1.1 	A bill for an act
1.2 	relating to human services; allowing nursing facilities to receive reimbursement 
1.3 	for building projects related to sprinkler systems or compliance with Life Safety 
1.4 	Code Standards; amending Minnesota Statutes 2005 Supplement, section 
1.5 	256B.434, subdivision 4.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2005 Supplement, section 256B.434, subdivision 4, 
1.8 	is amended to read:
1.9 		Subd. 4.Alternate rates for nursing facilities. (a) For nursing facilities which 
1.10 	have their payment rates determined under this section rather than section 256B.431, the 
1.11 	commissioner shall establish a rate under this subdivision. The nursing facility must enter 
1.12 	into a written contract with the commissioner.
1.13 	(b) A nursing facility's case mix payment rate for the first rate year of a facility's 
1.14 	contract under this section is the payment rate the facility would have received under 
1.15 	section 256B.431.
1.16 	(c) A nursing facility's case mix payment rates for the second and subsequent years 
1.17 	of a facility's contract under this section are the previous rate year's contract payment 
1.18 	rates plus an inflation adjustment and, for facilities reimbursed under this section or 
1.19 	section 256B.431, an adjustment to include the cost of any increase in Health Department 
1.20 	licensing fees for the facility taking effect on or after July 1, 2001. The index for the 
1.21 	inflation adjustment must be based on the change in the Consumer Price Index-All Items 
1.22 	(United States City average) (CPI-U) forecasted by the commissioner of finance's national 
1.23 	economic consultant, as forecasted in the fourth quarter of the calendar year preceding 
1.24 	the rate year. The inflation adjustment must be based on the 12-month period from the 
1.25 	midpoint of the previous rate year to the midpoint of the rate year for which the rate is 
2.1 	being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1, 2001, 
2.2 	July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July 
2.3 	1, 2008, this paragraph shall apply only to the property-related payment rate, except 
2.4 	that adjustments to include the cost of any increase in Health Department licensing fees 
2.5 	taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to 
2.6 	the property payment rate under this section and section 256B.431 shall be effective on 
2.7 	October 1. In determining the amount of the property-related payment rate adjustment 
2.8 	under this paragraph, the commissioner shall determine the proportion of the facility's 
2.9 	rates that are property-related based on the facility's most recent cost report. Beginning 
2.10 	October 1, 2006, facilities reimbursed under this section shall be allowed to receive a 
2.11 	property rate adjustment for building projects under section 144A.071, subdivision 2.
2.12 	(d) Effective July 1, 2006, facilities reimbursed under this section shall be allowed 
2.13 	to receive a property rate adjustment for building projects under section 144A.071, 
2.14 	subdivision 2, and the threshold in section 256B.431, subdivision 16, does not apply if the 
2.15 	building project was completed on or after January 1, 2005, and:
2.16 	(1) was to install a partial or complete sprinkler system; or 
2.17 	(2) was necessary for the facility to comply with the 2000 edition of the Life Safety 
2.18 	Code Standards (NFPA 101) and other standards applicable by reference.