Part 1

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12673

Sec. 15. Minnesota Statutes 2006, section 256D.44, subdivision 2, is amended to read:

 

Subd. 2. Standard of assistance for persons eligible for medical assistance waivers or at risk of placement in a group residential housing facility. The state standard of assistance for a person who: (1) is eligible for a medical assistance home and community-based services waiver or a person who; (2) has been determined by the local agency to meet the plan requirements for placement in a group residential housing facility under section 256I.04, subdivision 1a,; or (3) is eligible for a shelter needy payment under subdivision 5, paragraph (f), is the standard established in subdivision 3, paragraph (a) or (b).

 

EFFECTIVE DATE. This section is effective January 1, 2009.

 

Sec. 16. Minnesota Statutes 2006, section 256D.44, subdivision 5, is amended to read:

 

Subd. 5. Special needs. In addition to the state standards of assistance established in subdivisions 1 to 4, payments are allowed for the following special needs of recipients of Minnesota supplemental aid who are not residents of a nursing home, a regional treatment center, or a group residential housing facility.

 

(a) The county agency shall pay a monthly allowance for medically prescribed diets if the cost of those additional dietary needs cannot be met through some other maintenance benefit. 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.

 

(b) Payment for nonrecurring special needs must be allowed for necessary home repairs or necessary repairs or replacement of household furniture and appliances using the payment standard of the AFDC program in effect on July 16, 1996, for these expenses, as long as other funding sources are not available.

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(c) A fee for guardian or conservator service is allowed at a reasonable rate negotiated by the county or approved by the court. This rate shall not exceed five percent of the assistance unit's gross monthly income up to a maximum of $100 per month. If the guardian or conservator is a member of the county agency staff, no fee is allowed.

 

(d) The county agency shall continue to pay a monthly allowance of $68 for restaurant meals for a person who was receiving a restaurant meal allowance on June 1, 1990, and who eats two or more meals in a restaurant daily. The allowance must continue until the person has not received Minnesota supplemental aid for one full calendar month or until the person's living arrangement changes and the person no longer meets the criteria for the restaurant meal allowance, whichever occurs first.

 

(e) A fee of ten percent of the recipient's gross income or $25, whichever is less, is allowed for representative payee services provided by an agency that meets the requirements under SSI regulations to charge a fee for representative payee services. This special need is available to all recipients of Minnesota supplemental aid regardless of their living arrangement.

 

(f) (1) Notwithstanding the language in this subdivision, an amount equal to the maximum allotment authorized by the federal Food Stamp Program for a single individual which is in effect on the first day of January July of the previous each year will be added to the standards of assistance established in subdivisions 1 to 4 for individuals adults under the age of 65 who qualify as shelter needy and are: (i) relocating from an institution, or an adult mental health residential treatment program under section 256B.0622, and who are shelter needy; (ii) eligible for the self-directed supports option as defined under section 256B.0657, subdivision 2; or (iii) home and community-based waiver recipients living in their own home or rented or leased apartment which is not owned, operated, or controlled by a provider of service not related by blood or marriage.

 

(2) Notwithstanding subdivision 3, paragraph (c), an individual eligible for the shelter needy benefit under this paragraph is considered a household of one. An eligible individual who receives this benefit prior to age 65 may continue to receive the benefit after the age of 65.

 

(3) "Shelter needy" means that the assistance unit incurs monthly shelter costs that exceed 40 percent of the assistance unit's gross income before the application of this special needs standard. "Gross income" for the purposes of this section is the applicant's or recipient's income as defined in section 256D.35, subdivision 10, or the standard specified in subdivision 3, paragraph (a) or (b), whichever is greater. A recipient of a federal or state housing subsidy, that limits shelter costs to a percentage of gross income, shall not be considered shelter needy for purposes of this paragraph.

 

EFFECTIVE DATE. This section is effective January 1, 2009.

 

Sec. 17. Laws 2007, chapter 147, article 7, section 71, is amended to read:

 

Sec. 71. PROVIDER RATE INCREASES.

 

(a) The commissioner of human services shall increase allocations, reimbursement rates, or rate limits, as applicable, by 2.0 percent beginning October 1, 2007, and by 2.0 percent beginning July October 1, 2008, effective for services rendered on or after those dates. County contracts for services specified in this section must be amended to pass through these rate adjustments within 60 days of the effective date of the increase and must be retroactive from the effective date of the rate adjustment.

 

(b) The annual rate increases described in this section must be provided to:

 

(1) home and community-based waivered services for persons with developmental disabilities or related conditions, including consumer-directed community supports, under Minnesota Statutes, section 256B.501;

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(2) home and community-based waivered services for the elderly, including consumer-directed community supports, under Minnesota Statutes, section 256B.0915;

 

(3) waivered services under community alternatives for disabled individuals, including consumer-directed community supports, under Minnesota Statutes, section 256B.49;

 

(4) community alternative care waivered services, including consumer-directed community supports, under Minnesota Statutes, section 256B.49;

 

(5) traumatic brain injury waivered services, including consumer-directed community supports, under Minnesota Statutes, section 256B.49;

 

(6) nursing services and home health services under Minnesota Statutes, section 256B.0625, subdivision 6a;

 

(7) personal care services and qualified professional supervision of personal care services under Minnesota Statutes, section 256B.0625, subdivision 19a;

 

(8) private duty nursing services under Minnesota Statutes, section 256B.0625, subdivision 7;

 

(9) day training and habilitation services for adults with developmental disabilities or related conditions under Minnesota Statutes, sections 252.40 to 252.46, including the additional cost of rate adjustments on day training and habilitation services, provided as a social service under Minnesota Statutes, section 256M.60;

 

(10) alternative care services under Minnesota Statutes, section 256B.0913;

 

(11) adult residential program grants under Minnesota Statutes, section 245.73;

 

(12) children's community-based mental health services grants and adult community support and case management services grants under Minnesota Rules, parts 9535.1700 to 9535.1760;

 

(13) the group residential housing supplementary service rate under Minnesota Statutes, section 256I.05, subdivision 1a;

 

(14) adult mental health integrated fund grants under Minnesota Statutes, section 245.4661;

 

(15) semi-independent living services (SILS) under Minnesota Statutes, section 252.275, including SILS funding under county social services grants formerly funded under Minnesota Statutes, chapter 256I;

 

(16) 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 under Minnesota Statutes, section 256.01, subdivision 2; and deaf and hard-of-hearing grants under Minnesota Statutes, sections 256C.233 and 256C.25; Laws 1985, chapter 9, article 1; and Laws 1997, First Special Session chapter 5, section 20;

 

(17) living skills training programs for persons with intractable epilepsy who need assistance in the transition to independent living under Laws 1988, chapter 689;

 

(18) physical therapy services under sections 256B.0625, subdivision 8, and 256D.03, subdivision 4;

 

(19) occupational therapy services under sections 256B.0625, subdivision 8a, and 256D.03, subdivision 4;

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(20) speech-language therapy services under section 256D.03, subdivision 4, and Minnesota Rules, part 9505.0390;

 

(21) respiratory therapy services under section 256D.03, subdivision 4, and Minnesota Rules, part 9505.0295;

 

(22) adult rehabilitative mental health services under section 256B.0623;

 

(23) children's therapeutic services and support services under section 256B.0943;

 

(24) tier I chemical health services under Minnesota Statutes, chapter 254B;

 

(25) consumer support grants under Minnesota Statutes, section 256.476;

 

(26) family support grants under Minnesota Statutes, section 252.32;

 

(27) grants for case management services to persons with HIV or AIDS under Minnesota Statutes, section 256.01, subdivision 19; and

 

(28) aging grants under Minnesota Statutes, sections 256.975 to 256.977, 256B.0917, and 256B.0928.

 

(c) For services funded through Minnesota disability health options, the rate increases under this section apply to all medical assistance payments, including former group residential housing supplementary rates under Minnesota Statutes, chapter 256I.

 

(d) The commissioner may recoup payments made under this section from a provider that does not comply with paragraphs (f) and (g).

 

(e) A managed care plan receiving state payments for the services in this section must include these increases in their payments to providers on a prospective basis, effective on January 1 following the effective date of the rate increase.

 

(f) Providers that receive a rate increase under this section shall use 75 percent of the additional revenue to increase compensation-related costs for employees directly employed by the program on or after the effective date of the rate adjustments, except:

 

(1) the administrator;

 

(2) persons employed in the central office of a corporation or entity that has an ownership interest in the provider or exercises control over the provider; and

 

(3) persons paid by the provider under a management contract.

 

Compensation-related costs include: wages and salaries; FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' compensation; and the employer's share of health and dental insurance, life insurance, disability insurance, long-term care insurance, uniform allowance, and pensions.

 

(g) Two-thirds of the money available under paragraph (f) must be used for wage increases for all employees directly employed by the provider on or after the effective date of the rate adjustments, except those listed in paragraph (f), clauses (1) to (3). The wage adjustment that employees receive under this paragraph must be paid as an equal hourly percentage wage increase for all eligible employees. All wage increases under this paragraph must be effective on the same date. This paragraph shall not apply to employees covered by a collective bargaining agreement.

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(h) For public employees, the increase for wages and benefits for certain staff is available and pay rates must be increased only to the extent that they comply with laws governing public employees collective bargaining. Money received by a provider for pay increases under this section may be used only for increases implemented on or after the first day of the rate period in which the increase is available and must not be used for increases implemented prior to that date.

 

(i) The commissioner shall amend state grant contracts that include direct personnel-related grant expenditures to include the allocation for the portion of the contract that is employee compensation related. Grant contracts for compensation-related services must be amended to pass through these adjustments within 60 days of the effective date of the increase and must be retroactive to the effective date of the rate adjustment.

 

(j) The Board on Aging and its Area Agencies on Aging shall amend their grants that include direct personnel-related grant expenditures to include the rate adjustment for the portion of the grant that is employee compensation related. Grants for compensation-related services must be amended to pass through these adjustments within 60 days of the effective date of the increase and must be retroactive to the effective date of the rate adjustment.

 

(k) The calendar year 2008 rate for vendors reimbursed under Minnesota Statutes, chapter 254B, shall be at least 2.0 percent above the rate in effect on January 1, 2007. The calendar year 2009 rate shall be at least 2.0 percent above the rate in effect on January 1, 2008.

 

(l) Providers that receive a rate adjustment under paragraph (a) that is subject to paragraphs (f) and (g) shall provide to the commissioner, and those counties with whom they have a contract, within six months after the effective date of each rate adjustment, a letter, in a format specified by the commissioner, that provides assurances that the provider has developed and implemented a compensation plan and complied with paragraphs (f) and (g). The provider shall keep on file, and produce for the commissioner or county upon request, its plan, which must specify:

 

(1) an estimate of the amounts of money that must be used as specified in paragraphs (f) and (g); and

 

(2) a detailed distribution plan specifying the allowable compensation-related and wage increases the provider will implement to use the funds available in clause (1).

 

(m) Within six months after the effective date of each rate adjustment, the provider shall post this plan, excluding the information required in paragraph (l), clause (1), for a period of at least six weeks in an area of the provider's operation to which all eligible employees have access and provide instructions for employees who believe they have not received the wage and other compensation-related increases specified in paragraph (l), clause (2). Instructions must include a mailing address, e-mail address, and the telephone number that may be used by the employee to contact the commissioner or the commissioner's representative. Providers shall also make assurances to the commissioner and counties with whom they have a contract that they have complied with the requirement in this paragraph.

 

Sec. 18. MORATORIUM EXCEPTION PROPOSAL; WAIVER.

 

The commissioner of health may waive the six-mile limit in Minnesota Statutes, section 144A.073, subdivision 5, paragraph (e), when considering a moratorium exception proposal submitted under Minnesota Statutes, section 144A.073, to allow a nursing facility providing specialty care in Minneapolis to close and relocate beds to a new facility in Robbinsdale under common ownership.

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ARTICLE 16

 

CHILDREN AND FAMILY SERVICES

 

Section 1. Minnesota Statutes 2007 Supplement, section 256.741, subdivision 1, is amended to read:

 

Subdivision 1. Public assistance Definitions. (a) The term "direct support" as used in this chapter and chapters 257, 518, 518A, and 518C refers to an assigned support payment from an obligor which is paid directly to a recipient of TANF or MFIP public assistance.

 

(b) The term "public assistance" as used in this chapter and chapters 257, 518, 518A, and 518C, includes any form of assistance provided under the AFDC program formerly codified in sections 256.72 to 256.87, MFIP and MFIP-R formerly codified under chapter 256, MFIP under chapter 256J, work first program formerly codified under chapter 256K; child care assistance provided through the child care fund under chapter 119B; any form of medical assistance under chapter 256B; MinnesotaCare under chapter 256L; and foster care as provided under title IV-E of the Social Security Act.

 

(c) The term "child support agency" as used in this section refers to the public authority responsible for child support enforcement.

 

(d) The term "public assistance agency" as used in this section refers to a public authority providing public assistance to an individual.

 

(e) The terms "child support" and "arrears" as used in this section have the meanings provided in section 518A.26.

 

(f) The term "maintenance" as used in this section has the meaning provided in section 518.003.

 

Sec. 2. Minnesota Statutes 2006, section 256.741, subdivision 2, is amended to read:

 

Subd. 2. Assignment of support and maintenance rights. (a) An individual receiving public assistance in the form of assistance under any of the following programs: the AFDC program formerly codified in sections 256.72 to 256.87, MFIP under chapter 256J, MFIP-R and MFIP formerly codified under chapter 256, or work first program formerly codified under chapter 256K is considered to have assigned to the state at the time of application all rights to child support and maintenance from any other person the applicant or recipient may have in the individual's own behalf or in the behalf of any other family member for whom application for public assistance is made. An assistance unit is ineligible for the Minnesota family investment program unless the caregiver assigns all rights to child support and spousal maintenance benefits according to this section.

 

(1) An The assignment made according to this section is effective as to:

 

(i) any current child support and current spousal maintenance; and.

 

(ii) any accrued child support and spousal maintenance arrears.

 

(2) An assignment made after September 30, 1997, is effective as to:

 

(i) any current child support and current spousal maintenance;

 

(ii) any accrued child support and spousal maintenance arrears collected before October 1, 2000, or the date the individual terminates assistance, whichever is later; and

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(iii) any accrued child support and spousal maintenance arrears collected under federal tax intercept.

 

(2) Any child support or maintenance arrears that accrue while an individual is receiving public assistance in the form of assistance under any of the programs listed in this paragraph are permanently assigned to the state.

 

(3) The assignment of current child support and current maintenance ends on the date the individual ceases to receive or is no longer eligible to receive public assistance under any of the programs listed in this paragraph.

 

(b) An individual receiving public assistance in the form of medical assistance, including MinnesotaCare, is considered to have assigned to the state at the time of application all rights to medical support from any other person the individual may have in the individual's own behalf or in the behalf of any other family member for whom medical assistance is provided.

 

(1) An assignment made after September 30, 1997, is effective as to any medical support accruing after the date of medical assistance or MinnesotaCare eligibility.

 

(2) Any medical support arrears that accrue while an individual is receiving public assistance in the form of medical assistance, including MinnesotaCare, are permanently assigned to the state.

 

(3) The assignment of current medical support ends on the date the individual ceases to receive or is no longer eligible to receive public assistance in the form of medical assistance or MinnesotaCare.

 

(c) An individual receiving public assistance in the form of child care assistance under the child care fund pursuant to chapter 119B is considered to have assigned to the state at the time of application all rights to child care support from any other person the individual may have in the individual's own behalf or in the behalf of any other family member for whom child care assistance is provided.

 

An (1) The assignment made according to this paragraph is effective as to:

 

(1) any current child care support and any child care support arrears assigned and accruing after July 1, 1997, that are collected before October 1, 2000; and.

 

(2) any accrued child care support arrears collected under federal tax intercept. Any child care support arrears that accrue while an individual is receiving public assistance in the form of child care assistance under the child care fund in chapter 119B are permanently assigned to the state.

 

(3) The assignment of current child care support ends on the date the individual ceases to receive or is no longer eligible to receive public assistance in the form of child care assistance under the child care fund under chapter 119B.

 

Sec. 3. Minnesota Statutes 2006, section 256.741, subdivision 2a, is amended to read:

 

Subd. 2a. Families-first Distribution of child support arrearages. (a) The state shall distribute current child support and maintenance received by the state to an individual who assigns the right to that support under subdivision 2, paragraph (a).

 

(b) When the public authority collects child support arrearages on behalf of an individual who is receiving public assistance provided under MFIP or MFIP-R under this chapter, MFIP under chapter 256J, or work first under chapter 256K, and the public authority has the option of applying the collection to arrears permanently assigned to the state or to arrears temporarily assigned to the state, the public authority shall first apply the collection to satisfy those arrears that are permanently assigned to the state.

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(c) When the public authority collects child support arrearages on behalf of an individual who is not receiving public assistance, the public authority shall first apply the collection to satisfy those arrears that are not permanently assigned to the state.

 

(d) When the public authority collects child support arrearages certified under the federal tax offset, the public authority shall first apply the collection to satisfy those arrears that are permanently assigned to the state.

 

Sec. 4. Minnesota Statutes 2006, section 256.741, subdivision 3, is amended to read:

 

Subd. 3. Existing assignments. Assignments based on the receipt of public assistance in existence prior to July 1, 1997, are permanently assigned to the state. Arrears that accrued prior to the receipt of assistance that were assigned to the state between July 1, 1997, and October 1, 2009, must no longer be assigned as of October 1, 2009.

 

EFFECTIVE DATE. This section is effective October 1, 2009.

 

Sec. 5. Minnesota Statutes 2007 Supplement, section 256J.621, is amended to read:

 

256J.621 WORK PARTICIPATION BONUS CASH BENEFITS.

 

(a) Effective October 1, 2009, upon exiting the diversionary work program (DWP) or upon terminating MFIP cash assistance the Minnesota family investment program with earnings, a participant who is employed may be eligible for transitional assistance work participation cash benefits of $75 per month to assist in meeting the family's basic needs as the participant continues to move toward self-sufficiency.

 

(b) To be eligible for a transitional assistance payment work participation cash benefits, the participant shall not receive MFIP cash assistance or diversionary work program assistance during the month and the participant or participants must meet the following work requirements:

 

(1) if the participant is a single caregiver and has a child under six years of age, the participant must be employed at least 87 hours per month;

 

(2) if the participant is a single caregiver and does not have a child under six years of age, the participant must be employed at least 130 hours per month; or

 

(3) if the household is a two-parent family, at least one of the parents must be employed an average of at least 130 hours per month.

 

Whenever a participant exits the diversionary work program or is terminated from MFIP cash assistance and meets the other criteria in this section, transitional assistance is work participation cash benefits are available for up to 24 consecutive months.

 

(c) Expenditures on the program are maintenance of effort state funds for participants under paragraph (b), clauses (1) and (2). Expenditures for participants under paragraph (b), clause (3), are nonmaintenance of effort funds. Months in which a participant receives transitional assistance work participation cash benefits under this section do not count toward the participant's MFIP 60-month time limit.

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Sec. 6. Minnesota Statutes 2006, section 518A.50, is amended to read:

 

518A.50 PAYMENT TO PUBLIC AGENCY.

 

(a) This section applies to all proceedings involving a support order, including, but not limited to, a support order establishing an order for past support or reimbursement of public assistance.

 

(b) The court shall direct that all payments ordered for maintenance or support be made to the public authority responsible for child support enforcement so long as the obligee is receiving or has applied for public assistance, or has applied for child support or maintenance collection services. Public authorities responsible for child support enforcement may act on behalf of other public authorities responsible for child support enforcement, including the authority to represent the legal interests of or execute documents on behalf of the other public authority in connection with the establishment, enforcement, and collection of child support, maintenance, or medical support, and collection on judgments.

 

(c) Payments made to the public authority other than payments under section 518A.53 must be credited as of the date the payment is received by the central collections unit., except that payments made under section 518A.53 may be considered to have been paid as of the date the obligor received the remainder of the income.

 

(d) Monthly amounts received by the public agency responsible for child support enforcement from the obligor that are greater than the monthly amount of public assistance granted to the obligee must be remitted to the obligee.

 

EFFECTIVE DATE. This section is effective October 1, 2009.

 

Sec. 7. Minnesota Statutes 2006, section 518A.53, subdivision 5, is amended to read:

 

Subd. 5. Payor of funds responsibilities. (a) An order for or notice of withholding is binding on a payor of funds upon receipt. Withholding must begin no later than the first pay period that occurs after 14 days following the date of receipt of the order for or notice of withholding. In the case of a financial institution, preauthorized transfers must occur in accordance with a court-ordered payment schedule.

 

(b) A payor of funds shall withhold from the income payable to the obligor the amount specified in the order or notice of withholding and amounts specified under subdivisions 6 and 9 and shall remit the amounts withheld to the public authority within seven business days of the date the obligor is paid the remainder of the income. The payor of funds shall include with the remittance the Social Security number of the obligor, the case type indicator as provided by the public authority and the date the obligor is paid the remainder of the income. The obligor is considered to have paid the amount withheld as of the date the obligor received the remainder of the income. A payor of funds may combine all amounts withheld from one pay period into one payment to each public authority, but shall separately identify each obligor making payment.

 

(c) A payor of funds shall not discharge, or refuse to hire, or otherwise discipline an employee as a result of wage or salary withholding authorized by this section. A payor of funds shall be liable to the obligee for any amounts required to be withheld. A payor of funds that fails to withhold or transfer funds in accordance with this section is also liable to the obligee for interest on the funds at the rate applicable to judgments under section 549.09, computed from the date the funds were required to be withheld or transferred. A payor of funds is liable for reasonable attorney fees of the obligee or public authority incurred in enforcing the liability under this paragraph. A payor of funds that has failed to comply with the requirements of this section is subject to contempt sanctions under section 518A.73. If the payor of funds is an employer or independent contractor and violates this subdivision, a court may award the obligor twice the wages lost as a result of this violation. If a court finds a payor of funds violated this subdivision, the court shall impose a civil fine of not less than $500. The liabilities in this paragraph apply to intentional noncompliance with this section.

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(d) If a single employee is subject to multiple withholding orders or multiple notices of withholding for the support of more than one child, the payor of funds shall comply with all of the orders or notices to the extent that the total amount withheld from the obligor's income does not exceed the limits imposed under the Consumer Credit Protection Act, United States Code, title 15, section 1673(b), giving priority to amounts designated in each order or notice as current support as follows:

 

(1) if the total of the amounts designated in the orders for or notices of withholding as current support exceeds the amount available for income withholding, the payor of funds shall allocate to each order or notice an amount for current support equal to the amount designated in that order or notice as current support, divided by the total of the amounts designated in the orders or notices as current support, multiplied by the amount of the income available for income withholding; and

 

(2) if the total of the amounts designated in the orders for or notices of withholding as current support does not exceed the amount available for income withholding, the payor of funds shall pay the amounts designated as current support, and shall allocate to each order or notice an amount for past due support, equal to the amount designated in that order or notice as past due support, divided by the total of the amounts designated in the orders or notices as past due support, multiplied by the amount of income remaining available for income withholding after the payment of current support.

 

(e) When an order for or notice of withholding is in effect and the obligor's employment is terminated, the obligor and the payor of funds shall notify the public authority of the termination within ten days of the termination date. The termination notice shall include the obligor's home address and the name and address of the obligor's new payor of funds, if known.

 

(f) A payor of funds may deduct one dollar from the obligor's remaining salary for each payment made pursuant to an order for or notice of withholding under this section to cover the expenses of withholding.

 

EFFECTIVE DATE. This section is effective October 1, 2009.

 

Sec. 8. REPEALER.

 

Minnesota Statutes 2006, section 256.741, subdivision 15, is repealed.

 

ARTICLE 17

 

HEALTH CARE

 

Section 1. [62U.10] HEALTH CARE TRANSFER, SAVINGS, AND REPAYMENT.

 

Subdivision 1. Health Care Access Fund Transfer. On June 30, 2009, the commissioner of finance shall transfer $50,000,000 from the health care access fund to the general fund.

 

Subd. 2. Projected spending baseline. (a) By June 1, 2009, the commissioner of health shall calculate the annual projected total private and public health care spending for residents of this state and establish a health care spending baseline, beginning for calendar year 2008 and for the next ten years based on the annual projected growth in spending.

 

(b) In establishing the health care spending baseline, the commissioner shall use the Centers for Medicare and Medicaid Services forecast for total growth in national health care expenditures and adjust this forecast to reflect the demographics, health status, and other factors deemed necessary by the commissioner. The commissioner shall contract with an actuarial consultant to make recommendations for the adjustments needed to specifically reflect projected spending for residents of this state.

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(c) The commissioner may adjust the projected baseline as necessary to reflect any updated federal projections or account for unanticipated changes in federal policy.

 

(d) Medicare and long-term care spending must not be included in the calculations required under this section.

 

Subd. 3. Actual spending and savings determination. By June 1, 2010, and each June 1 thereafter until June 1, 2020, the commissioner of health shall determine the actual total private and public health care spending for residents of this state for the calendar year two years before the current calendar year, based on data collected under chapter 62J, and shall determine the difference between the projected spending, as determined under subdivision 2, and the actual spending for that year. The actual spending must be certified by an independent actuarial consultant. If the actual spending is less than the projected spending, the commissioner shall determine, based on the proportion of spending for state-administered health care programs to total private and public health care spending for the calendar year two years before the current calendar year, the percentage of the calculated aggregate savings amount accruing to state-administered health care programs.

 

Subd. 4. Repayment of transfer. When accumulated savings accruing to state-administered health care programs, as calculated under subdivision 3, meet or exceed $50,000,000, the commissioner of health shall certify that event to the commissioner of finance. In the next fiscal year following the certification, the commissioner of finance shall transfer $50,000,000 from the general fund to the health care access fund. The amount necessary to make the transfer is appropriated from the general fund to the commissioner of finance.

 

Subd. 5. Definitions. (a) For purposes of this section, the following definitions apply.

 

(b) "Public health care spending" means spending for a state-administered health care program.

 

(c) "State-administered health care program" means medical assistance, MinnesotaCare, general assistance medical care, and the state employee group insurance program.

 

Sec. 2. [144.058] INTERPRETER SERVICES QUALITY INITIATIVE.

 

(a) The commissioner of health shall establish a voluntary statewide roster, and develop a plan for a registry and certification process for interpreters who provide high quality, spoken language health care interpreter services. The roster, registry, and certification process shall be based on the findings and recommendations set forth by the Interpreter Services Work Group required under Laws 2007, chapter 147, article 12, section 13.

 

(b) By January 1, 2009, the commissioner shall establish a roster of all available interpreters to address access concerns, particularly in rural areas.

 

(c) By January 15, 2010, the commissioner shall:

 

(1) develop a plan for a registry of spoken language health care interpreters, including:

 

(i) development of standards for registration that set forth educational requirements, training requirements, demonstration of language proficiency and interpreting skills, agreement to abide by a code of ethics, and a criminal background check;

 

(ii) recommendations for appropriate alternate requirements in languages for which testing and training programs do not exist;

 

(iii) recommendations for appropriate fees; and

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(iv) recommendations for establishing and maintaining the standards for inclusion in the registry; and

 

(2) develop a plan for implementing a certification process based on national testing and certification processes for spoken language interpreters 12 months after the establishment of a national certification process.

 

(d) The commissioner shall consult with the Interpreter Stakeholder Group of the Upper Midwest Translators and Interpreters Association for advice on the standards required to plan for the development of a registry and certification process.

 

(e) The commissioner shall charge an annual fee of $50 to include an interpreter in the roster. Fee revenue shall be deposited in the state government special revenue fund.

 

EFFECTIVE DATE. This section is effective the day following final enactment.

 

Sec. 3. Minnesota Statutes 2007 Supplement, section 144E.45, subdivision 2, is amended to read:

 

Subd. 2. Potential allocations. (a) On November 1, annually, the board or the board's designee under section 144E.40, subdivision 2, shall determine the amount of the allocation of the prior year's accumulation to each qualified ambulance service person. The prior year's net investment gain or loss under paragraph (b) must be allocated and that year's general fund appropriation, plus any transfer from the Cooper/Sams volunteer ambulance account under section 144E.42, subdivision 2, and after deduction of administrative expenses, also must be allocated.

 

(b) The difference in the market value of the assets of the Cooper/Sams volunteer ambulance trust account as of the immediately previous June 30 and the June 30 occurring 12 months earlier must be reported on or before August 15 by the State Board of Investment. The market value gain or loss must be expressed as a percentage of the total potential award accumulations as of the immediately previous June 30, and that positive or negative percentage must be applied to increase or decrease the recorded potential award accumulation of each qualified ambulance service person.

 

(c) The appropriation for this purpose, after deduction of administrative expenses, must be divided by the total number of additional ambulance service personnel years of service recognized since the last allocation or 1,000 years of service, whichever is greater. If the allocation is based on the 1,000 years of service, any allocation not made for a qualified ambulance service person must be credited to the Cooper/Sams volunteer ambulance account under section 144E.42, subdivision 2. A qualified ambulance service person must be credited with a year of service if the person is certified by the chief administrative officer of the ambulance service as having rendered active ambulance service during the 12 months ending as of the immediately previous June 30. If the person has rendered prior active ambulance service, the person must be additionally credited with one-fifth of a year of service for each year of active ambulance service rendered before June 30, 1993, but not to exceed in any year one additional year of service or to exceed in total five years of prior service. Prior active ambulance service means employment by or the provision of service to a licensed ambulance service before June 30, 1993, as determined by the person's current ambulance service based on records provided by the person that were contemporaneous to the service. The prior ambulance service must be reported on or before August 1 to the board in an affidavit from the chief administrative officer of the ambulance service.

 

(d) Effective July 1, 2008, notwithstanding paragraphs (a) to (c), the value of each service credit shall be $447.19.

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Sec. 4. Minnesota Statutes 2006, section 145.9255, subdivision 1, is amended to read:

 

Subdivision 1. Establishment. To the extent funds are available for the purposes of this subdivision, the commissioner of health, in consultation with a representative from Minnesota planning, the commissioner of human services, and the commissioner of education, shall develop and implement the Minnesota education now and babies later (MN ENABL) program, targeted to adolescents ages 12 to 14, with the goal of reducing the incidence of adolescent pregnancy in the state and promoting abstinence until marriage. The program must provide a multifaceted, primary prevention, community health promotion approach to educating and supporting adolescents in the decision to postpone sexual involvement modeled after the ENABL program in California. The commissioner of health shall consult with the chief of the health education section of the California Department of Health Services for general guidance in developing and implementing the program.

 

Sec. 5. Minnesota Statutes 2006, section 256.969, subdivision 2b, is amended to read:

 

Subd. 2b. Operating payment rates. In determining operating payment rates for admissions occurring on or after the rate year beginning January 1, 1991, and every two years after, or more frequently as determined by the commissioner, the commissioner shall obtain operating data from an updated base year and establish operating payment rates per admission for each hospital based on the cost-finding methods and allowable costs of the Medicare program in effect during the base year. Rates under the general assistance medical care, medical assistance, and MinnesotaCare programs shall not be rebased to more current data on January 1, 1997, and January 1, 2005, and for the first 24 months of the rebased period beginning January 1, 2009. The base year operating payment rate per admission is standardized by the case mix index and adjusted by the hospital cost index, relative values, and disproportionate population adjustment. The cost and charge data used to establish operating rates shall only reflect inpatient services covered by medical assistance and shall not include property cost information and costs recognized in outlier payments.

 

Sec. 6. Minnesota Statutes 2006, section 256.969, subdivision 3a, is amended to read:

 

Subd. 3a. Payments. (a) Acute care hospital billings under the medical assistance program must not be submitted until the recipient is discharged. However, the commissioner shall establish monthly interim payments for inpatient hospitals that have individual patient lengths of stay over 30 days regardless of diagnostic category. Except as provided in section 256.9693, medical assistance reimbursement for treatment of mental illness shall be reimbursed based on diagnostic classifications. Individual hospital payments established under this section and sections 256.9685, 256.9686, and 256.9695, in addition to third party and recipient liability, for discharges occurring during the rate year shall not exceed, in aggregate, the charges for the medical assistance covered inpatient services paid for the same period of time to the hospital. This payment limitation shall be calculated separately for medical assistance and general assistance medical care services. The limitation on general assistance medical care shall be effective for admissions occurring on or after July 1, 1991. Services that have rates established under subdivision 11 or 12, must be limited separately from other services. After consulting with the affected hospitals, the commissioner may consider related hospitals one entity and may merge the payment rates while maintaining separate provider numbers. The operating and property base rates per admission or per day shall be derived from the best Medicare and claims data available when rates are established. The commissioner shall determine the best Medicare and claims data, taking into consideration variables of recency of the data, audit disposition, settlement status, and the ability to set rates in a timely manner. The commissioner shall notify hospitals of payment rates by December 1 of the year preceding the rate year. The rate setting data must reflect the admissions data used to establish relative values. Base year changes from 1981 to the base year established for the rate year beginning January 1, 1991, and for subsequent rate years, shall not be limited to the limits ending June 30, 1987, on the maximum rate of increase under subdivision 1. The commissioner may adjust base year cost, relative value, and case mix index data to exclude the costs of services that have been discontinued by the October 1 of the year preceding the rate year or that are paid separately from inpatient services. Inpatient stays that encompass portions of two or more rate years shall have payments established based on payment rates in effect at the time of admission unless the date of admission

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preceded the rate year in effect by six months or more. In this case, operating payment rates for services rendered during the rate year in effect and established based on the date of admission shall be adjusted to the rate year in effect by the hospital cost index.

 

(b) For fee-for-service admissions occurring on or after July 1, 2002, the total payment, before third-party liability and spenddown, made to hospitals for inpatient services is reduced by .5 percent from the current statutory rates.

 

(c) In addition to the reduction in paragraph (b), the total payment for fee-for-service admissions occurring on or after July 1, 2003, made to hospitals for inpatient services before third-party liability and spenddown, is reduced five percent from the current statutory rates. Mental health services within diagnosis related groups 424 to 432, and facilities defined under subdivision 16 are excluded from this paragraph.

 

(d) In addition to the reduction in paragraphs (b) and (c), the total payment for fee-for-service admissions occurring on or after July 1, 2005, made to hospitals for inpatient services before third-party liability and spenddown, is reduced 6.0 percent from the current statutory rates. Mental health services within diagnosis related groups 424 to 432 and facilities defined under subdivision 16 are excluded from this paragraph. Notwithstanding section 256.9686, subdivision 7, for purposes of this paragraph, medical assistance does not include general assistance medical care. Payments made to managed care plans shall be reduced for services provided on or after January 1, 2006, to reflect this reduction.

 

(e) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for fee-for-service admissions occurring on or after July 1, 2008, through June 30, 2009, made to hospitals for inpatient services before third-party liability and spenddown, is reduced 3.46 percent from the current statutory rates. Mental health services with diagnosis related groups 424 to 432 and facilities defined under subdivision 16 are excluded from this paragraph. Payments made to managed care plans shall be reduced for services provided on or after January 1, 2009, through June 30, 2009, to reflect this reduction.

 

(f) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for fee-for-service admissions occurring on or after July 1, 2009, through June 30, 2010, made to hospitals for inpatient services before third-party liability and spenddown, is reduced 1.9 percent from the current statutory rates. Mental health services with diagnosis related groups 424 to 432 and facilities defined under subdivision 16 are excluded from this paragraph. Payments made to managed care plans shall be reduced for services provided on or after July 1, 2009, through June 30, 2010, to reflect this reduction.

 

(g) In addition to the reductions in paragraphs (b), (c), and (d), the total payment for fee-for-service admissions occurring on or after July 1, 2010, made to hospitals for inpatient services before third-party liability and spenddown, is reduced 1.79 percent from the current statutory rates. Mental health services with diagnosis related groups 424 to 432 and facilities defined under subdivision 16 are excluded from this paragraph. Payments made to managed care plans shall be reduced for services provided on or after July 1, 2010, to reflect this reduction.

 

Sec. 7. Minnesota Statutes 2006, section 256B.0571, subdivision 8, is amended to read:

 

Subd. 8. Program established. (a) The commissioner, in cooperation with the commissioner of commerce, shall establish the Minnesota partnership for long-term care program to provide for the financing of long-term care through a combination of private insurance and medical assistance.

 

(b) An individual who meets the requirements in this paragraph is eligible to participate in the partnership program. The individual must:

 

(1) be a Minnesota resident at the time coverage first became effective under the partnership policy; and

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(2) be a beneficiary of a partnership policy that (i) is issued on or after the effective date of the state plan amendment implementing the partnership program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of subdivision 8a; and.

 

(3) have exhausted all of the benefits under the partnership policy as described in this section. Benefits received under a long-term care insurance policy before July 1, 2006, do not count toward the exhaustion of benefits required in this subdivision.

 

Sec. 8. Minnesota Statutes 2006, section 256B.0571, subdivision 9, is amended to read:

 

Subd. 9. Medical assistance eligibility. (a) Upon application for medical assistance program payment of long-term care services by an individual who meets the requirements described in subdivision 8, the commissioner shall determine the individual's eligibility for medical assistance according to paragraphs (b) to (i).

 

(b) After determining assets subject to the asset limit under section 256B.056, subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall allow the individual to designate assets to be protected from recovery under subdivisions 13 and 15 up to the dollar amount of the benefits utilized under the partnership policy as of the effective date of eligibility for medical assistance program payment of long-term care services. Benefits utilized under a long-term care insurance policy before July 1, 2006, do not count for the purpose of determining the amount of assets that can be designated. Designated assets shall be disregarded for purposes of determining eligibility for payment of long-term care services. The dollar amount of benefits utilized must be equal to the amount of claims paid by the issuer under the policy as verified by the issuer.

 

(c) The individual shall identify the designated assets and the full fair market value of those assets and designate them as assets to be protected at the time of initial application for medical assistance payment of long-term care services. The full fair market value of real property or interests in real property shall be based on the most recent full assessed value for property tax purposes for the real property, unless the individual provides a complete professional appraisal by a licensed appraiser to establish the full fair market value. The extent of a life estate in real property shall be determined using the life estate table in the health care program's manual. Ownership of any asset in joint tenancy shall be treated as ownership as tenants in common for purposes of its designation as a disregarded asset. The unprotected value of any protected asset is subject to estate recovery according to subdivisions 13 and 15.

 

(d) The right to designate assets to be protected is personal to the individual and ends when the individual dies, except as otherwise provided in subdivisions 13 and 15. It does not include the increase in the value of the protected asset and the income, dividends, or profits from the asset. It may be exercised by the individual or by anyone with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, transferred, or given away.

 

(e) If the dollar amount of the benefits utilized under a partnership policy is greater than the full fair market value of all assets protected at the time of the application for medical assistance long-term care services, As the individual continues to utilize benefits under a partnership policy after eligibility for medical assistance payment of long-term care services begins, the individual may designate, for additional protection, an increase in the value of protected assets and additional assets that become available during the individual's lifetime for protection under this section up to the amount of additional benefits utilized. The individual must make the designation in writing to the county agency no later than the last date on which the individual must report a change in circumstances to the county agency, as provided for under the medical assistance program. Any excess used for this purpose shall not be available to the individual's estate to protect assets in the estate from recovery under section 256B.15 or 524.3-1202, or otherwise. The amount used for this purpose must reduce the unused amount of asset protection available to protect assets in the individual's estate from recovery under section 256B.15 or 524.3-1202, or otherwise.

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(f) This section applies only to estate recovery under United States Code, title 42, section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other provisions of federal law, including, but not limited to, recovery from trusts under United States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of the Deficit Reduction Act of 2005, Public Law 109-171.

 

(g) An individual's protected assets owned by the individual's spouse who applies for payment of medical assistance long-term care services shall not be protected assets or disregarded for purposes of eligibility of the individual's spouse solely because they were protected assets of the individual.

 

(h) Assets designated under this subdivision shall not be subject to penalty under section 256B.0595.

 

(i) The commissioner shall otherwise determine the individual's eligibility for payment of long-term care services according to medical assistance eligibility requirements.

 

Sec. 9. Minnesota Statutes 2006, section 256B.0625, subdivision 13e, is amended to read:

 

Subd. 13e. Payment rates. (a) The basis for determining the amount of payment shall be the lower of the actual acquisition costs of the drugs plus a fixed dispensing fee; the maximum allowable cost set by the federal government or by the commissioner plus the fixed dispensing fee; or the usual and customary price charged to the public. The amount of payment basis must be reduced to reflect all discount amounts applied to the charge by any provider/insurer agreement or contract for submitted charges to medical assistance programs. The net submitted charge may not be greater than the patient liability for the service. The pharmacy dispensing fee shall be $3.65, except that the dispensing fee for intravenous solutions which must be compounded by the pharmacist shall be $8 per bag, $14 per bag for cancer chemotherapy products, and $30 per bag for total parenteral nutritional products dispensed in one liter quantities, or $44 per bag for total parenteral nutritional products dispensed in quantities greater than one liter. Actual acquisition cost includes quantity and other special discounts except time and cash discounts. Effective July 1, 2008, the actual acquisition cost of a drug shall be estimated by the commissioner, at average wholesale price minus 12 14 percent. The actual acquisition cost of antihemophilic factor drugs shall be estimated at the average wholesale price minus 30 percent. The maximum allowable cost of a multisource drug may be set by the commissioner and it shall be comparable to, but no higher than, the maximum amount paid by other third-party payors in this state who have maximum allowable cost programs. Establishment of the amount of payment for drugs shall not be subject to the requirements of the Administrative Procedure Act.

 

(b) An additional dispensing fee of $.30 may be added to the dispensing fee paid to pharmacists for legend drug prescriptions dispensed to residents of long-term care facilities when a unit dose blister card system, approved by the department, is used. Under this type of dispensing system, the pharmacist must dispense a 30-day supply of drug. The National Drug Code (NDC) from the drug container used to fill the blister card must be identified on the claim to the department. The unit dose blister card containing the drug must meet the packaging standards set forth in Minnesota Rules, part 6800.2700, that govern the return of unused drugs to the pharmacy for reuse. The pharmacy provider will be required to credit the department for the actual acquisition cost of all unused drugs that are eligible for reuse. Over-the-counter medications must be dispensed in the manufacturer's unopened package. The commissioner may permit the drug clozapine to be dispensed in a quantity that is less than a 30-day supply.

 

(c) Whenever a generically equivalent product is available, payment shall be on the basis of the actual acquisition cost of the generic drug, or on the maximum allowable cost established by the commissioner.

 

(d) The basis for determining the amount of payment for drugs administered in an outpatient setting shall be the lower of the usual and customary cost submitted by the provider or the amount established for Medicare by the United States Department of Health and Human Services pursuant to title XVIII, section 1847a of the federal Social Security Act.

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(e) The commissioner may negotiate lower reimbursement rates for specialty pharmacy products than the rates specified in paragraph (a). The commissioner may require individuals enrolled in the health care programs administered by the department to obtain specialty pharmacy products from providers with whom the commissioner has negotiated lower reimbursement rates. Specialty pharmacy products are defined as those used by a small number of recipients or recipients with complex and chronic diseases that require expensive and challenging drug regimens. Examples of these conditions include, but are not limited to: multiple sclerosis, HIV/AIDS, transplantation, hepatitis C, growth hormone deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms of cancer. Specialty pharmaceutical products include injectable and infusion therapies, biotechnology drugs, high-cost therapies, and therapies that require complex care. The commissioner shall consult with the formulary committee to develop a list of specialty pharmacy products subject to this paragraph. In consulting with the formulary committee in developing this list, the commissioner shall take into consideration the population served by specialty pharmacy products, the current delivery system and standard of care in the state, and access to care issues. The commissioner shall have the discretion to adjust the reimbursement rate to prevent access to care issues.

 

EFFECTIVE DATE. This section is effective July 1, 2008.

 

Sec. 10. Minnesota Statutes 2007 Supplement, section 256B.0631, subdivision 1, is amended to read:

 

Subdivision 1. Co-payments. (a) Except as provided in subdivision 2, the medical assistance benefit plan shall include the following co-payments for all recipients, effective for services provided on or after October 1, 2003, and before January 1, 2009:

 

(1) $3 per nonpreventive visit. For purposes of this subdivision, a visit means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;

 

(2) $3 for eyeglasses;

 

(3) $6 for nonemergency visits to a hospital-based emergency room; and

 

(4) $3 per brand-name drug prescription and $1 per generic drug prescription, subject to a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness.

 

(b) Except as provided in subdivision 2, the medical assistance benefit plan shall include the following co-payments for all recipients, effective for services provided on or after January 1, 2009:

 

(1) $6 for nonemergency visits to a hospital-based emergency room; and

 

(2) $3 per brand-name drug prescription and $1 per generic drug prescription, subject to a $7 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness.; and

 

(3) for individuals identified by the commissioner with income at or below 100 percent of the federal poverty guidelines, total monthly co-payments must not exceed five percent of family income. For purposes of this paragraph, family income is the total earned and unearned income of the individual and the individual's spouse, if the spouse is enrolled in medical assistance and also subject to the five percent limit on co-payments.

 

(c) Recipients of medical assistance are responsible for all co-payments in this subdivision.

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Sec. 11. Minnesota Statutes 2007 Supplement, section 256B.0631, subdivision 3, is amended to read:

 

Subd. 3. Collection. (a) The medical assistance reimbursement to the provider shall be reduced by the amount of the co-payment, except that reimbursement for prescription drugs reimbursements shall not be reduced:

 

(1) once a recipient has reached the $12 per month maximum or the $7 per month maximum effective January 1, 2009, for prescription drug co-payments; or

 

(2) for a recipient identified by the commissioner under 100 percent of the federal poverty guidelines who has met their monthly five percent co-payment limit.

 

(b) The provider collects the co-payment from the recipient. Providers may not deny services to recipients who are unable to pay the co-payment.

 

(c) Medical assistance reimbursement to fee-for-service providers and payments to managed care plans shall not be increased as a result of the removal of the co-payments effective January 1, 2009.

 

Sec. 12. [256B.194] FEDERAL PAYMENTS.

 

The commissioner may require medical assistance and MinnesotaCare providers to provide any information necessary to determine Medicaid-related costs, and require the cooperation of providers in any audit or review necessary to ensure payments are limited to cost. This section does not apply to providers who are exempt from the provisions of the CMS final rule, published May 29, 2007, at Federal Register, Vol. 72, No. 100, governing payments to providers that are units of government. This section becomes effective when the CMS final rule goes into effect at the end of the moratorium imposed by Congress.

 

Sec. 13. Minnesota Statutes 2006, section 256B.32, subdivision 1, is amended to read:

 

Subdivision 1. Facility fee for hospital emergency room and clinic visit. (a) The commissioner shall establish a facility fee payment mechanism that will pay a facility fee to all enrolled outpatient hospitals for each emergency room or outpatient clinic visit provided on or after July 1, 1989. This payment mechanism may not result in an overall increase in outpatient payment rates. This section does not apply to federally mandated maximum payment limits, department-approved program packages, or services billed using a nonoutpatient hospital provider number.

 

(b) For fee-for-service services provided on or after July 1, 2002, the total payment, before third-party liability and spenddown, made to hospitals for outpatient hospital facility services is reduced by .5 percent from the current statutory rates.

 

(c) In addition to the reduction in paragraph (b), the total payment for fee-for-service services provided on or after July 1, 2003, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced five percent from the current statutory rates. Facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

 

(d) In addition to the reductions in paragraphs (b) and (c), the total payment for fee-for-service services provided on or after July 1, 2008, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced three percent from the current statutory rates. Mental health services and facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

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Sec. 14. Minnesota Statutes 2006, section 256B.69, subdivision 5a, is amended to read:

 

Subd. 5a. Managed care contracts. (a) Managed care contracts under this section and sections 256L.12 and 256D.03, shall be entered into or renewed on a calendar year basis beginning January 1, 1996. Managed care contracts which were in effect on June 30, 1995, and set to renew on July 1, 1995, shall be renewed for the period July 1, 1995 through December 31, 1995 at the same terms that were in effect on June 30, 1995. The commissioner may issue separate contracts with requirements specific to services to medical assistance recipients age 65 and older.

 

(b) A prepaid health plan providing covered health services for eligible persons pursuant to chapters 256B, 256D, and 256L, is responsible for complying with the terms of its contract with the commissioner. Requirements applicable to managed care programs under chapters 256B, 256D, and 256L, established after the effective date of a contract with the commissioner take effect when the contract is next issued or renewed.

 

(c) Effective for services rendered on or after January 1, 2003, the commissioner shall withhold five percent of managed care plan payments under this section for the prepaid medical assistance and general assistance medical care programs pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. The withheld funds must be returned no sooner than July of the following year if performance targets in the contract are achieved. The commissioner may exclude special demonstration projects under subdivision 23. A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph that is reasonably expected to be returned.

 

(d)(1) Effective for services rendered on or after January 1, 2009, the commissioner shall withhold three percent of managed care plan payments under this section for the prepaid medical assistance and general assistance medical care programs. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.

 

(2) A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this paragraph. The return of the withhold under this paragraph is not subject to the requirements of paragraph (c).

 

Sec. 15. Minnesota Statutes 2006, section 256B.75, is amended to read:

 

256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.

 

(a) For outpatient hospital facility fee payments for services rendered on or after October 1, 1992, the commissioner of human services shall pay the lower of (1) submitted charge, or (2) 32 percent above the rate in effect on June 30, 1992, except for those services for which there is a federal maximum allowable payment. Effective for services rendered on or after January 1, 2000, payment rates for nonsurgical outpatient hospital facility fees and emergency room facility fees shall be increased by eight percent over the rates in effect on December 31, 1999, except for those services for which there is a federal maximum allowable payment. Services for which there is a federal maximum allowable payment shall be paid at the lower of (1) submitted charge, or (2) the federal maximum allowable payment. Total aggregate payment for outpatient hospital facility fee services shall not exceed the Medicare upper limit. If it is determined that a provision of this section conflicts with existing or future requirements of the United States government with respect to federal financial participation in medical assistance, the federal requirements prevail. The commissioner may, in the aggregate, prospectively reduce payment rates to avoid reduced federal financial participation resulting from rates that are in excess of the Medicare upper limitations.

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(b) Notwithstanding paragraph (a), payment for outpatient, emergency, and ambulatory surgery hospital facility fee services for critical access hospitals designated under section 144.1483, clause (10), shall be paid on a cost-based payment system that is based on the cost-finding methods and allowable costs of the Medicare program.

 

(c) Effective for services provided on or after July 1, 2003, rates that are based on the Medicare outpatient prospective payment system shall be replaced by a budget neutral prospective payment system that is derived using medical assistance data. The commissioner shall provide a proposal to the 2003 legislature to define and implement this provision.

 

(d) For fee-for-service services provided on or after July 1, 2002, the total payment, before third-party liability and spenddown, made to hospitals for outpatient hospital facility services is reduced by .5 percent from the current statutory rate.

 

(e) In addition to the reduction in paragraph (d), the total payment for fee-for-service services provided on or after July 1, 2003, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced five percent from the current statutory rates. Facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

 

(f) In addition to the reductions in paragraphs (d) and (e), the total payment for fee-for-service services provided on or after July 1, 2008, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced three percent from the current statutory rates. Mental health services and facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

 

ARTICLE 18

 

HEALTH AND HUMAN SERVICES APPROPRIATIONS

 

      Section 1. SUMMARY OF APPROPRIATIONS.

 

      The amounts shown in this section summarize direct appropriations by fund made in this article.

 

                                                                                                                       2008                               2009                               Total

 

General                                                                                            $(46,789,000)               $(124,196,000)               $(170,985,000)

 

State Government Special Revenue                                                     114,000                           667,000                           781,000

 

Health Care Access                                                                                        -0-                        (770,000)                        (770,000)

 

Federal TANF                                                                                     29,919,000                      56,356,000                      86,275,000

 

Total                                                                                             $(16,756,000)               $(67,943,000)               $(84,699,000)

 

      Sec. 2. APPROPRIATIONS.

 

The sums shown in the columns marked "Appropriations" are added to or, if shown in parentheses, subtracted from the appropriations in Laws 2007, chapter 147, or other law to the agencies and for the purposes specified in this article. The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose. The figures "2008" and "2009" used in this article mean that the addition or subtraction from appropriations listed under them are available for the fiscal year ending June 30, 2008, or June 30, 2009, respectively. "The first year" is fiscal year 2008. "The second year" is fiscal year 2009. "The biennium" is fiscal years 2008 and 2009. Supplemental appropriations and reductions for the fiscal year ending June 30, 2008, are effective the day following final enactment.

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                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

      Sec. 3. HUMAN SERVICES

 

      Subdivision 1. Total Appropriation                                                                          $(16,870,000)              $(64,480,000)

 

                                        Appropriations by Fund

 

                                                        2008                                        2009

 

General                              (46,789,000)                         (120,066,000)

 

Health Care Access                        -0-                                (770,000)

 

Federal TANF                     29,919,000                              56,356,000

 

The appropriation additions or reductions for each purpose are shown in the following subdivisions.

 

Additional Working Family Credit Expenditures to be Claimed for TANF/MOE. In addition to the transfer under prior law, the commissioner may count the following amounts of working family credit expenditure as TANF/MOE:

 

(1) $21,085,000 in fiscal year 2008;

 

(2) $48,408,000 in fiscal year 2009;

 

(3) ($468,000) in fiscal year 2010; and

 

(4) ($19,000) in fiscal year 2011.

 

Notwithstanding any contrary provision in this article, this rider expires June 30, 2011.

 

      Subd. 2. Agency Management   

 

Financial Operations                                                                                                                               -0-                     (5,867,000)

 

Transfer from Special Revenue Fund. $1,098,000 of the amount transferred into the special revenue fund from nongrant operating balances of general fund appropriations carried forward under Laws 2007, chapter 147, article 19, section 20, must be transferred to the general fund by June 30, 2009.

 

Base Adjustment. The general fund base is increased $23,000 in fiscal year 2010 and $26,000 in fiscal year 2011.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12694

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

      Subd. 3. Revenue and Pass-Through Revenue Expenditures

 

Federal TANF                                                                                                                                          -0-                           950,000

 

TANF Transfer to Federal Child Care and Development Fund. The following TANF fund amounts are appropriated to the commissioner for the purposes of MFIP and transition year child care under Minnesota Statutes, section 119B.05:

 

(1) fiscal year 2009, $950,000; and

 

(2) fiscal year 2010, $1,085,000.

 

The commissioner shall authorize the transfer of sufficient TANF funds to the federal child care and development fund to meet this appropriation and shall ensure that all transferred funds are expended according to federal child care and development fund regulations.

 

      Subd. 4. Children and Economic Assistance Grants

 

(a) MFIP/DWP Grants

 

                                        Appropriations by Fund

 

General                              (29,919,000)                           (50,060,000)

 

Federal TANF                     29,919,000                              47,946,000

 

These appropriation adjustments replace the appropriation adjustments in Laws 2008, chapter 232.

 

(b) Support Services Grants; TANF                                                                                                   -0-                        7,100,000

 

Supported Work. (1) Of the TANF appropriation, $7,100,000 in fiscal year 2009 is for supported work for MFIP participants, to be allocated to counties and tribes based on the criteria under clauses (1) and (2) and is available until expended. This appropriation shall become part of base level funding to the commissioner for the biennium beginning July 1, 2009. Paid transitional work experience and other supported employment under this clause shall provide a continuum of employment assistance, including outreach and recruitment, program orientation and intake, testing and assessment, job development and marketing, preworksite training, supported worksite experience, job coaching, and postplacement follow-up, in addition to extensive case management and referral services. The base for this program shall be $7,100,000 in fiscal year 2010 and zero in fiscal year 2011.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12695

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(2) A county or tribe is eligible to receive an allocation under clause (1) if:

 

(i) the county or tribe is not meeting the federal work participation rate;

 

(ii) the county or tribe has participants who are required to perform work activities under Minnesota Statutes, chapter 256J, but are not meeting hourly work requirements; and

 

(iii) the county or tribe has assessed participants who have completed six weeks of job search or are required to perform work activities and are not meeting the hourly requirements, and the county or tribe has determined that the participant would benefit from working in a supported work environment.

 

(3) A county or tribe may also be eligible for funds in order to contract for supplemental hours of paid work at the participant's child's place of education, child care location, or the child's physical or mental health treatment facility or office. Grants to counties and tribes under this clause are specifically for MFIP participants who need to work up to five hours more per week in order to meet the hourly work requirement, and the participant's employer cannot or will not offer more hours to the participant.

 

(c) Basic Sliding Fee Child Care Assistance Grants                                                                      -0-                     (9,227,000)

 

Child Care and Development Fund Unexpended Balance. In addition to the amount provided in this section, the commissioner shall expend $9,227,000 in fiscal year 2009 from the federal child care and development fund unexpended balance for basic sliding fee child care under Minnesota Statutes, section 119B.03. The commissioner shall ensure that all child care and development funds are expended according to the federal child care and development fund regulations.

 

Base Adjustment. The general fund base is increased by $9,444,000 in fiscal year 2010 and $9,227,000 in fiscal year 2011.

 

(d) Child Care Development Grants                                                                                                    -0-                        (360,000)

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund child care development grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12696

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Prekindergarten Exploratory Projects. Of this appropriation reduction, $250,000 in fiscal year 2009 is from the general fund appropriation for prekindergarten exploratory projects in Laws 2007, chapter 147, article 19, section 3, subdivision 4, paragraph (e).

 

Base Adjustment. Of the general fund reduction, $328,000 is onetime.

 

(e) Children's Services Grants                                                                                                (311,000)                     (1,898,000)

 

Base Adjustment. The general fund base is increased by $1,688,000 in each year of the fiscal year 2010 and 2011 biennium.

 

Funding Usage. Up to 75 percent of the fiscal year 2010 appropriation for children's mental health screening grants may be used to fund calendar year 2009 allocations for these programs, with the resulting calendar year funding pattern continuing into the future.

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund children's services grants issued under this paragraph, excluding children's mental health grants, adoption assistance grants, and relative custody assistance grants, shall be reduced by 1.8 percent at the allotment level.

 

(f) Children and Community Services Grants                          -0-                                     (1,345,000)

 

Base Adjustment. The general fund base is decreased by $98,000 in each year of the fiscal year 2010 and 2011 biennium.

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund children and community services grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

(g) Minnesota Supplemental Aid Grants                                                                                            -0-                           201,000

 

Group Residential Housing Grants                                            -0-                                        (133,000)

 

(h) Other Children's and Economic Assistance Grants

 

                                        Appropriations by Fund

 

General                                              -0-                                   352,000

 

Federal TANF                                  -0-                                   360,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12697

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund other children's and economic assistance grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

The base for grants impacted by this reduction shall increase by $4,000 in fiscal year 2010 and $14,000 in fiscal year 2011.

 

Foodshelf Programs. Of the general fund appropriation, $500,000 in fiscal year 2009 is for foodshelf programs under Minnesota Statutes, section 256E.34. This is a onetime appropriation and is available until expended.

 

Long-Term Homeless Supportive Services. $145,000 from the general fund and $360,000 from TANF in fiscal year 2009 is for the long-term homeless supportive services fund under Minnesota Statutes, section 256K.26. This is a onetime appropriation and is available until expended.

 

      Subd. 5. Basic Health Care Grants

 

(a) MinnesotaCare Grants

 

Health Care Access                                                                                                                               -0-                        (770,000)

 

Incentive Program and Outreach Grants. Of the appropriation for the Minnesota health care outreach program in Laws 2007, chapter 147, article 19, section 3, subdivision 7, paragraph (b):

 

(1) $400,000 in fiscal year 2009 from the general fund and $200,000 in fiscal year 2009 from the health care access fund are for the incentive program under Minnesota Statutes, section 256.962, subdivision 5. For the biennium beginning July 1, 2009, base level funding for this activity shall be $360,000 from the general fund and $160,000 from the health care access fund; and

 

(2) $100,000 in fiscal year 2009 from the general fund and $50,000 in fiscal year 2009 from the health care access fund are for the outreach grants under Minnesota Statutes, section 256.962, subdivision 2. For the biennium beginning July 1, 2009, base level funding for this activity shall be $90,000 from the general fund and $40,000 from the health care access fund.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12698

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(b) MA Basic Health Care Grants - Families and Children                                                           -0-                   (17,280,000)

 

Third-Party Liability. (a) During fiscal year 2009, the commissioner shall employ a contractor paid on a percentage basis to improve third-party collections. Improvement initiatives may include, but not be limited to, efforts to improve postpayment collection from nonresponsive claims and efforts to uncover third-party payers the commissioner has been unable to identify.

 

(b) In fiscal year 2009, the first $1,098,000 of recoveries, after contract payments and federal repayments, is appropriated to the commissioner for technology-related expenses.

 

Administrative Costs. (a) For contracts effective on or after January 1, 2009, the commissioner shall limit aggregate administrative costs paid to managed care plans under Minnesota Statutes, section 256B.69, and to county-based purchasing plans under Minnesota Statutes, section 256B.692, to an overall average of 6.6 percent of total contract payments under Minnesota Statutes, sections 256B.69 and 256B.692, for each calendar year. For purposes of this paragraph, administrative costs do not include premium taxes paid under Minnesota Statutes, section 297I.05, subdivision 5, and provider surcharges paid under Minnesota Statutes, section 256.9657, subdivision 3.

 

(b) Notwithstanding any law to the contrary, the commissioner may reduce or eliminate administrative requirements to meet the administrative target under paragraph (a).

 

(c) Notwithstanding any contrary provision of this article, this rider shall not expire.

 

Hospital Payment Delay. Notwithstanding Laws 2005, First Special Session chapter 4, article 9, section 2, subdivision 6, payments from the Medicaid Management Information System that would otherwise have been made for inpatient hospital services for medical assistance enrollees are delayed as follows: (1) for fiscal year 2008, June payments must be included in the first payments in fiscal year 2009; and (2) for fiscal year 2009, June payments must be included in the first payment of fiscal year 2010. The provisions of Minnesota Statutes, section 16A.124, do not apply to these delayed payments. Notwithstanding any contrary provision in this article, this paragraph expires on June 30, 2010.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12699

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(c) MA Basic Health Care Grants - Elderly and Disabled                                               (14,028,000)                     (9,368,000)

 

Minnesota Disability Health Options Rate Setting Methodology. The commissioner shall develop and implement a methodology for risk adjusting payments for community alternatives for disabled individuals (CADI) and traumatic brain injury (TBI) home and community-based waiver services delivered under the Minnesota disability health options program (MnDHO) effective January 1, 2009. The commissioner shall take into account the weighting system used to determine county waiver allocations in developing the new payment methodology. Growth in the number of enrollees receiving CADI or TBI waiver payments through MnDHO is limited to an increase of 200 enrollees in each calendar year from January 2009 through December 2011. If those limits are reached, additional members may be enrolled in MnDHO for basic care services only as defined under Minnesota Statutes, section 256B.69, subdivision 28, and the commissioner may establish a waiting list for future access of MnDHO members to those waiver services.

 

MA Basic Elderly and Disabled Adjustments. For the fiscal year ending June 30, 2009, the commissioner may adjust the rates for each service affected by rate changes under this section in such a manner across the fiscal year to achieve the necessary cost savings and minimize disruption to service providers, notwithstanding the requirements of Laws 2007, chapter 147, article 7, section 71.

 

(d) General Assistance Medical Care Grants                           -0-                                     (6,971,000)

 

(e) Other Health Care Grants                                                                                                              -0-                          (17,000)

 

MinnesotaCare Outreach Grants Special Revenue Account. The balance in the MinnesotaCare outreach grants special revenue account on July 1, 2009, estimated to be $900,000, must be transferred to the general fund.

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund health care grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

      Subd. 6. Continuing Care Grants

 

(a) Aging and Adult Services Grants                                                                                                  -0-                        (337,000)

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12700

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Base Adjustment. The general fund base is increased by $71,000 in fiscal year 2010 and $70,000 in fiscal year 2011.

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund aging and adult services state grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

Aging and Adult Services Adjustments. For the fiscal year ending June 30, 2009, the commissioner may allocate each grant affected by rate changes under this section in such a manner across the fiscal year to achieve the necessary cost savings and minimize disruption to grantees. To implement this paragraph, the commissioner may waive the requirements of Laws 2007, chapter 147, article 7, section 71, including the employee compensation-related cost requirements.

 

Living-At-Home/Block Nurse Program Funding. Notwithstanding the provisions of Minnesota Statutes, section 256B.0917, subdivision 8, for the fiscal year beginning July 1, 2008, the commissioner of human services shall transfer $240,000 from the community service grant program under Minnesota Statutes, section 256B.0917, subdivision 13, to the living-at-home/block nurse program under Minnesota Statutes, section 256B.0917, subdivision 8, to provide $20,000 each for 12 living-at-home/block nurse programs currently operating without base funding. This is onetime funding.

 

Alternative Care Grants                                                                                                                       -0-                        (198,000)

 

This reduction is onetime.

 

(b) MA Long-Term Care Facilities Grants                                                                         (2,306,000)                       3,045,000

 

Nursing Facility Rate Increase. (a) For the rate year beginning October 1, 2008, the commissioner shall make available to each nursing facility reimbursed under Minnesota Statutes, section 256B.434, operating payment rate adjustments equal to 1.00 percent of the operating payment rates determined by the blending in Minnesota Statutes, section 256B.441, subdivision 55, paragraph (a).

 

(b) Seventy-five percent of the money resulting from the rate adjustment under paragraph (a) must be used for increases in compensation-related costs for employees directly employed by the nursing facility on or after the effective date of the rate adjustment, except:

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12701

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(1) the administrator;

 

(2) persons employed in the central office of a corporation that has an ownership interest in the nursing facility or exercises control over the nursing facility; and

 

(3) persons paid by the nursing facility under a management contract.

 

(c) Two-thirds of the money available under paragraph (b) must be used for wage increases for all employees directly employed by the nursing facility on or after the effective date of the rate adjustment, except those listed in paragraph (b), clauses (1) to (3). The wage adjustment that employees receive under this paragraph must be paid as an equal hourly percentage wage increase for all eligible employees. All wage increases under this paragraph must be effective on the same date. Only costs associated with the portion of the equal hourly percentage wage increase that goes to all employees shall qualify under this paragraph. Costs associated with wage increases in excess of the amount of the equal hourly percentage wage increase provided to all employees shall be allowed only for meeting the requirements in paragraph (b). This paragraph shall not apply to employees covered by a collective bargaining agreement.

 

(d) The commissioner shall allow as compensation-related costs all costs for:

 

(1) wages and salaries;

 

(2) FICA taxes, Medicare taxes, state and federal unemployment taxes, and workers' compensation;

 

(3) the employer's share of health and dental insurance, life insurance, disability insurance, long-term care insurance, uniform allowance, and pensions; and

 

(4) other benefits provided, subject to the approval of the commissioner.

 

(e) The portion of the rate adjustment under paragraph (a) that is not subject to the requirements in paragraphs (b) and (c) shall be provided to nursing facilities effective October 1, 2008.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12702

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(f) Nursing facilities may apply for the portion of the rate adjustment under paragraph (a) that is subject to the requirements in paragraphs (b) and (c). The application must be submitted to the commissioner within six months of the effective date of the rate adjustment, and the nursing facility must provide additional information required by the commissioner within nine months of the effective date of the rate adjustment. The commissioner must respond to all applications within three weeks of receipt. The commissioner may waive the deadlines in this paragraph under extraordinary circumstances, to be determined at the sole discretion of the commissioner. The application must contain:

 

(1) an estimate of the amounts of money that must be used as specified in paragraphs (b) and (c);

 

(2) a detailed distribution plan specifying the allowable compensation-related and wage increases the nursing facility will implement to use the funds available in clause (1);

 

(3) a description of how the nursing facility will notify eligible employees of the contents of the approved application, which must provide for giving each eligible employee a copy of the approved application, excluding the information required in clause (1), or posting a copy of the approved application, excluding the information required in clause (1), for a period of at least six weeks in an area of the nursing facility to which all eligible employees have access; and

 

(4) instructions for employees who believe they have not received the compensation-related or wage increases specified in clause (2), as approved by the commissioner, and which must include a mailing address, e-mail address, and the telephone number that may be used by the employee to contact the commissioner or the commissioner's representative.

 

(g) The commissioner shall ensure that cost increases in distribution plans under paragraph (f), clause (2), that may be included in approved applications, comply with the following requirements:

 

(1) costs to be incurred during the applicable rate year resulting from wage and salary increases effective after October 1, 2007, and prior to the first day of the nursing facility's payroll period that includes October 1, 2008, shall be allowed if they were not used in the prior year's application;

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12703

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(2) a portion of the costs resulting from tenure-related wage or salary increases may be considered to be allowable wage increases, according to formulas that the commissioner shall provide, where employee retention is above the average statewide rate of retention of direct care employees;

 

(3) the annualized amount of increases in costs for the employer's share of health and dental insurance, life insurance, disability insurance, and workers' compensation shall be allowable compensation-related increases if they are effective on or after April 1, 2008, and prior to April 1, 2009; and

 

(4) for nursing facilities in which employees are represented by an exclusive bargaining representative, the commissioner shall approve the application only upon receipt of a letter of acceptance of the distribution plan, in regard to members of the bargaining unit, signed by the exclusive bargaining agent and dated after May 25, 2008. Upon receipt of the letter of acceptance, the commissioner shall deem all requirements of this rider as having been met in regard to the members of the bargaining unit.

 

(h) The commissioner shall review applications received under paragraph (f) and shall provide the portion of the rate adjustment under paragraphs (b) and (c) if the requirements of this rider have been met. The rate adjustment shall be effective October 1, 2008. Notwithstanding paragraph (a), if the approved application distributes less money than is available, the amount of the rate adjustment shall be reduced so that the amount of money made available is equal to the amount to be distributed.

 

(i) Of the general fund appropriation, $2,877,000 in fiscal year 2009 is for the purposes of paragraphs (a) to (h).

 

(j) Notwithstanding any contrary provision of this article, this rider shall not expire.

 

Nursing Facility Temporary Rate Adjustment. (a) Of the general fund appropriation, $2,877,000 for fiscal year 2009 is to make available to nursing facilities reimbursed under Minnesota Statutes, section 256B.434, for the rate year beginning October 1, 2008, a temporary rate adjustment equal to 1.0 percent of the operating payment rates determined by the blending in Minnesota Statutes, section 256B.441, subdivision 55, paragraph (a). This rate adjustment shall be removed from the facility's operating payment rate for the rate year beginning October 1, 2009.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12704

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(b) Seventy-five percent of the money resulting from the rate adjustment under paragraph (a) must be used to provide quarterly bonus payments, and to pay for associated employer costs and other benefits as specified in Minnesota Statutes, section 256B.434, subdivision 19, paragraph (d), clauses (2) to (4), for all employees directly employed by the nursing facility on December 31, 2008; March 31, 2009; June 30, 2009; and September 30, 2009, except:

 

(1) the administrator;

 

(2) persons employed in the central office of a corporation that has an ownership interest in the nursing facility or exercises control over the nursing facility; and

 

(3) persons paid by the nursing facility under a management contract.

 

(c) Two-thirds of the money available under paragraph (b) must be used for an equal hourly percentage wage bonus for all eligible employees.

 

(d) Nursing facilities may apply for the portion of the rate adjustment subject to paragraphs (b) and (c), and the commissioner shall review and act on applications, according to the procedures specified in Minnesota Statutes, section 256B.434, subdivision 19. The portion of the rate adjustment under paragraph (a) that is not subject to the requirements in paragraphs (b) and (c) shall be provided to nursing facilities effective October 1, 2008.

 

(e) Notwithstanding any contrary provision in this article, this rider expires December 31, 2009.

 

(c) MA Long-Term Care Waivers and Home Care Grants                                                             -0-                   (10,643,000)

 

Manage Growth in TBI and CADI Waiver. During the fiscal years beginning on July 1, 2008, July 1, 2009, and July 1, 2010, the commissioner shall allocate money for home and community-based programs covered under Minnesota Statutes, section 256B.49, to ensure a reduction in state spending that is equivalent to limiting the caseload growth of the traumatic brain injury (TBI) waiver to 200 allocations in each year of the biennium and the community alternatives for disabled individuals (CADI) waiver to 1,500 allocations each year of the biennium. Priorities for the allocation of funds must be for individuals anticipated to be discharged from institutional settings or who are at imminent risk of a placement in an institutional setting. Notwithstanding any contrary section in this article, this provision expires June 30, 2011.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12705

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(d) Mental Health Grants                                                                                                                      -0-                     (4,823,000)

 

Base Adjustment. This reduction is onetime.

 

Funding Usage. Up to 75 percent of the fiscal year 2010 appropriation for adult mental health grants may be used to fund calendar year 2009 allocations for these programs, with the resulting calendar year funding pattern continuing into the future.

 

(e) Chemical Dependency Entitlement Grants                          -0-                                     (2,069,000)

 

Payments for Substance Abuse Treatment. For services provided in fiscal year 2009, county-negotiated rates and provider claims to the consolidated chemical dependency fund must not exceed rates charged for services in excess of those in effect on May 31, 2008. If statutes authorize a cost-of-living adjustment during fiscal year 2009, then notwithstanding any law to the contrary, fiscal year 2009 rates may not exceed those in effect on May 31, 2008, plus any authorized cost-of-living adjustments.

 

Chemical Dependency Treatment Fund Special Revenue Account. The lesser of the balance of the consolidated chemical dependency treatment fund at the close of the fiscal year 2008, or $2,784,000 must be transferred and deposited into the general fund by September 1, 2008. The lesser of the balance of the consolidated chemical dependency treatment fund at the close of the fiscal year 2009, or $2,009,000 must be transferred and deposited into the general fund by September 1, 2009.

 

(f) Chemical Dependency Nonentitlement Grants                                                                            -0-                        1,967,000

 

Base Level Adjustment. The general fund base for chemical dependency nonentitlement treatment grants must be reduced by $1,686,000 for fiscal year 2010 and by $1,686,000 for fiscal year 2011.

 

White Earth treatment facility. $2,000,000 is appropriated from the general fund to the commissioner of human services for a grant to the White Earth tribe to purchase or develop one or more culturally specific treatment programs or capital facilities, or both, designed to serve youth from native cultures. This appropriation is onetime and is available until spent.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12706

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund chemical dependency nonentitlement grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

(g) Other Continuing Care Grants                                             -0-                                     (4,729,000)

 

Base Level Adjustment. The general fund base is increased by $7,283,000 in fiscal year 2010 and $4,921,000 in fiscal year 2011.

 

Housing Access Grants. Of the general fund appropriation, $250,000 is appropriated in fiscal year 2009 for housing access grants under Minnesota Statutes, section 256B.0658.

 

Funding Usage. Up to 75 percent of the fiscal year 2010 appropriation for semi-independent living services grants and family support grants may be used to fund calendar year 2009 allocations for these programs, with the resulting calendar year funding pattern continuing into the future.

 

Grants Reduction. Effective July 1, 2008, base level funding for nonforecast, general fund other continuing care grants issued under this paragraph, except for HIV grants, shall be reduced by 1.8 percent at the allotment level. HIV grants shall be reduced by 1.7 percent at the allotment level effective July 1, 2009.

 

Other Continuing Care Grant Adjustments. For the fiscal year ending June 30, 2009, the commissioner may allocate each grant affected by rate changes under this section in such a manner across the fiscal year to achieve the necessary cost savings and minimize disruption to grantees. To implement this paragraph, the commissioner may waive the requirements of Laws 2007, chapter 147, article 7, section 71, including the employee compensation-related cost requirements.

 

      Subd. 7. State-Operated Services

 

County Past Due Receivables. The commissioner is authorized to withhold county federal administrative reimbursement when the county of financial responsibility for cost-of-care payments due to the state under Minnesota Statutes, section 246.54 or 253B.045, is 90 days past due. The commissioner shall deposit the withheld federal administrative earnings for the county into the general fund to settle the claims with the county of financial responsibility. The process for withholding funds is governed by Minnesota Statutes, section 256.017.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12707

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Internet-Based Resource. Notwithstanding Laws 2005, First Special Session chapter 4, article 9, section 2, subdivision 10, base level funding for the fiscal year beginning July 1, 2008, is zero for the evidence-based practice for the treatment of methamphetamine abuse at the state-operated services chemical dependency program at Willmar. The Internet-based resource developed as part of the evidence-based practice must be maintained by the commissioner.

 

Community Behavioral Health Hospitals. Under Minnesota Statutes, section 246.51, subdivision 1, a determination order for clients in the community behavioral hospital operated by the commissioner is only required when a client's third-party mental health coverage has been exhausted.

 

(a) Mental Health Services                                                                                                        (225,000)                        (300,000)

 

(b) Minnesota Sex Offender Services                                                                                                 -0-                                   -0-

 

Sex Offender Program. Base level funding for the Minnesota sex offender program under Minnesota Statutes, chapter 246B, is reduced by $2,329,000 for fiscal years beginning on or after July 1, 2009. This reduction does not apply to the portion of the per diem related to professional treatment service costs.

 

Sec. 4. COMMISSIONER OF HEALTH

 

      Subdivision 1. Total Appropriation                                                                                            $-0-                 $(3,663,000)

 

                                        Appropriations by Fund

 

                                                        2008                                        2009

 

General                                              -0-                             (4,130,000)

 

State Government

Special Revenue                              -0-                                   467,000

 

The appropriation additions or reductions for each purpose are shown in the following subdivisions.

 

      Subd. 2. Community and Family Health Promotion                                                                   -0-                        (843,000)

 

Minnesota ENABL Program. Notwithstanding Laws 2007, chapter 147, article 19, section 4, subdivision 2, base level funding for the Minnesota ENABL program under Minnesota Statutes, section 145.9255, for the fiscal year beginning July 1, 2008, is zero.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12708

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Grants Reduction. Effective July 1, 2008, base level funding for general fund community and family health grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

      Subd. 3. Policy, Quality, and Compliance

 

                                        Appropriations by Fund

 

General                                              -0-                             (2,070,000)

 

State Government

Special Revenue                              -0-                                     32,000

 

Grants Reduction. Effective July 1, 2008, base level funding for general fund policy, quality, and compliance grants issued under this paragraph, excluding medical education and research costs transition funding grants to the Mayo Clinic, shall be reduced by 1.8 percent at the allotment level.

 

Interpreter Services Quality Initiative. Of the state government special revenue fund appropriation, $32,000 in fiscal year 2009 is for the interpreter services quality initiative under Minnesota Statutes, section 144.058.

 

MERC Federal Compliance. Notwithstanding Laws 2007, chapter 147, article 19, section 4, subdivision 3, the general fund appropriation in fiscal year 2009 for the commissioner to distribute to the Mayo Clinic for the purpose of providing transition funding while federal compliance changes are made to the medical education and research cost funding distribution formula in Minnesota Statutes, section 62J.692, shall be $4,250,000. Base level funding for this activity for fiscal years 2010 and 2011 shall be $1,000,000 each year. This funding shall not become part of the base in 2012 and 2013. Notwithstanding any contrary provision of this article, this rider expires on June 30, 2012.

 

Base Adjustment. The state government special revenue base is decreased by $11,000 in both fiscal years 2010 and 2011.

 

      Subd. 4. Health Protection

 

                                        Appropriations by Fund

 

General                                              -0-                                  (40,000)

 

State Government

Special Revenue                              -0-                                   435,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12709

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Grants Reduction. Effective July 1, 2008, base level funding for general fund health protection grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

Inspection Delegation. $435,000 from the state government special revenue fund in fiscal year 2009 is for the St. Louis County inspection delegation. The base funding for this appropriation shall increase by $89,000 in each of fiscal years 2010 and 2011.

 

      Subd. 5. Minority and Multicultural Health                                                                                -0-                          (77,000)

 

Grants Reduction. Effective July 1, 2008, base level funding for general fund minority and multicultural health grants issued under this paragraph shall be reduced by 1.8 percent at the allotment level.

 

      Subd. 6. Administrative Support Services                             0                                     (1,100,000)

 

Base Adjustment. The general fund base is increased $46,000 in fiscal years 2010 and 2011.

 

Sec. 5. HEALTH RELATED BOARDS

 

      Subdivision 1. Total Appropriation                                                                                  $114,000                       $200,000

 

                                        Appropriations by Fund

 

                                                        2008                                        2009

 

General                                              -0-                                           -0-

 

State Government

Special Revenue                      114,000                                   200,000

 

Transfer from Special Revenue Fund. During the fiscal year beginning July 1, 2008, the commissioner of finance shall transfer $3,219,000 from the state government special revenue fund to the general fund.

 

      Subd. 2. Board of Nursing Home Administrators

 

State Government Special Revenue                                                                                             100,000                           200,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12710

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Administrative Services Unit. The amounts appropriated are for the administrative services unit to pay for costs of contested case hearings and other unanticipated costs of legal proceedings involving health-related boards funded under Laws 2007, chapter 147, article 19, section 6. Upon certification of a health-related board to the administrative services unit that the costs will be incurred and that there is insufficient money available to pay for the costs out of money currently available to that board, the administrative services unit is authorized to transfer money from this appropriation to the board for payment of those costs with the approval of the commissioner of finance. This appropriation does not cancel. Any unencumbered and unspent balances remain available for these expenditures in subsequent fiscal years.

 

      Subd. 3. Board of Marriage and Family Therapy

 

State Government Special Revenue                                                                                               14,000                                   -0-

 

      Sec. 6. EMERGENCY MEDICAL SERVICES BOARD

 

Longevity Award and Incentive Program. For the fiscal year beginning July 1, 2008, $6,200,000 must be transferred from the ambulance service personnel longevity award and incentive trust to the general fund.

 

Sec. 7. Laws 2007, chapter 147, article 19, section 3, subdivision 4, is amended to read:

 

      Subd. 4. Children and Economic Assistance Grants

 

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

 

(a) MFIP/DWP Grants

 

                                        Appropriations by Fund

 

General                                 62,069,000                              62,405,000

 

Federal TANF                     75,904,000                              80,841,000

 

(b) Support Services Grants

 

                                        Appropriations by Fund

 

General                                   8,715,000                                8,715,000

 

Federal TANF                   113,429,000                            115,902,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12711

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

TANF Prior Appropriation Cancellation. Notwithstanding Laws 2001, First Special Session chapter 9, article 17, section 2, subdivision 11, paragraph (b), any unexpended TANF funds appropriated to the commissioner to contract with the Board of Trustees of Minnesota State Colleges and Universities, to provide tuition waivers to employees of health care and human service providers that are members of qualifying consortia operating under Minnesota Statutes, sections 116L.10 to 116L.15, must cancel at the end of fiscal year 2007.

 

MFIP Pilot Program. Of the TANF appropriation, $100,000 in fiscal year 2008 and $750,000 in fiscal year 2009 are for a grant to the Stearns-Benton Employment and Training Council for the Workforce U pilot program. Base level funding for this program shall be $750,000 in 2010 and $0 in 2011.

 

Supported Work. (1) Of the TANF appropriation, $5,468,000 in fiscal year 2008 and $7,291,000 in fiscal year 2009 are is for supported work for MFIP participants, to be allocated to counties and tribes based on the criteria under clauses (2) and (3), and is available until expended. Paid transitional work experience and other supported employment under this rider provides a continuum of employment assistance, including outreach and recruitment, program orientation and intake, testing and assessment, job development and marketing, preworksite training, supported worksite experience, job coaching, and postplacement follow-up, in addition to extensive case management and referral services. * (The preceding text "and $7,291,000 in fiscal year 2009" was indicated as vetoed by the governor.)

 

(2) A county or tribe is eligible to receive an allocation under this rider if:

 

(i) the county or tribe is not meeting the federal work participation rate;

 

(ii) the county or tribe has participants who are required to perform work activities under Minnesota Statutes, chapter 256J, but are not meeting hourly work requirements; and

 

(iii) the county or tribe has assessed participants who have completed six weeks of job search or are required to perform work activities and are not meeting the hourly requirements, and the county or tribe has determined that the participant would benefit from working in a supported work environment.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12712

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(3) A county or tribe may also be eligible for funds in order to contract for supplemental hours of paid work at the participant's child's place of education, child care location, or the child's physical or mental health treatment facility or office. This grant to counties and tribes is specifically for MFIP participants who need to work up to five hours more per week in order to meet the hourly work requirement, and the participant's employer cannot or will not offer more hours to the participant.

 

Work Study. Of the TANF appropriation, $750,000 each year are to the commissioner to contract with the Minnesota Office of Higher Education for the biennium beginning July 1, 2007, for work study grants under Minnesota Statutes, section 136A.233, specifically for low-income individuals who receive assistance under Minnesota Statutes, chapter 256J, and for grants to opportunities industrialization centers. * (The preceding text beginning "Work Study. Of the TANF appropriation," was indicated as vetoed by the governor.)

 

Integrated Service Projects. $2,500,000 in fiscal year 2008 and $2,500,000 in fiscal year 2009 are appropriated from the TANF fund to the commissioner to continue to fund the existing integrated services projects for MFIP families, and if funding allows, additional similar projects.

 

Base Adjustment. The TANF base for fiscal year 2010 is $115,902,000 and for fiscal year 2011 is $115,152,000.

 

(c) MFIP Child Care Assistance Grants

 

General                                 74,654,000                              71,951,000

 

(d) Basic Sliding Fee Child Care Assistance Grants

 

General                                 42,995,000                              45,008,000

 

Base Adjustment. The general fund base is $44,881,000 for fiscal year 2010 and $44,852,000 for fiscal year 2011.

 

At-Home Infant Care Program. No funding shall be allocated to or spent on the at-home infant care program under Minnesota Statutes, section 119B.035.

 

(e) Child Care Development Grants

 

General                                   4,390,000                                6,390,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12713

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Prekindergarten Exploratory Projects. Of the general fund appropriation, $2,000,000 the first year and $4,000,000 the second year are for grants to the city of St. Paul, Hennepin County, and Blue Earth County to establish scholarship demonstration projects to be conducted in partnership with the Minnesota Early Learning Foundation to promote children's school readiness. This appropriation is available until June 30, 2009.

 

Child Care Services Grants. Of this appropriation, $500,000 each year are for the purpose of providing child care services grants under Minnesota Statutes, section 119B.21, subdivision 5. This appropriation is for the 2008-2009 biennium only, and does not increase the base funding.

 

Early Childhood Professional Development System. Of this appropriation, $500,000 each year are for purposes of the early childhood professional development system, which increases the quality and continuum of professional development opportunities for child care practitioners. This appropriation is for the 2008-2009 biennium only, and does not increase the base funding.

 

Base Adjustment. The general fund base is $1,515,000 for each of fiscal years 2010 and 2011.

 

(f) Child Support Enforcement Grants

 

General                                 11,038,000                                3,705,000

 

Child Support Enforcement. $7,333,000 for fiscal year 2008 is to make grants to counties for child support enforcement programs to make up for the loss under the 2005 federal Deficit Reduction Act of federal matching funds for federal incentive funds passed on to the counties by the state.

 

This appropriation is available until June 30, 2009.

 

(g) Children's Services Grants

 

                                        Appropriations by Fund

 

General                                 63,647,000                              71,147,000

 

Health Care Access                250,000                                           -0-

 

TANF                                        240,000                                   340,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12714

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Grants for Programs Serving Young Parents. Of the TANF fund appropriation, $140,000 each year is for a grant to a program or programs that provide comprehensive services through a private, nonprofit agency to young parents in Hennepin County who have dropped out of school and are receiving public assistance. The program administrator shall report annually to the commissioner on skills development, education, job training, and job placement outcomes for program participants.

 

County Allocations for Rate Increases. County Children and Community Services Act allocations shall be increased by $197,000 effective October 1, 2007, and $696,000 effective October 1, 2008, to help counties pay for the rate adjustments to day training and habilitation providers for participants paid by county social service funds. Notwithstanding the provisions of Minnesota Statutes, section 256M.40, the allocation to a county shall be based on the county's proportion of social services spending for day training and habilitation services as determined in the most recent social services expenditure and grant reconciliation report.

 

Privatized Adoption Grants. Federal reimbursement for privatized adoption grant and foster care recruitment grant expenditures is appropriated to the commissioner for adoption grants and foster care and adoption administrative purposes.

 

Adoption Assistance Incentive Grants. Federal funds available during fiscal year 2008 and fiscal year 2009 for the adoption incentive grants are appropriated to the commissioner for these purposes.

 

Adoption Assistance and Relative Custody Assistance. The commissioner may transfer unencumbered appropriation balances for adoption assistance and relative custody assistance between fiscal years and between programs.

 

Children's Mental Health Grants. Of the general fund appropriation, $5,913,000 in fiscal year 2008 and $6,825,000 in fiscal year 2009 are for children's mental health grants. The purpose of these grants is to increase and maintain the state's children's mental health service capacity, especially for school-based mental health services. The commissioner shall require grantees to utilize all available third party reimbursement sources as a condition of using state grant funds. At least 15 percent of these funds shall be used to encourage efficiencies through early intervention services. At least another 15 percent shall be used to provide respite care services for children with severe emotional disturbance at risk of out-of-home placement.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12715

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Mental Health Crisis Services. Of the general fund appropriation, $2,528,000 in fiscal year 2008 and $2,850,000 in fiscal year 2009 are for statewide funding of children's mental health crisis services. Providers must utilize all available funding streams.

 

Children's Mental Health Evidence-Based and Best Practices. Of the general fund appropriation, $375,000 in fiscal year 2008 and $750,000 in fiscal year 2009 are for children's mental health evidence-based and best practices including, but not limited to: Adolescent Integrated Dual Diagnosis Treatment services; school-based mental health services; co-location of mental health and physical health care, and; the use of technological resources to better inform diagnosis and development of treatment plan development by mental health professionals. The commissioner shall require grantees to utilize all available third-party reimbursement sources as a condition of using state grant funds.

 

Culturally Specific Mental Health Treatment Grants. Of the general fund appropriation, $75,000 in fiscal year 2008 and $300,000 in fiscal year 2009 are for children's mental health grants to support increased availability of mental health services for persons from cultural and ethnic minorities within the state. The commissioner shall use at least 20 percent of these funds to help members of cultural and ethnic minority communities to become qualified mental health professionals and practitioners. The commissioner shall assist grantees to meet third-party credentialing requirements and require them to utilize all available third-party reimbursement sources as a condition of using state grant funds.

 

Mental Health Services for Children with Special Treatment Needs. Of the general fund appropriation, $50,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are for children's mental health grants to support increased availability of mental health services for children with special treatment needs. These shall include, but not be limited to: victims of trauma, including children subjected to abuse or neglect, veterans and their families, and refugee populations; persons with complex treatment needs, such as eating disorders; and those with low incidence disorders.

 

MFIP and Children's Mental Health Pilot Project. Of the TANF appropriation, $100,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are to fund the MFIP and children's mental health pilot project. Of these amounts, up to $100,000 may be expended on evaluation of this pilot.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12716

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

Prenatal Alcohol or Drug Use. Of the general fund appropriation, $75,000 each year is to award grants beginning July 1, 2007, to programs that provide services under Minnesota Statutes, section 254A.171, in Pine, Kanabec, and Carlton Counties. This appropriation shall become part of the base appropriation.

 

Base Adjustment. The general fund base is $62,572,000 in fiscal year 2010 and $62,575,000 in fiscal year 2011.

 

(h) Children and Community Services Grants

 

General                               101,369,000                              69,208,000

 

Base Adjustment. The general fund base is $69,274,000 in each of fiscal years 2010 and 2011.

 

Targeted Case Management Temporary Funding. (a) Of the general fund appropriation, $32,667,000 in fiscal year 2008 is transferred to the targeted case management contingency reserve account in the general fund to be allocated to counties and tribes affected by reductions in targeted case management federal Medicaid revenue as a result of the provisions in the federal Deficit Reduction Act of 2005, Public Law 109-171.

 

(b) Contingent upon (1) publication by the federal Centers for Medicare and Medicaid Services of final regulations implementing the targeted case management provisions of the federal Deficit Reduction Act of 2005, Public Law 109-171, or (2) the issuance of a finding by the Centers for Medicare and Medicaid Services of federal Medicaid overpayments for targeted case management expenditures, up to $32,667,000 is appropriated to the commissioner of human services. Prior to distribution of funds, the commissioner shall estimate and certify the amount by which the federal regulations or federal disallowance will reduce targeted case management Medicaid revenue over the 2008-2009 biennium.

 

(c) Within 60 days of a contingency described in paragraph (b), the commissioner shall distribute the grants proportionate to each affected county or tribe's targeted case management federal earnings for calendar year 2005, not to exceed the lower of (1) the amount of the estimated reduction in federal revenue or (2) $32,667,000.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12717

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(d) These funds are available in either year of the biennium. Counties and tribes shall use these funds to pay for social service-related costs, but the funds are not subject to provisions of the Children and Community Services Act grant under Minnesota Statutes, chapter 256M.

 

(e) This appropriation shall be available to pay counties and tribes for expenses incurred on or after July 1, 2007. The appropriation shall be available until expended.

 

(i) General Assistance Grants

 

General                                 37,876,000                              38,253,000

 

General Assistance Standard. The commissioner shall set the monthly standard of assistance for general assistance units consisting of an adult recipient who is childless and unmarried or living apart from parents or a legal guardian at $203. The commissioner may reduce this amount according to Laws 1997, chapter 85, article 3, section 54.

 

Emergency General Assistance. The amount appropriated for emergency general assistance funds is limited to no more than $7,889,812 in fiscal year 2008 and $7,889,812 in fiscal year 2009. Funds to counties must be allocated by the commissioner using the allocation method specified in Minnesota Statutes, section 256D.06.

 

(j) Minnesota Supplemental Aid Grants

 

General                                 30,505,000                              30,812,000

 

Emergency Minnesota Supplemental Aid Funds. The amount appropriated for emergency Minnesota supplemental aid funds is limited to no more than $1,100,000 in fiscal year 2008 and $1,100,000 in fiscal year 2009. Funds to counties must be allocated by the commissioner using the allocation method specified in Minnesota Statutes, section 256D.46.

 

(k) Group Residential Housing Grants

 

General                                 91,069,000                              98,671,000

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12718

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

People Incorporated. Of the general fund appropriation, $460,000 each year is to augment community support and mental health services provided to individuals residing in facilities under Minnesota Statutes, section 256I.05, subdivision 1m.

 

(l) Other Children and Economic Assistance Grants

 

General                                 20,183,000                              16,333,000

 

Federal TANF                       1,500,000                                1,500,000

 

Base Adjustment. The general fund base shall be $16,033,000 in fiscal year 2010 and $15,533,000 in fiscal year 2011. The TANF base shall be $1,500,000 in fiscal year 2010 and $1,181,000 in fiscal year 2011.

 

Homeless and Runaway Youth. Of the general fund appropriation, $500,000 each year are for the Runaway and Homeless Youth Act under Minnesota Statutes, section 256K.45. Funds shall be spent in each area of the continuum of care to ensure that programs are meeting the greatest need. This is a onetime appropriation.

 

Long-Term Homelessness. Of the general fund appropriation, $1,500,000 each year are $2,000,000 in fiscal year 2008 is for implementation of programs to address long-term homelessness and is available in either year of the biennium. This is a onetime appropriation.

 

Minnesota Community Action Grants. (a) Of the general fund appropriation, $250,000 each year is for the purposes of Minnesota community action grants under Minnesota Statutes, sections 256E.30 to 256E.32. This is a onetime appropriation.

 

(b) Of the TANF appropriation, $1,500,000 each year is for community action agencies for auto repairs, auto loans, and auto purchase grants to individuals who are eligible to receive benefits under Minnesota Statutes, chapter 256J, or who have lost eligibility for benefits under Minnesota Statutes, chapter 256J, due to earnings in the prior 12 months. Base level funding for this activity shall be $1,500,000 in fiscal year 2010 and $1,181,000 in fiscal year 2011. * (The preceding text beginning "(b) Of the TANF appropriation," was indicated as vetoed by the governor.)

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12719

                                APPROPRIATIONS

                                                                                                                                                            Available for the Year

                                                                                                                                                                  Ending June 30

                                                                                                                                                   2008                                      2009

 

(c) Money appropriated under paragraphs (a) and (b) that is not spent in the first year does not cancel but is available for the second year.

 

Sec. 8. SUNSET OF UNCODIFIED LANGUAGE.

 

All uncodified language contained in this article expires on June 30, 2009, unless a different expiration date is specified.

 

ARTICLE 19

 

HEALTH AND HUMAN SERVICES FORECAST ADJUSTMENTS

 

      Section 1. SUMMARY OF APPROPRIATIONS; DEPARTMENT OF HUMAN SERVICES FORECAST ADJUSTMENT.

 

The dollar amounts shown are added to or, if shown in parentheses, are subtracted from the appropriations in Laws 2007, chapter 147, from the general fund, or any other fund named, to the Department of Human Services for the purposes specified in this article, to be available for the fiscal year indicated for each purpose. The figure "2008" used in this article means that the appropriation or appropriations listed are available for the fiscal year ending June 30, 2008. The figure "2009" used in this article means that the appropriation or appropriations listed are available for the fiscal year ending June 30, 2009. Supplemental appropriations and reductions to appropriations for the fiscal year ending June 30, 2008, are effective the day following final enactment.

 

                                                                                                                                                               2008                               2009

 

General                                                                                                                                         $6,739,000                    $52,350,000

 

Health Care Access                                                                                                                (84,156,000)                   (96,019,000)

 

Federal TANF                                                                                                                          (28,427,000)                     (7,441,000)

 

Total                                                                                                                                   $(105,844,000)              $(51,110,000)

 

      Sec. 2. COMMISSIONER OF HUMAN SERVICES

 

      Subdivision 1. Total Appropriation                                                                        $(105,844,000)              $(51,110,000)

 

                                        Appropriations by Fund

 

                                                        2008                                        2009

 

General                                   6,739,000                              52,350,000

 

Health Care Access        (84,156,000)                           (96,019,000)

 

Federal TANF                  (28,427,000)                             (7,441,000)

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12720

                Subd. 2. Revenue and Pass-Through

 

Federal TANF                       1,187,000                                1,507,000

 

      Subd. 3. Children and Economic Assistance Grants

 

General                                (4,960,000)                                5,925,000

 

Federal TANF                  (29,614,000)                             (8,948,000)

 

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

 

(a) MFIP/DWP Grants

 

General                                 25,139,000                              11,665,000

 

Federal TANF                  (29,614,000)                             (8,948,000)

 

(b) MFIP Child Care Assistance Grants                                                                            (26,141,000)                   (10,710,000)

 

(c) General Assistance Grants                                                                                                 2,529,000                        6,033,000

 

(d) Minnesota Supplemental Aid Grants                                                                                   299,000                           500,000

 

(e) Group Residential Housing Grants                                                                                 (6,786,000)                     (1,563,000)

 

      Subd. 4. Basic Health Care Grants

 

General                                 30,075,000                              48,389,000

 

Health Care Access        (84,156,000)                           (96,019,000)

 

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

 

(a) MinnesotaCare

 

Health Care Access        (84,156,000)                           (96,019,000)

 

(b) MA Basic Health Care - Families and Children                                                           13,525,000                        7,005,000

 

(c) MA Basic Health Care - Elderly and Disabled                                                              (2,292,000)                        5,479,000

 

(d) General Assistance Medical Care                                                                                   18,842,000                      35,905,000

 

      Subd. 5. Continuing Care Grants                                                                               (18,376,000)                   (1,964,000)

 

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

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12721

(a) MA Long-Term Care Facilities                                  (10,986,000)           (2,148,000)

 

(b) MA Long-Term Care Waivers                               (18,484,000)                                   (13,598,000)

 

(c) Chemical Dependency Entitlement Grants             11,094,000                                    13,782,000"

 

Delete the title and insert:

 

"A bill for an act relating to the financing of state government; making supplemental appropriations and reductions in appropriations for early childhood through grade 12 education, higher education, environment and natural resources, energy, agriculture, veterans affairs, military affairs, economic development, transportation, public safety, judiciary, state government, and health and human services; modifying certain statutory provisions and laws; providing for certain programs; fixing and limiting fees; authorizing rulemaking; requiring reports; appropriating money; amending Minnesota Statutes 2006, sections 15A.0815, subdivisions 2, as amended, 3; 17.4988, subdivisions 2, 3; 41A.09, subdivision 3a; 93.481, by adding a subdivision; 97A.475, subdivision 29; 103A.204; 103A.43; 103B.151, subdivision 1; 103G.271, subdivision 6; 103G.291, by adding a subdivision; 103G.615, subdivision 2; 116.07, subdivision 4; 116L.04, subdivision 1; 116L.05, subdivisions 3, 5; 116L.16; 116L.20, subdivision 2; 116U.26; 121A.19; 122A.21; 123B.59, subdivision 1; 123B.62; 124D.04, subdivisions 3, 6, 8, 9; 124D.05, by adding a subdivision; 124D.118, subdivision 4; 124D.55; 125A.65, subdivision 4, by adding a subdivision; 125A.76, by adding a subdivision; 126C.10, subdivision 31, by adding a subdivision; 126C.17, subdivision 9; 126C.40, subdivision 1; 126C.45; 126C.51; 126C.52, subdivision 2, by adding a subdivision; 126C.53; 126C.55; 127A.45, subdivision 16; 136A.101, subdivision 8; 136G.11, subdivision 1; 145.9255, subdivision 1; 168.013, by adding a subdivision; 168.1255, by adding a subdivision; 168A.29, as amended; 190.19, subdivision 1, by adding a subdivision; 190.25, subdivision 3, by adding a subdivision; 192.501, by adding subdivisions; 216C.41, subdivision 4; 256.741, subdivisions 2, 2a, 3; 256.969, subdivisions 2b, 3a; 256B.0571, subdivisions 8, 9; 256B.0621, subdivisions 2, 6, 10; 256B.0625, subdivision 13e; 256B.0924, subdivisions 4, 6; 256B.19, subdivision 1d; 256B.32, subdivision 1; 256B.431, subdivision 23; 256B.69, subdivisions 5a, 6; 256B.75; 256D.44, subdivisions 2, 5; 270B.085, by adding a subdivision; 298.223, subdivision 2; 298.28, subdivision 9d, as added; 298.292, subdivision 2, as amended; 298.2961, subdivision 2; 299A.45, subdivision 1; 299A.705, by adding a subdivision; 325E.313; 325E.314; 357.021, subdivisions 6, 7; 446A.12, subdivision 1; 462A.22, subdivision 1; 473.1565, subdivision 3; 518A.50; 518A.53, subdivision 5; 609.531, subdivision 1; Minnesota Statutes 2007 Supplement, sections 80A.65, subdivision 1; 103G.291, subdivision 3; 116L.17, subdivision 1; 123B.54; 124D.531, subdivision 1; 125A.76, subdivision 2; 126C.44; 127A.49, subdivisions 2, 3; 136A.121, subdivision 7a; 144E.45, subdivision 2; 171.06, subdivision 2; 190.19, subdivision 2; 216C.41, subdivision 3; 256.741, subdivision 1; 256B.0625, subdivision 20; 256B.0631, subdivisions 1, 3; 256B.441, subdivisions 1, 55, 56; 256B.5012, subdivision 7; 256J.621; 297I.06, subdivision 3; Laws 1999, chapter 223, article 2, section 72; Laws 2005, chapter 156, article 1, section 11, subdivision 2; Laws 2006, chapter 282, article 2, section 27, subdivision 4; Laws 2007, chapter 45, article 1, section 3, subdivision 4; Laws 2007, chapter 54, article 1, section 11; Laws 2007, chapter 57, article 1, section 4, subdivisions 4, 6; Laws 2007, chapter 135, article 1, sections 3, subdivisions 2, 3; 6, subdivision 4; Laws 2007, chapter 143, article 1, section 3, subdivision 2; Laws 2007, chapter 144, article 1, sections 3, subdivision 2; 5, subdivision 5; 7; Laws 2007, chapter 146, article 1, section 24, subdivisions 2, 3, 4, 5, 6, 7, 8; article 2, section 46, subdivisions 2, 3, 4, 6, 9, 13, 14, 20; article 3, sections 23, subdivision 2; 24, subdivisions 3, 4, 9; article 4, section 16, subdivisions 2, 3, 6, 8; article 5, sections 11, subdivision 1; 13, subdivisions 2, 3, 4; article 7, section 4; article 9, section 17, subdivisions 2, 3, 4, 8, 9, 13; Laws 2007, chapter 147, article 7, section 71; article 19, section 3, subdivision 4; Laws 2007, chapter 148, article 1, section 12, subdivision 4; Laws 2007, First Special Session chapter 2, article 1, sections 8, subdivision 2; 11, subdivisions 1, 2, 6; Laws 2008, chapter 152, article 1, section 6, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 5; 13B; 85; 94; 103B; 114D; 116J; 124D; 129D; 136F; 144; 173; 192; 256B; proposing coding for new law as Minnesota Statutes, chapter 62U; repealing Minnesota Statutes 2006, sections 126C.21, subdivision 1; 127A.45, subdivision 7a; 256.741, subdivision 15; 341.31; Laws 2004, chapter 188, section 2; Laws 2007, First Special Session chapter 2, article 1, section 11, subdivisions 3, 4."

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12722

                We request the adoption of this report and repassage of the bill.

 

      House Conferees: Lyndon Carlson, Mary Murphy, Jean Wagenius, Tom Rukavina and Dennis Ozment.

 

      Senate Conferees: Richard J. Cohen, David J. Tomassoni, Dennis R. Frederickson, Don Betzold and Linda Higgins.

 

 

      Carlson moved that the report of the Conference Committee on H. F. No. 1812 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

 

 

      H. F. No. 1812, A bill for an act relating to the financing, organization, and operation of state government; providing for programs in education, early childhood education, higher education, environment and natural resources, energy, agriculture, veterans affairs, military affairs, jobs and economic development activities or programs, transportation, public safety, courts, human rights, judiciary, housing, public health, health department, and human services; modifying certain statutory provisions and laws; providing for certain programs for economic and state affairs; regulating certain activities and practices; regulating abortion funding; fixing and limiting fees; providing for the taxation of certain corporations; authorizing rulemaking, requiring studies and reports; providing civil penalties; making technical corrections; providing for fund transfers; appropriating money or reducing appropriations; amending Minnesota Statutes 2006, sections 3.30, subdivision 1; 3.855, subdivision 3; 3.971, subdivision 2; 10A.071, subdivision 3; 13.32, subdivision 3, by adding a subdivision; 13.461, by adding a subdivision; 13.465, subdivision 8; 13.851, by adding a subdivision; 15A.081, subdivision 8; 15A.0815; 16A.133, subdivision 1; 16B.281, subdivision 3; 16B.282; 16B.283; 16B.284; 16B.287, subdivision 2; 16C.16, subdivision 5; 16E.01, subdivision 3; 16E.03, subdivision 1; 16E.04, subdivision 2; 17.4988, subdivisions 2, 3; 43A.01, subdivision 3; 43A.17, subdivision 9; 84.788, subdivision 3; 84.82, subdivision 2, by adding a subdivision; 84.922, subdivision 2; 84.9256, subdivision 1; 85.011; 85.012, subdivisions 28, 49a; 85.013, subdivision 1; 85.054, subdivision 3, by adding a subdivision; 86B.401, subdivision 2; 88.15, subdivision 2; 89.715; 93.481, by adding a subdivision; 97A.055, subdivision 4b; 97A.141, subdivision 1; 103A.204; 103A.43; 103B.151, subdivision 1; 103G.291, by adding a subdivision; 103G.615, subdivision 2; 116J.423, by adding a subdivision; 116J.8731, subdivision 4; 116L.17, by adding a subdivision; 116U.26; 119A.03, subdivision 1; 120B.131, subdivision 2; 120B.31, as amended; 120B.35, as amended; 120B.36, as amended; 120B.362; 122A.21; 123B.02, subdivision 21; 123B.59, subdivision 1; 123B.62; 124D.04, subdivisions 3, 6, 8, 9; 124D.05, by adding a subdivision; 124D.10, subdivision 20; 124D.385, subdivision 4; 124D.55; 125A.65, by adding a subdivision; 125A.76, by adding a subdivision; 126C.10, subdivision 31, by adding a subdivision; 126C.17, subdivision 9; 126C.21, subdivision 1; 126C.51; 126C.52, subdivision 2, by adding a subdivision; 126C.53; 126C.55; 127A.45, subdivision 16; 136A.101, subdivision 8; 136A.121, subdivision 5; 136F.90, subdivision 1; 141.25, by adding a subdivision; 144.1222, subdivision 1a, by adding subdivisions; 144.1501, subdivision 2; 144.218, subdivision 1; 144.225, subdivision 2; 144.2252; 144.226, subdivision 1; 157.16, as amended; 168.1255, by adding a subdivision; 171.29, subdivision 1; 190.19, subdivision 1, by adding a subdivision; 192.501, by adding subdivisions; 197.585, subdivision 5; 216C.41, subdivision 4; 253B.045, subdivisions 1, 2, by adding a subdivision; 253B.185, subdivision 5; 256.01, by adding a subdivision; 256.741, subdivisions 2, 2a, 3; 256.969, subdivisions 2b, 20; 256B.0571, subdivisions 8, 9; 256B.0621, subdivisions 2, 6, 10; 256B.0917, subdivision 8; 256B.0924, subdivisions 4, 6; 256B.19, subdivision 1d; 256B.431, subdivision 23; 256B.69, subdivisions 5a, 6, by adding subdivisions; 256B.692, by adding a subdivision; 256D.44, subdivisions 2, 5; 256L.12, subdivision 9; 259.89, subdivision 1; 260C.317, subdivision 4; 268.125, subdivisions 1, 2, by adding a subdivision; 290.01, subdivisions 5, 19c, as amended, 19d, as amended, by adding a subdivision; 290.17, subdivision 4; 298.2214, subdivisions 1, 2, as amended; 298.223, subdivision 2; 298.28, subdivisions 9b, 9d, as added; 298.292, subdivision 2, as amended; 298.2961, subdivision 2; 341.21, as amended; 341.23; 341.26; 341.28, as amended; 341.29; 341.30; 341.32, as amended; 341.33; 341.34, subdivision 1; 341.35; 341.37; 349A.02, subdivision 1; 446A.12, subdivision 1; 462A.22, subdivision 1; 473.1565, subdivision 3; 518A.50; 518A.53,

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12723

subdivision 5; 609.531, subdivision 1; Minnesota Statutes 2007 Supplement, sections 3.922, by adding a subdivision; 10A.01, subdivision 35; 16B.328, by adding a subdivision; 80A.28, subdivision 1; 84.8205, subdivision 1; 103G.291, subdivision 3; 116J.575, subdivision 1a; 116L.17, subdivision 1; 120B.021, subdivision 1; 120B.024; 120B.30; 123B.143, subdivision 1; 124D.531, subdivision 1; 126C.21, subdivision 3; 126C.44; 136A.121, subdivision 7a; 136A.126; 136A.127; 136A.128, by adding a subdivision; 136A.65, subdivisions 1, 3, 5, 6, 7; 136A.66; 136A.67; 136A.69; 136F.02, subdivision 1; 136F.03, subdivision 4; 141.25, subdivision 5; 141.28, subdivision 1; 141.35; 144.4167, by adding a subdivision; 190.19, subdivision 2; 214.04, subdivision 3; 216C.052, subdivision 2; 216C.41, subdivision 3; 253B.185, subdivision 1b; 256.741, subdivision 1; 256B.0625, subdivision 20; 256B.0631, subdivisions 1, 3; 256B.199; 256B.434, subdivision 19; 256B.441, subdivisions 1, 55, 56; 256J.621; 268.047, subdivisions 1, 2; 268.085, subdivisions 3, 9, 16; 268.125, subdivision 3; 298.227; 341.22; 341.25; 341.27; 341.321; 446A.072, subdivisions 3, 5a; 446A.086; Laws 1999, chapter 223, article 2, section 72; Laws 2006, chapter 282, article 2, section 27, subdivision 4; Laws 2007, chapter 45, article 2, section 1; Laws 2007, chapter 54, article 1, section 11; Laws 2007, chapter 57, article 1, section 4, subdivisions 3, 4, 6; Laws 2007, chapter 135, article 1, section 3, subdivisions 2, 3; Laws 2007, chapter 144, article 1, sections 3, subdivisions 2, 18; 5, subdivisions 2, 5; Laws 2007, chapter 146, article 1, section 24, subdivisions 2, 3, 4, 5, 6, 7, 8; article 2, section 46, subdivisions 2, 3, 4, 6, 9, 13; article 3, sections 23, subdivision 2; 24, subdivisions 3, 4, 9; article 4, section 16, subdivisions 2, 3, 6, 8; article 5, section 13, subdivisions 2, 3, 4, 5; article 7, section 4; article 9, section 17, subdivisions 2, 3, 4, 8, 9, 13; Laws 2007, chapter 147, article 2, section 21; article 19, section 3, subdivisions 1, 4; Laws 2007, chapter 148, article 1, sections 7; 12, subdivision 4; Laws 2007, First Special Session chapter 2, article 1, section 11, subdivisions 1, 2, 6; Laws 2008, chapter 152, article 1, section 6, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 5; 13B; 16A; 43A; 115A; 116J; 120B; 121A; 124D; 127A; 136F; 144; 192; 256B; 268; 325F; 341; 446A; repealing Minnesota Statutes 2006, sections 16B.281, subdivisions 2, 4, 5; 16B.285; 84.961, subdivision 4; 85.013, subdivision 21b; 97A.141, subdivision 2; 121A.67; 125A.16; 125A.19; 125A.20; 125A.57; 168.123, subdivision 2a; 256.741, subdivision 15; 256J.24, subdivision 6; 259.83, subdivision 3; 259.89, subdivisions 2, 3, 4, 5; 290.01, subdivision 6b; 298.28, subdivision 9a; 341.31; 645.44, subdivision 19; Minnesota Statutes 2007 Supplement, section 256.969, subdivision 27; Laws 1989, chapter 335, article 1, section 21, subdivision 8, as amended; Laws 2004, chapter 188, section 2; Laws 2006, chapter 263, article 3, section 16; Laws 2007, First Special Session chapter 2, article 1, section 11, subdivisions 3, 4.

 

 

      The bill was read for the third time, as amended by Conference, and placed upon its repassage.

 

      The question was taken on the repassage of the bill and the roll was called. There were 115 yeas and 19 nays as follows:

 

      Those who voted in the affirmative were:

 

Abeler

Anderson, S.

Anzelc

Atkins

Benson

Bigham

Bly

Brown

Brynaert

Bunn

Carlson

Clark

Cornish

Davnie

Demmer

Dettmer

Dill

Dittrich

Dominguez

Doty

Drazkowski

Eastlund

Eken

Erhardt

Erickson

Faust

Fritz

Gardner

Gottwalt

Greiling

Gunther

Hamilton

Hansen

Hausman

Haws

Heidgerken

Hilstrom

Hilty

Hornstein

Hortman

Hosch

Howes

Huntley

Jaros

Johnson

Kahn

Kalin

Knuth

Koenen

Kranz

Laine

Lanning

Lenczewski

Lesch

Lieder

Lillie

Loeffler

Madore

Magnus

Mahoney

Mariani

Marquart

Masin

McFarlane

McNamara

Moe

Morgan

Morrow

Mullery

Murphy, E.

Murphy, M.

Nelson

Nornes

Norton

Olin

Otremba

Ozment

Paulsen

Paymar

Peterson, A.

Peterson, N.

Peterson, S.

Poppe

Rukavina

Ruth

Ruud

Sailer

Scalze

Seifert

Sertich

Severson

Shimanski

Simon

Simpson

Slawik

Slocum

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12724

Smith

Solberg

Swails

Thao

Thissen

Tillberry

Tingelstad

Tschumper

Urdahl

Wagenius

Walker

Ward

Wardlow

Welti

Westrom

Winkler

Wollschlager

Zellers

Spk. Kelliher

 

 

      Those who voted in the negative were:

 

Anderson, B.

Beard

Berns

Brod

Buesgens

Dean

DeLaForest

Emmer

Finstad

Garofalo

Hackbarth

Holberg

Hoppe

Juhnke

Kohls

Liebling

Olson

Pelowski

Peppin

 

 

      The bill was repassed, as amended by Conference, and its title agreed to.

 

 

      Simon moved that the House recess subject to the call of the Chair. The motion prevailed.

 

RECESS

 

RECONVENED

 

      The House reconvened and was called to order by Speaker pro tempore Paulsen.

 

 

      The following Conference Committee Report was received:

 

 

CONFERENCE COMMITTEE REPORT ON H. F. No. 3149

 

      A bill for an act relating to the financing and operation of state and local government; making policy, technical, administrative, enforcement, collection, refund, clarifying, and other changes to income, franchise, property, sales and use, minerals, wheelage, mortgage, deed, and estate taxes, and other taxes and tax-related provisions; providing for homestead credit state refund; providing for aids to local governments; providing city foreclosure and deed grants; changing and providing property tax exemptions and credits; modifying job opportunity building zone program; modifying green acre eligibility requirements; providing aggregate resource preservation property tax law; providing seasonal recreational property tax deferral program; modifying eligibility for senior citizen tax deferral program; modifying transit taxing district; modifying levies, property valuation procedures, homestead provisions, property tax classes, and class rates; requiring levy limits under certain contingencies; providing for and modifying sales tax exemptions; exempting two-wheel, motorized vehicles from wheelage tax; abolishing the political contribution refund; providing exclusion from income for certain veterans' retirement benefits; providing credits; providing for additional financing of metropolitan area transit and paratransit capital expenditures; authorizing issuance of certain obligations; modifying provision governing bonding for county libraries; changing and authorizing powers, duties, and requirements of local governments and authorities and state departments or agencies; modifying, extending, and authorizing certain tax increment financing districts; authorizing and modifying local sales taxes; prohibiting the imposition of new local sales taxes; providing federal updates; changing accelerated sales tax; creating Surplus Lines Association of Minnesota; creating Iron Range revitalization account; changing provisions related to data practices and debt collection; requiring studies; providing appointments; appropriating money; amending Minnesota Statutes 2006, sections 13.51, subdivision 3; 13.585, subdivision 5; 16D.02, subdivisions 3, 6; 16D.04, subdivision 2, as amended; 60A.196; 163.051, subdivision 1; 168.012, subdivision 1, by adding a subdivision; 168.013, subdivision 1f; 168A.03, subdivision 1; 169.01, by adding a subdivision; 169.781, subdivision 1; 216B.1612, by adding a subdivision; 216B.1646; 270A.03, subdivision 7; 270A.08, subdivision 1;

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12725

270B.15; 270C.33, subdivision 5; 270C.56, subdivisions 1, as amended, 3; 270C.85, subdivision 2; 272.02, subdivisions 13, 20, 21, 27, 31, 38, 49, by adding subdivisions; 272.03, subdivision 3, by adding a subdivision; 273.11, subdivisions 1, 1a, 8, 14a, 14b, by adding subdivisions; 273.111, subdivisions 3, as amended, 4, 8, 9, 11, 11a, by adding a subdivision; 273.121, as amended; 273.124, subdivisions 1, 6, 13, as amended, 21; 273.128, subdivision 1, as amended; 273.13, subdivisions 23, as amended, 24, 25, as amended, 33, 34, as added; 273.1384, subdivisions 1, 2; 274.01, subdivision 3; 274.014, subdivision 3; 274.14; 275.025, subdivisions 1, 2; 275.065, subdivisions 1c, 6, 8, 9, 10, by adding subdivisions; 275.70, by adding a subdivision; 275.71; 276.04, subdivision 2, as amended; 282.08; 287.20, subdivisions 3a, 9, by adding a subdivision; 289A.12, by adding a subdivision; 289A.18, subdivision 1, as amended; 289A.19, subdivision 2, by adding a subdivision; 289A.20, subdivision 4, as amended; 289A.40, subdivision 1; 289A.50, subdivision 1; 289A.55, by adding a subdivision; 289A.60, subdivision 15, as amended, by adding a subdivision; 290.01, subdivisions 6, 6b, 19a, as amended, 29, by adding a subdivision; 290.06, by adding subdivisions; 290.068, subdivisions 1, 3, by adding subdivisions; 290.07, subdivision 1; 290.091, subdivision 2, as amended; 290.21, subdivision 4; 290.92, subdivisions 1, 26, 31, as added; 290A.03, subdivision 13; 290A.04, subdivisions 2h, 3, 4, by adding subdivisions; 290B.03, subdivision 1; 290B.04, subdivisions 1, 3, 4; 290B.05, subdivision 1; 290B.07; 291.03, subdivision 1; 295.50, subdivision 4; 295.52, subdivision 4, as amended; 295.53, subdivision 4a; 296A.07, subdivision 4; 296A.08, subdivision 3; 296A.16, subdivision 2; 297A.61, subdivisions 22, 29; 297A.665, as amended; 297A.67, subdivision 7, as amended; 297A.70, subdivisions 2, 8; 297A.71, subdivision 23, by adding subdivisions; 297A.75; 297A.99, subdivision 1, as amended; 297A.995, subdivision 10, by adding subdivisions; 297B.01, subdivision 7, by adding a subdivision; 297B.03; 297F.01, subdivision 8; 297F.09, subdivision 10, as amended; 297F.21, subdivision 1; 297G.01, subdivision 9; 297G.09, subdivision 9, as amended; 297H.09; 297I.05, subdivision 12; 298.24, subdivision 1, as amended; 298.75, subdivisions 1, 2, 6, 7; 365A.095; 383A.80, subdivision 4; 383A.81, subdivisions 1, 2; 383B.80, subdivision 4; 383E.20; 429.101, subdivision 1; 469.033, subdivision 6; 469.040, subdivision 4; 469.174, subdivision 10b; 469.177, subdivision 1c, by adding a subdivision; 469.1813, subdivision 8; 469.312, by adding a subdivision; 469.319; 469.3201; 473.39, by adding a subdivision; 473.446, subdivisions 2, 8; 477A.011, subdivisions 34, 36, as amended, by adding subdivisions; 477A.0124, subdivision 5; 477A.013, subdivisions 1, 8, as amended, 9, as amended; 477A.03; Minnesota Statutes 2007 Supplement, sections 115A.1314, subdivision 2; 268.19, subdivision 1; 273.1231, subdivision 7, by adding a subdivision; 273.1232, subdivision 1; 273.1233, subdivisions 1, 3; 273.1234; 273.1235, subdivisions 1, 3; 273.124, subdivision 14; 273.1393; 275.065, subdivisions 1, 1a, 3; 290.01, subdivision 19b, as amended; 298.227; Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as amended; Laws 1995, chapter 264, article 5, section 46, subdivision 2; Laws 2003, chapter 127, article 10, section 31, subdivision 1; Laws 2006, chapter 259, article 10, section 14, subdivision 1; Laws 2008, chapter 154, article 2, section 11; article 3, section 7; article 9, sections 23; 24; proposing coding for new law in Minnesota Statutes, chapters 60A; 116J; 169; 216F; 273; 298; 373; 383C; 383D; 383E; 469; proposing coding for new law as Minnesota Statutes, chapter 290D; repealing Minnesota Statutes 2006, sections 10A.322, subdivision 4; 273.11, subdivision 14; 273.111, subdivision 6; 290.06, subdivision 23; 290.191, subdivision 4; 290A.04, subdivisions 2, 2b; 473.4461; 477A.014, subdivision 5; Minnesota Statutes 2007 Supplement, section 477A.014, subdivision 4; Laws 2005, First Special Session chapter 3, article 5, section 24; Minnesota Rules, parts 8031.0100, subpart 3; 8093.2100.

 

May 18, 2008

 

The Honorable Margaret Anderson Kelliher

Speaker of the House of Representatives

 

The Honorable James P. Metzen

President of the Senate

 

      We, the undersigned conferees for H. F. No. 3149 report that we have agreed upon the items in dispute and recommend as follows:

 

      That the Senate recede from its amendments and that H. F. No. 3149 be further amended as follows:

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12726

                Delete everything after the enacting clause and insert:

 

"ARTICLE 1

 

HOMEOWNER PROPERTY TAX REFUND

 

Section 1. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to read:

 

Subd. 2. Homeowners. A claimant whose property taxes payable are in excess of the percentage of the household income stated below shall pay an amount equal to the percent of income shown for the appropriate household income level along with the percent to be paid by the claimant of the remaining amount of property taxes payable. The state refund equals the amount of property taxes payable that remain, up to the state refund amount shown below.

 

Household Income               Percent of Income                   Percent Paid by Claimant                 Maximum State Refund

 

             $0 to 1,189                        1.0 percent                                     15 percent                                       $1,450 $1,850

        1,190 to 2,379                        1.1 percent                                     15 percent                                       $1,450 $1,850

        2,380 to 3,589                        1.2 percent                                     15 percent                                       $1,410 $1,800

        3,590 to 4,789                        1.3 percent                                     20 percent                                       $1,410 $1,800

        4,790 to 5,979                        1.4 percent                                     20 percent                                       $1,360 $1,730

        5,980 to 8,369                        1.5 percent                                     20 percent                                       $1,360 $1,730

        8,370 to 9,559                        1.6 percent                                     25 percent                                       $1,310 $1,670

      9,560 to 10,759                        1.7 percent                                     25 percent                                       $1,310 $1,670

    10,760 to 11,949                        1.8 percent                                     25 percent                                       $1,260 $1,610

    11,950 to 13,139                        1.9 percent                                     30 percent                                       $1,260 $1,610

    13,140 to 14,349                        2.0 percent                                     30 percent                                       $1,210 $1,540

    14,350 to 16,739                        2.1 percent                                     30 percent                                       $1,210 $1,540

    16,740 to 17,929                        2.2 percent                                     35 percent                                       $1,160 $1,480

    17,930 to 19,119                        2.3 percent                                     35 percent                                       $1,160 $1,480

    19,120 to 20,319                        2.4 percent                                     35 percent                                       $1,110 $1,420

    20,320 to 25,099                        2.5 percent                                     40 percent                                       $1,110 $1,420

    25,100 to 28,679                        2.6 percent                                     40 percent                                       $1,070 $1,360

    28,680 to 35,849                        2.7 percent                                     40 percent                                       $1,070 $1,360

    35,850 to 41,819                        2.8 percent                                     45 percent                                          $970 $1,240

    41,820 to 47,799                        3.0 percent                                     45 percent                                          $970 $1,240

    47,800 to 53,779                        3.2 percent                                     45 percent                                          $870 $1,110

    53,780 to 59,749                        3.5 percent                                     50 percent                                             $780 $990

    59,750 to 65,729                        4.0 3.5 percent                               50 percent                                             $680 $870

    65,730 to 69,319                        4.0 3.5 percent                               50 percent                                             $580 $740

    69,320 to 71,719                        4.0 3.5 percent                               50 percent                                             $480 $610

    71,720 to 74,619                        4.0 3.5 percent                               50 percent                                             $390 $500

    74,620 to 77,519                        4.0 3.5 percent                               50 percent                                             $290 $370

 

      The payment made to a claimant shall be the amount of the state refund calculated under this subdivision. No payment is allowed if the claimant's household income is $77,520 or more.

 

EFFECTIVE DATE. This section is effective beginning with refunds based on property taxes payable in 2009.

Journal of the House - 119th Day - Sunday, May 18, 2008 - Top of Page 12727

Sec. 2. TAXPAYER ASSISTANCE SERVICES; PROPERTY TAX REFUND.

 

(a) $100,000 in fiscal year 2009 is appropriated from the general fund to the commissioner of revenue to make grants to one or more nonprofit organizations, qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to coordinate, facilitate, encourage, and aid in the provision of taxpayer assistance services. The commissioner must award grants under this section so as to increase the availability of taxpayer assistance services after April 15, to assist homeowners in filing claims for the property tax refund, and to increase participation in the program. This appropriation is onetime and is not added to the agency's base budget.

 

(b) "Taxpayer assistance services" means accounting and tax preparation services provided by volunteers to low-income and disadvantaged Minnesota residents to help them file federal and state income tax returns, Minnesota property tax refund claims, and may include provision of personal representation before the Department of Revenue and Internal Revenue Service.

 

ARTICLE 2

 

AIDS TO LOCAL GOVERNMENTS

 

Section 1. Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to read:

 

Subd. 34. City revenue need. (a) For a city with a population equal to or greater than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing percentage; plus (2) 19.141678 times the population decline percentage; plus (3) 2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638 times the household size.

 

(b) For a city with a population less than 2,500, "city revenue need" is the sum of (1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4) 1.206 times the transformed population; minus (5) 62.772.

 

(c) For a city with a population of 2,500 or more and a population in one of the most recently available five years that was less than 2,500, "city revenue need" is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its transition factor; plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied by the difference between one and its transition factor. For purposes of this paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's population estimate has been 2,500 or more. This provision only applies for aids payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It applies to any city for aids payable in 2009 and thereafter. The city revenue need under this paragraph may not be less than 285.

 

(d) The city revenue need cannot be less than zero.

 

(e) For calendar year 2005 and subsequent years, the city revenue need for a city, as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit price deflator for government consumption expenditures and gross investment for state and local governments as prepared by the United States Department of Commerce, for the most recently available year to the 2003 implicit price deflator for state and local government purchases.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, as amended by Laws 2008, chapter 154, article 1, section 1, is amended to read:

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Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision, "city aid base" is zero.

 

(b) The city aid base for any city with a population less than 500 is increased by $40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $40,000 for aids payable in calendar year 1995 only, provided that:

 

(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;

 

(ii) the city portion of the tax capacity rate exceeds 100 percent; and

 

(iii) its city aid base is less than $60 per capita.

 

(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:

 

(i) the city has a population in 1994 of 2,500 or more;

 

(ii) the city is located in a county, outside of the metropolitan area, which contains a city of the first class;

 

(iii) the city's net tax capacity used in calculating its 1996 aid under section 477A.013 is less than $400 per capita; and

 

(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of property located in the city is classified as railroad property.

 

(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:

 

(i) the city was incorporated as a statutory city after December 1, 1993;

 

(ii) its city aid base does not exceed $5,600; and

 

(iii) the city had a population in 1996 of 5,000 or more.

 

(e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:

 

(i) the city had a population in 1996 of at least 50,000;

 

(ii) its population had increased by at least 40 percent in the ten-year period ending in 1996; and

 

(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.

 

(f) (e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, provided that:

 

(1) the city has a population that is greater than 1,000 and less than 2,500;

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(2) its commercial and industrial percentage for aids payable in 1999 is greater than 45 percent; and

 

(3) the total market value of all commercial and industrial property in the city for assessment year 1999 is at least 15 percent less than the total market value of all commercial and industrial property in the city for assessment year 1998.

 

(g) (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:

 

(1) the city had a population in 1997 of 2,500 or more;

 

(2) the net tax capacity of the city used in calculating its 1999 aid under section 477A.013 is less than $650 per capita;

 

(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under section 477A.013 is greater than 12 percent;

 

(4) the 1999 local government aid of the city under section 477A.013 is less than 20 percent of the amount that the formula aid of the city would have been if the need increase percentage was 100 percent; and

 

(5) the city aid base of the city used in calculating aid under section 477A.013 is less than $7 per capita.

 

(h) (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:

 

(1) the city has a population in 1997 of 2,000 or more;

 

(2) the net tax capacity of the city used in calculating its 1999 aid under section 477A.013 is less than $455 per capita;

 

(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is greater than $195 per capita; and

 

(4) the 1999 local government aid of the city under section 477A.013 is less than 38 percent of the amount that the formula aid of the city would have been if the need increase percentage was 100 percent.

 

(i) (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:

 

(1) the city has a population in 1998 that is greater than 200 but less than 500;

 

(2) the city's revenue need used in calculating aids payable in 2000 was greater than $200 per capita;

 

(3) the city net tax capacity for the city used in calculating aids available in 2000 was equal to or less than $200 per capita;

 

(4) the city aid base of the city used in calculating aid under section 477A.013 is less than $65 per capita; and

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(5) the city's formula aid for aids payable in 2000 was greater than zero.

 

(j) (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:

 

(1) the city had a population in 1998 that is greater than 200 but less than 500;

 

(2) the city's commercial industrial percentage used in calculating aids payable in 2000 was less than ten percent;

 

(3) more than 25 percent of the city's population was 60 years old or older according to the 1990 census;

 

(4) the city aid base of the city used in calculating aid under section 477A.013 is less than $15 per capita; and

 

(5) the city's formula aid for aids payable in 2000 was greater than zero.

 

(k) (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 only, provided that:

 

(1) the net tax capacity of the city used in calculating its 2000 aid under section 477A.013 is less than $810 per capita;

 

(2) the population of the city declined more than two percent between 1988 and 1998;

 

(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is greater than $240 per capita; and

 

(4) the city received less than $36 per capita in aid under section 477A.013, subdivision 9, for aids payable in 2000.

 

(l) (k) The city aid base for a city with a population of 10,000 or more which is located outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to the lesser of:

 

(1)(i) the total population of the city, as determined by the United States Bureau of the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or

 

(2) $2,500,000.

 

(m) (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:

 

(1) the city is located in the seven-county metropolitan area;

 

(2) its population in 2000 is between 10,000 and 20,000; and

 

(3) its commercial industrial percentage, as calculated for city aid payable in 2001, was greater than 25 percent.

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(n) (m) The city aid base for a city is increased by $150,000 in calendar years 2002 to 2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year 2009 only, provided that:

 

(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;

 

(2) its home county is located within the seven-county metropolitan area;

 

(3) its pre-1940 housing percentage is less than 15 percent; and

 

(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 per capita.

 

(o) (n) The city aid base for a city is increased by $200,000 beginning in calendar year 2003 and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, provided that the city qualified for an increase in homestead and agricultural credit aid under Laws 1995, chapter 264, article 8, section 18.

 

(p) (o) The city aid base for a city is increased by $200,000 in 2004 only and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, is also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear dry cask storage facility.

 

(q) (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the maximum total aid it may receive under section 477A.013, subdivision 9, is also increased by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by more than 40 percent between 1990 and 2000.

 

(r) (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the maximum total aid it may receive under section 477A.013, subdivision 9, is also increased by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000 and has a state park for which the city provides rescue services and which comprised at least 14 percent of the total geographic area included within the city boundaries in 2000.

 

(s) The city aid base for a city with a population less than 5,000 is increased in 2006 and thereafter and the minimum and maximum amount of total aid it may receive under this section is also increased in calendar year 2006 only by an amount equal to $6 multiplied by its population.

 

(t) (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and the minimum and maximum amount of total aid it may receive under section 477A.013, subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:

 

(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed to be placed in trust status as tax-exempt Indian land;

 

(2) the placement of the land is being challenged administratively or in court; and

 

(3) due to the challenge, the land proposed to be placed in trust is still on the tax rolls as of May 1, 2006.

 

(u) (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and the minimum and maximum total amount of aid it may receive under this section is also increased in calendar year 2007 only, provided that:

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(1) the city has a 2004 estimated population greater than 200 but less than 2,000;

 

(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;

 

(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids payable in 2006 was greater than 110 percent; and

 

(4) it is located in a county where at least 15,000 acres of land are classified as tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

 

(v) (t) The city aid base for a city is increased by $30,000 in 2009 only, and the maximum total aid it may receive under section 477A.013, subdivision 9, is also increased by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than 3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities and one township in 2002.

 

(u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and the maximum total aid it may receive under section 477A.013, subdivision 9, is also increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for aids payable in 2007 of less than $150 per capita and the city experienced flooding on March 14, 2007, that resulted in evacuation of at least 40 homes.

 

(v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the maximum total aid it may receive under section 477A.013, subdivision 9, is also increased by $100,000 in calendar year 2009 only, if the city:

 

(1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical area;

 

(2) has a 2005 population greater than 7,000 but less than 8,000; and

 

(3) has a 2005 net tax capacity per capita of less than $500.

 

(w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, is increased by $25,000 in calendar year 2009 only, provided that:

 

(1) the city is located in the seven-county metropolitan area;

 

(2) its population in 2006 is less than 200; and

 

(3) the percentage of its housing stock built before 1940, according to the 2000 United States Census, is greater than 40 percent.

 

(x) The city aid base is increased by $90,000 in calendar year 2009 only and the minimum and maximum total amount of aid it may receive under section 477A.013, subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the city is located in the seven-county metropolitan area, has a 2006 population between 5,000 and 7,000 and has a 1997 population of over 7,000.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 3. Minnesota Statutes 2006, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 41. Small city aid base. (a) "Small city aid base" for a city with a population less than 5,000 is equal to $8.50 multiplied by its population. The small city aid base for all other cities is equal to zero.

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(b) For calendar year 2010 and subsequent years, the small city aid base for a city, as determined in paragraph (a), is multiplied by the ratio of the appropriation under section 477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under that section for aids payable in 2009.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 4. Minnesota Statutes 2006, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 42. City jobs base. (a) "City jobs base" for a city with a population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of jobs per capita in the city, and (3) its population. For cities with a population less than 5,000, the city jobs base is equal to zero. For a city receiving aid under section 477A.011, subdivision 36, paragraph (l), its city jobs base is reduced by the lesser of 36 percent of the amount of aid received under that paragraph or $1,000,000. No city's city jobs base may exceed $4,725,000 under this paragraph.

 

(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as determined in paragraph (a), is multiplied by the ratio of the appropriation under section 477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under that section for aids payable in 2009.

 

(c) For purposes of this subdivision, "jobs per capita in the city" means (1) the average annual number of employees in the city based on the data from the Quarterly Census of Employment and Wages, as reported by the Department of Employment and Economic Development, for the most recent calendar year available as of May 1, 2008, divided by (2) the city's population for the same calendar year as the employment data. The commissioner of the Department of Employment and Economic Development shall certify to the city the average annual number of employees for each city by June 1, 2008. A city may challenge an estimate under this paragraph by filing its specific objection, including the names of employers that it feels may have misreported data, in writing with the commissioner by June 20, 2008. The commissioner shall make every reasonable effort to address the specific objection and adjust the data as necessary. The commissioner shall certify the estimates of the annual employment to the commissioner of revenue by July 15, 2008, including any estimates still under objection.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 5. Minnesota Statutes 2006, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 43. Unmet need. "Unmet need" for a city is equal to the difference between (1) its city revenue need multiplied by its population, and (2) its city net tax capacity multiplied by the tax effort rate.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 6. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:

 

Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition aid equal to the amount, if any, by which:

 

(1) the difference between:

 

(i) the aid the county received under subdivision 1 in 2004, divided by the total aid paid to all counties under subdivision 1, multiplied by $205,000,000; and

 

(ii) the amount of aid the county is certified to receive in 2005 under subdivisions 3 and 4;

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exceeds:

 

(2) three percent of the county's adjusted net tax capacity.

 

A county's aid under this paragraph may not be less than zero.

 

(b) In 2006, a county is eligible to receive two-thirds of the transition aid it received in 2005.

 

(c) In 2007, For 2009 and each year thereafter, a county is eligible to receive one-third of the transition aid it received in 2005 2007.

 

(d) No county shall receive aid under this subdivision after 2007.

 

(b) In 2009 only, a county with (1) a 2006 population less than 30,000, and (2) an average Part I crimes per capita greater than 3.9 percent based on factors used in determining county program aid payable in 2008, shall receive $100,000.

 

EFFECTIVE DATE. This section is effective for aids payable in 2009 and thereafter.

 

Sec. 7. Minnesota Statutes 2006, section 477A.013, subdivision 8, as amended by Laws 2008, chapter 154, article 1, section 2, is amended to read:

 

Subd. 8. City formula aid. (a) In calendar year 2009, the formula aid for a city is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase percentage multiplied by its unmet need.

 

(b) In calendar year 2004 2010 and subsequent years, the formula aid for a city is equal to the need increase percentage multiplied by the difference between (1) the city's revenue need multiplied by its population, and (2) the sum of the city's net tax capacity multiplied by the tax effort rate. the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase percentage multiplied by the average of its unmet need for the most recently available two years.

 

No city may have a formula aid amount less than zero. The need increase percentage must be the same for all cities.

 

The applicable need increase percentage must be calculated by the Department of Revenue so that the total of the aid under subdivision 9 equals the total amount available for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 4 and 5. For aids payable in 2009 only, all data used in calculating aid to cities under sections 477A.011 to 477A.013 will be based on the data available for calculating aid to cities for aids payable in 2008. For aids payable in 2010 and thereafter, data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the most recently available data as of January 1 in the year in which the aid is calculated.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter, provided that the appropriation increase for aids payable in 2009 under section 477A.03, subdivision 2a, goes into effect.

 

Sec. 8. Minnesota Statutes 2006, section 477A.013, subdivision 9, as amended by Laws 2008, chapter 154, article 1, section 3, is amended to read:

 

Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each city shall receive an aid distribution equal to the sum of (1) the city formula aid under subdivision 8, and (2) its city aid base, and (3) one-half of the difference between its total aid in the previous year under this subdivision and its city aid base in the previous year.

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(b) For aids payable in 2010 and thereafter, each city shall receive an aid distribution equal to (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its formula aid under subdivision 8 in the previous year, prior to any adjustments under this subdivision 2009 only, the total aid for any city shall not exceed the sum of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus (2) its total aid in the previous year.

 

(c) For aids payable in 2009 2010 and thereafter, the total aid for any city shall not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total aid for any city with a population of 2,500 or more may not be less than its total aid under this section in the previous year minus the lesser of $15 $10 multiplied by its population, or ten percent of its net levy in the year prior to the aid distribution.

 

(d) For aids payable in 2009 2010 and thereafter, the total aid for a city with a population less than 2,500 must not be less than the amount it was certified to receive in the previous year minus the lesser of $15 $10 multiplied by its population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a population less than 2,500 must not be less than what it received under this section in the previous year unless its total aid in calendar year 2008 was aid under section 477A.011, subdivision 36, paragraph (s), in which case its minimum aid is zero.

 

(e) A city's aid loss under this section may not exceed $300,000 in any year in which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or greater than the appropriation under that subdivision in the previous year, unless the city has an adjustment in its city net tax capacity under the process described in section 469.174, subdivision 28.

 

(f) If a city's net tax capacity used in calculating aid under this section has decreased in any year by more than 25 percent from its net tax capacity in the previous year due to property becoming tax-exempt Indian land, the city's maximum allowed aid increase under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease resulting from the property becoming tax exempt.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter, provided that the appropriation increase for aids payable in 2009 under section 477A.03, subdivision 2a, goes into effect.

 

Sec. 9. Minnesota Statutes 2006, section 477A.03, is amended to read:

 

477A.03 APPROPRIATION.

 

Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the commissioner of revenue.

 

Subd. 2a. Cities. For aids payable in 2004 2009 and thereafter, the total aids aid paid under section 477A.013, subdivision 9, are limited to $429,000,000 is $526,148,487, subject to adjustment in subdivision 5. For aids payable in 2005, the total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For aids payable in 2006 and thereafter, the total aids paid under section 477A.013, subdivision 9, is limited to $485,052,000.

 

Subd. 2b. Counties. (a) For aids payable in calendar year 2005 and thereafter, the total aids paid to counties under section 477A.0124, subdivision 3, are limited to $100,500,000. For aids payable in 2009 and thereafter, the total aid payable under section 477A.0124, subdivision 3, is $111,500,000 minus one-half of the total aid amount determined under section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision 5. Each calendar year, $500,000 shall be retained by the commissioner of revenue to make reimbursements to the commissioner of finance for payments made under section 611.27. For calendar year 2004, the amount shall be in addition to the payments authorized under section 477A.0124, subdivision 1. For calendar year 2005 and

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subsequent years, the amount shall be deducted from the appropriation under this paragraph. The reimbursements shall be to defray the additional costs associated with court-ordered counsel under section 611.27. Any retained amounts not used for reimbursement in a year shall be included in the next distribution of county need aid that is certified to the county auditors for the purpose of property tax reduction for the next taxes payable year.

 

(b) For aids payable in 2005 2009 and thereafter, the total aids aid under section 477A.0124, subdivision 4, are limited to $105,000,000 is $116,132,923 minus one-half of the total aid amount determined under section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision 5. For aids payable in 2006 and thereafter, the total aid under section 477A.0124, subdivision 4, is limited to $105,132,923. The commissioner of finance shall bill the commissioner of revenue for the cost of preparation of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner of revenue for the cost of preparation of local impact notes for school districts as required by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner of revenue shall deduct the amounts billed under this paragraph from the appropriation under this paragraph. The amounts deducted are appropriated to the commissioner of finance and the commissioner of education for the preparation of local impact notes.

 

Subd. 5. Aid adjustments. For aids payable in 2010, the aid amounts contained in subdivisions 2a and 2b are increased by two percent. For aids payable in 2011 and thereafter, the aids amounts contained in subdivisions 2a and 2b are equal to 104 percent of the amounts for aids payable in 2010 under this section.

 

EFFECTIVE DATE. This section is effective for aids payable in calendar year 2009 and thereafter.

 

Sec. 10. [477A.16] UTILITY VALUATION TRANSITION AID.

 

Subdivision 1. Definitions. (a) When used in this section, the following terms have the meanings indicated in this subdivision.

 

(b) "Local unit" means a home rule charter or statutory city, or a town.

 

(c) "Old rule utility net tax capacity" means the net tax capacity of all public utility property within the local unit's taxing jurisdiction for assessment year 2007, calculated as if the property were valued under valuation rules in effect prior to assessment year 2007.

 

(d) "New rule utility net tax capacity" means the net tax capacity of all public utility property within the local unit's taxing jurisdiction for assessment year 2007, calculated as if the property were valued under valuation rules in effect for assessment year 2007, but without the phase-in provisions of Minnesota Rules, part 8100.0800.

 

(e) "Modified net tax capacity" means the local unit's net tax capacity for taxes payable in 2008, modified by substituting the old rule utility net tax capacity for the actual net tax capacity of utility property. Modified net tax capacity must be determined by the commissioner of revenue based on information and data available to the commissioner as of July 1, 2008.

 

(f) "Net tax capacity differential" means the positive difference, if any, by which the local unit's old rule utility net tax capacity exceeds its new rule utility net tax capacity.

 

(g) "Current year net tax capacity differential" means the positive difference, if any, by which the local unit's old rule utility net tax capacity exceeds its total tax capacity of utility property for taxes payable in the current year.

 

Subd. 2. Aid eligibility; payment. (a) If the net tax capacity differential of the local unit exceeds four percent of its modified net tax capacity, the local unit is eligible for transition aid computed under paragraphs (b) and (c).

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(b) For aids payable in 2009, transition aid under this section for an eligible local unit equals 50 percent of (1) the net tax capacity differential, times (2) the jurisdiction's tax rate for taxes payable in 2008.

 

(c) For aids payable in 2010 and thereafter, transition aid under this section for an eligible local unit equals (1) the current year net tax capacity differential for taxes payable in the year preceding the aid distribution year, times (2) the jurisdiction's tax rate for taxes payable in 2008.

 

(c) The commissioner of revenue shall compute the amount of transition aid payable to each local unit under this section. On or before August 1 of each year, the commissioner shall certify the amount of transition aid computed for aids payable in the following year for each recipient local unit. The commissioner shall pay transition aid to local units annually at the times provided in section 477A.015.

 

Subd. 3. Appropriation. An amount sufficient to pay transition aid under this section is annually appropriated to the commissioner of revenue from the general fund.

 

EFFECTIVE DATE. This section is effective for aids payable in 2009 and thereafter.

 

Sec. 11. STATE PARKS LOCATED ON LAKE VERMILION; DISTRIBUTION OF PAYMENTS IN LIEU OF TAXES.

 

(a) Notwithstanding Minnesota Statutes, section 477A.14, payments in lieu of taxation under Minnesota Statutes, sections 477A.11 to 477A.145, for the land included in any state park located in whole or in part on the shores of Lake Vermilion must be distributed to the taxing jurisdictions containing the property as follows: one-third to the school district, one-third to the township, and one-third to the county. Each of those taxing jurisdictions may use the payments for their general purposes.

 

(b) Notwithstanding Minnesota Statutes, section 477A.11, the payments for all lands described in paragraph (a) must be made at the rate set for acquired natural resources land.

 

Sec. 12. STUDY OF AIDS TO LOCAL GOVERNMENTS.

 

The chairs of the senate and house of representatives committees with jurisdiction over taxes shall each appoint five members to a study group of the tax committees to examine the current system of aids to local governments and make recommendations on improvements to the system. Of the five members appointed by each chair, two must be members of the tax committee, one of whom is a majority party member and one of whom is a minority party member. The remaining members must represent local units of government. The chairs of the divisions of the tax committees having jurisdiction over property taxes shall also be members and shall serve as cochairs of the study group. The study shall include, but not be limited to, consideration of existing disparities in the distribution of local government aid, an analysis of current law need and capacity factors as well as alternative need factors, alternative analytical methods for determining correlations between factors and need, the formula used to calculate aid for small cities, and volatility in the local government aid distribution. The group must report on its specific recommendations to the legislature by December 15, 2010.

 

EFFECTIVE DATE. This section is effective the day following final enactment.

 

Sec. 13. OUT-OF-HOME PLACEMENT AID.

 

In calendar year 2009 only, $500,000 shall be distributed to any county in which (1) the 2006 estimated population exceeds 30,000, and (2) the 2006 percentage of households receiving food stamps exceeds 15 percent, based on data used in computing county program aids for aids payable in 2008 and the 2006 estimated household

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count according to the state demographer. The aid must be used to meet the county's cost of out-of-home placement programs. $500,000 is appropriated to the commissioner of revenue from the general fund to make the payment authorized under this section. The payment must be made prior to June 30, 2009.

 

EFFECTIVE DATE. This section is effective the day following final enactment.

 

Sec. 14. REPEALER.

 

Minnesota Statutes 2006, section 477A.014, subdivision 5, and Minnesota Statutes 2007 Supplement, section 477A.014, subdivision 4, are repealed.

 

EFFECTIVE DATE. This section is effective for aid payable in 2009 and thereafter.

 

ARTICLE 3

 

LEVY LIMITS

 

Section 1. Minnesota Statutes 2006, section 275.70, subdivision 5, is amended to read:

 

Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes levied by a local governmental unit for the following purposes or in the following manner:

 

(1) to pay the costs of the principal and interest on bonded indebtedness or to reimburse for the amount of liquor store revenues used to pay the principal and interest due on municipal liquor store bonds in the year preceding the year for which the levy limit is calculated;

 

(2) to pay the costs of principal and interest on certificates of indebtedness issued for any corporate purpose except for the following:

 

(i) tax anticipation or aid anticipation certificates of indebtedness;

 

(ii) certificates of indebtedness issued under sections 298.28 and 298.282;

 

(iii) certificates of indebtedness used to fund current expenses or to pay the costs of extraordinary expenditures that result from a public emergency; or

 

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an insufficiency in other revenue sources;

 

(3) to provide for the bonded indebtedness portion of payments made to another political subdivision of the state of Minnesota;

 

(4) to fund payments made to the Minnesota State Armory Building Commission under section 193.145, subdivision 2, to retire the principal and interest on armory construction bonds;

 

(5) property taxes approved by voters which are levied against the referendum market value as provided under section 275.61;

 

(6) to fund matching requirements needed to qualify for federal or state grants or programs to the extent that either (i) the matching requirement exceeds the matching requirement in calendar year 2001, or (ii) it is a new matching requirement that did not exist prior to 2002;

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(7) to pay the expenses reasonably and necessarily incurred in preparing for or repairing the effects of natural disaster including the occurrence or threat of widespread or severe damage, injury, or loss of life or property resulting from natural causes, in accordance with standards formulated by the Emergency Services Division of the state Department of Public Safety, as allowed by the commissioner of revenue under section 275.74, subdivision 2;

 

(8) pay amounts required to correct an error in the levy certified to the county auditor by a city or county in a levy year, but only to the extent that when added to the preceding year's levy it is not in excess of an applicable statutory, special law or charter limitation, or the limitation imposed on the governmental subdivision by sections 275.70 to 275.74 in the preceding levy year;

 

(9) to pay an abatement under section 469.1815;

 

(10) to pay any costs attributable to increases in the employer contribution rates under chapter 353, or locally administered pension plans, that are effective after June 30, 2001;

 

(11) to pay the operating or maintenance costs of a county jail as authorized in section 641.01 or 641.262, or of a correctional facility as defined in section 241.021, subdivision 1, paragraph (f), to the extent that the county can demonstrate to the commissioner of revenue that the amount has been included in the county budget as a direct result of a rule, minimum requirement, minimum standard, or directive of the Department of Corrections, or to pay the operating or maintenance costs of a regional jail as authorized in section 641.262. For purposes of this clause, a district court order is not a rule, minimum requirement, minimum standard, or directive of the Department of Corrections. If the county utilizes this special levy, except to pay operating or maintenance costs of a new regional jail facility under sections 641.262 to 641.264 which will not replace an existing jail facility, any amount levied by the county in the previous levy year for the purposes specified under this clause and included in the county's previous year's levy limitation computed under section 275.71, shall be deducted from the levy limit base under section 275.71, subdivision 2, when determining the county's current year levy limitation. The county shall provide the necessary information to the commissioner of revenue for making this determination;

 

(12) to pay for operation of a lake improvement district, as authorized under section 103B.555. If the county utilizes this special levy, any amount levied by the county in the previous levy year for the purposes specified under this clause and included in the county's previous year's levy limitation computed under section 275.71 shall be deducted from the levy limit base under section 275.71, subdivision 2, when determining the county's current year levy limitation. The county shall provide the necessary information to the commissioner of revenue for making this determination;

 

(13) to repay a state or federal loan used to fund the direct or indirect required spending by the local government due to a state or federal transportation project or other state or federal capital project. This authority may only be used if the project is not a local government initiative;

 

(14) to pay for court administration costs as required under section 273.1398, subdivision 4b, less the (i) county's share of transferred fines and fees collected by the district courts in the county for calendar year 2001 and (ii) the aid amount certified to be paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes levied to pay for these costs in the year in which the court financing is transferred to the state, the amount under this clause is limited to the amount of aid the county is certified to receive under section 273.1398, subdivision 4a;

 

(15) to fund a police or firefighters relief association as required under section 69.77 to the extent that the required amount exceeds the amount levied for this purpose in 2001;

 

(16) for purposes of a storm sewer improvement district under section 444.20; and

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(17) to pay for the maintenance and support of a city or county society for the prevention of cruelty to animals under section 343.11. If the city or county uses this special levy, any amount levied by the city or county in the previous levy year for the purposes specified in this clause and included in the city's or county's previous year's levy limit computed under section 275.71, must be deducted from the levy limit base under section 275.71, subdivision 2, in determining the city's or county's current year levy limit.;

 

(18) for counties, to pay for the increase in their share of health and human service costs caused by reductions in federal health and human services grants effective after September 30, 2007;

 

(19) for a city, for the costs reasonably and necessarily incurred for securing, maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by the commissioner of revenue under section 275.74, subdivision 2. A city must have either (i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in the city or in a zip code area of the city that is at least 50 percent higher than the average foreclosure rate in the metropolitan area, as defined in Minnesota Statutes section 473.121, subdivision 2, to use this special levy. For purposes of this paragraph, "foreclosure rate" means the number of foreclosures, as indicated by sheriff sales records, divided by the number of households in the city in 2007;

 

(20) for a city, for the unreimbursed costs of redeployed traffic control agents and lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified to the Federal Highway Administration;

 

(21) to pay costs attributable to wages and benefits for sheriff, police, and fire personnel. If a local governmental unit did not use this special levy in the previous year its levy limit base under section 275.71 shall be reduced by the amount equal to the amount it levied for the purposes specified in this clause in the previous year; and

 

(22) an amount equal to any reductions in the certified aids or credits payable under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under section 16A.152. The amount of the levy allowed under this clause is equal to the amount unallotted in the calendar year in which the tax is levied unless the unallotment amount is not known by September 1 of the levy year, in which case the unallotment amount may be levied in the following year.

 

EFFECTIVE DATE. This section is effective for taxes levied in calendar year 2008 and thereafter, payable in 2009 and thereafter.

 

Sec. 2. Minnesota Statutes 2006, section 275.70, is amended by adding a subdivision to read:

 

Subd. 6. Levy aid base. "Levy aid base" for a local governmental unit for a levy year means its total levy spread on net tax capacity, minus any amounts that would qualify as a special levy under section 275.70, plus the sum of (1) the total amount of aids and reimbursements that the local governmental unit is certified to receive under sections 477A.011 to 477A.014 in the same year, (2) taconite aids under sections 298.28 and 298.282 in the same year, including any aid which was required to be placed in a special fund for expenditure in the next succeeding year, and (3) payments to the local governmental unit under section 272.029 in the same year, adjusted for any error in estimation in the preceding year.

 

EFFECTIVE DATE. This section is effective for levies certified in calendar year 2008, payable in calendar year 2009 and thereafter.

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Sec. 3. Minnesota Statutes 2006, section 275.71, is amended to read:

 

275.71 LEVY LIMITS.

 

Subdivision 1. Limit on levies. Notwithstanding any other provision of law or municipal charter to the contrary which authorize ad valorem taxes in excess of the limits established by sections 275.70 to 275.74, the provisions of this section apply to local governmental units for all purposes other than those for which special levies and special assessments are made.

 

Subd. 2. Levy limit base. (a) The levy limit base for a local governmental unit for taxes levied in 2003 is equal to its adjusted levy limit base in the previous year, subject to any adjustments under section 275.72, plus any aid amounts received in 2003 under section 273.138 or 273.166, minus the difference between its levy limit under subdivision 5 for taxes levied in 2002 and the amount it actually levied under that subdivision in that year, and certified property tax replacement aid payable in 2003 under section 174.242. 2008 is its levy aid base from the previous year, subject to any adjustments under section 275.72. For taxes levied in 2009 and 2010, the levy limit base for a local governmental unit is its adjusted levy limit base in the previous year, subject to any adjustments under section 275.72.

 

Subd. 3. Adjustments for state takeovers. (a) The levy limit base for each local unit of government shall be adjusted to reflect the assumption by the state of financing for certain government functions as indicated in this subdivision.

 

(b) For a county in a judicial district for which financing has not been transferred to the state by January 1, 2001, the levy limit base for 2001 is permanently reduced by the amount of the county's 2001 budget for court administration costs, as certified under section 273.1398, subdivision 4b, paragraph (b), net of the county's share of transferred fines and fees collected by the district courts in the county for the same budget period.

 

(c) For a governmental unit which levied a tax in 2000 under section 473.388, subdivision 7, the levy limit base for 2001 is permanently reduced by an amount equal to the sum of the governmental unit's taxes payable 2001 nondebt transit services levy plus the portion of its 2001 homestead and agricultural credit aid under section 273.1398, subdivision 2, attributable to nondebt transit services.

 

(d) For counties in a judicial district in which the state assumed financing of mandated services costs as defined in section 480.181, subdivision 4, on July 1, 2001, the levy limit base for taxes levied in 2001 is permanently reduced by an amount equal to one-half of the aid reduction under section 273.1398, subdivision 4a, paragraph (g).

 

Subd. 4. Adjusted levy limit base. (a) For taxes levied in 2003 2008 through 2010, the adjusted levy limit base is equal to the levy limit base computed under subdivisions 2 and 3 subdivision 2 or section 275.72, reduced by 40 percent of the difference between (1) the sum of 2003 certified aid payments, under sections 273.138, 273.1398 except for amounts certified under subdivision 4a, paragraph (b), 273.166, 477A.011 to 477A.03, 477A.06, and 477A.07, before any reduction under Laws 2003, First Special Session chapter 21, articles 5 and 6, and (2) the sum of the aids paid in 2004 under those same sections, after any reductions in 2004 under Laws 2003, First Special Session chapter 21, articles 5 and 6. multiplied by:

 

(1) one plus the lessor of 3.9 percent or the percentage growth in the implicit price deflator;

 

(2) one plus a percentage equal to 50 percent of the percentage increase in the number of households, if any, for the most recent 12-month period for which data is available; and

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(3) one plus a percentage equal to 50 percent of the percentage increase in the taxable market value of the jurisdiction due to new construction of class 3 property, as defined in section 273.13, subdivision 4, except for state-assessed utility and railroad property, for the most recent year for which data is available.

 

(b) For taxes levied in 2003 only, the adjusted levy limit base is increased by 60 percent of the difference between a jurisdiction's market value credit in 2003 before any reductions under Laws 2003, First Special Session chapter 21, articles 5 and 6, and its market value credit in 2004 after reductions in Laws 2003, First Special Session chapter 21, articles 5 and 6.

 

Subd. 5. Property tax levy limit. For taxes levied in 2003 2008 through 2010, the property tax levy limit for a local governmental unit is equal to its adjusted levy limit base determined under subdivision 4 plus any additional levy authorized under section 275.73, which is levied against net tax capacity, reduced by the sum of (i) the total amount of aids and reimbursements that the local governmental unit is certified to receive under sections 477A.011 to 477A.014, except for the increases in city aid bases in calendar year 2002 under section 477A.011, subdivision 36, paragraphs (l), (n), and (o), (ii) homestead and agricultural aids it is certified to receive under section 273.1398, (iii) (ii) taconite aids under sections 298.28 and 298.282 including any aid which was required to be placed in a special fund for expenditure in the next succeeding year, (iv) temporary court aid under section 273.1398, subdivision 4a, and (v) (iii) estimated payments to the local governmental unit under section 272.029, adjusted for any error in estimation in the preceding year, and (iv) aids under section 477A.16.

 

Subd. 6. Levies in excess of levy limits. If the levy made by a city or county exceeds the levy limit provided in sections 275.70 to 275.74, except when the excess levy is due to the rounding of the rate in accordance with section 275.28, the county auditor shall only extend the amount of taxes permitted under sections 275.70 to 275.74, as provided for in section 275.16.

 

EFFECTIVE DATE. This section is effective for levies certified in calendar years 2008 through 2010, payable in 2009 through 2011.

 

Sec. 4. Minnesota Statutes 2006, section 275.74, subdivision 2, is amended to read:

 

Subd. 2. Authorization for special levies. (a) A local governmental unit may request authorization to levy for unreimbursed costs for natural disasters under section 275.70, subdivision 5, clause (7). The local governmental unit shall submit a request to levy under section 275.70, subdivision 5, clause (7), to the commissioner of revenue by September 30 of the levy year and the request must include information documenting the estimated unreimbursed costs. The commissioner of revenue may grant levy authority, up to the amount requested based on the documentation submitted. All decisions of the commissioner are final.

 

(b) A city may request authorization to levy for reasonable and necessary costs for securing, maintaining, or demolishing foreclosed or abandoned residential properties under section 275.70, subdivision 5, clause (19). The local governmental unit shall submit a request to levy under section 275.70, subdivision 5, clause (19), to the commissioner of revenue by September 30 of the levy year and the request must include information documenting the estimated costs. For taxes payable in 2009, the amount may include unanticipated costs incurred above the amount budgeted for these purposes in 2008. Costs of securing foreclosed or abandoned residential properties include payment for police and fire department services. The commissioner of revenue may grant levy authority, up to the lesser of (1) the amount requested based on the documentation submitted, or (2) $3,000 multiplied by the number of foreclosed residential properties, as defined by sheriff sales records, in calendar year 2007. All decisions of the commissioner are final.

 

EFFECTIVE DATE. This section is effective for levies certified in 2008 through 2010, payable in 2009 through 2011.

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Sec. 5. [275.76] MAINTENANCE OF EFFORT AND MATCHING REQUIREMENTS SUSPENDED.

 

Notwithstanding any law to the contrary, all maintenance of effort and matching fund requirements for counties, including, but not limited to, those under sections 116L.872, 119B.11, 134.34, 145A.131, 145.882, 242.39, 245.4835, 245.714, 254B.02, 254B.03, 256B.0625, 256F.10, and 256F.13, are suspended for the taxes payable years that levy limits are in effect.

 

ARTICLE 4

 

INCOME AND ESTATE TAXES

 

Section 1. Minnesota Statutes 2006, section 289A.19, subdivision 2, is amended to read:

 

Subd. 2. Corporate franchise and mining company taxes. Corporations or mining companies shall receive an extension of seven months or the amount of time granted by the Internal Revenue Service, whichever is longer, for filing the return of a corporation subject to tax under chapter 290 or for filing the return of a mining company subject to tax under sections 298.01 and 298.015. Interest on any balance of tax not paid when the regularly required return is due must be paid at the rate specified in section 270C.40, from the date such payment should have been made if no extension was granted, until the date of payment of such tax.

 

If a corporation or mining company does not:

 

(1) pay at least 90 percent of the amount of tax shown on the return on or before the regular due date of the return, the penalty prescribed by section 289A.60, subdivision 1, shall be imposed on the unpaid balance of tax; or

 

(2) pay the balance due shown on the regularly required return on or before the extended due date of the return, the penalty prescribed by section 289A.60, subdivision 1, shall be imposed on the unpaid balance of tax from the original due date of the return.

 

EFFECTIVE DATE. This section is effective the day following final enactment and applies to any federal extension that allows filing after that date.

 

Sec. 2. Minnesota Statutes 2006, section 289A.19, is amended by adding a subdivision to read:

 

Subd. 7. Federal extensions. When an extension of time to file a partnership or S corporation tax return is granted by the Internal Revenue Service, the commissioner shall grant an automatic extension to file the comparable Minnesota return for that period. An extension granted under this subdivision does not affect the due date for making payments of tax.

 

EFFECTIVE DATE. This section is effective the day following final enactment and applies to any federal extension that allows filing after that date.

 

Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:

 

Subd. 6b. Foreign operating corporation. The term "foreign operating corporation," when applied to a corporation, means a domestic corporation with the following characteristics:

 

(1) it is part of a unitary business at least one member of which is taxable in this state;

 

(2) it is not a foreign sales corporation under section 922 of the Internal Revenue Code, as amended through December 31, 1999, for the taxable year;

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(3) it is not an interest charge domestic international sales corporation under sections 992, 993, 994, and 995 of the Internal Revenue Code;

 

(4) either (i) the average of the percentages of its property and payrolls, including the pro rata share of its unitary partnerships' property and payrolls, assigned to locations outside the United States, where the United States includes the District of Columbia and excludes the commonwealth of Puerto Rico and possessions of the United States, as determined under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent of the gross income from all sources of the corporation in the tax year is active foreign business income; and

 

(4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under section 290.191 or 290.20, that are located outside the United States. If the domestic corporation does not have payroll as determined under section 290.191 or 290.20, but it or its partnerships have paid $1,000,000 for work, performed directly for the domestic corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not require payrolls to be included in the average calculation

 

(5) for purposes of this subdivision, active foreign business income means gross income that is (i) derived from sources without the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the active conduct of a trade or business in a foreign country.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2007.

 

Sec. 4. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as amended by Laws 2008, chapter 154, article 3, section 3, is amended to read:

 

Subd. 19b. Subtractions from federal taxable income. For individuals, estates, and trusts, there shall be subtracted from federal taxable income:

 

(1) net interest income on obligations of any authority, commission, or instrumentality of the United States to the extent includable in taxable income for federal income tax purposes but exempt from state income tax under the laws of the United States;

 

(2) if included in federal taxable income, the amount of any overpayment of income tax to Minnesota or to any other state, for any previous taxable year, whether the amount is received as a refund or as a credit to another taxable year's income tax liability;

 

(3) the amount paid to others, less the amount used to claim the credit allowed under section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and transportation of each qualifying child in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, "textbooks" includes books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. Equipment expenses qualifying for deduction includes expenses as defined and limited in section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for, or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs. For purposes of the subtraction provided by this clause, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code;

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(4) income as provided under section 290.0802;

 

(5) to the extent included in federal adjusted gross income, income realized on disposition of property exempt from tax under section 290.491;

 

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) of the Internal Revenue Code in determining federal taxable income by an individual who does not itemize deductions for federal income tax purposes for the taxable year, an amount equal to 50 percent of the excess of charitable contributions over $500 allowable as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and under the provisions of Public Law 109-1;

 

(7) for taxable years beginning before January 1, 2008, the amount of the federal small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code which is included in gross income under section 87 of the Internal Revenue Code;

 

(8) for individuals who are allowed a federal foreign tax credit for taxes that do not qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover of subnational foreign taxes for the taxable year, but not to exceed the total subnational foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, "federal foreign tax credit" means the credit allowed under section 27 of the Internal Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed under section 904(c) of the Internal Revenue Code minus national level foreign taxes to the extent they exceed the federal foreign tax credit;

 

(9) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. The resulting delayed depreciation cannot be less than zero;

 

(10) job opportunity building zone income as provided under section 469.316;

 

(11) to the extent included in federal taxable income, the amount of compensation paid to members of the Minnesota National Guard or other reserve components of the United States military for active service performed in Minnesota, excluding compensation for services performed under the Active Guard Reserve (AGR) program. For purposes of this clause, "active service" means (i) state active service as defined in section 190.05, subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, subdivision 5c, but "active service" excludes services performed exclusively for purposes of basic combat training, advanced individual training, annual training, and periodic inactive duty training; special training periodically made available to reserve members; and service performed in accordance with section 190.08, subdivision 3;

 

(12) to the extent included in federal taxable income, the amount of compensation paid to Minnesota residents who are members of the armed forces of the United States or United Nations for active duty performed outside Minnesota under United States Code, title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of the United Nations;

 

(13) an amount, not to exceed $10,000, equal to qualified expenses related to a qualified donor's donation, while living, of one or more of the qualified donor's organs to another person for human organ transplantation. For purposes of this clause, "organ" means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; "human organ transplantation" means the medical procedure by which transfer of a human organ is made

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from the body of one person to the body of another person; "qualified expenses" means unreimbursed expenses for both the individual and the qualified donor for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses may be subtracted under this clause only once; and "qualified donor" means the individual or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An individual may claim the subtraction in this clause for each instance of organ donation for transplantation during the taxable year in which the qualified expenses occur;

 

(14) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the case of a shareholder of a corporation that is an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. If the net operating loss exceeds the addition for the tax year, a subtraction is not allowed under this clause;

 

(15) to the extent included in federal taxable income, compensation paid to a nonresident who is a service member as defined in United States Code, title 10, section 101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public Law 108-189, section 101(2); and

 

(16) international economic development zone income as provided under section 469.325; and

 

(17) to the extent included in federal taxable income, the amount of national service educational awards received from the National Service Trust under United States Code, title 42, sections 12601 to 12604, for service in an approved Americorps National Service program.

 

EFFECTIVE DATE. This section is effective for tax years beginning after December 31, 2008, except clause (17) is effective for tax years beginning after December 31, 2007.

 

Sec. 5. Minnesota Statutes 2006, section 290.01, subdivision 19c, as amended by Laws 2008, chapter 154, article 3, section 4, is amended to read:

 

Subd. 19c. Corporations; additions to federal taxable income. For corporations, there shall be added to federal taxable income:

 

(1) the amount of any deduction taken for federal income tax purposes for income, excise, or franchise taxes based on net income or related minimum taxes, including but not limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, another state, a political subdivision of another state, the District of Columbia, or any foreign country or possession of the United States;

 

(2) interest not subject to federal tax upon obligations of: the United States, its possessions, its agencies, or its instrumentalities; the state of Minnesota or any other state, any of its political or governmental subdivisions, any of its municipalities, or any of its governmental agencies or instrumentalities; the District of Columbia; or Indian tribal governments;

 

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal Revenue Code;

 

(4) the amount of any net operating loss deduction taken for federal income tax purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss deduction under section 810 of the Internal Revenue Code;

 

(5) the amount of any special deductions taken for federal income tax purposes under sections 241 to 247 and 965 of the Internal Revenue Code;

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(6) losses from the business of mining, as defined in section 290.05, subdivision 1, clause (a), that are not subject to Minnesota income tax;

 

(7) the amount of any capital losses deducted for federal income tax purposes under sections 1211 and 1212 of the Internal Revenue Code;

 

(8) the exempt foreign trade income of a foreign sales corporation under sections 921(a) and 291 of the Internal Revenue Code;

 

(9) the amount of percentage depletion deducted under sections 611 through 614 and 291 of the Internal Revenue Code;

 

(10) for certified pollution control facilities placed in service in a taxable year beginning before December 31, 1986, and for which amortization deductions were elected under section 169 of the Internal Revenue Code of 1954, as amended through December 31, 1985, the amount of the amortization deduction allowed in computing federal taxable income for those facilities;

 

(11) the amount of any deemed dividend from a foreign operating corporation determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend shall be reduced by the amount of the addition to income required by clauses (20), (21), (22), and (23);

 

(12) the amount of a partner's pro rata share of net income which does not flow through to the partner because the partnership elected to pay the tax on the income under section 6242(a)(2) of the Internal Revenue Code;

 

(13) the amount of net income excluded under section 114 of the Internal Revenue Code;

 

(14) any increase in subpart F income, as defined in section 952(a) of the Internal Revenue Code, for the taxable year when subpart F income is calculated without regard to the provisions of section 103 of Public Law 109-222;

 

(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that in the taxable year generates a deduction for depreciation under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the amount of the loss from the activity that is not allowed in the taxable year. In succeeding taxable years when the losses not allowed in the taxable year are allowed, the depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;

 

(16) 80 percent of the amount by which the deduction allowed by section 179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended through December 31, 2003;

 

(17) to the extent deducted in computing federal taxable income, the amount of the deduction allowable under section 199 of the Internal Revenue Code;

 

(18) the exclusion allowed under section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans; and

 

(19) the amount of expenses disallowed under section 290.10, subdivision 2;

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(20) an amount equal to the interest and intangible expenses, losses, and costs paid, accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit of a corporation that is a member of the taxpayer's unitary business group that qualifies as a foreign operating corporation. For purposes of this clause, intangible expenses and costs include:

 

(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property;

 

(ii) losses incurred, directly or indirectly, from factoring transactions or discounting transactions;

 

(iii) royalty, patent, technical, and copyright fees;

 

(iv) licensing fees; and

 

(v) other similar expenses and costs.

 

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.

 

This clause does not apply to any item of interest or intangible expenses or costs paid, accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect to such item of income to the extent that the income to the foreign operating corporation is income from sources without the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code;

 

(21) except as already included in the taxpayer's taxable income pursuant to clause (20), any interest income and income generated from intangible property received or accrued by a foreign operating corporation that is a member of the taxpayer's unitary group. For purposes of this clause, income generated from intangible property includes:

 

(i) income related to the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property;

 

(ii) income from factoring transactions or discounting transactions;

 

(iii) royalty, patent, technical, and copyright fees;

 

(iv) licensing fees; and

 

(v) other similar income.

 

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.

 

This clause does not apply to any item of interest or intangible income received or accrued by a foreign operating corporation with respect to such item of income to the extent that the income is income from sources without the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code;

 

(22) the dividends attributable to the income of a foreign operating corporation that is a member of the taxpayer's unitary group in an amount that is equal to the dividends paid deduction of a real estate investment trust under section 561(a) of the Internal Revenue Code for amounts paid or accrued by the real estate investment trust to the foreign operating corporation; and

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(23) the income of a foreign operating corporation that is a member of the taxpayer's unitary group in an amount that is equal to gains derived from the sale of real or personal property located in the United States.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2007.

 

Sec. 6. Minnesota Statutes 2006, section 290.01, subdivision 19d, as amended by Laws 2008, chapter 154, article 11, section 12, is amended to read:

 

Subd. 19d. Corporations; modifications decreasing federal taxable income. For corporations, there shall be subtracted from federal taxable income after the increases provided in subdivision 19c:

 

(1) the amount of foreign dividend gross-up added to gross income for federal income tax purposes under section 78 of the Internal Revenue Code;

 

(2) the amount of salary expense not allowed for federal income tax purposes due to claiming the work opportunity credit under section 51 of the Internal Revenue Code;

 

(3) any dividend (not including any distribution in liquidation) paid within the taxable year by a national or state bank to the United States, or to any instrumentality of the United States exempt from federal income taxes, on the preferred stock of the bank owned by the United States or the instrumentality;

 

(4) amounts disallowed for intangible drilling costs due to differences between this chapter and the Internal Revenue Code in taxable years beginning before January 1, 1987, as follows:

 

(i) to the extent the disallowed costs are represented by physical property, an amount equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7, subject to the modifications contained in subdivision 19e; and

 

(ii) to the extent the disallowed costs are not represented by physical property, an amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 290.09, subdivision 8;

 

(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the Internal Revenue Code, except that:

 

(i) for capital losses incurred in taxable years beginning after December 31, 1986, capital loss carrybacks shall not be allowed;

 

(ii) for capital losses incurred in taxable years beginning after December 31, 1986, a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be allowed;

 

(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryback to each of the three taxable years preceding the loss year, subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and

 

(iv) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryover to each of the five taxable years succeeding the loss year to the extent such loss was not used in a prior taxable year and subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed;

 

(6) an amount for interest and expenses relating to income not taxable for federal income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 291 of the Internal Revenue Code in computing federal taxable income;

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(7) in the case of mines, oil and gas wells, other natural deposits, and timber for which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a reasonable allowance for depletion based on actual cost. In the case of leases the deduction must be apportioned between the lessor and lessee in accordance with rules prescribed by the commissioner. In the case of property held in trust, the allowable deduction must be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the trust, or if there is no provision in the instrument, on the basis of the trust's income allocable to each;

 

(8) for certified pollution control facilities placed in service in a taxable year beginning before December 31, 1986, and for which amortization deductions were elected under section 169 of the Internal Revenue Code of 1954, as amended through December 31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7;

 

(9) amounts included in federal taxable income that are due to refunds of income, excise, or franchise taxes based on net income or related minimum taxes paid by the corporation to Minnesota, another state, a political subdivision of another state, the District of Columbia, or a foreign country or possession of the United States to the extent that the taxes were added to federal taxable income under section 290.01, subdivision 19c, clause (1), in a prior taxable year;

 

(10) 80 percent of royalties, fees, or other like income accrued or received from a foreign operating corporation or a foreign corporation which is part of the same unitary business as the receiving corporation, unless the income resulting from such payments or accruals is income from sources within the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code;

 

(11) income or gains from the business of mining as defined in section 290.05, subdivision 1, clause (a), that are not subject to Minnesota franchise tax;

 

(12) the amount of disability access expenditures in the taxable year which are not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;

 

(13) the amount of qualified research expenses not allowed for federal income tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that the amount exceeds the amount of the credit allowed under section 290.068;

 

(14) the amount of salary expenses not allowed for federal income tax purposes due to claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;

 

(15) for taxable years beginning before January 1, 2008, the amount of the federal small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code which is included in gross income under section 87 of the Internal Revenue Code;

 

(16) for a corporation whose foreign sales corporation, as defined in section 922 of the Internal Revenue Code, constituted a foreign operating corporation during any taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, claiming the deduction under section 290.21, subdivision 4, for income received from the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of income excluded under section 114 of the Internal Revenue Code, provided the income is not income of a foreign operating company;

 

(17) any decrease in subpart F income, as defined in section 952(a) of the Internal Revenue Code, for the taxable year when subpart F income is calculated without regard to the provisions of section 103 of Public Law 109-222;

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(16) (18) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The resulting delayed depreciation cannot be less than zero; and

 

(17) (19) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the amount of the addition.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2007.

 

Sec. 7. Minnesota Statutes 2006, section 290.06, subdivision 33, as amended by Laws 2008, chapter 154, article 11, section 13, is amended to read:

 

Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a credit against the tax due under this chapter for an amount equal to: (1) for corporate filers, including shareholders of an "S" corporation under section 290.9725, 25 percent of the expenses incurred during the taxable year to conduct tuberculosis testing on those cattle; and (2) for all other filers, one-half the expenses incurred during the taxable year to conduct tuberculosis testing on those cattle.

 

(b) If the amount of credit which the taxpayer is eligible to receive under this subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the excess to the taxpayer.

 

(c) The amount necessary to pay claims for the refund provided in this subdivision is appropriated from the general fund to the commissioner of revenue.

 

(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in Minnesota is not federally required are not allowed in claiming the credit under paragraph (a).

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2008.

 

Sec. 8. Minnesota Statutes 2006, section 290.0677, subdivision 1, as amended by Laws 2008, chapter 154, article 3, section 5, is amended to read:

 

Subdivision 1. Credit allowed; current military service. (a) An individual is allowed a credit against the tax due under this chapter equal to $59 for each month or portion thereof that the individual was in active military service in a designated area after September 11, 2001, and before January 1, 2009, while a Minnesota domiciliary.

 

(b) An individual is allowed a credit against the tax due under this chapter equal to $120 for each month or portion thereof that the individual was in active military service in a designated area after December 31, 2008, while a Minnesota domiciliary.

 

(c) For active service performed after September 11, 2001, and before December 31, 2006, the individual may claim the credit in the taxable year beginning after December 31, 2005, and before January 1, 2007.

 

(c) (d) For active service performed after December 31, 2006, the individual may claim the credit for the taxable year in which the active service was performed.

 

(d) (e) If an individual entitled to the credit died prior to January 1, 2006, the individual's estate or heirs at law, if the individual's probate estate has closed or the estate was not probated, may claim the credit.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2008.

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Sec. 9. Minnesota Statutes 2006, section 290.0677, is amended by adding a subdivision to read:

 

Subd. 1a. Credit allowed; past military service. (a) A qualified individual is allowed a credit against the tax imposed under this chapter for past military service. The credit equals $750. The credit allowed under this subdivision is reduced by 10 percent of adjusted gross income in excess of $30,000, but in no case is the credit less than zero.

 

(b) For a nonresident or a part-year resident, the credit under this subdivision must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2008.

 

Sec. 10. Minnesota Statutes 2006, section 290.0677, subdivision 2, is amended to read:

 

Subd. 2. Definitions. (a) For purposes of this section the following terms have the meanings given.

 

(b) "Designated area" means a:

 

(1) combat zone designated by Executive Order from the President of the United States;

 

(2) qualified hazardous duty area, designated in Public Law; or

 

(3) location certified by the U. S. Department of Defense as eligible for combat zone tax benefits due to the location's direct support of military operations.

 

(c) "Active military service" means active duty service in any of the United States Armed Forces, the National Guard, or reserves.

 

(d) "Qualified individual" means an individual who has

 

(1) either (i) served at least 20 years in the military or (ii) has a service-connected disability rating of 100 percent for a total and permanent disability; and

 

(2) separated from military service before the end of the taxable year.

 

(e) "Adjusted gross income" has the meaning given in section 61 of the Internal Revenue Code.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2008.

 

Sec. 11. Minnesota Statutes 2006, section 290.0677, subdivision 3, is amended to read:

 

Subd. 3. Credit refundable. If the amount of credit which the individual is eligible to receive under this section subdivision 1 exceeds the individual's tax liability under this chapter, the commissioner shall refund the excess to the individual.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2008.

 

Sec. 12. Minnesota Statutes 2006, section 290.091, subdivision 2, as amended by Laws 2008, chapter 154, article 4, section 7, is amended to read:

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Subd. 2. Definitions. For purposes of the tax imposed by this section, the following terms have the meanings given:

 

(a) "Alternative minimum taxable income" means the sum of the following for the taxable year:

 

(1) the taxpayer's federal alternative minimum taxable income as defined in section 55(b)(2) of the Internal Revenue Code;

 

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum taxable income, but excluding:

 

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code:;

 

(A) for taxable years beginning before January 1, 2006, to the extent that the deduction exceeds 1.0 percent of adjusted gross income;

 

(B) for taxable years beginning after December 31, 2005, to the full extent of the deduction.

 

For purposes of this clause, "adjusted gross income" has the meaning given in section 62 of the Internal Revenue Code;

 

(ii) the medical expense deduction;

 

(iii) the casualty, theft, and disaster loss deduction; and

 

(iv) the impairment-related work expenses of a disabled person;

 

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), to the extent not included in federal alternative minimum taxable income, the excess of the deduction for depletion allowable under section 611 of the Internal Revenue Code for the taxable year over the adjusted basis of the property at the end of the taxable year (determined without regard to the depletion deduction for the taxable year);

 

(4) to the extent not included in federal alternative minimum taxable income, the amount of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue Code determined without regard to subparagraph (E);

 

(5) to the extent not included in federal alternative minimum taxable income, the amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

 

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) to (9), (11), and (12);

 

less the sum of the amounts determined under the following:

 

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

 

(2) an overpayment of state income tax as provided by section 290.01, subdivision 19b, clause (2), to the extent included in federal alternative minimum taxable income;

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(3) the amount of investment interest paid or accrued within the taxable year on indebtedness to the extent that the amount does not exceed net investment income, as defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted in computing federal adjusted gross income; and

 

(4) amounts subtracted from federal taxable income as provided by section 290.01, subdivision 19b, clauses (6) and (9) to (16).

 

In the case of an estate or trust, alternative minimum taxable income must be computed as provided in section 59(c) of the Internal Revenue Code.

 

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of the Internal Revenue Code.

 

(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable income after subtracting the exemption amount determined under subdivision 3.

 

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed under this chapter.

 

(e) "Net minimum tax" means the minimum tax imposed by this section.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2007.

 

Sec. 13. Minnesota Statutes 2006, section 290.191, subdivision 5, is amended to read:

 

Subd. 5. Determination of sales factor. For purposes of this section, the following rules apply in determining the sales factor.

 

(a) The sales factor includes all sales, gross earnings, or receipts received in the ordinary course of the business, except that the following types of income are not included in the sales factor:

 

(1) interest;

 

(2) dividends;

 

(3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;

 

(4) sales of property used in the trade or business, except sales of leased property of a type which is regularly sold as well as leased;

 

(5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue Code or sales of stock; and

 

(6) royalties, fees, or other like income of a type which qualify for a subtraction from federal taxable income under section 290.01, subdivision 19d(10).

 

(b) Sales of tangible personal property are made within this state if the property is received by a purchaser at a point within this state, and the taxpayer is taxable in this state, regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination of the property.

 

(c) Tangible personal property delivered to a common or contract carrier or foreign vessel for delivery to a purchaser in another state or nation is a sale in that state or nation, regardless of f.o.b. point or other conditions of the sale.

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(d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine, fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is licensed by a state or political subdivision to resell this property only within the state of ultimate destination, the sale is made in that state.

 

(e) Sales made by or through a corporation that is qualified as a domestic international sales corporation under section 992 of the Internal Revenue Code are not considered to have been made within this state.

 

(f) Sales, rents, royalties, and other income in connection with real property is attributed to the state in which the property is located.

 

(g) Receipts from the lease or rental of tangible personal property, including finance leases and true leases, must be attributed to this state if the property is located in this state and to other states if the property is not located in this state. Receipts from the lease or rental of moving property including, but not limited to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts factor to the extent that the property is used in this state. The extent of the use of moving property is determined as follows:

 

(1) A motor vehicle is used wholly in the state in which it is registered.

 

(2) The extent that rolling stock is used in this state is determined by multiplying the receipts from the lease or rental of the rolling stock by a fraction, the numerator of which is the miles traveled within this state by the leased or rented rolling stock and the denominator of which is the total miles traveled by the leased or rented rolling stock.

 

(3) The extent that an aircraft is used in this state is determined by multiplying the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft.

 

(4) The extent that a vessel, mobile equipment, or other mobile property is used in the state is determined by multiplying the receipts from the lease or rental of the property by a fraction, the numerator of which is the number of days during the taxable year the property was in this state and the denominator of which is the total days in the taxable year.

 

(h) Royalties and other income not described in paragraph (a), clause (6), received for the use of or for the privilege of using intangible property, including patents, know-how, formulas, designs, processes, patterns, copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or similar items, must be attributed to the state in which the property is used by the purchaser. If the property is used in more than one state, the royalties or other income must be apportioned to this state pro rata according to the portion of use in this state. If the portion of use in this state cannot be determined, the royalties or other income must be excluded from both the numerator and the denominator. Intangible property is used in this state if the purchaser uses the intangible property or the rights therein in the regular course of its business operations in this state, regardless of the location of the purchaser's customers.

 

(i) Sales of intangible property are made within the state in which the property is used by the purchaser. If the property is used in more than one state, the sales must be apportioned to this state pro rata according to the portion of use in this state. If the portion of use in this state cannot be determined, the sale must be excluded from both the numerator and the denominator of the sales factor. Intangible property is used in this state if the purchaser used the intangible property in the regular course of its business operations in this state.

 

(j) Receipts from the performance of services must be attributed to the state where the services are received. For the purposes of this section, receipts from the performance of services provided to a corporation, partnership, or trust may only be attributed to a state where it has a fixed place of doing business. If the state where the services are received is not readily determinable or is a state where the corporation, partnership, or trust receiving the service

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does not have a fixed place of doing business, the services shall be deemed to be received at the location of the office of the customer from which the services were ordered in the regular course of the customer's trade or business. If the ordering office cannot be determined, the services shall be deemed to be received at the office of the customer to which the services are billed.

 

(k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts from management, distribution, or administrative services performed by a corporation or trust for a fund of a corporation or trust regulated under United States Code, title 15, sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of the fund resides. Under this paragraph, receipts for services attributed to shareholders are determined on the basis of the ratio of: (1) the average of the outstanding shares in the fund owned by shareholders residing within Minnesota at the beginning and end of each year; and (2) the average of the total number of outstanding shares in the fund at the beginning and end of each year. Residence of the shareholder, in the case of an individual, is determined by the mailing address furnished by the shareholder to the fund. Residence of the shareholder, when the shares are held by an insurance company as a depositor for the insurance company policyholders, is the mailing address of the policyholders. In the case of an insurance company holding the shares as a depositor for the insurance company policyholders, if the mailing address of the policyholders cannot be determined by the taxpayer, the receipts must be excluded from both the numerator and denominator. Residence of other shareholders is the mailing address of the shareholder.

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2009.

 

Sec. 14. Minnesota Statutes 2006, section 290.191, subdivision 6, is amended to read:

 

Subd. 6. Determination of receipts factor for financial institutions. (a) For purposes of this section, the rules in this subdivision and subdivision subdivisions 5, paragraph (k), and 8 apply in determining the receipts factor for financial institutions.

 

(b) "Receipts" for this purpose means gross income, including net taxable gain on disposition of assets, including securities and money market instruments, when derived from transactions and activities in the regular course of the taxpayer's trade or business.

 

(c) "Money market instruments" means federal funds sold and securities purchased under agreements to resell, commercial paper, banker's acceptances, and purchased certificates of deposit and similar instruments to the extent that the instruments are reflected as assets under generally accepted accounting principles.

 

(d) "Securities" means United States Treasury securities, obligations of United States government agencies and corporations, obligations of state and political subdivisions, corporate stock, bonds, and other securities, participations in securities backed by mortgages held by United States or state government agencies, loan-backed securities and similar investments to the extent the investments are reflected as assets under generally accepted accounting principles.

 

(e) Receipts from the lease or rental of real or tangible personal property, including both finance leases and true leases, must be attributed to this state if the property is located in this state. Receipts from the lease or rental of tangible personal property that is characteristically moving property, including, but not limited to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts factor to the extent that the property is used in this state. The extent of the use of moving property is determined as follows:

 

(1) A motor vehicle is used wholly in the state in which it is registered.

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(2) The extent that rolling stock is used in this state is determined by multiplying the receipts from the lease or rental of the rolling stock by a fraction, the numerator of which is the miles traveled within this state by the leased or rented rolling stock and the denominator of which is the total miles traveled by the leased or rented rolling stock.

 

(3) The extent that an aircraft is used in this state is determined by multiplying the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft.

 

(4) The extent that a vessel, mobile equipment, or other mobile property is used in the state is determined by multiplying the receipts from the lease or rental of property by a fraction, the numerator of which is the number of days during the taxable year the property was in this state and the denominator of which is the total days in the taxable year.

 

(f) Interest income and other receipts from assets in the nature of loans that are secured primarily by real estate or tangible personal property must be attributed to this state if the security property is located in this state under the principles stated in paragraph (e).

 

(g) Interest income and other receipts from consumer loans not secured by real or tangible personal property that are made to residents of this state, whether at a place of business, by traveling loan officer, by mail, by telephone or other electronic means, must be attributed to this state.

 

(h) Interest income and other receipts from commercial loans and installment obligations that are unsecured by real or tangible personal property or secured by intangible property must be attributed to this state if the proceeds of the loan are to be applied in this state. If it cannot be determined where the funds are to be applied, the income and receipts are attributed to the state in which the office of the borrower from which the application would be made in the regular course of business is located. If this cannot be determined, the transaction is disregarded in the apportionment formula.

 

(i) Interest income and other receipts from a participating financial institution's portion of participation and syndication loans must be attributed under paragraphs (e) to (h). A participation loan is an arrangement in which a lender makes a loan to a borrower and then sells, assigns, or otherwise transfers all or a part of the loan to a purchasing financial institution. A syndication loan is a loan transaction involving multiple financial institutions in which all the lenders are named as parties to the loan documentation, are known to the borrower, and have privity of contract with the borrower.

 

(j) Interest income and other receipts including service charges from financial institution credit card and travel and entertainment credit card receivables and credit card holders' fees must be attributed to the state to which the card charges and fees are regularly billed.

 

(k) Merchant discount income derived from financial institution credit card holder transactions with a merchant must be attributed to the state in which the merchant is located. In the case of merchants located within and outside the state, only receipts from merchant discounts attributable to sales made from locations within the state are attributed to this state. It is presumed, subject to rebuttal, that the location of a merchant is the address shown on the invoice submitted by the merchant to the taxpayer.

 

(l) Receipts from the performance of fiduciary and other services must be attributed to the state in which the services are received. For the purposes of this section, services provided to a corporation, partnership, or trust must be attributed to a state where it has a fixed place of doing business. If the state where the services are received is not readily determinable or is a state where the corporation, partnership, or trust does not have a fixed place of doing business, the services shall be deemed to be received at the location of the office of the customer from which the services were ordered in the regular course of the customer's trade or business. If the ordering office cannot be determined, the services shall be deemed to be received at the office of the customer to which the services are billed.

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(m) Receipts from the issuance of travelers checks and money orders must be attributed to the state in which the checks and money orders are purchased.

 

(n) Receipts from investments of a financial institution in securities and from money market instruments must be apportioned to this state based on the ratio that total deposits from this state, its residents, including any business with an office or other place of business in this state, its political subdivisions, agencies, and instrumentalities bear to the total deposits from all states, their residents, their political subdivisions, agencies, and instrumentalities. In the case of an unregulated financial institution subject to this section, these receipts are apportioned to this state based on the ratio that its gross business income, excluding such receipts, earned from sources within this state bears to gross business income, excluding such receipts, earned from sources within all states. For purposes of this subdivision, deposits made by this state, its residents, its political subdivisions, agencies, and instrumentalities must be attributed to this state, whether or not the deposits are accepted or maintained by the taxpayer at locations within this state.

 

(o) A financial institution's interest in property described in section 290.015, subdivision 3, paragraph (b), is included in the receipts factor in the same manner as assets in the nature of securities or money market instruments are included in paragraph (n).

 

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2009.

 

Sec. 15. Minnesota Statutes 2006, section 291.03, subdivision 1, is amended to read:

 

Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the proportion of the maximum credit for state death taxes computed under section 2011 of the Internal Revenue Code, as amended through December 31, 2000, but using Minnesota adjusted taxable estate instead of federal adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal gross estate. The tax determined under this paragraph shall not be greater than the amount computed by applying the rates and brackets under section 2001(c) of the Internal Revenue Code to the Minnesota adjusted gross estate and subtracting the federal credit allowed under section 2010 of the Internal Revenue Code of 1986, as amended through December 31, 2000. For the purposes of this section, expenses which are deducted for federal income tax purposes under section 642(g) of the Internal Revenue Code as amended through December 31, 2002, are not allowable in computing the tax under this chapter.

 

(b) The tax determined under this subdivision must not be greater than the sum of the following amounts multiplied by a fraction, the numerator of which is the Minnesota gross estate and the denominator of which is the federal gross estate:

 

(1) the rates and brackets under section 2001(c) of the Internal Revenue Code multiplied by the sum of:

 

(A) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus

 

(B) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue Code; less

 

(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue Code; and less

 

(3) the federal credit allowed under section 2010 of the Internal Revenue Code.

 

(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 31, 2000.

 

EFFECTIVE DATE. This section is effective for estates of decedents dying after December 31, 2005.

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Sec. 16. Minnesota Statutes 2006, section 291.03, is amended by adding a subdivision to read:

 

Subd. 1a. Expenses disallowed. For the purposes of this section, expenses which are deducted for federal income tax purposes under section 642(g) of the Internal Revenue Code are not allowable in computing the tax under this chapter.

 

EFFECTIVE DATE. This section is effective for estates of decedents dying after December 31, 2005.

 

Sec. 17. Laws 2008, chapter 154, article 3, section 3, the effective date, is amended to read:

 

EFFECTIVE DATE. This section is effective for tax years beginning after December 31, 2007, except that clause (11) and the phrase "to the extent included in federal taxable income," added in clause (12) are effective retroactively for taxable years beginning after December 31, 2004.

 

ARTICLE 5

 

LOCAL DEVELOPMENT

 

Section 1. [116J.8732] SEED CAPITAL INVESTMENT CREDIT; COMMISSIONER'S RESPONSIBILITIES.

 

Subdivision 1. Scope. This section establishes rules that businesses must satisfy to qualify for the seed capital investment credit under section 290.06, subdivision 34, and the commissioner's responsibility for certifying the qualifying businesses.

 

Subd. 2. Definitions. (a) For purposes of this section and section 290.06, subdivision 34, the following terms have the meanings given.

 

(b) "Border city" means a city qualifying to designate a border city development zone under section 469.1731.

 

(c) "Pass-through entity" means a corporation that for the applicable tax year is treated as an S corporation or a general partnership, limited partnership, limited liability partnership, trust, or limited liability company and which for the applicable taxable year is not taxed as a corporation under chapter 290.

 

(d) "Primary sector business" means a qualified business that through the employment of knowledge or labor adds value to a product, process, or service and increases revenues to a Minnesota business generated by sales of products or services to customers outside of the state or increases revenues to a qualified business the customers of which previously were unable to acquire, or had limited availability of the product or service from a Minnesota provider.

 

(e) "Qualified business" means a business certified by the commissioner as meeting the requirements of subdivision 3.

 

Subd. 3. Qualified business. (a) The commissioner shall certify whether a business that has requested to become a qualified business meets the requirements of paragraph (b).

 

(b) For purposes of this section, a qualified business must be a primary sector business, other than a real estate investment trust, that:

 

(1) is incorporated or its satellite operation is incorporated as a for-profit corporation or is a partnership, limited partnership, limited liability company, limited liability partnership, or joint venture;

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(2) is in compliance with the requirements for filings with the commissioner of commerce under the securities laws of this state;

 

(3) has Minnesota residents as a majority of its employees in its principal office or the satellite operation, which is located in a border city;

 

(4) has its principal office in a border city and has the majority of its business activity performed in a border city, except sales activity, or has a significant operation in a border city that has or is projected to have more than ten employees or $150,000 of sales annually; and

 

(5) relies on innovation, research, or the development of new products and processes in its plans for growth and profitability.

 

(c) The commissioner shall establish the necessary forms and procedures for certifying qualified businesses.

 

(d) A qualified business may apply to the commissioner for a recertification. Only one recertification is available to a qualified business. The application for recertification must be filed with the commissioner within 90 days before the original certification expiration date. The recertification issued by the director must comply with the provisions of paragraph (e).

 

(e) The commissioner shall issue a certification letter to a business the commissioner determines is a qualified business. The certification letter must include:

 

(1) the certification effective date; and

 

(2) the certification expiration date, which may not be more than four years from the certification effective date.

 

Subd. 4. Seed capital investment credit reporting. Within 30 days after the date that an investment in a qualified business is purchased, the qualified business shall file with the commissioner and the commissioner of revenue and provide to the investor completed forms prescribed by the commissioner of revenue that show as to each investment in the qualified business the following:

 

(1) the name, address, and Social Security number of the taxpayer who made the investment; and

 

(2) the dollar amount paid for the investment by the taxpayer.

 

EFFECTIVE DATE. This section is effective the day following final enactment.

 

Sec. 2. Minnesota Statutes 2006, section 116J.993, subdivision 3, is amended to read:

 

Subd. 3. Business subsidy. "Business subsidy" or "subsidy" means a state or local government agency grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business.

 

The following forms of financial assistance are not a business subsidy:

 

(1) a business subsidy of less than $25,000 $150,000;

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(2) assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria;

 

(3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made;

 

(4) redevelopment property polluted by contaminants as defined in section 116J.552, subdivision 3;

 

(5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50 percent of the total cost;

 

(6) assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services;

 

(7) assistance for housing;

 

(8) assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under section 469.174, subdivision 23;

 

(9) assistance for energy conservation;

 

(10) tax reductions resulting from conformity with federal tax law;

 

(11) workers' compensation and unemployment insurance;

 

(12) benefits derived from regulation;

 

(13) indirect benefits derived from assistance to educational institutions;

 

(14) funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;

 

(15) assistance for a collaboration between a Minnesota higher education institution and a business;

 

(16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19;

 

(17) redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value;

 

(18) general changes in tax increment financing law and other general tax law changes of a principally technical nature;

 

(19) federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency;

 

(20) funds from dock and wharf bonds issued by a seaway port authority;

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(21) business loans and loan guarantees of $75,000 $150,000 or less;

 

(22) federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and

 

(23) property tax abatements granted under section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100.

 

Sec. 3. Minnesota Statutes 2006, section 116J.994, subdivision 2, is amended to read:

 

Subd. 2. Developing a set of criteria. A business subsidy may not be granted until the grantor has adopted criteria after a public hearing for awarding business subsidies that comply with this section. The criteria may not be adopted on a case-by-case basis. The criteria must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies. The criteria must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or may be stated as a formula that will generate a specific dollar amount. A grantor may deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the department. The commissioner of employment and economic development may assist local government agencies in developing criteria. A copy of the criteria must be submitted to the Department of Employment and Economic Development along with the first annual report following the enactment of this section or with the first annual report after it has adopted criteria, whichever is earlier. Notwithstanding section 116J.993, subdivision 3, clauses (1) and (21), for the purpose of this subdivision, "business subsidies" as defined under section 116J.993 includes the following forms of financial assistance:

 

(1) a business subsidy of $25,000 or more; and

 

(2) business loans and guarantees of $75,000 or more.

 

Sec. 4. Minnesota Statutes 2006, section 116J.994, subdivision 5, is amended to read:

 

Subd. 5. Public notice and hearing. (a) Before granting a business subsidy that exceeds $500,000 for a state government grantor and $100,000 $150,000 for a local government grantor, the grantor must provide public notice and a hearing on the subsidy. A public hearing and notice under this subdivision is not required if a hearing and notice on the subsidy is otherwise required by law.

 

(b) Public notice of a proposed business subsidy under this subdivision by a state government grantor, other than the Iron Range Resources and Rehabilitation Board, must be published in the State Register. Public notice of a proposed business subsidy under this subdivision by a local government grantor or the Iron Range Resources and Rehabilitation Board must be published in a local newspaper of general circulation. The public notice must identify the location at which information about the business subsidy, including a summary of the terms of the subsidy, is available. Published notice should be sufficiently conspicuous in size and placement to distinguish the notice from the surrounding text. The grantor must make the information available in printed paper copies and, if possible, on the Internet. The government agency must provide at least a ten-day notice for the public hearing.

 

(c) The public notice must include the date, time, and place of the hearing.

 

(d) The public hearing by a state government grantor other than the Iron Range Resources and Rehabilitation Board must be held in St. Paul.

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(e) If more than one nonstate grantor provides a business subsidy to the same recipient, the nonstate grantors may designate one nonstate grantor to hold a single public hearing regarding the business subsidies provided by all nonstate grantors. For the purposes of this paragraph, "nonstate grantor" includes the iron range resources and rehabilitation board.

 

(f) The public notice of any public meeting about a business subsidy agreement, including those required by this subdivision and by subdivision 4, must include notice that a person with residence in or the owner of taxable property in the granting jurisdiction may file a written complaint with the grantor if the grantor fails to comply with sections 116J.993 to 116J.995, and that no action may be filed against the grantor for the failure to comply unless a written complaint is filed.

 

Sec. 5. Minnesota Statutes 2006, section 116J.994, subdivision 8, is amended to read:

 

Subd. 8. Reports by grantors. (a) Local government agencies of a local government with a population of more than 2,500 and state government agencies, regardless of whether or not they have awarded any business subsidies, must file a report by April 1 of each year with the commissioner. Local government agencies of a local government with a population of 2,500 or less are exempt from filing this report if they have not awarded a business subsidy in the past five years. The report must include a list of recipients that did not complete the recipient report required under subdivision 7 and a list of recipients that have not met their job and wage goals within two years and the steps being taken to bring them into compliance or to recoup the subsidy.

 

If the commissioner has not received the report by April 1 from an entity required to report, the commissioner shall issue a warning to the government agency. If the commissioner has still not received the report by June 1 of that same year from an entity required to report, then that government agency may not award any business subsidies until the report has been filed.

 

(b) The report required under paragraph (a) is also required for financial assistance of $25,000 and greater that is excluded from the definition of "business subsidy" by section 116J.993, subdivision 3, clause (1), and of $75,000 and greater that is excluded from the definition of "business subsidy" by section 116J.993, subdivision 3, clause (21). The report for the financial assistance under this paragraph must be completed within one year of the granting of the financial assistance. The report required for financial assistance under this paragraph must include:

 

(1) the name of the recipient, its organizational structure, its address and contact information, and its industry sector;

 

(2) a description of the amount and use of the financial assistance and the total project budget, including a list of all financial assistance by all grantors for the project and the private sources of financial assistance;

 

(3) the public purpose of the financial assistance, the job goals associated with both the financial assistance and the total project in which the financial assistance is included, the hourly wage of each job created, and the cost of health insurance provided by the employer;

 

(4) the date the project will be completed;

 

(5) the name and address of the parent corporation of the recipient, if any; and

 

(6) any other information the commissioner may request.

 

(c) Within one year of completing a report under paragraph (b), the local government agency must report to the commissioner on progress in achieving the purposes and goals under clause (3).

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(d) The commissioner of employment and economic development must provide information on reporting requirements to state and local government agencies.

 

Sec. 6. Minnesota Statutes 2007 Supplement, section 268.19, subdivision 1, as amended by Laws 2008, chapter 315, section 16, is amended to read:

 

Subdivision 1. Use of data. (a) Except as provided by this section, data gathered from any person under the administration of the Minnesota Unemployment Insurance Law are private data on individuals or nonpublic data not on individuals as defined in section 13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court order or section 13.05. A subpoena is not considered a district court order. These data may be disseminated to and used by the following agencies without the consent of the subject of the data:

 

(1) state and federal agencies specifically authorized access to the data by state or federal law;

 

(2) any agency of any other state or any federal agency charged with the administration of an unemployment insurance program;