1.1                          A bill for an act 
  1.2             relating to human services; providing an exception to 
  1.3             the nursing home construction moratorium; modifying 
  1.4             special provisions for moratorium exceptions; amending 
  1.5             Minnesota Statutes 2002, sections 144A.071, by adding 
  1.6             a subdivision; 256B.431, subdivision 17. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 144A.071, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 4c.  [EXCEPTIONS FOR REPLACEMENT BEDS AFTER JUNE 30, 
  1.11  2003.] (a) The commissioner of health, in coordination with the 
  1.12  commissioner of human services, may approve the renovation, 
  1.13  replacement, upgrading, or relocation of a nursing home or 
  1.14  boarding care home, under the following conditions:  to license 
  1.15  and certify an 80-bed city-owned facility in Nicollet county to 
  1.16  be constructed on the site of a new city-owned hospital to 
  1.17  replace an existing 85-bed facility attached to a hospital that 
  1.18  is also being replaced.  The threshold allowed for this project 
  1.19  under section 144A.073 shall be the maximum amount available to 
  1.20  pay the additional medical assistance costs of the new facility. 
  1.21     (b) Projects approved under this subdivision shall be 
  1.22  treated in a manner equivalent to projects approved under 
  1.23  subdivision 4a. 
  1.24     (c) Of the amount appropriated in Laws 2001, First Special 
  1.25  Session chapter 9, article 17, section 2, subdivision 9, 
  1.26  paragraph (g), for nursing home moratorium exceptions under 
  2.1   section 144A.073, the $94,562 allocated for a project in 
  2.2   Nicollet county shall not cancel but shall be available to the 
  2.3   commissioner of human services until expended for the additional 
  2.4   medical assistance costs authorized in this section. 
  2.5      Sec. 2.  Minnesota Statutes 2002, section 256B.431, 
  2.6   subdivision 17, is amended to read: 
  2.7      Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
  2.8   (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
  2.9   for rate periods beginning on October 1, 1992, and for rate 
  2.10  years beginning after June 30, 1993, a nursing facility that (1) 
  2.11  has completed a construction project approved under section 
  2.12  144A.071, subdivision 4a, clause (m); (2) has completed a 
  2.13  construction project approved under section 144A.071, 
  2.14  subdivision 4a, and effective after June 30, 1995; (3) has 
  2.15  completed a construction project approved under section 
  2.16  144A.071, subdivision 4c; or (3) (4) has completed a renovation, 
  2.17  replacement, or upgrading project approved under the moratorium 
  2.18  exception process in section 144A.073 shall be reimbursed for 
  2.19  costs directly identified to that project as provided in 
  2.20  subdivision 16 and this subdivision subdivisions 17 to 17f. 
  2.21     (b) Subd. 17a.  [ALLOWABLE INTEREST EXPENSE.] (a) 
  2.22  Notwithstanding Minnesota Rules, part 9549.0060, subparts 5, 
  2.23  item A, subitems (1) and (3), and 7, item D, allowable interest 
  2.24  expense on debt shall include: 
  2.25     (1) interest expense on debt related to the cost of 
  2.26  purchasing or replacing depreciable equipment, excluding 
  2.27  vehicles, not to exceed six percent of the total historical cost 
  2.28  of the project; and 
  2.29     (2) interest expense on debt related to financing or 
  2.30  refinancing costs, including costs related to points, loan 
  2.31  origination fees, financing charges, legal fees, and title 
  2.32  searches; and issuance costs including bond discounts, bond 
  2.33  counsel, underwriter's counsel, corporate counsel, printing, and 
  2.34  financial forecasts.  Allowable debt related to items in this 
  2.35  clause shall not exceed seven percent of the total historical 
  2.36  cost of the project.  To the extent these costs are financed, 
  3.1   the straight-line amortization of the costs in this clause is 
  3.2   not an allowable cost; and 
  3.3      (3) interest on debt incurred for the establishment of a 
  3.4   debt reserve fund, net of the interest earned on the debt 
  3.5   reserve fund. 
  3.6      (c) (b) Debt incurred for costs under paragraph (b) (a) is 
  3.7   not subject to Minnesota Rules, part 9549.0060, subpart 5, item 
  3.8   A, subitem (5) or (6). 
  3.9      (d) Subd. 17b.  [PROPERTY-RELATED PAYMENT RATE.] The 
  3.10  incremental increase in a nursing facility's rental rate, 
  3.11  determined under Minnesota Rules, parts 9549.0010 to 9549.0080, 
  3.12  and this section, resulting from the acquisition of allowable 
  3.13  capital assets, and allowable debt and interest expense under 
  3.14  this subdivision shall be added to its property-related payment 
  3.15  rate and shall be effective on the first day of the month 
  3.16  following the month in which the moratorium project was 
  3.17  completed. 
  3.18     (e) Subd. 17c.  [REPLACEMENT-COSTS-NEW PER BED LIMIT.] 
  3.19  Notwithstanding subdivision 3f, paragraph (a), for rate periods 
  3.20  beginning on October 1, 1992, and for rate years beginning after 
  3.21  June 30, 1993, the replacement-costs-new per bed limit to be 
  3.22  used in Minnesota Rules, part 9549.0060, subpart 4, item B, for 
  3.23  a nursing facility that has completed a renovation, replacement, 
  3.24  or upgrading project that has been approved under the moratorium 
  3.25  exception process in section 144A.073, or that has completed an 
  3.26  addition to or replacement of buildings, attached fixtures, or 
  3.27  land improvements for which the total historical cost exceeds 
  3.28  the lesser of $150,000 or ten percent of the most recent 
  3.29  appraised value, must be $47,500 per licensed bed in 
  3.30  multiple-bed rooms and $71,250 per licensed bed in a single-bed 
  3.31  room.  These amounts must be adjusted annually as specified in 
  3.32  subdivision 3f, paragraph (a), beginning January 1, 1993. 
  3.33     (f) Subd. 17d.  [DETERMINATION OF RENTAL PER DIEM FOR TOTAL 
  3.34  REPLACEMENT PROJECTS.] (a) For purposes of this paragraph 
  3.35  subdivision, a total replacement means the complete replacement 
  3.36  of the nursing facility's physical plant through the 
  4.1   construction of a new physical plant, the transfer of the 
  4.2   nursing facility's license from one physical plant location to 
  4.3   another, or a new building addition to relocate beds from three- 
  4.4   and four-bed wards.  For total replacement projects completed on 
  4.5   or after July 1, 1992, the commissioner shall compute the 
  4.6   incremental change in the nursing facility's rental per diem, 
  4.7   for rate years beginning on or after July 1, 1995, by replacing 
  4.8   its appraised value, including the historical capital asset 
  4.9   costs, and the capital debt and interest costs with the new 
  4.10  nursing facility's allowable capital asset costs and the related 
  4.11  allowable capital debt and interest costs.  If the new nursing 
  4.12  facility has decreased its licensed capacity, the aggregate 
  4.13  investment per bed limit in subdivision 3a, paragraph (c), shall 
  4.14  apply.  
  4.15     (b) If the new nursing facility has retained a portion of 
  4.16  the original physical plant for nursing facility usage, then a 
  4.17  portion of the appraised value prior to the replacement must be 
  4.18  retained and included in the calculation of the incremental 
  4.19  change in the nursing facility's rental per diem.  For purposes 
  4.20  of this part subdivision, the original nursing facility means 
  4.21  the nursing facility prior to the total replacement project.  
  4.22  The portion of the appraised value to be retained shall be 
  4.23  calculated according to clauses (1) to (3): 
  4.24     (1) The numerator of the allocation ratio shall be the 
  4.25  square footage of the area in the original physical plant which 
  4.26  is being retained for nursing facility usage. 
  4.27     (2) The denominator of the allocation ratio shall be the 
  4.28  total square footage of the original nursing facility physical 
  4.29  plant. 
  4.30     (3) Each component of the nursing facility's allowable 
  4.31  appraised value prior to the total replacement project shall be 
  4.32  multiplied by the allocation ratio developed by dividing clause 
  4.33  (1) by clause (2). 
  4.34     (c) In the case of either type of total replacement as 
  4.35  authorized under section 144A.071 or 144A.073, the provisions of 
  4.36  this subdivision subdivisions 17 to 17f shall also apply.  
  5.1      (d) For purposes of the moratorium exception authorized 
  5.2   under section 144A.071, subdivision 4a, paragraph (s), if the 
  5.3   total replacement involves the renovation and use of an existing 
  5.4   health care facility physical plant, the new allowable capital 
  5.5   asset costs and related debt and interest costs shall include 
  5.6   first the allowable capital asset costs and related debt and 
  5.7   interest costs of the renovation, to which shall be added the 
  5.8   allowable capital asset costs of the existing physical plant 
  5.9   prior to the renovation, and if reported by the facility, the 
  5.10  related allowable capital debt and interest costs. 
  5.11     (g) Subd. 17e.  [REPLACEMENT-COSTS-NEW PER BED LIMIT 
  5.12  EFFECTIVE JULY 1, 2001.] Notwithstanding Minnesota Rules, part 
  5.13  9549.0060, subpart 11, item C, subitem (2), for a total 
  5.14  replacement, as defined in paragraph (f), authorized under 
  5.15  section 144A.071 or 144A.073 after July 1, 1999, or any building 
  5.16  project that is a relocation, renovation, upgrading, or 
  5.17  conversion completed on or after July 1, 2001, the 
  5.18  replacement-costs-new per bed limit shall be $74,280 per 
  5.19  licensed bed in multiple-bed rooms, $92,850 per licensed bed in 
  5.20  semiprivate rooms with a fixed partition separating the resident 
  5.21  beds, and $111,420 per licensed bed in single rooms.  Minnesota 
  5.22  Rules, part 9549.0060, subpart 11, item C, subitem (2), does not 
  5.23  apply.  These amounts must be adjusted annually as specified in 
  5.24  subdivision 3f, paragraph (a), beginning January 1, 2000.  
  5.25     (h) Subd. 17f.  [PROVISIONS FOR SPECIFIC FACILITIES.] (a) 
  5.26  For a total replacement, as defined in paragraph (f) subdivision 
  5.27  17d, authorized under section 144A.073 for a 96-bed nursing home 
  5.28  in Carlton county, the replacement-costs-new per bed limit shall 
  5.29  be $74,280 per licensed bed in multiple-bed rooms, $92,850 per 
  5.30  licensed bed in semiprivate rooms with a fixed partition 
  5.31  separating the resident's beds, and $111,420 per licensed bed in 
  5.32  a single room.  Minnesota Rules, part 9549.0060, subpart 11, 
  5.33  item C, subitem (2), does not apply.  The resulting maximum 
  5.34  allowable replacement-costs-new multiplied by 1.25 shall 
  5.35  constitute the project's dollar threshold for purposes of 
  5.36  application of the limit set forth in section 144A.071, 
  6.1   subdivision 2.  The commissioner of health may waive the 
  6.2   requirements of section 144A.073, subdivision 3b, paragraph (b), 
  6.3   clause (2), on the condition that the other requirements of that 
  6.4   paragraph are met. 
  6.5      (i) (b) For a renovation authorized under section 144A.073 
  6.6   for a 65-bed nursing home in St. Louis county, the incremental 
  6.7   increase in rental rate for purposes of paragraph 
  6.8   (d) subdivision 17b shall be $8.16, and the total replacement 
  6.9   cost, allowable appraised value, allowable debt, and allowable 
  6.10  interest shall be increased according to the incremental 
  6.11  increase. 
  6.12     (j) (c) For a total replacement, as defined in paragraph 
  6.13  (f) subdivision 17d, authorized under section 144A.073 involving 
  6.14  a new building addition that relocates beds from three-bed wards 
  6.15  for an 80-bed nursing home in Redwood county, the 
  6.16  replacement-costs-new per bed limit shall be $74,280 per 
  6.17  licensed bed for multiple-bed rooms; $92,850 per licensed bed 
  6.18  for semiprivate rooms with a fixed partition separating the 
  6.19  beds; and $111,420 per licensed bed for single rooms.  These 
  6.20  amounts shall be adjusted annually, beginning January 1, 2001.  
  6.21  Minnesota Rules, part 9549.0060, subpart 11, item C, subitem 
  6.22  (2), does not apply.  The resulting maximum allowable 
  6.23  replacement-costs-new multiplied by 1.25 shall constitute the 
  6.24  project's dollar threshold for purposes of application of the 
  6.25  limit set forth in section 144A.071, subdivision 2.  The 
  6.26  commissioner of health may waive the requirements of section 
  6.27  144A.073, subdivision 3b, paragraph (b), clause (2), on the 
  6.28  condition that the other requirements of that paragraph are met.