HF 1395

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; providing rate increases for nursing facilities,
ICFs/MR, and community-based long-term care providers; setting a floor
for nursing facility payment rates; modifying individual income tax rates;
establishing the long-term care payment rate account; appropriating money;
amending Minnesota Statutes 2006, sections 256B.434, by adding subdivisions;
256B.5012, by adding a subdivision; 290.06, subdivisions 2c, 2d; 290.62.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 4i. new text end

new text begin Rate increases for October 1, 2007, and October 1, 2008. new text end

new text begin (a) For the
rate period beginning October 1, 2007, the commissioner shall make available to each
nursing facility reimbursed under this section or section 256B.441 an adjustment equal to
seven percent of the total operating payment rate, and for the rate year beginning October
1, 2008, the commissioner shall make available to each nursing facility reimbursed under
this section or section 256B.441 an adjustment equal to six percent of the total operating
payment rate.
new text end

new text begin (b) Seventy-five percent of the money resulting from the rate adjustment under
paragraph (a) must be used to increase wages and benefits and pay associated costs
for all employees, except management fees, the administrator, and central office staff.
Seventy-five percent of the money received by a facility as a result of the rate adjustment
provided in paragraph (a) must be used only for wage, benefit, and staff increases
implemented on or after the effective date of the rate increase each year, and must not be
used for increases implemented prior to that date.
new text end

new text begin (c) Nursing facilities may apply for the portion of the rate adjustment under
paragraph (a) for employee wages and benefits and associated costs. The application
must be made to the commissioner and contain a plan by which the nursing facility
will distribute the funds according to paragraph (b). For nursing facilities in which the
employees are represented by an exclusive bargaining representative, an agreement
negotiated and agreed to by the employer and the exclusive bargaining representative
constitutes the plan. A negotiated agreement may constitute the plan only if the agreement
is finalized after the date of enactment of all increases for the rate year and signed by both
parties prior to submission to the commissioner. The commissioner shall review the
plan to ensure that the rate adjustments are used as provided in paragraph (b). To be
eligible, a facility must submit its distribution plan by March 31, 2008, and March 31,
2009, respectively. The commissioner may approve distribution plans on or before June
30, 2008, and June 30, 2009, respectively. If a facility's distribution plan is effective after
the first day of the applicable rate period that the funds are available, the rate adjustments
are effective the same date as the facility's plan.
new text end

new text begin (d) A copy of the approved distribution plan must be made available to all employees
by giving each employee a copy or by posting a copy in an area of the nursing facility
to which all employees have access. If an employee does not receive the wage and
benefit adjustment described in the facility's approved plan and is unable to resolve the
problem with the facility's management or through the employee's union representative,
the employee may contact the commissioner at an address or telephone number provided
by the commissioner and included in the approved plan.
new text end

Sec. 2.

Minnesota Statutes 2006, section 256B.434, is amended by adding a
subdivision to read:

new text begin Subd. 4j. new text end

new text begin Rate increase for nursing facilities. new text end

new text begin Effective October 1, 2007, operating
payment rates of all nursing facilities that are reimbursed under this section or section
256B.441 must be increased to be equal, for a RUG's rate with a weight of 1.00, to the
geographic group III median rate for the same RUG's weight. The percentage of the
operating payment rate for each facility to be case-mix adjusted must be equal to the
percentage that is case-mix adjusted in that facility's September 30, 2007, operating
payment rate. This subdivision applies only if it results in a rate increase. Increases
provided by this subdivision must be calculated after any other nursing facility rate
increase provided under this chapter. Increases provided by this subdivision must be
added to the rate determined under any new reimbursement system established under
section 256B.441.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.5012, is amended by adding a
subdivision to read:

new text begin Subd. 7. new text end

new text begin ICF/MR rate increases October 1, 2007, and October 1, 2008. new text end

new text begin (a) For
the rate period beginning October 1, 2007, the commissioner shall make available to
each facility reimbursed under this section an adjustment to the total operating payment
rate of seven percent. For the rate period beginning October 1, 2008, the commissioner
shall make available to each facility reimbursed under this section an adjustment to the
total operating payment rate of six percent.
new text end

new text begin (b) Seventy-five percent of the money resulting from the rate adjustment under
paragraph (a) must be used to increase wages and benefits and pay associated costs for
employees, except for administrative and central office employees. Seventy-five percent
of the money received by a facility as a result of the rate adjustment provided in paragraph
(a) must be used only for wage, benefit, and staff increases implemented on or after
the effective date of the rate increase each year, and must not be used for increases
implemented prior to that date. The wage adjustment eligible employees may receive may
vary based on merit, seniority, or other factors determined by the provider.
new text end

new text begin (c) For each facility, the commissioner shall make available an adjustment, based
on occupied beds, using the percentage specified in paragraph (a) multiplied by the total
payment rate, including variable rate but excluding the property-related payment rate, in
effect on the preceding day. The total payment rate must include the adjustment provided
in section new text begin 256B.501, subdivision 12 new text end .
new text end

new text begin (d) A facility whose payment rates are governed by closure agreements, receivership
agreements, or Minnesota Rules, part , is not eligible for an adjustment
otherwise granted under this subdivision.
new text end

new text begin (e) A facility may apply for the portion of the payment rate adjustment provided
under paragraph (a) for employee wages and benefits and associated costs. The application
must be made to the commissioner and contain a plan by which the facility will distribute
the funds according to paragraph (b). For facilities in which the employees are represented
by an exclusive bargaining representative, an agreement negotiated and agreed to by the
employer and the exclusive bargaining representative constitutes the plan. A negotiated
agreement may constitute the plan only if the agreement is finalized after the date of
enactment of all rate increases for the rate year. The commissioner shall review the plan to
ensure that the payment rate adjustment per diem is used as provided in this subdivision.
To be eligible, a facility must submit its plan by March 31, 2008, and December 31,
2008, respectively. If a facility's plan is effective for its employees after the first day of
the applicable rate period that the funds are available, the payment rate adjustment per
diem is effective the same date as its plan.
new text end

new text begin (f) A copy of the approved distribution plan must be made available to all employees
by giving each employee a copy or by posting it in an area of the facility to which all
employees have access. If an employee does not receive the wage and benefit adjustment
described in the facility's approved plan and is unable to resolve the problem with the
facility's management or through the employee's union representative, the employee
may contact the commissioner at an address or telephone number provided by the
commissioner and included in the approved plan.
new text end

Sec. 4.

Minnesota Statutes 2006, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:

(1) On the first deleted text begin $25,680 deleted text end new text begin $31,150 new text end , 5.35 percent;

(2) On all over deleted text begin $25,680 deleted text end new text begin $31,150 new text end , but not over deleted text begin $102,030 deleted text end new text begin $123,750 new text end , 7.05 percent;

(3) On all over deleted text begin $102,030 deleted text end new text begin $123,750, but not over $500,000 new text end , 7.85 percent new text begin ;
new text end

new text begin (4) On all over $500,000, 9.8 percent new text end .

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin $17,570 deleted text end new text begin $21,310 new text end , 5.35 percent;

(2) On all over deleted text begin $17,570 deleted text end new text begin $21,310 new text end , but not over deleted text begin $57,710 deleted text end new text begin $69,990 new text end , 7.05 percent;

(3) On all over deleted text begin $57,710 deleted text end new text begin $69,990, but not over $282,790 new text end , 7.85 percent new text begin ;
new text end

new text begin (4) On all over $282,790, 9.8 percent new text end .

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin $21,630 deleted text end new text begin $26,230 new text end , 5.35 percent;

(2) On all over deleted text begin $21,630 deleted text end new text begin $26,230 new text end , but not over deleted text begin $86,910 deleted text end new text begin $105,410 new text end , 7.05 percent;

(3) On all over deleted text begin $86,910 deleted text end new text begin $105,410, but not over $425,890 new text end , 7.85 percent new text begin ;
new text end

new text begin (4) On all over $425,890, 9.8 percent new text end .

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9),
and reduced by the Minnesota assignable portion of the subtraction for United States
government interest under section 290.01, subdivision 19b, clause (1), and the subtractions
under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), and (16), after applying
the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), and reduced by the
amounts specified in section 290.01, subdivision 19b, clauses (1), (9), (10), (14), (15),
and (16).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2006, except that for taxable years beginning after December 31, 2006, and
before January 1, 2008, the 9.8 percent rate is reduced to 8.0 percent, and for taxable years
beginning after December 31, 2007, and before January 1, 2010, the 9.8 percent rate
is reduced to 9.5 percent.
new text end

Sec. 5.

Minnesota Statutes 2006, section 290.06, subdivision 2d, is amended to read:

Subd. 2d.

Inflation adjustment of brackets.

(a) For taxable years beginning after
December 31, deleted text begin 2000 deleted text end new text begin 2007 new text end , the minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
percentage determined under paragraph (b). For the purpose of making the adjustment as
provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
rate brackets as they existed for taxable years beginning after December 31, deleted text begin 1999 deleted text end new text begin 2006 new text end ,
and before January 1, deleted text begin 2001 deleted text end new text begin 2008 new text end . The rate applicable to any rate bracket must not be
changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.

(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For deleted text begin 2001 deleted text end new text begin
2008 new text end , the commissioner shall then determine the percent change from the 12 months
ending on August 31, deleted text begin 1999 deleted text end new text begin 2006 new text end , to the 12 months ending on August 31, deleted text begin 2000 deleted text end new text begin 2007 new text end , and
in each subsequent year, from the 12 months ending on August 31, deleted text begin 1999 deleted text end new text begin 2006 new text end , to the 12
months ending on August 31 of the year preceding the taxable year. The determination of
the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
not be subject to the Administrative Procedure Act contained in chapter 14.

No later than December 15 of each year, the commissioner shall announce the
specific percentage that will be used to adjust the tax rate brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2006.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290.62, is amended to read:

290.62 DISTRIBUTION OF REVENUES.

new text begin Subdivision 1. new text end

new text begin Payment into state treasury. new text end

All revenues derived from the
taxes, interest, penalties and charges under this chapter shall, notwithstanding any other
provisions of law, be paid into the state treasury and credited to the general fund, and
be distributed as follows:

(1) There shall, notwithstanding any other provision of the law, be paid from this
general fund all refunds of taxes erroneously collected from taxpayers under this chapter
as provided herein;

(2) There is hereby appropriated to the persons entitled to payment herein, from
the fund or account in the state treasury to which the money was credited, an amount
sufficient to make the refund and payment.

new text begin Subd. 2. new text end

new text begin Long-term care payment rate account. new text end

new text begin By July 15 of each odd-numbered
year, the commissioner of finance, in consultation with the commissioner of revenue, shall
estimate the amount of revenue anticipated for the biennium resulting from the increases
in section 290.06, subdivisions 2c and 2d. The estimated amounts must be deposited in a
long-term care payment rate account in the special revenue fund. Amounts in the account,
along with its investment earnings, are credited to the account and are available to fund
increases in long-term care provider payment rates.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 7. new text begin COMMUNITY SERVICE PROVIDER RATE.
new text end

new text begin (a) The commissioner of human services shall increase reimbursement rates or rate
limits, as applicable, by seven percent for the rate period beginning October 1, 2007,
and by six percent for the rate period beginning October 1, 2008, effective for services
rendered on or after those dates.
new text end

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

new text begin (1) home and community-based waivered services for persons with developmental
disabilities or related conditions under Minnesota Statutes, section 256B.501;
new text end

new text begin (2) home and community-based waivered services for the elderly under Minnesota
Statutes, section 256B.0915;
new text end

new text begin (3) waivered services under community alternatives for disabled individuals under
Minnesota Statutes, section 256B.49;
new text end

new text begin (4) community alternative care waivered services under Minnesota Statutes, section
256B.49;
new text end

new text begin (5) traumatic brain injury waivered services under Minnesota Statutes, section
256B.49;
new text end

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

new text begin (7) personal care services and nursing supervision of personal care services under
Minnesota Statutes, section 256B.0625, subdivision 19a;
new text end

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

new text begin (9) day training and habilitation services for adults with developmental disabilities
or related conditions under Minnesota Statutes, sections 252.40 to 252.46;
new text end

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

new text begin (11) adult residential program grants under Minnesota Rules, parts 9535.2000 to
9535.3000;
new text end

new text begin (12) adult and family community support grants under Minnesota Rules, parts
9535.1700 to 9535.1760;
new text end

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

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

new text begin (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;
new text end

new text begin (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;
new text end

new text begin (17) living skills training programs for persons with intractable epilepsy who need
assistance in the transition to independent living;
new text end

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

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

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

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

new text begin (c) Providers that receive a rate increase under this section shall use 75 percent of
the additional revenue to increase wages and benefits and pay associated costs for all
employees, except for management fees, the administrator, and central office staff.
new text end

new text begin (d) 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.
new text end

new text begin (e) A copy of the provider's plan for complying with paragraph (c) must be made
available to all employees by giving each employee a copy or by posting a copy in an area
of the provider's operation to which all employees have access. If an employee does not
receive the adjustment, if any, described in the plan and is unable to resolve the problem
with the provider, the employee may contact the employee's union representative. If the
employee is not covered by a collective bargaining agreement, the employee may contact
the commissioner at a telephone number provided by the commissioner and included in
the provider's plan.
new text end

Sec. 8. new text begin APPROPRIATION.
new text end

new text begin There is annually appropriated from the long-term care payment rate account in the
special revenue fund to the commissioner of human services, beginning October 1, 2007,
and each July 1 thereafter, an amount sufficient to fund the long-term care provider rate
increases authorized by sections 1, 2, 3, and 7.
new text end