assistance reimbursement for day treatment to 15 hours per week per person instead of the three hours per day per person specified in Minnesota Rules, part 9505.0323, subpart 15.

Sec. 6. Minnesota Statutes 1996, section 245.4871, subdivision 4, is amended to read:

Subd. 4. [CASE MANAGER.] (a) "Case manager" means an individual employed by the county or other entity authorized by the county board to provide case management services specified in subdivision 3 for the child with severe emotional disturbance and the child's family. A case manager must have experience and training in working with children.

(b) A case manager must meet the qualifications for a mental health practitioner in subdivision 26:

(1) have at least a bachelor's degree in one of the behavioral sciences or a related field from an accredited college or university;

(2) have at least 2,000 hours of supervised experience in the delivery of mental health services to children;

(3) have experience and training in identifying and assessing a wide range of children's needs; and

(4) (2) be knowledgeable about local community resources and how to use those resources for the benefit of children and their families.

(d) The case manager must meet in person with a mental health professional at least once each month to obtain clinical supervision.

(e) Case managers with a bachelor's degree but without 2,000 hours of supervised experience in the delivery of mental health services to children with emotional disturbance must:

(1) begin 40 hours of training approved by the commissioner of human services in case management skills and in the characteristics and needs of children with severe emotional disturbance before beginning to provide case management services; and

(2) receive clinical supervision regarding individual service delivery from a mental health professional at least once each week until the requirement of 2,000 hours of experience is met.

(f) Clinical supervision must be documented in the child's record. When the case manager is not a mental health professional, the county board must provide or contract for needed clinical supervision.

(g) The county board must ensure that the case manager has the freedom to access and coordinate the services within the local system of care that are needed by the child.

(h) Until June 30, 1999, a refugee an immigrant who does not have the qualifications specified in this subdivision may provide case management services to child refugees immigrants with severe emotional disturbance of the same ethnic group as the refugee immigrant if the person:

(1) is actively pursuing credits toward the completion of a bachelor's degree in one of the behavioral sciences or related fields at an accredited college or university;

(2) completes 40 hours of training as specified in this subdivision; and

(3) receives clinical supervision at least once a week until the requirements of obtaining a bachelor's degree and 2,000 hours of supervised experience this subdivision are met.

(i) Case managers without a bachelor's degree but with 6,000 hours of supervised experience in the delivery of mental health services to children with emotional disturbance must begin 40 hours of training approved by the commissioner of human services in case management skills and in the characteristics and needs of children with severe emotional disturbance before beginning to provide case management services.

Sec. 7. [256.9364] [POST-KIDNEY TRANSPLANT DRUG PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] The commissioner of human services shall establish and administer a program to pay for costs of drugs prescribed exclusively for post-kidney transplant maintenance when those costs are not otherwise reimbursed by a third-party payer. The commissioner may contract with a nonprofit entity to administer this program.

Subd. 2. [ELIGIBILITY REQUIREMENTS.] To be eligible for the program, an applicant must satisfy the following requirements:

(1) the applicant's family gross income must not exceed 275 percent of the federal poverty level; and

(2) the applicant must be a Minnesota resident who has resided in Minnesota for at least 12 months.

An applicant shall not be excluded because the applicant received the transplant outside the state of Minnesota, so long as the other requirements are met.

Subd. 3. [PAYMENT AMOUNTS.] (a) The amount of the payments made for each eligible recipient shall be based on the following:

(1) available funds; and

(b) The payment rate under this program must be no greater than the medical assistance reimbursement rate for the prescribed drug.

(c) Payments shall be made to or on behalf of an eligible recipient for the cost of the post-kidney transplant maintenance drugs that is not covered, reimbursed, or eligible for reimbursement by any other third party or government entity, including, but not limited to, private or group health insurance, medical assistance, Medicare, the Veterans Administration, the senior citizen drug program established under section 256.955, or under any waiver arrangement received by the state to provide a prescription drug benefit for qualified Medicare beneficiaries or service-limited Medicare beneficiaries.

(d) The commissioner may restrict or categorize payments to meet the appropriation allocated for this program.

(e) Any cost of the post-kidney transplant maintenance drugs that is not reimbursed under this program is the responsibility of the program recipient.

Subd. 4. [DRUG FORMULARY.] The commissioner shall maintain a drug formulary that includes all drugs eligible for reimbursement by the program. The commissioner may use the drug formulary established under section 256B.0625, subdivision 13. The commissioner shall establish an internal review procedure for updating the formulary that allows for the addition and deletion of drugs to the formulary. The drug formulary must be reviewed at least quarterly per fiscal year.

Subd. 5. [PRIVATE DONATIONS.] The commissioner may accept funding from other public or private sources.

Subd. 6. [SUNSET.] This program expires on July 1, 2000.

Sec. 8. Minnesota Statutes 1997 Supplement, section 256.9657, subdivision 3, is amended to read:

Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 1992, each health maintenance organization with a certificate of authority issued by the commissioner of health under chapter 62D and each community integrated service network licensed by the commissioner under chapter 62N shall pay to the commissioner of human services a surcharge equal to six-tenths of one percent of the total premium revenues of the health maintenance organization or community integrated service network as reported to the commissioner of health according to the schedule in subdivision 4.

(b) For purposes of this subdivision, total premium revenue means:

(1) premium revenue recognized on a prepaid basis from individuals and groups for provision of a specified range of health services over a defined period of time which is normally one month, excluding premiums paid to a health maintenance organization or community integrated service network from the Federal Employees Health Benefit Program;

(2) premiums from Medicare wrap-around subscribers for health benefits which supplement Medicare coverage;

(3) Medicare revenue, as a result of an arrangement between a health maintenance organization or a community integrated service network and the health care financing administration of the federal Department of Health and Human Services, for services to a Medicare beneficiary, excluding Medicare revenue that states are prohibited from taxing under sections 4001 and 4002 of Public Law Number 105-33 received by a health maintenance organization or community integrated service network through risk sharing or Medicare Choice + contracts; and

(4) medical assistance revenue, as a result of an arrangement between a health maintenance organization or community integrated service network and a Medicaid state agency, for services to a medical assistance beneficiary.

(c) When a health maintenance organization or community integrated service network merges or consolidates with or is acquired by another health maintenance organization or community integrated service network, the surviving corporation or the new corporation shall be responsible for the annual surcharge originally imposed on each of the entities or corporations subject to the merger, consolidation, or acquisition, regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N.

(d) Effective July 1 of each year, the surviving corporation's or the new corporation's surcharge shall be based on the revenues earned in the second previous calendar year by all of the entities or corporations subject to the merger, consolidation, or acquisition regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N until the total premium revenues of the surviving corporation include the total premium revenues of all the merged entities as reported to the commissioner of health.

(e) When a health maintenance organization or community integrated service network, which is subject to liability for the surcharge under this chapter, transfers, assigns, sells, leases, or disposes of all or substantially all of its property or assets, liability for the surcharge imposed by this chapter is imposed on the transferee, assignee, or buyer of the health maintenance organization or community integrated service network.

(f) In the event a health maintenance organization or community integrated service network converts its licensure to a different type of entity subject to liability for the surcharge under this chapter, but survives in the same or substantially similar form, the surviving entity remains liable for the surcharge regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N.

(g) The surcharge assessed to a health maintenance organization or community integrated service network ends when the entity ceases providing services for premiums and the cessation is not connected with a merger, consolidation, acquisition, or conversion.

Sec. 9. Minnesota Statutes 1997 Supplement, section 256.9685, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY.] The commissioner shall establish procedures for determining medical assistance and general assistance medical care payment rates under a prospective payment system for inpatient hospital services in hospitals that qualify as vendors of medical assistance. The commissioner shall establish, by rule, procedures for implementing this section and sections 256.9686, 256.969, and 256.9695. The medical assistance payment rates must be based on methods and standards that the commissioner finds are adequate to provide for the costs that must be incurred for the care of recipients in efficiently and economically operated hospitals. Services must meet the requirements of section 256B.04, subdivision 15, or 256D.03, subdivision 7, paragraph (b), to be eligible for payment.

Sec. 10. Minnesota Statutes 1996, section 256.969, is amended by adding a subdivision to read:

Subd. 9c. [COUNTY BILLING.] Hospitals that have a disproportionate population adjustment greater than eight percent shall be eligible for a special payment for uncompensated care. These hospitals may bill a county of residence for services provided to a resident of that county provided:

(1) the patient is from a county other than that in which the hospital resides; and

(2) the hospital has made a preliminary determination at the delivery of service that the patient was indigent based on current medical assistance guidelines.

Counties that are billed under this program must pay eligible hospitals at the rates established under the medical assistance program. If the county can establish eligibility for medical assistance after the service has been delivered, the state shall reimburse the county for any funds paid to the eligible hospital.

Sec. 11. Minnesota Statutes 1996, section 256.969, subdivision 16, is amended to read:

sections 450f to 450n, are exempt from the rate establishment methods required by this section and shall be reimbursed at charges as limited to the amount allowed under federal law paid according to the rate published by the United States assistant secretary for health under authority of United States Code, title 42, sections 248A and 248B.

Sec. 12. Minnesota Statutes 1996, section 256.969, subdivision 17, is amended to read:

Subd. 17. [OUT-OF-STATE HOSPITALS IN LOCAL TRADE AREAS.] Out-of-state hospitals that are located within a Minnesota local trade area and that have more than 20 admissions in the base year shall have rates established using the same procedures and methods that apply to Minnesota hospitals. For this subdivision and subdivision 18, local trade area means a county contiguous to Minnesota and located in a metropolitan statistical area as determined by Medicare for October 1 prior to the most current rebased rate year. Hospitals that are not required by law to file information in a format necessary to establish rates shall have rates established based on the commissioner's estimates of the information. Relative values of the diagnostic categories shall not be redetermined under this subdivision until required by rule. Hospitals affected by this subdivision shall then be included in determining relative values. However, hospitals that have rates established based upon the commissioner's estimates of information shall not be included in determining relative values. This subdivision is effective for hospital fiscal years beginning on or after July 1, 1988. A hospital shall provide the information necessary to establish rates under this subdivision at least 90 days before the start of the hospital's fiscal year.

Sec. 13. Minnesota Statutes 1996, section 256B.03, subdivision 3, is amended to read:

Subd. 3. [AMERICAN INDIAN HEALTH FUNDING.] (a) Notwithstanding subdivision 1 and sections 256B.0625 and 256D.03, subdivision 4, paragraph (f) (i), the commissioner may make payments to federally recognized Indian tribes with a reservation in the state to provide medical assistance and general assistance medical care to Indians, as defined under federal law, who reside on or near the reservation. The payments may be made in the form of a block grant or other payment mechanism determined in consultation with the tribe. Any alternative payment mechanism agreed upon by the tribes and the commissioner under this subdivision is not dependent upon county agreement but is intended to create a direct payment mechanism between the state and the tribe for the administration of the medical assistance program and general assistance medical care programs, and for covered services.

(b) A tribe that implements a purchasing model under this subdivision shall report to the commissioner at least annually on the operation of the model. The commissioner and the tribe shall cooperatively determine the data elements, format, and timetable for the report.

(c) For purposes of this subdivision, "Indian tribe" means a tribe, band, or nation, or other organized group or community of Indians that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians and for which a reservation exists as is consistent with Public Law Number 100-485, as amended.

(d) Payments under this subdivision may not result in an increase in expenditures that would not otherwise occur in the medical assistance program under this chapter or the general assistance medical care program under chapter 256D.

Sec. 14. Minnesota Statutes 1996, section 256B.055, is amended by adding a subdivision to read:

Subd. 7a. [SPECIAL CATEGORY FOR DISABLED CHILDREN.] Medical assistance may be paid for a person who is under age 18 and who meets income and asset eligibility requirements of the Supplemental Security Income program if the person was receiving Supplemental Security Income payments on the date of enactment of section 211(a) of Public Law Number 104-193, the Personal Responsibility and Work Opportunity Act of 1996, and the person would have continued to receive the payments except for the change in the childhood disability criteria in section 211(a) of Public Law Number 104-193.

Sec. 15. Minnesota Statutes 1996, section 256B.057, subdivision 3a, is amended to read:

Sec. 16. Minnesota Statutes 1996, section 256B.057, is amended by adding a subdivision to read:

Subd. 3b. [QUALIFIED INDIVIDUALS.] Beginning July 1, 1998, to the extent of the federal allocation to Minnesota, a person, who would otherwise be eligible as a qualified Medicare beneficiary under subdivision 3, except that the person's income is in excess of the limit, is eligible as a qualified individual according to the following criteria:

(1) if the person's income is greater than 120 percent, but less than 135 percent of the official federal poverty guidelines for the applicable family size, the person is eligible for medical assistance reimbursement of Medicare Part B premiums; or

(2) if the person's income is greater than 135 percent but less than 175 percent of the official federal poverty guidelines for the applicable family size, the person is eligible for medical assistance reimbursement of that portion of the Medicare Part B premium attributable to an increase in Part B expenditures which resulted from the shift of home care services from Medicare Part A to Medicare Part B under section 4732 of Public Law Number 105-33, the Balanced Budget Act of 1997.

The commissioner shall limit enrollment of qualifying individuals under this subdivision according to the requirements of section 4732 of Public Law Number 105-33.

Sec. 17. Minnesota Statutes 1997 Supplement, section 256B.06, subdivision 4, is amended to read:

Subd. 4. [CITIZENSHIP REQUIREMENTS.] (a) Eligibility for medical assistance is limited to citizens of the United States, qualified noncitizens as defined in this subdivision, and other persons residing lawfully in the United States.

(b) "Qualified noncitizen" means a person who meets one of the following immigration criteria:

(1) admitted for lawful permanent residence according to United States Code, title 8;

(2) admitted to the United States as a refugee according to United States Code, title 8, section 1157;

(3) granted asylum according to United States Code, title 8, section 1158;

(4) granted withholding of deportation according to United States Code, title 8, section 1253(h);

(5) paroled for a period of at least one year according to United States Code, title 8, section 1182(d)(5);

(6) granted conditional entrant status according to United States Code, title 8, section 1153(a)(7); or

(7) determined to be a battered noncitizen by the United States Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, title V of the Omnibus Consolidated Appropriations Bill, Public Law Number 104-200;

(8) is a child of a noncitizen determined to be a battered noncitizen by the United States Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, title V of the Omnibus Consolidated Appropriations Bill, Public Law Number 104-200; or

(9) determined to be a Cuban or Haitian entrant as defined in section 501(e) of Public Law Number 96-422, the Refugee Education Assistance Act of 1980.

(c) All qualified noncitizens who were residing in the United States before August 22, 1996, who otherwise meet the eligibility requirements of chapter 256B, are eligible for medical assistance with federal financial participation.

Beginning December 1, 1996, qualified noncitizens who entered the United States on or after August 22, 1996, and who otherwise meet the eligibility requirements of chapter 256B are eligible for medical assistance with federal participation for five years if they meet one of the following criteria:

(i) refugees admitted to the United States according to United States Code, title 8, section 1157;

(ii) persons granted asylum according to United States Code, title 8, section 1158;

(iii) persons granted withholding of deportation according to United States Code, title 8, section 1253(h);

(iv) veterans of the United States Armed Forces with an honorable discharge for a reason other than noncitizen status, their spouses and unmarried minor dependent children; or

(v) persons on active duty in the United States Armed Forces, other than for training, their spouses and unmarried minor dependent children.

Beginning December 1, 1996, qualified noncitizens who do not meet one of the criteria in items (i) to (v) are eligible for medical assistance without federal financial participation as described in paragraph (j).

(e) Noncitizens who are not qualified noncitizens as defined in paragraph (b), who are lawfully residing in the United States and who otherwise meet the eligibility requirements of chapter 256B, are eligible for medical assistance under clauses (1) to (3). These individuals must cooperate with the Immigration and Naturalization Service to pursue any applicable immigration status, including citizenship, that would qualify them for medical assistance with federal financial participation.

(1) Persons who were medical assistance recipients on August 22, 1996, are eligible for medical assistance with federal financial participation through December 31, 1996.

(2) Beginning January 1, 1997, persons described in clause (1) are eligible for medical assistance without federal financial participation as described in paragraph (j).

(3) Beginning December 1, 1996, persons residing in the United States prior to August 22, 1996, who were not receiving medical assistance and persons who arrived on or after August 22, 1996, are eligible for medical assistance without federal financial participation as described in paragraph (j).

(f) Nonimmigrants who otherwise meet the eligibility requirements of chapter 256B are eligible for the benefits as provided in paragraphs (g) to (i). For purposes of this subdivision, a "nonimmigrant" is a person in one of the classes listed in United States Code, title 8, section 1101(a)(15).

(g) Payment shall also be made for care and services that are furnished to noncitizens, regardless of immigration status, who otherwise meet the eligibility requirements of chapter 256B, if such care and services are necessary for the treatment of an emergency medical condition, except for organ transplants and related care and services and routine prenatal care.

(h) For purposes of this subdivision, the term "emergency medical condition" means a medical condition that meets the requirements of United States Code, title 42, section 1396b(v).

(i) Pregnant noncitizens who are undocumented or nonimmigrants, who otherwise meet the eligibility requirements of chapter 256B, are eligible for medical assistance payment without federal financial participation for care and services through the period of pregnancy, and 60 days postpartum, except for labor and delivery.

(k) The commissioner shall submit to the legislature by December 31, 1998, a report on the number of recipients and cost of coverage of care and services made according to paragraphs (i) and (j).

Sec. 18. Minnesota Statutes 1996, section 256B.0625, is amended by adding a subdivision to read:

Subd. 17a. [PAYMENT FOR AMBULANCE SERVICES.] Effective for services rendered on or after July 1, 1999, medical assistance payments for ambulance services shall be increased by ten percent.

Sec. 19. Minnesota Statutes 1996, section 256B.0625, subdivision 20, is amended to read:

Subd. 20. [MENTAL ILLNESS HEALTH CASE MANAGEMENT.] (a) To the extent authorized by rule of the state agency, medical assistance covers case management services to persons with serious and persistent mental illness or subject to federal approval, and children with severe emotional disturbance. Services provided under this section must meet the relevant standards in sections 245.461 to 245.4888, the Comprehensive Adult and Children's Mental Health Acts, Minnesota Rules, parts 9520.0900 to 9520.0926, and 9505.0322, excluding subpart 10.

(b) Entities meeting program standards set out in rules governing family community support services as defined in section 245.4871, subdivision 17, are eligible for medical assistance reimbursement for case management services for children with severe emotional disturbance when these services meet the program standards in Minnesota Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subpart 6 subparts 6 and 10.

(b) In counties where fewer than 50 percent of children estimated to be eligible under medical assistance to receive case management services for children with severe emotional disturbance actually receive these services in state fiscal year 1995, community mental health centers serving those counties, entities meeting program standards in Minnesota Rules, parts 9520.0570 to 9520.0870, and other entities authorized by the commissioner are eligible for medical assistance reimbursement for case management services for children with severe emotional disturbance when these services meet the program standards in Minnesota Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subpart 6.

(c) Medical assistance and MinnesotaCare payment for mental health case management shall be made on a monthly basis. In order to receive payment for an eligible child, the provider must document at least a face-to-face contact with the child, the child's parents, or the child's legal representative. To receive payment for an eligible adult, the provider must document at least a face-to-face contact with the adult or the adult's legal representative.

(d) Payment for mental health case management provided by county or state staff shall be based on the monthly rate methodology under section 256B.094, subdivision 6, paragraph (b), with separate rates calculated for child welfare and mental health, and within mental health, separate rates for children and adults.

(e) Payment for mental health case management provided by county-contracted vendors shall be based on a monthly rate negotiated by the host county. The negotiated rate must not exceed the rate charged by the vendor for the same service to other payers. If the service is provided by a team of contracted vendors, the county may negotiate a team rate with a vendor who is a member of the team. The team shall determine how to distribute the rate among its members. No reimbursement received by contracted vendors shall be returned to the county, except to reimburse the county for advance funding provided by the county to the vendor.

(f) If the service is provided by a team which includes contracted vendors and county or state staff, the costs for county or state staff participation in the team shall be included in the rate for county-provided services. In this case, the contracted vendor and the county may each receive separate payment for services provided by each entity in the same month. In order to prevent duplication of services, the county must document, in the recipient's file, the need for team case management and a description of the roles of the team members.

(h) Any net increase in revenue to the county as a result of the change in this section must be used to provide expanded mental health services as defined in sections 245.461 to 245.4888, the Comprehensive Adult and Children's Mental Health Acts, excluding inpatient and residential treatment. For adults, increased revenue may also be used for services and consumer supports which are part of adult mental health projects approved under Laws 1997, chapter 203, article 7, section 25. For children, increased revenue may also be used for respite care and nonresidential individualized rehabilitation services as defined in section 245.492, subdivisions 17 and 23. "Increased revenue" has the meaning given in Minnesota Rules, part 9520.0903, subpart 3.

(i) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of costs for mental health case management shall be provided by the recipient's county of responsibility, as defined in sections 256G.01 to 256G.12, from sources other than federal funds or funds used to match other federal funds.

(j) The commissioner may suspend, reduce, or terminate the reimbursement to a provider that does not meet the reporting or other requirements of this section. The county of responsibility, as defined in sections 256G.01 to 256G.12, is responsible for any federal disallowances. The county may share this responsibility with its contracted vendors.

(k) The commissioner shall set aside a portion of the federal funds earned under this section to repay the special revenue maximization account under section 256.01, subdivision 2, clause (15). The repayment is limited to:

(1) the costs of developing and implementing this section; and

(2) programming the information systems.

(l) Notwithstanding section 256.025, subdivision 2, payments to counties for case management expenditures under this section shall only be made from federal earnings from services provided under this section. Payments to contracted vendors shall include both the federal earnings and the county share.

(m) Notwithstanding section 256B.041, county payments for the cost of mental health case management services provided by county or state staff shall not be made to the state treasurer. For the purposes of mental health case management services provided by county or state staff under this section, the centralized disbursement of payments to counties under section 256B.041 consists only of federal earnings from services provided under this section.

(n) Case management services under this subdivision do not include therapy, treatment, legal, or outreach services.

(o) If the recipient is a resident of a nursing facility, intermediate care facility, or hospital, and the recipient's institutional care is paid by medical assistance, payment for case management services under this subdivision is limited to the last 30 days of the recipient's residency in that facility and may not exceed more than two months in a calendar year.

(p) Payment for case management services under this subdivision shall not duplicate payments made under other program authorities for the same purpose.

(q) By July 1, 2000, the commissioner shall evaluate the effectiveness of the changes required by this section, including changes in number of persons receiving mental health case management, changes in hours of service per person, and changes in caseload size.

Sec. 20. Minnesota Statutes 1997 Supplement, section 256B.0625, subdivision 31a, is amended to read:

(b) By January 1, 1998, the commissioner, in cooperation with the commissioner of administration, shall establish an augmentative and alternative communication system purchasing program within a state agency or by contract with a qualified private entity. The purpose of this service is to facilitate ready availability of the augmentative and alternative communication systems needed to meet the needs of persons with severe expressive communication limitations in an efficient and cost-effective manner. This program shall:

(1) coordinate purchase and rental of augmentative and alternative communication systems;

(2) negotiate agreements with manufacturers and vendors for purchase of components of these systems, for warranty coverage, and for repair service;

(3) when efficient and cost-effective, maintain and refurbish if needed, an inventory of components of augmentative and alternative communication systems for short- or long-term loan to recipients;

(4) facilitate training sessions for service providers, consumers, and families on augmentative and alternative communication systems; and

(5) develop a recycling program for used augmentative and alternative communications systems to be reissued and used for trials and short-term use, when appropriate.

The availability of components of augmentative and alternative communication systems through this program is subject to prior authorization requirements established under subdivision 25 The commissioner shall reimburse augmentative and alternative communication manufacturers and vendors at the manufacturer's suggested retail price for augmentative and alternative communication systems and related components. The commissioner shall separately reimburse providers for purchasing and integrating individual communication systems which are unavailable as a package from an augmentative and alternative communication vendor.

(c) Reimbursement rates established by this purchasing program are not subject to Minnesota Rules, part 9505.0445, item S or T.

Sec. 21. Minnesota Statutes 1996, section 256B.0625, subdivision 34, is amended to read:

Subd. 34. [AMERICAN INDIAN HEALTH SERVICES FACILITIES.] Medical assistance payments to American Indian health services facilities for outpatient medical services billed after June 30, 1990, must be facilities of the Indian health service and facilities operated by a tribe or tribal organization under funding authorized by United States Code, title 25, sections 450f to 450n, or title III of the Indian Self-Determination and Education Assistance Act, Public Law Number 93-638, shall be at the option of the facility in accordance with the rate published by the United States Assistant Secretary for Health under the authority of United States Code, title 42, sections 248(a) and 249(b). General assistance medical care payments to facilities of the American Indian health services and facilities operated by a tribe or tribal organization for the provision of outpatient medical care services billed after June 30, 1990, must be in accordance with the general assistance medical care rates paid for the same services when provided in a facility other than an American a facility of the Indian health service or a facility operated by a tribe or tribal organization.

Sec. 22. Minnesota Statutes 1996, section 256B.0625, subdivision 38, is amended to read:

Subd. 38. [PAYMENTS FOR MENTAL HEALTH SERVICES.] Payments for mental health services covered under the medical assistance program that are provided by masters-prepared mental health professionals shall be 80 percent of the rate paid to doctoral-prepared professionals. Payments for mental health services covered under the medical assistance program that are provided by masters-prepared mental health professionals employed by community mental health centers shall be 100 percent of the rate paid to doctoral-prepared professionals. For purposes of reimbursement of mental health professionals under the medical assistance program, all social workers who:

(2) are licensed at the level of graduate social worker or independent social worker; and

(3) are practicing clinical social work under appropriate supervision, as defined by section 148B.18; meet all requirements under Minnesota Rules, part 9505.0323, subpart 24, and shall be paid accordingly.

Sec. 23. Minnesota Statutes 1997 Supplement, section 256B.0627, subdivision 5, is amended to read:

Subd. 5. [LIMITATION ON PAYMENTS.] Medical assistance payments for home care services shall be limited according to this subdivision.

(a) [LIMITS ON SERVICES WITHOUT PRIOR AUTHORIZATION.] A recipient may receive the following home care services during a calendar year:

(1) any initial assessment;

(2) up to two reassessments per year done to determine a recipient's need for personal care services; and

(3) up to five skilled nurse visits.

(b) [PRIOR AUTHORIZATION; EXCEPTIONS.] All home care services above the limits in paragraph (a) must receive the commissioner's prior authorization, except when:

(1) the home care services were required to treat an emergency medical condition that if not immediately treated could cause a recipient serious physical or mental disability, continuation of severe pain, or death. The provider must request retroactive authorization no later than five working days after giving the initial service. The provider must be able to substantiate the emergency by documentation such as reports, notes, and admission or discharge histories;

(2) the home care services were provided on or after the date on which the recipient's eligibility began, but before the date on which the recipient was notified that the case was opened. Authorization will be considered if the request is submitted by the provider within 20 working days of the date the recipient was notified that the case was opened;

(3) a third-party payor for home care services has denied or adjusted a payment. Authorization requests must be submitted by the provider within 20 working days of the notice of denial or adjustment. A copy of the notice must be included with the request;

(4) the commissioner has determined that a county or state human services agency has made an error; or

(5) the professional nurse determines an immediate need for up to 40 skilled nursing or home health aide visits per calendar year and submits a request for authorization within 20 working days of the initial service date, and medical assistance is determined to be the appropriate payer.

(c) [RETROACTIVE AUTHORIZATION.] A request for retroactive authorization will be evaluated according to the same criteria applied to prior authorization requests.

(d) [ASSESSMENT AND SERVICE PLAN.] Assessments under section 256B.0627, subdivision 1, paragraph (a), shall be conducted initially, and at least annually thereafter, in person with the recipient and result in a completed service plan using forms specified by the commissioner. Within 30 days of recipient or responsible party request for home care services, the assessment, the service plan, and other information necessary to determine medical necessity such as diagnostic or testing information, social or medical histories, and hospital or facility discharge summaries shall be submitted to the commissioner. For personal care services:

(2) If the recipient's medical need changes, the recipient's provider may assess the need for a change in service authorization and request the change from the county public health nurse. Within 30 days of the request, the public health nurse will determine whether to request the change in services based upon the provider assessment, or conduct a home visit to assess the need and determine whether the change is appropriate.

(3) To continue to receive personal care services when the recipient displays no significant change, the county public health nurse has the option to review with the commissioner, or the commissioner's designee, the service plan on record and receive authorization for up to an additional 12 months at a time for up to three years. after the first year, the recipient or the responsible party, in conjunction with the public health nurse, may complete a service update on forms developed by the commissioner. The service update may substitute for the annual reassessment described in subdivision 1.

(e) [PRIOR AUTHORIZATION.] The commissioner, or the commissioner's designee, shall review the assessment, the service plan, and any additional information that is submitted. The commissioner shall, within 30 days after receiving a complete request, assessment, and service plan, authorize home care services as follows:

(1) [HOME HEALTH SERVICES.] All home health services provided by a licensed nurse or a home health aide must be prior authorized by the commissioner or the commissioner's designee. Prior authorization must be based on medical necessity and cost-effectiveness when compared with other care options. When home health services are used in combination with personal care and private duty nursing, the cost of all home care services shall be considered for cost-effectiveness. The commissioner shall limit nurse and home health aide visits to no more than one visit each per day.

(2) [PERSONAL CARE SERVICES.] (i) All personal care services and registered nurse supervision must be prior authorized by the commissioner or the commissioner's designee except for the assessments established in paragraph (a). The amount of personal care services authorized must be based on the recipient's home care rating. A child may not be found to be dependent in an activity of daily living if because of the child's age an adult would either perform the activity for the child or assist the child with the activity and the amount of assistance needed is similar to the assistance appropriate for a typical child of the same age. Based on medical necessity, the commissioner may authorize:

(A) up to two times the average number of direct care hours provided in nursing facilities for the recipient's comparable case mix level; or

(B) up to three times the average number of direct care hours provided in nursing facilities for recipients who have complex medical needs or are dependent in at least seven activities of daily living and need physical assistance with eating or have a neurological diagnosis; or

(C) up to 60 percent of the average reimbursement rate, as of July 1, 1991, for care provided in a regional treatment center for recipients who have Level I behavior, plus any inflation adjustment as provided by the legislature for personal care service; or

(D) up to the amount the commissioner would pay, as of July 1, 1991, plus any inflation adjustment provided for home care services, for care provided in a regional treatment center for recipients referred to the commissioner by a regional treatment center preadmission evaluation team. For purposes of this clause, home care services means all services provided in the home or community that would be included in the payment to a regional treatment center; or

(E) up to the amount medical assistance would reimburse for facility care for recipients referred to the commissioner by a preadmission screening team established under section 256B.0911 or 256B.092; and

(F) a reasonable amount of time for the provision of nursing supervision of personal care services.

(iii) The home care rating shall be determined by the commissioner or the commissioner's designee based on information submitted to the commissioner by the county public health nurse on forms specified by the commissioner. The home care rating shall be a combination of current assessment tools developed under sections 256B.0911 and 256B.501 with an addition for seizure activity that will assess the frequency and severity of seizure activity and with adjustments, additions, and clarifications that are necessary to reflect the needs and conditions of recipients who need home care including children and adults under 65 years of age. The commissioner shall establish these forms and protocols under this section and shall use an advisory group, including representatives of recipients, providers, and counties, for consultation in establishing and revising the forms and protocols.

(iv) A recipient shall qualify as having complex medical needs if the care required is difficult to perform and because of recipient's medical condition requires more time than community-based standards allow or requires more skill than would ordinarily be required and the recipient needs or has one or more of the following:

(A) daily tube feedings;

(B) daily parenteral therapy;

(C) wound or decubiti care;

(D) postural drainage, percussion, nebulizer treatments, suctioning, tracheotomy care, oxygen, mechanical ventilation;

(E) catheterization;

(F) ostomy care;

(G) quadriplegia; or

(H) other comparable medical conditions or treatments the commissioner determines would otherwise require institutional care.

(v) A recipient shall qualify as having Level I behavior if there is reasonable supporting evidence that the recipient exhibits, or that without supervision, observation, or redirection would exhibit, one or more of the following behaviors that cause, or have the potential to cause:

(A) injury to the recipient's own body;

(B) physical injury to other people; or

(C) destruction of property.

(vi) Time authorized for personal care relating to Level I behavior in subclause (v), items (A) to (C), shall be based on the predictability, frequency, and amount of intervention required.

(vii) A recipient shall qualify as having Level II behavior if the recipient exhibits on a daily basis one or more of the following behaviors that interfere with the completion of personal care services under subdivision 4, paragraph (a):

(A) unusual or repetitive habits;

(B) withdrawn behavior; or

(C) offensive behavior.

(3) [PRIVATE DUTY NURSING SERVICES.] All private duty nursing services shall be prior authorized by the commissioner or the commissioner's designee. Prior authorization for private duty nursing services shall be based on medical necessity and cost-effectiveness when compared with alternative care options. The commissioner may authorize medically necessary private duty nursing services in quarter-hour units when:

(i) the recipient requires more individual and continuous care than can be provided during a nurse visit; or

(ii) the cares are outside of the scope of services that can be provided by a home health aide or personal care assistant.

The commissioner may authorize:

(A) up to two times the average amount of direct care hours provided in nursing facilities statewide for case mix classification "K" as established by the annual cost report submitted to the department by nursing facilities in May 1992;

(B) private duty nursing in combination with other home care services up to the total cost allowed under clause (2);

(C) up to 16 hours per day if the recipient requires more nursing than the maximum number of direct care hours as established in item (A) and the recipient meets the hospital admission criteria established under Minnesota Rules, parts 9505.0500 to 9505.0540.

The commissioner may authorize up to 16 hours per day of medically necessary private duty nursing services or up to 24 hours per day of medically necessary private duty nursing services until such time as the commissioner is able to make a determination of eligibility for recipients who are cooperatively applying for home care services under the community alternative care program developed under section 256B.49, or until it is determined by the appropriate regulatory agency that a health benefit plan is or is not required to pay for appropriate medically necessary health care services. Recipients or their representatives must cooperatively assist the commissioner in obtaining this determination. Recipients who are eligible for the community alternative care program may not receive more hours of nursing under this section than would otherwise be authorized under section 256B.49.

(4) [VENTILATOR-DEPENDENT RECIPIENTS.] If the recipient is ventilator-dependent, the monthly medical assistance authorization for home care services shall not exceed what the commissioner would pay for care at the highest cost hospital designated as a long-term hospital under the Medicare program. For purposes of this clause, home care services means all services provided in the home that would be included in the payment for care at the long-term hospital. "Ventilator-dependent" means an individual who receives mechanical ventilation for life support at least six hours per day and is expected to be or has been dependent for at least 30 consecutive days.

(f) [PRIOR AUTHORIZATION; TIME LIMITS.] The commissioner or the commissioner's designee shall determine the time period for which a prior authorization shall be effective. If the recipient continues to require home care services beyond the duration of the prior authorization, the home care provider must request a new prior authorization. Under no circumstances, other than the exceptions in paragraph (b), shall a prior authorization be valid prior to the date the commissioner receives the request or for more than 12 months. A recipient who appeals a reduction in previously authorized home care services may continue previously authorized services, other than temporary services under paragraph (h), pending an appeal under section 256.045. The commissioner must provide a detailed explanation of why the authorized services are reduced in amount from those requested by the home care provider.

(h) [PRIOR AUTHORIZATION REQUESTS; TEMPORARY SERVICES.] The agency nurse, the independently enrolled private duty nurse, or county public health nurse may request a temporary authorization for home care services by telephone. The commissioner may approve a temporary level of home care services based on the assessment, and service or care plan information, and primary payer coverage determination information as required. Authorization for a temporary level of home care services including nurse supervision is limited to the time specified by the commissioner, but shall not exceed 45 days, unless extended because the county public health nurse has not completed the required assessment and service plan, or the commissioner's determination has not been made. The level of services authorized under this provision shall have no bearing on a future prior authorization.

(i) [PRIOR AUTHORIZATION REQUIRED IN FOSTER CARE SETTING.] Home care services provided in an adult or child foster care setting must receive prior authorization by the department according to the limits established in paragraph (a).

The commissioner may not authorize:

(1) home care services that are the responsibility of the foster care provider under the terms of the foster care placement agreement and administrative rules. Requests for home care services for recipients residing in a foster care setting must include the foster care placement agreement and determination of difficulty of care;

(2) personal care services when the foster care license holder is also the personal care provider or personal care assistant unless the recipient can direct the recipient's own care, or case management is provided as required in section 256B.0625, subdivision 19a;

(3) personal care services when the responsible party is an employee of, or under contract with, or has any direct or indirect financial relationship with the personal care provider or personal care assistant, unless case management is provided as required in section 256B.0625, subdivision 19a;

(4) home care services when the number of foster care residents is greater than four unless the county responsible for the recipient's foster placement made the placement prior to April 1, 1992, requests that home care services be provided, and case management is provided as required in section 256B.0625, subdivision 19a; or

(5) home care services when combined with foster care payments, other than room and board payments that exceed the total amount that public funds would pay for the recipient's care in a medical institution.

Sec. 24. Minnesota Statutes 1997 Supplement, section 256B.0627, subdivision 8, is amended to read:

Subd. 8. [PERSONAL CARE ASSISTANT SERVICES; SHARED CARE.] (a) Medical assistance payments for personal care assistance shared care shall be limited according to this subdivision.

(b) Recipients of personal care assistant services may share staff and the commissioner shall provide a rate system for shared personal care assistant services. For two persons sharing care, the rate system shall not exceed 1-1/2 times the amount paid for providing services to one person, and shall increase incrementally by one-half the cost of serving a single person, for each person served. A personal care assistant may not serve more than three children in a single setting. for three persons, the rate shall not exceed twice the rate for serving a single individual. No more than three persons may receive shared care from a personal care assistant in a single setting.

(c) Shared care is the provision of personal care services by a personal care assistant to two or three recipients at the same time and in the same setting. For the purposes of this subdivision, "setting" means:

(1) the home or foster care home of one of the individual recipients; or

The provisions of this subdivision do not apply when a personal care assistant is caring for multiple recipients in more than one setting.

(d) The recipient or the recipient's responsible party, in conjunction with the county public health nurse, shall determine:

(1) whether shared care is an appropriate option based on the individual needs and preferences of the recipient; and

(2) the amount of shared care allocated as part of the overall authorization of personal care services.

The recipient or the responsible party, in conjunction with the supervising registered nurse, shall approve the setting, grouping, and arrangement of shared care based on the individual needs and preferences of the recipients. Decisions on the selection of recipients to share care must be based on the ages of the recipients, compatibility, and coordination of their care needs.

(e) The following items must be considered by the recipient or the responsible party and the supervising nurse, and documented in the recipient's care plan:

(1) the additional qualifications needed by the personal care assistant to provide care to several recipients in the same setting;

(2) the additional training and supervision needed by the personal care assistant to ensure that the needs of the recipient are met appropriately and safely. The provider must provide on-site supervision by a registered nurse within the first 14 days of shared care, and monthly thereafter;

(3) the setting in which the shared care will be provided;

(4) the ongoing monitoring and evaluation of the effectiveness and appropriateness of the service and process used to make changes in service or setting; and

(5) a contingency plan which accounts for absence of the recipient in a shared care setting due to illness or other circumstances and staffing contingencies.

(f) The provider must offer the recipient or the responsible party the option of shared or individual personal care assistant care. The recipient or the responsible party can withdraw from participating in a shared care arrangement at any time.

(g) Notwithstanding provisions to the contrary, all other statutory and regulatory provisions relating to personal care services continue to be in effect.

Nothing in this subdivision shall be construed to reduce the total number of hours authorized for an individual recipient.

Sec. 25. Minnesota Statutes 1997 Supplement, section 256B.0645, is amended to read:

256B.0645 [PROVIDER PAYMENTS; RETROACTIVE CHANGES IN ELIGIBILITY.]

Payment to a provider for a health care service provided to a general assistance medical care recipient who is later determined eligible for medical assistance or MinnesotaCare according to section 256L.14 for the period in which the health care service was provided, shall be considered payment in full, and shall not may be adjusted due to the change in eligibility. This section applies does not apply to both fee-for-service payments and payments made to health plans on a prepaid capitated basis.

Sec. 26. Minnesota Statutes 1997 Supplement, section 256B.0911, subdivision 2, is amended to read:

Subd. 2. [PERSONS REQUIRED TO BE SCREENED; EXEMPTIONS.] All applicants to Medicaid certified nursing facilities must be screened prior to admission, regardless of income, assets, or funding sources, except the following:

(2) residents transferred from other certified nursing facilities located within the state of Minnesota;

(3) individuals who have a contractual right to have their nursing facility care paid for indefinitely by the veteran's administration;

(4) individuals who are enrolled in the Ebenezer/Group Health social health maintenance organization project, or enrolled in a demonstration project under section 256B.69, subdivision 18 8, at the time of application to a nursing home;

(5) individuals previously screened and currently being served under the alternative care program or under a home and community-based services waiver authorized under section 1915(c) of the Social Security Act; or

(6) individuals who are admitted to a certified nursing facility for a short-term stay, which, based upon a physician's certification, is expected to be 14 days or less in duration, and who have been screened and approved for nursing facility admission within the previous six months. This exemption applies only if the screener determines at the time of the initial screening of the six-month period that it is appropriate to use the nursing facility for short-term stays and that there is an adequate plan of care for return to the home or community-based setting. If a stay exceeds 14 days, the individual must be referred no later than the first county working day following the 14th resident day for a screening, which must be completed within five working days of the referral. Payment limitations in subdivision 7 will apply to an individual found at screening to not meet the level of care criteria for admission to a certified nursing facility.

Regardless of the exemptions in clauses (2) to (6), persons who have a diagnosis or possible diagnosis of mental illness, mental retardation, or a related condition must receive a preadmission screening before admission unless the admission prior to screening is authorized by the local mental health authority or the local developmental disabilities case manager, or unless authorized by the county agency according to Public Law Number 101-508.

Before admission to a Medicaid certified nursing home or boarding care home, all persons must be screened and approved for admission through an assessment process. The nursing facility is authorized to conduct case mix assessments which are not conducted by the county public health nurse under Minnesota Rules, part 9549.0059. The designated county agency is responsible for distributing the quality assurance and review form for all new applicants to nursing homes.

Other persons who are not applicants to nursing facilities must be screened if a request is made for a screening.

Sec. 27. Minnesota Statutes 1996, section 256B.0911, subdivision 4, is amended to read:

Subd. 4. [RESPONSIBILITIES OF THE COUNTY AND THE SCREENING TEAM.] (a) The county shall:

(1) provide information and education to the general public regarding availability of the preadmission screening program;

(2) accept referrals from individuals, families, human service and health professionals, and hospital and nursing facility personnel;

(3) assess the health, psychological, and social needs of referred individuals and identify services needed to maintain these persons in the least restrictive environments;

(4) determine if the individual screened needs nursing facility level of care;

(5) assess specialized service needs based upon an evaluation by:

(i) a qualified independent mental health professional for persons with a primary or secondary diagnosis of a serious mental illness; and

(6) make recommendations for individuals screened regarding cost-effective community services which are available to the individual;

(7) make recommendations for individuals screened regarding nursing home placement when there are no cost-effective community services available;

(8) develop an individual's community care plan and provide follow-up services as needed; and

(9) prepare and submit reports that may be required by the commissioner of human services.

(b) The screener shall document that the most cost-effective alternatives available were offered to the individual or the individual's legal representative. For purposes of this section, "cost-effective alternatives" means community services and living arrangements that cost the same or less than nursing facility care.

(c) Screeners shall adhere to the level of care criteria for admission to a certified nursing facility established under section 144.0721.

(d) For persons who are eligible for medical assistance or who would be eligible within 180 days of admission to a nursing facility and who are admitted to a nursing facility, the nursing facility must include a screener or the case manager in the discharge planning process for those individuals who the team has determined have discharge potential. The screener or the case manager must ensure a smooth transition and follow-up for the individual's return to the community.

Screeners shall cooperate with other public and private agencies in the community, in order to offer a variety of cost-effective services to the disabled and elderly. The screeners shall encourage the use of volunteers from families, religious organizations, social clubs, and similar civic and service organizations to provide services.

Sec. 28. Minnesota Statutes 1997 Supplement, section 256B.0911, subdivision 7, is amended to read:

Subd. 7. [REIMBURSEMENT FOR CERTIFIED NURSING FACILITIES.] (a) Medical assistance reimbursement for nursing facilities shall be authorized for a medical assistance recipient only if a preadmission screening has been conducted prior to admission or the local county agency has authorized an exemption. Medical assistance reimbursement for nursing facilities shall not be provided for any recipient who the local screener has determined does not meet the level of care criteria for nursing facility placement or, if indicated, has not had a level II PASARR evaluation completed unless an admission for a recipient with mental illness is approved by the local mental health authority or an admission for a recipient with mental retardation or related condition is approved by the state mental retardation authority. The county preadmission screening team may deny certified nursing facility admission using the level of care criteria established under section 144.0721 and deny medical assistance reimbursement for certified nursing facility care. Persons receiving care in a certified nursing facility or certified boarding care home who are reassessed by the commissioner of health according to section 144.0722 and determined to no longer meet the level of care criteria for a certified nursing facility or certified boarding care home may no longer remain a resident in the certified nursing facility or certified boarding care home and must be relocated to the community if the persons were admitted on or after July 1, 1998.

(b) Persons receiving services under section 256B.0913, subdivisions 1 to 14, or 256B.0915 who are reassessed and found to not meet the level of care criteria for admission to a certified nursing facility or certified boarding care home may no longer receive these services if persons were admitted to the program on or after July 1, 1998. The commissioner shall make a request to the health care financing administration for a waiver allowing screening team approval of Medicaid payments for certified nursing facility care. An individual has a choice and makes the final decision between nursing facility placement and community placement after the screening team's recommendation, except as provided in paragraphs (b) and (c).

(d) Upon the receipt by the commissioner of approval by the Secretary of Health and Human Services of the waiver requested under paragraph (a), the local screener shall deny medical assistance reimbursement for nursing facility care for an individual whose long-term care needs can be met in a community-based setting and whose cost of community-based home care services is less than 75 percent of the average payment for nursing facility care for that individual's case mix classification, and who is either:

(i) a current medical assistance recipient being screened for admission to a nursing facility; or

(ii) an individual who would be eligible for medical assistance within 180 days of entering a nursing facility and who meets a nursing facility level of care.

(e) Appeals from the screening team's recommendation or the county agency's final decision shall be made according to section 256.045, subdivision 3.

Sec. 29. Minnesota Statutes 1997 Supplement, section 256B.0915, subdivision 1d, is amended to read:

Subd. 1d. [POSTELIGIBILITY TREATMENT OF INCOME AND RESOURCES FOR ELDERLY WAIVER.] (a) Notwithstanding the provisions of section 256B.056, the commissioner shall make the following amendment to the medical assistance elderly waiver program effective July 1, 1997 1999, or upon federal approval, whichever is later.

A recipient's maintenance needs will be an amount equal to the Minnesota supplemental aid equivalent rate as defined in section 256I.03, subdivision 5, plus the medical assistance personal needs allowance as defined in section 256B.35, subdivision 1, paragraph (a), when applying posteligibility treatment of income rules to the gross income of elderly waiver recipients, except for individuals whose income is in excess of the special income standard according to Code of Federal Regulations, title 42, section 435.236. Recipient maintenance needs shall be adjusted under this provision each July 1.

(b) The commissioner of human services shall secure approval of additional elderly waiver slots sufficient to serve persons who will qualify under the revised income standard described in paragraph (a) before implementing section 256B.0913, subdivision 16.

Sec. 30. Minnesota Statutes 1996, section 256B.41, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY.] The commissioner shall establish, by rule, procedures for determining rates for care of residents of nursing facilities which qualify as vendors of medical assistance, and for implementing the provisions of this section and sections 256B.421, 256B.431, 256B.432, 256B.433, 256B.47, 256B.48, 256B.50, and 256B.502. The procedures shall be based on methods and standards that the commissioner finds are adequate to provide for the costs that must be incurred for the care of residents in efficiently and economically operated nursing facilities and shall specify the costs that are allowable for establishing payment rates through medical assistance.

Sec. 31. Minnesota Statutes 1996, section 256B.431, subdivision 2b, is amended to read:

Subd. 2b. [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For rate years beginning on or after July 1, 1985, the commissioner shall establish procedures for determining per diem reimbursement for operating costs.

(b) The commissioner shall contract with an econometric firm with recognized expertise in and access to national economic change indices that can be applied to the appropriate cost categories when determining the operating cost payment rate.

(c) The commissioner shall analyze and evaluate each nursing facility's cost report of allowable operating costs incurred by the nursing facility during the reporting year immediately preceding the rate year for which the payment rate becomes effective.

of residents in an efficiently and economically operated nursing facility. In developing the geographic groups for purposes of reimbursement under this section, the commissioner shall ensure that nursing facilities in any county contiguous to the Minneapolis-St. Paul seven-county metropolitan area are included in the same geographic group. The limits established by the commissioner shall not be less, in the aggregate, than the 60th percentile of total actual allowable historical operating cost per diems for each group of nursing facilities established under subdivision 1 based on cost reports of allowable operating costs in the previous reporting year. For rate years beginning on or after July 1, 1989, facilities located in geographic group I as described in Minnesota Rules, part 9549.0052, on January 1, 1989, may choose to have the commissioner apply either the care related limits or the other operating cost limits calculated for facilities located in geographic group II, or both, if either of the limits calculated for the group II facilities is higher. The efficiency incentive for geographic group I nursing facilities must be calculated based on geographic group I limits. The phase-in must be established utilizing the chosen limits. For purposes of these exceptions to the geographic grouping requirements, the definitions in Minnesota Rules, parts 9549.0050 to 9549.0059 (Emergency), and 9549.0010 to 9549.0080, apply. The limits established under this paragraph remain in effect until the commissioner establishes a new base period. Until the new base period is established, the commissioner shall adjust the limits annually using the appropriate economic change indices established in paragraph (e). In determining allowable historical operating cost per diems for purposes of setting limits and nursing facility payment rates, the commissioner shall divide the allowable historical operating costs by the actual number of resident days, except that where a nursing facility is occupied at less than 90 percent of licensed capacity days, the commissioner may establish procedures to adjust the computation of the per diem to an imputed occupancy level at or below 90 percent. The commissioner shall establish efficiency incentives as appropriate. The commissioner may establish efficiency incentives for different operating cost categories. The commissioner shall consider establishing efficiency incentives in care related cost categories. The commissioner may combine one or more operating cost categories and may use different methods for calculating payment rates for each operating cost category or combination of operating cost categories. For the rate year beginning on July 1, 1985, the commissioner shall:

(1) allow nursing facilities that have an average length of stay of 180 days or less in their skilled nursing level of care, 125 percent of the care related limit and 105 percent of the other operating cost limit established by rule; and

(2) exempt nursing facilities licensed on July 1, 1983, by the commissioner to provide residential services for the physically handicapped under Minnesota Rules, parts 9570.2000 to 9570.3600, from the care related limits and allow 105 percent of the other operating cost limit established by rule.

For the purpose of calculating the other operating cost efficiency incentive for nursing facilities referred to in clause (1) or (2), the commissioner shall use the other operating cost limit established by rule before application of the 105 percent.

(e) The commissioner shall establish a composite index or indices by determining the appropriate economic change indicators to be applied to specific operating cost categories or combination of operating cost categories.

(f) Each nursing facility shall receive an operating cost payment rate equal to the sum of the nursing facility's operating cost payment rates for each operating cost category. The operating cost payment rate for an operating cost category shall be the lesser of the nursing facility's historical operating cost in the category increased by the appropriate index established in paragraph (e) for the operating cost category plus an efficiency incentive established pursuant to paragraph (d) or the limit for the operating cost category increased by the same index. If a nursing facility's actual historic operating costs are greater than the prospective payment rate for that rate year, there shall be no retroactive cost settle-up. In establishing payment rates for one or more operating cost categories, the commissioner may establish separate rates for different classes of residents based on their relative care needs.

a nursing facility's reported public employee retirement act contribution for the reporting year as apportioned to the care-related operating cost categories and other operating cost categories multiplied by the appropriate composite index or indices established pursuant to paragraph (e) as costs under this paragraph. Total adjusted real estate tax liability, payments in lieu of real estate tax, actual special assessments paid, the indexed public employee retirement act contribution, and license fees paid as required by the Minnesota department of health, for each nursing facility (1) shall be divided by actual resident days in order to compute the operating cost payment rate for this operating cost category, (2) shall not be used to compute the care-related operating cost limits or other operating cost limits established by the commissioner, and (3) shall not be increased by the composite index or indices established pursuant to paragraph (e), unless otherwise indicated in this paragraph.

(h) For rate years beginning on or after July 1, 1987, the commissioner shall adjust the rates of a nursing facility that meets the criteria for the special dietary needs of its residents and the requirements in section 31.651. The adjustment for raw food cost shall be the difference between the nursing facility's allowable historical raw food cost per diem and 115 percent of the median historical allowable raw food cost per diem of the corresponding geographic group.

The rate adjustment shall be reduced by the applicable phase-in percentage as provided under subdivision 2h.

(i) For the cost report year ending September 30, 1996, and for all subsequent reporting years, certified nursing facilities must identify, differentiate, and record resident day statistics for residents in case mix classification A who, on or after July 1, 1996, meet the modified level of care criteria in section 144.0721. The resident day statistics shall be separated into case mix classification A-1 for any resident day meeting the high-function class A level of care criteria and case mix classification A-2 for other case mix class A resident days.

Sec. 32. Minnesota Statutes 1996, section 256B.431, is amended by adding a subdivision to read:

Subd. 27. [SPEND-UP AND HIGH COST LIMITS INDEXED; NOT REBASED.] (a) For rate years beginning on or after July 1, 1998, the commissioner shall modify the determination of the spend-up limits referred to in subdivision 26, paragraph (a), by indexing each group's previous year's median value by the factor in subdivision 26, paragraph (d), clause (2), plus one percentage point.

(b) For rate years beginning on or after July 1, 1998, the commissioner shall modify the determination of the high cost limits referred to in subdivision 26, paragraph (b), by indexing each group's previous year's high cost per diem limits at .5 and one standard deviations above the median by the factor in subdivision 26, paragraph (d), clause (2), plus one percentage point.

Sec. 33. Minnesota Statutes 1996, section 256B.501, subdivision 2, is amended to read:

Subd. 2. [AUTHORITY.] The commissioner shall establish procedures and rules for determining rates for care of residents of intermediate care facilities for persons with mental retardation or related conditions which qualify as providers of medical assistance and waivered services. Approved rates shall be established on the basis of methods and standards that the commissioner finds adequate to provide for the costs that must be incurred for the quality care of residents in efficiently and economically operated facilities and services. The procedures shall specify the costs that are allowable for payment through medical assistance. The commissioner may use experts from outside the department in the establishment of the procedures.

Sec. 34. Minnesota Statutes 1997 Supplement, section 256B.69, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] For the purposes of this section, the following terms have the meanings given.

(b) "Demonstration provider" means a health maintenance organization or, community integrated service network, or accountable provider network authorized and operating under chapter 62D or, 62N, or 62T that participates in the demonstration project according to criteria, standards, methods, and other requirements established for the project and approved by the commissioner. Notwithstanding the above, Itasca county may continue to participate as a demonstration provider until July 1, 2000.

(c) "Eligible individuals" means those persons eligible for medical assistance benefits as defined in sections 256B.055, 256B.056, and 256B.06.

(d) "Limitation of choice" means suspending freedom of choice while allowing eligible individuals to choose among the demonstration providers.

(e) This paragraph supersedes paragraph (c) as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, this paragraph expires and the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes. "Eligible individuals" means those persons eligible for medical assistance benefits as defined in sections 256B.055, 256B.056, and 256B.06. Notwithstanding sections 256B.055, 256B.056, and 256B.06, an individual who becomes ineligible for the program because of failure to submit income reports or recertification forms in a timely manner, shall remain enrolled in the prepaid health plan and shall remain eligible to receive medical assistance coverage through the last day of the month following the month in which the enrollee became ineligible for the medical assistance program.

Sec. 35. Minnesota Statutes 1997 Supplement, section 256B.69, subdivision 3a, is amended to read:

Subd. 3a. [COUNTY AUTHORITY.] (a) The commissioner, when implementing the general assistance medical care, or medical assistance prepayment program within a county, must include the county board in the process of development, approval, and issuance of the request for proposals to provide services to eligible individuals within the proposed county. County boards must be given reasonable opportunity to make recommendations regarding the development, issuance, review of responses, and changes needed in the request for proposals. The commissioner must provide county boards the opportunity to review each proposal based on the identification of community needs under chapters 145A and 256E and county advocacy activities. If a county board finds that a proposal does not address certain community needs, the county board and commissioner shall continue efforts for improving the proposal and network prior to the approval of the contract. The county board shall make recommendations regarding the approval of local networks and their operations to ensure adequate availability and access to covered services. The provider or health plan must respond directly to county advocates and the state prepaid medical assistance ombudsperson regarding service delivery and must be accountable to the state regarding contracts with medical assistance and general assistance medical care funds. The county board may recommend a maximum number of participating health plans after considering the size of the enrolling population; ensuring adequate access and capacity; considering the client and county administrative complexity; and considering the need to promote the viability of locally developed health plans. The county board or a single entity representing a group of county boards and the commissioner shall mutually select health plans for participation at the time of initial implementation of the prepaid medical assistance program in that county or group of counties and at the time of contract renewal. The commissioner shall also seek input for contract requirements from the county or single entity representing a group of county boards at each contract renewal and incorporate those recommendations into the contract negotiation process. The commissioner, in conjunction with the county board, shall actively seek to develop a mutually agreeable timetable prior to the development of the request for proposal, but counties must agree to initial enrollment beginning on or before January 1, 1999, in either the prepaid medical assistance and general assistance medical care programs or county-based purchasing under section 256B.692. At least 90 days before enrollment in the medical assistance and general assistance medical care prepaid programs begins in a county in which the prepaid programs have not been established, the commissioner shall provide a report to the chairs of senate and house committees having jurisdiction over state health care programs which verifies that the commissioner complied with the requirements for county involvement that are specified in this subdivision.

(c) At the option of the county board, the board may develop contract requirements related to the achievement of local public health goals to meet the health needs of medical assistance and general assistance medical care enrollees. These requirements must be reasonably related to the performance of health plan functions and within the scope of the medical assistance and general assistance medical care benefit sets. If the county board and the commissioner mutually agree to such requirements, the department shall include such requirements in all health plan contracts governing the prepaid medical assistance and general assistance medical care programs in that county at initial implementation of the program in that county and at the time of contract renewal. The county board may participate in the enforcement of the contract provisions related to local public health goals.

(d) For counties in which prepaid medical assistance and general assistance medical care programs have not been established, the commissioner shall not implement those programs if a county board submits acceptable and timely preliminary and final proposals under section 256B.692, until county-based purchasing is no longer operational in that county. For counties in which prepaid medical assistance and general assistance medical care programs are in existence on or after September 1, 1997, the commissioner must terminate contracts with health plans according to section 256B.692, subdivision 5, if the county board submits and the commissioner accepts preliminary and final proposals according to that subdivision. The commissioner is not required to terminate contracts that begin on or after September 1, 1997, according to section 256B.692 until two years have elapsed from the date of initial enrollment.

(e) In the event that a county board or a single entity representing a group of county boards and the commissioner cannot reach agreement regarding: (i) the selection of participating health plans in that county; (ii) contract requirements; or (iii) implementation and enforcement of county requirements including provisions regarding local public health goals, the commissioner shall resolve all disputes after taking into account the recommendations of a three-person mediation panel. The panel shall be composed of one designee of the president of the association of Minnesota counties, one designee of the commissioner of human services, and one designee of the commissioner of health.

(f) If a county which elects to implement county-based purchasing ceases to implement county-based purchasing, it is prohibited from assuming the responsibility of county-based purchasing for a period of five years from the date it discontinues purchasing.

(g) Notwithstanding the requirement in paragraph (a) that a county must agree to initial enrollment on or before January 1, 1999, the commissioner shall grant a delay of up to 12 months in the implementation of the county-based purchasing authorized in section 256B.692 if the county or group of counties has submitted a preliminary proposal for county-based purchasing by September 1, 1997, has not already implemented the prepaid medical assistance program before January 1, 1998, and has submitted a written request for the delay to the commissioner by July 1, 1998. In order for the delay to be continued, the county or group of counties must also submit to the commissioner the following information by December 1, 1998:

(1) identify the proposed date of implementation, not later than January 1, 2000;

(2) include copies of the county board resolutions which demonstrate the continued commitment to the implementation of county-based purchasing by the proposed date of implementation. County board authorization may remain contingent on the submission of a final proposal which meets the requirements of section 256B.692, subdivision 5, paragraph (b);

(3) if more than one county is involved in the proposal, demonstrate actions taken for the establishment of a governance structure between the participating counties and describe how the fiduciary responsibilities of county-based purchasing will be allocated between the counties;

(4) describe actions taken to identify how the risk of a deficit will be managed in the event expenditures are greater than total capitation payments. This description must identify how any of the following strategies will be assessed:

(i) risk contracts with licensed health plans;

(ii) risk arrangements with providers who are not licensed health plans;

(iii) risk arrangements with other licensed insurance entities; and

(5) include, if county-based purchasing will not contract with licensed health plans or provider networks, letters of interest from local providers in at least the categories of hospital, physician, mental health, and pharmacy which express interest in contracting for services; and

(6) describe the options being considered to obtain the administrative services required in section 256B.692, subdivision 3, clauses (3) and (5).

For counties which receive a delay under this subdivision, the final proposals required under section 256B.692, subdivision 5, paragraph (b), must be submitted at least six months prior to the requested implementation date. Authority to implement county-based purchasing remains contingent on approval of the final proposal as required under section 256B.692.

Sec. 36. Minnesota Statutes 1996, section 256B.69, is amended by adding a subdivision to read:

Subd. 25. [AMERICAN INDIAN RECIPIENTS.] (a) Beginning on or after January 1, 1999, for American Indian recipients of medical assistance who are required to enroll with a demonstration provider under subdivision 4 or in a county-based purchasing entity, if applicable, under section 256B.692, medical assistance shall cover health care services provided at Indian health services facilities and facilities operated by a tribe or tribal organization under funding authorized by United States Code, title 25, sections 450f to 450n, or title III of the Indian Self-Determination and Education Assistance Act, Public Law Number 93-638, if those services would otherwise be covered under section 256B.0625. Payments for services provided under this subdivision shall be made on a fee-for-service basis, and may, at the option of the tribe or tribal organization, be made in accordance with rates authorized under sections 256.969, subdivision 16, and 256B.0625, subdivision 34. Implementation of this subdivision is contingent on federal approval.

(b) The commissioner of human services, in consultation with the tribal governments, shall develop a plan for tribes to assist in the enrollment process for American Indian recipients enrolled in the prepaid medical assistance program under this section or the prepaid general assistance medical care program under section 256D.03, subdivision 4, paragraph (d). This plan also shall address how tribes will be included in ensuring the coordination of care for American Indian recipients between Indian health service or tribal providers and other providers.

(c) For purposes of this subdivision, "American Indian" has the meaning given to persons to whom services will be provided for in Code of Federal Regulations, title 42, section 36.12.

(d) This subdivision also applies to American Indian recipients of general assistance medical care and to the prepaid general assistance medical care program under section 256D.03, subdivision 4, paragraph (d).

Sec. 37. Minnesota Statutes 1997 Supplement, section 256B.692, subdivision 2, is amended to read:

Subd. 2. [DUTIES OF THE COMMISSIONER OF HEALTH.] Notwithstanding chapters 62D and 62N, a county that elects to purchase medical assistance and general assistance medical care in return for a fixed sum without regard to the frequency or extent of services furnished to any particular enrollee is not required to obtain a certificate of authority under chapter 62D or 62N. A county that elects to purchase medical assistance and general assistance medical care services under this section must satisfy the commissioner of health that the requirements of chapter 62D, applicable to health maintenance organizations, or chapter 62N, applicable to community integrated service networks, will be met. A county must also assure the commissioner of health that the requirements of section sections 62J.041; 62J.48; 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 62Q, including sections 62Q.07; 62Q.075; 62Q.105; 62Q.1055; 62Q.106; 62Q.11; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 62Q.30; 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; and 72A.201 will be met. All enforcement and rulemaking powers available under chapters 62D and, 62J, 62M, 62N, and 62Q are hereby granted to the commissioner of health with respect to counties that purchase medical assistance and general assistance medical care services under this section.

Sec. 38. Minnesota Statutes 1997 Supplement, section 256B.692, subdivision 5, is amended to read:

July 1, 1997. Counties submitting preliminary proposals must establish a local planning process that involves input from medical assistance and general assistance medical care recipients, recipient advocates, providers and representatives of local school districts, labor, and tribal government to advise on the development of a final proposal and its implementation.

(b) The county board must submit a final proposal on or before July 1, 1998, that demonstrates the ability to meet all the requirements of this section, including beginning enrollment on January 1, 1999, unless a delay has been granted under section 256B.69, subdivision 3a, paragraph (g).

(c) After January 1, 1999, for a county in which the prepaid medical assistance program is in existence, the county board must submit a preliminary proposal at least 15 months prior to termination of health plan contracts in that county and a final proposal six months prior to the health plan contract termination date in order to begin enrollment after the termination. Nothing in this section shall impede or delay implementation or continuation of the prepaid medical assistance and general assistance medical care programs in counties for which the board does not submit a proposal, or submits a proposal that is not in compliance with this section.

(d) The commissioner is not required to terminate contracts for the prepaid medical assistance and prepaid general assistance medical care programs that begin on or after September 1, 1997, in a county for which a county board has submitted a proposal under this paragraph, until two years have elapsed from the date of initial enrollment in the prepaid medical assistance and prepaid general assistance medical care programs.

Sec. 39. Minnesota Statutes 1997 Supplement, section 256B.77, subdivision 3, is amended to read:

Subd. 3. [ASSURANCES TO THE COMMISSIONER OF HEALTH.] A county authority that elects to participate in a demonstration project for people with disabilities under this section is not required to obtain a certificate of authority under chapter 62D or 62N. A county authority that elects to participate in a demonstration project for people with disabilities under this section must assure the commissioner of health that the requirements of chapters 62D and, 62N, and section 256B.692, subdivision 2, are met. All enforcement and rulemaking powers available under chapters 62D and, 62J, 62M, 62N, and 62Q are granted to the commissioner of health with respect to the county authorities that contract with the commissioner to purchase services in a demonstration project for people with disabilities under this section.

Sec. 40. Minnesota Statutes 1997 Supplement, section 256B.77, subdivision 7a, is amended to read:

Subd. 7a. [ELIGIBLE INDIVIDUALS.] (a) Persons are eligible for the demonstration project as provided in this subdivision.

(b) "Eligible individuals" means those persons living in the demonstration site who are eligible for medical assistance and are disabled based on a disability determination under section 256B.055, subdivisions 7 and 12, or who are eligible for medical assistance and have been diagnosed as having:

(1) serious and persistent mental illness as defined in section 245.462, subdivision 20;

(2) severe emotional disturbance as defined in section 245.487, subdivision 6; or

(3) mental retardation, or being a mentally retarded person as defined in section 252A.02, or a related condition as defined in section 252.27, subdivision 1a.

Other individuals may be included at the option of the county authority based on agreement with the commissioner.

(c) Eligible individuals residing on a federally recognized Indian reservation may be excluded from participation in the demonstration project at the discretion of the tribal government based on agreement with the commissioner, in consultation with the county authority.

(e) A person who is a sexual psychopathic personality as defined in section 253B.02, subdivision 18a, or a sexually dangerous person as defined in section 253B.02, subdivision 18b, is excluded from enrollment in the demonstration project.

Sec. 41. Minnesota Statutes 1997 Supplement, section 256B.77, subdivision 10, is amended to read:

Subd. 10. [CAPITATION PAYMENT.] (a) The commissioner shall pay a capitation payment to the county authority and, when applicable under subdivision 6, paragraph (a), to the service delivery organization for each medical assistance eligible enrollee. The commissioner shall develop capitation payment rates for the initial contract period for each demonstration site in consultation with an independent actuary, to ensure that the cost of services under the demonstration project does not exceed the estimated cost for medical assistance services for the covered population under the fee-for-service system for the demonstration period. For each year of the demonstration project, the capitation payment rate shall be based on 96 percent of the projected per person costs that would otherwise have been paid under medical assistance fee-for-service during each of those years. Rates shall be adjusted within the limits of the available risk adjustment technology, as mandated by section 62Q.03. In addition, the commissioner shall implement appropriate risk and savings sharing provisions with county administrative entities and, when applicable under subdivision 6, paragraph (a), service delivery organizations within the projected budget limits. Capitation rates shall be adjusted at least annually to include any rate increases and payments for expanded or newly covered services for eligible individuals. The initial demonstration project rate shall include an amount in addition to the fee for service payments to adjust for underutilization of dental services. Any savings beyond those allowed for the county authority, county administrative entity, or service delivery organization shall be first used to meet the unmet needs of eligible individuals. Payments to providers participating in the project are exempt from the requirements of sections 256.966 and 256B.03, subdivision 2.

(b) The commissioner shall monitor and evaluate annually the effect of the discount on consumers, the county authority, and providers of disability services. Findings shall be reported and recommendations made, as appropriate, to ensure that the discount effect does not adversely affect the ability of the county administrative entity or providers of services to provide appropriate services to eligible individuals, and does not result in cost shifting of eligible individuals to the county authority.

Sec. 42. Minnesota Statutes 1997 Supplement, section 256B.77, subdivision 12, is amended to read:

Subd. 12. [SERVICE COORDINATION.] (a) For purposes of this section, "service coordinator" means an individual selected by the enrollee or the enrollee's legal representative and authorized by the county administrative entity or service delivery organization to work in partnership with the enrollee to develop, coordinate, and in some instances, provide supports and services identified in the personal support plan. Service coordinators may only provide services and supports if the enrollee is informed of potential conflicts of interest, is given alternatives, and gives informed consent. Eligible service coordinators are individuals age 18 or older who meet the qualifications as described in paragraph (b). Enrollees, their legal representatives, or their advocates are eligible to be service coordinators if they have the capabilities to perform the activities and functions outlined in paragraph (b). Providers licensed under chapter 245A to provide residential services, or providers who are providing residential services covered under the group residential housing program may not act as service coordinator for enrollees for whom they provide residential services. This does not apply to providers of short-term detoxification services. Each county administrative entity or service delivery organization may develop further criteria for eligible vendors of service coordination during the demonstration period and shall determine whom it contracts with or employs to provide service coordination. County administrative entities and service delivery organizations may pay enrollees or their advocates or legal representatives for service coordination activities.

(b) The service coordinator shall act as a facilitator, working in partnership with the enrollee to ensure that their needs are identified and addressed. The level of involvement of the service coordinator shall depend on the needs and desires of the enrollee. The service coordinator shall have the knowledge, skills, and abilities to, and is responsible for:

(1) arranging for an initial assessment, and periodic reassessment as necessary, of supports and services based on the enrollee's strengths, needs, choices, and preferences in life domain areas;

(2) developing and updating the personal support plan based on relevant ongoing assessment;

(4) assisting the enrollee and the enrollee's legal representative, if any, to maximize informed choice of and control over services and supports and to exercise the enrollee's rights and advocate on behalf of the enrollee;

(5) monitoring the progress toward achieving the enrollee's outcomes in order to evaluate and adjust the timeliness and adequacy of the implementation of the personal support plan;

(6) facilitating meetings and effectively collaborating with a variety of agencies and persons, including attending individual family service plan and individual education plan meetings when requested by the enrollee or the enrollee's legal representative;

(7) soliciting and analyzing relevant information;

(8) communicating effectively with the enrollee and with other individuals participating in the enrollee's plan;

(9) educating and communicating effectively with the enrollee about good health care practices and risk to the enrollee's health with certain behaviors;

(10) having knowledge of basic enrollee protection requirements, including data privacy;

(11) informing, educating, and assisting the enrollee in identifying available service providers and accessing needed resources and services beyond the limitations of the medical assistance benefit set covered services; and

(12) providing other services as identified in the personal support plan.

(c) For the demonstration project, the qualifications and standards for service coordination in this section shall replace comparable existing provisions of existing statutes and rules governing case management for eligible individuals.

(d) The provisions of this subdivision apply only to the demonstration sites that begin implementation on July 1, 1998 designated by the commissioner under subdivision 5.

All other demonstration sites must comply with laws and rules governing case management services for eligible individuals in effect when the site begins the demonstration project.

Sec. 43. Minnesota Statutes 1997 Supplement, section 256D.03, subdivision 3, is amended to read:

Subd. 3. [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] (a) General assistance medical care may be paid for any person who is not eligible for medical assistance under chapter 256B, including eligibility for medical assistance based on a spenddown of excess income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in clause (4) (5), except as provided in paragraph (b); and:

(1) who is receiving assistance under section 256D.05, except for families with children who are eligible under Minnesota family investment program-statewide (MFIP-S), who is having a payment made on the person's behalf under sections 256I.01 to 256I.06, or who resides in group residential housing as defined in chapter 256I and can meet a spenddown using the cost of remedial services received through group residential housing; or

(2)(i) who is a resident of Minnesota; and whose equity in assets is not in excess of $1,000 per assistance unit. Exempt assets, the reduction of excess assets, and the waiver of excess assets must conform to the medical assistance program in chapter 256B, with the following exception: the maximum amount of undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by the trustee, assuming the full exercise of the trustee's discretion under the terms of the trust, must be applied toward the asset maximum; and

been applied to the wage earner's income, the disregard shall not be applied again until the wage earner's income has not been considered in an eligibility determination for general assistance, general assistance medical care, medical assistance, or MFIP-S for 12 consecutive months. The earned income and work expense deductions for a person who does not reside with a dependent child under age 21 shall be the same as the method used to determine eligibility for a person under section 256D.06, subdivision 1, except the disregard of the first $50 of earned income is not allowed; or

(3) who would be eligible for medical assistance except that the person resides in a facility that is determined by the commissioner or the federal Health Care Financing Administration to be an institution for mental diseases; or

(4) who is receiving care and rehabilitation services from a nonprofit center established to serve victims of torture. These individuals are eligible for general assistance medical care only for the period during which they are receiving services from the center. During this period of eligibility, individuals eligible under this clause shall not be required to participate in prepaid general assistance medical care.

(4) (5) Beginning July 1, 1998, applicants or recipients who meet all eligibility requirements of MinnesotaCare as defined in sections 256L.01 to 256L.16, and are:

(i) adults with dependent children under 21 whose gross family income is equal to or less than 275 percent of the federal poverty guidelines; or

(ii) adults without children with earned income and whose family gross income is between 75 percent of the federal poverty guidelines and the amount set by section 256L.04, subdivision 7, shall be terminated from general assistance medical care upon enrollment in MinnesotaCare.

(b) For services rendered on or after July 1, 1997, eligibility is limited to one month prior to application if the person is determined eligible in the prior month. A redetermination of eligibility must occur every 12 months. Beginning July 1, 1998, Minnesota health care program applications completed by recipients and applicants who are persons described in paragraph (a), clause (4) (5), may be returned to the county agency to be forwarded to the department of human services or sent directly to the department of human services for enrollment in MinnesotaCare. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available in any month during which a MinnesotaCare eligibility determination and enrollment are pending. Upon notification of eligibility for MinnesotaCare, notice of termination for eligibility for general assistance medical care shall be sent to an applicant or recipient. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available until enrollment in MinnesotaCare subject to the provisions of paragraph (d).

(c) The date of an initial Minnesota health care program application necessary to begin a determination of eligibility shall be the date the applicant has provided a name, address, and social security number, signed and dated, to the county agency or the department of human services. If the applicant is unable to provide an initial application when health care is delivered due to a medical condition or disability, a health care provider may act on the person's behalf to complete the initial application. The applicant must complete the remainder of the application and provide necessary verification before eligibility can be determined. The county agency must assist the applicant in obtaining verification if necessary.

(d) County agencies are authorized to use all automated databases containing information regarding recipients' or applicants' income in order to determine eligibility for general assistance medical care or MinnesotaCare. Such use shall be considered sufficient in order to determine eligibility and premium payments by the county agency.

(e) General assistance medical care is not available for a person in a correctional facility unless the person is detained by law for less than one year in a county correctional or detention facility as a person accused or convicted of a crime, or admitted as an inpatient to a hospital on a criminal hold order, and the person is a recipient of general assistance medical care at the time the person is detained by law or admitted on a criminal hold order and as long as the person continues to meet other eligibility requirements of this subdivision.

(g) In determining the amount of assets of an individual, there shall be included any asset or interest in an asset, including an asset excluded under paragraph (a), that was given away, sold, or disposed of for less than fair market value within the 60 months preceding application for general assistance medical care or during the period of eligibility. Any transfer described in this paragraph shall be presumed to have been for the purpose of establishing eligibility for general assistance medical care, unless the individual furnishes convincing evidence to establish that the transaction was exclusively for another purpose. For purposes of this paragraph, the value of the asset or interest shall be the fair market value at the time it was given away, sold, or disposed of, less the amount of compensation received. For any uncompensated transfer, the number of months of ineligibility, including partial months, shall be calculated by dividing the uncompensated transfer amount by the average monthly per person payment made by the medical assistance program to skilled nursing facilities for the previous calendar year. The individual shall remain ineligible until this fixed period has expired. The period of ineligibility may exceed 30 months, and a reapplication for benefits after 30 months from the date of the transfer shall not result in eligibility unless and until the period of ineligibility has expired. The period of ineligibility begins in the month the transfer was reported to the county agency, or if the transfer was not reported, the month in which the county agency discovered the transfer, whichever comes first. For applicants, the period of ineligibility begins on the date of the first approved application.

(h) When determining eligibility for any state benefits under this subdivision, the income and resources of all noncitizens shall be deemed to include their sponsor's income and resources as defined in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, title IV, Public Law Number 104-193, sections 421 and 422, and subsequently set out in federal rules.

(i)(1) An undocumented noncitizen or a nonimmigrant is ineligible for general assistance medical care other than emergency services. For purposes of this subdivision, a nonimmigrant is an individual in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and an undocumented noncitizen is an individual who resides in the United States without the approval or acquiescence of the Immigration and Naturalization Service.

(j) (2) This paragraph does not apply to a child under age 18, to a Cuban or Haitian entrant as defined in Public Law Number 96-422, section 501(e)(1) or (2)(a), or to a noncitizen who is aged, blind, or disabled as defined in Code of Federal Regulations, title 42, sections 435.520, 435.530, 435.531, 435.540, and 435.541, or to an individual eligible for general assistance medical care under paragraph (a), clause (4), who cooperates with the Immigration and Naturalization Service to pursue any applicable immigration status, including citizenship, that would qualify the individual for medical assistance with federal financial participation.

(k) (3) For purposes of paragraphs (f) and (i) this paragraph, "emergency services" has the meaning given in Code of Federal Regulations, title 42, section 440.255(b)(1), except that it also means services rendered because of suspected or actual pesticide poisoning.

(l) (j) Notwithstanding any other provision of law, a noncitizen who is ineligible for medical assistance due to the deeming of a sponsor's income and resources, is ineligible for general assistance medical care.

Sec. 44. Minnesota Statutes 1996, section 256D.03, subdivision 4, is amended to read:

Subd. 4. [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) For a person who is eligible under subdivision 3, paragraph (a), clause (3), general assistance medical care covers, except as provided in paragraph (c):

(1) inpatient hospital services;

(2) outpatient hospital services;

(3) services provided by Medicare certified rehabilitation agencies;

(4) prescription drugs and other products recommended through the process established in section 256B.0625, subdivision 13;

(6) eyeglasses and eye examinations provided by a physician or optometrist;

(7) hearing aids;

(8) prosthetic devices;

(9) laboratory and X-ray services;

(10) physician's services;

(11) medical transportation;

(12) chiropractic services as covered under the medical assistance program;

(13) podiatric services;

(14) dental services;

(15) outpatient services provided by a mental health center or clinic that is under contract with the county board and is established under section 245.62;

(16) day treatment services for mental illness provided under contract with the county board;

(17) prescribed medications for persons who have been diagnosed as mentally ill as necessary to prevent more restrictive institutionalization;

(18) case management services for a person with serious and persistent mental illness who would be eligible for medical assistance except that the person resides in an institution for mental diseases;

(19) psychological services, medical supplies and equipment, and Medicare premiums, coinsurance and deductible payments;

(20) (19) medical equipment not specifically listed in this paragraph when the use of the equipment will prevent the need for costlier services that are reimbursable under this subdivision;

(21) (20) services performed by a certified pediatric nurse practitioner, a certified family nurse practitioner, a certified adult nurse practitioner, a certified obstetric/gynecological nurse practitioner, or a certified geriatric nurse practitioner in independent practice, if the services are otherwise covered under this chapter as a physician service, and if the service is within the scope of practice of the nurse practitioner's license as a registered nurse, as defined in section 148.171; and

(22) (21) services of a certified public health nurse or a registered nurse practicing in a public health nursing clinic that is a department of, or that operates under the direct authority of, a unit of government, if the service is within the scope of practice of the public health nurse's license as a registered nurse, as defined in section 148.171.

(b) Except as provided in paragraph (c), for a recipient who is eligible under subdivision 3, paragraph (a), clause (1) or (2), general assistance medical care covers the services listed in paragraph (a) with the exception of special transportation services.

(c) Gender reassignment surgery and related services are not covered services under this subdivision unless the individual began receiving gender reassignment services prior to July 1, 1995.

provide services in an economical manner or to control utilization, with safeguards to ensure that necessary services are provided. Before implementing prepaid programs in counties with a county operated or affiliated public teaching hospital or a hospital or clinic operated by the University of Minnesota, the commissioner shall consider the risks the prepaid program creates for the hospital and allow the county or hospital the opportunity to participate in the program in a manner that reflects the risk of adverse selection and the nature of the patients served by the hospital, provided the terms of participation in the program are competitive with the terms of other participants considering the nature of the population served. Payment for services provided pursuant to this subdivision shall be as provided to medical assistance vendors of these services under sections 256B.02, subdivision 8, and 256B.0625. For payments made during fiscal year 1990 and later years, the commissioner shall consult with an independent actuary in establishing prepayment rates, but shall retain final control over the rate methodology. Notwithstanding the provisions of subdivision 3, an individual who becomes ineligible for general assistance medical care because of failure to submit income reports or recertification forms in a timely manner, shall remain enrolled in the prepaid health plan and shall remain eligible for general assistance medical care coverage through the last day of the month in which the enrollee became ineligible for general assistance medical care.

(e) The commissioner of human services may reduce payments provided under sections 256D.01 to 256D.21 and 261.23 in order to remain within the amount appropriated for general assistance medical care, within the following restrictions.:

(i) For the period July 1, 1985 to December 31, 1985, reductions below the cost per service unit allowable under section 256.966, are permitted only as follows: payments for inpatient and outpatient hospital care provided in response to a primary diagnosis of chemical dependency or mental illness may be reduced no more than 30 percent; payments for all other inpatient hospital care may be reduced no more than 20 percent. Reductions below the payments allowable under general assistance medical care for the remaining general assistance medical care services allowable under this subdivision may be reduced no more than ten percent.

(ii) For the period January 1, 1986 to December 31, 1986, reductions below the cost per service unit allowable under section 256.966 are permitted only as follows: payments for inpatient and outpatient hospital care provided in response to a primary diagnosis of chemical dependency or mental illness may be reduced no more than 20 percent; payments for all other inpatient hospital care may be reduced no more than 15 percent. Reductions below the payments allowable under general assistance medical care for the remaining general assistance medical care services allowable under this subdivision may be reduced no more than five percent.

(iii) For the period January 1, 1987 to June 30, 1987, reductions below the cost per service unit allowable under section 256.966 are permitted only as follows: payments for inpatient and outpatient hospital care provided in response to a primary diagnosis of chemical dependency or mental illness may be reduced no more than 15 percent; payments for all other inpatient hospital care may be reduced no more than ten percent. Reductions below the payments allowable under medical assistance for the remaining general assistance medical care services allowable under this subdivision may be reduced no more than five percent.

(iv) For the period July 1, 1987 to June 30, 1988, reductions below the cost per service unit allowable under section 256.966 are permitted only as follows: payments for inpatient and outpatient hospital care provided in response to a primary diagnosis of chemical dependency or mental illness may be reduced no more than 15 percent; payments for all other inpatient hospital care may be reduced no more than five percent. Reductions below the payments allowable under medical assistance for the remaining general assistance medical care services allowable under this subdivision may be reduced no more than five percent.

(v) For the period July 1, 1988 to June 30, 1989, reductions below the cost per service unit allowable under section 256.966 are permitted only as follows: payments for inpatient and outpatient hospital care provided in response to a primary diagnosis of chemical dependency or mental illness may be reduced no more than 15 percent; payments for all other inpatient hospital care may not be reduced. Reductions below the payments allowable under medical assistance for the remaining general assistance medical care services allowable under this subdivision may be reduced no more than five percent.

(f) (g) Any county may, from its own resources, provide medical payments for which state payments are not made.

(g) (h) Chemical dependency services that are reimbursed under chapter 254B must not be reimbursed under general assistance medical care.

(h) (i) The maximum payment for new vendors enrolled in the general assistance medical care program after the base year shall be determined from the average usual and customary charge of the same vendor type enrolled in the base year.

(i) (j) The conditions of payment for services under this subdivision are the same as the conditions specified in rules adopted under chapter 256B governing the medical assistance program, unless otherwise provided by statute or rule.

Sec. 45. Minnesota Statutes 1996, section 256D.03, is amended by adding a subdivision to read:

Subd. 9. [PAYMENT FOR AMBULANCE SERVICES.] Effective July 1, 1999, general assistance medical care payments for ambulance services shall be increased by ten percent.

Sec. 46. Minnesota Statutes 1997 Supplement, section 256L.07, subdivision 2, is amended to read:

Subd. 2. [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED COVERAGE.] (a) To be eligible for subsidized premium payments based on a sliding scale, a family or individual must not have access to subsidized health coverage through an employer, and must not have had access to subsidized health coverage through an employer for the 18 months prior to application for subsidized coverage under the MinnesotaCare program. The requirement that the family or individual must not have had access to employer-subsidized coverage during the previous 18 months does not apply if: (1) employer-subsidized coverage was lost due to the death of an employee or divorce; (2) employer-subsidized coverage was lost because an individual became ineligible for coverage as a child or dependent; or (3) employer-subsidized coverage was lost for reasons that would not disqualify the individual for unemployment benefits under section 268.09 and the family or individual has not had access to employer-subsidized coverage since the loss of coverage. If employer-subsidized coverage was lost for reasons that disqualify an individual for unemployment benefits under section 268.09, children of that individual are exempt from the requirement of no access to employer subsidized coverage for the 18 months prior to application, as long as the children have not had access to employer subsidized coverage since the disqualifying event. The requirement that the family or individual must not have had access to employer-subsidized coverage during the previous 18 months does apply if employer-subsidized coverage is lost due to an employer terminating health care coverage as an employee benefit, unless that coverage was provided under section 256M.03.

(b) For purposes of this requirement, subsidized health coverage means health coverage for which the employer pays at least 50 percent of the cost of coverage for the employee, excluding dependent coverage, or a higher percentage as specified by the commissioner. Children are eligible for employer-subsidized coverage through either parent, including the noncustodial parent. The commissioner must treat employer contributions to Internal Revenue Code Section 125 plans as qualified employer subsidies toward the cost of health coverage for employees for purposes of this subdivision.

Sec. 47. Minnesota Statutes 1997 Supplement, section 256L.07, subdivision 3, is amended to read:

Subd. 3. [PERIOD UNINSURED.] To be eligible for subsidized premium payments based on a sliding scale, families and individuals initially enrolled in the MinnesotaCare program under section 256L.04, subdivisions 5 and 7, must have had no health coverage for at least four months prior to application. The commissioner may change this eligibility criterion for sliding scale premiums in order to remain within the limits of available appropriations. The requirement of at least four months of no health coverage prior to application for the MinnesotaCare program does not apply to:

(1) families, children, and individuals who apply for the MinnesotaCare program upon termination from or as required by the medical assistance program, general assistance medical care program, or coverage under a regional demonstration project for the uninsured funded under section 256B.73, the Hennepin county assured care program, or the Group Health, Inc., community health plan;

(3) children enrolled pursuant to Laws 1992, chapter 549, article 4, section 17; or

(4) individuals currently serving or who have served in the military reserves, and dependents of these individuals, if these individuals: (i) reapply for MinnesotaCare coverage after a period of active military service during which they had been covered by the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); (ii) were covered under MinnesotaCare immediately prior to obtaining coverage under CHAMPUS; and (iii) have maintained continuous coverage; or

(5) children who lose coverage under section 256M.03 due to an employer terminating health coverage as an employee benefit or due to an employee layoff.

Sec. 48. [256M.01] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] For purposes of this chapter, the terms defined in this section have the meanings given.

Subd. 2. [COMMISSIONER.] "Commissioner" means the commissioner of human services.

Subd. 3. [EMPLOYER-SUBSIDIZED INSURANCE.] "Employer-subsidized insurance" has the meaning provided in section 256L.07, subdivision 2.

Sec. 49. [256M.03] [COVERAGE OF CHILDREN INELIGIBLE FOR MINNESOTACARE.]

Subdivision 1. [PAYMENTS FOR EMPLOYER-SUBSIDIZED COVERAGE.] A child who would otherwise be eligible for coverage under MinnesotaCare, except for the availability of employer-subsidized coverage, is eligible for payment of the employee share of employer-subsidized coverage for the child under the state children's health insurance program established in title 21 of the Social Security Act, according to the sliding scale in subdivision 2. In order to be eligible under this subdivision, a child must not have employer-subsidized coverage at the time of application for payment, and the employer-subsidized coverage must qualify as benchmark coverage or benchmark equivalent coverage under title 21 of the Social Security Act, section 2103. Payments shall be made directly to the employer providing employer-subsidized insurance.

Subd. 2. [SLIDING SCALE PAYMENTS.] Upon federal approval of the plan, the commissioner shall pay the difference of the MinnesotaCare sliding premium scale as specified in Minnesota Statutes, section 256L.08, up to a maximum of five percent of the qualifying family's income and the employee share of the coverage.

Subd. 3. [LIMITATION.] The availability of payments under this section is subject to the limits of available appropriations. The commissioner may set limits on the number of children receiving payments under this section, or modify payment levels, in order to remain within the limits of appropriations.

Subd. 4. [ADVISORY TASK FORCE.] The commissioner shall convene an advisory task force comprised of representatives of small businesses, health plan companies, and insurance agents in order to develop a plan to implement this section.

Sec. 50. [256M.05] [MAINTENANCE OF EMPLOYER SUBSIDY.]

Sec. 51. Laws 1997, chapter 195, section 5, is amended to read:

Sec. 5. [PERSONAL CARE ASSISTANT PROVIDERS.]

The commissioner of health shall create a unique category of licensure as appropriate for providers offering, providing, or arranging personal care assistant services to more than one individual. The commissioner shall work with the department of human services, providers, consumers, and advocates in developing the licensure standards. The licensure standards must include requirements for providers to provide consumers advance written notice of service termination, a service transition plan, and an appeal process. If the commissioner determines there are costs related to rulemaking under this section, the commissioner shall include a budget request for this item in the 2000-2001 biennial budget. Prior to promulgating the rule, the commissioner shall submit the proposed rule to the legislature by January 15, 1999.

Sec. 52. Laws 1997, chapter 203, article 4, section 64, is amended to read:

Sec. 64. [STUDY OF ELDERLY WAIVER EXPANSION.]

The commissioner of human services shall appoint a task force that includes representatives of counties, health plans, consumers, and legislators to study the impact of the expansion of the elderly waiver program under section 4 and to make recommendations for any changes in law necessary to facilitate an efficient and equitable relationship between the elderly waiver program and the Minnesota senior health options project. Based on the results of the task force study, the commissioner may seek any federal waivers needed to improve the relationship between the elderly waiver and the Minnesota senior health options project. The commissioner shall report the results of the task force study to the legislature by January 15, 1998 July 1, 2000.

Sec. 53. Laws 1997, chapter 225, article 2, section 64, is amended to read:

Sec. 64. [EFFECTIVE DATE.]

Section 8 is effective for payments made for MinnesotaCare services on or after July 1, 1996. Section 23 is effective the day following final enactment. Section 46 is effective January 1, 1998, and applies to high deductible health plans issued or renewed on or after that date.

Sec. 54. [SUBMITTAL OF PLAN TO ACCESS STATE CHILDREN'S HEALTH INSURANCE FUNDING.]

The commissioner of human services shall submit a plan to implement Minnesota Statutes, sections 256M.01 to 256M.05, to the secretary of health and human services, in order to obtain funding through the state children's health insurance program established in title 21 of the Social Security Act. The commissioner shall also request a waiver to purchase family coverage as specified in title 21 of the Social Security Act, section 2105(c)(3). Upon approval of the waiver, the commissioner shall expand the definition of those eligible for coverage under Minnesota Statutes, section 256M.03, to include all adults eligible for coverage under the employee's policy.

Sec. 55. [OFFSET OF HMO SURCHARGE.]

Beginning October 1, 1998, and ending December 31, 1998, the commissioner of human services shall offset monthly charges for the health maintenance organization surcharge by the monthly amount the health maintenance organization overpaid from August 1, 1997, to September 30, 1998, due to taxation of Medicare revenues prohibited by section 256.9657, subdivision 3.

Sec. 56. [MR/RC WAIVER PROPOSAL.]

Sec. 57. [COVERAGE OF REHABILITATIVE AND THERAPEUTIC SERVICES.]

(a) The threshold limits for fee-for-service medical assistance rehabilitative and therapeutic services for January 1, 1998 through June 30, 1999, shall be the limits prescribed in the department of human services health care programs provider manual for calendar year 1997. Rehabilitative and therapeutic services are: occupational therapy services provided to medical assistance recipients pursuant to Minnesota Statutes, section 256B.0625, subdivision 8; physical therapy services provided to medical assistance recipients pursuant to Minnesota Statutes, section 256B.0625, subdivision 8a; and speech language pathology services provided to medical assistance recipients pursuant to Minnesota Rules, part 9505.0390.

(b) The commissioner of human services, in consultation with the department of human services rehabilitative work group, shall report to the chair of the senate health and family security committee and the chair of the house health and human services committee by January 15, 1999, recommendations and proposed legislation for the appropriate level of rehabilitative services delivered to medical assistance recipients before prior authorization. The recommendations shall also include proposed legislation to clarify the rehabilitative and therapeutic benefit set for medical assistance, as well as the appropriate response time for requests for prior authorization.

Sec. 58. [DISPROPORTIONATE SHARE ADJUSTMENT FOR DENTAL SERVICES.]

The commissioner of human services shall develop a disproportionate share adjustment for dental services provided under the medical assistance, general assistance medical care, and MinnesotaCare programs. The adjustment must provide progressive increases above current fee-for-service rates for dental providers whose medical assistance, general assistance medical care, and MinnesotaCare caseloads in total comprise more than specified percentages of their total caseloads. The disproportionate share adjustment must also apply to managed care capitation rates.

The commissioner shall present recommendations and proposed legislation for a disproportionate share adjustment to the legislature by December 15, 1998.

Sec. 59. [REPORT ON COUNTY ALLOCATIONS.]

Beginning August 1, 1998, the commissioner of human services shall issue an annual report on the home and community-based waiver for persons with mental retardation or a related condition, which includes a list of the counties in which less than 95 percent of the allocation provided, excluding the county waivered services reserve, has been committed for two or more quarters during the previous state fiscal year. For each listed county, the report shall include the amount of funds allocated but not used, the number and ages of individuals screened and waiting for services, the services needed, a description of the technical assistance provided by the commissioner to assist the county in jointly planning with other counties in order to serve more persons, and additional actions which will be taken to serve those screened and waiting for services.

Sec. 60. [DENTAL ACCESS.]

The commissioner of human services shall make recommendations to the legislature by February 1, 1999, on how access to dental services for medical assistance, general assistance medical care, and MinnesotaCare enrollees could be expanded. In preparing the recommendations, the commissioner shall consult with consumers, the board of dentistry, dental providers, the dental hygiene association, consumer advocates, legislators, and other affected parties.

Sec. 61. [REPORT BY UNIVERSITY OF MINNESOTA ACADEMIC HEALTH CENTER.]

Sec. 62. [COUNTY BILLING BY CLINICS.]

Clinics that (1) serve the primary health care needs of low-income population groups; (2) use a sliding fee scale based on ability to pay and do not limit access to care because of financial limitations of the client; and (3) are nonprofit under Minnesota Statutes, chapter 317, or are federally qualified health centers, shall be eligible for a special payment for uncompensated care. The clinics may bill a county of residence for services provided to a resident of that county provided:

(1) the patient is from a county other than that in which the clinic resides; and

(2) the clinic has made a preliminary determination at the delivery of service that the patient was indigent based on current medical assistance guidelines.

Counties that are billed under this program shall pay eligible clinics at the rates established under the medical assistance program. If the county can establish eligibility for medical assistance after the service has been delivered, the state shall reimburse the county for any funds paid to the eligible clinic.

Sec. 63. [RECOMMENDATIONS FOR RECYCLING PROGRAM.]

The commissioner of human services shall develop recommendations for a recycling program for used augmentative and alternative communications systems that would allow these systems to be reissued and used for trials and short-term use, when appropriate. The commissioner shall present recommendations to the legislature by December 15, 1998.

Sec. 64. [REPEALER.]

Minnesota Statutes 1996, section 144.0721, subdivision 3a; and Minnesota Statutes 1997 Supplement, sections 144.0721, subdivision 3; and 256B.0913, subdivision 15, are repealed.

Sec. 65. [EFFECTIVE DATES.]

(a) Section 8 (256.9657, subdivision 3) is effective retroactive to August 1, 1997.

(b) Sections 14 (256B.055, subdivision 7a) and 17 (256B.06, subdivision 4) are effective retroactive to July 1, 1997.

(c) Sections 12 (256.969, subdivision 17), 19 (256B.0625, subdivision 20), and 44 (256D.03, subdivision 4) are effective January 1, 1999.

(d) Section 25 (256B.0645) is effective for changes in eligibility that occur on or after July 1, 1998.

(e) Sections 5 (245.462, subdivision 8) and 36 (256B.69, subdivision 25) are effective 30 days after final enactment.

(f) Section 24 (256B.0627, subdivision 8), related to shared care, and section 57 (coverage of rehab.) are effective the day following final enactment.

(g) Sections 18 and 45 (256B.0625, subdivision 17a, and 256D.03, subdivision 9) are effective July 1, 1999.

Section 1. Minnesota Statutes 1997 Supplement, section 60A.15, subdivision 1, is amended to read:

Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or before April 1, June 1, and December 1 of each year, every domestic and foreign company, including town and farmers' mutual insurance companies, domestic mutual insurance companies, marine insurance companies, health maintenance organizations, community integrated service networks, and nonprofit health service plan corporations, shall pay to the commissioner of revenue installments equal to one-third of the insurer's total estimated tax for the current year. Except as provided in paragraphs (d), (e), (h), and (i), installments must be based on a sum equal to two percent of the premiums described in paragraph (b).

(b) Installments under paragraph (a), (d), or (e) are percentages of gross premiums less return premiums on all direct business received by the insurer in this state, or by its agents for it, in cash or otherwise, during such year.

(c) Failure of a company to make payments of at least one-third of either (1) the total tax paid during the previous calendar year or (2) 80 percent of the actual tax for the current calendar year shall subject the company to the penalty and interest provided in this section, unless the total tax for the current tax year is $500 or less.

(d) For health maintenance organizations, nonprofit health service plan corporations, and community integrated service networks, the installments must be based on an amount determined under paragraph (h) or (i).

(e) For purposes of computing installments for town and farmers' mutual insurance companies and for mutual property casualty companies with total assets on December 31, 1989, of $1,600,000,000 or less, the following rates apply:

(1) for all life insurance, two percent;

(2) for town and farmers' mutual insurance companies and for mutual property and casualty companies with total assets of $5,000,000 or less, on all other coverages, one percent; and

(3) for mutual property and casualty companies with total assets on December 31, 1989, of $1,600,000,000 or less, on all other coverages, 1.26 percent.

(f) If the aggregate amount of premium tax payments under this section and the fire marshal tax payments under section 299F.21 made during a calendar year is equal to or exceeds $120,000, all tax payments in the subsequent calendar year must be paid by means of a funds transfer as defined in section 336.4A-104, paragraph (a). The funds transfer payment date, as defined in section 336.4A-401, must be on or before the date the payment is due. If the date the payment is due is not a funds transfer business day, as defined in section 336.4A-105, paragraph (a), clause (4), the payment date must be on or before the funds transfer business day next following the date the payment is due.

(g) Premiums under medical assistance, general assistance medical care, the MinnesotaCare program, and the Minnesota comprehensive health insurance plan and all payments, revenues, and reimbursements received from the federal government for Medicare-related coverage as defined in section 62A.31, subdivision 3, paragraph (e), are not subject to tax under this section.

organizations, community integrated service networks, and nonprofit health service plan corporations that have met the cost containment goals established under section 62J.04 in the individual and small employer market for calendar year 1998 are exempt from payment of the tax imposed under this section for premiums paid after March 30, 1999, and before January 1, 2000.

(i) For calendar years after 1999, the commissioner of finance shall determine the balance of the health care access fund on September 1 of each year beginning September 1, 1999. If the commissioner determines that there is no structural deficit for the next fiscal year, no tax shall be imposed under paragraph (d) for the following calendar year. If the commissioner determines that there will be a structural deficit in the fund for the following fiscal year, then the commissioner, in consultation with the commissioner of revenue, shall determine the amount needed to eliminate the structural deficit and a tax shall be imposed under paragraph (d) for the following calendar year. The commissioner shall determine the rate of the tax as either one-quarter of one percent, one-half of one percent, three-quarters of one percent, or one percent of premiums described in paragraph (b), whichever is the lowest of those rates that the commissioner determines will produce sufficient revenue to eliminate the projected structural deficit. The commissioner of finance shall publish in the State Register by October 1 of each year the amount of tax to be imposed for the following calendar year.

(j) In approving the premium rates as required in sections 62L.08, subdivision 8, and 62A.65, subdivision 3, the commissioners of health and commerce shall ensure that any exemption from the tax as described in paragraphs (h) and (i) is reflected in the premium rate.

Sec. 2. Minnesota Statutes 1997 Supplement, section 256B.04, subdivision 18, is amended to read:

Subd. 18. [APPLICATIONS FOR MEDICAL ASSISTANCE.] The state agency may take applications for medical assistance and conduct eligibility determinations for MinnesotaCare enrollees who are required to apply for medical assistance according to section 256L.03, subdivision 3, paragraph (b).

Sec. 3. Minnesota Statutes 1996, section 256B.057, is amended by adding a subdivision to read:

Subd. 7. [WAIVER OF MAINTENANCE OF EFFORT REQUIREMENT.] Unless a federal waiver of the maintenance of effort requirement of section 2105(d) of title XXI of the Balanced Budget Act of 1997, Public Law Number 105-33, Statutes at Large, volume 111, page 251, is granted by the federal Department of Health and Human Services by September 30, 1998, eligibility for children under age 21 must be determined without regard to asset standards established in section 256B.056, subdivision 3. The commissioner of human services shall publish a notice in the State Register upon receipt of a federal waiver.

Sec. 4. Minnesota Statutes 1996, section 256B.057, is amended by adding a subdivision to read:

Subd. 8. [CHILDREN UNDER AGE TWO.] Medical assistance may be paid for a child under two years of age whose countable family income is above 275 percent of the federal poverty guidelines for the same size family but less than or equal to 280 percent of the federal poverty guidelines for the same size family.

Sec. 5. Minnesota Statutes 1997 Supplement, section 256D.03, subdivision 3, is amended to read:

Subd. 3. [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] (a) General assistance medical care may be paid for any person who is not eligible for medical assistance under chapter 256B, including eligibility for medical assistance based on a spenddown of excess income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in clause (4), except as provided in paragraph (b); and:

(2)(i) who is a resident of Minnesota; and whose equity in assets is not in excess of $1,000 per assistance unit. Exempt assets, the reduction of excess assets, and the waiver of excess assets must conform to the medical assistance program in chapter 256B, with the following exception: the maximum amount of undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by the trustee, assuming the full exercise of the trustee's discretion under the terms of the trust, must be applied toward the asset maximum; and

(ii) who has countable income not in excess of the assistance standards established in section 256B.056, subdivision 4, or whose excess income is spent down according to section 256B.056, subdivision 5, using a six-month budget period. The method for calculating earned income disregards and deductions for a person who resides with a dependent child under age 21 shall follow section 256B.056, subdivision 1a. However, if a disregard of $30 and one-third of the remainder has been applied to the wage earner's income, the disregard shall not be applied again until the wage earner's income has not been considered in an eligibility determination for general assistance, general assistance medical care, medical assistance, or MFIP-S for 12 consecutive months. The earned income and work expense deductions for a person who does not reside with a dependent child under age 21 shall be the same as the method used to determine eligibility for a person under section 256D.06, subdivision 1, except the disregard of the first $50 of earned income is not allowed; or

(3) who would be eligible for medical assistance except that the person resides in a facility that is determined by the commissioner or the federal Health Care Financing Administration to be an institution for mental diseases.

(4) Beginning July 1, 1998 January 1, 2000, applicants or recipients who meet all eligibility requirements of MinnesotaCare as defined in sections 256L.01 to 256L.16, and are:

(i) adults with dependent children under 21 whose gross family income is equal to or less than 275 percent of the federal poverty guidelines; or

(ii) adults without children with earned income and whose family gross income is between 75 percent of the federal poverty guidelines and the amount set by section 256L.04, subdivision 7, shall be terminated from general assistance medical care upon enrollment in MinnesotaCare.

(b) For services rendered on or after July 1, 1997, eligibility is limited to one month prior to application if the person is determined eligible in the prior month. A redetermination of eligibility must occur every 12 months. Beginning July 1, 1998 January 1, 2000, Minnesota health care program applications completed by recipients and applicants who are persons described in paragraph (a), clause (4), may be returned to the county agency to be forwarded to the department of human services or sent directly to the department of human services for enrollment in MinnesotaCare. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available in any month during which a MinnesotaCare eligibility determination and enrollment are pending. Upon notification of eligibility for MinnesotaCare, notice of termination for eligibility for general assistance medical care shall be sent to an applicant or recipient. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available until enrollment in MinnesotaCare subject to the provisions of paragraph (d).

(c) The date of an initial Minnesota health care program application necessary to begin a determination of eligibility shall be the date the applicant has provided a name, address, and social security number, signed and dated, to the county agency or the department of human services. If the applicant is unable to provide an initial application when health care is delivered due to a medical condition or disability, a health care provider may act on the person's behalf to complete the initial application. The applicant must complete the remainder of the application and provide necessary verification before eligibility can be determined. The county agency must assist the applicant in obtaining verification if necessary.

(d) County agencies are authorized to use all automated databases containing information regarding recipients' or applicants' income in order to determine eligibility for general assistance medical care or MinnesotaCare. Such use shall be considered sufficient in order to determine eligibility and premium payments by the county agency.

(f) General assistance medical care is not available for applicants or recipients who do not cooperate with the county agency to meet the requirements of medical assistance. General assistance medical care is limited to payment of emergency services only for applicants or recipients as described in paragraph (a), clause (4), whose MinnesotaCare coverage is denied or terminated for nonpayment of premiums as required by sections 256L.06 to 256L.08 and 256L.07.

(g) In determining the amount of assets of an individual, there shall be included any asset or interest in an asset, including an asset excluded under paragraph (a), that was given away, sold, or disposed of for less than fair market value within the 60 months preceding application for general assistance medical care or during the period of eligibility. Any transfer described in this paragraph shall be presumed to have been for the purpose of establishing eligibility for general assistance medical care, unless the individual furnishes convincing evidence to establish that the transaction was exclusively for another purpose. For purposes of this paragraph, the value of the asset or interest shall be the fair market value at the time it was given away, sold, or disposed of, less the amount of compensation received. For any uncompensated transfer, the number of months of ineligibility, including partial months, shall be calculated by dividing the uncompensated transfer amount by the average monthly per person payment made by the medical assistance program to skilled nursing facilities for the previous calendar year. The individual shall remain ineligible until this fixed period has expired. The period of ineligibility may exceed 30 months, and a reapplication for benefits after 30 months from the date of the transfer shall not result in eligibility unless and until the period of ineligibility has expired. The period of ineligibility begins in the month the transfer was reported to the county agency, or if the transfer was not reported, the month in which the county agency discovered the transfer, whichever comes first. For applicants, the period of ineligibility begins on the date of the first approved application.

(h) When determining eligibility for any state benefits under this subdivision, the income and resources of all noncitizens shall be deemed to include their sponsor's income and resources as defined in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, title IV, Public Law Number 104-193, sections 421 and 422, and subsequently set out in federal rules.

(i) An undocumented noncitizen or a nonimmigrant is ineligible for general assistance medical care other than emergency services. For purposes of this subdivision, a nonimmigrant is an individual in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and an undocumented noncitizen is an individual who resides in the United States without the approval or acquiescence of the Immigration and Naturalization Service.

(j) This paragraph does not apply to a child under age 18, to a Cuban or Haitian entrant as defined in Public Law Number 96-422, section 501(e)(1) or (2)(a), or to a noncitizen who is aged, blind, or disabled as defined in Code of Federal Regulations, title 42, sections 435.520, 435.530, 435.531, 435.540, and 435.541, who cooperates with the Immigration and Naturalization Service to pursue any applicable immigration status, including citizenship, that would qualify the individual for medical assistance with federal financial participation.

(k) For purposes of paragraphs (f) and (i), "emergency services" has the meaning given in Code of Federal Regulations, title 42, section 440.255(b)(1), except that it also means services rendered because of suspected or actual pesticide poisoning.

(l) Notwithstanding any other provision of law, a noncitizen who is ineligible for medical assistance due to the deeming of a sponsor's income and resources, is ineligible for general assistance medical care.

Sec. 6. Minnesota Statutes 1997 Supplement, section 256L.01, is amended to read:

256L.01 [DEFINITIONS.]

Subdivision 1. [SCOPE.] For purposes of sections 256L.01 to 256L.10 256L.18, the following terms shall have the meanings given them.

Subd. 2. [COMMISSIONER.] "Commissioner" means the commissioner of human services.

Subd. 3. [ELIGIBLE PROVIDERS.] "Eligible providers" means those health care providers who provide covered health services to medical assistance recipients under rules established by the commissioner for that program.

Subd. 3a. [FAMILY WITH CHILDREN.] (a) "Family with children" means:

(1) parents, their children, and dependent siblings residing in the same household; or

(2) grandparents, foster parents, relative caretakers as defined in the medical assistance program, or legal guardians; their wards who are children; and dependent siblings residing in the same household.

(b) The term includes children and dependent siblings who are temporarily absent from the household in settings such as schools, camps, or visitation with noncustodial parents.

(c) For purposes of this subdivision, a dependent sibling means an unmarried child who is a full-time student under the age of 25 years who is financially dependent upon a parent, grandparent, foster parent, relative caretaker, or legal guardian. Proof of school enrollment is required.

Subd. 4. [GROSS INDIVIDUAL OR GROSS FAMILY INCOME.] "Gross individual or gross family income" for farm and nonfarm self-employed means income calculated using as the baseline the adjusted gross income reported on the applicant's federal income tax form for the previous year and adding back in reported depreciation, carryover loss, and net operating loss amounts that apply to the business in which the family is currently engaged. Applicants shall report the most recent financial situation of the family if it has changed from the period of time covered by the federal income tax form. The report may be in the form of percentage increase or decrease.

Subd. 5. [INCOME.] "Income" has the meaning given for earned and unearned income for families and children in the medical assistance program, according to the state's aid to families with dependent children plan in effect as of July 16, 1996. The definition does not include medical assistance income methodologies and deeming requirements. The earned income of full-time and part-time students under age 19 is not counted as income. Public assistance payments and supplemental security income are not excluded income.

Sec. 7. Minnesota Statutes 1997 Supplement, section 256L.02, subdivision 3, is amended to read:

Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner shall manage spending for the MinnesotaCare program in a manner that maintains a minimum reserve in accordance with section 16A.76. As part of each state revenue and expenditure forecast, the commissioner must make a quarterly an assessment of the expected expenditures for the covered services for the remainder of the current biennium and for the following biennium. The estimated expenditure, including the reserve requirements described in section 16A.76, shall be compared to an estimate of the revenues that will be deposited available in the health care access fund. Based on this comparison, and after consulting with the chairs of the house ways and means committee and the senate finance committee, and the legislative commission on health care access, the commissioner shall, as necessary, make the adjustments specified in paragraph (b) to ensure that expenditures remain within the limits of available revenues for the remainder of the current biennium and for the following biennium. The commissioner shall not hire additional staff using appropriations from the health care access fund until the commissioner of finance makes a determination that the adjustments implemented under paragraph (b) are sufficient to allow MinnesotaCare expenditures to remain within the limits of available revenues for the remainder of the current biennium and for the following biennium.

Sec. 8. Minnesota Statutes 1997 Supplement, section 256L.02, is amended by adding a subdivision to read:

Subd. 4. [FUNDING FOR PREGNANT WOMEN AND CHILDREN UNDER AGE TWO.] For fiscal years beginning on or after July 1, 1999, the state cost of health care services provided to MinnesotaCare enrollees who are pregnant women or children under age two shall be paid out of the general fund rather than the health care access fund. If the commissioner of finance decides to pay for these costs using a source other than the general fund, the commissioner shall include the change as a budget initiative in the biennial or supplemental budget, and shall not change the funding source through a forecast modification.

Sec. 9. Minnesota Statutes 1997 Supplement, section 256L.03, subdivision 1, is amended to read:

Subdivision 1. [COVERED HEALTH SERVICES.] "Covered health services" means the health services reimbursed under chapter 256B, with the exception of inpatient hospital services, special education services, private duty nursing services, adult dental care services other than preventive services, orthodontic services, nonemergency medical transportation services, personal care assistant and case management services, nursing home or intermediate care facilities services, inpatient mental health services, and chemical dependency services. Effective July 1, 1998, adult dental care for nonpreventive services with the exception of orthodontic services is available to persons who qualify under section 256L.04, subdivisions 1 to 7, or 256L.13, with family gross income equal to or less than 175 percent of the federal poverty guidelines. Outpatient mental health services covered under the MinnesotaCare program are limited to diagnostic assessments, psychological testing, explanation of findings, medication management by a physician, day treatment, partial hospitalization, and individual, family, and group psychotherapy.

No public funds shall be used for coverage of abortion under MinnesotaCare except where the life of the female would be endangered or substantial and irreversible impairment of a major bodily function would result if the fetus were carried to term; or where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in this section.

Sec. 10. Minnesota Statutes 1997 Supplement, section 256L.03, is amended by adding a subdivision to read:

Subd. 1a. [COVERED SERVICES FOR PREGNANT WOMEN AND CHILDREN UNDER MINNESOTACARE HEALTH CARE REFORM WAIVER.] Children and pregnant women are eligible for coverage of all services that are eligible for reimbursement under the medical assistance program according to chapter 256B, except that abortion services under MinnesotaCare shall be limited as provided under section 256L.03, subdivision 1. Pregnant women and children are exempt from the provisions of subdivision 5, regarding copayments. Pregnant women and children who are lawfully residing in the United States but who are not "qualified noncitizens" under title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law Number 104-193, Statutes at Large, volume 110, page 2105, are eligible for coverage of all services provided under the medical assistance program according to chapter 256B.

Sec. 11. Minnesota Statutes 1997 Supplement, section 256L.03, is amended by adding a subdivision to read:

Subd. 1b. [PREGNANT WOMEN; ELIGIBILITY FOR FULL MEDICAL ASSISTANCE SERVICES.] A woman who is enrolled in MinnesotaCare when her pregnancy is diagnosed is eligible for coverage of all services provided under the medical assistance program according to chapter 256B retroactive to the date the pregnancy is medically diagnosed. Copayments totaling $30 or more, paid after the date the pregnancy is diagnosed, shall be refunded.

Sec. 12. Minnesota Statutes 1997 Supplement, section 256L.03, subdivision 3, is amended to read:

(b) Enrollees who qualify under section 256L.04, subdivision 7, or who qualify under section 256L.04, subdivisions 1 to 6, or 256L.13 with family gross income that exceeds 175 percent of the federal poverty guidelines and who are not pregnant, and are determined by the commissioner to have a basis of eligibility for medical assistance shall apply for and cooperate with the requirements of medical assistance by the last day of the third month following admission to an inpatient hospital. If an enrollee fails to apply for medical assistance within this time period, the enrollee and the enrollee's family shall be disenrolled from the plan and they may not reenroll until 12 calendar months have elapsed. Enrollees and enrollees' families disenrolled for not applying for or not cooperating with medical assistance may not reenroll.

(c) Admissions for inpatient hospital services paid for under section 256L.11, subdivision 3, must be certified as medically necessary in accordance with Minnesota Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):

(1) all admissions must be certified, except those authorized under rules established under section 254A.03, subdivision 3, or approved under Medicare; and

(2) payment under section 256L.11, subdivision 3, shall be reduced by five percent for admissions for which certification is requested more than 30 days after the day of admission. The hospital may not seek payment from the enrollee for the amount of the payment reduction under this clause.

(d) Any enrollee or family member of an enrollee who has previously been permanently disenrolled from MinnesotaCare for not applying for and cooperating with medical assistance shall be eligible to reenroll if 12 calendar months have elapsed since the date of disenrollment.

Sec. 13. Minnesota Statutes 1997 Supplement, section 256L.03, subdivision 4, is amended to read:

Subd. 4. [COORDINATION WITH MEDICAL ASSISTANCE.] The commissioner shall coordinate the provision of hospital inpatient services under the MinnesotaCare program with enrollee eligibility under the medical assistance spenddown, and shall apply to the secretary of health and human services for any necessary federal waivers or approvals.

Sec. 14. Minnesota Statutes 1997 Supplement, section 256L.03, subdivision 5, is amended to read:

Subd. 5. [COPAYMENTS AND COINSURANCE.] The MinnesotaCare benefit plan shall include the following copayments and coinsurance requirements:

(1) ten percent of the paid charges for inpatient hospital services for adult enrollees not eligible for medical assistance, subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and $3,000 per family;

(2) $3 per prescription for adult enrollees;

(3) $25 for eyeglasses for adult enrollees; and

(4) effective July 1, 1998, 50 percent of the fee-for-service rate for adult dental care services other than preventive care services for persons eligible under section 256L.04, subdivisions 1 to 7, or 256L.13, with income equal to or less than 175 percent of the federal poverty guidelines.

Prior to July 1, 1997, enrollees who are not eligible for medical assistance with or without a spenddown shall be financially responsible for the coinsurance amount and amounts which exceed the $10,000 benefit limit. Effective July 1, 1997, adult enrollees who qualify under section 256L.04, subdivision 7, or who qualify under section 256L.04, subdivisions 1 to 6, or 256L.13 with family gross income that exceeds 175 percent of the federal poverty guidelines and who are not pregnant, and who are not eligible for medical assistance with or without a spenddown, shall be financially responsible for the coinsurance amount and amounts which exceed the $10,000 inpatient hospital benefit limit.

Sec. 15. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 1, is amended to read:

Subdivision 1. [CHILDREN; EXPANSION AND CONTINUATION OF ELIGIBILITY FAMILIES WITH CHILDREN.] (a) [CHILDREN.] Prior to October 1, 1992, "eligible persons" means children who are one year of age or older but less than 18 years of age who have gross family incomes that are equal to or less than 185 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B and who are not otherwise insured for the covered services. The period of eligibility extends from the first day of the month in which the child's first birthday occurs to the last day of the month in which the child becomes 18 years old. Families with children with family income equal to or less than 275 percent of the federal poverty guidelines for the applicable family size shall be eligible for MinnesotaCare according to this section. All other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers to enrollment under section 256L.07, shall apply unless otherwise specified.

(b) [EXPANSION OF ELIGIBILITY.] Eligibility for MinnesotaCare shall be expanded as provided in subdivisions 3 to 7, except children who meet the criteria in this subdivision shall continue to be enrolled pursuant to this subdivision. The enrollment requirements in this paragraph apply to enrollment under subdivisions 1 to 7. Parents who enroll in the MinnesotaCare program must also enroll their children and dependent siblings, if the children and their dependent siblings are eligible. Children and dependent siblings may be enrolled separately without enrollment by parents. However, if one parent in the household enrolls, both parents must enroll, unless other insurance is available. If one child from a family is enrolled, all children must be enrolled, unless other insurance is available. If one spouse in a household enrolls, the other spouse in the household must also enroll, unless other insurance is available. Families cannot choose to enroll only certain uninsured members. For purposes of this section, a "dependent sibling" means an unmarried child who is a full-time student under the age of 25 years who is financially dependent upon a parent. Proof of school enrollment will be required.

(c) [CONTINUATION OF ELIGIBILITY.] Individuals who initially enroll in the MinnesotaCare program under the eligibility criteria in subdivisions 3 to 7 remain eligible for the MinnesotaCare program, regardless of age, place of residence, or the presence or absence of children in the same household, as long as all other eligibility criteria are met and residence in Minnesota and continuous enrollment in the MinnesotaCare program or medical assistance are maintained. In order for either parent or either spouse in a household to remain enrolled, both must remain enrolled, unless other insurance is available.

Sec. 16. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 2, is amended to read:

Subd. 2. [COOPERATION IN ESTABLISHING THIRD PARTY LIABILITY, PATERNITY, AND OTHER MEDICAL SUPPORT.] (a) To be eligible for MinnesotaCare, individuals and families must cooperate with the state agency to identify potentially liable third party payers and assist the state in obtaining third party payments. "Cooperation" includes, but is not limited to, identifying any third party who may be liable for care and services provided under MinnesotaCare to the enrollee, providing relevant information to assist the state in pursuing a potentially liable third party, and completing forms necessary to recover third party payments.

(b) A parent, guardian, or child enrolled in the MinnesotaCare program must cooperate with the department of human services and the local agency in establishing the paternity of an enrolled child and in obtaining medical care support and payments for the child and any other person for whom the person can legally assign rights, in accordance with applicable laws and rules governing the medical assistance program. A child shall not be ineligible for or disenrolled from the MinnesotaCare program solely because the child's parent or guardian fails to cooperate in establishing paternity or obtaining medical support.

Sec. 17. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 7, is amended to read:

Subd. 7. [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO CHILDREN.] (a) Beginning October 1, 1994, the definition of "eligible persons" is expanded to include all individuals and households with no children who have gross family incomes that are equal to or less than 125 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B.

(c) All eligible persons under paragraphs (a) and (b) are eligible for coverage through the MinnesotaCare program but must pay a premium as determined under sections 256L.07 and 256L.08. Individuals and families whose income is greater than the limits established under section 256L.08 may not enroll in the MinnesotaCare program.

Sec. 18. Minnesota Statutes 1997 Supplement, section 256L.04, is amended by adding a subdivision to read:

Subd. 7a. [INELIGIBILITY.] Applicants whose income is greater than the limits established under this section may not enroll in the MinnesotaCare program.

Sec. 19. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 8, is amended to read:

Subd. 8. [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL ASSISTANCE.] (a) Individuals who apply for MinnesotaCare receive supplemental security income or retirement, survivors, or disability benefits due to a disability, or other disability-based pension, who qualify under section 256L.04, subdivision 7, but who are potentially eligible for medical assistance without a spenddown shall be allowed to enroll in MinnesotaCare for a period of 60 days, so long as the applicant meets all other conditions of eligibility. The commissioner shall identify and refer the applications of such individuals to their county social service agency. The county and the commissioner shall cooperate to ensure that the individuals obtain medical assistance coverage for any months for which they are eligible.

(b) The enrollee must cooperate with the county social service agency in determining medical assistance eligibility within the 60-day enrollment period. Enrollees who do not apply for and cooperate with medical assistance within the 60-day enrollment period, and their other family members, shall be disenrolled from the plan within one calendar month. Persons disenrolled for nonapplication for medical assistance may not reenroll until they have obtained a medical assistance eligibility determination for the family member or members who were referred to the county agency. Persons disenrolled for noncooperation with medical assistance may not reenroll until they have cooperated with the county agency and have obtained a medical assistance eligibility determination.

(c) Beginning January 1, 2000, counties that choose to become MinnesotaCare enrollment sites shall consider MinnesotaCare applications of individuals described in paragraph (a) to also be applications for medical assistance and shall first determine whether medical assistance eligibility exists. Adults with children with family income under 175 percent of the federal poverty guidelines for the applicable family size, pregnant women, and children who qualify under subdivision 1 who are potentially eligible for medical assistance without a spenddown may choose to enroll in either MinnesotaCare or medical assistance.

(d) The commissioner shall redetermine provider payments made under MinnesotaCare to the appropriate medical assistance payments for those enrollees who subsequently become eligible for medical assistance.

Sec. 20. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 9, is amended to read:

Subd. 9. [GENERAL ASSISTANCE MEDICAL CARE.] A person cannot have coverage under both MinnesotaCare and general assistance medical care in the same month. Eligibility for MinnesotaCare cannot be replaced by eligibility for general assistance medical care, and eligibility for general assistance medical care cannot be replaced by eligibility for MinnesotaCare.

Sec. 21. Minnesota Statutes 1997 Supplement, section 256L.04, subdivision 10, is amended to read:

Sec. 22. Minnesota Statutes 1997 Supplement, section 256L.04, is amended by adding a subdivision to read:

Subd. 12. [PERSONS IN DETENTION.] An applicant residing in a correctional or detention facility is not eligible for MinnesotaCare. An enrollee residing in a correctional or detention facility is not eligible at renewal of eligibility under section 256L.05, subdivision 3b.

Sec. 23. Minnesota Statutes 1997 Supplement, section 256L.04, is amended by adding a subdivision to read:

Subd. 13. [FAMILIES WITH GRANDPARENTS, RELATIVE CARETAKERS, FOSTER PARENTS, OR LEGAL GUARDIANS.] In families that include a grandparent, relative caretaker as defined in the medical assistance program, foster parent, or legal guardian, the grandparent, relative caretaker, foster parent, or legal guardian may apply as a family or may apply separately for the child. If the grandparent, relative caretaker, foster parent, or legal guardian applies with the family, their income is included in the gross family income for determining eligibility and premium amount.

Sec. 24. Minnesota Statutes 1997 Supplement, section 256L.05, is amended by adding a subdivision to read:

Subd. 1a. [PERSON AUTHORIZED TO APPLY ON APPLICANT'S BEHALF.] A family member who is age 18 or over or who is an authorized representative, as defined in the medical assistance program, may apply on an applicant's behalf.

Sec. 25. Minnesota Statutes 1997 Supplement, section 256L.05, subdivision 2, is amended to read:

Subd. 2. [COMMISSIONER'S DUTIES.] The commissioner shall use individuals' social security numbers as identifiers for purposes of administering the plan and conduct data matches to verify income. Applicants shall submit evidence of individual and family income, earned and unearned, including such as the most recent income tax return, wage slips, or other documentation that is determined by the commissioner as necessary to verify income eligibility. The commissioner shall perform random audits to verify reported income and eligibility. The commissioner may execute data sharing arrangements with the department of revenue and any other governmental agency in order to perform income verification related to eligibility and premium payment under the MinnesotaCare program.

Sec. 26. Minnesota Statutes 1997 Supplement, section 256L.05, subdivision 3, is amended to read:

Subd. 3. [EFFECTIVE DATE OF COVERAGE.] The effective date of coverage is the first day of the month following the month in which eligibility is approved and the first premium payment has been received. As provided in section 256B.057, coverage for newborns is automatic from the date of birth and must be coordinated with other health coverage. The effective date of coverage for eligible newborns or eligible newly adoptive children added to a family receiving covered health services is the date of entry into the family. The effective date of coverage for other new recipients added to the family receiving covered health services is the first day of the month following the month in which eligibility is approved and the first premium payment has been received or at renewal, whichever the family receiving covered health services prefers. All eligibility criteria must be met by the family at the time the new family member is added. The income of the new family member is included with the family's gross income and the adjusted premium begins in the month the new family member is added. The premium must be received eight working days prior to the end of the month for coverage to begin the following month. Benefits are not available until the day following discharge if an enrollee is hospitalized on the first day of coverage. Notwithstanding any other law to the contrary, benefits under sections 256L.01 to 256L.10 256L.18 are secondary to a plan of insurance or benefit program under which an eligible person may have coverage and the commissioner shall use cost avoidance techniques to ensure coordination of any other health coverage for eligible persons. The commissioner shall identify eligible persons who may have coverage or benefits under other plans of insurance or who become eligible for medical assistance.

Sec. 27. Minnesota Statutes 1997 Supplement, section 256L.05, is amended by adding a subdivision to read:

Sec. 28. Minnesota Statutes 1997 Supplement, section 256L.05, is amended by adding a subdivision to read:

Subd. 3b. [REAPPLICATION.] Families and individuals must reapply after a lapse in coverage of one calendar month or more and must meet all eligibility criteria.

Sec. 29. Minnesota Statutes 1997 Supplement, section 256L.05, subdivision 4, is amended to read:

Subd. 4. [APPLICATION PROCESSING.] The commissioner of human services shall determine an applicant's eligibility for MinnesotaCare no more than 30 days from the date that the application is received by the department of human services. Beginning January 1, 2000, this requirement also applies to local county human services agencies that determine eligibility for MinnesotaCare. To prevent processing delays, applicants who appear to meet eligibility requirements shall be enrolled. The enrollee must provide all required verifications within 30 days of enrollment or coverage from the program shall be terminated. Enrollees who are determined to be ineligible when verifications are provided shall be terminated.

Sec. 30. Minnesota Statutes 1997 Supplement, section 256L.06, subdivision 3, is amended to read:

Subd. 3. [ADMINISTRATION AND COMMISSIONER'S DUTIES.] (a) Premiums are dedicated to the commissioner for MinnesotaCare. The commissioner shall make an annual redetermination of continued eligibility and identify people who may become eligible for medical assistance.

(b) The commissioner shall develop and implement procedures to: (1) require enrollees to report changes in income; (2) adjust sliding scale premium payments, based upon changes in enrollee income; and (3) disenroll enrollees from MinnesotaCare for failure to pay required premiums. Failure to pay includes payment with a dishonored check. The commissioner may demand a guaranteed form of payment as the only means to replace a dishonored check.

(c) Premiums are calculated on a calendar month basis and may be paid on a monthly, quarterly, or annual basis, with the first payment due upon notice from the commissioner of the premium amount required. The commissioner shall inform applicants and enrollees of these premium payment options. Premium payment is required before enrollment is complete and to maintain eligibility in MinnesotaCare.

(d) Nonpayment of the premium will result in disenrollment from the plan within one calendar month after the due date. Persons disenrolled for nonpayment or who voluntarily terminate coverage from the program may not reenroll until four calendar months have elapsed. Persons disenrolled for nonpayment or who voluntarily terminate coverage from the program may not reenroll for four calendar months unless the person demonstrates good cause for nonpayment. Good cause does not exist if a person chooses to pay other family expenses instead of the premium. The commissioner shall define good cause in rule.

Sec. 31. Minnesota Statutes 1997 Supplement, section 256L.07, is amended to read:

256L.07 [ELIGIBILITY FOR SUBSIDIZED PREMIUMS BASED ON SLIDING SCALE.]

Subdivision 1. [GENERAL REQUIREMENTS.] Families and individuals who enroll on or after October 1, 1992, are eligible for subsidized premium payments based on a sliding scale under section 256L.08 only if the family or individual meets the requirements in subdivisions 2 and 3. Children already enrolled in the children's health plan as of September 30, 1992, eligible under section 256L.04, subdivision 1, paragraph (a), children who enroll in the MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549, article 4, section 17, and children who enroll under section 256L.04, subdivision 6, are eligible for subsidized premium payments without meeting these requirements, as long as they maintain continuous coverage in the MinnesotaCare plan or medical assistance.

Subd. 2. [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED COVERAGE.] (a) To be eligible for subsidized premium payments based on a sliding scale, a family or individual must not have access to subsidized health coverage through an employer, and must not have had access to subsidized health coverage through an employer for the 18 months prior to application for subsidized coverage under the MinnesotaCare program. The requirement that the family or individual must not have had access to employer-subsidized coverage during the previous 18 months does not apply if: (1) employer-subsidized coverage was lost due to the death of an employee or divorce; (2) employer-subsidized coverage was lost because an individual became ineligible for coverage as a child or dependent; or (3) employer-subsidized coverage was lost for reasons that would not disqualify the individual for unemployment benefits under section 268.09 and the family or individual has not had access to employer-subsidized coverage since the loss of coverage. If employer-subsidized coverage was lost for reasons that disqualify an individual for unemployment benefits under section 268.09, children of that individual are exempt from the requirement of no access to employer subsidized coverage for the 18 months prior to application, as long as the children have not had access to employer subsidized coverage since the disqualifying event. The requirement that the. A family or individual must not have had access to employer-subsidized coverage during the previous 18 months does apply if whose employer-subsidized coverage is lost due to an employer terminating health care coverage as an employee benefit during the previous 18 months is not eligible.

(b) For purposes of this requirement, subsidized health coverage means health coverage for which the employer pays at least 50 percent of the cost of coverage for the employee, excluding dependent coverage or dependent, or a higher percentage as specified by the commissioner. Children are eligible for employer-subsidized coverage through either parent, including the noncustodial parent. The commissioner must treat employer contributions to Internal Revenue Code Section 125 plans and any other employer benefits intended to pay health care costs as qualified employer subsidies toward the cost of health coverage for employees for purposes of this subdivision.

Subd. 3. [PERIOD UNINSURED OTHER HEALTH COVERAGE.] To be eligible for subsidized premium payments based on a sliding scale, (a) Families and individuals initially enrolled in the MinnesotaCare program under section 256L.04, subdivisions 5 and 7, must have had no health coverage while enrolled or for at least four months prior to application and renewal. A child in a family with income equal to or less than 150 percent of the federal poverty guidelines, who has other health coverage, is eligible if the other health coverage meets the requirements of Minnesota Rules, part 9506.0020, subpart 3, item B. The commissioner may change this eligibility criterion for sliding scale premiums in order to remain within the limits of available appropriations. The requirement of at least four months of no health coverage prior to application for the MinnesotaCare program does not apply to: newborns.

(1) families, children, and individuals who apply for the MinnesotaCare program upon termination from or as required by the medical assistance program, general assistance medical care program, or coverage under a regional demonstration project for the uninsured funded under section 256B.73, the Hennepin county assured care program, or the Group Health, Inc., community health plan;

(2) families and individuals initially enrolled under section 256L.04, subdivisions 1, paragraph (a), and 3;

(3) children enrolled pursuant to Laws 1992, chapter 549, article 4, section 17; or

(4) individuals currently serving or who have served in the military reserves, and dependents of these individuals, if these individuals: (i) reapply for MinnesotaCare coverage after a period of active military service during which they had been covered by the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); (ii) were covered under MinnesotaCare immediately prior to obtaining coverage under CHAMPUS; and (iii) have maintained continuous coverage.

(b) For purposes of this section, medical assistance, general assistance medical care, and civilian health and medical program of the uniformed service (CHAMPUS) are not considered insurance or health coverage.

(c) For purposes of this section, Medicare part A or B coverage under title XVIII of the Social Security Act, United States Code, title 42, sections 1395c to 1395w-4, is considered health coverage. An applicant or enrollee may not refuse Medicare coverage to establish eligibility for MinnesotaCare.

(b) For purposes of paragraph (a), "termination from continuation coverage" means involuntary termination for any reason, other than nonpayment of premium by the family, child, or individual. Involuntary termination includes termination of coverage due to reaching the end of the maximum period for continuation coverage required under federal or state law.

Sec. 32. Minnesota Statutes 1997 Supplement, section 256L.09, subdivision 2, is amended to read:

Subd. 2. [RESIDENCY REQUIREMENT.] (a) Prior to July 1, 1997, to be eligible for health coverage under the MinnesotaCare program, families and individuals must be permanent residents of Minnesota.

(b) Effective July 1, 1997, To be eligible for health coverage under the MinnesotaCare program, adults without children must be permanent residents of Minnesota.

(c) Effective July 1, 1997, (b) To be eligible for health coverage under the MinnesotaCare program, pregnant women, families, and children must meet the residency requirements as provided by Code of Federal Regulations, title 42, section 435.403, except that the provisions of section 256B.056, subdivision 1, shall apply upon receipt of federal approval.

Sec. 33. Minnesota Statutes 1997 Supplement, section 256L.09, subdivision 4, is amended to read:

Subd. 4. [ELIGIBILITY AS MINNESOTA RESIDENT.] (a) For purposes of this section, a permanent Minnesota resident is a person who has demonstrated, through persuasive and objective evidence, that the person is domiciled in the state and intends to live in the state permanently.

(b) To be eligible as a permanent resident, all applicants an applicant must demonstrate the requisite intent to live in the state permanently by:

(1) showing that the applicant maintains a residence at a verified address other than a place of public accommodation, through the use of evidence of residence described in section 256D.02, subdivision 12a, clause (1);

(2) demonstrating that the applicant has been continuously domiciled in the state for no less than 180 days immediately before the application; and

(3) signing an affidavit declaring that (A) the applicant currently resides in the state and intends to reside in the state permanently; and (B) the applicant did not come to the state for the primary purpose of obtaining medical coverage or treatment.

(c) A person who is temporarily absent from the state does not lose eligibility for MinnesotaCare. "Temporarily absent from the state" means the person is out of the state for a temporary purpose and intends to return when the purpose of the absence has been accomplished. A person is not temporarily absent from the state if another state has determined that the person is a resident for any purpose. If temporarily absent from the state, the person must follow the requirements of the health plan in which he or she is enrolled to receive services.

Sec. 34. Minnesota Statutes 1997 Supplement, section 256L.09, subdivision 6, is amended to read:

Subd. 6. [12-MONTH PREEXISTING EXCLUSION.] If the 180-day requirement in subdivision 4, paragraph (b), clause (2), is determined by a court to be unconstitutional, the commissioner of human services shall impose a 12-month preexisting condition exclusion on coverage for persons who have been domiciled in the state for less than 180 days.

Sec. 35. Minnesota Statutes 1997 Supplement, section 256L.11, subdivision 6, is amended to read:

(a) If the medical assistance rate minus any copayment required under section 256L.03, subdivision 4, is less than or equal to the amount remaining in the enrollee's benefit limit under section 256L.03, subdivision 3, payment must be the medical assistance rate minus any copayment required under section 256L.03, subdivision 4. The hospital must not seek payment from the enrollee in addition to the copayment. The MinnesotaCare payment plus the copayment must be treated as payment in full.

(b) If the medical assistance rate minus any copayment required under section 256L.03, subdivision 4, is greater than the amount remaining in the enrollee's benefit limit under section 256L.03, subdivision 3, payment must be the lesser of:

(1) the amount remaining in the enrollee's benefit limit; or

(2) charges submitted for the inpatient hospital services less any copayment established under section 256L.03, subdivision 4.

The hospital may seek payment from the enrollee for the amount by which usual and customary charges exceed the payment under this paragraph. If payment is reduced under section 256L.03, subdivision 3, paragraph (c) (b), the hospital may not seek payment from the enrollee for the amount of the reduction.

(c) For admissions occurring during the period of July 1, 1997, through June 30, 1998, for adults who are not pregnant and are eligible under section 256L.04, subdivisions 1 to 6 and 2, or 256L.13, and whose incomes are equal to or less than 175 percent of the federal poverty guidelines, the commissioner shall pay hospitals directly, up to the medical assistance payment rate, for inpatient hospital benefits in excess of the $10,000 annual inpatient benefit limit.

Sec. 36. Minnesota Statutes 1997 Supplement, section 256L.12, subdivision 5, is amended to read:

Subd. 5. [ELIGIBILITY FOR OTHER STATE PROGRAMS.] MinnesotaCare enrollees who become eligible for medical assistance or general assistance medical care will remain in the same managed care plan if the managed care plan has a contract for that population. Effective January 1, 1998, MinnesotaCare enrollees who were formerly eligible for general assistance medical care pursuant to section 256D.03, subdivision 3, within six months of MinnesotaCare enrollment and were enrolled in a prepaid health plan pursuant to section 256D.03, subdivision 4, paragraph (d), must remain in the same managed care plan if the managed care plan has a contract for that population. Contracts between the department of human services and managed care plans must include MinnesotaCare, and medical assistance and may, at the option of the commissioner of human services, also include general assistance medical care. Managed care plans must participate in the MinnesotaCare and general assistance medical care programs under a contract with the department of human services in service areas where they participate in the medical assistance program.

Sec. 37. Minnesota Statutes 1997 Supplement, section 256L.15, is amended to read:

256L.15 [PREMIUMS.]

Subdivision 1. [PREMIUM DETERMINATION.] Families and with children enrolled according to sections 256L.13 to 256L.16 and individuals shall pay an enrollment fee or a premium determined according to a sliding fee based on the cost of coverage as a percentage of the family's gross family income. Pregnant women and children under age two are exempt from the provisions of section 256L.06, subdivision 3, paragraph (b), clause (3), requiring disenrollment for failure to pay premiums. For pregnant women, this exemption continues until the first day of the month following the 60th day postpartum. Women who remain enrolled during pregnancy or the postpartum period, despite nonpayment of premiums, shall be disenrolled on the first of the month following the 60th day postpartum for the penalty period that otherwise applies under section 256L.06, unless they begin paying premiums.

Subd. 1a. [PAYMENT OPTIONS.] The commissioner may offer the following payment options to an enrollee:

(1) payment by check;

(3) payment by recurring automatic checking withdrawal;

(4) payment by one-time electronic transfer of funds; or

(5) payment by wage withholding with the consent of the employer and the employee.

Subd. 1b. [PAYMENTS NONREFUNDABLE.] MinnesotaCare premiums and enrollment fees are not refundable.

Subd. 2. [SLIDING SCALE TO DETERMINE PERCENTAGE OF GROSS INDIVIDUAL OR FAMILY INCOME.] The commissioner shall establish a sliding fee scale to determine the percentage of gross individual or family income that households at different income levels must pay to obtain coverage through the MinnesotaCare program. The sliding fee scale must be based on the enrollee's gross individual or family income during the previous four months. The sliding fee scale begins with a premium of 1.5 percent of gross individual or family income for individuals or families with incomes below the limits for the medical assistance program for families and children and proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent. These percentages are matched to evenly spaced income steps ranging from the medical assistance income limit for families and children to 275 percent of the federal poverty guidelines for the applicable family size. An adult without children whose income is equal to or less than 175 percent of the federal poverty guidelines shall pay premiums according to the sliding fee scale. When an enrollee's income exceeds the eligibility limit established for families with children under section 256L.04, subdivision 1, the enrollee must pay the full cost of coverage as required under section 256L.07, subdivision 1. The sliding fee scale and percentages are not subject to the provisions of chapter 14. If a family or individual reports increased income after enrollment, premiums shall not be adjusted until eligibility renewal.

Subd. 3. [EXCEPTIONS TO SLIDING SCALE.] An annual premium of $48 is required for all children who are eligible according to section 256L.13, subdivision 4.

Subd. 4. [CHILDREN IN FAMILIES WITH INCOME AT OR LESS THAN 150 PERCENT OF FEDERAL POVERTY GUIDELINES.] Children in families with income at or below 150 percent of the federal poverty guidelines, when only the children are enrolled, may pay an annual enrollment fee of $48 per child. Payment of the $48 annual enrollment fee in families with only the children enrolled guarantees eligibility for 12 months regardless of changes in circumstances. If the entire family is enrolled, the children are required to pay a monthly premium of $4.

Sec. 38. Minnesota Statutes 1997 Supplement, section 256L.17, is amended by adding a subdivision to read:

Subd. 6. [WAIVER OF MAINTENANCE OF EFFORT REQUIREMENT.] Unless a federal waiver of the maintenance of effort requirements of section 2105(d) of title XXI of the Balanced Budget Act of 1997, Public Law Number 105-33, Statutes at Large, volume 111, page 251, is granted by the federal Department of Health and Human Services by September 30, 1998, this section does not apply to children. The commissioner shall publish a notice in the State Register upon receipt of a federal waiver.

Sec. 39. [256L.19] [STATE CHILDREN'S HEALTH INSURANCE PROGRAM.]

Subdivision 1. [AUTHORITY.] The commissioner is authorized to claim enhanced federal matching funds under sections 2105(a)(2) and 2110 of the Balanced Budget Act of 1997, Public Law Number 105-33, for any and all state or local expenditures eligible as child health assistance for targeted low income children and health service initiatives for low income children. If required by federal law or regulations, the commissioner is authorized to establish accounts, make appropriate payments, and receive reimbursement from state and local entities providing child health assistance or health services for low income children, in order to obtain enhanced federal matching funds. Enhanced federal matching funds received as a result of authority exercised under this section shall be deposited in the general fund.

Sec. 40. [UNCOMPENSATED CARE STUDY.]

The commissioner of health, in consultation with the commissioner of human services, shall present to the legislative commission on health care access, by January 15, 1999, a report and recommendations on the provision and financing of uncompensated care in Minnesota. The report must:

(1) document the extent of uncompensated care provided in Minnesota;

(2) discuss options for financing uncompensated care;

(3) describe other state approaches to monitoring and financing uncompensated care; and

(4) describe alternative approaches to encourage health care coverage.

Sec. 41. [SPECIAL PREMIUM TAX PAYMENT.]

Health maintenance organizations, community integrated service networks, and nonprofit health service plan corporations that have met the cost containment goals established in Minnesota Statutes, section 62J.04, in the individual and small employer market for calendar year 1996 shall pay a special, one-time 1999 premium tax payment. The tax payment must be based on an amount equal to one percent of gross premiums less return premiums on all direct business received by the insurer in this state, or by its agents for it, in cash or otherwise after March 30, 1997, and before January 1, 1998. Payment of the tax under this section is due January 2, 1999. Provisions relating to the payment, assessment, and collection of the tax assessed under Minnesota Statutes, section 60A.15, shall apply to the special tax payment assessed under this section.

Sec. 42. [REVISOR'S INSTRUCTION.]

In each section of Minnesota Statutes referred to in column A, the revisor of statutes shall delete the reference in column B and insert the reference in column C.

Column A Column B Column C

256B.057, subd. 1a 256L.08 256L.15

256B.0645 256L.14 256L.03, subd. 1a

256L.16 256L.14 256L.03, subd. 1a

Sec. 43. [REPEALER.]

Minnesota Statutes 1997 Supplement, sections 256B.057, subdivision 1a; 256L.04, subdivisions 3, 4, 5, and 6; 256L.06, subdivisions 1 and 2; 256L.08; 256L.09, subdivision 3; 256L.13; 256L.14; and 256L.15, subdivision 3, are repealed.

Sec. 44. [EFFECTIVE DATE.]

(a) Sections 2 (256B.04, subdivision 18), 5 to 7, 9 to 37, 42 (Revisor Instruction), and 43 (Repealer) are effective January 1, 1999.

(b) Sections 3 (256B.057, subdivision 7), 4 (256B.057, subdivision 8), 38 (256L.17, subdivision 6), and 39 (256L.19) are effective September 30, 1998.

Section 1. Minnesota Statutes 1997 Supplement, section 119B.01, subdivision 16, is amended to read:

Sec. 2. Minnesota Statutes 1996, section 245A.03, is amended by adding a subdivision to read:

Subd. 2b. [EXCEPTION.] The provision in subdivision 2, clause (2), does not apply to:

(1) a child care provider who as an applicant for licensure or as a licenseholder has received a license denial under section 245A.05, a fine under section 245A.06, or a sanction under 245A.07 from the commissioner that has not been reversed on appeal; or

(2) a child care provider, or a child care provider who has a household member who, as a result of a licensing process, has a disqualification under chapter 245A that has not been set aside by the commissioner.

Sec. 3. Minnesota Statutes 1996, section 245A.03, is amended by adding a subdivision to read:

Subd. 4. [EXCLUDED CHILD CARE PROGRAMS; RIGHT TO SEEK LICENSURE.] Nothing in this section shall prohibit a child care program that is excluded from licensure under subdivision 2, clause (2), or under Laws 1997, chapter 248, section 46, as amended by Laws 1997, First Special Session chapter 5, section 10, from seeking a license under this chapter. The commissioner shall ensure that any application received from such an excluded provider is processed in the same manner as all other applications for licensed family day care.

Sec. 4. Minnesota Statutes 1996, section 245A.14, subdivision 4, is amended to read:

Subd. 4. [SPECIAL FAMILY DAY CARE HOMES.] Nonresidential child care programs serving 14 or fewer children that are conducted at a location other than the license holder's own residence shall be licensed under this section and the rules governing family day care or group family day care if:

(a) the license holder is the primary provider of care;

(b) and the nonresidential child care program is conducted in a dwelling that is located on a residential lot; and or

(c) the license holder complies with all other requirements of sections 245A.01 to 245A.15 and the rules governing family day care or group family day care.

(b) the license holder is an employer who may or may not be the primary provider of care, and the purpose for the child care program is to provide child care services to children of the license holder's employees.

Sec. 5. Minnesota Statutes 1997 Supplement, section 256.01, subdivision 2, is amended to read:

Subd. 2. [SPECIFIC POWERS.] Subject to the provisions of section 241.021, subdivision 2, the commissioner of human services shall:

(1) Administer and supervise all forms of public assistance provided for by state law and other welfare activities or services as are vested in the commissioner. Administration and supervision of human services activities or services includes, but is not limited to, assuring timely and accurate distribution of benefits, completeness of service, and quality program management. In addition to administering and supervising human services activities vested by law in the department, the commissioner shall have the authority to:

(a) require county agency participation in training and technical assistance programs to promote compliance with statutes, rules, federal laws, regulations, and policies governing human services;

(b) monitor, on an ongoing basis, the performance of county agencies in the operation and administration of human services, enforce compliance with statutes, rules, federal laws, regulations, and policies governing welfare services and promote excellence of administration and program operation;

(d) require county agencies to make an adjustment to the public assistance benefits issued to any individual consistent with federal law and regulation and state law and rule and to issue or recover benefits as appropriate;

(e) delay or deny payment of all or part of the state and federal share of benefits and administrative reimbursement according to the procedures set forth in section 256.017; and

(f) make contracts with and grants to public and private agencies and organizations, both profit and nonprofit, and individuals, using appropriated funds; and

(g) enter into contractual agreements with federally recognized Indian tribes with a reservation in Minnesota to the extent necessary for the tribe to operate a federally approved family assistance program or any other program under the supervision of the commissioner. The commissioner may establish necessary accounts for the purposes of receiving and disbursing funds as necessary for the operation of the programs.

(2) Inform county agencies, on a timely basis, of changes in statute, rule, federal law, regulation, and policy necessary to county agency administration of the programs.

(3) Administer and supervise all child welfare activities; promote the enforcement of laws protecting handicapped, dependent, neglected and delinquent children, and children born to mothers who were not married to the children's fathers at the times of the conception nor at the births of the children; license and supervise child-caring and child-placing agencies and institutions; supervise the care of children in boarding and foster homes or in private institutions; and generally perform all functions relating to the field of child welfare now vested in the state board of control.

(4) Administer and supervise all noninstitutional service to handicapped persons, including those who are visually impaired, hearing impaired, or physically impaired or otherwise handicapped. The commissioner may provide and contract for the care and treatment of qualified indigent children in facilities other than those located and available at state hospitals when it is not feasible to provide the service in state hospitals.

(5) Assist and actively cooperate with other departments, agencies and institutions, local, state, and federal, by performing services in conformity with the purposes of Laws 1939, chapter 431.

(6) Act as the agent of and cooperate with the federal government in matters of mutual concern relative to and in conformity with the provisions of Laws 1939, chapter 431, including the administration of any federal funds granted to the state to aid in the performance of any functions of the commissioner as specified in Laws 1939, chapter 431, and including the promulgation of rules making uniformly available medical care benefits to all recipients of public assistance, at such times as the federal government increases its participation in assistance expenditures for medical care to recipients of public assistance, the cost thereof to be borne in the same proportion as are grants of aid to said recipients.

(7) Establish and maintain any administrative units reasonably necessary for the performance of administrative functions common to all divisions of the department.

(8) Act as designated guardian of both the estate and the person of all the wards of the state of Minnesota, whether by operation of law or by an order of court, without any further act or proceeding whatever, except as to persons committed as mentally retarded. For children under the guardianship of the commissioner whose interests would be best served by adoptive placement, the commissioner may contract with a licensed child-placing agency to provide adoption services. A contract with a licensed child-placing agency must be designed to supplement existing county efforts and may not replace existing county programs, unless the replacement is agreed to by the county board and the appropriate exclusive bargaining representative or the commissioner has evidence that child placements of the county continue to be substantially below that of other counties.

(9) Act as coordinating referral and informational center on requests for service for newly arrived immigrants coming to Minnesota.

(11) Establish county, regional, or statewide schedules of maximum fees and charges which may be paid by county agencies for medical, dental, surgical, hospital, nursing and nursing home care and medicine and medical supplies under all programs of medical care provided by the state and for congregate living care under the income maintenance programs.

(12) Have the authority to conduct and administer experimental projects to test methods and procedures of administering assistance and services to recipients or potential recipients of public welfare. To carry out such experimental projects, it is further provided that the commissioner of human services is authorized to waive the enforcement of existing specific statutory program requirements, rules, and standards in one or more counties. The order establishing the waiver shall provide alternative methods and procedures of administration, shall not be in conflict with the basic purposes, coverage, or benefits provided by law, and in no event shall the duration of a project exceed four years. It is further provided that no order establishing an experimental project as authorized by the provisions of this section shall become effective until the following conditions have been met:

(a) The secretary of health, education, and welfare of the United States has agreed, for the same project, to waive state plan requirements relative to statewide uniformity.

(b) A comprehensive plan, including estimated project costs, shall be approved by the legislative advisory commission and filed with the commissioner of administration.

(13) According to federal requirements, establish procedures to be followed by local welfare boards in creating citizen advisory committees, including procedures for selection of committee members.

(14) Allocate federal fiscal disallowances or sanctions which are based on quality control error rates for the aid to families with dependent children, Minnesota family investment program-statewide, medical assistance, or food stamp program in the following manner:

(a) One-half of the total amount of the disallowance shall be borne by the county boards responsible for administering the programs. For the medical assistance, MFIP-S, and AFDC programs, disallowances shall be shared by each county board in the same proportion as that county's expenditures for the sanctioned program are to the total of all counties' expenditures for the AFDC, MFIP-S, and medical assistance programs. For the food stamp program, sanctions shall be shared by each county board, with 50 percent of the sanction being distributed to each county in the same proportion as that county's administrative costs for food stamps are to the total of all food stamp administrative costs for all counties, and 50 percent of the sanctions being distributed to each county in the same proportion as that county's value of food stamp benefits issued are to the total of all benefits issued for all counties. Each county shall pay its share of the disallowance to the state of Minnesota. When a county fails to pay the amount due hereunder, the commissioner may deduct the amount from reimbursement otherwise due the county, or the attorney general, upon the request of the commissioner, may institute civil action to recover the amount due.

(b) Notwithstanding the provisions of paragraph (a), if the disallowance results from knowing noncompliance by one or more counties with a specific program instruction, and that knowing noncompliance is a matter of official county board record, the commissioner may require payment or recover from the county or counties, in the manner prescribed in paragraph (a), an amount equal to the portion of the total disallowance which resulted from the noncompliance, and may distribute the balance of the disallowance according to paragraph (a).

(15) Develop and implement special projects that maximize reimbursements and result in the recovery of money to the state. For the purpose of recovering state money, the commissioner may enter into contracts with third parties. Any recoveries that result from projects or contracts entered into under this paragraph shall be deposited in the state treasury and credited to a special account until the balance in the account reaches $1,000,000. When the balance in the account exceeds $1,000,000, the excess shall be transferred and credited to the general fund. All money in the account is appropriated to the commissioner for the purposes of this paragraph.

(17) Have the authority to establish and enforce the following county reporting requirements:

(a) The commissioner shall establish fiscal and statistical reporting requirements necessary to account for the expenditure of funds allocated to counties for human services programs. When establishing financial and statistical reporting requirements, the commissioner shall evaluate all reports, in consultation with the counties, to determine if the reports can be simplified or the number of reports can be reduced.

(b) The county board shall submit monthly or quarterly reports to the department as required by the commissioner. Monthly reports are due no later than 15 working days after the end of the month. Quarterly reports are due no later than 30 calendar days after the end of the quarter, unless the commissioner determines that the deadline must be shortened to 20 calendar days to avoid jeopardizing compliance with federal deadlines or risking a loss of federal funding. Only reports that are complete, legible, and in the required format shall be accepted by the commissioner.

(c) If the required reports are not received by the deadlines established in clause (b), the commissioner may delay payments and withhold funds from the county board until the next reporting period. When the report is needed to account for the use of federal funds and the late report results in a reduction in federal funding, the commissioner shall withhold from the county boards with late reports an amount equal to the reduction in federal funding until full federal funding is received.

(d) A county board that submits reports that are late, illegible, incomplete, or not in the required format for two out of three consecutive reporting periods is considered noncompliant. When a county board is found to be noncompliant, the commissioner shall notify the county board of the reason the county board is considered noncompliant and request that the county board develop a corrective action plan stating how the county board plans to correct the problem. The corrective action plan must be submitted to the commissioner within 45 days after the date the county board received notice of noncompliance.

(e) The final deadline for fiscal reports or amendments to fiscal reports is one year after the date the report was originally due. If the commissioner does not receive a report by the final deadline, the county board forfeits the funding associated with the report for that reporting period and the county board must repay any funds associated with the report received for that reporting period.

(f) The commissioner may not delay payments, withhold funds, or require repayment under paragraph (c) or (e) if the county demonstrates that the commissioner failed to provide appropriate forms, guidelines, and technical assistance to enable the county to comply with the requirements. If the county board disagrees with an action taken by the commissioner under paragraph (c) or (e), the county board may appeal the action according to sections 14.57 to 14.69.

(g) Counties subject to withholding of funds under paragraph (c) or forfeiture or repayment of funds under paragraph (e) shall not reduce or withhold benefits or services to clients to cover costs incurred due to actions taken by the commissioner under paragraph (c) or (e).

(18) Allocate federal fiscal disallowances or sanctions for audit exceptions when federal fiscal disallowances or sanctions are based on a statewide random sample for the foster care program under title IV-E of the Social Security Act, United States Code, title 42, in direct proportion to each county's title IV-E foster care maintenance claim for that period.

(19) Be responsible for ensuring the detection, prevention, investigation, and resolution of fraudulent activities or behavior by applicants, recipients, and other participants in the human services programs administered by the department.

(20) Require county agencies to identify overpayments, establish claims, and utilize all available and cost-beneficial methodologies to collect and recover these overpayments in the human services programs administered by the department.

invoice for the rebate within the terms and conditions used for the federal rebate program established pursuant to section 1927 of title XIX of the Social Security Act. The manufacturers must provide the commissioner with any information necessary to verify the rebate determined per drug. The rebate program shall utilize the terms and conditions used for the federal rebate program established pursuant to section 1927 of title XIX of the Social Security Act.

Sec. 6. Minnesota Statutes 1996, section 256.014, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT OF SYSTEMS.] The commissioner of human services shall establish and enhance computer systems necessary for the efficient operation of the programs the commissioner supervises, including:

(1) management and administration of the food stamp and income maintenance programs, including the electronic distribution of benefits;

(2) management and administration of the child support enforcement program; and

(3) administration of medical assistance and general assistance medical care.

The commissioner shall distribute the nonfederal share of the costs of operating and maintaining the systems to the commissioner and to the counties participating in the system in a manner that reflects actual system usage, except that the nonfederal share of the costs of the MAXIS computer system and child support enforcement systems shall be borne entirely by the commissioner. Development costs must not be assessed against county agencies.

The commissioner may enter into contractual agreements with federally recognized Indian tribes with a reservation in Minnesota to participate in state-operated computer systems related to the management and administration of the food stamp, income maintenance, child support enforcement, medical assistance, and general assistance medical care programs to the extent necessary for the tribe to operate a federally approved family assistance program or any other program under the supervision of the commissioner.

Sec. 7. Minnesota Statutes 1997 Supplement, section 256.031, subdivision 6, is amended to read:

Subd. 6. [END OF FIELD TRIALS.] (a) Upon agreement with the federal government, the field trials of the Minnesota family investment plan will end June 30, 1998.

(b) Families in the comparison group under subdivision 3, paragraph (d), clause (i), receiving aid to families with dependent children under sections 256.72 to 256.87, and STRIDE services under section 256.736 will continue in those programs until June 30, 1998. After June 30, 1998, families who cease receiving assistance under the Minnesota family investment plan and comparison group families who cease receiving assistance under AFDC and STRIDE who are eligible for the Minnesota family investment program-statewide (MFIP-S), medical assistance, general assistance medical care, or the food stamp program shall be placed with their consent on the programs for which they are eligible.

(c) Families who cease receiving assistance under the MFIP and comparison families who cease receiving assistance under AFDC and STRIDE who are ineligible for MFIP-S due to increased income from employment, or increased child or spousal support or a combination of employment income and child or spousal support, shall be eligible for extended medical assistance under section 256B.0635. For the purpose of determining receipt of extended medical assistance, receipt of AFDC and MFIP shall be considered to be the same as receipt of MFIP-S.

Sec. 8. Minnesota Statutes 1997 Supplement, section 256.741, is amended by adding a subdivision to read:

Subd. 2a. [FAMILIES-FIRST DISTRIBUTION OF CHILD SUPPORT ARREARAGES.] Child support collected on behalf of a family that formerly received assistance under AFDC, MFIP, MFIP-R, MFIP-S, or Work First must be distributed as follows:

(2) to the extent that the amount collected exceeds the amount required to be paid to the family for the month in which collected, the state shall distribute the amount as follows:

(i) the state shall first distribute the amount collected to the family to the extent necessary to satisfy any support arrearages accrued after the family ceased to receive assistance from the state; and

(ii) the state shall then distribute the amount collected to the family to the extent necessary to satisfy any support arrearages with respect to the family that accrued before the family received assistance from the state.

Sec. 9. Minnesota Statutes 1997 Supplement, section 256.9864, is amended to read:

256.9864 [REPORTS BY RECIPIENT.]

(a) An assistance unit with a recent work history or with earned income shall report monthly to the county agency on income received and other circumstances affecting eligibility or assistance amounts. All other assistance units shall report on income and other circumstances affecting eligibility and assistance amounts, as specified by the state agency.

(b) An assistance unit required to submit a report on the form designated by the commissioner and within ten days of the due date or the date of the significant change, whichever is later, or otherwise report significant changes which would affect eligibility or assistance amounts, is considered to have continued its application for assistance effective the date the required report is received by the county agency, if a complete report is received within a calendar month in which assistance was received, except that no assistance shall be paid for the period beginning with the end of the month in which the report was due and ending with the date the report was received by the county agency.

Sec. 10. Minnesota Statutes 1997 Supplement, section 256B.062, is amended to read:

256B.062 [CONTINUED ELIGIBILITY.]

Medical assistance may be paid for persons who received aid to families with dependent children in at least three of the six months preceding the month in which the person became ineligible for aid to families with dependent children, if the ineligibility was due to an increase in hours of employment or employment income or due to the loss of an earned income disregard. A person who is eligible for extended medical assistance is entitled to six months of assistance without reapplication, unless the assistance unit ceases to include a dependent child. For a person under 21 years of age, medical assistance may not be discontinued within the six-month period of extended eligibility until it has been determined that the person is not otherwise eligible for medical assistance. Medical assistance may be continued for an additional six months if the person meets all requirements for the additional six months, according to Title XIX of the Social Security Act, as amended by section 303 of the Family Support Act of 1988, Public Law Number 100-485. This section is repealed effective March 31 July 1, 1998.

Sec. 11. Minnesota Statutes 1997 Supplement, section 256B.0635, is amended by adding a subdivision to read:

Subd. 3. [EXTENDED MEDICAL ASSISTANCE FOR MFIP-S PARTICIPANTS WHO OPT TO DISCONTINUE MONTHLY CASH ASSISTANCE.] Upon federal approval, medical assistance is available to persons who received MFIP-S in at least three of the six months preceding the month in which the person opted to discontinue receiving MFIP-S cash assistance under section 256J.31, subdivision 12. A person who is eligible for medical assistance under this section may receive medical assistance without reapplication as long as the person meets MFIP-S eligibility requirements, unless the assistance unit does not include a dependent child. Medical assistance may be paid pursuant to subdivisions 1 and 2 for persons who are no longer eligible for MFIP-S due to increased employment or child support.

Sec. 12. Minnesota Statutes 1997 Supplement, section 256D.05, subdivision 8, is amended to read:

date, and are otherwise eligible for general assistance can receive benefits under this section. The income and assets of sponsors of noncitizens shall be deemed available to general assistance applicants and recipients according to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law Number 104-193, title IV, sections 421 and 422, and subsequently set out in federal rules.

(b) As a condition of eligibility, each legal adult noncitizen in the assistance unit who has resided in the country for four years or more and who is under 70 years of age must:

(1) be enrolled in a literacy class, English as a second language class, or a citizen class;

(2) be applying for admission to a literacy class, English as a second language class, and is on a waiting list;

(3) be in the process of applying for a waiver from the Immigration and Naturalization Service of the English language or civics requirements of the citizenship test;

(4) have submitted an application for citizenship to the Immigration and Naturalization Service and is waiting for a testing date or a subsequent swearing in ceremony; or

(5) have been denied citizenship due to a failure to pass the test after two attempts or because of an inability to understand the rights and responsibilities of becoming a United States citizen, as documented by the Immigration and Naturalization Service or the county.

If the county social service agency determines that a legal noncitizen subject to the requirements of this subdivision will require more than one year of English language training, then the requirements of clause (1) or (2) shall be imposed after the legal noncitizen has resided in the country for three years. Individuals who reside in a facility licensed under chapter 144A, 144D, 245A, or 256I are exempt from the requirements of this section.

Sec. 13. Minnesota Statutes 1996, section 256D.051, is amended by adding a subdivision to read:

Subd. 18. [WAIVER OF SERVICE COST REIMBURSEMENT LIMIT FOR PARTICIPANTS WITH SIGNIFICANT BARRIERS TO EMPLOYMENT.]

(a) To the extent of available resources, the commissioner may waive the $400 service cost limit specified in subdivision 6 for county agencies who propose to provide enhanced services under the food stamp employment and training program to hard-to-employ individuals. A "hard-to-employ individual" is defined as:

(1) a recipient of general assistance under chapter 256D; or

(2) an individual with at least one of the following three barriers to employment:

(i) the individual has not completed secondary school or obtained a general equivalency development diploma or an adult diploma, and has low skills in reading or mathematics;

(ii) the individual requires substance abuse treatment for employment; and

(iii) the individual has a poor work history.

(b) To obtain a waiver, the county agency must submit a waiver request to the commissioner. The request must specify:

(1) the number of hard-to-employ individuals the agency plans to serve;

(2) the nature of the enhanced employment and training services the agency will provide; and

Sec. 14. [256D.053] [MINNESOTA FOOD ASSISTANCE PROGRAM.]

Subdivision 1. [PROGRAM ESTABLISHED.] For the period from July 1, 1998, to June 30, 1999, the Minnesota food assistance program is established to provide food assistance to legal noncitizens residing in this state who are ineligible to participate in the federal food stamp program solely due to the provisions of section 402 or 403 of Public Law Number 104-193, as authorized by Title VII of the 1997 Emergency Supplemental Appropriations Act, Public Law Number 105-18.

Subd. 2. [ELIGIBILITY REQUIREMENTS.] To be eligible for the Minnesota food assistance program, all of the following conditions must be met:

(1) the applicant must meet the initial and ongoing eligibility requirements for the federal food stamp program, except for the applicant's ineligible immigration status;

(2) the applicant must be either a qualified noncitizen as defined in section 256J.08, subdivision 73, or a noncitizen otherwise residing lawfully in the United States;

(3) the applicant must be a resident of the state; and

(4) the applicant must not be receiving assistance under the Minnesota family investment program-statewide or the work first program.

Subd. 3. [PROGRAM ADMINISTRATION.] (a) The rules for the Minnesota food assistance program shall follow exactly the regulations for the federal food stamp program, except for the provisions pertaining to immigration status under section 402 or 403 of Public Law Number 104-193.

(b) The county agency shall use the income, budgeting, and benefit allotment regulations of the federal food stamp program to calculate an eligible recipient's monthly Minnesota food assistance program benefit. Until September 30, 1998, eligible recipients under this subdivision shall receive the average per person food stamp issuance in Minnesota in the fiscal year ending June 30, 1997. Beginning October 1, 1998, eligible recipients shall receive the same level of benefits as those provided by the federal food stamp program to similarly situated citizen recipients. The monthly Minnesota food assistance program benefits shall not exceed an amount equal to the amount of federal food stamp benefits the household would receive if all members of the household were eligible for the federal food stamp program.

(c) Minnesota food assistance program benefits must be disregarded as income in all programs that do not count food stamps as income.

(d) The county agency must redetermine a Minnesota food assistance program recipient's eligibility for the federal food stamp program when the agency receives information that the recipient's legal immigration status has changed in such a way that would make the recipient potentially eligible for the federal food stamp program.

(e) Until October 1, 1998, the commissioner may provide benefits under this section in cash.

Subd. 4. [STATE PLAN REQUIRED.] The commissioner shall submit a state plan to the secretary of agriculture to allow the commissioner to purchase federal food stamp benefits for each Minnesota food assistance program recipient who is ineligible to participate in the federal food stamp program solely due to the provisions of section 402 or 403 of Public Law Number 104-193, as authorized by Title VII of the 1997 Emergency Supplemental Appropriations Act, Public Law Number 105-18. The commissioner shall enter into a contract as necessary with the secretary to use the existing federal food stamp benefit delivery system for the purposes of administering the Minnesota food assistance program under this section.

Sec. 15. Minnesota Statutes 1996, section 256D.46, subdivision 2, is amended to read:

Sec. 16. Minnesota Statutes 1997 Supplement, section 256J.02, subdivision 4, is amended to read:

Subd. 4. [AUTHORITY TO TRANSFER.] Subject to limitations of title I of Public Law Number 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as amended, the legislature may transfer money from the TANF block grant to the child care fund under chapter 119B, or the Title XX block grant under section 256E.07.

Sec. 17. Minnesota Statutes 1997 Supplement, section 256J.03, is amended to read:

256J.03 [TANF RESERVE ACCOUNT.]

Subdivision 1. The Minnesota family investment program-statewide/TANF TANF reserve account is created in the state treasury. Funds retained or deposited in the TANF reserve shall include: (1) funds designated by the legislature and; (2) unexpended state funds resulting from the acceleration of TANF expenditures under subdivision 2; (3) earnings available from the federal TANF block grant appropriated to the commissioner but not expended in the biennium beginning July 1, 1997, shall be retained; and (4) TANF funds available in fiscal years 1998, 1999, 2000, and 2001 that are not spent or not budgeted to be spent in those years.

Funds deposited in the reserve account to must be expended for the Minnesota family investment program-statewide in fiscal year 2000 and subsequent fiscal years and directly related state programs for the purposes in subdivision 3.

Subd. 2. [AUTHORIZATION TO ACCELERATE EXPENDITURE OF TANF FUNDS.] The commissioner may expend federal Temporary Assistance to Needy Families block grant funds in excess of appropriated levels for the purpose of accelerating federal funding of the MFIP program. By the end of the fiscal year in which the additional federal expenditures are made, the commissioner must deposit into the reserve account an amount of unexpended state funds appropriated for assistance to families grants, aid to families with dependent children, and Minnesota family investment plan equal to the additional federal expenditures. Reserve funds may be spent as TANF appropriations if insufficient TANF funds are available because of acceleration.

Subd. 3. [ALLOWED TRANSFER PURPOSE.] Funds from the reserve account may be used for the following purposes:

(1) unanticipated Temporary Assistance to Needy Families block grant maintenance of effort shortfalls;

(2) MFIP cost increases due to reduced federal revenues and federal law changes;

(3) one-half of the MFIP general fund cost increase in fiscal year 2000 and subsequent fiscal years due to caseload increases over fiscal year 1999; and

(4) transfers allowed under section 256J.02, subdivision 4.

Sec. 18. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 11, is amended to read:

Subd. 11. [CAREGIVER.] "Caregiver" means a minor child's natural or adoptive parent or parents and stepparent who live in the home with the minor child. For purposes of determining eligibility for this program, caregiver also means any of the following individuals, if adults, who live with and provide care and support to a minor child when the minor child's natural or adoptive parent or parents or stepparent do not reside in the same home: legal custodians custodian or guardian, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, aunt, first cousin, nephew, niece, person of preceding generation as denoted by prefixes of "great," "great-great," or "great-great-great," or a spouse of any person named in the above groups even after the marriage ends by death or divorce.

Sec. 19. Minnesota Statutes 1997 Supplement, section 256J.08, is amended by adding a subdivision to read:

Sec. 20. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 26, is amended to read:

Subd. 26. [EARNED INCOME.] "Earned income" means cash or in-kind income earned through the receipt of wages, salary, commissions, profit from employment activities, net profit from self-employment activities, payments made by an employer for regularly accrued vacation or sick leave, and any other profit from activity earned through effort or labor. The income must be in return for, or as a result of, legal activity.

Sec. 21. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 28, is amended to read:

Subd. 28. [EMERGENCY.] "Emergency" means a situation or a set of circumstances that causes or threatens to cause destitution to a minor child family with a child under age 21.

Sec. 22. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 40, is amended to read:

Subd. 40. [GROSS EARNED INCOME.] "Gross earned income" means earned income from employment before mandatory and voluntary payroll deductions. Gross earned income includes salaries, wages, tips, gratuities, commissions, incentive payments from work or training programs, payments made by an employer for regularly accrued vacation or sick leave, and profits from other activity earned by an individual's effort or labor. Gross earned income includes uniform and meal allowances if federal income tax is deducted from the allowance. Gross earned income includes flexible work benefits received from an employer if the employee has the option of receiving the benefit or benefits in cash. For self-employment, gross earned income is the nonexcluded income minus expenses for the business.

Sec. 23. Minnesota Statutes 1997 Supplement, section 256J.08, is amended by adding a subdivision to read:

Subd. 46a. [SHELTER COSTS.] "Shelter costs" means rent, manufactured home lot rental costs, or monthly principal, interest, insurance premiums, and property taxes due for mortgages or contracts for deed.

Sec. 24. Minnesota Statutes 1997 Supplement, section 256J.08, is amended by adding a subdivision to read:

Subd. 50a. [INTERSTATE TRANSITIONAL STANDARD.] "Interstate transitional standard" means a combination of the cash assistance a family with no other income would have received in the state of previous residence and the Minnesota food portion for the appropriate size family.

Sec. 25. Minnesota Statutes 1997 Supplement, section 256J.08, is amended by adding a subdivision to read:

Subd. 51a. [LEGAL CUSTODIAN.] "Legal custodian" means any person who is under a legal obligation to provide care and support for a minor and who is in fact providing care and support for a minor. For an Indian child, custodian means any Indian person who has legal custody of an Indian child under tribal law or custom or under state law or to whom temporary physical care, custody, and control has been transferred by the parent of the child, as provided in section 257.351, subdivision 8.

Sec. 26. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 60, is amended to read:

Subd. 60. [MINOR CHILD.] "Minor child" means a child who is living in the same home of a parent or other caregiver, is not the parent of a child in the home, and is either less than 18 years of age or is under the age of 19 years and is regularly attending as a full-time student and is expected to complete a high school or in a secondary school or pursuing a full-time secondary level course of vocational or technical training designed to fit students for gainful employment before reaching age 19.

Sec. 27. Minnesota Statutes 1997 Supplement, section 256J.08, is amended by adding a subdivision to read:

Sec. 28. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 68, is amended to read:

Subd. 68. [PERSONAL PROPERTY.] "Personal property" means an item of value that is not real property, including the value of a contract for deed held by a seller, assets held in trust on behalf of members of an assistance unit, cash surrender value of life insurance, value of a prepaid burial, savings account, value of stocks and bonds, and value of retirement accounts.

Sec. 29. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 73, is amended to read:

Subd. 73. [QUALIFIED NONCITIZEN.] "Qualified noncitizen" means a person:

(1) who was lawfully admitted for permanent residence pursuant to United States Code, title 8;

(2) who was admitted to the United States as a refugee pursuant to United States Code, title 8; section 1157;

(3) whose deportation is being withheld pursuant to United States Code, title 8, section 1253(h);

(4) who was paroled for a period of at least one year pursuant to United States Code, title 8, section 1182(d)(5);

(5) who was granted conditional entry pursuant to United State Code, title 8, section 1153(a)(7);

(6) who was granted asylum pursuant to United States Code, title 8, section 1158; or

(7) determined to be a battered noncitizen by the United States Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Title V of the Omnibus Consolidated Appropriations Bill, Public Law Number 104-208; or

(8) who was admitted as a Cuban or Haitian entrant.

Sec. 30. Minnesota Statutes 1997 Supplement, section 256J.08, subdivision 83, is amended to read:

Subd. 83. [SIGNIFICANT CHANGE.] "Significant change" means a decline in gross income of 35 36 percent or more from the income used to determine the grant for the current month.

Sec. 31. Minnesota Statutes 1997 Supplement, section 256J.09, subdivision 6, is amended to read:

Subd. 6. [INVALID REASON FOR DELAY.] A county agency must not delay a decision on eligibility or delay issuing the assistance payment except to establish state residence as provided in section 256J.12 by:

(1) treating the 30-day processing period as a waiting period;

(2) delaying approval or issuance of the assistance payment pending the decision of the county board; or

(3) awaiting the result of a referral to a county agency in another county when the county receiving the application does not believe it is the county of financial responsibility.

Sec. 32. Minnesota Statutes 1997 Supplement, section 256J.09, subdivision 9, is amended to read:

(b) An overpayment must be determined when a change in household composition is not reported within the deadlines in section 256J.30, subdivision 9. Any overpayment must be calculated from the month of the change including the needs, income, and assets of any individual who is required to be included in the assistance unit under section 256J.24, subdivision 2. Individuals not included in the assistance unit who are identified in section 256J.37, subdivisions 1 to 2, must have their income and assets considered when determining the amount of the overpayment.

Sec. 33. Minnesota Statutes 1997 Supplement, section 256J.11, subdivision 2, as amended by Laws 1997, Third Special Session chapter 1, section 1, is amended to read:

Subd. 2. [NONCITIZENS; FOOD PORTION.] (a) For the period September 1, 1997, to October 31, 1997, noncitizens who do not meet one of the exemptions in section 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, but were residing in this state as of July 1, 1997, are eligible for the 6/10 of the average value of food stamps for the same family size and composition until MFIP-S is operative in the noncitizen's county of financial responsibility and thereafter, the 6/10 of the food portion of MFIP-S. However, federal food stamp dollars cannot be used to fund the food portion of MFIP-S benefits for an individual under this subdivision.

(b) For the period November 1, 1997, to June 30, 1998 1999, noncitizens who do not meet one of the exemptions in section 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, but were residing in this state as of July 1, 1997, and are receiving cash assistance under the AFDC, family general assistance, MFIP or MFIP-S programs are eligible for the average value of food stamps for the same family size and composition until MFIP-S is operative in the noncitizen's county of financial responsibility and thereafter, the food portion of MFIP-S. However, federal food stamp dollars cannot be used to fund the food portion of MFIP-S benefits for an individual under this subdivision. The assistance provided under this subdivision, which is designated as a supplement to replace lost benefits under the federal food stamp program, must be disregarded as income in all programs that do not count food stamps as income where the commissioner has the authority to make the income disregard determination for the program.

(c) The commissioner shall submit a state plan to the secretary of agriculture to allow the commissioner to purchase federal food stamp benefits in an amount equal to the MFIP-S food portion for each legal noncitizen receiving MFIP-S assistance who is ineligible to participate in the federal food stamp program solely due to the provisions of section 402 or 403 of Public Law Number 104-193, as authorized by Title VII of the 1997 Emergency Supplemental Appropriations Act, Public Law Number 105-18. The commissioner shall enter into a contract as necessary with the secretary to use the existing federal food stamp benefit delivery system for the purposes of administering the food portion of MFIP-S under this subdivision.

Sec. 34. Minnesota Statutes 1997 Supplement, section 256J.12, is amended to read:

256J.12 [MINNESOTA RESIDENCE.]

Subdivision 1. [SIMPLE RESIDENCY.] To be eligible for AFDC or MFIP-S, whichever is in effect, a family an assistance unit must have established residency in this state which means the family assistance unit is present in the state and intends to remain here.

Subd. 1a. [30-DAY RESIDENCY REQUIREMENT.] A family An assistance unit is considered to have established residency in this state only when a child or caregiver has resided in this state for at least 30 days with the intention of making the person's home here and not for any temporary purpose. The birth of a child in Minnesota to a member of the assistance unit does not automatically establish the residency in this state under this subdivision of the other members of the assistance unit. Time spent in a shelter for battered women shall count toward satisfying the 30-day residency requirement.

Subd. 2. [EXCEPTIONS.] (a) A county shall waive the 30-day residency requirement where unusual hardship would result from denial of assistance.

(b) For purposes of this section, unusual hardship means a family an assistance unit:

(1) is without alternative shelter; or

(c) For purposes of this subdivision, the following definitions apply (1) "metropolitan statistical area" is as defined by the U.S. Census Bureau; (2) "alternative shelter" includes any shelter that is located within the metropolitan statistical area containing the county and for which the family is eligible, provided the family assistance unit does not have to travel more than 20 miles to reach the shelter and has access to transportation to the shelter. Clause (2) does not apply to counties in the Minneapolis-St. Paul metropolitan statistical area.

(d) Applicants are considered to meet the residency requirement under subdivision 1a if they once resided in Minnesota and:

(1) joined the United States armed services, returned to Minnesota within 30 days of leaving the armed services, and intend to remain in Minnesota; or

(2) left to attend school in another state, paid nonresident tuition or Minnesota tuition rates under a reciprocity agreement, and returned to Minnesota within 30 days of graduation with the intent to remain in Minnesota.

(e) The 30-day residence requirement is met when:

(1) a minor child or a minor caregiver moves from another state to the residence of a relative caregiver;

(2) the minor caregiver applies for and receives family cash assistance;

(3) the relative caregiver chooses not to be part of the MFIP-S assistance unit; and

(4) the relative caregiver has resided in Minnesota for at least 30 days prior to the date the assistance unit applies for cash assistance.

(f) Ineligible mandatory unit members who have resided in Minnesota for 12 months immediately before the unit's date of application establish the other assistance unit members' eligibility for the MFIP-S transitional standard.

Subd. 2a. [MIGRANT WORKERS.] Migrant workers, as defined in section 256J.08, and their immediate families are exempt from the requirements of subdivisions 1 and 1a, provided the migrant worker provides verification that the migrant family worked in this state within the last 12 months and earned at least $1,000 in gross wages during the time the migrant worker worked in this state.

Subd. 3. [PAYMENT PLAN FOR NEW RESIDENTS.] Assistance paid to an eligible family assistance unit in which all members have resided in this state for fewer than 12 consecutive calendar months immediately preceding the date of application shall be at the standard and in the form specified in section 256J.43.

Subd. 4. [SEVERABILITY CLAUSE.] If any subdivision in this section is enjoined from implementation or found unconstitutional by any court of competent jurisdiction, the remaining subdivisions shall remain valid and shall be given full effect.

Sec. 35. Minnesota Statutes 1997 Supplement, section 256J.14, is amended to read:

256J.14 [ELIGIBILITY FOR PARENTING OR PREGNANT MINORS.]

(a) The definitions in this paragraph only apply to this subdivision.

(1) "Household of a parent, legal guardian, or other adult relative" means the place of residence of:

(i) a natural or adoptive parent;

(iii) a caregiver as defined in section 256J.08, subdivision 11; or

(iv) an appropriate adult relative designated by a county agency.

(2) "Adult-supervised supportive living arrangement" means a private family setting which assumes responsibility for the care and control of the minor parent and minor child, or other living arrangement, not including a public institution, licensed by the commissioner of human services which ensures that the minor parent receives adult supervision and supportive services, such as counseling, guidance, independent living skills training, or supervision.

(b) A minor parent and the minor child who is in the care of the minor parent must reside in the household of a parent, legal guardian, other appropriate adult relative, or other caregiver, or in an adult-supervised supportive living arrangement in order to receive MFIP-S unless:

(1) the minor parent has no living parent, other appropriate adult relative, or legal guardian whose whereabouts is known;

(2) no living parent, other appropriate adult relative, or legal guardian of the minor parent allows the minor parent to live in the parent's, appropriate other adult relative's, or legal guardian's home;

(3) the minor parent lived apart from the minor parent's own parent or legal guardian for a period of at least one year before either the birth of the minor child or the minor parent's application for MFIP-S;

(4) the physical or emotional health or safety of the minor parent or minor child would be jeopardized if the minor parent and the minor child resided in the same residence with the minor parent's parent, other appropriate adult relative, or legal guardian; or

(5) an adult supervised supportive living arrangement is not available for the minor parent and the dependent child in the county in which the minor parent and child currently resides reside. If an adult supervised supportive living arrangement becomes available within the county, the minor parent and child must reside in that arrangement.

(c) Minor applicants must be informed orally and in writing about the eligibility requirements and their rights and obligations under the MFIP-S program. The county must advise the minor of the possible exemptions and specifically ask whether one or more of these exemptions is applicable. If the minor alleges one or more of these exemptions, then the county must assist the minor in obtaining the necessary verifications to determine whether or not these exemptions apply.

(d) If the county worker has reason to suspect that the physical or emotional health or safety of the minor parent or minor child would be jeopardized if they resided with the minor parent's parent, other adult relative, or legal guardian, then the county worker must make a referral to child protective services to determine if paragraph (b), clause (4), applies. A new determination by the county worker is not necessary if one has been made within the last six months, unless there has been a significant change in circumstances which justifies a new referral and determination.

(e) If a minor parent is not living with a parent or, legal guardian, or other adult relative due to paragraph (b), clause (1), (2), or (4), the minor parent must reside, when possible, in a living arrangement that meets the standards of paragraph (a), clause (2).

(f) When a minor parent and minor child live lives with another a parent, other adult relative, legal guardian, or in an adult-supervised supportive living arrangement, MFIP-S must be paid, when possible, in the form of a protective payment on behalf of the minor parent and minor child in accordance with according to section 256J.39, subdivisions 2 to 4.

Sec. 36. Minnesota Statutes 1997 Supplement, section 256J.15, subdivision 2, is amended to read:

The county agency must count the striker's prestrike earnings as current earnings. When A significant change cannot be invoked when a member of an assistance unit, or an individual identified under section 256J.37, subdivisions 1 to 2, is on strike. A member of an assistance unit who, or an individual identified under section 256J.37, subdivisions 1 to 2, is not considered a striker when that person is not in the bargaining unit that voted for the strike and does not cross the picket line for fear of personal injury, the assistance unit member is not a striker. Except for a member of an assistance unit who is not in the bargaining unit that voted for the strike and who does not cross the picket line for fear of personal injury, a significant change cannot be invoked as a result of a labor dispute.

Sec. 37. Minnesota Statutes 1997 Supplement, section 256J.20, subdivision 2, is amended to read:

Subd. 2. [REAL PROPERTY LIMITATIONS.] Ownership of real property by an applicant or participant is subject to the limitations in paragraphs (a) and (b).

(a) A county agency shall exclude the homestead of an applicant or participant according to clauses (1) to (4) (5):

(1) an applicant or participant who is purchasing real property through a contract for deed and using that property as a home is considered the owner of real property;

(2) the total amount of land that can be excluded under this subdivision is limited to surrounding property which is not separated from the home by intervening property owned by others. Additional property must be assessed as to its legal and actual availability according to subdivision 1;

(3) when real property that has been used as a home by a participant is sold, the county agency must treat the cash proceeds from the sale as excluded property for six months when the participant intends to reinvest the proceeds in another home and maintains those proceeds, unused for other purposes, in a separate account; and

(4) when the homestead is jointly owned, but the client does not reside in it because of legal separation, pending divorce, or battering or abuse by the spouse or partner, the homestead is excluded.; and

(5) the homestead shall continue to be excluded if it is temporarily unoccupied due to employment, illness, or as the result of compliance with a county-approved employability plan. The education, training, or job search must be within the state, but can be outside the immediate geographic area. A homestead temporarily unoccupied because it is not habitable due to a casualty or natural disaster is excluded. The homestead is excluded during periods only if the client intends to return to it.

(b) The equity value of real property that is not excluded under paragraph (a) and which is legally available must be applied against the limits in subdivision 3. When the equity value of the real property exceeds the limits under subdivision 3, the applicant or participant may qualify to receive assistance when the applicant or participant continues to make a good faith effort to sell the property and signs a legally binding agreement to repay the amount of assistance, less child support collected by the agency. Repayment must be made within five working days after the property is sold. Repayment to the county agency must be in the amount of assistance received or the proceeds of the sale, whichever is less.

Sec. 38. Minnesota Statutes 1997 Supplement, section 256J.20, subdivision 3, is amended to read:

Subd. 3. [OTHER PROPERTY LIMITATIONS.] To be eligible for MFIP-S, the equity value of all nonexcluded real and personal property of the assistance unit must not exceed $2,000 for applicants and $5,000 for ongoing recipients participants. The value of assets in clauses (1) to (18) (20) must be excluded when determining the equity value of real and personal property:

must use the N.A.D.A. Official Used Car Guide, Midwest Edition, for newer model cars. The N.A.D.A. Official Used Car Guide, Midwest Edition, is incorporated by reference. When a vehicle is not listed in the guidebook, or when the applicant or participant disputes the loan value listed in the guidebook as unreasonable given the condition of the particular vehicle, the county agency may require the applicant or participant to document the loan value by securing a written statement from a motor vehicle dealer licensed under section 168.27, stating the amount that the dealer would pay to purchase the vehicle. The county agency shall reimburse the applicant or participant for the cost of a written statement that documents a lower loan value;

(2) the value of life insurance policies for members of the assistance unit;

(3) one burial plot per member of an assistance unit;

(4) the value of personal property needed to produce earned income, including tools, implements, farm animals, inventory, business loans, business checking and savings accounts used at least annually and used exclusively for the operation of a self-employment business, and any motor vehicles if the vehicles are essential for the self-employment business;

(5) the value of personal property not otherwise specified which is commonly used by household members in day-to-day living such as clothing, necessary household furniture, equipment, and other basic maintenance items essential for daily living;

(6) the value of real and personal property owned by a recipient of Supplemental Security Income or Minnesota supplemental aid;

(7) the value of corrective payments, but only for the month in which the payment is received and for the following month;

(8) a mobile home used by an applicant or participant as the applicant's or participant's home;

(9) money in a separate escrow account that is needed to pay real estate taxes or insurance and that is used for this purpose;

(10) money held in escrow to cover employee FICA, employee tax withholding, sales tax withholding, employee worker compensation, business insurance, property rental, property taxes, and other costs that are paid at least annually, but less often than monthly;

(11) monthly assistance and, emergency assistance, and diversionary payments for the current month's needs;

(12) the value of school loans, grants, or scholarships for the period they are intended to cover;

(13) payments listed in section 256J.21, subdivision 2, clause (9), which are held in escrow for a period not to exceed three months to replace or repair personal or real property;

(14) income received in a budget month through the end of the budget payment month;

(15) savings from earned income of a minor child or a minor parent that are set aside in a separate account designated specifically for future education or employment costs;

(16) the federal earned income tax credit and, Minnesota working family credit, state and federal income tax refunds, state homeowners and renters credits under chapter 290A, property tax rebates under Laws 1997, chapter 231, article 1, section 16, and other federal or state tax rebates in the month received and the following month;

(17) payments excluded under federal law as long as those payments are held in a separate account from any nonexcluded funds; and

(19) the assets of children ineligible to receive MFIP-S benefits because foster care or adoption assistance payments are made on their behalf; and

(20) the assets of persons whose income is excluded under section 256J.21, subdivision 2, clause 43.

Sec. 39. Minnesota Statutes 1997 Supplement, section 256J.21, is amended to read:

256J.21 [INCOME LIMITATIONS.]

Subdivision 1. [INCOME INCLUSIONS.] To determine MFIP-S eligibility, the county agency must evaluate income received by members of an assistance unit, or by other persons whose income is considered available to the assistance unit, and only count income that is available to the member of the assistance unit. Income is available if the individual has legal access to the income. The income of an unrelated adult living in the same household as the assistance unit who contributes financially to the household in any way that subsidizes the expenses for which the assistance unit is receiving a grant is considered to be available to the assistance unit. All payments, unless specifically excluded in subdivision 2, must be counted as income.

Subd. 2. [INCOME EXCLUSIONS.] (a) The following must be excluded in determining a family's available income:

(1) payments for basic care, difficulty of care, and clothing allowances received for providing family foster care to children or adults under Minnesota Rules, parts 9545.0010 to 9545.0260 and 9555.5050 to 9555.6265, and payments received and used for care and maintenance of a third-party beneficiary who is not a household member;

(2) reimbursements for employment training received through the Job Training Partnership Act, United States Code, title 29, chapter 19, sections 1501 to 1792b;

(3) reimbursement for out-of-pocket expenses incurred while performing volunteer services, jury duty, or employment;

(4) all educational assistance, except the county agency must count graduate student teaching assistantships, fellowships, and other similar paid work as earned income and, after allowing deductions for any unmet and necessary educational expenses, shall count scholarships or grants awarded to graduate students that do not require teaching or research as unearned income;

(5) loans, regardless of purpose, from public or private lending institutions, governmental lending institutions, or governmental agencies;

(6) loans from private individuals, regardless of purpose, provided an applicant or participant documents that the lender expects repayment;

(7)(i) state and federal income tax refunds;

(ii) federal income tax refunds;

(8)(i) state and federal earned income credits;

(ii) Minnesota working family credits;

(iii) state homeowners and renters credits under chapter 290A;

(iv) property tax rebates under Laws 1997, chapter 231, article 1, section 16; and

(v) other federal or state tax rebates;

(10) the portion of an insurance settlement that is used to pay medical, funeral, and burial expenses, or to repair or replace insured property;

(11) reimbursements for medical expenses that cannot be paid by medical assistance;

(12) payments by a vocational rehabilitation program administered by the state under chapter 268A, except those payments that are for current living expenses;

(13) in-kind income, including any payments directly made by a third party to a provider of goods and services;

(14) assistance payments to correct underpayments, but only for the month in which the payment is received;

(15) emergency assistance payments;

(16) funeral and cemetery payments as provided by section 256.935;

(17) nonrecurring cash gifts of $30 or less, not exceeding $30 per participant in a calendar month;

(18) any form of energy assistance payment made through Public Law Number 97-35, Low-Income Home Energy Assistance Act of 1981, payments made directly to energy providers by other public and private agencies, and any form of credit or rebate payment issued by energy providers;

(19) Supplemental Security Income, including retroactive payments;

(20) Minnesota supplemental aid, including retroactive payments;

(21) proceeds from the sale of real or personal property;

(22) adoption assistance payments under section 259.67;

(23) state-funded family subsidy program payments made under section 252.32 to help families care for children with mental retardation or related conditions;

(24) interest payments and dividends from property that is not excluded from and that does not exceed the asset limit;

(25) rent rebates;

(26) income earned by a minor caregiver or minor child who is at least a half-time student in an approved secondary education program;

(27) income earned by a caregiver under age 20 who is at least a half-time student in an approved secondary education program;

(28) MFIP-S child care payments under section 119B.05;

(29) all other payments made through MFIP-S to support a caregiver's pursuit of greater self-support;

(30) income a participant receives related to shared living expenses;

(31) reverse mortgages;

(32) benefits provided by the Child Nutrition Act of 1966, United States Code, title 42, chapter 13A, sections 1771 to 1790;

(34) benefits from the National School Lunch Act, United States Code, title 42, chapter 13, sections 1751 to 1769e;

(35) relocation assistance for displaced persons under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, United States Code, title 42, chapter 61, subchapter II, section 4636, or the National Housing Act, United States Code, title 12, chapter 13, sections 1701 to 1750jj;

(36) benefits from the Trade Act of 1974, United States Code, title 19, chapter 12, part 2, sections 2271 to 2322;

(37) war reparations payments to Japanese Americans and Aleuts under United States Code, title 50, sections 1989 to 1989d;

(38) payments to veterans or their dependents as a result of legal settlements regarding Agent Orange or other chemical exposure under Public Law Number 101-239, section 10405, paragraph (a)(2)(E);

(39) income that is otherwise specifically excluded from the MFIP-S program consideration in federal law, state law, or federal regulation;

(40) security and utility deposit refunds;

(41) American Indian tribal land settlements excluded under Public Law Numbers 98-123, 98-124, and 99-377 to the Mississippi Band Chippewa Indians of White Earth, Leech Lake, and Mille Lacs reservations and payments to members of the White Earth Band, under United States Code, title 25, chapter 9, section 331, and chapter 16, section 1407;

(42) all income of the minor parent's parent and stepparent when determining the grant for the minor parent in households that include a minor parent living with a parent or stepparent on MFIP-S with other dependent children; and

(43) income of the minor parent's parent and stepparent equal to 200 percent of the federal poverty guideline for a family size not including the minor parent and the minor parent's child in households that include a minor parent living with a parent or stepparent not on MFIP-S when determining the grant for the minor parent. The remainder of income is deemed as specified in section 256J.37, subdivision 1 1b;

(44) payments made to children eligible for relative custody assistance under section 257.85;

(45) vendor payments for goods and services made on behalf of a client unless the client has the option of receiving the payment in cash; and

(46) the principal portion of a contract for deed payment.

Subd. 3. [INITIAL INCOME TEST.] The county agency shall determine initial eligibility by considering all earned and unearned income that is not excluded under subdivision 2. To be eligible for MFIP-S, the assistance unit's countable income minus the disregards in paragraphs (a) and (b) must be below the transitional standard of assistance according to section 256J.24 for that size assistance unit.

(a) The initial eligibility determination must disregard the following items:

(1) the employment disregard is 18 percent of the gross earned income whether or not the member is working full time or part time;

(2) dependent care costs must be deducted from gross earned income for the actual amount paid for dependent care up to the a maximum disregard allowed of $200 per month for each child less than two years of age, and $175 per month for each child two years of age and older under this chapter and chapter 119B; and

(4) an allocation for the unmet need of an ineligible spouse or an ineligible child under the age of 21 for whom the caregiver is financially responsible and who lives with the caregiver according to section 256J.36.

(b) Notwithstanding paragraph (a), when determining initial eligibility for applicants who have applicant units when at least one member has received AFDC, family general assistance, MFIP, MFIP-R, work first, or MFIP-S in this state within four months of the most recent application for MFIP-S, the employment disregard for all unit members is 36 percent of the gross earned income.

After initial eligibility is established, the assistance payment calculation is based on the monthly income test.

Subd. 4. [MONTHLY INCOME TEST AND DETERMINATION OF ASSISTANCE PAYMENT.] The county agency shall determine ongoing eligibility and the assistance payment amount according to the monthly income test. To be eligible for MFIP-S, the result of the computations in paragraphs (a) to (e) must be at least $1.

(a) Apply a 36 percent income disregard to gross earnings and subtract this amount from the family wage level. If the difference is equal to or greater than the transitional standard, the assistance payment is equal to the transitional standard. If the difference is less than the transitional standard, the assistance payment is equal to the difference. The employment disregard in this paragraph must be deducted every month there is earned income.

(b) All payments made according to a court order for spousal support or the support of children not living in the assistance unit's household must be disregarded from the income of the person with the legal obligation to pay support, provided that, if there has been a change in the financial circumstances of the person with the legal obligation to pay support since the support order was entered, the person with the legal obligation to pay support has petitioned for a modification of the court order.

(c) An allocation for the unmet need of an ineligible spouse or an ineligible child under the age of 21 for whom the caregiver is financially responsible and who lives with the caregiver must be made according to section 256J.36.

(d) Subtract unearned income dollar for dollar from the transitional standard to determine the assistance payment amount.

(d) (e) When income is both earned and unearned, the amount of the assistance payment must be determined by first treating gross earned income as specified in paragraph (a). After determining the amount of the assistance payment under paragraph (a), unearned income must be subtracted from that amount dollar for dollar to determine the assistance payment amount.

(e) (f) When the monthly income is greater than the transitional or family wage level standard after applicable deductions and the income will only exceed the standard for one month, the county agency must suspend the assistance payment for the payment month.

Subd. 5. [DISTRIBUTION OF INCOME.] The income of all members of the assistance unit must be counted. Income may also be deemed from ineligible persons to the assistance unit. Income must be attributed to the person who earns it or to the assistance unit according to paragraphs (a) to (c).

(a) Funds distributed from a trust, whether from the principal holdings or sale of trust property or from the interest and other earnings of the trust holdings, must be considered income when the income is legally available to an applicant or participant. Trusts are presumed legally available unless an applicant or participant can document that the trust is not legally available.

(b) Income from jointly owned property must be divided equally among property owners unless the terms of ownership provide for a different distribution.

Sec. 40. Minnesota Statutes 1997 Supplement, section 256J.24, subdivision 1, is amended to read:

Subdivision 1. [MFIP-S ASSISTANCE UNIT.] An MFIP-S assistance unit is either a group of individuals with at least one minor child who live together whose needs, assets, and income are considered together and who receive MFIP-S assistance, or a pregnant woman and her spouse who receives receive MFIP-S assistance.

Individuals identified in subdivision 2 must be included in the MFIP-S assistance unit. Individuals identified in subdivision 3 must be excluded from the assistance unit are ineligible to receive MFIP-S. Individuals identified in subdivision 4 may be included in the assistance unit at their option. Individuals not included in the assistance unit who are identified in section 256J.37, subdivision subdivisions 1 or to 2, must have their income and assets considered when determining eligibility and benefits for an MFIP-S assistance unit. All assistance unit members, whether mandatory or elective, who live together and for whom one caregiver or two caregivers apply must be included in a single assistance unit.

Sec. 41. Minnesota Statutes 1997 Supplement, section 256J.24, subdivision 2, is amended to read:

Subd. 2. [MANDATORY ASSISTANCE UNIT COMPOSITION.] Except for minor caregivers and their children who are must be in a separate assistance unit from the other persons in the household, when the following individuals live together, they must be included in the assistance unit:

(1) a minor child, including a pregnant minor;

(2) the minor child's siblings, half-siblings, and step-siblings; and

(3) the minor child's natural, adoptive parents, and stepparents; and

(4) the spouse of a pregnant woman.

Sec. 42. Minnesota Statutes 1997 Supplement, section 256J.24, subdivision 3, is amended to read:

Subd. 3. [INDIVIDUALS WHO MUST BE EXCLUDED FROM AN ASSISTANCE UNIT.] (a) The following individuals must be excluded from an assistance unit who are part of the assistance unit determined under subdivision 2 are ineligible to receive MFIP-S:

(1) individuals receiving Supplemental Security Income or Minnesota supplemental aid;

(2) individuals living at home while performing court-imposed, unpaid community service work due to a criminal conviction;

(3) individuals disqualified from the food stamp program or MFIP-S, until the disqualification ends;

(4) children on whose behalf federal, state or local foster care payments under title IV-E of the Social Security Act are made, except as provided in section sections 256J.13, subdivision 2, and 256J.74, subdivision 2; and

(5) children receiving ongoing monthly adoption assistance payments under section 269.67.

(b) The exclusion of a person under this subdivision does not alter the mandatory assistance unit composition.

Sec. 43. Minnesota Statutes 1997 Supplement, section 256J.24, subdivision 4, is amended to read:

(b) Any minor child not related as a sibling, stepsibling, or adopted sibling to the minor child in the unit, but for whom there is an eligible caregiver may elect to be in the unit.

(c) A foster care provider of a minor child who is receiving federal, state, or local foster care maintenance payments may elect to receive MFIP-S if the provider meets the definition of caregiver under section 256J.08, subdivision 11. If the provider chooses to receive MFIP-S, the spouse of the provider must also be included in the assistance unit with the provider. The provider and spouse are eligible for assistance even if the only minor child living in the provider's home is receiving foster care maintenance payments.

(d) The adult caregiver or caregivers of a minor parent are eligible to be a separate assistance unit from the minor parent and the minor parent's child when:

(1) the adult caregiver or caregivers have no other minor children in the household;

(2) the minor parent and the minor parent's child are living together with the adult caregiver or caregivers; and

(3) the minor parent and the minor parent's child receive MFIP-S, or would be eligible to receive MFIP-S, if they were not receiving SSI benefits.

Sec. 44. Minnesota Statutes 1997 Supplement, section 256J.24, is amended by adding a subdivision to read:

Subd. 5a. [FOOD PORTION OF MFIP-S TRANSITIONAL STANDARD.] The commissioner shall adjust the food portion of the MFIP-S transitional standard by October 1 each year beginning October 1998 to reflect the cost-of-living adjustments to the Food Stamp Program. The commissioner shall annually publish in the State Register the transitional standard for an assistance unit of sizes 1 to 10.

Sec. 45. Minnesota Statutes 1997 Supplement, section 256J.24, is amended by adding a subdivision to read:

Subd. 8. [ASSISTANCE PAID TO ELIGIBLE ASSISTANCE UNITS.] For all applicants who are eligible for MFIP-S assistance, payments for shelter and utilities up to the amount of MFIP-S benefits for which the assistance unit is eligible may, upon county option, be vendor paid for as many months as the assistance unit is eligible or six months, whichever comes first. The residual amount of the grant after vendor payment, if any, must be paid to the MFIP-S caregiver. A county that chooses this method of payment must use it for all eligible applicants.

Sec. 46. Minnesota Statutes 1997 Supplement, section 256J.26, subdivision 1, is amended to read:

Subdivision 1. [PERSON CONVICTED OF DRUG OFFENSES.] (a) Applicants or recipients participants who have been convicted of a drug offense after July 1, 1997, may, if otherwise eligible, receive AFDC or MFIP-S benefits subject to the following conditions:

(1) Benefits for the entire assistance unit must be paid in vendor form for shelter and utilities during any time the applicant is part of the assistance unit;.

(2) The convicted applicant or recipient participant shall be subject to random drug testing as a condition of continued eligibility and is subject to sanctions under section 256J.46 following any positive test for an illegal controlled substance, except that the grant must continue to be vendor paid under clause (1).

For purposes of this subdivision, section 256J.46 is effective July 1, 1997.

This subdivision also applies to persons who receive food stamps under section 115 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. is subject to the following sanctions:

(ii) for failing a drug test two or more times, the residual amount of the participant's grant after making vendor payments for shelter and utility costs, if any, must be reduced by an amount equal to 30 percent of the MFIP-S transitional standard or the interstate transitional standard, whichever is applicable.

(b) Applicants or participants who have been convicted of a drug offense after July 1, 1997, may, if otherwise eligible, receive food stamps if the convicted applicant or participant is subject to random drug testing as a condition of continued eligibility. Following a positive test for an illegal controlled substance, the applicant is subject to the following sanctions:

(1) for failing a drug test the first time, food stamps shall be reduced by ten percent of the applicable food stamp allotment; and

(2) for failing a drug test two or more times, food stamps shall be reduced by an amount equal to 30 percent of the applicable food stamp allotment.

(b) (c) For the purposes of this subdivision, "drug offense" means a conviction that occurred after July 1, 1997, of sections 152.021 to 152.025, 152.0261, or 152.096. Drug offense also means a conviction in another jurisdiction of the possession, use, or distribution of a controlled substance, or conspiracy to commit any of these offenses, if the offense occurred after July 1, 1997, and the conviction is a felony offense in that jurisdiction, or in the case of New Jersey, a high misdemeanor.

Sec. 47. Minnesota Statutes 1997 Supplement, section 256J.26, subdivision 2, is amended to read:

Subd. 2. [PAROLE VIOLATORS.] An individual violating a condition of probation or parole or supervised release imposed under federal law or the law of any state is ineligible to receive disqualified from receiving AFDC or MFIP-S.

Sec. 48. Minnesota Statutes 1997 Supplement, section 256J.26, subdivision 3, is amended to read:

Subd. 3. [FLEEING FELONS.] An individual who is fleeing to avoid prosecution, or custody, or confinement after conviction for a crime that is a felony under the laws of the jurisdiction from which the individual flees, or in the case of New Jersey, is a high misdemeanor, is ineligible to receive disqualified from receiving AFDC or MFIP-S.

Sec. 49. Minnesota Statutes 1997 Supplement, section 256J.26, subdivision 4, is amended to read:

Subd. 4. [DENIAL OF ASSISTANCE FOR TEN YEARS TO A PERSON FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCY.] An individual who is convicted in federal or state court of having made a fraudulent statement or representation with respect to the place of residence of the individual in order to receive assistance simultaneously from two or more states is ineligible to receive disqualified from receiving AFDC or MFIP-S for ten years beginning on the date of the conviction.

Sec. 50. Minnesota Statutes 1997 Supplement, section 256J.28, subdivision 1, is amended to read:

Subdivision 1. [EXPEDITED ISSUANCE OF FOOD STAMP ASSISTANCE.] The following households are entitled to expedited issuance of food stamp assistance:

(1) households with less than $150 in monthly gross income provided their liquid assets do not exceed $100;

(2) migrant or seasonal farm worker households who are destitute as defined in Code of Federal Regulations, title 7, subtitle B, chapter 2, subchapter C, part 273, section 273.10, paragraph (e)(3), provided their liquid assets do not exceed $100; and

(3) eligible households whose combined monthly gross income and liquid resources are less than the household's monthly rent or mortgage and utilities.

Sec. 51. Minnesota Statutes 1997 Supplement, section 256J.28, subdivision 2, is amended to read:

Subd. 2. [FOOD STAMPS FOR HOUSEHOLD MEMBERS NOT IN THE ASSISTANCE UNIT.] (a) For household members who purchase and prepare food with the MFIP-S assistance unit but are not part of the assistance unit, the county agency must determine a separate food stamp benefit based on regulations agreed upon with the United States Department of Agriculture.

(b) This subdivision does not apply to optional members who have chosen not to be in the assistance unit.

(c) (b) Fair hearing requirements for persons who receive food stamps under this subdivision are governed by section 256.045, and Code of Federal Regulations, title 7, subtitle B, chapter II, part 273, section 273.15.

Sec. 52. Minnesota Statutes 1997 Supplement, section 256J.28, is amended by adding a subdivision to read:

Subd. 5. [FOOD STAMPS FOR PERSONS RESIDING IN A BATTERED WOMAN'S SHELTER.] Members of an MFIP-S assistance unit residing in a battered woman's shelter may receive food stamps or the food portion twice in a month if the unit that initially received the food stamps or food portion included the alleged abuser.

Sec. 53. Minnesota Statutes 1997 Supplement, section 256J.30, subdivision 10, is amended to read:

Subd. 10. [COOPERATION WITH HEALTH CARE BENEFITS.] (a) The caregiver of a minor child must cooperate with the county agency to identify and provide information to assist the county agency in pursuing third-party liability for medical services.

(b) A caregiver must assign to the department any rights to health insurance policy benefits the caregiver has during the period of MFIP-S eligibility.

(c) A caregiver must identify any third party who may be liable for care and services available under the medical assistance program on behalf of the applicant or participant and all other assistance unit members.

(d) When a participant refuses to identify any third party who may be liable for care and services, the recipient must be sanctioned as provided in section 256J.46, subdivision 1. The recipient is also ineligible for medical assistance for a minimum of one month and until the recipient cooperates with the requirements of this subdivision.

Sec. 54. Minnesota Statutes 1997 Supplement, section 256J.30, subdivision 11, is amended to read:

Subd. 11. [REQUIREMENT TO ASSIGN SUPPORT AND MAINTENANCE RIGHTS.] To be eligible An assistance unit is ineligible for MFIP-S, unless the caregiver must assign assigns all rights to child support and spousal maintenance benefits according to sections 256.74, subdivision 5, and section 256.741, if enacted.

Sec. 55. Minnesota Statutes 1997 Supplement, section 256J.31, subdivision 5, is amended to read:

Subd. 5. [MAILING OF NOTICE.] The notice of adverse action shall be issued according to paragraphs (a) to (c).

(a) A county agency shall mail a notice of adverse action at least ten days before the effective date of the adverse action, except as provided in paragraphs (b) and (c).

(b) A county agency must mail a notice of adverse action at least five days before the effective date of the adverse action when the county agency has factual information that requires an action to reduce, suspend, or terminate assistance based on probable fraud.

(c) A county agency shall mail a notice of adverse action before or on the effective date of the adverse action when the county agency:

(2) is informed of the death of a participant or the payee;

(3) receives a signed statement from the caregiver that assistance is no longer wanted;

(4) receives a signed statement from the caregiver that provides information that requires the termination or reduction of assistance;

(5) verifies that a member of the assistance unit is absent from the home and does not meet temporary absence provisions in section 256J.13;

(6) verifies that a member of the assistance unit has entered a regional treatment center or a licensed residential facility for medical or psychological treatment or rehabilitation;

(7) verifies that a member of an assistance unit has been placed in foster care, and the provisions of section 256J.13, subdivision 2, paragraph (b) (c), clause (2), do not apply;

(8) verifies that a member of an assistance unit has been approved to receive assistance by another state; or

(9) cannot locate a caregiver.

Sec. 56. Minnesota Statutes 1997 Supplement, section 256J.31, subdivision 10, is amended to read:

Subd. 10. [PROTECTION FROM GARNISHMENT.] MFIP-S grants or earnings of a caregiver while participating in full or part-time employment or training shall be protected from garnishment. This protection for earnings shall extend for a period of six months from the date of termination from MFIP-S.

Sec. 57. Minnesota Statutes 1997 Supplement, section 256J.31, is amended by adding a subdivision to read:

Subd. 12. [RIGHT TO DISCONTINUE CASH ASSISTANCE.] A participant may discontinue receipt of the cash assistance portion of MFIP-S assistance and retain eligibility for child care assistance under section 119B.05 and for medical assistance under sections 256B.055, subdivision 3a, and 256B.0635.

Sec. 58. [256J.311] [PROCEDURES TO IDENTIFY DOMESTIC VIOLENCE VICTIMS.] The commissioner shall develop procedures for county agencies and their contractors under this chapter and chapter 256K to identify victims of domestic violence from among applicants and recipients of assistance. The procedures must provide, at a minimum, universal notification to all applicants and recipients of MFIP-S that:

(1) referrals to counseling and supportive services are available for victims of domestic violence;

(2) nonpermanent resident battered individuals married to United States citizens or permanent residents may be eligible to petition for permanent residency under the federal Violence Against Women Act, and referrals to appropriate legal services are available;

(3) victims of domestic violence are exempt from the 60-month limit on assistance while the individual is complying with an approved safety plan, as defined in section 256J.49, subdivision 11; and

(4) victims of domestic violence may choose to be exempt or deferred from MFIP-S work requirements for up to 12 months while the individual is complying with an approved safety plan as defined in section 256J.49, subdivision 11.

Sec. 59. Minnesota Statutes 1997 Supplement, section 256J.32, subdivision 4, is amended to read:

Subd. 4. [FACTORS TO BE VERIFIED.] The county agency shall verify the following at application:

(1) identity of adults;

(2) presence of the minor child in the home, if questionable;

(3) relationship of a minor child to caregivers in the assistance unit;

(4) age, if necessary to determine MFIP-S eligibility;

(5) immigration status;

(6) social security number in accordance with according to the requirements of section 256J.30, subdivision 12;

(7) income;

(8) self-employment expenses used as a deduction;

(9) source and purpose of deposits and withdrawals from business accounts;

(10) spousal support and child support payments made to persons outside the household;

(11) real property;

(12) vehicles;

(13) checking and savings accounts;

(14) savings certificates, savings bonds, stocks, and individual retirement accounts;

(15) pregnancy, if related to eligibility;

(16) inconsistent information, if related to eligibility;

(17) medical insurance;

(18) anticipated graduation date of an 18-year-old;

(19) burial accounts;

(20) school attendance, if related to eligibility; and

(21) residence;

(22) a claim of domestic violence if used as a basis for a deferral or exemption from the 60-month time limit in section 256J.42 or employment and training services requirements in section 256J.56; and

(23) disability if used as an exemption from employment and training services requirements under section 256J.56.

Sec. 60. Minnesota Statutes 1997 Supplement, section 256J.32, subdivision 6, is amended to read:

Subd. 6. [RECERTIFICATION.] (a) The county agency shall recertify eligibility in an annual face-to-face interview with the participant and verify the following:

(2) income, unless excluded, including self-employment expenses used as a deduction or deposits or withdrawals from business accounts;

(3) assets when the value is within $200 of the asset limit; and

(4) inconsistent information, if related to eligibility.

(b) As part of the recertification process, each recipient must be asked if the applicant has symptoms of a drug or alcohol dependency or substance abuse problems.

Sec. 61. Minnesota Statutes 1997 Supplement, section 256J.32, is amended by adding a subdivision to read:

Subd. 7. [NOTICE TO UNDOCUMENTED PERSONS; RELEASE OF PRIVATE DATA.] County agencies in consultation with the commissioner of human services shall provide notification to undocumented persons regarding the release of personal data to the immigration and naturalization service and develop protocol regarding the release or sharing of data about undocumented persons with the Immigration and Naturalization Service as required under sections 404, 434, and 411A of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

Sec. 62. Minnesota Statutes 1997 Supplement, section 256J.33, subdivision 1, is amended to read:

Subdivision 1. [DETERMINATION OF ELIGIBILITY.] A county agency must determine MFIP-S eligibility prospectively for a payment month based on retrospectively assessing income and the county agency's best estimate of the circumstances that will exist in the payment month.

Except as described in section 256J.34, subdivision 1, when prospective eligibility exists, a county agency must calculate the amount of the assistance payment using retrospective budgeting. To determine MFIP-S eligibility and the assistance payment amount, a county agency must apply countable income, described in section 256J.37, subdivisions 3 to 10, received by members of an assistance unit or by other persons whose income is counted for the assistance unit, described under sections 256J.21 and 256J.37, subdivisions 1 and to 2.

This income must be applied to the transitional standard or family wage standard subject to this section and sections 256J.34 to 256J.36. Income received in a calendar month and not otherwise excluded under section 256J.21, subdivision 2, must be applied to the needs of an assistance unit.

Sec. 63. Minnesota Statutes 1997 Supplement, section 256J.33, subdivision 4, is amended to read:

Subd. 4. [MONTHLY INCOME TEST.] A county agency must apply the monthly income test retrospectively for each month of MFIP-S eligibility. An assistance unit is not eligible when the countable income equals or exceeds the transitional standard or the family wage level for the assistance unit. The income applied against the monthly income test must include:

(1) gross earned income from employment, prior to mandatory payroll deductions, voluntary payroll deductions, wage authorizations, and after the disregards in section 256J.21, subdivision 3 4, and the allocations in section 256J.36, unless the employment income is specifically excluded under section 256J.21, subdivision 2;

(2) gross earned income from self-employment less deductions for self-employment expenses in section 256J.37, subdivision 5, but prior to any reductions for personal or business state and federal income taxes, personal FICA, personal health and life insurance, and after the disregards in section 256J.21, subdivision 3 4, and the allocations in section 256J.36;

(3) unearned income after deductions for allowable expenses in section 256J.37, subdivision 9, and allocations in section 256J.36, unless the income has been specifically excluded in section 256J.21, subdivision 2;

(4) gross earned income from employment as determined under clause (1) which is received by a member of an assistance unit who is a minor child or minor caregiver and less than a half-time student;

(6) the income of a parent when that parent is not included in the assistance unit;

(7) the income of an eligible relative and spouse who seek to be included in the assistance unit; and

(8) the unearned income of a minor child included in the assistance unit.

Sec. 64. Minnesota Statutes 1997 Supplement, section 256J.35, is amended to read:

256J.35 [AMOUNT OF ASSISTANCE PAYMENT.]

Except as provided in paragraphs (a) to (c) (d), the amount of an assistance payment is equal to the difference between the transitional standard or the Minnesota family wage level in section 256J.24, whichever is less, and countable income.

(a) When MFIP-S eligibility exists for the month of application, the amount of the assistance payment for the month of application must be prorated from the date of application or the date all other eligibility factors are met for that applicant, whichever is later. This provision applies when an applicant loses at least one day of MFIP-S eligibility.

(b) MFIP-S overpayments to an assistance unit must be recouped according to section 256J.38, subdivision 4.

(c) An initial assistance payment must not be made to an applicant who is not eligible on the date payment is made.

(d) An individual whose needs have been otherwise provided for in another state, in whole or in part by county, state, or federal dollars during a month, is ineligible to receive MFIP-S for the month.

Sec. 65. Minnesota Statutes 1997 Supplement, section 256J.36, is amended to read:

256J.36 [ALLOCATION FOR UNMET NEED OF OTHER HOUSEHOLD MEMBERS.]

Except as prohibited in paragraphs (a) and (b), an allocation of income is allowed from the caregiver's income to meet the unmet need of an ineligible spouse or an ineligible child under the age of 21 for whom the caregiver is financially responsible who also lives with the caregiver. An allocation is allowed from the caregiver's income to meet the need of an ineligible or excluded person. That allocation is allowed in an amount up to the difference between the MFIP-S family allowance transitional standard for the assistance unit when that excluded or ineligible person is included in the assistance unit and the MFIP-S family allowance for the assistance unit when the excluded or ineligible person is not included in the assistance unit. These allocations must be deducted from the caregiver's counted earnings and from unearned income subject to paragraphs (a) and (b).

(a) Income of a minor child in the assistance unit must not be allocated to meet the need of a an ineligible person who is not a member of the assistance unit, including the child's parent, even when that parent is the payee of the child's income.

(b) Income of an assistance unit a caregiver must not be allocated to meet the needs of a disqualified person ineligible for failure to cooperate with program requirements including child support requirements, a person ineligible due to fraud, or a relative caregiver and the caregiver's spouse who opt out of the assistance unit.

Sec. 66. Minnesota Statutes 1997 Supplement, section 256J.37, subdivision 1, is amended to read:

Subdivision 1. [DEEMED INCOME FROM INELIGIBLE HOUSEHOLD MEMBERS.] Unless otherwise provided under subdivision 1a or 1b, the income of ineligible household members must be deemed after allowing the following disregards:

(1) the first 18 percent of the excluded ineligible family member's gross earned income;

(3) child or spousal support paid to a person who lives outside of the household all payments made by the ineligible person according to a court order for spousal support or the support of children not living in the assistance unit's household, provided that, if there has been a change in the financial circumstances of the ineligible person since the support order was entered, the ineligible person has petitioned for a modification of the support order; and

(4) an amount for the needs of the ineligible person and other persons who live in the household but are not included in the assistance unit and are or could be claimed by an ineligible person as dependents for determining federal personal income tax liability. This amount is equal to the difference between the MFIP-S need transitional standard when the excluded ineligible person is included in the assistance unit and the MFIP-S need transitional standard when the excluded ineligible person is not included in the assistance unit.

Sec. 67. Minnesota Statutes 1997 Supplement, section 256J.37, is amended by adding a subdivision to read:

Subd. 1a. [DEEMED INCOME FROM DISQUALIFIED MEMBERS.] The income of disqualified members must be deemed after allowing the following disregards:

(1) the first 18 percent of the disqualified member's gross earned income;

(2) amounts the disqualified member actually paid to individuals not living in the same household but whom the disqualified member claims or could claim as dependents for determining federal personal income tax liability;

(3) all payments made by the disqualified member according to a court order for spousal support or the support of children not living in the assistance unit's household, provided that, if there has been a change in the financial circumstances of the disqualified member's legal obligation to pay support since the support order was entered, the disqualified member has petitioned for a modification of the support order; and

(4) an amount for the needs of other persons who live in the household but are not included in the assistance unit and are or could be claimed by the disqualified member as dependents for determining federal personal income tax liability. This amount is equal to the difference between the MFIP-S transitional standard when the ineligible person is included in the assistance unit and the MFIP-S transitional standard when the ineligible person is not included in the assistance unit. An amount shall not be allowed for the needs of a disqualified member.

Sec. 68. Minnesota Statutes 1997 Supplement, section 256J.37, is amended by adding a subdivision to read:

Subd. 1b. [DEEMED INCOME FROM PARENTS OF MINOR CAREGIVERS.] In households where minor caregivers live with a parent or parents who do not receive MFIP-S, the income of the parents must be deemed after allowing the following disregards:

(1) income of the parents equal to 200 percent of the federal poverty guideline for a family size not including the minor parent and the minor parent's child in the household according to section 256J.21, subdivision 2, clause (43);

(2) 18 percent of the parents' gross earned income;

(3) amounts the parents actually paid to individuals not living in the same household but whom the parents claim or could claim as dependents for determining federal personal income tax liability; and

(4) all payments made by parents according to a court order for spousal support or the support of children not living in the parent's household, provided that, if there has been a change in the financial circumstances of the parent's legal obligation to pay support since the support order was entered, the parents have petitioned for a modification of the support order.

Sec. 69. Minnesota Statutes 1997 Supplement, section 256J.37, subdivision 2, is amended to read:

Law Number 104-193, sections 421 and 422, and subsequently set out in federal rules. If a noncitizen applies for or receives MFIP-S, the county must deem the income and assets of the noncitizen's sponsor and the sponsor's spouse who have signed an affidavit of support for the noncitizen as specified in sections 421 and 422 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, title IV, Public Law Number 104-193. The income of a sponsor and the sponsor's spouse is considered unearned income of the noncitizen. The assets of a sponsor and the sponsor's spouse are considered available assets of the noncitizen.

Sec. 70. Minnesota Statutes 1997 Supplement, section 256J.37, subdivision 9, is amended to read:

Subd. 9. [UNEARNED INCOME.] (a) The county agency must apply unearned income, including housing subsidies as in paragraph (b), to the transitional standard. When determining the amount of unearned income, the county agency must deduct the costs necessary to secure payments of unearned income. These costs include legal fees, medical fees, and mandatory deductions such as federal and state income taxes.

(b) Effective July 1, 1998 1999, the county agency shall count $100 of the value of public and assisted rental subsidies provided through the Department of Housing and Urban Development (HUD) as unearned income. The full amount of the subsidy must be counted as unearned income when the subsidy is less than $100.

(c) For the period from July 1, 1998, to June 30, 1999, the provisions of paragraph (b) shall not apply to MFIP-S participants who are exempt from the employment and training services component because they are:

(i) individuals who are age 60 or older;

(ii) individuals who are suffering from a professionally certified permanent or temporary illness, injury, or incapacity which is expected to continue for more than 30 days and which prevents the person from obtaining or retaining employment; or

(iii) caregivers whose presence in the home is required because of the professionally certified illness or incapacity of another member in the household which is expected to last for more than 30 days and the caregiver's presence replaces other specialized care arrangements.

Sec. 71. Minnesota Statutes 1997 Supplement, section 256J.38, subdivision 1, is amended to read:

Subdivision 1. [SCOPE OF OVERPAYMENT.] When a participant or former participant receives an overpayment due to agency, client, or ATM error, or due to assistance received while an appeal is pending and the participant or former participant is determined ineligible for assistance or for less assistance than was received, the county agency must recoup or recover the overpayment under using the conditions of this section. following methods:

(1) reconstruct each affected budget month and corresponding payment month;

(2) use the policies and procedures that were in effect for the payment month; and

(3) do not allow employment disregards in section 256J.21, subdivision 3 or 4, in the calculation of the overpayment when the unit has not reported within two calendar months following the end of the month in which the income was received.

Sec. 72. Minnesota Statutes 1997 Supplement, section 256J.39, subdivision 2, is amended to read:

Subd. 2. [PROTECTIVE AND VENDOR PAYMENTS.] Alternatives to paying assistance directly to a participant may be used when:

(1) a county agency determines that a vendor payment is the most effective way to resolve an emergency situation pertaining to basic needs;

(3) a caregiver has exhibited a continuing pattern of mismanaging funds as determined by the county agency;

(4) the vendor payment is part of a sanction under section 256J.46, subdivision 2; or

(5) (4) the vendor payment is required under section 256J.24, subdivision 8, 256J.26, or 256J.43;

(5) a protective payment is required for a minor parent under section 256J.14; or

(6) a caregiver has exhibited a continuing pattern of mismanaging funds as determined by the county agency.

The director of a county agency must approve a proposal for protective or vendor payment for money mismanagement when there is a pattern of mismanagement under clause (6). During the time a protective or vendor payment is being made, the county agency must provide services designed to alleviate the causes of the mismanagement.

The continuing need for and method of payment must be documented and reviewed every 12 months. The director of a county agency must approve the continuation of protective or vendor payments. When it appears that the need for protective or vendor payments will continue or is likely to continue beyond two years because the county agency's efforts have not resulted in sufficiently improved use of assistance on behalf of the minor child, judicial appointment of a legal guardian or other legal representative must be sought by the county agency.

Sec. 73. Minnesota Statutes 1997 Supplement, section 256J.395, is amended to read:

256J.395 [VENDOR PAYMENT OF RENT SHELTER COSTS AND UTILITIES.]

Subdivision 1. [VENDOR PAYMENT.] (a) Effective July 1, 1997, when a county is required to provide assistance to a recipient participant in vendor form for rent shelter costs and utilities under this chapter, or chapter 256, 256D, or 256K, the cost of utilities for a given family may be assumed to be:

(1) the average of the actual monthly cost of utilities for that family for the prior 12 months at the family's current residence, if applicable;

(2) the monthly plan amount, if any, set by the local utilities for that family at the family's current residence; or

(3) the estimated monthly utility costs for the dwelling in which the family currently resides.

(b) For purposes of this section, "utility" means any of the following: municipal water and sewer service; electric, gas, or heating fuel service; or wood, if that is the heating source.

(c) In any instance where a vendor payment for rent is directed to a landlord not legally entitled to the payment, the county social services agency shall immediately institute proceedings to collect the amount of the vendored rent payment, which shall be considered a debt under section 270A.03, subdivision 5.

Subd. 2. [VENDOR PAYMENT NOTIFICATION.] (a) When a county agency is required to provide assistance to a participant in vendor payment form for shelter costs or utilities under subdivision 1, and the participant does not give the agency the information needed to pay the vendor, the county agency shall notify the participant of the intent to terminate assistance by mail at least ten days before the effective date of the adverse action.

(b) The notice of action shall include a request for information about:

(1) the amount of the participant's shelter costs or utilities;

(2) the due date of the shelter costs or utilities; and

(c) If the participant fails to provide the requested information by the effective date of the adverse action, the county must terminate the MFIP-S grant. If the applicant or participant verifies they do not have shelter costs or utility obligations, the county shall not terminate assistance if the assistance unit is otherwise eligible.

Sec. 74. Minnesota Statutes 1997 Supplement, section 256J.42, is amended to read:

256J.42 [60-MONTH TIME LIMIT.]

Subdivision 1. [TIME LIMIT.] (a) Except for the exemptions in this section and in section 256J.11, subdivision 2, An assistance unit in which any adult caregiver has received 60 months of cash assistance funded in whole or in part by the TANF block grant in this or any other state or United States territory, MFIP-S, AFDC, or family general assistance, funded in whole or in part by state appropriations, is ineligible to receive MFIP-S. Any cash assistance funded with TANF dollars in this or any other state or United States territory, or MFIP-S assistance funded in whole or in part by state appropriations, that was received by the unit on or after the date TANF was implemented, including any assistance received in states or United States territories of prior residence, counts toward the 60-month limitation. The 60-month limit applies to a minor who is the head of a household or who is married to the head of a household except under subdivision 5. The 60-month time period does not need to be consecutive months for this provision to apply.

(b) Months before July 1998 in which individuals receive assistance as part of an MFIP, MFIP-R, or MFIP or MFIP-R comparison group family under sections 256.031 to 256.0361 or sections 256.047 to 256.048 are not included in the 60-month time limit.

Subd. 2. [ASSISTANCE FROM ANOTHER STATE.] An individual whose needs have been otherwise provided for in another state, in whole or in part by the TANF block grant during a month, is ineligible to receive MFIP-S for the month.

Subd. 3. [ADULTS LIVING ON AN INDIAN RESERVATION.] In determining the number of months for which an adult has received assistance under MFIP-S, the county agency must disregard any month during which the adult lived on an Indian reservation if, during the month:

(1) at least 1,000 individuals were living on the reservation; and

(2) at least 50 percent of the adults living on the reservation were unemployed not employed.

Subd. 4. [VICTIMS OF DOMESTIC VIOLENCE.] Any cash assistance received by an assistance unit in a month when a caregiver is complying with a safety plan under the MFIP-S employment and training component does not count toward the 60-month limitation on assistance.

Subd. 5. [EXEMPTION FOR CERTAIN FAMILIES.] (a) Any cash assistance received by an assistance unit does not count toward the 60-month limit on assistance during a month in which the parental caregiver is in the category in section 256J.56, clause (1). The exemption applies for the period of time the caregiver belongs to one of the categories specified in this subdivision.

(b) From July 1, 1997, until the date MFIP-S is operative in the caregiver's county of financial responsibility, any cash assistance received by a caregiver who is complying with sections 256.73, subdivision 5a, and 256.736, if applicable, does not count toward the 60-month limit on assistance. Thereafter, any cash assistance received by a minor caregiver who is complying with the requirements of sections 256J.14 and 256J.54, if applicable, does not count towards the 60-month limit on assistance.

(c) Any diversionary assistance or emergency assistance received does not count toward the 60-month limit.

Sec. 75. Minnesota Statutes 1997 Supplement, section 256J.43, is amended to read:

256J.43 [INTERSTATE PAYMENT STANDARDS.]

Subdivision 1. [PAYMENT.] (a) Effective July 1, 1997, the amount of assistance paid to an eligible family unit in which all members have resided in this state for fewer than 12 consecutive calendar months immediately preceding the date of application shall be the lesser of either the payment interstate transitional standard that would have been received by the family assistance unit from the state of immediate prior residence, or the amount calculated in accordance with AFDC or MFIP-S standards. The lesser payment must continue until the family assistance unit meets the 12-month requirement. An assistance unit that has not resided in Minnesota for 12 months from the date of application is not exempt from the interstate payment provisions solely because a child is born in Minnesota to a member of the assistance unit. Payment must be calculated by applying this state's budgeting policies, and the unit's net income must be deducted from the payment standard in the other state or in this state, whichever is lower. Payment shall be made in vendor form for rent and utilities, up to the limit of the grant amount, and residual amounts, if any, shall be paid directly to the assistance unit.

(b) During the first 12 months a family an assistance unit resides in this state, the number of months that a family unit is eligible to receive AFDC or MFIP-S benefits is limited to the number of months the family assistance unit would have been eligible to receive similar benefits in the state of immediate prior residence.

(c) This policy applies whether or not the family assistance unit received similar benefits while residing in the state of previous residence.

(d) When a family an assistance unit moves to this state from another state where the family assistance unit has exhausted that state's time limit for receiving benefits under that state's TANF program, the family unit will not be eligible to receive any AFDC or MFIP-S benefits in this state for 12 months from the date the family assistance unit moves here.

(e) For the purposes of this section, "state of immediate prior residence" means:

(1) the state in which the applicant declares the applicant spent the most time in the 30 days prior to moving to this state; or

(2) the state in which an applicant who is a migrant worker maintains a home.

(f) The commissioner shall annually verify and update all other states' payment standards as they are to be in effect in July of each year.

(g) Applicants must provide verification of their state of immediate prior residence, in the form of tax statements, a driver's license, automobile registration, rent receipts, or other forms of verification approved by the commissioner.

(h) Migrant workers, as defined in section 256J.08, and their immediate families are exempt from this section, provided the migrant worker provides verification that the migrant family worked in this state within the last 12 months and earned at least $1,000 in gross wages during the time the migrant worker worked in this state.

Subd. 2. [TEMPORARY ABSENCE FROM MINNESOTA.] (a) For an assistance unit that has met the requirements of section 256J.12, the number of months that the assistance unit receives benefits under the interstate payment standards in this section is not affected by an absence from Minnesota for fewer than 30 consecutive days.

(b) For an assistance unit that has met the requirements of section 256J.12, the number of months that the assistance unit receives benefits under the interstate payment standards in this section is not affected by an absence from Minnesota for more than 30 consecutive days but fewer than 90 consecutive days, provided the assistance unit continues to maintain a residence in Minnesota during the period of absence.

Subd. 3. [EXCEPTIONS TO THE INTERSTATE PAYMENT POLICY.] Applicants who lived in another state in the 12 months prior to applying for assistance are exempt from the interstate payment policy for the months that a member of the unit:

(2) attended school in another state, paid nonresident tuition or Minnesota tuition rates under a reciprocity agreement, provided the person left Minnesota specifically to attend school and returned to Minnesota within 30 days of graduation with the intent to remain in Minnesota; or

(3) meets the following criteria:

(i) a minor child or a minor caregiver moves from another state to the residence of a relative caregiver;

(ii) the minor caregiver applies for and receives family cash assistance;

(iii) the relative caregiver chooses not to be part of the MFIP-S assistance unit; and

(iv) the relative caregiver has resided in Minnesota for at least 12 months from the date the assistance unit applies for cash assistance.

Subd. 4. [INELIGIBLE MANDATORY UNIT MEMBERS.] Ineligible mandatory unit members who have resided in Minnesota for 12 months immediately before the unit's date of application establish the other assistance unit members' eligibility for the MFIP-S transitional standard.

Sec. 76. Minnesota Statutes 1997 Supplement, section 256J.44, is amended by adding a subdivision to read:

Subd. 3. [INTERVIEW TO IDENTIFY APPLICANTS WITH DRUG OR ALCOHOL DEPENDENCIES.] As part of the initial screening under this section, each applicant must also be asked if the applicant has symptoms of a drug or alcohol dependency or substance abuse problems. If this interview indicates that the applicant may have a drug or alcohol dependency, the applicant must be referred for further assessment. If the further assessment indicates that the applicant or recipient has a drug or alcohol dependency or substance abuse problem that requires treatment, and that the individual's dependency is amenable to treatment, the county must offer the individual a referral to an appropriate treatment option.

Sec. 77. Minnesota Statutes 1997 Supplement, section 256J.45, subdivision 1, is amended to read:

Subdivision 1. [COUNTY AGENCY TO PROVIDE ORIENTATION.] A county agency must provide each MFIP-S caregiver with a face-to-face orientation. The caregiver must attend the orientation. The county agency must inform the caregiver that failure to attend the orientation is considered a first an occurrence of noncompliance with program requirements, and will result in the imposition of a sanction under section 256J.46. If the client complies with the orientation requirement prior to the effective date of the sanction, the orientation sanction shall be lifted.

Sec. 78. Minnesota Statutes 1997 Supplement, section 256J.45, subdivision 2, is amended to read:

Subd. 2. [GENERAL INFORMATION.] The MFIP-S orientation must consist of a presentation that informs caregivers of:

(1) the necessity to obtain immediate employment;

(2) the work incentives under MFIP-S;

(3) the requirement to comply with the employment plan and other requirements of the employment and training services component of MFIP-S;

(4) the consequences for failing to comply with the employment plan and other program requirements;

(5) the rights, responsibilities, and obligations of participants;

(6) the types and locations of child care services available through the county agency;

(8) the caregiver's eligibility for transition year child care assistance under section 119B.05;

(9) the caregiver's eligibility for extended medical assistance when the caregiver loses eligibility for MFIP-S due to increased earnings or increased child or spousal support; and

(10) the caregiver's option to choose an employment and training provider and information about each provider, including but not limited to, services offered, program components, job placement rates, job placement wages, and job retention rates; and

(11) the caregiver's option to request approval of an education and training plan according to section 256J.52.

Sec. 79. Minnesota Statutes 1997 Supplement, section 256J.45, is amended by adding a subdivision to read:

Subd. 3. [GOOD CAUSE FOR NOT ATTENDING ORIENTATION.] (a) The county agency shall not impose the sanction under section 256J.46 if it determines that the participant has good cause for failing to attend orientation. Good cause exists when:

(1) appropriate child care is not available;

(2) the participant is ill or injured;

(3) a family member is ill and needs care by the participant that prevents the participant from attending orientation;

(4) the caregiver is unable to secure necessary transportation;

(5) the caregiver is in an emergency situation that prevents orientation attendance;

(6) the orientation conflicts with the caregiver's work, training, or school schedule; or

(7) the caregiver documents other verifiable impediments to orientation attendance beyond the caregiver's control.

(b) Counties must work with clients to provide child care and transportation necessary to ensure a caregiver has every opportunity to attend orientation.

Sec. 80. Minnesota Statutes 1997 Supplement, section 256J.46, subdivision 1, is amended to read:

Subdivision 1. [SANCTIONS FOR PARTICIPANTS NOT COMPLYING WITH PROGRAM REQUIREMENTS.] (a) The following participants are subject to a sanction under this subdivision:

(1) a participant who fails without good cause to comply with the requirements of this chapter, and who is not subject to a sanction under subdivision 2, shall be subject to a sanction as provided in this subdivision; and

(2) a participant who has not complied with the orientation requirement before the effective date of the sanction.

A sanction under this subdivision becomes effective ten days after the required notice is given. For purposes of this subdivision, each month that a participant fails to comply with a requirement of this chapter shall be considered a separate occurrence of noncompliance. A participant who has had one or more sanctions imposed must remain in compliance with the provisions of this chapter for six months in order for a subsequent occurrence of noncompliance to be considered a first occurrence.

(b) Sanctions for noncompliance shall be imposed as follows:

with the residual paid to the participant. The reduction in the grant amount must be in effect for a minimum of one month and shall be removed in the month following the month that the participant returns to compliance or in the month following the minimum one-month sanction, whichever is later.

(2) For a second or subsequent occurrence of noncompliance, or when both participants in a two-parent household are out of compliance at the same time, the participant's rent assistance unit's shelter costs shall be vendor paid up to the amount of the cash portion of the MFIP-S grant for which the participant's assistance unit is eligible. At county option, the participant's assistance unit's utilities may also be vendor paid up to the amount of the cash portion of the MFIP-S grant remaining after vendor payment of the participant's rent assistance unit's shelter costs. The vendor payment of rent and, if in effect, utilities, must be in effect for six months from the date that a sanction is imposed under this clause. The residual amount of the grant after vendor payment, if any, must be reduced by an amount equal to 30 percent of the applicable MFIP-S transitional standard, or the interstate transitional standard for an assistance unit of the same size, whichever is applicable, before the residual is paid to the participant assistance unit. The reduction in the grant amount must be in effect for a minimum of one month and shall be removed in the month following the month that the a participant in a one-parent household returns to compliance or in the month following the minimum one-month sanction, whichever is later. In a two-parent household, the grant reduction shall be removed in the month following the month both participants return to compliance or in the month following the minimum one-month sanction, whichever is later. The vendor payment of rent shelter costs and, if applicable, utilities shall be removed six months after the month in which the participant returns or participants return to compliance.

(c) No later than during the second month that a sanction under paragraph (b), clause (2), is in effect due to noncompliance with employment services, the participant's case file must be reviewed to determine if:

(i) the continued noncompliance can be explained and mitigated by providing a needed preemployment activity, as defined in section 256J.49, subdivision 13, clause (16);

(ii) the participant qualifies for a good cause exception under section 256J.57; or

(iii) the participant qualifies for an exemption under section 256J.56.

If the lack of an identified activity can explain the noncompliance, the county must work with the participant to provide the identified activity, and the county must restore the participant's grant amount to the full amount for which the assistance unit is eligible. The grant must be restored retroactively to the first day of the month in which the participant was found to lack preemployment activities or to qualify for an exemption or good cause exception.

If the participant is found to qualify for a good cause exception or an exemption, the county must restore the participant's grant to the full amount for which the assistance unit is eligible. If the participant's grant is restored under this paragraph, the vendor payment of rent and if applicable, utilities, shall be removed six months after the month in which the sanction was imposed and the county must consider a subsequent occurrence of noncompliance to be a first occurrence.

Sec. 81. Minnesota Statutes 1997 Supplement, section 256J.46, subdivision 2, is amended to read:

Sec. 82. Minnesota Statutes 1997 Supplement, section 256J.47, subdivision 4, is amended to read:

Subd. 4. [INELIGIBILITY FOR MFIP-S; EMERGENCY ASSISTANCE; AND EMERGENCY GENERAL ASSISTANCE.] Upon receipt of diversionary assistance, the family is ineligible for MFIP-S, emergency assistance, and emergency general assistance for a period of time. To determine the period of ineligibility, the county shall use the following formula: regardless of household changes, the county agency must calculate the number of days of ineligibility by dividing the diversionary assistance issued by the transitional standard a family of the same size and composition would have received under MFIP-S, or if applicable the interstate transitional standard, multiplied by 30, truncating the result. The ineligibility period begins the date the diversionary assistance is issued.

Sec. 83. Minnesota Statutes 1997 Supplement, section 256J.48, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY.] Notwithstanding other eligibility provisions of this chapter, any family without resources immediately available to meet emergency needs identified in subdivision 3 shall be eligible for an emergency grant under the following conditions:

(1) a family member has resided in this state for at least 30 days;

(2) the family is without resources immediately available to meet emergency needs;

(3) assistance is necessary to avoid destitution or provide emergency shelter arrangements; and

(4) the family's destitution or need for shelter or utilities did not arise because the child or relative caregiver refused without good cause under section 256J.57 to accept employment or training for employment in this state or another state; and

(5) at least one child or pregnant woman in the emergency assistance unit meets MFIP-S citizenship requirements in section 256J.11.

Sec. 84. Minnesota Statutes 1997 Supplement, section 256J.48, subdivision 3, is amended to read:

Subd. 3. [EMERGENCY NEEDS.] Emergency needs are limited to the following:

(a) [RENT.] A county agency may deny assistance to prevent eviction from rented or leased shelter of an otherwise eligible applicant when the county agency determines that an applicant's anticipated income will not cover continued payment for shelter, subject to conditions in clauses (1) to (3):

(1) a county agency must not deny assistance when an applicant can document that the applicant is unable to locate habitable shelter, unless the county agency can document that one or more habitable shelters are available in the community that will result in at least a 20 percent reduction in monthly expense for shelter and that this shelter will be cost-effective for the applicant;

(2) when no alternative shelter can be identified by either the applicant or the county agency, the county agency shall not deny assistance because anticipated income will not cover rental obligation; and

(3) when cost-effective alternative shelter is identified, the county agency shall issue assistance for moving expenses as provided in paragraph (d) (e).

(b) [DEFINITIONS.] For purposes of paragraph (a), the following definitions apply (1) "metropolitan statistical area" is as defined by the United States Census Bureau; (2) "alternative shelter" includes any shelter that is located within the metropolitan statistical area containing the county and for which the applicant is eligible, provided the applicant does not have to travel more than 20 miles to reach the shelter and has access to transportation to the shelter. Clause (2) does not apply to counties in the Minneapolis-St. Paul metropolitan statistical area.

(c) [MORTGAGE AND CONTRACT FOR DEED ARREARAGES.] A county agency shall issue assistance for mortgage or contract for deed arrearages on behalf of an otherwise eligible applicant according to clauses (1) to (4):

(2) assistance for arrearages must be issued only when no subsequent foreclosure action is expected within the 12 months following the issuance;

(3) assistance for arrearages must be issued only when an applicant has been refused refinancing through a bank or other lending institution and the amount payable, when combined with any payments made by the applicant, will be accepted by the creditor as full payment of the arrearage;

(4) costs paid by a family which are counted toward the payment requirements in this clause are: principle principal and interest payments on mortgages or contracts for deed, balloon payments, homeowner's insurance payments, manufactured home lot rental payments, and tax or special assessment payments related to the homestead. Costs which are not counted include closing costs related to the sale or purchase of real property.

To be eligible for assistance for costs specified in clause (4) which are outstanding at the time of foreclosure, an applicant must have paid at least 40 percent of the family's gross income toward these costs in the month of application and the 11-month period immediately preceding the month of application.

When an applicant is eligible under clause (4), a county agency shall issue assistance up to a maximum of four times the MFIP-S transitional standard for a comparable assistance unit.

(d) [DAMAGE OR UTILITY DEPOSITS.] A county agency shall issue assistance for damage or utility deposits when necessary to alleviate the emergency. The county may require that assistance paid in the form of a damage deposit or a utility deposit, less any amount retained by the landlord to remedy a tenant's default in payment of rent or other funds due to the landlord under a rental agreement, or to restore the premises to the condition at the commencement of the tenancy, ordinary wear and tear excepted, be returned to the county when the individual vacates the premises or be paid to the recipient's new landlord as a vendor payment. The county may require that assistance paid in the form of a utility deposit less any amount retained to satisfy outstanding utility costs be returned to the county when the person vacates the premises, or be paid for the person's new housing unit as a vendor payment. The vendor payment of returned funds shall not be considered a new use of emergency assistance.

(e) [MOVING EXPENSES.] A county agency shall issue assistance for expenses incurred when a family must move to a different shelter according to clauses (1) to (4):

(1) moving expenses include the cost to transport personal property belonging to a family, the cost for utility connection, and the cost for securing different shelter;

(2) moving expenses must be paid only when the county agency determines that a move is cost-effective;

(3) moving expenses must be paid at the request of an applicant, but only when destitution or threatened destitution exists; and

(4) moving expenses must be paid when a county agency denies assistance to prevent an eviction because the county agency has determined that an applicant's anticipated income will not cover continued shelter obligation in paragraph (a).

(f) [HOME REPAIRS.] A county agency shall pay for repairs to the roof, foundation, wiring, heating system, chimney, and water and sewer system of a home that is owned and lived in by an applicant.

The applicant shall document, and the county agency shall verify the need for and method of repair.

The payment must be cost-effective in relation to the overall condition of the home and in relation to the cost and availability of alternative housing.

(g) [UTILITY COSTS.] Assistance for utility costs must be made when an otherwise eligible family has had a termination or is threatened with a termination of municipal water and sewer service, electric, gas or heating fuel service, or lacks wood when that is the heating source, subject to the conditions in clauses (1) and (2):

(2) a county agency shall not issue assistance for utility costs unless a family paid at least eight percent of the family's gross income toward utility costs due during the preceding 12 months.

Clauses (1) and (2) must not be construed to prevent the issuance of assistance when a county agency must take immediate and temporary action necessary to protect the life or health of a child.

(h) [SPECIAL DIETS.] Effective January 1, 1998, a county shall pay for special diets or dietary items for MFIP-S participants. Persons receiving emergency assistance funds for special diets or dietary items are also eligible to receive emergency assistance for shelter and utility emergencies, if otherwise eligible. The need for special diets or dietary items must be prescribed by a licensed physician. Costs for special diets shall be determined as percentages of the allotment for a one-person household under the Thrifty Food Plan as defined by the United States Department of Agriculture. The types of diets and the percentages of the Thrifty Food Plan that are covered are as follows:

(1) high protein diet, at least 80 grams daily, 25 percent of Thrifty Food Plan;

(2) controlled protein diet, 40 to 60 grams and requires special products, 100 percent of Thrifty Food Plan;

(3) controlled protein diet, less than 40 grams and requires special products, 125 percent of Thrifty Food Plan;

(4) low cholesterol diet, 25 percent of Thrifty Food Plan;

(5) high residue diet, 20 percent of Thrifty Food Plan;

(6) pregnancy and lactation diet, 35 percent of Thrifty Food Plan;

(7) gluten-free diet, 25 percent of Thrifty Food Plan;

(8) lactose-free diet, 25 percent of Thrifty Food Plan;

(9) antidumping diet, 15 percent of Thrifty Food Plan;

(10) hypoglycemic diet, 15 percent of Thrifty Food Plan; or

(11) ketogenic diet, 25 percent of Thrifty Food Plan.

Sec. 85. Minnesota Statutes 1997 Supplement, section 256J.50, subdivision 5, is amended to read:

Subd. 5. [PARTICIPATION REQUIREMENTS FOR SINGLE-PARENT AND TWO-PARENT CASES.] (a) A county must establish a uniform schedule for requiring participation by single parents. Mandatory participation must be required within six months of eligibility for cash assistance. For two-parent cases, participation is required concurrent with the receipt of MFIP-S cash assistance.

(b) Beginning January 1, 1998, with the exception of caregivers required to attend high school under the provisions of section 256J.54, subdivision 5, MFIP caregivers, upon completion of the secondary assessment, must develop an employment plan and participate in work activities.

(c) Upon completion of the secondary assessment:

(1) In single-parent families with no children under six years of age, the job counselor and the caregiver must develop an employment plan that includes 20 to 35 hours per week of work activities for the period January 1, 1998, to September 30, 1998; 25 to 35 hours of work activities per week in federal fiscal year 1999; and 30 to 35 hours per week of work activities in federal fiscal year 2000 and thereafter.

(3) In two-parent families, the job counselor and the caregivers must develop employment plans which result in a combined total of at least 55 hours per week of work activities.

Sec. 86. Minnesota Statutes 1997 Supplement, section 256J.50, is amended by adding a subdivision to read:

Subd. 10. [COORDINATION.] The county agency and the county agency's employment and training providers must consult and coordinate with other providers of employment and training services to identify existing resources, in order to prevent duplication of services, to assure that other programs' services are available to enable participants to achieve self-sufficiency, and to assure that costs for these other services for which participants are eligible are not incurred by MFIP-S. At a minimum, the county agency and its providers must coordinate with Jobs Training and Partnership Act providers and with any other relevant employment, training, and education programs in the county.

Sec. 87. Minnesota Statutes 1997 Supplement, section 256J.515, is amended to read:

256J.515 [OVERVIEW OF EMPLOYMENT AND TRAINING SERVICES.]

During the first meeting with participants, job counselors must ensure that an overview of employment and training services is provided that: (1) stresses the necessity and opportunity of immediate employment,; (2) outlines the job search resources offered,; (3) outlines education or training opportunities available; (4) describes the range of work activities that are allowable under MFIP-S to meet the individual needs of participants; (5) explains the requirements to comply with an employment plan and; (6) explains the consequences for failing to comply,; and (7) explains the services that are available to support job search and work and education.

Sec. 88. Minnesota Statutes 1997 Supplement, section 256J.52, subdivision 2, is amended to read:

Subd. 2. [INITIAL ASSESSMENT.] (a) The job counselor must, with the cooperation of the participant, assess the participant's ability to obtain and retain employment. This initial assessment must include a review of the participant's education level, prior employment or work experience, transferable work skills, and existing job markets. The job counselor must assess each participant's literacy and math skills as part of an initial assessment. If a participant lacks basic math or literacy skills at or below an eighth grade level, the participant must be allowed to enroll in adult basic education activities as part of the participant's job search support plan or employment plan. A participant with low-level math and literacy skills should not be categorically assumed to be unemployable.

(b) In assessing the participant, the job counselor must determine if the participant needs refresher courses for professional certification or licensure, in which case, the job search plan under subdivision 3 must include the courses necessary to obtain the certification or licensure, in addition to other work activities, provided the combination of the courses and other work activities are at least for 40 hours per week.

(c) If a participant can demonstrate to the satisfaction of the county agency that If the job counselor determines that a lack of proficiency in English is a barrier to obtaining suitable employment, the job counselor must include participation in an intensive English as a second language program if available or otherwise a regular English as a second language program in the individual's employment plan under subdivision 5 for as long as the participant is making satisfactory progress and the individual's lack of proficiency in English remains a barrier to obtaining suitable employment. Lack of proficiency in English is not necessarily a barrier to employment.

(d) Understanding that education may provide the best opportunity for unsubsidized employment, the job counselor may approve an education or training plan as a first option, and postpone the job search requirement, if the participant has a proposal for an education program, including those that may lead to a certificate, diploma, or degree and which:

(1) can be completed within 12 months or within 18 months if remedial education courses are necessary;

(2) meets the criteria of section 256J.53, subdivisions 2, 3, and 5; and

(e) A participant who, at the time of the initial assessment, presents a plan that includes farming as a self-employed work activity must have an employment plan developed under subdivision 5 that includes the farming as an approved work activity.

Sec. 89. Minnesota Statutes 1997 Supplement, section 256J.52, subdivision 3, is amended to read:

Subd. 3. [JOB SEARCH; JOB SEARCH SUPPORT PLAN.] (a) If, after the initial assessment, the job counselor determines that the participant possesses sufficient skills that the participant is likely to succeed in obtaining suitable employment, the participant must conduct job search for a period of up to eight weeks, for at least 30 hours per week. The participant must accept any offer of suitable employment. The job counselor and participant must develop a job search support plan which specifies, at a minimum: whether the job search is to be supervised or unsupervised; the number of hours of job search that will be required; support services that will be provided while the participant conducts job search activities; the courses necessary to obtain certification or licensure, if applicable, and after obtaining the license or certificate, the client must comply with subdivision 5; and how frequently the participant must report to the job counselor on the status of the participant's job search activities. The job counselor may approve other work activities listed in section 256J.49, subdivision 13, to be included in a job search support plan.

(b) During the eight-week job search period, either the job counselor or the participant may request a review of the participant's job search plan and progress towards obtaining suitable employment. If a review is requested by the participant, the job counselor must concur that the review is appropriate for the participant at that time. If a review is conducted, the job counselor may make a determination to conduct a secondary assessment prior to the conclusion of the job search.

(c) Failure to conduct the required job search, to accept any offer of suitable employment, to develop or comply with a job search support plan, or voluntarily quitting suitable employment without good cause results in the imposition of a sanction under section 256J.46. If at the end of eight weeks the participant has not obtained suitable employment, the job counselor must conduct a secondary assessment of the participant under subdivision 3.

Sec. 90. Minnesota Statutes 1997 Supplement, section 256J.52, subdivision 4, is amended to read:

Subd. 4. [SECONDARY ASSESSMENT.] (a) The job counselor must conduct a secondary assessment for those participants who:

(1) in the judgment of the job counselor, have barriers to obtaining employment that will not be overcome with a job search support plan under subdivision 3;

(2) have completed eight weeks of job search under subdivision 3 without obtaining suitable employment; or

(3) have not received a secondary assessment, are working at least 20 hours per week, and the participant, job counselor, or county agency requests a secondary assessment; or

(4) have an existing plan or are already involved in training or education activities under section 256J.55, subdivision 5.

(b) In the secondary assessment the job counselor must evaluate the participant's skills and prior work experience, family circumstances, interests and abilities, need for preemployment activities, supportive or educational services, and the extent of any barriers to employment. The job counselor must use the information gathered through the secondary assessment to develop an employment plan under subdivision 5.

Sec. 91. Minnesota Statutes 1997 Supplement, section 256J.52, is amended by adding a subdivision to read:

Subd. 8. [ADMINISTRATIVE SUPPORT FOR POSTEMPLOYMENT EDUCATION AND TRAINING.] After a caregiver has been employed for six consecutive months, or after the first month in which the caregiver works on average more than 20 hours per week, the caregiver's job counselor shall inform the caregiver that the caregiver may request a secondary assessment and shall provide information about:

(1) part-time education and training options available to the caregiver; and

(2) child care and transportation resources available to support postemployment education and training.

Sec. 92. Minnesota Statutes 1997 Supplement, section 256J.52, is amended by adding a subdivision to read:

Subd. 9. [TRAINING CONCURRENT WITH EMPLOYMENT.] An MFIP caregiver who is meeting the minimum hourly work participation requirements under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 through employment must be allowed to meet any additional MFIP-S hourly work participation requirements through training or education that meets the requirements of section 256J.53.

Sec. 93. Minnesota Statutes 1997 Supplement, section 256J.54, subdivision 2, is amended to read:

Subd. 2. [RESPONSIBILITY FOR ASSESSMENT AND EMPLOYMENT PLAN.] For caregivers who are under age 18 without a high school diploma or its equivalent, the assessment under subdivision 1 and the employment plan under subdivision 3 must be completed by the social services agency under section 257.33. For caregivers who are age 18 or 19 without a high school diploma or its equivalent, the assessment under subdivision 1 and the employment plan under subdivision 3 must be completed by the job counselor. The social services agency or the job counselor shall consult with representatives of educational agencies that are required to assist in developing educational plans under section 126.235.

Sec. 94. Minnesota Statutes 1997 Supplement, section 256J.54, subdivision 3, is amended to read:

Subd. 3. [EDUCATIONAL OPTION DEVELOPED.] If the job counselor or county social services agency identifies an appropriate educational option for a caregiver under the age of 20 without a high school diploma or its equivalent, it the counselor or agency must develop an employment plan which reflects the identified option. The plan must specify that participation in an educational activity is required, what school or educational program is most appropriate, the services that will be provided, the activities the caregiver will take part in, including child care and supportive services, the consequences to the caregiver for failing to participate or comply with the specified requirements, and the right to appeal any adverse action. The employment plan must, to the extent possible, reflect the preferences of the caregiver.

Sec. 95. Minnesota Statutes 1997 Supplement, section 256J.54, subdivision 4, is amended to read:

Subd. 4. [NO APPROPRIATE EDUCATIONAL OPTION.] If the job counselor determines that there is no appropriate educational option for a caregiver who is age 18 or 19 without a high school diploma or its equivalent, the job counselor must develop an employment plan, as defined in section 256J.49, subdivision 5, for the caregiver. If the county social services agency determines that school attendance is not appropriate for a caregiver under age 18 without a high school diploma or its equivalent, the county agency shall refer the caregiver to social services for services as provided in section 257.33.

Sec. 96. Minnesota Statutes 1997 Supplement, section 256J.54, subdivision 5, is amended to read:

Subd. 5. [SCHOOL ATTENDANCE REQUIRED.] (a) Notwithstanding the provisions of section 256J.56, minor parents, or 18- or 19-year-old parents without a high school diploma or its equivalent must attend school unless:

(1) transportation services needed to enable the caregiver to attend school are not available;

(3) the caregiver is ill or incapacitated seriously enough to prevent attendance at school; or

(4) the caregiver is needed in the home because of the illness or incapacity of another member of the household. This includes a caregiver of a child who is younger than six weeks of age.

(b) The caregiver must be enrolled in a secondary school and meeting the school's attendance requirements. The county, social service agency, or job counselor must verify at least once per quarter that the caregiver is meeting the school's attendance requirements. An enrolled caregiver is considered to be meeting the attendance requirements when the school is not in regular session, including during holiday and summer breaks.

Sec. 97. Minnesota Statutes 1997 Supplement, section 256J.55, subdivision 5, is amended to read:

Subd. 5. [OPTION TO UTILIZE EXISTING PLAN.] With job counselor approval, if a participant is already complying with a job search support or employment plan that was developed for a different program or is already involved in education or training activities, the participant may utilize continue that plan and that program's services, subject to the requirements of subdivision 3, or activity to be in compliance with sections 256J.52 to 256J.57 so long as the plan meets, or is modified to meet, the requirements of those sections.

Sec. 98. Minnesota Statutes 1997 Supplement, section 256J.56, is amended to read:

256J.56 [EMPLOYMENT AND TRAINING SERVICES COMPONENT; EXEMPTIONS.]

(a) An MFIP-S caregiver is exempt from the requirements of sections 256J.52 to 256J.55 if the caregiver belongs to any of the following groups:

(1) individuals who are age 60 or older;

(2) individuals who are suffering from a professionally certified permanent or temporary illness, injury, or incapacity which is expected to continue for more than 30 days and which prevents the person from obtaining or retaining employment. Persons in this category with a temporary illness, injury, or incapacity must be reevaluated at least quarterly;

(3) caregivers whose presence in the home is required because of the professionally certified illness or incapacity of another member in the assistance unit, a relative in the household, or a foster child in the household;

(4) women who are pregnant, if the pregnancy has resulted in a professionally certified incapacity that prevents the woman from obtaining or retaining employment;

(5) caregivers of a child under the age of one year who personally provide full-time care for the child. This exemption may be used for only 12 months in a lifetime. In two-parent households, only one parent or other relative may qualify for this exemption;

(6) individuals single parents, or one parent in a two-parent family, employed at least 40 hours per week or at least 30 hours per week and engaged in job search for at least an additional ten 35 hours per week;

(7) individuals experiencing a personal or family crisis that makes them incapable of participating in the program, as determined by the county agency. If the participant does not agree with the county agency's determination, the participant may seek professional certification, as defined in section 256J.08, that the participant is incapable of participating in the program.

Persons in this exemption category must be reevaluated every 60 days; or

A caregiver who is exempt under clause (5) must enroll in and attend an early childhood and family education class, a parenting class, or some similar activity, if available, during the period of time the caregiver is exempt under this section. Notwithstanding section 256J.46, failure to attend the required activity shall not result in the imposition of a sanction.

(b) The county agency must provide employment and training services to MFIP-S caregivers who are exempt under this section, but who volunteer to participate. Exempt volunteers may request approval for any work activity under section 256J.49, subdivision 13. The hourly participation requirements for nonexempt caregivers under section 256J.50, subdivision 5, do not apply to exempt caregivers who volunteer to participate.

Sec. 99. Minnesota Statutes 1997 Supplement, section 256J.57, subdivision 1, is amended to read:

Subdivision 1. [GOOD CAUSE FOR FAILURE TO COMPLY.] The county agency shall not impose the sanction under section 256J.46 if it determines that the participant has good cause for failing to comply with the requirements of section 256J.45 or sections 256J.52 to 256J.55. Good cause exists when:

(1) appropriate child care is not available;

(2) the job does not meet the definition of suitable employment;

(3) the participant is ill or injured;

(4) a family member of the assistance unit, a relative in the household, or a foster child in the household is ill and needs care by the participant that prevents the participant from complying with the job search support plan or employment plan;

(5) the parental caregiver is unable to secure necessary transportation;

(6) the parental caregiver is in an emergency situation that prevents compliance with the job search support plan or employment plan;

(7) the schedule of compliance with the job search support plan or employment plan conflicts with judicial proceedings;

(8) the parental caregiver is already participating in acceptable work activities;

(9) the employment plan requires an educational program for a caregiver under age 20, but the educational program is not available;

(10) activities identified in the job search support plan or employment plan are not available;

(11) the parental caregiver is willing to accept suitable employment, but suitable employment is not available; or

(12) the parental caregiver documents other verifiable impediments to compliance with the job search support plan or employment plan beyond the parental caregiver's control.

Sec. 100. Minnesota Statutes 1997 Supplement, section 256J.74, subdivision 2, is amended to read:

Subd. 2. [CONCURRENT ELIGIBILITY, LIMITATIONS.] A county agency must not count an applicant or participant as a member of more than one assistance unit in a given payment month, except as provided in clauses (1) and (2).

(1) A participant who is a member of an assistance unit in this state is eligible to be included in a second assistance unit in the first full month that after the month the participant leaves the first assistance unit and lives with a joins the second assistance unit.

Sec. 101. Minnesota Statutes 1997 Supplement, section 256J.74, is amended by adding a subdivision to read:

Subd. 5. [FOOD STAMPS.] For any month an individual receives food stamp benefits, the individual is not eligible for the MFIP-S food portion of assistance, except as provided under section 256J.28, subdivision 5.

Sec. 102. [256J.77] [AGING OF CASH BENEFITS.]

Cash benefits under chapters 256D, 256J, and 256K by warrants or electronic benefit transfer that have not been accessed within 90 days of issuance, shall be canceled. Cash benefits may be replaced after they are canceled, for up to one year after the date of issuance, if failure to do so would place the client or family at risk. For the purposes of this section, "accessed" means cashing a warrant or making at least one withdrawal from benefits deposited in an electronic benefit account.

Sec. 103. Minnesota Statutes 1997 Supplement, section 256K.03, subdivision 5, is amended to read:

Subd. 5. [EXEMPTION CATEGORIES.] (a) The applicant will be exempt from the job search requirements and development of a job search plan and an employability development plan under subdivisions 3, 4, and 8 if the applicant belongs to any of the following groups:

(1) caregivers under age 20 who have not completed a high school education and are attending high school on a full-time basis;

(2) individuals who are age 60 or older;

(3) (2) individuals who are suffering from a professionally certified permanent or temporary illness, injury, or incapacity which is expected to continue for more than 30 days and which prevents the person from obtaining or retaining employment. Persons in this category with a temporary illness, injury, or incapacity must be reevaluated at least quarterly;

(4) (3) caregivers whose presence in the home is needed because of the professionally certified illness or incapacity of another member in the assistance unit, a relative in the household, or a foster child in the household;

(5) (4) women who are pregnant, if it the pregnancy has been medically verified resulted in a professionally certified incapacity that the child is expected to be born within the next six months prevents the woman from obtaining and retaining employment;

(6) (5) caregivers or other caregiver relatives of a child under the age of three one year who personally provide full-time care for the child. This exemption may be used for only 12 months in a lifetime. In two-parent households, only one parent or other relative may qualify for this exemption;

(7) individuals (6) single parents, or one parent in a two-parent family, employed at least 30 35 hours per week;

(8) individuals for whom participation would require a round trip commuting time by available transportation of more than two hours, excluding transporting of children for child care;

(9) individuals for whom lack of proficiency in English is a barrier to employment, provided such individuals are participating in an intensive program which lasts no longer than six months and is designed to remedy their language deficiency;

(10) individuals who, because of advanced age or lack of ability, are incapable of gaining proficiency in English, as determined by the county social worker, shall continue to be exempt under this subdivision and are not subject to the requirement that they be participating in a language program;

(12) individuals in need of refresher courses for purposes of obtaining professional certification or licensure.

(b) In a two-parent family, only one caregiver may be exempted under paragraph (a), clauses (4) and (6).

(8) second parents in two-parent families employed for 20 or more hours per week, provided the first parent is employed at least 35 hours per week.

(b) A caregiver who is exempt under clause (5) must enroll in and attend an early childhood and family education class, a parenting class, or some similar activity, if available, during the period of time the caregiver is exempt under this section. Notwithstanding section 256J.46, failure to attend the required activity shall not result in the imposition of a sanction.

Sec. 104. Minnesota Statutes 1996, section 268.88, is amended to read:

268.88 [LOCAL SERVICE UNIT PLANS.]

(a) By April 15, 1991 1999, and by April 15 of each second year thereafter, local service units shall prepare and submit to the commissioner a plan that covers the next two state fiscal years. At least 30 days prior to submission of the plan, the local service unit shall solicit comments from the public on the contents of the proposed plan. The commissioner shall notify each local service unit within 60 days of receipt of its plan that the plan has been approved or disapproved. The plan must include:

(1) a statement of objectives for the employment and training services the local service unit administers;

(2) the establishment of job placement and job retention goals, the establishment of public assistance caseload reduction goals, and the strategies and programs that will be used to achieve these goals;

(3) a statement of whether the goals from the preceding year were met and an explanation if the local service unit failed to meet the goals;

(4) the amount proposed to be allocated to each employment and training service;

(5) the proposed types of employment and training services the local service unit plans to utilize;

(6) a description of how the local service unit will use funds provided under section 256.736 to meet the requirements of that section. The description must include the two work programs required by section 256.736, subdivision 10, paragraph (a), clause (13), what services will be provided, number of clients served, per service expenditures, type of clients served, and projected outcomes chapter 256J to meet the requirements of that chapter. The description must include what services will be provided, per service expenditures, how many employment and training slots the local service unit will provide, how slots will be allocated between providers, how many dollars the local service unit will provide per slot per provider, how many participants per slot, the ratio of participants per job counselor, and an accounting of proposed uses for any residual funds not included in slot allocations to providers;

(7) a report on the use of wage subsidies, grant diversions, community investment programs, and other services administered under this chapter;

(8) a performance review of the employment and training service providers delivering employment and training services for the local service unit;

(9) a copy of any contract between the local service unit and an employment and training service provider including expected outcomes and service levels for public assistance clients; and

(10) a copy of any other agreements between educational institutions, family support services, and child care providers; and

(b) In counties with a city of the first class, the county and the city shall develop and submit a joint plan. The plan may not be submitted until agreed to by both the city and the county. The plan must provide for the direct allocation of employment and training money to the city and the county unless waived by either. If the county and the city cannot concur on a plan, the commissioner shall resolve their dispute. In counties in which a federally recognized Indian tribe is operating an employment and training program under an agreement with the commissioner of human services, the plan must provide that the county will coordinate its employment and training programs, including developing a system for referrals, sanctions, and the provision of supporting services such as access to child care funds and transportation with programs operated by the Indian tribe. The plan may not be given final approval by the commissioner until the tribal unit and county have submitted written agreement on these provisions in the plan. If the county and Indian tribe cannot agree on these provisions, the local service unit shall notify the commissioner of economic security and the commissioners of economic security and human services shall resolve the dispute.

(c) The commissioner may withhold the distribution of employment and training money from a local service unit that does not submit a plan to the commissioner by the date set by this section, and shall withhold the distribution of employment and training money from a local service unit whose plan has been disapproved by the commissioner until an acceptable amended plan has been submitted.

(d) Beginning April 15, 1992, and by April 15 of each second year thereafter, local service units must prepare and submit to the commissioner an interim year plan update that deals with performance in that state fiscal year and changes anticipated for the second year of the biennium. The update must include information about employment and training programs addressed in the local service unit's two-year plan and shall be completed in accordance with criteria established by the commissioner.

Sec. 105. [REPORT REQUIRED.]

Beginning January 1, 1999, the commissioner shall report annually to the legislature on the percent, for each of the four quarters of the immediate preceding year, of the MFIP-S caseload participants who are exempt from work under the provisions of Minnesota Statutes, section 256J.56, clause (2) or (3).

Sec. 106. [DEVELOPMENT OF REQUIRED ROUTINE INTERVIEW TOOLS.]

The commissioner of human services shall develop a list of no more than six questions to be used by county agencies and their contractors under Minnesota Statutes, section 256J.44, subdivision 3, to identify MFIP-S applicants and recipients who have drug or alcohol dependencies or substance abuse problems.

Sec. 107. Laws 1997, chapter 248, section 46, as amended by Laws 1997, First Special Session chapter 5, section 10, is amended to read:

Sec. 46. [UNLICENSED CHILD CARE PROVIDERS; INTERIM EXPANSION.]

(a) Notwithstanding Minnesota Statutes, section 245A.03, subdivision 2, clause (2), until June 30, 1999, nonresidential child care programs or services that are provided by an unrelated individual to persons from two or three other unrelated families are excluded from the licensure provisions of Minnesota Statutes, chapter 245A, provided that:

(1) the individual provides services at any one time to no more than four children who are unrelated to the individual;

(2) no more than two of the children are under two years of age; and

(3) the total number of children being cared for at any one time does not exceed five.

(b) Paragraph (a), clauses (1) to (3), do not apply to:

(1) nonresidential programs that are provided by an unrelated individual to persons from a single related family;

(3) a child care provider who, as an applicant for licensure or as a licenseholder, has received a license denial under Minnesota Statutes, section 245A.05, a fine under section 245A.06, or a sanction under section 245A.07 from the commissioner that has not been reversed on appeal; or

(4) a child care provider, or a child care provider who has a household member who, as a result of a licensing process, has a disqualification under Minnesota Statutes, chapter 245A, that has not been set aside by the commissioner.

Sec. 108. [TRANSFER OF STATE MONEY FROM TANF RESERVE.]

For fiscal year 1999, the commissioner of human services may transfer to the general fund up to 100 percent of the state money that remains in the TANF reserve account for the purposes of sections 1 to 4 (256D.05, subdivision 8; 256D.053, subdivisions 1, 2, 3, and 4; 256J.11, subdivision 2; and 256J.37, subdivision 9).

Sec. 109. [REPEALER.]

(a) Minnesota Statutes 1997 Supplement, section 256J.28, subdivision 4, is repealed effective January 1, 1998.

(b) Minnesota Statutes 1997 Supplement, section 256B.062, is repealed effective July 1, 1998.

(c) Minnesota Statutes 1997 Supplement, section 256J.25, is repealed.

(d) Minnesota Statutes 1996, sections 256.031, as amended by Laws 1997, chapter 85, article 3, section 1; article 4, section 11; 256.032; 256.033, as amended by Laws 1997, chapter 85, article 3, sections 2 and 3; 256.034; 256.035; 256.036; 256.0361; 256.047; 256.0475; 256.048; and 256.049; Minnesota Statutes 1997 Supplement, sections 256J.32, subdivision 5; and 256J.34, subdivision 5, are repealed effective July 1, 1998.

(e) Minnesota Rules (exempt), parts 9500.9100 to 9500.9220, are repealed effective July 1, 1998.

(f) Laws 1997, chapter 85, article 1, sections 61 and 71, and article 3, section 55, are repealed.

Sec. 110. [EFFECTIVE DATE.]

(a) Sections 5 (256.01, subdivision 2) and 6 (256.014, subdivision 1) are effective the day following final enactment. Section 45 (256J.24, subdivision 8) is effective October 1, 1998.

(b) Sections 2, 3, and 92 (245A.03, subdivision 2b; 245A.03, subdivision 4; Laws 1997, chapter 248, section 46) are effective the day following final enactment.

(c) Sections 5, 6, and 17 (256.01, subdivision 2; 256.014, subdivision 1; 256J.03, subdivision 1) are effective the day following final enactment.

Section 12 (256D.05, subdivision 8) is effective the day following final enactment.

Section 1. Minnesota Statutes 1997 Supplement, section 119B.02, is amended to read:

119B.02 [DUTIES OF COMMISSIONER.]

section. The rules must establish a sliding schedule of fees for parents receiving child care services. The rules shall provide that funds received as a lump sum payment of child support arrearages shall not be counted as income to a family in the month received but shall be prorated over the 12 months following receipt and added to the family income during those months. In the rules adopted under this section, county and human services boards shall be authorized to establish policies for payment of child care spaces for absent children, when the payment is required by the child's regular provider. The rules shall not set a maximum number of days for which absence payments can be made, but instead shall direct the county agency to set limits and pay for absences according to the prevailing market practice in the county. County policies for payment of absences shall be subject to the approval of the commissioner. The commissioner shall maximize the use of federal money in section 256.736 and other programs that provide federal or state reimbursement for child care services for low-income families who are in education, training, job search, or other activities allowed under those programs. Money appropriated under this section must be coordinated with the programs that provide federal reimbursement for child care services to accomplish this purpose. Federal reimbursement obtained must be allocated to the county that spent money for child care that is federally reimbursable under programs that provide federal reimbursement for child care services. The counties shall use the federal money to expand child care services. The commissioner may adopt rules under chapter 14 to implement and coordinate federal program requirements.

Subd. 2. [CONTRACTUAL AGREEMENTS WITH TRIBES.] The commissioner may enter into contractual agreements with a federally recognized Indian tribe with a reservation in Minnesota to carry out the responsibilities of county human service agencies to the extent necessary for the tribe to operate child care assistance programs under the supervision of the commissioner. Funding to support services under sections 119B.03 and 119B.05 may be transferred to the federally recognized Indian tribe with a reservation in Minnesota from allocations available to counties in which reservation boundaries lie. When funding is transferred under section 119B.03, the amount shall be commensurate to estimates of the proportion of reservation residents with characteristics identified in section 119B.03, subdivision 6, to the total population of county residents with those same characteristics.

Sec. 2. [EFFECTIVE DATE.]

Section 1 (119B.02, subdivision 1) is effective the day following final enactment.

Section 1. Minnesota Statutes 1996, section 62A.65, subdivision 5, is amended to read:

Subd. 5. [PORTABILITY OF COVERAGE.] (a) No individual health plan may be offered, sold, issued, or with respect to children age 18 or under renewed, to a Minnesota resident that contains a preexisting condition limitation, preexisting condition exclusion, or exclusionary rider, unless the limitation or exclusion is permitted under this subdivision, provided that, except for children age 18 or under, underwriting restrictions may be retained on individual contracts that are issued without evidence of insurability as a replacement for prior individual coverage that was sold before May 17, 1993. The individual may be subjected to an 18-month preexisting condition limitation, unless the individual has maintained continuous coverage as defined in section 62L.02. The individual must not be subjected to an exclusionary rider. An individual who has maintained continuous coverage may be subjected to a one-time preexisting condition limitation of up to 12 months, with credit for time covered under qualifying coverage as defined in section 62L.02, at the time that the individual first is covered under an individual health plan by any health carrier. Credit must be given for all qualifying coverage with respect to all preexisting conditions, regardless of whether the conditions were preexisting with respect to any previous qualifying coverage. The individual must not be subjected to an exclusionary rider. Thereafter, the individual must not be subject to any preexisting condition limitation, preexisting condition exclusion, or exclusionary rider under an individual health plan by any health carrier, except an unexpired portion of a limitation under prior coverage, so long as the individual maintains continuous coverage as defined in section 62L.02.

provided under federal law, the health carrier need not offer coverage under this paragraph until the individual has exhausted the continuation coverage. The offer must not be subject to underwriting, except as permitted under this paragraph. A health plan issued under this paragraph must be a qualified plan as defined in section 62E.02 and must not contain any preexisting condition limitation, preexisting condition exclusion, or exclusionary rider, except for any unexpired limitation or exclusion under the previous coverage. The individual health plan must cover pregnancy on the same basis as any other covered illness under the individual health plan. The initial premium rate for the individual health plan must comply with subdivision 3. The premium rate upon renewal must comply with subdivision 2. In no event shall the premium rate exceed 90 percent of the premium charged for comparable individual coverage by the Minnesota comprehensive health association, and the premium rate must be less than that amount if necessary to otherwise comply with this section. An individual health plan offered under this paragraph to a person satisfies the health carrier's obligation to offer conversion coverage under section 62E.16, with respect to that person. Coverage issued under this paragraph must provide that it cannot be canceled or nonrenewed as a result of the health carrier's subsequent decision to leave the individual, small employer, or other group market. Section 72A.20, subdivision 28, applies to this paragraph.

Sec. 2. Minnesota Statutes 1996, section 62D.042, subdivision 2, is amended to read:

Subd. 2. [BEGINNING ORGANIZATIONS NET WORTH REQUIREMENTS.] (a) Beginning organizations shall maintain net worth of at least 8-1/3 percent of the sum of all expenses expected to be incurred in the 12 months following the date the certificate of authority is granted, or $1,500,000, whichever is greater.

(b) After the first full calendar year of operation, organizations shall maintain net worth of at least 8-1/3 percent and at most 16-2/3 25 percent of the sum of all expenses incurred during the most recent calendar year, but in no case shall net worth fall below $1,000,000.

(c) Notwithstanding paragraphs (a) and (b), any health maintenance organization owned by a political subdivision of this state, which has a higher than average percentage of enrollees who are enrolled in medical assistance or general assistance medical care, may exceed the maximum net worth limits provided in paragraphs (a) and (b), with the advance approval of the commissioner.

Sec. 3. Minnesota Statutes 1996, section 62E.16, is amended to read:

62E.16 [POLICY CONVERSION RIGHTS.]

a provision which, upon the death of the individual in whose name the contract was issued, permits every other individual then covered under the contract to elect, within the period specified in the contract, to continue coverage under the same or a different contract without the addition of underwriting restrictions until the individual would have ceased to have been entitled to coverage had the individual in whose name the contract was issued lived. An individual conversion contract issued by a health maintenance organization shall not be deemed to be an individual enrollment contract for the purposes of section 62D.10. An individual health plan offered under section 62A.65, subdivision 5, paragraph (b), to a person satisfies the health carrier's obligation to offer conversion coverage under this section with respect to that person.

Sec. 4. [62Q.096] [CREDENTIALING OF PROVIDERS.]

If a health plan company has initially credentialed, as providers in its provider network, individual providers employed by or under contract with an entity that: (1) is authorized to bill under section 256B.0625, subdivision 5; (2) meets the requirements of Minnesota Rules, parts 9520.0750 to 9520.0870; (3) is designated an essential community provider under section 62Q.19; and (4) is under contract with the health plan company to provide mental health services, the health plan company must continue to credential at least the same number of providers from that entity, as long as those providers meet the health plan company's credentialing standards. A health plan company shall not refuse to credential these providers on the grounds that their provider network has a sufficient number of providers of that type.

Sec. 5. Minnesota Statutes 1997 Supplement, section 171.29, subdivision 2, is amended to read:

Subd. 2. [FEES, ALLOCATION.] (a) A person whose driver's license has been revoked as provided in subdivision 1, except under section 169.121 or 169.123, shall pay a $30 fee before the driver's license is reinstated.

(b) A person whose driver's license has been revoked as provided in subdivision 1 under section 169.121 or 169.123 shall pay a $250 fee plus a $10 surcharge before the driver's license is reinstated. The $250 fee is to be credited as follows:

(1) Twenty percent shall be credited to the trunk highway fund.

(2) Fifty-five percent shall be credited to the general fund.

(3) Eight percent shall be credited to a separate account to be known as the bureau of criminal apprehension account. Money in this account may be appropriated to the commissioner of public safety and the appropriated amount shall be apportioned 80 percent for laboratory costs and 20 percent for carrying out the provisions of section 299C.065.

(4) Twelve percent shall be credited to a separate account to be known as the alcohol-impaired driver education account. Money in the account is appropriated as follows:

(i) The first $200,000 in a fiscal year is to the commissioner of children, families, and learning for programs in elementary and secondary schools.

(ii) The remainder credited in a fiscal year is appropriated to the commissioner of transportation to be spent as grants to the Minnesota highway safety center at St. Cloud State University for programs relating to alcohol and highway safety education in elementary and secondary schools.

(5) Five percent shall be credited to a separate account to be known as the traumatic brain injury and spinal cord injury account. $100,000 is annually appropriated from the account to the commissioner of human services for traumatic brain injury case management services. The remaining money in the account is annually appropriated to the commissioner of health to be used as follows: 35 percent for a contract with a qualified community-based organization to provide information, resources, and support to assist persons with traumatic brain injury and their families to access services, and 65 percent to establish and maintain the traumatic brain injury and spinal cord injury registry created in section 144.662 and to reimburse the commissioner of economic security for the reasonable cost of services provided under section 268A.03, clause (o). For the purposes of this clause, a "qualified community-based organization" is a private, not-for-profit organization of consumers of traumatic brain injury services and their family members. The organization must be registered with the United States Internal Revenue Service under the provisions of section 501(c)(3) as a tax exempt organization and must have as its purposes:

(ii) the provision of a network of support for persons with traumatic brain injury, their families, and friends;

(iii) the development and support of programs and services to prevent traumatic brain injury;

(iv) the establishment of education programs for persons with traumatic brain injury; and

(v) the empowerment of persons with traumatic brain injury through participation in its governance.

(c) The $10 surcharge shall be credited to a separate account to be known as the remote electronic alcohol monitoring pilot program account. The commissioner shall transfer the balance of this account to the commissioner of finance on a monthly basis for deposit in the general fund.

Sec. 6. Minnesota Statutes 1997 Supplement, section 256F.05, subdivision 8, is amended to read:

Subd. 8. [USES OF FAMILY PRESERVATION FUND GRANTS.] (a) A county which has not demonstrated that year that its family preservation core services are developed as provided in subdivision 1a, must use its family preservation fund grant exclusively for family preservation services defined in section 256F.03, subdivision 5, paragraphs (a), (b), (c), and (e).

(b) A county which has demonstrated that year that its family preservation core services are developed becomes eligible either to continue using its family preservation fund grant as provided in paragraph (a), or to exercise the expanded service option under paragraph (c).

(c) The expanded service option permits an eligible county to use its family preservation fund grant for child welfare preventive services. For purposes of this section, child welfare preventive services are those services directed toward a specific child or family that further the goals of section 256F.01 and include assessments, family preservation services, service coordination, community-based treatment, crisis nursery services when the parents retain custody and there is no voluntary placement agreement with a child-placing agency, respite care except when it is provided under a medical assistance waiver, home-based services, and other related services. For purposes of this section, child welfare preventive services shall not include shelter care or other placement services under the authority of the court or public agency to address an emergency. To exercise this option, an eligible county must notify the commissioner in writing of its intention to do so no later than 30 days into the quarter during which it intends to begin or in its county plan, as provided in section 256F.04, subdivision 2. Effective with the first day of that quarter, the county must maintain its base level of expenditures for child welfare preventive services and use the family preservation fund to expand them. The base level of expenditures for a county shall be that established under section 256F.10, subdivision 7. For counties which have no such base established, a comparable base shall be established with the base year being the calendar year ending at least two calendar quarters before the first calendar quarter in which the county exercises its expanded service option. The commissioner shall, at the request of the counties, reduce, suspend, or eliminate either or both of a county's obligations to continue the base level of expenditures and to expand child welfare preventive services under extraordinary circumstances.

(d) Notwithstanding paragraph (a), a county that is participating in the child protection assessments or investigations community collaboration pilot program under section 626.5560, or in the concurrent permanency planning pilot program under section 257.0711, may use its family preservation fund grant for those programs.

Sec. 7. Laws 1997, chapter 207, section 7, is amended to read:

Sec. 7. [PRIVATE SALE OF TAX-FORFEITED LAND; CARLTON COUNTY.]

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Carlton county may sell by private sale the tax-forfeited land described in paragraph (d) under the remaining provisions of Minnesota Statutes, chapter 282.

(c) The conveyance must be in a form approved by the attorney general.

(d) The land to be conveyed is located in Carlton county and is described as:

North 6.66 acres of the West Half of the Northeast Quarter of the Southwest Quarter, subject to pipeline easement, Section 6, Township 48 North, Range 16 West, City of Carlton.

(e) Carlton county has determined that this sale best serves the land management interests of Carlton county.

Sec. 8. [CONVEYANCE OF STATE LAND; ANOKA COUNTY.]

Subdivision 1. [CONVEYANCE AUTHORIZED.] Notwithstanding Minnesota Statutes, sections 92.45, 94.09, 94.10, and 103F.335, subdivision 3, or any other law to the contrary, the commissioner of administration may convey all, or any part of, the land and associated buildings described in subdivision 3 to Anoka county after the commissioner of human services declares said property surplus to its needs.

Subd. 2. [FORM.] (a) The conveyance shall be in a form approved by the attorney general.

(b) The conveyance is subject to a scenic easement, as defined in Minnesota Statutes, section 103F.311, subdivision 6, to be under the custodial control of the commissioner of natural resources, on that portion of the conveyed land that is designated for inclusion in the wild and scenic river system under Minnesota Statutes, section 103F.325. The scenic easement shall allow for continued use of the structures located within the easement and for development of a walking path within the easement.

(c) The conveyance shall restrict use of the land to governmental, including recreational, purposes and shall provide that ownership of any portion of the land that ceases to be used for such purposes shall revert to the state of Minnesota.

(d) The commissioner of administration may convey any part of the property described in subdivision 3 any time after the land is declared surplus by the commissioner of human services and the execution and recording of the scenic easement under paragraph (b) has been completed.

(e) Notwithstanding any law, regulation, or ordinance to the contrary, the instrument of conveyance to Anoka county may be recorded in the office of the Anoka county recorder without compliance with any subdivision requirement.

Subd. 3. [LAND DESCRIPTION.] Subject to right-of-way for Grant Street, Northview Lane, Garfield Street, 5th Avenue, and State Trunk Highway No. 288, also known as 4th Avenue, the land to be conveyed may include all, or part of, that which is described as follows:

(1) all that part of Government Lots 3 and 4 and that part of the Southeast Quarter of the Southwest Quarter, all in Section 31, Township 32 North, Range 24 West, Anoka county, Minnesota, described as follows:

Beginning at the southwest corner of said Southeast Quarter of the Southwest Quarter of Section 31; thence North 13 degrees 16 minutes 11 seconds East, assumed bearing, 473.34 feet; thence North 07 degrees 54 minutes 43 seconds East 186.87 feet; thence North 14 degrees 08 minutes 33 seconds West 154.77 feet; thence North 62 degrees 46 minutes 44 seconds West 526.92 feet; thence North 25 degrees 45 minutes 30 seconds East 74.43 feet; thence northerly 88.30 feet along a tangential curve concave to the west having a radius of 186.15 feet and a central angle of 27 degrees 10 minutes 50 seconds; thence North 01 degrees 25 minutes 20 seconds West, tangent to said curve, 140.53 feet; thence North 71 degrees 56 minutes 34 seconds West to the southeasterly shoreline of the Rum river; thence southwesterly along said shoreline to the south line of said Government Lot 4; thence easterly along said south line to the point of beginning. For the purpose of this description the south line of said Southeast Quarter of the Southwest Quarter of Section 31 has an assumed bearing of North 89 degrees 08 minutes 19 seconds East;

(3) all that part of said Block 6, Woodbury's Addition to the city of Anoka lying westerly of Northview 1st Addition, Anoka county, Minnesota;

(4) all that part of said Northview 1st Addition lying westerly of the east line of Lots 11 through 20, Block 1, inclusive, thereof; and

(5) all that part of the Northeast Quarter of the Northwest Quarter of said Section 6, Township 31 North, Range 24 West, Anoka county, Minnesota, lying northerly of the centerline of Grant Street as defined by said plat of Grant Properties and lying westerly of said east line of Lots 11 through 20, Block 1, inclusive, Northview 1st Addition and said line's extension north and south.

Subd. 4. [DETERMINATION.] The commissioner of human services has determined that the land described in subdivision 3 will no longer be needed for the Anoka metro regional treatment center upon the completion of the state facilities currently under construction, and the completion of renovation work to state buildings that are not located on the land described in subdivision 3. The state's land and building management interests may best be served by conveying all, or part of, the land and associated buildings located on the land described in subdivision 3.

Sec. 9. [CONVEYANCE OF STATE LAND; CROW WING COUNTY.]

Subdivision 1. [CONVEYANCE AUTHORIZED.] Notwithstanding Minnesota Statutes, sections 92.45, 94.09, 94.10, and 103F.335, subdivision 3, or any other law to the contrary, the commissioner of administration may convey, all or any part of, the land, and the state building located on said land, described in subdivision 3 to Crow Wing county after the commissioner of human services declares said property surplus to its needs.

Subd. 2. [FORM.] (a) The conveyance shall be in a form approved by the attorney general.

(b) The conveyance shall restrict use of the land to county governmental purposes, including community corrections programs, and shall provide that ownership of any portion of the land or building that ceases to be used for such purposes shall revert to the state of Minnesota.

Subd. 3. [LAND DESCRIPTION.] The land to be conveyed is that part of the Northeast Quarter of Section 30, Township 45 North, Range 30 West, Crow Wing county, Minnesota, described as follows:

Commencing at the southeast corner of said Northeast Quarter; thence North 00 degrees 46 minutes 05 seconds West, bearing based on the Crow Wing county coordinate database NAD 83/94, 1520.06 feet along the east line of said Northeast Quarter to the point of beginning; thence continue North 00 degrees 46 minutes 05 seconds West 634.14 feet along said east line of the Northeast Quarter; thence South 89 degrees 13 minutes 20 seconds West 550.00 feet; thence South 18 degrees 57 minutes 23 seconds East 115.59 feet; thence South 42 degrees 44 minutes 39 seconds East 692.37 feet; thence South 62 degrees 46 minutes 19 seconds East 20.24 feet; thence North 89 degrees 13 minutes 55 seconds East 33.00 feet to the point of beginning. Containing 4.69 acres, more or less. Subject to the right-of-way of the township road along the east side thereof, subject to other easements, reservations, and restrictions of record, if any.

Subd. 4. [DETERMINATION.] The commissioner of human services has determined that the land described in subdivision 3 and the building on the land will not be needed for future operations of the Brainerd regional human services center. The state's land management interests would best be served by conveying the land to Crow Wing county for governmental use.

Sec. 10. [TOWN OF WHITE, ST. LOUIS COUNTY.]

That part of the southeast quarter of southwest quarter (SE 1/4 of SW 1/4), section 10, township 58 north of range 15 west of the fourth principal meridian, according to the United States government survey thereof, St. Louis county, Minnesota, described as follows:

Commencing at the southeast corner of said SE 1/4 of SW 1/4, section 10, township 58, range 15, thence proceeding north along the east line thereof for a distance of 550 feet; thence west and parallel to the south line thereof for a distance of 800 feet; thence south and parallel to the east line thereof, for a distance of 550 feet to the south line; thence east along said south line thereof, for a distance of 800 feet to the point of beginning.

Subd. 2. [NO CONSIDERATION OR ELECTION REQUIRED.] The transfer authorized by subdivision 1 shall be without consideration and no vote of the electors of the town of White or city of Aurora shall be required.

Subd. 3. [USE; PUBLIC PROPERTY.] The property legally described in subdivision 1 shall be used for health care and related purposes and shall be considered public property for purposes of Minnesota Statutes, section 16A.695. The activities conducted on the property described in subdivision 1 by the White community hospital corporation, its successors and assigns shall be considered a governmental program as authorized by Minnesota Statutes, chapter 447.

Subd. 4. [NAME.] The public name of the buildings and improvements located on the real property legally described in subdivision 1 shall always include the words "White community."

Sec. 11. [LOAN GUARANTEE.]

The director of the division of emergency management of the department of public safety shall, as the governor's authorized representative and on behalf of the state, agree to provide security for and guarantee a promissory note or similar document for a loan from the Federal Emergency Management Agency under its community disaster loan program to the city of Ada in the amount of approximately $1,200,000. The loan is to cover operating losses for a publicly owned health care facility that was damaged in the spring floods of 1997.

Sec. 12. [LICENSING MORATORIUM; JUVENILE FACILITIES.]

Subdivision 1. [MORATORIUM; COMMISSIONER OF CORRECTIONS.] Except as provided in subdivision 4, the commissioner of corrections may not:

(1) issue any license under Minnesota Statutes, section 241.021, to operate a new correctional facility for the detention or confinement of juvenile offenders that will include more than 25 beds for juveniles; or

(2) renew a license under Minnesota Statutes, section 241.021, to operate a correctional facility licensed before the effective date of this moratorium, for the detention or confinement of juvenile offenders, if the number of beds in the facility will increase by more than 25 beds since the time the most recent license was issued.

Subd. 2. [MORATORIUM; COMMISSIONER OF HUMAN SERVICES.] Except as provided in subdivision 4, the commissioner of human services may not:

(1) issue any license under Minnesota Rules, parts 9545.0905 to 9545.1125, for the residential placement of juveniles at a facility that will include more than 25 beds for juveniles; or

(2) renew a license under Minnesota Rules, parts 9545.0905 to 9545.1125, for the residential placement of juveniles at a facility licensed before the effective date of this moratorium, if the number of beds in the facility will increase by more than 25 beds since the time the most recent license was issued.

Subd. 3. [MORATORIUM; OTHER BEDS.] Except as provided in subdivision 4, no state agency may:

(2) renew a license for any existing facility licensed before the effective date of this moratorium, if the number of beds in the facility will increase by more than 25 beds since the time the most recent license was issued.

For the purposes of this subdivision, "juvenile" means a delinquent child, as defined in Minnesota Statutes, section 260.015, subdivision 5; a juvenile petty offender, as defined in Minnesota Statutes, section 260.015, subdivision 21; or a child in need of protection or services, as defined in Minnesota Statutes, section 260.015, subdivision 2a.

Subd. 4. [EXEMPTIONS.] The moratorium in this section does not apply to:

(1) any secure juvenile detention and treatment facility, which is funded in part through a grant under Laws 1994, chapter 643, section 79;

(2) the department of corrections' facilities at Red Wing and Sauk Centre;

(3) the proposed department of corrections' facility at Camp Ripley;

(4) any facility that submitted a formal request for licensure under Minnesota Statutes, section 241.021, before December 31, 1997; and

(5) any residential academy receiving state funding for fiscal year 1998 or 1999 for capital improvements.

Subd. 5. [MORATORIUM; LENGTH.] The moratorium in this section stays in effect until June 30, 1999.

Sec. 13. [JUVENILE PLACEMENT STUDY.]

The legislative audit commission is requested to direct the legislative auditor to conduct a study of juvenile out-of-home placements. The study must include:

(1) an evaluation of existing placements for juveniles, including, but not limited to, the number of beds at each facility, the average number of beds occupied each day at each facility, and the location of each facility, and an analysis of the projected need for an increased number of beds for juvenile out-of-home placements, including the geographic area where beds will be needed;

(2) an evaluation of existing services and programming provided in juvenile out-of-home placements and an assessment of the types of services and programming that are needed in juvenile out-of-home placements, by geographic area;

(3) an evaluation of the utilization of continuum of care;

(4) an assessment of the reasons why juveniles are placed outside their homes;

(5) a summary of the demographics of juveniles placed outside their homes, by county, including information on race, gender, age, and other relevant factors;

(6) a summary of the geographic distance between the juvenile's home and the location of the out-of-home placement, including observations for the reasons a juvenile was placed at a particular location;

(7) a determination of the average length of time that a juvenile in Minnesota spends in an out-of-home placement and a determination of the average length of time that a juvenile spends in each type of out-of-home placement, including, but not limited to, residential treatment centers, correctional facilities, and group homes;

(8) a determination of the completion rates of juveniles participating in programming in out-of-home placements and an analysis of the reasons for noncompletion of programming;

(10) an analysis of the effectiveness of the juvenile out-of-home placement, including information on recidivism, where applicable, and the child's performance after returning to the child's home;

(11) an estimate of the cost each county spends on juvenile out-of-home placements;

(12) a description and examination of the per diem components per offender at state, local, and private facilities providing placements for juveniles; and

(13) other issues that may affect juvenile out-of-home placements.

If the commission directs the auditor to conduct this study, the auditor shall report its findings to the chairs of the house and senate committees and divisions with jurisdiction over criminal justice and health and human services policy and funding by January 15, 1999.

Sec. 14. [CITY OF EVELETH; LOAN FORGIVENESS.]

Notwithstanding the provisions of any other law or charter, the city of Eveleth may, by resolution of its city council, forgive all or any portion of the principal and interest due or to become due to the city, pursuant to any loan or loans made by the city, in an amount not exceeding $100,000, prior to January 1, 1998, to any hospital, nursing home, other health care facility or corporation, partnership, or limited liability company operating such a facility within the city of Eveleth.

Sec. 15. [REPEALER.]

(a) Minnesota Rules, part 2740.1600, subpart 1, is repealed.

(b) Minnesota Statutes 1997 Supplement, section 62D.042, subdivision 3, is repealed.

Sec. 16. [EFFECTIVE DATE.]

(a) Section 2 (62D.042, subdivision 2) is effective January 1, 1999.

(b) Section 15, paragraph (b) (repealing section 62D.042, subdivision 3) is effective the day following final enactment.

(c) Section 7 (Laws 1997, chapter 207, section 7) is effective the day following final enactment.

(d) Section 10 (TOWN OF WHITE, ST. LOUIS COUNTY) is effective upon compliance with Minnesota Statutes, section 645.021, subdivision 2.

(e) Sections 12 and 13 (licensing and juvenile placement) are effective the day following final enactment.

(f) Section 14 (loan forgiveness by the city of Eveleth) is effective the day following final enactment without local approval according to Minnesota Statutes, section 645.023, subdivision 1, clause (a)."

Delete the title and insert:

148.67; 148.70; 148.705; 148.71; 148.72, subdivisions 1, 2, and 4; 148.73; 148.74; 148.75; 148.76; 148.78; 214.01, subdivision 2; 214.03; 245.462, subdivisions 4 and 8; 245.4871, subdivision 4; 245A.03, by adding subdivisions; 245A.14, subdivision 4; 254A.17, subdivision 1, and by adding a subdivision; 256.014, subdivision 1; 256.969, subdivisions 16, 17, and by adding a subdivision; 256B.03, subdivision 3; 256B.055, by adding a subdivision; 256B.057, subdivision 3a, and by adding subdivisions; 256B.0625, subdivisions 20, 34, 38, and by adding a subdivision; 256B.0911, subdivision 4; 256B.41, subdivision 1; 256B.431, subdivisions 2b, 2i, 11, and by adding subdivisions; 256B.501, subdivision 2; 256B.69, by adding a subdivision; 256D.03, subdivision 4, and by adding a subdivision; 256D.051, by adding a subdivision; 256D.46, subdivision 2; 268.88; and 268.92, subdivision 4; Minnesota Statutes 1997 Supplement, sections 60A.15, subdivision 1; 62D.11, subdivision 1; 62J.69, subdivisions 1, 2, and by adding a subdivision; 62J.70, subdivision 3; 62J.71, subdivisions 1, 3, and 4; 62J.72, subdivision 1; 62Q.105, subdivision 1; 62Q.30; 103I.208, subdivision 2; 119B.01, subdivision 16; 119B.02; 144.1494, subdivision 1; 144.9504, subdivision 2; 144.9506, subdivision 1; 144A.071, subdivision 4a; 144A.46, subdivision 2; 144A.4605, subdivision 4; 171.29, subdivision 2; 214.32, subdivision 1; 256.01, subdivision 2; 256.031, subdivision 6; 256.741, by adding a subdivision; 256.9657, subdivision 3; 256.9685, subdivision 1; 256.9864; 256B.04, subdivision 18; 256B.06, subdivision 4; 256B.062; 256B.0625, subdivision 31a; 256B.0627, subdivisions 5 and 8; 256B.0635, by adding a subdivision; 256B.0645; 256B.0911, subdivisions 2 and 7; 256B.0915, subdivision 1d; 256B.0951, by adding a subdivision; 256B.431, subdivisions 3f and 26; 256B.69, subdivisions 2 and 3a; 256B.692, subdivisions 2 and 5; 256B.77, subdivisions 3, 7a, 10, and 12; 256D.03, subdivision 3; 256D.05, subdivision 8; 256F.05, subdivision 8; 256J.02, subdivision 4; 256J.03; 256J.08, subdivisions 11, 26, 28, 40, 60, 68, 73, 83, and by adding subdivisions; 256J.09, subdivisions 6 and 9; 256J.11, subdivision 2, as amended; 256J.12; 256J.14; 256J.15, subdivision 2; 256J.20, subdivisions 2 and 3; 256J.21; 256J.24, subdivisions 1, 2, 3, 4, and by adding subdivisions; 256J.26, subdivisions 1, 2, 3, and 4; 256J.28, subdivisions 1, 2, and by adding a subdivision; 256J.30, subdivisions 10 and 11; 256J.31, subdivisions 5, 10, and by adding a subdivision; 256J.32, subdivisions 4, 6, and by adding a subdivision; 256J.33, subdivisions 1 and 4; 256J.35; 256J.36; 256J.37, subdivisions 1, 2, 9, and by adding subdivisions; 256J.38, subdivision 1; 256J.39, subdivision 2; 256J.395; 256J.42; 256J.43; 256J.44, by adding a subdivision; 256J.45, subdivisions 1, 2, and by adding a subdivision; 256J.46, subdivisions 1 and 2; 256J.47, subdivision 4; 256J.48, subdivisions 2 and 3; 256J.50, subdivision 5, and by adding a subdivision; 256J.515; 256J.52, subdivisions 2, 3, 4, and by adding subdivisions; 256J.54, subdivisions 2, 3, 4, and 5; 256J.55, subdivision 5; 256J.56; 256J.57, subdivision 1; 256J.74, subdivision 2, and by adding a subdivision; 256K.03, subdivision 5; 256L.01; 256L.02, subdivision 3, and by adding a subdivision; 256L.03, subdivisions 1, 3, 4, 5, and by adding subdivisions; 256L.04, subdivisions 1, 2, 7, 8, 9, 10, and by adding subdivisions; 256L.05, subdivisions 2, 3, 4, and by adding subdivisions; 256L.06, subdivision 3; 256L.07, subdivisions 2 and 3; 256L.09, subdivisions 2, 4, and 6; 256L.11, subdivision 6; 256L.12, subdivision 5; 256L.15; and 256L.17, by adding a subdivision; Laws 1997, chapter 195, section 5; chapter 203, article 1, section 2, subdivisions 5 and 12; article 4, section 64; chapter 207, section 7; chapter 225, article 2, section 64; chapter 248, section 46, as amended; proposing coding for new law in Minnesota Statutes, chapters 62J; 62Q; 144; 145; 148; 256; 256B; 256D; 256J; and 256L; proposing coding for new law as Minnesota Statutes, chapter 256M; repealing Minnesota Statutes 1996, sections 144.0721, subdivision 3a; 144.491; 144.9501, subdivisions 12, 14, and 16; 144.9503, subdivisions 5, 8, and 9; 256.031, as amended; 256.032; 256.033, as amended; 256.034; 256.035; 256.036; 256.0361; 256.047; 256.0475; 256.048; and 256.049; Minnesota Statutes 1997 Supplement, sections 62D.042, subdivision 3; 144.0721, subdivision 3; 256B.057, subdivision 1a; 256B.062; 256B.0913, subdivision 15; 256J.25; 256J.28, subdivision 4; 256J.32, subdivision 5; 256J.34, subdivision 5; 256L.04, subdivisions 3, 4, 5, and 6; 256L.06, subdivisions 1 and 2; 256L.08; 256L.09, subdivision 3; 256L.13; 256L.14; and 256L.15, subdivision 3; Laws 1997, chapter 85, article 1, sections 61 and 71; article 3, section 55; Minnesota Rules (exempt), parts 2740.1600, subpart 1; and 9500.9100 to 9500.9220."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

subdivision 3, and by adding a subdivision; 16A.501; 16A.72; 16B.04, subdivision 4; 16B.30; 17.03, subdivision 11; 43A.04, subdivision 1a; 43A.317, subdivision 8; 45.012; 84.027, subdivision 14; 116.03, subdivision 2a; 116J.011; 144.05, subdivision 2; 174.02, subdivision 1a; 175.001, subdivision 6; 190.09, subdivision 2; 196.05, subdivision 2; 216A.07, subdivision 6; 268.0122, subdivision 6; 270.02, subdivision 3a; 299A.01, subdivision 1a; 352D.12; 363.05, subdivision 3; and 469.177, subdivision 11; Minnesota Statutes 1997 Supplement, sections 16A.11, subdivision 1; 120.0111; 241.01, subdivision 3b; and 245.03, subdivision 2; Laws 1994, chapter 632, article 3, section 12, as amended; Laws 1997 chapter 202, article 1, section 11; and Laws 1997, Second Special Session chapter 2, section 8; proposing coding for new law in Minnesota Statutes, chapters 16B; 214; and 325G; repealing Minnesota Statutes 1996, sections 3.971, subdivision 3; 15.90; 15.91; and 15.92; Minnesota Statutes 1997 Supplement, sections 16A.11, subdivision 3c; and 241.015.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [STATE GOVERNMENT APPROPRIATIONS.]

The sums in the columns headed "APPROPRIATIONS" are appropriated from the general fund, or another named fund, to the agencies and for the purposes specified to be available for the fiscal years indicated for each purpose.

1998 1999

General $ 2,215,000 $ 30,758,000

Special Revenue -0- 15,000

Natural Resources -0- 25,000

Game and Fish -0- 33,000

Trunk Highway -0- 55,000

APPROPRIATIONS

Available for the Year

Ending June 30

1998 1999

Sec. 2. LEGISLATURE 25,000

The House of Representatives television office shall log all citizen comments received and shall distribute comments originating from each member's district to the appropriate House member within one week after the comments are received.

Sec. 3. LEGISLATIVE AUDIT COMMISSION

The legislative audit commission is requested to evaluate the interpretation and enforcement of the state building code by state and local enforcement officials. If conducted, the evaluation shall pay particular attention to: (1) interpretation and enforcement of the code as applied to public buildings as compared to interpretation and enforcement when applied to privately-owned buildings; and (2) the extent to which interpretation and enforcement of the code involves public safety concerns. If conducted, the results of the evaluation shall be reported to the legislature by January 15, 1999.

Sec. 4. ATTORNEY GENERAL -0- 24,000,000

The commissioner of finance and the attorney general shall convene a joint executive-legislative task force to evaluate:

(1) the availability of legal services from the attorney general's office necessary to meet the needs of state government;

(2) the adequacy and suitability of the current mechanism for funding legal services;

(3) the appropriateness of billing rates to cover the cost of legal services; and

(4) the appropriateness of the current process for setting billing rates.

In addition to representatives of the commissioner and the attorney general, the task force must include representatives of partner and nonpartner agencies receiving services from the office of the attorney general, legislative fiscal staff representing committees responsible for funding the office of the attorney general, and the office of the legislative auditor.

Sec. 5. SECRETARY OF STATE -0- 100,000

This appropriation is to make necessary changes to the statewide voter registration system to facilitate reassignment of voters to the correct precinct and election districts following legislative redistricting in 2002. This appropriation is available until June 30, 2000.

Sec. 6. OFFICE OF STRATEGIC AND LONG-RANGE PLANNING 1,215,000 305,000

$15,000 is appropriated in fiscal year 1998 and $65,000 is appropriated in fiscal year 1999 for census-related activities.

$1,200,000 in fiscal year 1998 is for purposes of section 69. This appropriation is available until June 30, 1999.

$240,000 in fiscal year 1999 is for grants to regional development commissions to assist local units of government with the preparation of local land use plans. In regions not served by an active regional development commission, the director may select another regional organization.

Sec. 7. DEPARTMENT OF ADMINISTRATION -0- 5,479,000

$3,850,000 is appropriated in fiscal year 1999 for modifications of state business systems to address year 2000 changes. $2,000,000 may be used only for requests presented to the legislature in 1997, but not funded. $1,850,000 may be used only for the department of finance, for abatements, testing, interfaces, and small agency requests. This appropriation is available only if the commissioner first determines that there will be third party or outside agency compliance testing of each system funded by this appropriation to verify that agency information systems are year 2000 capable. This appropriation may not be used to provide funding for any system that is funded by a fund other than the general fund. This appropriation is added to the appropriation for technology management in Laws 1997, chapter 202, article 1, section 12, subdivision 7. This appropriation is available until expended.

$150,000 is appropriated in fiscal year 1999 for the office of citizenship and volunteer services for coordinating the Minnesota alliance with youth initiative.

$100,000 is for grants to the Minneapolis park and recreation board and the St. Paul park and recreation department to provide public technology access to children, adults, and neighborhood groups to state, county, city, and school district information systems. The funds shall be used to connect 48 park facilities to the city's network backbone and Internet system by writing software, purchasing and upgrading hardware, and installing communication lines and servers. The funds are available only to the extent they are matched one-to-one from nonstate sources. Upon receipt of a grant, the Minneapolis park and recreation board and the St. Paul park and recreation department must apply for federal matching funds for computer and technology enhancement by units of local government.

500,000 is added to the department of administration base for fiscal year 2000 only for grants to noncommercial television stations to assist with conversion to a digital broadcast signal mandated by the federal government. In order to qualify for these grants, a station must meet the criterion established for grants in Minnesota Statutes, section 129D.12, subdivision 2.

$20,000 is for a portrait of Governor Carlson.

$1,000,000 is for a payment to the Minneapolis community development agency in partial repayment of a 1986 loan made by the agency to the Minneapolis park board to acquire property for the central riverfront regional park. As a condition of receiving this payment, the Minneapolis community development agency must agree that the payment will serve as full satisfaction and accord for the 1986 loan, and that this will be the final payment made by the state.

No state agency shall adopt any rules with regard to codes or standards for heating, cooling, refrigeration, ventilation, piping, or appurtenances; installation or maintenance, without the substantial agreement and consensus of the Minnesota chapter of I.A.P.M.O.; Minnesota Mechanical Contractors Association; Minnesota Association of Plumbing, Heating and Cooling Contracts; Sheet Metal, Air Conditioning, and Roofing Contractors Association of Minnesota.

$44,000 is for costs associated with making the State Register and the guidebook to state agency services available on the Internet. The management analysis division of the department of administration must analyze the financial impacts of making the State Register and the guidebook to state agency services available on the Internet on the department's bookstore operation. The division must report its preliminary findings to the chairs of the house and senate governmental operations budget and finance divisions by January 15, 1999. A complete analysis of fiscal impacts must be submitted to these chairs by January 15, 2000.

Sec. 8. CAPITOL AREA ARCHITECTURAL AND PLANNING

BOARD 150,000

This appropriation is for the Minnesota women's suffrage memorial garden on the capitol grounds. This appropriation is available until June 30, 1999.

Sec. 9. DEPARTMENT OF EMPLOYEE RELATIONS 1,000,000 -0-

$1,000,000 is for fiscal year 1998 for transfer to the insurance trust fund under Minnesota Statutes, section 43A.316, subdivision 9, for the purposes stated in that subdivision.

The commissioner of the department of employee relations shall study and report to the legislature by August 1, 1999, to: (1) determine what temporary state jobs occupied by disabled individuals are filled by able-bodied individuals when the jobs become permanent; (2) examine whether state agencies are in compliance with state and federal law in hiring qualified disabled individuals; and (3) recommend any assistance state agencies may need to comply with applicable laws.

Sec. 10. REVENUE 731,000

This appropriation is added to the appropriation in Laws 1997, chapter 202, article 1, section 17, subdivision 8, and must be used for information systems and to expand the Minnesota collection enterprise office staff in Ely. The legislature estimates that this appropriation will result in increased revenue to the general fund of $900,000 in fiscal year 1999.

Sec. 11. AMATEUR SPORTS COMMISSION 536,000

$136,000 is for a grant to the Iron Range resources and rehabilitation board to expand the facilities at Mt. Itasca ski area.

$100,000 is for a grant to the United States Olympic Committee's Minnesota Olympic development program to fund development of a statewide winter sports program for females and at-risk youth.

$300,000 is for a grant to the city of Gilbert for costs associated with refurbishing of an ice arena, provided that a dollar-for-dollar match is provided by the city of Gilbert.

Sec. 12. MILITARY AFFAIRS 125,000

Sec. 13. MINNEAPOLIS EMPLOYEES RETIREMENT FUND (1,000,000)

The scheduled state payment to the Minneapolis employees retirement fund on March 15, 1999, is reduced from $2,250,000 to $1,250,000. If the actuarial valuation as of July 1, 1998, of the Minneapolis employees retirement fund does not result in a reduction of total required employer contributions of greater than $1,000,000 for calendar year 1999, the required employer contributions for employers other than the state of Minnesota will not be increased above the amounts those employers contributed in calendar year 1998. If the July 1, 1998, actuarial valuation of the Minneapolis employees retirement fund does not result in a reduction of total employer contribution of greater than $1,000,000, the Minneapolis employees retirement fund must report to the commissioner of finance and the chairs of the Senate state government finance committee and the House state government finance division on the effect of the underfunding and the amounts needed to correct any deficiency.

Sec. 14. INSURANCE PREMIUM

SUPPLEMENT -0- 435,000

General -0- 307,000

Water Recreation -0- 23,000

Snowmobile Trails and

Enforcement -0- 2,000

Special Revenue -0- 15,000

Game and Fish -0- 33,000

Trunk Highway -0- 55,000

The amounts appropriated are to the commissioner of finance for the second year of the biennium for transfer to agencies affected by cost increases due to the extension of eligibility for employer-paid premiums for health, dental, and life insurance to part-time seasonal employees as provided in collective bargaining agreements for the current biennium.

The schedule provided in the 1998 supplemental budget recommendation detail page supporting the governor's request for these appropriations must be applied when determining base-level funding of affected agencies for the biennium ending June 30, 2001.

Sec. 15. HUMAN SERVICES 750,000

Sec. 16. Minnesota Statutes 1996, section 3.3005, subdivision 2, is amended to read:

Subd. 2. A state agency shall not expend money received by it under federal law for any purpose unless a request to spend federal money from that source for that purpose in that fiscal year has been submitted by the governor to the legislature as a part of a budget request submitted during or within ten days before the start of a regular legislative session, or unless specifically authorized by law or as provided by this section.

Sec. 17. Minnesota Statutes 1996, section 3.3005, is amended by adding a subdivision to read:

Subd. 2a. [REVIEW OF FEDERAL FUNDS SPENDING REQUEST.] Twenty days after a governor's budget request that includes a request to spend federal money is submitted to the legislature under subdivision 2, a state agency may expend money included in that request unless, within the 20-day period, a member of the legislative advisory commission requests further review. If a legislative advisory commission member requests further review of a federal funds spending request, the agency may not expend the federal funds until the request has been satisfied and withdrawn, the expenditure is approved in law, or the regular session of the legislature is adjourned for the year.

Sec. 18. Minnesota Statutes 1996, section 4.07, subdivision 3, is amended to read:

Subd. 3. [FEDERAL AND STATE LAW; APPROPRIATION OF FUNDS.] The governor or any state department or agency designated by the governor shall comply with any and all requirements of federal law and any rules and regulations promulgated thereunder to enable the application for, the receipt of, and the acceptance of such federal funds. The expenditure of any such funds received shall be governed by the laws of the state except insofar as federal requirements may otherwise provide. All such money received by the governor or any state department or agency designated by the governor for such purpose shall be deposited in the state treasury and, subject to section 3.3005, are hereby appropriated annually in order to enable the governor or the state department or agency designated by the governor for such purpose to carry out the purposes for which the funds are received. None of such federal money so deposited in the state treasury shall cancel and they shall be available for expenditure in accordance with the requirements of federal law.

Sec. 19. Minnesota Statutes 1996, section 10A.071, subdivision 3, is amended to read:

Subd. 3. [EXCEPTIONS.] (a) The prohibitions in this section do not apply if the gift is:

(1) a contribution as defined in section 10A.01, subdivision 7;

(2) services to assist an official in the performance of official duties, including but not limited to providing advice, consultation, information, and communication in connection with legislation, and services to constituents;

(3) services of insignificant monetary value;

(4) a plaque or similar memento recognizing individual services in a field of specialty or to a charitable cause;

(5) a trinket or memento of insignificant value;

(6) informational material of unexceptional value; or

(7) food or a beverage given at a reception, meal, or meeting away from the recipient's place of work by an organization before whom the recipient appears to make a speech or answer questions as part of a program; or

(b) The prohibitions in this section do not apply if the gift is given:

(1) because of the recipient's membership in a group, a majority of whose members are not officials, and an equivalent gift is given to the other members of the group; or

(2) by a lobbyist or principal who is a member of the family of the recipient, unless the gift is given on behalf of someone who is not a member of that family.

Sec. 20. Minnesota Statutes 1996, section 10A.20, is amended by adding a subdivision to read:

Subd. 15. [AVAILABILITY.] The board shall make all reports required under this section available on the Internet as soon as possible after the reports are filed. The board may not require additional reporting as a result of this subdivision. The board must provide this service with funds appropriated to it and may not increase fees as a result of this subdivision.

Sec. 21. Minnesota Statutes 1996, section 14.04, is amended to read:

14.04 [AGENCY ORGANIZATION; GUIDEBOOK.]

To assist interested persons dealing with it, each agency shall must, in a manner prescribed by the commissioner of administration, prepare a description of its organization, stating the general course and method of its operations and where and how the public may obtain information or make submissions or requests. The commissioner of administration shall must publish these descriptions at least once every four years commencing in 1981 in a guidebook of state agencies. Notice of the publication of the guidebook shall must be published in the State Register and given in newsletters, newspapers, or other publications, or through other means of communication. The commissioner must make an electronic version of the guidebook available on the Internet free of charge through the North Star information service.

Sec. 22. [14.095] [HEARING ON PETITION.]

Within 90 days of a petition filed by a local government pursuant to section 14.09, the administrative law judge assigned by the chief administrative law judge shall conduct a hearing on the petition. The agency shall give notice of the hearing in the same manner required for notice of a proposed rule hearing under section 14.14, subdivision 1a. At the public hearing, the agency shall make an affirmative presentation of facts establishing the need for and reasonableness of the agency rule or portion of the rule that is the subject of the petition. If the administrative law judge determines that the agency has not established the need for and reasonableness of the rule or some portion of the rule, the rule or portion for which the agency has not established need and reasonableness does not have the force of law, effective 90 days after the administrative law judge's decision or upon adjournment of the next regular annual session of the legislature, whichever is later. The decision of the administrative law judge shall be reported within 30 days to the chairs of the house and senate government operations committees and the house and senate policy committees with jurisdiction over the agency whose rule is the subject of the petition. No petition may be filed under this section after July 1, 1999.

Sec. 23. Minnesota Statutes 1996, section 14.46, subdivision 4, is amended to read:

Subd. 4. [COST; DISTRIBUTION.] When an agency properly submits a rule, proposed rule, notice, or other material to the commissioner of administration, the commissioner shall must then be accountable for the publication of the same in the State Register. The commissioner of administration shall must require each agency which requests the publication of rules, proposed rules, notices, or other material in the State Register to pay its proportionate cost of the State Register unless other funds are provided and are sufficient to cover the cost of the State Register.

The commissioner must make an electronic version of the State Register available on the Internet free of charge through the North Star information service.

Sec. 24. Minnesota Statutes 1996, section 15.91, subdivision 2, is amended to read:

Subd. 2. [PERFORMANCE REPORTS.] By November 30 January 2 of each even-numbered odd-numbered year, each agency shall issue a performance report that includes the following:

(1) the agency's mission;

(2) the most important goals and objectives for each major program for which the agency will request funding in its next biennial budget;

(3) identification of the populations served by the programs that support the agency's mission; and

(4) workload, efficiency, output, and outcome

(3) the most important measures for each program goals and objectives listed in the report, with data showing each programs' actual performance relative to these measures for the previous four fiscal years and the performance the agency projects it will achieve during the next two fiscal years with the level of funding it has requested.

If it would enhance an understanding of its mission, programs, and performance, the agency shall include in its report information that describes the broader economic, social, and physical environment in which the agency's programs are administered.

Each agency shall send a copy of its performance report to the speaker of the house, president of the senate, legislative auditor, and legislative reference library, and provide a copy to others upon request.

The commissioner of finance shall ensure that performance reports are complete, succinct, accurate, and reliable and compiled in such a way that they are useful to the public, legislators, and managers in state government. To maintain a computerized performance data system, the commissioner of finance may require agencies to provide performance data annually.

The legislative auditor shall periodically review and comment on selected performance reports as provided for by section 3.971, subdivision 3.

Sec. 25. Minnesota Statutes 1996, section 16A.10, as amended by Laws 1997, chapter 202, article 2, section 12, is amended to read:

16A.10 [BUDGET PREPARATION.]

Subd. 1a. [PURPOSE OF PERFORMANCE DATA.] Performance data shall be presented in the budget proposal to provide information so that the legislature can determine the extent to which state programs are successful in meeting goals and objectives. Agencies shall present as much historical information as needed to understand major trends and shall set targets for future performance issues where feasible and appropriate. The information shall appropriately highlight agency performance issues that would assist legislative review and decision making.

Subd. 2. [BY OCTOBER 15 AND NOVEMBER 30.] By October 15 of each even-numbered year, an agency must file the following with the commissioner:

(1) budget estimates for the most recent and current fiscal years;

(2) its upcoming biennial budget estimates;

(3) a comprehensive and integrated statement of agency missions and outcome and performance measures; and

(4) a concise explanation of any planned changes in the level of services or new activities.

The commissioner shall prepare and file the budget estimates for an agency failing to file them. By November 30, the commissioner shall send the final budget format, agency budget plans or requests estimates for the next biennium, and copies of the filed material to the ways and means and finance committees, except that the commissioner shall not be required to transmit information that identifies executive branch budget decision items. At this time, a list of each employee's name, title, and salary must be available to the legislature, either on paper or through electronic retrieval.

Subd. 3. [DUTIES TO GOVERNOR-ELECT.] Immediately after the election of a new governor, the commissioner shall report the budget estimates and make available to the governor-elect all department information, staff, and facilities relating to the budget.

Sec. 26. Minnesota Statutes 1997 Supplement, section 16A.103, subdivision 1, is amended to read:

Subdivision 1. [STATE REVENUE AND EXPENDITURES.] In February and November each year, the commissioner shall prepare and deliver to the governor and legislature a forecast of state revenue and expenditures. The November forecast must be delivered to the legislature and governor no later than the end of the first week of December. The February forecast must be delivered to the legislature and governor by the end of February. The forecast must assume the continuation of current laws and reasonable estimates of projected growth in the national and state economies and affected populations. Revenue must be estimated for all sources provided for in current law. Expenditures must be estimated for all obligations imposed by law and those projected to occur as a result of inflation and variables outside the control of the legislature. In determining the rate of inflation, the application of inflation, and the other variables to be included in the expenditure part of the forecast, the commissioner must consult with the chair of the senate state government finance committee, the chair of the house committee on ways and means, and house and senate fiscal staff. In addition, the commissioner shall forecast Minnesota personal income for each of the years covered by the forecast and include these estimates in the forecast documents. A forecast prepared during the first fiscal year of a biennium must cover that biennium and the next biennium. A forecast prepared during the second fiscal year of a biennium must cover that biennium and the next two bienniums.

Sec. 27. Minnesota Statutes 1997 Supplement, section 16A.11, subdivision 1, is amended to read:

Sec. 28. Minnesota Statutes 1996, section 16A.11, subdivision 3, is amended to read:

Subd. 3. [PART TWO: DETAILED BUDGET.] Part two of the budget, the detailed budget estimates both of expenditures and revenues, shall must contain any statements on the financial plan which the governor believes desirable or which may be required by the legislature. Part of the budget must be prepared using performance-based budgeting concepts. In this subdivision, "performance-based budgeting" means a budget system that identifies agency outcomes and results and provides comprehensive information regarding actual and proposed changes in funding and outcomes. The detailed estimates shall include the governor's budget plan of each agency arranged in tabular form so it may readily be compared with the governor's budget for each agency. The detailed estimates must include a separate line listing the total number of professional or technical service contracts and the total cost of those contracts for the prior biennium and the projected number of professional or technical service contracts and the projected costs of those contracts for the current and upcoming biennium. They shall must also include, as part of each agency's organization chart, a summary of the personnel employed by the agency, showing the reflected as full-time equivalent positions for the current biennium, and the number of full-time equivalent employees of all kinds employed by the agency on June 30 of the last complete fiscal year, and the number of professional or technical service consultants for the current biennium.

Sec. 29. Minnesota Statutes 1996, section 16A.11, is amended by adding a subdivision to read:

Subd. 3a. [AGENCY BUDGET REQUESTS.] After the governor's budget is presented to the legislature, agencies, if requested, must provide information to the legislature about budget requests that have originated in the agency.

Sec. 30. Minnesota Statutes 1996, section 16A.72, is amended to read:

16A.72 [INCOME CREDITED TO GENERAL FUND; EXCEPTIONS.]

All income, including fees or receipts of any nature, shall be credited to the general fund, except:

(1) federal aid;

(2) contributions, or reimbursements received for any account of any division or department for which an appropriation is made by law;

(3) income to the University of Minnesota;

(4) income to revolving funds now established in institutions under the control of the commissioners of corrections or human services;

(5) investment earnings resulting from the master lease program, except that the amount credited to another fund or account may not exceed the amount of the additional expense incurred by that fund or account through participation in the master lease program;

(6) investment earnings resulting from any gift, donation, device, endowment, trust, or court-ordered or court-approved escrow account or trust fund, which should be credited to the fund or account and appropriated for the purpose for which they were received;

(7) receipts from the operation of patients' and inmates' stores and vending machines, which shall be deposited in the social welfare fund in each institution for the benefit of the patients and inmates;

(7) (8) money received in payment for services of inmate labor employed in the industries carried on in the state correctional facilities which receipts shall be credited to the current expense fund of those facilities;

(8) (9) as provided in sections 16B.57 and 85.22;

(10) (11) the percent of income collected by a private collection agency and retained by the collection agency as its collection fee; or

(11) (12) as otherwise provided by law.

Sec. 31. [16B.104] [PROCUREMENT REQUIREMENTS.]

(a) Technology access standards must be developed by the commissioner, in consultation with the office of technology, and must require compliance with nonvisual access standards established by the state. The requirement must be included in all contracts for the procurement of information technology by, or for the use of, agencies, political subdivisions, the University of Minnesota, and the Minnesota state colleges and universities.

(b) The nonvisual access standards must include the following minimum specifications:

(1) effective, interactive control and use of the technology, including the operating system, applications programs, prompts, and format of the data presented, must be readily achievable by nonvisual means;

(2) the nonvisual access technology must be compatible with information technology used by other individuals with whom the blind or visually impaired individual must interact;

(3) nonvisual access technology must be integrated into networks used to share communications among employees, program participants, and the public; and

(4) the nonvisual access technology must have the capability of providing equivalent access by nonvisual means to telecommunications or other interconnected network services used by persons who are not blind or visually impaired.

(c) Nothing in this section requires the installation of software or peripheral devices used for nonvisual access when the information technology is being used by individuals who are not blind or visually impaired.

(d) Compliance with this section in regard to information technology purchased prior to August 1, 1998, must be achieved at the time of procurement of an upgrade or replacement of the existing equipment or software.

Sec. 32. [16B.76] [CONSTRUCTION CODES ADVISORY COUNCIL.]

Subdivision 1. [MEMBERSHIP.] (a) The construction codes advisory council consists of the following members:

(1) the commissioner of administration or the commissioner's designee representing the department's building codes and standards division;

(2) the commissioner of health or the commissioner's designee representing an environmental health section of the department;

(3) the commissioner of public safety or the commissioner's designee representing the department's state fire marshal division;

(4) the commissioner of public service or the commissioner's designee representing the department's energy division;

(5) two members representing the Minnesota Building Officials, one of whom must reside outside the metropolitan area, as defined in section 473.121, subdivision 2, appointed by the commissioner of administration; and

(6) one member representing each of the following organizations and appointed by the commissioner of administration:

(i) Fire Marshal's Association of Minnesota;

(iii) American Institute of Architects Minnesota;

(iv) Consulting Engineers Council of Minnesota;

(v) Building Owners and Managers Association;

(vi) Builders Association of Minnesota;

(vii) Associated General Contractors of Minnesota;

(viii) Associated Builders and Contractors of Minnesota, Inc.;

(ix) Minnesota Association of Plumbing, Heating, and Cooling Contractors;

(x) Minnesota Mechanical Contractors Association;

(xi) League of Minnesota Cities;

(xii) Sheet Metal, Air Conditioning, and Roofing Contractors;

(xiii) Minnesota Electrical Association;

(xiv) Minnesota Utility Contractors Association;

(xv) National Electrical Contractors Association; and

(xvi) Building and Construction Trades.

(b) For members who are not state officials or employees, terms, compensation, removal, and the filling of vacancies are governed by section 15.059. The council shall select one of its members to serve as chair.

(c) The council expires June 30, 2001.

Subd. 2. [DUTIES OF THE COUNCIL.] (a) The council shall review laws, codes, rules, standards, and licensing requirements relating to building construction and may:

(1) recommend ways to eliminate inconsistencies, to streamline construction regulation and construction processes, and to improve procedures within and among jurisdictions;

(2) review and comment on current and proposed laws and rules to promote coordination and consistency;

(3) advise agencies on possible changes in rules to make them easier to understand and apply; and

(4) promote the coordination, within each jurisdiction, of the administration and enforcement of construction codes.

(b) The council shall report its findings and recommendations to the commissioner of administration and the head of any other affected agency by the end of each calendar year. The council may recommend changes in laws or rules governing building construction. The council may establish subcommittees to facilitate its work.

Sec. 33. Minnesota Statutes 1996, section 16D.02, subdivision 3, is amended to read:

Subd. 3. [DEBT.] "Debt" means an amount owed to the state directly, or through a state agency, on account of a fee, duty, lease, direct loan, loan insured or guaranteed by the state, rent, service, sale of real or personal property, overpayment, fine, assessment, penalty, restitution, damages, interest, tax, bail bond, forfeiture, reimbursement, liability owed, an assignment to the state including assignments under sections 256.72 to 256.87, the Social Security Act, or other state or federal law, recovery of costs incurred by the state, or any other source of indebtedness to the state. Debt also includes amounts owed to individuals as a result of civil, criminal, or administrative action brought by the state or a state agency pursuant to its statutory authority or for which the state or state agency acts in a fiduciary capacity in providing collection services in accordance with the regulations adopted under the Social Security Act at Code of Federal Regulations, title 45, section 302.33. Debt also includes an amount owed to the courts or University of Minnesota for which the commissioner provides collection services pursuant to contract.

Sec. 34. Minnesota Statutes 1996, section 16D.04, subdivision 1, is amended to read:

Subdivision 1. [DUTIES.] The commissioner shall provide services to the state and its agencies to collect debts owed the state. The commissioner is not a collection agency as defined by section 332.31, subdivision 3, and is not licensed, bonded, or regulated by the commissioner of commerce under sections 332.31 to 332.35 or 332.38 to 332.45. The commissioner is subject to section 332.37, except clause (9) or, (10), (12), or (19). Debts referred to the commissioner for collection under section 256.9792 may in turn be referred by the commissioner to the enterprise. An audited financial statement may not be required as a condition of debt placement with a private agency if the private agency: (1) has errors and omissions coverage under a professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond to cover actions of its employees, in an amount of at least $100,000. In cases of debts referred under section 256.9792, the provisions of this chapter and section 256.9792 apply to the extent they are not in conflict. If they are in conflict, the provisions of section 256.9792 control. For purposes of this chapter, the referring agency for such debts remains the department of human services.

Sec. 35. Minnesota Statutes 1996, section 16D.04, subdivision 4, is amended to read:

Subd. 4. [AUTHORITY TO CONTRACT.] The commissioner commissioners of revenue and finance may contract with credit bureaus, private collection agencies, and other entities as necessary for the collection of debts. A private collection agency acting under a contract with the commissioner commissioners of revenue and finance is subject to sections 332.31 to 332.45, except that the private collection agency may indicate that it is acting under a contract with the commissioner state. The commissioner may not delegate the powers provided under section 16D.08 to any nongovernmental entity.

Sec. 36. [16D.045] [STAFF.]

Any staff hired by the commissioner of revenue after June 30, 1998, to work for the Minnesota collection enterprise must be located in the Ely office.

Sec. 37. Minnesota Statutes 1996, section 16D.08, subdivision 2, is amended to read:

court. The word "tax" or "taxes" when used in the tax collection statutes listed in this subdivision also means debts referred under this chapter. For debts other than state taxes or child support, before any of the tax collection remedies listed in this subdivision can be used, except for the remedies in section 270.06, clauses (7) and (17), if the referring agency has not already obtained a judgment or filed a lien, the commissioner must first obtain a judgment against the debtor.

Sec. 38. Minnesota Statutes 1996, section 16D.11, as amended by Laws 1997, chapter 187, article 3, section 3, is amended to read:

16D.11 [COLLECTION PENALTY COSTS.]

Subdivision 1. [IMPOSITION.] As determined by the commissioner of finance, a penalty collection costs shall be added to the debts referred to the commissioner or private collection agency for collection. The penalty is Collection costs are collectible by the commissioner or private agency from the debtor at the same time and in the same manner as the referred debt. The referring agency shall advise the debtor of the penalty collection costs under this section and the debtor's right to cancellation of the penalty collection costs under subdivision 3 at the time the agency sends notice to the debtor under section 16D.07. If the commissioner or private agency collects an amount less than the total due, the payment is applied proportionally to the penalty collection costs and the underlying debt unless the commissioner of finance has waived this requirement for certain categories of debt pursuant to the department's internal guidelines. Penalties Collection costs collected by the commissioner under this subdivision or retained under subdivision 6 shall be deposited in the general fund as nondedicated receipts. Penalties Collection costs collected by private agencies are appropriated to the referring agency to pay the collection fees charged by the private agency. Penalty Collections of collection costs in excess of collection agency fees must be deposited in the general fund as nondedicated receipts.

Subd. 2. [COMPUTATION.] Beginning July 1, 1995, At the time a debt is referred, the amount of the penalty collection costs is equal to 15 percent of the debt, or 25 percent of the debt remaining unpaid if the commissioner or private collection agency has to take enforced collection action by serving a summons and complaint on or entering judgment against the debtor, or by utilizing any of the remedies authorized under section 16D.08, subdivision 2, except for the remedies in sections 270.06, clause (7), and 270.66 or when referred by the commissioner for additional collection activity by a private collection agency. If, after referral of a debt to a private collection agency, the debtor requests cancellation of the penalty collection costs under subdivision 3, the debt must be returned to the commissioner for resolution of the request.

Subd. 3. [CANCELLATION.] The penalty Collection costs imposed under subdivision 1 shall be canceled and subtracted from the amount due if:

(1) the debtor's household income as defined in section 290A.03, subdivision 5, excluding the exemption subtractions in subdivision 3, paragraph (3) of that section, for the 12 months preceding the date of referral is less than twice the annual federal poverty guideline under United States Code, title 42, section 9902, subsection (2);

(2) within 60 days after the first contact with the debtor by the enterprise or collection agency, the debtor establishes reasonable cause for the failure to pay the debt prior to referral of the debt to the enterprise;

(3) a good faith dispute as to the legitimacy or the amount of the debt is made, and payment is remitted or a payment agreement is entered into within 30 days after resolution of the dispute;

(4) good faith litigation occurs and the debtor's position is substantially justified, and if the debtor does not totally prevail, the debt is paid or a payment agreement is entered into within 30 days after the judgment becomes final and nonappealable; or

(5) penalties collection costs have been added by the referring agency and are included in the amount of the referred debt.

Subd. 4. [APPEAL.] Decisions of the commissioner denying an application to cancel the penalty collection costs under subdivision 3 are subject to the contested case procedure under chapter 14.

Subd. 6. [CHARGE TO REFERRING AGENCY.] If the penalty is collection costs are canceled under subdivision 3, an amount equal to the penalty is retained by the commissioner from the debt collected, and is accounted for and subject to the same provisions of this chapter as if the penalty had been collected from the debtor.

Subd. 7. [ADJUSTMENT OF RATE.] By June 1 of each year, the commissioner of finance shall determine the rate of the penalty collection costs for debts referred to the enterprise during the next fiscal year. The rate is a percentage of the debts in an amount that most nearly equals the costs of the enterprise necessary to process and collect referred debts under this chapter. In no event shall the rate of the penalty collection costs when a debt is first referred exceed three-fifths of the maximum penalty collection costs, and in no event shall the rate of the maximum penalty collection costs exceed 25 percent of the debt. Determination of the rate of the penalty collection costs under this section is not subject to the fee setting requirements of section 16A.1285.

Sec. 39. Minnesota Statutes 1996, section 16D.16, is amended to read:

16D.16 [SETOFFS.]

Subdivision 1. [AUTHORIZATION.] Unless prohibited by other law, the state agency utilizes a more specific setoff statute, or the state payments are subject to a more specific setoff statute, the commissioner or a state agency may automatically deduct the amount of a debt owed to the state from any state payment due to the debtor, except tax refunds, earned income tax credit, child care tax credit, prejudgment debts of $5,000 or less, funds exempt under section 550.37, or funds owed an individual who receives. Earned income tax credit, child care credit, funds exempt under section 550.37, or funds owed to an individual who is receiving assistance under the provisions of chapter 256 are not subject to setoff under this chapter section. If a debtor has entered into a written payment plan with respect to payment of a specified debt, the right of setoff may not be used to satisfy that debt. Notwithstanding section 181.79, the state may deduct from the wages due or earned by a state employee to collect a debt, subject to the limitations in section 571.922.

Subd. 2. [NOTICE AND HEARING.] Before setoff, the commissioner or state agency shall mail written notice by certified mail to the debtor, addressed to the debtor's last known address, that the commissioner or state agency intends to set off a debt owed to the state by the debtor against future payments due the debtor from the state. For debts owed to the state that have not been reduced to judgment, if no opportunity to be heard or administrative appeal process or a hearing by an impartial decision maker on the validity or accuracy of the debt has yet been made available to the debtor to contest the validity or accuracy of the debt, before setoff for a prejudgment debt, the notice to the debtor must advise that the debtor has a right to make a written request for a contested case hearing on the validity of the debt or the right to setoff. The debtor has 30 days from the date of that notice to make a written request for a contested case hearing to contest the validity of the debt or the right to setoff. The debtor's request must state the debtor's reasons for contesting the debt or the right to setoff. If the commissioner or state agency desires to pursue the right to setoff following receipt of the debtor's request for a hearing, the commissioner or state agency shall schedule a contested case hearing within 30 days of the receipt of the request for the hearing. If the commissioner or state agency decides not to pursue the right to setoff, the debtor must be notified of that decision.

Sec. 40. Minnesota Statutes 1997 Supplement, section 16E.07, subdivision 3, is amended to read:

Subd. 3. [ACCESS TO DATA.] The legislature determines that the greatest possible access to certain government information and data is essential to allow citizens to participate fully in a democratic system of government. Certain information and data, including, but not limited to the following, must be provided free of charge or for a nominal cost associated with reproducing the information or data:

(1) directories of government services and institutions, including an electronic version of the guidebook to state agency services published by the commissioner of administration;

(2) legislative and rulemaking information, including an electronic version of the State Register, public information newsletters, bill text and summaries, bill status information, rule status information, meeting schedules, and the text of statutes and rules;

(4) opinions of the attorney general;

(5) campaign finance and public disclosure board and election information;

(6) public budget information;

(7) local government documents, such as codes, ordinances, minutes, meeting schedules, and other notices in the public interest;

(8) official documents, releases, speeches, and other public information issued by government agencies; and

(9) the text of other government documents and publications that government agencies determine are important to public understanding of government activities.

Sec. 41. Minnesota Statutes 1996, section 43A.17, subdivision 8, is amended to read:

Subd. 8. [ACCUMULATED VACATION LEAVE.] The commissioner of employee relations shall not agree to a collective bargaining agreement or recommend a compensation plan pursuant to section 43A.18, subdivisions 1, 2, 3, and 4, nor shall an arbitrator issue an award under sections 179A.01 to 179A.25, if the compensation plan, agreement, or award permits an employee to convert accumulated vacation leave into cash before separation from state service.

This section does not prohibit the commissioner from negotiating a collective bargaining agreement or recommending approval of a compensation plan which: (1) permits an employee to receive payment for accumulated vacation leave upon beginning an unpaid leave of absence approved for more than one year in duration if the leave of absence is not for the purpose of accepting an unclassified position in state civil service; or (2) permits an employee to receive payment for accumulated vacation leave upon layoff.

Sec. 42. Minnesota Statutes 1997 Supplement, section 43A.30, subdivision 5, is amended to read:

Subd. 5. [ADMINISTRATION.] The commissioner of employee relations may administer the employee insurance program. The commissioner may assess agencies, and employers of persons eligible for state-paid insurance and benefits under section 43A.24, the cost of these administrative services, including diagnostic and referral services provided by the employee assistance program under section 16B.39, and include it in the amounts billed for life insurance, hospital, medical, and dental benefits, and optional coverages authorized. Receipts from the assessments must be deposited in the state treasury and credited to a special account in the employee insurance trust fund and are appropriated to the commissioner to pay these administrative costs.

Sec. 43. Minnesota Statutes 1996, section 43A.317, subdivision 8, is amended to read:

Subd. 8. [PREMIUMS.] (a) [PAYMENTS.] Employers enrolled in the program shall pay premiums according to terms established by the commissioner. If an employer fails to make the required payments, the commissioner may cancel coverage and pursue other civil remedies.

(b) [RATING METHOD.] The commissioner shall determine the premium rates and rating method for the program. The rating method for eligible small employers must meet or exceed the requirements of chapter 62L. The rating methods must recover in premiums all of the ongoing costs for state administration and for maintenance of a premium stability and claim fluctuation reserve. Premiums must be established so as to recover and repay within five years after July 1, 1993, any direct appropriations received to provide start-up administrative costs. Premiums must be established so as to recover and repay within five years after July 1, 1993, any direct appropriations received to establish initial reserves. On June 30, 1999, after paying all necessary and reasonable expenses, the commissioner must apply up to $2,075,000 of any remaining balance in the Minnesota employees' insurance trust fund to repayment of any amounts drawn or expended for this program from the health care access fund.

Sec. 44. [62Q.66] [DURABLE MEDICAL EQUIPMENT COVERAGE.]

No health plan company that covers durable medical equipment may utilize medical coverage criteria for durable medical equipment that limits coverage solely to equipment used in the home.

Sec. 45. [62Q.67] [DISCLOSURE OF COVERED DURABLE MEDICAL EQUIPMENT.]

Subdivision 1. [DISCLOSURE.] A health plan company that covers durable medical equipment shall provide enrollees, and upon request prospective enrollees, written disclosure that includes the information set forth in subdivision 2. The health plan company may include the information in the member contract, certificate of coverage, schedule of payments, member handbook, or other written enrollee communication.

Subd. 2. [INFORMATION TO BE DISCLOSED.] A health plan company that covers durable medical equipment shall disclose the following information:

(1) general descriptions of the coverage for durable medical equipment, level of coverage available, and criteria and procedures for any required prior authorizations; and

(2) the address and telephone number of a health plan representative whom an enrollee may contact to obtain specific information verbally, or upon request in writing, about prior authorization including criteria used in making coverage decisions and information on limitations or exclusions for durable medical equipment.

Sec. 46. Minnesota Statutes 1996, section 179A.16, subdivision 1, is amended to read:

Subdivision 1. [NONESSENTIAL EMPLOYEES.] An exclusive representative or an employer of a unit of employees other than essential employees may request interest arbitration by providing written notice of the request to the other party and the commissioner. The written request for arbitration must specify the items to be submitted to arbitration and whether conventional, final-offer total-package, or final-offer item-by-item arbitration is contemplated by the request.

Except for city attorney legal units, the items to be submitted to arbitration and the form of arbitration to be used are subject to mutual agreement. If an agreement to arbitrate is reached, it must be reduced to writing and a copy of the agreement filed with the commissioner. A failure to respond, or to reach agreement on the items or form of arbitration, within 15 days of receipt of the request to arbitrate constitutes a rejection of the request.

Sec. 47. Minnesota Statutes 1996, section 179A.16, is amended by adding a subdivision to read:

Subd. 1a. [CITY ATTORNEY LEGAL UNITS.] An exclusive representative or employer of a city attorney legal unit may petition for binding interest arbitration by filing a written request with the other party and the commissioner. The written request must specify the items that the party wishes to submit to binding arbitration. Within 15 days of the request, the commissioner shall determine whether further mediation of the dispute would be appropriate and shall only certify matters to the board in cases where the commissioner believes that both parties have made substantial, good faith bargaining efforts and that an impasse has occurred.

Sec. 48. Minnesota Statutes 1996, section 179A.16, subdivision 3, is amended to read:

Subd. 3. [PROCEDURE.] Within 15 days from the time the commissioner has certified a matter to be ready for binding arbitration because of an agreement under subdivision 1 or in accordance with subdivision 1a or 2, both parties shall submit their final positions on the items in dispute. In the event of a dispute over the items to be submitted to binding arbitration involving essential employees, the commissioner shall determine the items to be decided by arbitration based on the efforts to mediate the dispute and the positions submitted by the parties during the course of those efforts. The parties may stipulate items to be excluded from arbitration.

Sec. 49. Minnesota Statutes 1996, section 179A.16, subdivision 9, is amended to read:

Sec. 50. Minnesota Statutes 1996, section 179A.18, subdivision 1, is amended to read:

Subdivision 1. [WHEN AUTHORIZED.] Essential employees may not strike. Except as otherwise provided by subdivision 2 and section 179A.17, subdivision 2, other public employees may strike only under the following circumstances:

(1)(a) the collective bargaining agreement between their exclusive representative and their employer has expired or, if there is no agreement, impasse under section 179A.17, subdivision 2, has occurred; and

(b) the exclusive representative and the employer have participated in mediation over a period of at least 45 days, provided that the mediation period established by section 179A.17, subdivision 2, governs negotiations under that section, and provided that for the purposes of this subclause the mediation period commences on the day following receipt by the commissioner of a request for mediation; or

(2) the employer violates section 179A.13, subdivision 2, clause (9); or

(3) in the case of city attorney legal units, neither the exclusive representative nor the employer has petitioned for binding interest arbitration in accordance with section 179A.16; or

(4) in the case of state employees,:

(a) the legislative commission on employee relations has rejected a negotiated agreement or arbitration decision during a legislative interim; or

(b) the entire legislature rejects or fails to ratify a negotiated agreement or arbitration decision, which has been approved during a legislative interim by the legislative commission on employee relations, at a special legislative session called to consider it, or at its next regular legislative session, whichever occurs first.

Sec. 51. Minnesota Statutes 1997 Supplement, section 270.063, subdivision 1, is amended to read:

Subdivision 1. [APPROPRIATION.] For the purpose of collecting delinquent state tax liabilities or debts as defined in section 16D.02, subdivision 3, there is appropriated to the commissioner of revenue an amount representing the cost of collection by contract with collection agencies, revenue departments of other states, or attorneys to enable the commissioner to reimburse these agencies, departments, or attorneys for this service. The commissioner shall report quarterly on the status of this program to the chair of the house tax and appropriation committees and senate tax and finance committees.

Sec. 52. [325G.53] [CONSUMER EDUCATION; TELEMARKETING FRAUD.]

Subdivision 1. [ESTABLISHMENT.] The attorney general shall establish an outreach advocacy network to educate citizens of the state with respect to telemarketing fraud.

Subd. 2. [DUTIES.] The advocacy network shall:

(1) conduct clinics and seminars throughout the state to educate consumers with respect to telemarketing fraud, including providing an explanation of rights under federal and state law, such as the right to be placed on an individual business's no-call list, and recommending effective strategies to combat fraud;

(2) facilitate outreach to groups particularly susceptible to telemarketing fraud by training advocates for senior citizens and other consumer groups to conduct clinics and seminars in their communities;

(3) prepare and publish informational brochures on telemarketing fraud for distribution to consumers; and

Sec. 53. Minnesota Statutes 1996, section 349A.06, is amended by adding a subdivision to read:

Subd. 12. [RETAILER BONUS.] The director may adopt a plan whereby eligible lottery retailers will receive a bonus payment, in addition to commissions or incentives earned for the sale of lottery tickets, if total lottery sales for a fiscal year increase when compared to the total lottery sales for the previous fiscal year. The bonus payment shall be no more than ten percent of any increase in total lottery sale, which shall be paid to active lottery retailers at the end of a fiscal year on the basis of each lottery retailer's market share.

Sec. 54. Minnesota Statutes 1996, section 349A.09, subdivision 2, is amended to read:

Subd. 2. [CONTENT OF ADVERTISING.] (a) Advertising and promotional materials for the lottery adopted or published by the director must be consistent with the dignity of the state and may only:

(1) present information on how lottery games are played, prizes offered, where and how tickets may be purchased, when drawings are held, and odds on the games advertised;

(2) identify state programs supported by lottery net revenues;

(3) present the lottery as a form of entertainment; or

(4) state the winning numbers or identity of winners of lottery prizes.

(b) The director may not adopt or publish any advertising for the lottery which:

(1) presents directly or indirectly any lottery game as a potential means of relieving any person's financial difficulties;

(2) is specifically targeted with the intent to exploit a person, or a specific group or economic class of people, or a religious holiday by use of a religious theme or symbol;

(3) presents the purchase of a lottery ticket as a financial investment or a way to achieve financial security;

(4) uses the name or picture of a current elected state official to promote a lottery game;

(5) exhorts the public to bet by directly or indirectly misrepresenting a person's chance of winning a prize; or

(6) denigrates a person who does not buy a lottery ticket or unduly praises a person who does buy a ticket.

Sec. 55. Minnesota Statutes 1996, section 349A.10, subdivision 3, is amended to read:

Subd. 3. [LOTTERY OPERATIONS.] (a) The director shall establish a lottery operations account in the lottery fund. The director shall pay all costs of operating the lottery, including payroll costs or amounts transferred to the state treasury for payroll costs, but not including lottery prizes, from the lottery operating account. The director shall credit to the lottery operations account amounts sufficient to pay the operating costs of the lottery.

(b) The director may not credit in fiscal year 1993 amounts to the lottery operations account which when totaled exceed 14.5 percent of gross revenue to the lottery fund. Except as provided in paragraph (e), the director may not credit in any fiscal year thereafter amounts to the lottery operations account which when totaled exceed 15 percent of gross revenue to the lottery fund in that fiscal year. In computing total amounts credited to the lottery operations account under this paragraph the director shall disregard amounts transferred to or retained by lottery retailers as sales commissions or other compensation.

(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4 four percent of gross revenues in a fiscal year for contracts for the preparation, publication, and placement of advertising.

(e) In addition to the amounts credited to the lottery operations account under paragraph (b), the director is authorized, if necessary, to meet the current obligations of the lottery and to credit up to 25 percent of an amount equal to the average annual amount which was authorized to be credited to the lottery operations account for the previous three fiscal years but was not needed to meet the obligations of the lottery.

Sec. 56. Minnesota Statutes 1996, section 349A.11, is amended to read:

349A.11 [CONFLICT OF INTEREST.]

Subdivision 1. [LOTTERY TICKET; RETAILER.] (a) The director, an employee of the lottery, a member of the immediate family of the director or employee residing in the same household may not:

(1) purchase a lottery ticket; or

(2) have any personal pecuniary interest in any vendor holding a lottery procurement contract, or in any lottery retailer; or

(3) receive any gift, gratuity, or other thing of value, excluding food or beverage, from any lottery vendor or lottery retailer, or person applying to be a retailer or vendor, in excess of $100 in any calendar year.

Subd. 2. [GIFTS.] The director or an employee of the lottery in the unclassified service may not accept a gift the acceptance of which by an official would be prohibited by section 10A.071.

Subd. 3. [PENALTY.] (b) A violation of paragraph (a) subdivision 1, clause (1), is a misdemeanor. A violation of paragraph (a) subdivision 1, clause (2), is a gross misdemeanor. A violation of paragraph (a) subdivision 1, clause (3), is a misdemeanor unless the gift, gratuity, or other item of value received has a value in excess of $500, in which case a violation is a gross misdemeanor.

Subd. 4. [FUTURE EMPLOYMENT.] (c) The director or an unclassified employee of the lottery may not, within one year two years of terminating employment with the lottery, accept employment with, act as an agent or attorney for, or otherwise represent any person, corporation, or entity that had any lottery procurement contract or bid for a lottery procurement contract with before the lottery within a period of two years prior to the termination of their employment. A violation of this paragraph is a misdemeanor.

Sec. 57. [349A.16] [LOTTERY RETAILER COMMISSIONS.]

The director of the state lottery shall: (1) increase commissions paid to lottery retailers in effect on January 1, 1998, by one-half percent on the price of each ticket sold by each retailer; and (2) provide that each lottery retailer receive a commission of at least one percent on the amount of each winning ticket cashed by that retailer. The director of the state lottery shall periodically review lottery ticket sales and make such adjustments to lottery retailer commission rates as are deemed necessary to maintain appropriate return to the state.

Sec. 58. Minnesota Statutes 1996, section 469.177, subdivision 11, is amended to read:

Subd. 11. [DEDUCTION FOR ENFORCEMENT COSTS; APPROPRIATION.] (a) The county treasurer shall deduct an amount equal to 0.1 0.2 percent of any increment distributed to an authority or municipality. The county treasurer shall pay the amount deducted to the state treasurer for deposit in the state general fund.

(b) The amounts deducted and paid under paragraph (a) are appropriated to the state auditor for the cost of (1) the financial reporting of tax increment financing information and (2) the cost of examining and auditing of authorities' use of tax increment financing as provided under section 469.1771, subdivision 1. Notwithstanding section 16A.28 or any other law to the contrary, this appropriation does not cancel and remains available until spent.

Sec. 59. [473.5965] [LEASE.]

Any lease agreement between the metropolitan sports facilities commission and a professional baseball franchise entered into after the effective date of this section:

(1) must be for a term of at least seven years; and

Sec. 60. Laws 1997, chapter 202, article 4, section 13, subdivision 7, is amended to read:

Subd. 7. [EXPIRATION.] This section expires June 30, 1998 December 31, 1998.

Sec. 61. [ADVISORY COUNCIL MEMBERSHIP EXPANDED.]

(a) The membership of the advisory council on community-based planning established under Laws 1997, chapter 202, article 4, section 13, subdivision 3, is increased by six voting members appointed as follows:

(1) two members appointed by the association of counties;

(2) two members appointed by the township officers association;

(3) one member appointed by the coalition of greater Minnesota cities; and

(4) one member appointed by the Minnesota association of small cities.

(b) All of the members appointed under paragraph (a), clauses (1) to (4), must reside outside of the seven-county metropolitan area.

Sec. 62. [FUNDING FROM EXISTING BUDGET.]

The office of strategic and long-range planning shall provide administrative and staff support, and otherwise pay the costs of the advisory council, including extra costs imposed by section 61, on community-based planning out of its existing budget.

Sec. 63. [SETTLEMENT DIVISION; TRANSFER OF JUDGES.]

The office of administrative hearings shall establish a settlement division. The workers' compensation judges at the department of labor and industry, together with their support staff, offices, furnishings, equipment, and supplies, are transferred to the settlement division of the office of administrative hearings. Minnesota Statutes, section 15.039, applies to the transfer of employees. The settlement division of the office of administrative hearings shall maintain offices in the cities of St. Paul, Duluth, and Detroit Lakes. The office of a judge in the settlement division of the office of administrative hearings and the support staff of the judge may be located in a building that contains offices of the department of labor and industry. The seniority of a workers' compensation judge at the office of administrative hearings, after the transfer, shall be based on the total length of service at either agency. For purposes of the commissioner's plan under Minnesota Statutes, section 43A.18, subdivision 2, all compensation judges at the office of administrative hearings shall be considered to be in the same employment condition, the same organizational unit and qualified for work in either division.

Sec. 64. [TRANSFER.]

Subdivision 1. [DUTIES AFFECTED.] (a) The powers and duties assigned to the workers' compensation judges at the department of labor and industry on July 1, 1997, shall be transferred from the commissioner of the department of labor and industry to the workers' compensation judges in the settlement division of the office of administrative hearings. These powers and duties include the following:

(1) the authority to conduct settlement conferences and issue summary decisions;

(2) the authority to approve settlement agreements and issue orders on agreements;

(3) the authority to conduct administrative discontinuance conferences, make determinations and issue orders regarding the discontinuance disputes;

(4) the authority to issue orders on motions and conduct special term evidentiary hearings related to the motions;

(6) the authority to make allocations of dependency benefits;

(7) the authority to issue temporary orders;

(8) the authority to make an award regarding the remodeling of the residence of a handicapped employee;

(9) the authority to conduct administrative conferences, make determinations and issue orders regarding medical disputes except where the amount in dispute is $1,500 or less;

(10) the authority to conduct administrative conferences, make determinations and issue orders regarding retraining disputes; and

(11) the authority to conduct administrative conferences, make determinations and issue orders regarding any medical or rehabilitation dispute where the commissioner of the department of labor and industry determines that the issues involved should be determined by a judge.

(b) The transfer of the power and duty to conduct settlement conferences and approve settlement agreements does not affect the ability of the commissioner of the department of labor and industry to provide voluntary mediation services and approve mediation agreements. The powers and duties assigned to the customer assistance teams on July 1, 1997, shall remain at the department of labor and industry. These powers shall include:

(1) the authority to conduct voluntary mediation sessions;

(2) the authority to review mediation agreements and issue mediation awards;

(3) the authority to conduct administrative conferences, make determinations, and issue orders regarding rehabilitation services and plans, other than disputes involving retraining;

(4) the authority to conduct administrative conferences, make determinations, and issue orders regarding medical disputes when the amount in dispute is $1,500 or less; and

(5) the authority to award interest in any matter decided by the commissioner.

Subd. 2. [REFERRAL.] Within ten days of filing, the commissioner shall refer all claim petitions and petitions for temporary orders, statements of attorney fees, objections to penalty assessments, and any other formal petitions or related filings, to the settlement division of the office of administrative hearings for review by a compensation judge, the compensation judge shall determine whether a settlement conference or other action is appropriate. Within ten days of filing, the commissioner shall refer all medical requests except where the amount in dispute is $1,500 or less, to the settlement division of the office of administrative hearings for administrative conference.

Subd. 3. [PROHIBITION.] The commissioner of administration may not use authority in Minnesota Statutes, section 16B.37, nor may any other executive branch official use this or any other authority, to transfer powers, duties, work, or employees relating to workers compensation judges.

Sec. 65. [TRANSFER OF FUNDS.]

Sec. 66. [SMALL CLAIMS COURT TRANSFER.]

The small claims court at the department of labor and industry is transferred to the office of administrative hearings.

Sec. 67. [NO EFFECT ON CERTAIN AGREEMENTS.]

Sections 63 to 66 do not abrogate or modify the terms of a memorandum of understanding entered into by the state and an exclusive representative of state employees affected by the transfer of duties in sections 63 to 66.

Sec. 68. [PORTRAIT.]

If a private donor provides or provides funds for a museum quality portrait of Rudy and Lola Perpich based on the portrait currently on display at the Minnesota historical society, the state must accept the gift. The commissioner of administration shall substitute the portrait of Rudy and Lola Perpich for the portrait of Governor Rudy Perpich that currently is displayed on the ground floor of the state capitol.

Sec. 69. [LIVESTOCK INDUSTRY ENVIRONMENTAL STEERING COMMITTEE.]

Subdivision 1. [COMMITTEE.] The environmental quality board shall establish the livestock industry environmental steering committee consisting of representatives of the livestock industry, environmental interests, and other stakeholders. The livestock environmental steering committee shall advise the environmental quality board on the scope and content of the generic environmental impact statement required in subdivision 2.

Compensation of members and reimbursement of their expenses is governed by Minnesota Statutes, section 15.059. The committee expires upon completion of the generic environmental impact statement required in subdivision 2 and presentation of the final report to the legislature.

Subd. 2. [GENERIC ENVIRONMENTAL IMPACT STATEMENT.] A generic environmental impact statement must be prepared under the direction of the environmental quality board to examine the long-term effects of the livestock industry as it exists and as it is changing on the economy, environment, and way of life of Minnesota and its citizens. The study may address:

(1) the overall dimensions of animal agriculture in Minnesota, including species of livestock; an inventory of numbers, types, and locations of facilities; and the related support networks and economic activity involved in the life cycles of livestock;

(2) environmental issues associated with livestock production from growing feed to raising the animals to their shipment to their processing and sale to consumer; effects on air, groundwater, surface water, land, and other aspects of the environment both within and without the state examined and correlated to various management practices, facilities, and other variables affecting the environment;

(3) economic issues such as the various financial and ownership arrangements currently or potentially used in the industries, patterns of vertical integration, size, long-term sustainability of various forms of ownership and production methods, access to markets, current and anticipated financial trends, effects of governmental policies, and comparative economic impact of alternative means of production; and

(4) the roles of various units of government in regulation of various aspects of feedlot operation including federal, state, interstate bodies, counties, townships, soil conservation districts, watershed districts, and others with planning, zoning, or environmental responsibilities.

Subd. 3. [EXPIRATION.] This section expires on June 30, 2001.

Sec. 70. [INSTRUCTION TO REVISOR.]

Sec. 71. [REPEALER.]

(a) Minnesota Statutes 1996, section 3.971, subdivision 3; and Minnesota Statutes 1997 Supplement, sections 16A.11, subdivision 3c; and 241.015, are repealed.

(b) Minnesota Statutes 1997 Supplement, sections 394.232, subdivision 5; and 572A.01, are repealed.

Sec. 72. [EFFECTIVE DATE.]

(a) Sections 16 to 18, 24 to 28, 60 to 66, and 71, paragraph (a), are effective the day following final enactment. Sections 53 to 57 are effective the day following final enactment.

(b) Section 31 is effective August 1, 1998.

(c) All appropriations for fiscal year 1998 are effective the day following final enactment.

(d) Sections 44 and 45 are effective January 1, 1999, and apply to health plans issued, renewed, or continued as defined in Minnesota Statutes, section 60A.02, subdivision 2a, to provide coverage to a Minnesota resident on or after that date.

Section 1. Minnesota Statutes 1996, section 16A.055, subdivision 6, is amended to read:

Subd. 6. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 2. Minnesota Statutes 1996, section 16B.04, subdivision 4, is amended to read:

Subd. 4. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 3. Minnesota Statutes 1996, section 17.03, subdivision 11, is amended to read:

Subd. 11. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 4. Minnesota Statutes 1996, section 43A.04, subdivision 1a, is amended to read:

Subd. 1a. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 5. Minnesota Statutes 1996, section 45.012, is amended to read:

45.012 [COMMISSIONER.]

(a) The department of commerce is under the supervision and control of the commissioner of commerce. The commissioner is appointed by the governor in the manner provided by section 15.06.

(b) Data that is received by the commissioner or the commissioner's designee by virtue of membership or participation in an association, group, or organization that is not otherwise subject to chapter 13 is confidential or protected nonpublic data but may be shared with the department employees as the commissioner considers appropriate. The commissioner may release the data to any person, agency, or the public if the commissioner determines that the access will aid the law enforcement process, promote public health or safety, or dispel widespread rumor or unrest.

(c) It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 6. Minnesota Statutes 1996, section 84.027, subdivision 14, is amended to read:

Subd. 14. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 7. Minnesota Statutes 1996, section 116.03, subdivision 2a, is amended to read:

Subd. 2a. [MISSION; EFFICIENCY.] It is part of the agency's mission that within the agency's resources the commissioner and the members of the agency shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the agency as efficiently as possible;

(3) coordinate the agency's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the agency required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the agency.

Sec. 8. Minnesota Statutes 1996, section 116J.011, is amended to read:

116J.011 [MISSION.]

The mission of the department of trade and economic development is to employ all of the available state government resources to facilitate an economic environment that produces net new job growth in excess of the national average and to increase nonresident and resident tourism revenues. It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 9. Minnesota Statutes 1997 Supplement, section 120.0111, is amended to read:

120.0111 [MISSION STATEMENT.]

The mission of public education in Minnesota, a system for lifelong learning, is to ensure individual academic achievement, an informed citizenry, and a highly productive work force. This system focuses on the learner, promotes and values diversity, provides participatory decision making, ensures accountability, models democratic principles, creates and sustains a climate for change, provides personalized learning environments, encourages learners to reach their maximum potential, and integrates and coordinates human services for learners. The public schools of this state shall serve the needs of the students by cooperating with the students' parents and legal guardians to develop the students' intellectual capabilities and lifework skills in a safe and positive environment. It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;

(5) utilize constructive and cooperative labor-management practices to the extent otherwise required by chapters 43A and 179A;

(6) include specific objectives in report to the legislature on the performance report required under section 15.91 to increase the efficiency of agency operations, when appropriate and the accomplishment of agency goals; and

(7) recommend to the legislature, in the performance report of the department required under section 15.91, appropriate changes in law necessary to carry out the mission and improve the performance of the department.

Sec. 10. Minnesota Statutes 1996, section 144.05, subdivision 2, is amended to read:

Subd. 2. [MISSION; EFFICIENCY.] It is part of the department's mission that within the department's resources the commissioner shall endeavor to:

(1) prevent the waste or unnecessary spending of public money;

(2) use innovative fiscal and human resource practices to manage the state's resources and operate the department as efficiently as possible;

(3) coordinate the department's activities wherever appropriate with the activities of other governmental agencies;

(4) use technology where appropriate to increase agency productivity, improve customer service, increase public access to information about government, and increase public participation in the business of government;