1.1 	A bill for an act
1.2 	relating to health; imposing a cigarette cost
1.3 	mitigation fee; repealing the health care provider
1.4 	tax; amending Minnesota Statutes 2004, sections
1.5 	13.4963, subdivision 2; 62J.041, subdivision 1;
1.6 	62Q.095, subdivision 6; 214.16, subdivisions 2, 3;
1.7 	270B.14, subdivision 1; 325D.32, subdivision 9;
1.8 	proposing coding for new law in Minnesota Statutes,
1.9 	chapter 62J; repealing Minnesota Statutes 2004,
1.10 	sections 13.4967, subdivision 3; 295.50; 295.51;
1.11 	295.52; 295.53; 295.54; 295.55; 295.56; 295.57;
1.12 	295.58; 295.581; 295.582; 295.59.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 13.4963,
1.15 	subdivision 2, is amended to read:
1.16 		Subd. 2.Generally.  Classification and disclosure of tax
1.17 	data created, collected, or maintained by the Department of
1.18 	Revenue under chapter 115B, 289A (except for taxes imposed under
1.19 	sections 298.01, 298.015, and 298.24), 290, 290A, 291, 295,
1.20 	297A, or 297H, or any similar Indian tribal tax administered by
1.21 	the commissioner according to a tax agreement between the state
1.22 	and an Indian tribal government are governed by chapter 270B.
1.23 	
EFFECTIVE DATE. This section is effective January 1, 2006.

1.24 	Sec. 2. Minnesota Statutes 2004, section 62J.041,
1.25 	subdivision 1, is amended to read:
1.26 		Subdivision 1.Definitions.  (a) For purposes of this
1.27 	section, the following definitions apply.
1.28 	(b) "Health plan company" has the definition provided in
1.29 	section 62Q.01.
2.1 	(c) "Total expenditures" means incurred claims or
2.2 	expenditures on health care services, administrative expenses,
2.3 	charitable contributions, and all other payments made by health
2.4 	plan companies out of premium revenues.
2.5 	(d) "Net expenditures" means total expenditures minus
2.6 	exempted taxes and assessments and payments or allocations made
2.7 	to establish or maintain reserves.
2.8 	(e) "Exempted taxes and assessments" means direct payments
2.9 	for taxes to government agencies, contributions to the Minnesota
2.10 	Comprehensive Health Association, the medical assistance
2.11 	provider's surcharge under section 256.9657, the MinnesotaCare
2.12 	provider tax under Minnesota Statutes 2004,section 295.52,
2.13 	assessments by the Health Coverage Reinsurance Association,
2.14 	assessments by the Minnesota Life and Health Insurance Guaranty
2.15 	Association, assessments by the Minnesota Risk Adjustment
2.16 	Association, and any new assessments imposed by federal or state
2.17 	law.
2.18 	(f) "Consumer cost-sharing or subscriber liability" means
2.19 	enrollee coinsurance, co-payment, deductible payments, and
2.20 	amounts in excess of benefit plan maximums.
2.21 	
EFFECTIVE DATE. This section is effective January 1, 2006.

2.22 	Sec. 3. [62J.27] CIGARETTE COST MITIGATION FEE.
2.23 		Subdivision 1.Imposition of fee. A cigarette cost
2.24 	mitigation fee is imposed on and collected from cigarette
2.25 	distributors to recover for the state health costs related to or
2.26 	caused by smoking and to reduce smoking, particularly by youths.
2.27 		Subd. 2.Definitions. The definitions under section
2.28 	297F.01 apply to this section.
2.29 		Subd. 3.Computation of fee. (a) The legislature shall
2.30 	biennially set the amount of the fee by law based on an estimate
2.31 	of the health costs to the state of cigarette smoking.  The fee
2.32 	for fiscal year 2006 and for each succeeding fiscal year is
2.33 	$....... until modified by law.
2.34 	(b) For each fiscal year, the commissioner shall determine
2.35 	each cigarette distributor's fee and notify the distributor by
2.36 	the first day of May preceding the beginning of the fiscal
3.1 	year.  A distributor's fee is determined by multiplying the
3.2 	total fee under paragraph (a) by a fraction, the numerator of
3.3 	which is the number of tax stamps purchased by the distributor
3.4 	under chapter 297F in the calendar year ending during the
3.5 	previous fiscal year and the denominator of which is the total
3.6 	number of tax stamps purchased under chapter 297F in that period
3.7 	by all distributors.
3.8 		Subd. 4.Successors in interest; new entrants. (a) A
3.9 	"distributor" includes any individual or entity that is the
3.10 	successor in interest to a distributor, including any entity
3.11 	that has substantially acquired the business assets of a
3.12 	distributor.  The successor in interest is liable for the fee
3.13 	under this section.  The commissioner shall calculate and impose
3.14 	the fee on a successor in interest on a basis that includes the
3.15 	purchases of tax stamps by its predecessor, as well as any
3.16 	purchases made by the successor entity or person itself, during
3.17 	the relevant period.
3.18 	(b) If a distributor did not purchase tax stamps for at
3.19 	least 500,000 cigarettes in each month of the calendar year
3.20 	ending during the previous fiscal year, the fee under this
3.21 	section must be applied at the rate under subdivision 6 for the
3.22 	fiscal year.  The commissioner shall notify the distributor that
3.23 	its fee will be calculated and imposed under this paragraph by
3.24 	the first day of May preceding the fiscal year and the
3.25 	distributor shall pay the fee with each of its monthly tax
3.26 	returns filed under section 297F.09 for the fiscal year.
3.27 		Subd. 5.Payment. A distributor must pay the fee in
3.28 	equal monthly installments in the same time and manner as
3.29 	provided for payment of tax under chapter 297F.  The
3.30 	commissioner shall bill distributors for the fee.  This may be
3.31 	done at the time the commissioner notifies the distributor of
3.32 	its annual liability for the fee or at another time or in a
3.33 	manner the commissioner determines to be adequate and
3.34 	appropriate.
3.35 		Subd. 6.Fee on use of unstamped cigarettes. (a) The
3.36 	commissioner shall estimate the average rate of the fee under
4.1 	this section on a per cigarette basis for each fiscal year to
4.2 	which the fee applies.  The commissioner shall publish this rate
4.3 	in the State Register by June 15 preceding the beginning of the
4.4 	fiscal year.
4.5 	(b) Any person, other than a distributor, that purchases or
4.6 	possesses cigarettes that have not been stamped or taxed under
4.7 	chapter 297F is liable for the fee under this section on the
4.8 	possession or use of those cigarettes at the rate published in
4.9 	the State Register for the fiscal year.
4.10 		Subd. 7.Administration. The audit, assessment,
4.11 	interest, appeal, refund, and collection provisions applicable
4.12 	to the taxes imposed under chapter 297F apply to the fee imposed
4.13 	under this section.
4.14 		Subd. 8.License revocation. (a) The commissioner may
4.15 	revoke or suspend the license of a distributor for failure to
4.16 	pay the fee or otherwise comply with the requirements under this
4.17 	section.  The provisions and procedures under section 297F.04
4.18 	apply to a suspension or revocation under this subdivision.
4.19 	(b) The commissioner may revoke a retailer's sales or use
4.20 	tax permit under section 297F.185 if:
4.21 	(1) the retailer, directly or indirectly, purchases for
4.22 	resale 20,000 cigarettes or more from a distributor that has not
4.23 	paid the fee under this section; and 
4.24 	(2) the commissioner has notified the person that the
4.25 	distributor has not paid the fee before the purchase was made or
4.26 	the commissioner has posted notice that the distributor is in
4.27 	violation of the fee law on the department's Web site at least
4.28 	15 days before the sale was made.
4.29 		Subd. 9.Deposit of revenues. The commissioner shall
4.30 	deposit the revenues from the fee under this section in the
4.31 	health care access fund.
4.32 		Subd. 10.Exemption; administrative procedure act. The
4.33 	commissioner's calculations of the fee amounts under this
4.34 	section are not subject to the provisions of the Administrative
4.35 	Procedure Act, chapter 14.
4.36 	
EFFECTIVE DATE. This section is effective July 1, 2005.
5.1 	The fee for fiscal year 2006 applies at five-sixths the amount
5.2 	under section 62J.27, subdivision 3, and payments are due in ten
5.3 	equal monthly installments beginning in September 2005.  The
5.4 	commissioner of revenue shall notify distributors of their
5.5 	liability for the fee and monthly payment schedule by no later
5.6 	than August 15, 2005.

5.7 	Sec. 4. Minnesota Statutes 2004, section 62Q.095,
5.8 	subdivision 6, is amended to read:
5.9 		Subd. 6.Exemption.  A health plan company, to the extent
5.10 	that it operates as a staff model health plan company as defined
5.11 	in section 295.50, subdivision 12b,by employing allied
5.12 	independent health care providers to deliver health care
5.13 	services to enrollees, is exempt from this section. For
5.14 	purposes of this section, "staff model health plan company"
5.15 	means a health plan company as defined in section 62Q.01,
5.16 	subdivision 4, that employs one or more types of health care
5.17 	provider to deliver health care services to the health plan
5.18 	company's enrollees.
5.19 	
EFFECTIVE DATE. This section is effective January 1, 2006.

5.20 	Sec. 5. Minnesota Statutes 2004, section 214.16,
5.21 	subdivision 2, is amended to read:
5.22 		Subd. 2.Board cooperation required.  The board shall
5.23 	assist the commissioner of health in data collection activities
5.24 	required under Laws 1992, chapter 549, article 7, and shall
5.25 	assist the commissioner of revenue in activities related to
5.26 	collection of the health care provider tax required under Laws
5.27 	1992, chapter 549, article 9.  Upon the request of the
5.28 	commissioner or the commissioner of revenue, the board shall
5.29 	make available names and addresses of current licensees and
5.30 	provide other information or assistance as needed.
5.31 	
EFFECTIVE DATE. This section is effective January 1, 2006.

5.32 	Sec. 6. Minnesota Statutes 2004, section 214.16,
5.33 	subdivision 3, is amended to read:
5.34 		Subd. 3.Grounds for disciplinary action.  The board
5.35 	shall take disciplinary action, which may include license
5.36 	revocation, against a regulated person for:
6.1 	(1) intentional failure to provide the commissioner of
6.2 	health with the data required under chapter 62J; and 
6.3 	(2) intentional failure to provide the commissioner of
6.4 	revenue with data on gross revenue and other information
6.5 	required for the commissioner to implement sections 295.50 to
6.6 	295.58;
6.7 	(3) intentional failure to pay the health care provider tax
6.8 	required under section 295.52; and 
6.9 	(4) entering into a contract or arrangement that is
6.10 	prohibited under sections 62J.70 to 62J.73.
6.11 	
EFFECTIVE DATE. This section is effective January 1, 2006.

6.12 	Sec. 7. Minnesota Statutes 2004, section 270B.14,
6.13 	subdivision 1, is amended to read:
6.14 		Subdivision 1.Disclosure to commissioner of human
6.15 	services.  (a) On the request of the commissioner of human
6.16 	services, the commissioner shall disclose return information
6.17 	regarding taxes imposed by chapter 290, and claims for refunds
6.18 	under chapter 290A, to the extent provided in paragraph (b) and
6.19 	for the purposes set forth in paragraph (c).
6.20 	(b) Data that may be disclosed are limited to data relating
6.21 	to the identity, whereabouts, employment, income, and property
6.22 	of a person owing or alleged to be owing an obligation of child
6.23 	support.
6.24 	(c) The commissioner of human services may request data
6.25 	only for the purposes of carrying out the child support
6.26 	enforcement program and to assist in the location of parents who
6.27 	have, or appear to have, deserted their children.  Data received
6.28 	may be used only as set forth in section 256.978.
6.29 	(d) The commissioner shall provide the records and
6.30 	information necessary to administer the supplemental housing
6.31 	allowance to the commissioner of human services.
6.32 	(e) At the request of the commissioner of human services,
6.33 	the commissioner of revenue shall electronically match the
6.34 	Social Security numbers and names of participants in the
6.35 	telephone assistance plan operated under sections 237.69 to
6.36 	237.711, with those of property tax refund filers, and determine
7.1 	whether each participant's household income is within the
7.2 	eligibility standards for the telephone assistance plan.
7.3 	(f) The commissioner may provide records and information
7.4 	collected under Minnesota Statutes 2004,sections 295.50 to
7.5 	295.59,to the commissioner of human services for purposes of
7.6 	the Medicaid Voluntary Contribution and Provider-Specific Tax
7.7 	Amendments of 1991, Public Law 102-234.  Upon the written
7.8 	agreement by the United States Department of Health and Human
7.9 	Services to maintain the confidentiality of the data, the
7.10 	commissioner may provide records and information collected under
7.11 	sections 295.50 to 295.59 to the Centers for Medicare and
7.12 	Medicaid Services section of the United States Department of
7.13 	Health and Human Services for purposes of meeting federal
7.14 	reporting requirements.
7.15 	(g) The commissioner may provide records and information to
7.16 	the commissioner of human services as necessary to administer
7.17 	the early refund of refundable tax credits.
7.18 	(h) The commissioner may disclose information to the
7.19 	commissioner of human services necessary to verify income for
7.20 	eligibility and premium payment under the MinnesotaCare program,
7.21 	under section 256L.05, subdivision 2.
7.22 	(i) The commissioner may disclose information to the
7.23 	commissioner of human services necessary to verify whether
7.24 	applicants or recipients for the Minnesota family investment
7.25 	program, general assistance, food support, and Minnesota
7.26 	supplemental aid program have claimed refundable tax credits
7.27 	under chapter 290 and the property tax refund under chapter
7.28 	290A, and the amounts of the credits.
7.29 	
EFFECTIVE DATE. This section is effective January 1, 2006.

7.30 	Sec. 8. Minnesota Statutes 2004, section 325D.32,
7.31 	subdivision 9, is amended to read:
7.32 		Subd. 9.Basic cost of cigarettes.  "Basic cost of
7.33 	cigarettes" means the gross invoice cost of cigarettes to the
7.34 	wholesaler or retailer plus (1) the full face value of any
7.35 	stamps which may be required by any cigarette tax act of this
7.36 	state, unless included by the manufacturer in the list price and
8.1 	(2) the greater of the amount of the published fee under section
8.2 	62J.27, subdivision 6, or the actual per cigarette fee paid by
8.3 	the wholesaler for the fiscal year.
8.4 	
EFFECTIVE DATE. This section is effective September 1,
8.5 	2005.

8.6 	Sec. 9. REPEALER.
 8.7 	Minnesota Statutes 2004, sections 13.4967, subdivision 3;
8.8 	295.50; 295.51; 295.52; 295.53; 295.54; 295.55; 295.56; 295.57;
8.9 	295.58; 295.581; 295.582; and 295.59, are repealed.

8.10 	EFFECTIVE DATE. This section is effective for gross
8.11 	revenues received after December 31, 2005.