1.1                          A bill for an act 
  1.2             relating to medical assistance; limiting the burial 
  1.3             expense exclusion to $5,000; prohibiting certain asset 
  1.4             transfers within 60 months of application for 
  1.5             assistance; establishing a penalty period that begins 
  1.6             with the month of application; requiring approval of 
  1.7             the commissioner of human services for certain 
  1.8             hardship waivers; prohibiting certain asset transfers 
  1.9             prior to 60 months before application; amending 
  1.10            Minnesota Statutes 1994, sections 149.11; 256B.056, 
  1.11            subdivision 3; 256B.0595, by adding subdivisions; 
  1.12            325F.71, subdivision 2; 524.2-403; and 524.3-801; 
  1.13            Minnesota Statutes 1995 Supplement, section 256B.0595, 
  1.14            subdivisions 2, 3, and 4; repealing Minnesota Statutes 
  1.15            1995 Supplement, section 256B.15, subdivision 5. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1994, section 149.11, is 
  1.18  amended to read: 
  1.19     149.11 [PREARRANGED FUNERAL PLANS; CONTRACTS; TRUST FUNDS.] 
  1.20     (a) When prior to the death of any person, that person or 
  1.21  another enters into any transaction, makes a contract, or any 
  1.22  series or combination of transactions or contracts with another 
  1.23  person, partnership, association, or corporation, other than an 
  1.24  insurance company licensed to do business in the state of 
  1.25  Minnesota, by the terms of which, certain personal property 
  1.26  related to the funeral services or the burial, cremation, or 
  1.27  other disposition of human remains will be used upon the death 
  1.28  of the person for whom the property is to be used, or when the 
  1.29  professional services of a funeral director or embalmer will 
  1.30  then be furnished, or both, then the total of all money paid by 
  2.1   the terms of the transaction, contract, or series or combination 
  2.2   of transactions or contracts shall be held in trust for the 
  2.3   purpose for which it has been paid until the death of the person 
  2.4   for whose benefit the money was paid, or refunded to the person 
  2.5   who made the payment or payments, upon demand.  A prearranged 
  2.6   funeral or burial contract buyer may, at the buyer's option, 
  2.7   declare the funeral or burial trust to be irrevocable up to an 
  2.8   amount equivalent to the current allowable supplemental security 
  2.9   income asset exclusion used for determining eligibility for 
  2.10  public assistance the amount permitted under section 256B.056, 
  2.11  subdivision 3, paragraph (d).  The contract buyer may, at the 
  2.12  buyer's option, also declare the interest to be irrevocable to 
  2.13  the extent permitted by federal laws and rules governing public 
  2.14  assistance.  The buyer of either a revocable or an irrevocable 
  2.15  prearranged funeral or burial contract retains the right to 
  2.16  designate as trustee a different funeral establishment at any 
  2.17  time before the death of the person for whose benefit the money 
  2.18  was paid.  Upon the death of that person, the next of kin or 
  2.19  other legal representative of that person's estate retains the 
  2.20  right to designate as trustee a different funeral 
  2.21  establishment.  Accruals of interest or dividends declared upon 
  2.22  the sum of money held in trust are subject to the same trust.  
  2.23  The person, partnership, association, or corporation holding the 
  2.24  money in trust shall inform the person on whose behalf the money 
  2.25  is held that all money paid plus all accrued earnings will be 
  2.26  held in trust until the death of that person or until a request 
  2.27  for a refund is made if made prior to death, except for a 
  2.28  prearranged funeral or burial trust declared irrevocable by the 
  2.29  buyer under this section.  The location of the trust account 
  2.30  including the name and address of the institution in which the 
  2.31  money is being held and any identifying account numbers, and any 
  2.32  subsequent changes in that information must be disclosed in 
  2.33  writing to the person on whose behalf the money is being held, 
  2.34  at the time the funds are deposited into the trust account and 
  2.35  at the time of any subsequent changes in the information.  The 
  2.36  personal property shall include but not be limited to a casket, 
  3.1   burial vault not interred in a grave, combination casket-vault, 
  3.2   or other receptacle not described in paragraph (b) for the 
  3.3   interment, entombment, cremation, or other disposition of human 
  3.4   remains.  
  3.5      (b) Nothing in this section shall prevent the sale and 
  3.6   delivery of cemetery lots, graves, burial vaults preinterred in 
  3.7   a grave, cremation urns, crypt spaces, niches, or grave or lot 
  3.8   markers or monuments before their use is required.  Nothing in 
  3.9   this section prevents the preconstruction sale of crypt spaces 
  3.10  to be permanently installed except that any seller of mausoleum 
  3.11  space or columbarium space, selling burial space in a mausoleum 
  3.12  or columbarium that is not completely constructed and usable, 
  3.13  must comply with section 306.90.  
  3.14     (c) It is the intent of the legislature that the provisions 
  3.15  of this section shall be construed as a limitation upon the 
  3.16  manner in which a person or legal entity is permitted to accept 
  3.17  funds in prepayment of funeral services to be performed in the 
  3.18  future or in prepayment of funeral or burial goods to be used in 
  3.19  connection with the funeral or final disposition of human 
  3.20  remains.  It is further intended to allow members of the public 
  3.21  to arrange and pay for funerals, final dispositions, funeral 
  3.22  services, and funeral and burial goods for themselves and their 
  3.23  families in advance of need while at the same time providing all 
  3.24  possible safeguards so that the prepaid funds cannot be 
  3.25  dissipated, whether intentionally or not, so as to be available 
  3.26  for the payment of the services and goods selected. 
  3.27     Sec. 2.  Minnesota Statutes 1994, section 256B.056, 
  3.28  subdivision 3, is amended to read: 
  3.29     Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
  3.30  assistance, a person must not individually own more than $3,000 
  3.31  in assets, or if a member of a household with two family members 
  3.32  (husband and wife, or parent and child), the household must not 
  3.33  own more than $6,000 in assets, plus $200 for each additional 
  3.34  legal dependent.  In addition to these maximum amounts, an 
  3.35  eligible individual or family may accrue interest on these 
  3.36  amounts, but they must be reduced to the maximum at the time of 
  4.1   an eligibility redetermination.  The accumulation of the 
  4.2   clothing and personal needs allowance pursuant to section 
  4.3   256B.35 must also be reduced to the maximum at the time of the 
  4.4   eligibility redetermination.  The value of assets that are not 
  4.5   considered in determining eligibility for medical assistance is 
  4.6   the value of those assets that are excluded by the aid to 
  4.7   families with dependent children program for families and 
  4.8   children, and the supplemental security income program for aged, 
  4.9   blind, and disabled persons, with the following exceptions: 
  4.10     (a) Household goods and personal effects are not considered.
  4.11     (b) Capital and operating assets of a trade or business 
  4.12  that the local agency determines are necessary to the person's 
  4.13  ability to earn an income are not considered. 
  4.14     (c) Motor vehicles are excluded to the same extent excluded 
  4.15  by the supplemental security income program. 
  4.16     (d) Assets designated as burial expenses for burial 
  4.17  services or burial space items are excluded to the same extent 
  4.18  excluded by the supplemental security income program up to a 
  4.19  maximum total amount of $5,000, provided that the assets must be 
  4.20  placed in a prepaid burial account, burial insurance, 
  4.21  irrevocable burial trust, or any combination of these options, 
  4.22  in order to qualify for this exemption.  The maximum amount 
  4.23  allowed under this paragraph shall be increased annually by the 
  4.24  percentage change in the previous year in the consumer price 
  4.25  index for urban consumers. 
  4.26     Sec. 3.  Minnesota Statutes 1994, section 256B.0595, is 
  4.27  amended by adding a subdivision to read: 
  4.28     Subd. 1a.  [PROHIBITED TRANSFERS.] (a) Notwithstanding any 
  4.29  contrary provisions of this section, this subdivision applies to 
  4.30  transfers involving recipients of medical assistance that are 
  4.31  made on or after its effective date and to all transfers 
  4.32  involving persons who apply for medical assistance on or after 
  4.33  its effective date, regardless of when the transfer occurred.  A 
  4.34  person, a person's spouse, or any person, court, or 
  4.35  administrative body with legal authority to act in place of, on 
  4.36  behalf of, at the direction of, or upon the request of the 
  5.1   person or the person's spouse, may not give away, sell, dispose 
  5.2   of, or reduce ownership or control of any income, asset, or 
  5.3   interest therein for less than fair market value for the purpose 
  5.4   of establishing or maintaining medical assistance eligibility 
  5.5   for the person.  For purposes of determining eligibility for 
  5.6   medical assistance services, any transfer of such income or 
  5.7   assets for less than fair market value within 60 months before 
  5.8   or any time after a person applies for medical assistance may be 
  5.9   considered.  Any such transfer is presumed to have been made for 
  5.10  the purpose of establishing or maintaining medical assistance 
  5.11  eligibility, and the person is ineligible for medical assistance 
  5.12  services for the period of time determined under subdivision 2a, 
  5.13  unless the person furnishes convincing evidence to establish 
  5.14  that the transaction was exclusively for another purpose, or 
  5.15  unless the transfer is permitted under subdivision 3a or 4a. 
  5.16     (b) Any transfer made prior to the 60-month period referred 
  5.17  to in paragraph (a) is also presumed to have been made for the 
  5.18  purposes of establishing medical assistance eligibility, and the 
  5.19  provisions of paragraph (a), including the period of 
  5.20  ineligibility, apply, unless the person furnishes convincing 
  5.21  evidence to establish that the transaction was exclusively for 
  5.22  another purpose, or unless the transfer is permitted under 
  5.23  subdivision 3a or 4a. 
  5.24     (c) This section applies to transfers of income or assets 
  5.25  for less than fair market value, including assets that are 
  5.26  considered income in the month received, such as inheritances, 
  5.27  court settlements, and retroactive benefit payments or income to 
  5.28  which the person or the person's spouse is entitled but does not 
  5.29  receive due to action by the person, the person's spouse, or any 
  5.30  person, court, or administrative body with legal authority to 
  5.31  act in place of, on behalf of, at the direction of, or upon the 
  5.32  request of the person or the person's spouse.  
  5.33     (d) This section applies to payments for care or personal 
  5.34  services provided by a relative, unless the compensation was 
  5.35  stipulated in a notarized, written agreement which was in 
  5.36  existence when the service was performed, the care or services 
  6.1   directly benefited the person, and the payments made represented 
  6.2   reasonable compensation for the care or services provided.  A 
  6.3   notarized written agreement is not required if payment for the 
  6.4   services was made within 60 days after the service was provided. 
  6.5      (e) This section applies to the portion of any income, 
  6.6   asset, or interest therein that a person, a person's spouse, or 
  6.7   any person, court, or administrative body with legal authority 
  6.8   to act in place of, on behalf of, at the direction of, or upon 
  6.9   the request of the person or the person's spouse, to any trust, 
  6.10  annuity, or other instrument, that exceeds the value of the 
  6.11  benefit likely to be returned to the person or spouse while 
  6.12  alive, based on estimated life expectancy of adults entering 
  6.13  long-term care.  The commissioner shall adopt rules establishing 
  6.14  life expectancies of adults entering long-term care. 
  6.15     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
  6.16  256B.0595, subdivision 2, is amended to read: 
  6.17     Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
  6.18  uncompensated transfer occurring on or before August 10, 1993, 
  6.19  the number of months of ineligibility for long-term care 
  6.20  services shall be the lesser of 30 months, or the uncompensated 
  6.21  transfer amount divided by the average medical assistance rate 
  6.22  for nursing facility services in the state in effect on the date 
  6.23  of application.  The amount used to calculate the average 
  6.24  medical assistance payment rate shall be adjusted each July 1 to 
  6.25  reflect payment rates for the previous calendar year.  The 
  6.26  period of ineligibility begins with the month in which the 
  6.27  assets were transferred.  If the transfer was not reported to 
  6.28  the local agency at the time of application, and the applicant 
  6.29  received long-term care services during what would have been the 
  6.30  period of ineligibility if the transfer had been reported, a 
  6.31  cause of action exists against the transferee for the cost of 
  6.32  long-term care services provided during the period of 
  6.33  ineligibility, or for the uncompensated amount of the transfer, 
  6.34  whichever is less.  The action may be brought by the state or 
  6.35  the local agency responsible for providing medical assistance 
  6.36  under chapter 256G.  The uncompensated transfer amount is the 
  7.1   fair market value of the asset at the time it was given away, 
  7.2   sold, or disposed of, less the amount of compensation received.  
  7.3      (b) For uncompensated transfers made after August 10, 1993, 
  7.4   the number of months of ineligibility for long-term care 
  7.5   services shall be the total uncompensated value of the resources 
  7.6   transferred divided by the average medical assistance rate for 
  7.7   nursing facility services in the state in effect on the date of 
  7.8   application.  The amount used to calculate the average medical 
  7.9   assistance payment rate shall be adjusted each July 1 to reflect 
  7.10  payment rates for the previous calendar year.  The period of 
  7.11  ineligibility begins with the month in which the assets were 
  7.12  transferred except that if one or more uncompensated transfers 
  7.13  are made during a period of ineligibility, the total assets 
  7.14  transferred during the ineligibility period shall be combined 
  7.15  and a penalty period calculated to begin in the month the first 
  7.16  uncompensated transfer was made.  If the transfer was not 
  7.17  reported to the local agency at the time of application, and the 
  7.18  applicant received medical assistance services during what would 
  7.19  have been the period of ineligibility if the transfer had been 
  7.20  reported, a cause of action exists against the transferee for 
  7.21  the cost of medical assistance services provided during the 
  7.22  period of ineligibility, or for the uncompensated amount of the 
  7.23  transfer, whichever is less.  The action may be brought by the 
  7.24  state or the local agency responsible for providing medical 
  7.25  assistance under chapter 256G.  The uncompensated transfer 
  7.26  amount is the fair market value of the asset at the time it was 
  7.27  given away, sold, or disposed of, less the amount of 
  7.28  compensation received.  
  7.29     (c) If a calculation of a penalty period results in a 
  7.30  partial month, payments for long-term care services shall be 
  7.31  reduced in an amount equal to the fraction, except that in 
  7.32  calculating the value of uncompensated transfers, if the total 
  7.33  value of all uncompensated transfers made in a month not 
  7.34  included in an existing penalty period does not exceed 
  7.35  $1,000 $500, then such transfers shall be disregarded for each 
  7.36  month prior to the month of application for or during receipt of 
  8.1   medical assistance. 
  8.2      Sec. 5.  Minnesota Statutes 1994, section 256B.0595, is 
  8.3   amended by adding a subdivision to read: 
  8.4      Subd. 2a.  [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 
  8.5   any contrary provisions of this section, this subdivision 
  8.6   applies to transfers involving recipients of medical assistance 
  8.7   that are made on or after its effective date and to all 
  8.8   transfers involving persons who apply for medical assistance on 
  8.9   or after its effective date, regardless of when the transfer 
  8.10  occurred.  For any uncompensated transfer occurring within 60 
  8.11  months prior to the date of application, at any time after 
  8.12  application, or while eligible, the number of months of 
  8.13  cumulative ineligibility for medical assistance services shall 
  8.14  be the total uncompensated value of the assets and income 
  8.15  transferred divided by the statewide average per person nursing 
  8.16  facility payment made by the state in effect on the date of 
  8.17  application.  The amount used to calculate the average per 
  8.18  person payment shall be adjusted each July 1 to reflect average 
  8.19  payments for the previous calendar year.  For applicants, the 
  8.20  period of ineligibility begins with the month in which the 
  8.21  person applied for medical assistance and satisfied all other 
  8.22  requirements for eligibility, or the month the local agency 
  8.23  becomes aware of the transfer, if later.  For recipients, the 
  8.24  period of ineligibility begins in the month the agency becomes 
  8.25  aware of the transfer, except that penalty periods for transfers 
  8.26  made during a period of ineligibility as determined under this 
  8.27  section shall begin in the month following the existing period 
  8.28  of ineligibility.  If the transfer was not reported to the local 
  8.29  agency at the time of application, and the applicant received 
  8.30  medical assistance services during what would have been the 
  8.31  period of ineligibility if the transfer had been reported, a 
  8.32  cause of action exists against the transferee for the cost of 
  8.33  medical assistance services provided during the period of 
  8.34  ineligibility, or for the uncompensated amount of the transfer 
  8.35  that was not recovered from the transferor through the 
  8.36  implementation of a penalty period under this subdivision, 
  9.1   whichever is less.  The action may be brought by the state or 
  9.2   the local agency responsible for providing medical assistance 
  9.3   under chapter 256G.  The total uncompensated value is the fair 
  9.4   market value of the income or asset at the time it was given 
  9.5   away, sold, or disposed of, less the amount of compensation 
  9.6   received.  
  9.7      (b) If a calculation of a penalty period results in a 
  9.8   partial month, payments for medical assistance services shall be 
  9.9   reduced in an amount equal to the fraction, except that in 
  9.10  calculating the value of uncompensated transfers, if the total 
  9.11  value of all uncompensated transfers made in a month not 
  9.12  included in an existing penalty period does not exceed $500, 
  9.13  then such transfers shall be disregarded for each month prior to 
  9.14  the month of application for or during receipt of medical 
  9.15  assistance. 
  9.16     Sec. 6.  Minnesota Statutes 1995 Supplement, section 
  9.17  256B.0595, subdivision 3, is amended to read: 
  9.18     Subd. 3.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
  9.19  (a) An institutionalized person is not ineligible for long-term 
  9.20  care services due to a transfer of assets for less than fair 
  9.21  market value if the asset transferred was a homestead and: 
  9.22     (1) title to the homestead was transferred to the 
  9.23  individual's 
  9.24     (i) spouse; 
  9.25     (ii) child who is under age 21; 
  9.26     (iii) blind or permanently and totally disabled child as 
  9.27  defined in the supplemental security income program; 
  9.28     (iv) sibling who has equity interest in the home and who 
  9.29  was residing in the home for a period of at least one year 
  9.30  immediately before the date of the individual's admission to the 
  9.31  facility; or 
  9.32     (v) son or daughter who was residing in the individual's 
  9.33  home for a period of at least two years immediately before the 
  9.34  date of the individual's admission to the facility, and who 
  9.35  provided care to the individual that, as certified by the 
  9.36  individual's attending physician, permitted the individual to 
 10.1   reside at home rather than in an institution or facility; 
 10.2      (2) a satisfactory showing is made that the individual 
 10.3   intended to dispose of the homestead at fair market value or for 
 10.4   other valuable consideration; or 
 10.5      (3) the local agency commissioner grants a waiver of the 
 10.6   excess resources created by the uncompensated transfer a penalty 
 10.7   resulting from a transfer for less than fair market value 
 10.8   because denial of eligibility would cause undue hardship for the 
 10.9   individual, based on the individual has no other means of 
 10.10  obtaining necessary care, and there exists an imminent threat to 
 10.11  the individual's health and well-being.  Whenever an applicant 
 10.12  or recipient is denied eligibility because of a transfer for 
 10.13  less than fair market value, the local agency shall notify the 
 10.14  applicant or recipient that they may request a waiver of the 
 10.15  penalty if the denial of eligibility will cause undue hardship.  
 10.16  In evaluating a waiver, the commissioner shall take into account 
 10.17  whether the individual was the victim of financial exploitation, 
 10.18  whether the individual has made reasonable efforts to recover 
 10.19  the transferred property or resource, and other factors relevant 
 10.20  to a determination of hardship. 
 10.21  If the commissioner does not approve a hardship waiver, the 
 10.22  commissioner shall issue a written notice to the individual 
 10.23  stating the reasons for the denial and the process for appealing 
 10.24  the commissioner's decision. 
 10.25     (b) When a waiver is granted under paragraph (a), clause 
 10.26  (3), a cause of action exists against the person to whom the 
 10.27  homestead was transferred for that portion of long-term care 
 10.28  services granted within: 
 10.29     (1) 30 months of a transfer made on or before August 10, 
 10.30  1993; 
 10.31     (2) 60 months if the homestead was transferred after August 
 10.32  10, 1993, to a trust or portion of a trust that is considered a 
 10.33  transfer of assets under federal law; or 
 10.34     (3) 36 months if transferred in any other manner after 
 10.35  August 10, 1993, 
 10.36  or the amount of the uncompensated transfer, whichever is less, 
 11.1   together with the costs incurred due to the action.  The action 
 11.2   may shall be brought by the state or unless the state delegates 
 11.3   this responsibility to the local agency responsible for 
 11.4   providing medical assistance under chapter 256G. 
 11.5      Sec. 7.  Minnesota Statutes 1994, section 256B.0595, is 
 11.6   amended by adding a subdivision to read: 
 11.7      Subd. 3a.  [HOMESTEAD EXCEPTION TO TRANSFER PROHIBITION.] 
 11.8   (a) This subdivision applies to transfers involving recipients 
 11.9   of medical assistance that are made on or after its effective 
 11.10  date and to all transfers involving persons who apply for 
 11.11  medical assistance on or after its effective date, regardless of 
 11.12  when the transfer occurred.  A person is not ineligible for 
 11.13  medical assistance services due to a transfer of assets for less 
 11.14  than fair market value as described in subdivision 1a if the 
 11.15  asset transferred was a homestead and: 
 11.16     (1) title to the homestead was transferred to the 
 11.17  individual's relatives who are residing in the homestead and are 
 11.18  the individual's 
 11.19     (i) spouse; 
 11.20     (ii) child who is under age 21; 
 11.21     (iii) blind or permanently and totally disabled child as 
 11.22  defined in the supplemental security income program; 
 11.23     (iv) sibling who has equity interest in the home and who 
 11.24  was residing in the home for a period of at least one year 
 11.25  immediately before the date of the individual's admission to the 
 11.26  facility; or 
 11.27     (v) son or daughter who was residing in the individual's 
 11.28  home for a period of at least two years immediately before the 
 11.29  date of the individual's admission to the facility, and who 
 11.30  provided care to the individual that, as certified by the 
 11.31  individual's attending physician, permitted the individual to 
 11.32  reside at home rather than in an institution or facility; 
 11.33     (2) a satisfactory showing is made that the individual 
 11.34  intended to dispose of the homestead at fair market value or for 
 11.35  other valuable consideration; or 
 11.36     (3) the commissioner grants a waiver of a penalty resulting 
 12.1   from a transfer for less than fair market value because denial 
 12.2   of eligibility would cause undue hardship for the individual, 
 12.3   the individual has no other means of obtaining necessary care, 
 12.4   and there exists an imminent threat to the individual's health 
 12.5   and well-being.  Whenever an applicant or recipient is denied 
 12.6   eligibility because of a transfer for less than fair market 
 12.7   value, the local agency shall notify the applicant or recipient 
 12.8   that they may request a waiver of the penalty if the denial of 
 12.9   eligibility will cause undue hardship.  In evaluating a waiver, 
 12.10  the commissioner shall take into account whether the individual 
 12.11  was the victim of financial exploitation, whether the individual 
 12.12  has made reasonable efforts to recover the transferred property 
 12.13  or resource, and other factors relevant to a determination of 
 12.14  hardship.  If the commissioner does not approve a hardship 
 12.15  waiver, the commissioner shall issue a written notice to the 
 12.16  individual stating the reasons for the denial and the process 
 12.17  for appealing the commissioner's decision. 
 12.18     (b) When a waiver is granted under paragraph (a), clause 
 12.19  (3), a cause of action exists against the person to whom the 
 12.20  homestead was transferred for that portion of medical assistance 
 12.21  services granted within 60 months of the date the transferor 
 12.22  applied for medical assistance and satisfied all other 
 12.23  requirements for eligibility, 
 12.24  or the amount of the uncompensated transfer, whichever is less, 
 12.25  together with the costs incurred due to the action.  The action 
 12.26  shall be brought by the state unless the state delegates this 
 12.27  responsibility to the local agency responsible for providing 
 12.28  medical assistance under chapter 256G. 
 12.29     Sec. 8.  Minnesota Statutes 1995 Supplement, section 
 12.30  256B.0595, subdivision 4, is amended to read: 
 12.31     Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 
 12.32  institutionalized person who has made, or whose spouse has made 
 12.33  a transfer prohibited by subdivision 1, is not ineligible for 
 12.34  long-term care services if one of the following conditions 
 12.35  applies: 
 12.36     (1) the assets were transferred to the individual's spouse 
 13.1   or to another for the sole benefit of the spouse; or 
 13.2      (2) the institutionalized spouse, prior to being 
 13.3   institutionalized, transferred assets to a spouse, provided that 
 13.4   the spouse to whom the assets were transferred does not then 
 13.5   transfer those assets to another person for less than fair 
 13.6   market value.  (At the time when one spouse is 
 13.7   institutionalized, assets must be allocated between the spouses 
 13.8   as provided under section 256B.059); or 
 13.9      (3) the assets were transferred to the individual's child 
 13.10  who is blind or permanently and totally disabled as determined 
 13.11  in the supplemental security income program; or 
 13.12     (4) a satisfactory showing is made that the individual 
 13.13  intended to dispose of the assets either at fair market value or 
 13.14  for other valuable consideration; or 
 13.15     (5)  the local agency commissioner determines that denial 
 13.16  of eligibility for long-term care services would work an undue 
 13.17  hardship and grants a waiver of excess assets because the 
 13.18  individual has no other means of obtaining necessary care, and 
 13.19  there exists an imminent threat to the individual's health and 
 13.20  well-being.  Whenever an applicant or recipient is denied 
 13.21  eligibility because of a transfer for less than fair market 
 13.22  value, the local agency shall notify the applicant or recipient 
 13.23  that they may request a waiver of the penalty if the denial of 
 13.24  eligibility will cause undue hardship.  In evaluating a waiver, 
 13.25  the commissioner shall take into account whether the individual 
 13.26  was the victim of financial exploitation, whether the individual 
 13.27  has made reasonable efforts to recover the transferred property 
 13.28  or resource, and other factors relevant to a determination of 
 13.29  hardship.  If the commissioner does not approve a hardship 
 13.30  waiver, the commissioner shall issue a written notice to the 
 13.31  individual stating the reasons for the denial and the process 
 13.32  for appealing the commissioner's decision.  When a waiver is 
 13.33  granted, a cause of action exists against the person to whom the 
 13.34  assets were transferred for that portion of long-term care 
 13.35  services granted within: 
 13.36     (i) 30 months of a transfer made on or before August 10, 
 14.1   1993; 
 14.2      (ii) 60 months of a transfer if the assets were transferred 
 14.3   after August 30, 1993, to a trust or portion of a trust that is 
 14.4   considered a transfer of assets under federal law; or 
 14.5      (iii) 36 months of a transfer if transferred in any other 
 14.6   manner after August 10, 1993, 
 14.7   or the amount of the uncompensated transfer, whichever is less, 
 14.8   together with the costs incurred due to the action.  The action 
 14.9   may shall be brought by the state or unless the state delegates 
 14.10  this responsibility to the local agency responsible for 
 14.11  providing medical assistance under this chapter; or 
 14.12     (6) for transfers occurring after August 10, 1993, the 
 14.13  assets were transferred by the person or person's spouse:  (i) 
 14.14  into a trust established solely for the benefit of a son or 
 14.15  daughter of any age who is blind or disabled as defined by the 
 14.16  Supplemental Security Income program; or (ii) into a trust 
 14.17  established solely for the benefit of an individual who is under 
 14.18  65 years of age who is disabled as defined by the Supplemental 
 14.19  Security Income program. 
 14.20     Sec. 9.  Minnesota Statutes 1994, section 256B.0595, is 
 14.21  amended by adding a subdivision to read: 
 14.22     Subd. 4a.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] This 
 14.23  subdivision applies to transfers involving recipients of medical 
 14.24  assistance that are made on or after its effective date and to 
 14.25  all transfers involving persons who apply for medical assistance 
 14.26  on or after its effective date, regardless of when the transfer 
 14.27  occurred.  A person or a person's spouse who has made a transfer 
 14.28  prohibited by subdivision 1a is not ineligible for medical 
 14.29  assistance services if one of the following conditions applies: 
 14.30     (1) the assets or income were transferred to the 
 14.31  individual's spouse or to another for the sole benefit of the 
 14.32  spouse, except that after eligibility is established, transfers 
 14.33  to a spouse are permitted only to comply with the provisions of 
 14.34  section 256B.059; or 
 14.35     (2) the institutionalized spouse, prior to being 
 14.36  institutionalized, transferred assets or income to a spouse, 
 15.1   provided that the spouse to whom the assets or income were 
 15.2   transferred does not then transfer those assets or income to 
 15.3   another person for less than fair market value.  (At the time 
 15.4   when one spouse is institutionalized, assets must be allocated 
 15.5   between the spouses as provided under section 256B.059); or 
 15.6      (3) the assets or income were transferred to a trust for 
 15.7   the sole benefit of the individual's child who is blind or 
 15.8   permanently and totally disabled as determined in the 
 15.9   supplemental security income program and the trust reverts to 
 15.10  the state upon the disabled child's death to the extent medical 
 15.11  assistance has paid for services for the child; or 
 15.12     (4) a satisfactory showing is made that the individual 
 15.13  intended to dispose of the assets or income either at fair 
 15.14  market value or for other valuable consideration; or 
 15.15     (5) the commissioner determines that denial of eligibility 
 15.16  for medical assistance services would work an undue hardship and 
 15.17  grants a waiver of a penalty resulting from a transfer for less 
 15.18  than fair market value because denial of eligibility would cause 
 15.19  undue hardship for the individual, the individual has no other 
 15.20  means of obtaining necessary care, and there exists an imminent 
 15.21  threat to the individual's health and well-being.  Whenever an 
 15.22  applicant or recipient is denied eligibility because of a 
 15.23  transfer for less than fair market value, the local agency shall 
 15.24  notify the applicant or recipient that they may request a waiver 
 15.25  of the penalty if the denial of eligibility will cause undue 
 15.26  hardship.  In evaluating a waiver, the commissioner shall take 
 15.27  into account whether the individual was the victim of financial 
 15.28  exploitation, whether the individual has made reasonable efforts 
 15.29  to recover the transferred property or resource, and other 
 15.30  factors relevant to a determination of hardship.  If the 
 15.31  commissioner does not approve a hardship waiver, the 
 15.32  commissioner shall issue a written notice to the individual 
 15.33  stating the reasons for the denial and the process for appealing 
 15.34  the commissioner's decision.  When a waiver is granted, a cause 
 15.35  of action exists against the person to whom the assets were 
 15.36  transferred for that portion of medical assistance services 
 16.1   granted within 60 months of the date the transferor applied for 
 16.2   medical assistance and satisfied all other requirements for 
 16.3   eligibility, 
 16.4   or the amount of the uncompensated transfer, whichever is less, 
 16.5   together with the costs incurred due to the action.  The action 
 16.6   shall be brought by the state unless the state delegates this 
 16.7   responsibility to the local agency responsible for providing 
 16.8   medical assistance under this chapter. 
 16.9      Sec. 10.  Minnesota Statutes 1994, section 256B.0595, is 
 16.10  amended by adding a subdivision to read:  
 16.11     Subd. 7.  [CAUSE OF ACTION.] There is a rebuttable 
 16.12  presumption that a transferee in a transaction governed by 
 16.13  subdivision 1a acted with the intent and purpose of assisting 
 16.14  the person to qualify for medical assistance services if the 
 16.15  transfer was for less than fair market value and was made prior 
 16.16  to the 60-month period under subdivision 1a.  The presumption is 
 16.17  not rebuttable when the person who receives medical assistance 
 16.18  services is a resident of a long-term care facility or is 
 16.19  receiving that level of care in the community at the time of the 
 16.20  transfer.  A cause of action exists against the transferee for 
 16.21  the cost of medical assistance services provided to the person 
 16.22  who receives medical assistance services, or for the 
 16.23  uncompensated amount of the transfer, whichever is less.  The 
 16.24  action may be brought by the state or the local agency 
 16.25  responsible for providing medical assistance under chapter 
 16.26  256G.  There shall be no recovery for medical assistance payment 
 16.27  of medical assistance services as a result of the transfer of 
 16.28  any property or resource that is an exception to the transfer 
 16.29  prohibition listed in subdivisions 3a and 4a. 
 16.30     Sec. 11.  Minnesota Statutes 1994, section 256B.0595, is 
 16.31  amended by adding a subdivision to read: 
 16.32     Subd. 8.  [NOTICE OF RIGHTS.] If a period of ineligibility 
 16.33  is imposed under subdivision 2 or 2a, the local agency shall 
 16.34  inform the applicant or recipient subject to the penalty of the 
 16.35  person's rights under section 325F.71, subdivision 2. 
 16.36     Sec. 12.  Minnesota Statutes 1994, section 325F.71, 
 17.1   subdivision 2, is amended to read: 
 17.2      Subd. 2.  [SUPPLEMENTAL CIVIL PENALTY.] (a) In addition to 
 17.3   any liability for a civil penalty pursuant to Minnesota 
 17.4   Statutes, sections 325D.43 to 325D.48, regarding deceptive trade 
 17.5   practices; 325F.67, regarding false advertising; and 325F.68 to 
 17.6   325F.70, regarding consumer fraud; a person who engages in any 
 17.7   conduct prohibited by those statutes, and whose conduct is 
 17.8   perpetrated against one or more senior citizens or handicapped 
 17.9   persons, is liable for an additional civil penalty not to exceed 
 17.10  $10,000 for each violation, if one or more of the factors in 
 17.11  paragraph (b) are present. 
 17.12     (b) In determining whether to impose a civil penalty 
 17.13  pursuant to paragraph (a), and the amount of the penalty, the 
 17.14  court shall consider, in addition to other appropriate factors, 
 17.15  the extent to which one or more of the following factors are 
 17.16  present: 
 17.17     (1) whether the defendant knew or should have known that 
 17.18  the defendant's conduct was directed to one or more senior 
 17.19  citizens or handicapped persons; 
 17.20     (2) whether the defendant's conduct caused senior citizens 
 17.21  or handicapped persons to suffer:  loss or encumbrance of a 
 17.22  primary residence, principal employment, or source of income; 
 17.23  substantial loss of property set aside for retirement or for 
 17.24  personal or family care and maintenance; substantial loss of 
 17.25  payments received under a pension or retirement plan or a 
 17.26  government benefits program; or assets essential to the health 
 17.27  or welfare of the senior citizen or handicapped person; 
 17.28     (3) whether one or more senior citizens or handicapped 
 17.29  persons are more vulnerable to the defendant's conduct than 
 17.30  other members of the public because of age, poor health or 
 17.31  infirmity, impaired understanding, restricted mobility, or 
 17.32  disability, and actually suffered physical, emotional, or 
 17.33  economic damage resulting from the defendant's conduct; or 
 17.34     (4) whether the defendant's conduct caused senior citizens 
 17.35  or handicapped persons to make an uncompensated asset transfer 
 17.36  that resulted in the person being found ineligible for medical 
 18.1   assistance. 
 18.2      Sec. 13.  Minnesota Statutes 1994, section 524.2-403, is 
 18.3   amended to read: 
 18.4      524.2-403 [EXEMPT PROPERTY.] 
 18.5      (a) If there is a surviving spouse, then, in addition to 
 18.6   the homestead and family allowance, the surviving spouse is 
 18.7   entitled from the estate to: 
 18.8      (1) property not exceeding $10,000 in value in excess of 
 18.9   any security interests therein, in household furniture, 
 18.10  furnishings, appliances, and personal effects, subject to an 
 18.11  award of sentimental value property under section 525.152; and 
 18.12     (2) one automobile, if any, without regard to value. 
 18.13     (b) If there is no surviving spouse, the decedent's 
 18.14  children are entitled jointly to the same property as provided 
 18.15  in paragraph (a). 
 18.16     (c) If encumbered chattels are selected and the value in 
 18.17  excess of security interests, plus that of other exempt 
 18.18  property, is less than $10,000, or if there is not $10,000 worth 
 18.19  of exempt property in the estate, the surviving spouse or 
 18.20  children are entitled to other personal property of the estate, 
 18.21  if any, to the extent necessary to make up the $10,000 value. 
 18.22     (d) Rights to exempt property and assets needed to make up 
 18.23  a deficiency of exempt property have priority over all claims 
 18.24  against the estate, but the right to any assets to make up a 
 18.25  deficiency of exempt property abates as necessary to permit 
 18.26  earlier payment of the family allowance. 
 18.27     (e) The rights granted by this section are in addition to 
 18.28  any benefit or share passing to the surviving spouse or children 
 18.29  by the decedent's will, unless otherwise provided by intestate 
 18.30  succession or by way of elective share.  
 18.31     (f) A claim under section 246.53, 261.04, 256B.15, or 
 18.32  256D.16 takes precedence over any rights granted to a decedent's 
 18.33  adult children under this section. 
 18.34     Sec. 14.  Minnesota Statutes 1994, section 524.3-801, is 
 18.35  amended to read: 
 18.36     524.3-801 [NOTICE TO CREDITORS.] 
 19.1      (a) Unless notice has already been given under this 
 19.2   section, upon appointment of a general personal representative 
 19.3   in informal proceedings or upon the filing of a petition for 
 19.4   formal appointment of a general personal representative, notice 
 19.5   thereof, in the form prescribed by court rule, shall be given 
 19.6   under the direction of the court administrator by publication 
 19.7   once a week for two successive weeks in a legal newspaper in the 
 19.8   county wherein the proceedings are pending giving the name and 
 19.9   address of the general personal representative and notifying 
 19.10  creditors of the estate to present their claims within four 
 19.11  months after the date of the court administrator's notice which 
 19.12  is subsequently published or be forever barred, unless they are 
 19.13  entitled to further service of notice under paragraph (b) or (c).
 19.14     (b)(1) Within three months after:  (i) the date of the 
 19.15  first publication of the notice; or (ii) June 16, 1989, 
 19.16  whichever is later, the personal representative may determine, 
 19.17  in the personal representative's discretion, that it is or is 
 19.18  not advisable to conduct a reasonably diligent search for 
 19.19  creditors of the decedent who are either not known or not 
 19.20  identified.  If the personal representative determines that a 
 19.21  reasonably diligent search is advisable, the personal 
 19.22  representative shall conduct the search. 
 19.23     (2) If the notice is first published after June 16, 1989, 
 19.24  the personal representative shall, within three months after the 
 19.25  date of the first publication of the notice, serve a copy of the 
 19.26  notice upon each then known and identified creditor in the 
 19.27  manner provided in paragraph (c).  If the decedent or a 
 19.28  predeceased spouse of the decedent received assistance under 
 19.29  section 246.53, 256B.15, 256D.16, or 261.04, the personal 
 19.30  representative shall serve a copy of the notice on the 
 19.31  commissioner of human services in the manner provided in 
 19.32  paragraph (c) on or before the date of the first publication of 
 19.33  the notice.  The copy of the notice served on the commissioner 
 19.34  of human services shall include the full name, date of birth, 
 19.35  and social security number of the decedent or the predeceased 
 19.36  spouse who received assistance under any of the sections listed 
 20.1   in this paragraph.  Notwithstanding any will or other instrument 
 20.2   to the contrary, no property subject to administration by the 
 20.3   estate may be sold, assigned, conveyed, transferred, delivered, 
 20.4   or disposed of by the estate or the personal representative 
 20.5   until 70 days after the date the notice is received by the 
 20.6   commissioner, unless the local agency consents.  If notice was 
 20.7   first published under the applicable provisions of law under the 
 20.8   direction of the court administrator before June 16, 1989, and 
 20.9   if a personal representative is empowered to act at any time 
 20.10  after June 16, 1989, the personal representative shall, within 
 20.11  three months after June 16, 1989, serve upon the then known and 
 20.12  identified creditors in the manner provided in paragraph (c) a 
 20.13  copy of the notice as published, together with a supplementary 
 20.14  notice requiring each of the creditors to present any claim 
 20.15  within one month after the date of the service of the notice or 
 20.16  be forever barred. 
 20.17     (3) Under this section, a creditor is "known" if:  (i) the 
 20.18  personal representative knows that the creditor has asserted a 
 20.19  claim that arose during the decedent's life against either the 
 20.20  decedent or the decedent's estate; or (ii) the creditor has 
 20.21  asserted a claim that arose during the decedent's life and the 
 20.22  fact is clearly disclosed in accessible financial records known 
 20.23  and available to the personal representative.  Under this 
 20.24  section, a creditor is "identified" if the personal 
 20.25  representative's knowledge of the name and address of the 
 20.26  creditor will permit service of notice to be made under 
 20.27  paragraph (c).  
 20.28     (c) The personal representative shall serve a copy of any 
 20.29  notice and any supplementary notice required by paragraph (b), 
 20.30  clause (1) or (2), upon each creditor of the decedent who is 
 20.31  then known to the personal representative and identified, except 
 20.32  a creditor whose claim has either been presented to the personal 
 20.33  representative or paid, either by delivery of a copy of the 
 20.34  required notice to the creditor, or by mailing a copy of the 
 20.35  notice to the creditor by certified, registered, or ordinary 
 20.36  first class mail addressed to the creditor at the creditor's 
 21.1   office or place of residence. 
 21.2      Sec. 15.  [REPEALER.] 
 21.3      Minnesota Statutes 1995 Supplement, section 256B.15, 
 21.4   subdivision 5, is repealed. 
 21.5      Sec. 16.  [EFFECTIVE DATE; APPLICATION.] 
 21.6      (a) Sections 3, 5, 7, 9, 10, and 15 are effective the day 
 21.7   following final enactment to the extent permitted by federal 
 21.8   law.  If any provisions of these sections are prohibited by 
 21.9   federal law, those provisions shall become effective when 
 21.10  federal law is changed to permit their application or a waiver 
 21.11  is received.  The commissioner of human services shall notify 
 21.12  the revisor of statutes when federal law is enacted or a waiver 
 21.13  is received and publish a notice in the State Register.  The 
 21.14  commissioner must include the notice in the first State Register 
 21.15  published after the effective date of the federal changes.  
 21.16     (b) If, by July 1, 1996, any provisions of these sections 
 21.17  are not effective because of prohibitions in federal law, the 
 21.18  commissioner shall apply to the federal government for a waiver 
 21.19  of those prohibitions, and those provisions shall become 
 21.20  effective upon receipt of a federal waiver, notification to the 
 21.21  revisor of statutes, and publication of a notice in the State 
 21.22  Register to that effect. 
 21.23     (c) Section 13 applies to estates of decedents dying on or 
 21.24  after its effective date.  Section 14 applies to estates where 
 21.25  the notice under Minnesota Statutes, section 524.3-801, 
 21.26  paragraph (a), was first published on or after its effective 
 21.27  date.  Section 14 does not affect any right or duty to provide 
 21.28  notice to known creditors, including a local agency, before its 
 21.29  effective date. 
 21.30     (d) Sections 1, 2, 4, 6, 8, 11, and 12 to 14 are effective 
 21.31  the day following final enactment.