1.1 	A bill for an act
1.2 	relating to health; providing an exception to hospital restricted construction or 
1.3 	modification;amending Minnesota Statutes 2005 Supplement, section 144.551, 
1.4 	subdivision 1.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2005 Supplement, section 144.551, subdivision 1, 
1.7 	is amended to read:
1.8 		Subdivision 1.Restricted construction or modification. (a) The following 
1.9 	construction or modification may not be commenced:
1.10 	(1) any erection, building, alteration, reconstruction, modernization, improvement, 
1.11 	extension, lease, or other acquisition by or on behalf of a hospital that increases the bed 
1.12 	capacity of a hospital, relocates hospital beds from one physical facility, complex, or site 
1.13 	to another, or otherwise results in an increase or redistribution of hospital beds within 
1.14 	the state; and
1.15 	(2) the establishment of a new hospital.
1.16 	(b) This section does not apply to:
1.17 	(1) construction or relocation within a county by a hospital, clinic, or other health 
1.18 	care facility that is a national referral center engaged in substantial programs of patient 
1.19 	care, medical research, and medical education meeting state and national needs that 
1.20 	receives more than 40 percent of its patients from outside the state of Minnesota;
1.21 	(2) a project for construction or modification for which a health care facility held 
1.22 	an approved certificate of need on May 1, 1984, regardless of the date of expiration of 
1.23 	the certificate;
2.1 	(3) a project for which a certificate of need was denied before July 1, 1990, if a 
2.2 	timely appeal results in an order reversing the denial;
2.3 	(4) a project exempted from certificate of need requirements by Laws 1981, chapter 
2.4 	200, section 2;
2.5 	(5) a project involving consolidation of pediatric specialty hospital services within 
2.6 	the Minneapolis-St. Paul metropolitan area that would not result in a net increase in the 
2.7 	number of pediatric specialty hospital beds among the hospitals being consolidated;
2.8 	(6) a project involving the temporary relocation of pediatric-orthopedic hospital 
2.9 	beds to an existing licensed hospital that will allow for the reconstruction of a new 
2.10 	philanthropic, pediatric-orthopedic hospital on an existing site and that will not result in a 
2.11 	net increase in the number of hospital beds. Upon completion of the reconstruction, 
2.12 	the licenses of both hospitals must be reinstated at the capacity that existed on each site 
2.13 	before the relocation;
2.14 	(7) the relocation or redistribution of hospital beds within a hospital building or 
2.15 	identifiable complex of buildings provided the relocation or redistribution does not result 
2.16 	in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds 
2.17 	from one physical site or complex to another; or (iii) redistribution of hospital beds within 
2.18 	the state or a region of the state;
2.19 	(8) relocation or redistribution of hospital beds within a hospital corporate system 
2.20 	that involves the transfer of beds from a closed facility site or complex to an existing site 
2.21 	or complex provided that: (i) no more than 50 percent of the capacity of the closed facility 
2.22 	is transferred; (ii) the capacity of the site or complex to which the beds are transferred 
2.23 	does not increase by more than 50 percent; (iii) the beds are not transferred outside of a 
2.24 	federal health systems agency boundary in place on July 1, 1983; and (iv) the relocation or 
2.25 	redistribution does not involve the construction of a new hospital building;
2.26 	(9) a construction project involving up to 35 new beds in a psychiatric hospital in 
2.27 	Rice County that primarily serves adolescents and that receives more than 70 percent of its 
2.28 	patients from outside the state of Minnesota;
2.29 	(10) a project to replace a hospital or hospitals with a combined licensed capacity 
2.30 	of 130 beds or less if: (i) the new hospital site is located within five miles of the current 
2.31 	site; and (ii) the total licensed capacity of the replacement hospital, either at the time of 
2.32 	construction of the initial building or as the result of future expansion, will not exceed 70 
2.33 	licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is 
2.34 	less;
2.35 	(11) the relocation of licensed hospital beds from an existing state facility operated 
2.36 	by the commissioner of human services to a new or existing facility, building, or complex 
3.1 	operated by the commissioner of human services; from one regional treatment center 
3.2 	site to another; or from one building or site to a new or existing building or site on the 
3.3 	same campus;
3.4 	(12) the construction or relocation of hospital beds operated by a hospital having a 
3.5 	statutory obligation to provide hospital and medical services for the indigent that does not 
3.6 	result in a net increase in the number of hospital beds, notwithstanding section 144.552, 27 
3.7 	beds, of which 12 serve mental health needs, may be transferred from Hennepin County 
3.8 	Medical Center to Regions Hospital under this clause;
3.9 	(13) a construction project involving the addition of up to 31 new beds in an existing 
3.10 	nonfederal hospital in Beltrami County;
3.11 	(14) a construction project involving the addition of up to eight new beds in an 
3.12 	existing nonfederal hospital in Otter Tail County with 100 licensed acute care beds;
3.13 	(15) a construction project involving the addition of 20 new hospital beds 
3.14 	used for rehabilitation services in an existing hospital in Carver County serving the 
3.15 	southwest suburban metropolitan area. Beds constructed under this clause shall not be 
3.16 	eligible for reimbursement under medical assistance, general assistance medical care, 
3.17 	or MinnesotaCare;
3.18 	(16) a project for the construction or relocation of up to 20 hospital beds for the 
3.19 	operation of up to two psychiatric facilities or units for children provided that the operation 
3.20 	of the facilities or units have received the approval of the commissioner of human services;
3.21 	(17) a project involving the addition of 14 new hospital beds to be used for 
3.22 	rehabilitation services in an existing hospital in Itasca County;
3.23 	(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin 
3.24 	County that closed 20 rehabilitation beds in 2002, provided that the beds are used only 
3.25 	for rehabilitation in the hospital's current rehabilitation building. If the beds are used for 
3.26 	another purpose or moved to another location, the hospital's licensed capacity is reduced 
3.27 	by 20 beds; or
3.28 	(19) a critical access hospital established under section 144.1483, clause (9), and 
3.29 	section 1820 of the federal Social Security Act, United States Code, title 42, section 
3.30 	1395i-4, that delicensed beds since enactment of the Balanced Budget Act of 1997, Public 
3.31 	Law 105-33, to the extent that the critical access hospital does not seek to exceed the 
3.32 	maximum number of beds permitted such hospital under federal law.; or
3.33 	(20) a project for an acute care hospital in Fergus Falls that will increase the bed 
3.34 	capacity from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 
3.35 	and closing a separately licensed 13-bed skilled nursing facility.