1.1                          A bill for an act 
  1.2             relating to human services; modifying rate setting for 
  1.3             certain nursing facilities; appropriating money; 
  1.4             amending Minnesota Statutes 1999 Supplement, section 
  1.5             256B.431, subdivision 17. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.8   256B.431, subdivision 17, is amended to read: 
  1.9      Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
  1.10  (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
  1.11  for rate periods beginning on October 1, 1992, and for rate 
  1.12  years beginning after June 30, 1993, a nursing facility that (1) 
  1.13  has completed a construction project approved under section 
  1.14  144A.071, subdivision 4a, clause (m); (2) has completed a 
  1.15  construction project approved under section 144A.071, 
  1.16  subdivision 4a, and effective after June 30, 1995; or (3) has 
  1.17  completed a renovation, replacement, or upgrading project 
  1.18  approved under the moratorium exception process in section 
  1.19  144A.073 shall be reimbursed for costs directly identified to 
  1.20  that project as provided in subdivision 16 and this subdivision. 
  1.21     (b) Notwithstanding Minnesota Rules, part 9549.0060, 
  1.22  subparts 5, item A, subitems (1) and (3), and 7, item D, 
  1.23  allowable interest expense on debt shall include: 
  1.24     (1) interest expense on debt related to the cost of 
  1.25  purchasing or replacing depreciable equipment, excluding 
  2.1   vehicles, not to exceed six percent of the total historical cost 
  2.2   of the project; and 
  2.3      (2) interest expense on debt related to financing or 
  2.4   refinancing costs, including costs related to points, loan 
  2.5   origination fees, financing charges, legal fees, and title 
  2.6   searches; and issuance costs including bond discounts, bond 
  2.7   counsel, underwriter's counsel, corporate counsel, printing, and 
  2.8   financial forecasts.  Allowable debt related to items in this 
  2.9   clause shall not exceed seven percent of the total historical 
  2.10  cost of the project.  To the extent these costs are financed, 
  2.11  the straight-line amortization of the costs in this clause is 
  2.12  not an allowable cost; and 
  2.13     (3) interest on debt incurred for the establishment of a 
  2.14  debt reserve fund, net of the interest earned on the debt 
  2.15  reserve fund. 
  2.16     (c) Debt incurred for costs under paragraph (b) is not 
  2.17  subject to Minnesota Rules, part 9549.0060, subpart 5, item A, 
  2.18  subitem (5) or (6). 
  2.19     (d) The incremental increase in a nursing facility's rental 
  2.20  rate, determined under Minnesota Rules, parts 9549.0010 to 
  2.21  9549.0080, and this section, resulting from the acquisition of 
  2.22  allowable capital assets, and allowable debt and interest 
  2.23  expense under this subdivision shall be added to its 
  2.24  property-related payment rate and shall be effective on the 
  2.25  first day of the month following the month in which the 
  2.26  moratorium project was completed. 
  2.27     (e) Notwithstanding subdivision 3f, paragraph (a), for rate 
  2.28  periods beginning on October 1, 1992, and for rate years 
  2.29  beginning after June 30, 1993, the replacement-costs-new per bed 
  2.30  limit to be used in Minnesota Rules, part 9549.0060, subpart 4, 
  2.31  item B, for a nursing facility that has completed a renovation, 
  2.32  replacement, or upgrading project that has been approved under 
  2.33  the moratorium exception process in section 144A.073, or that 
  2.34  has completed an addition to or replacement of buildings, 
  2.35  attached fixtures, or land improvements for which the total 
  2.36  historical cost exceeds the lesser of $150,000 or ten percent of 
  3.1   the most recent appraised value, must be $47,500 per licensed 
  3.2   bed in multiple-bed rooms and $71,250 per licensed bed in a 
  3.3   single-bed room.  These amounts must be adjusted annually as 
  3.4   specified in subdivision 3f, paragraph (a), beginning January 1, 
  3.5   1993. 
  3.6      (f) A nursing facility that completes a project identified 
  3.7   in this subdivision and, as of April 17, 1992, has not been 
  3.8   mailed a rate notice with a special appraisal for a completed 
  3.9   project, or completes a project after April 17, 1992, but before 
  3.10  September 1, 1992, may elect either to request a special 
  3.11  reappraisal with the corresponding adjustment to the 
  3.12  property-related payment rate under the laws in effect on June 
  3.13  30, 1992, or to submit their capital asset and debt information 
  3.14  after that date and obtain the property-related payment rate 
  3.15  adjustment under this section, but not both. 
  3.16     (g) For purposes of this paragraph, a total replacement 
  3.17  means the complete replacement of the nursing facility's 
  3.18  physical plant through the construction of a new physical plant 
  3.19  or, the transfer of the nursing facility's license from one 
  3.20  physical plant location to another, or a new building addition 
  3.21  to relocate beds from three- and four-bed wards.  For total 
  3.22  replacement projects completed on or after July 1, 1992, the 
  3.23  commissioner shall compute the incremental change in the nursing 
  3.24  facility's rental per diem, for rate years beginning on or after 
  3.25  July 1, 1995, by replacing its appraised value, including the 
  3.26  historical capital asset costs, and the capital debt and 
  3.27  interest costs with the new nursing facility's allowable capital 
  3.28  asset costs and the related allowable capital debt and interest 
  3.29  costs.  If the new nursing facility has decreased its licensed 
  3.30  capacity, the aggregate investment per bed limit in subdivision 
  3.31  3a, paragraph (d), shall apply.  If the new nursing facility has 
  3.32  retained a portion of the original physical plant for nursing 
  3.33  facility usage, then a portion of the appraised value prior to 
  3.34  the replacement must be retained and included in the calculation 
  3.35  of the incremental change in the nursing facility's rental per 
  3.36  diem.  For purposes of this part, the original nursing facility 
  4.1   means the nursing facility prior to the total replacement 
  4.2   project.  The portion of the appraised value to be retained 
  4.3   shall be calculated according to clauses (1) to (3): 
  4.4      (1) The numerator of the allocation ratio shall be the 
  4.5   square footage of the area in the original physical plant which 
  4.6   is being retained for nursing facility usage. 
  4.7      (2) The denominator of the allocation ratio shall be the 
  4.8   total square footage of the original nursing facility physical 
  4.9   plant. 
  4.10     (3) Each component of the nursing facility's allowable 
  4.11  appraised value prior to the total replacement project shall be 
  4.12  multiplied by the allocation ratio developed by dividing clause 
  4.13  (1) by clause (2). 
  4.14     In the case of either type of total replacement as 
  4.15  authorized under section 144A.071 or 144A.073, the provisions of 
  4.16  this subdivision shall also apply.  For purposes of the 
  4.17  moratorium exception authorized under section 144A.071, 
  4.18  subdivision 4a, paragraph (s), if the total replacement involves 
  4.19  the renovation and use of an existing health care facility 
  4.20  physical plant, the new allowable capital asset costs and 
  4.21  related debt and interest costs shall include first the 
  4.22  allowable capital asset costs and related debt and interest 
  4.23  costs of the renovation, to which shall be added the allowable 
  4.24  capital asset costs of the existing physical plant prior to the 
  4.25  renovation, and if reported by the facility, the related 
  4.26  allowable capital debt and interest costs. 
  4.27     (h) Notwithstanding Minnesota Rules, part 9549.0060, 
  4.28  subpart 11, item C, subitem (2), for a total replacement, as 
  4.29  defined in paragraph (g), authorized under section 144A.071 or 
  4.30  144A.073 after July 1, 1999, the replacement-costs-new per bed 
  4.31  limit shall be $74,280 per licensed bed in multiple-bed rooms, 
  4.32  $92,850 per licensed bed in semiprivate rooms with a fixed 
  4.33  partition separating the resident beds, and $111,420 per 
  4.34  licensed bed in single rooms.  Minnesota Rules, part 9549.0060, 
  4.35  subpart 11, item C, subitem (2), does not apply.  These amounts 
  4.36  must be adjusted annually as specified in subdivision 3f, 
  5.1   paragraph (a), beginning January 1, 2000.  
  5.2      (i) For a total replacement, as defined in paragraph (g), 
  5.3   authorized under section 144A.073 for a 96-bed nursing home in 
  5.4   Carlton county, the replacement-costs-new per bed limit shall be 
  5.5   $74,280 per licensed bed in multiple-bed rooms, $92,850 per 
  5.6   licensed bed in semiprivate rooms with a fixed partition 
  5.7   separating the resident's beds, and $111,420 per licensed bed in 
  5.8   a single room.  Minnesota Rules, part 9549.0060, subpart 11, 
  5.9   item C, subitem (2), does not apply.  The resulting maximum 
  5.10  allowable replacement-costs-new multiplied by 1.25 shall 
  5.11  constitute the project's dollar threshold for purposes of 
  5.12  application of the limit set forth in section 144A.071, 
  5.13  subdivision 2.  The commissioner of health may waive the 
  5.14  requirements of section 144A.073, subdivision 3b, paragraph (b), 
  5.15  clause (2), on the condition that the other requirements of that 
  5.16  paragraph are met. 
  5.17     (j) For a total replacement, as defined in paragraph (g), 
  5.18  authorized under section 144A.073 involving a new building 
  5.19  addition that relocates beds from three-bed wards for an 80-bed 
  5.20  nursing home in Redwood county, the replacement-costs-new per 
  5.21  bed limit shall be $74,280 per licensed bed for multiple-bed 
  5.22  rooms; $92,850 per licensed bed for semiprivate rooms with a 
  5.23  fixed partition separating the beds; and $111,420 per licensed 
  5.24  bed for single rooms.  These amounts shall be adjusted annually, 
  5.25  beginning January 1, 2001.  Minnesota Rules, part 9549.0060, 
  5.26  subpart 11, item C, subitem (2), does not apply.  The resulting 
  5.27  maximum allowable replacement-costs-new multiplied by 1.25 shall 
  5.28  constitute the project's dollar threshold for purposes of 
  5.29  application of the limit set forth in section 144A.071, 
  5.30  subdivision 2.  The commissioner of health may waive the 
  5.31  requirements of section 144A.073, subdivision 3b, paragraph (b), 
  5.32  clause (2), on the condition that the other requirements of that 
  5.33  paragraph are met. 
  5.34     Sec. 2.  [APPROPRIATION.] 
  5.35     $....... is appropriated from the general fund to the 
  5.36  commissioner of human services to provide funding for section 1.