1.1 	A bill for an act
1.2 	relating to human services; making changes to continuing care provisions 
1.3 	and elderly and disabled services; expanding sick leave benefits;amending 
1.4 	Minnesota Statutes 2004, sections 144.0724, subdivisions 3, 4; 181.9413; 
1.5 	256B.434, by adding a subdivision; 256B.438, subdivision 4; Minnesota Statutes 
1.6 	2005 Supplement, sections 144A.071, subdivision 1a; 256B.434, subdivision 4.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 144.0724, subdivision 3, is amended to 
1.9 	read:
1.10 		Subd. 3.Resident reimbursement classifications. (a) Resident reimbursement 
1.11 	classifications shall be based on the minimum data set, version 2.0 assessment instrument, 
1.12 	or its successor version mandated by the Centers for Medicare and Medicaid Services 
1.13 	that nursing facilities are required to complete for all residents. The commissioner of 
1.14 	health shall establish resident classes according to the 34 group, resource utilization 
1.15 	groups, version III or RUG-III model. Resident classes must be established based on the 
1.16 	individual items on the minimum data set and must be completed according to the facility 
1.17 	manual for case mix classification issued by the Minnesota Department of Health. The 
1.18 	facility manual for case mix classification shall be drafted by the Minnesota Department 
1.19 	of Health and presented to the chairs of health and human services legislative committees 
1.20 	by December 31, 2001.
1.21 	(b) Each resident must be classified based on the information from the minimum 
1.22 	data set according to general domains in clauses (1) to (7):
1.23 	(1) extensive services where a resident requires intravenous feeding or medications, 
1.24 	suctioning, or tracheostomy care, or is on a ventilator or respirator;
1.25 	(2) rehabilitation where a resident requires physical, occupational, or speech therapy;
2.1 	(3) special care where a resident has cerebral palsy; quadriplegia; multiple sclerosis; 
2.2 	pressure ulcers; ulcers; fever with vomiting, weight loss, pneumonia, or dehydration; 
2.3 	surgical wounds with treatment; or tube feeding and aphasia; or is receiving radiation 
2.4 	therapy;
2.5 	(4) clinically complex status where a resident has tube feeding, burns, coma, 
2.6 	septicemia, pneumonia, internal bleeding, chemotherapy, dialysis, oxygen, transfusions, 
2.7 	foot infections or lesions with treatment, heiplegia/hemiparesis hemiplegia/hemiparesis, 
2.8 	physician visits or order changes, or diabetes with injections and order changes;
2.9 	(5) impaired cognition where a resident has poor cognitive performance;
2.10 	(6) behavior problems where a resident exhibits wandering or socially inappropriate 
2.11 	or disruptive behavior, has hallucinations or delusions, is physically or verbally abusive 
2.12 	toward others, or resists care, unless the resident's other condition would place the resident 
2.13 	in other categories; and
2.14 	(7) reduced physical functioning where a resident has no special clinical conditions.
2.15 	(c) The commissioner of health shall establish resident classification according to a 
2.16 	34 group model based on the information on the minimum data set and within the general 
2.17 	domains listed in paragraph (b), clauses (1) to (7). Detailed descriptions of each resource 
2.18 	utilization group shall be defined in the facility manual for case mix classification issued 
2.19 	by the Minnesota Department of Health. The 34 groups are described as follows:
2.20 	(1) SE3: requires four or five extensive services;
2.21 	(2) SE2: requires two or three extensive services;
2.22 	(3) SE1: requires one extensive service;
2.23 	(4) RAD: requires rehabilitation services and is dependent in activity of daily living 
2.24 	(ADL) at a count of 17 or 18;
2.25 	(5) RAC: requires rehabilitation services and ADL count is 14 to 16;
2.26 	(6) RAB: requires rehabilitation services and ADL count is ten to 13;
2.27 	(7) RAA: requires rehabilitation services and ADL count is four to nine;
2.28 	(8) SSC: requires special care and ADL count is 17 or 18;
2.29 	(9) SSB: requires special care and ADL count is 15 or 16;
2.30 	(10) SSA: requires special care and ADL count is seven to 14;
2.31 	(11) CC2: clinically complex with depression and ADL count is 17 or 18;
2.32 	(12) CC1: clinically complex with no depression and ADL count is 17 or 18;
2.33 	(13) CB2: clinically complex with depression and ADL count is 12 to 16;
2.34 	(14) CB1: clinically complex with no depression and ADL count is 12 to 16;
2.35 	(15) CA2: clinically complex with depression and ADL count is four to 11;
2.36 	(16) CA1: clinically complex with no depression and ADL count is four to 11;
3.1 	(17) IB2: impaired cognition with nursing rehabilitation and ADL count is six to ten;
3.2 	(18) IB1: impaired cognition with no nursing rehabilitation and ADL count is six 
3.3 	to ten;
3.4 	(19) IA2: impaired cognition with nursing rehabilitation and ADL count is four or 
3.5 	five;
3.6 	(20) IA1: impaired cognition with no nursing rehabilitation and ADL count is four 
3.7 	or five;
3.8 	(21) BB2: behavior problems with nursing rehabilitation and ADL count is six to ten;
3.9 	(22) BB1: behavior problems with no nursing rehabilitation and ADL count is 
3.10 	six to ten;
3.11 	(23) BA2: behavior problems with nursing rehabilitation and ADL count is four to 
3.12 	five;
3.13 	(24) BA1: behavior problems with no nursing rehabilitation and ADL count is 
3.14 	four to five;
3.15 	(25) PE2: reduced physical functioning with nursing rehabilitation and ADL count 
3.16 	is 16 to 18;
3.17 	(26) PE1: reduced physical functioning with no nursing rehabilitation and ADL 
3.18 	count is 16 to 18;
3.19 	(27) PD2: reduced physical functioning with nursing rehabilitation and ADL count 
3.20 	is 11 to 15;
3.21 	(28) PD1: reduced physical functioning with no nursing rehabilitation and ADL 
3.22 	count is 11 to 15;
3.23 	(29) PC2: reduced physical functioning with nursing rehabilitation and ADL count 
3.24 	is nine or ten;
3.25 	(30) PC1: reduced physical functioning with no nursing rehabilitation and ADL 
3.26 	count is nine or ten;
3.27 	(31) PB2: reduced physical functioning with nursing rehabilitation and ADL count 
3.28 	is six to eight;
3.29 	(32) PB1: reduced physical functioning with no nursing rehabilitation and ADL 
3.30 	count is six to eight;
3.31 	(33) PA2: reduced physical functioning with nursing rehabilitation and ADL count 
3.32 	is four or five; and
3.33 	(34) PA1: reduced physical functioning with no nursing rehabilitation and ADL 
3.34 	count is four or five.

3.35 	Sec. 2. Minnesota Statutes 2004, section 144.0724, subdivision 4, is amended to read:
4.1 		Subd. 4.Resident assessment schedule. (a) A facility must conduct and 
4.2 	electronically submit to the commissioner of health case mix assessments that conform 
4.3 	with the assessment schedule defined by Code of Federal Regulations, title 42, section  
4.4 	483.20, and published by the United States Department of Health and Human Services, 
4.5 	Centers for Medicare and Medicaid Services, in the Long Term Care Assessment 
4.6 	Instrument User's Manual, version 2.0, October 1995, and subsequent clarifications made 
4.7 	in the Long-Term Care Assessment Instrument Questions and Answers, version 2.0, 
4.8 	August 1996. The commissioner of health may substitute successor manuals or question 
4.9 	and answer documents published by the United States Department of Health and Human 
4.10 	Services, Centers for Medicare and Medicaid Services, to replace or supplement the 
4.11 	current version of the manual or document. 
4.12 	(b) The assessments used to determine a case mix classification for reimbursement 
4.13 	include the following:
4.14 	(1) a new admission assessment must be completed by day 14 following admission;
4.15 	(2) an annual assessment must be completed within 366 days of the last 
4.16 	comprehensive assessment;
4.17 	(3) a significant change assessment must be completed within 14 days of the 
4.18 	identification of a significant change; and
4.19 	(4) the second quarterly assessment following either a new admission assessment, 
4.20 	an annual assessment, or a significant change assessment, and all quarterly assessments 
4.21 	beginning October 1, 2006. Each quarterly assessment must be completed within 92 
4.22 	days of the previous assessment.

4.23 	Sec. 3. Minnesota Statutes 2005 Supplement, section 144A.071, subdivision 1a, 
4.24 	is amended to read:
4.25 		Subd. 1a.Definitions. For purposes of sections 144A.071 to 144A.073, the 
4.26 	following terms have the meanings given them:
4.27 	(a) "Attached fixtures" has the meaning given in Minnesota Rules, part 9549.0020, 
4.28 	subpart 6.
4.29 	(b) "Buildings" has the meaning given in Minnesota Rules, part 9549.0020, subpart 
4.30 	7.
4.31 	(c) "Capital assets" has the meaning given in section 256B.421, subdivision 16.
4.32 	(d) "Commenced construction" means that all of the following conditions were met: 
4.33 	the final working drawings and specifications were approved by the commissioner of 
4.34 	health; the construction contracts were let; a timely construction schedule was developed, 
5.1 	stipulating dates for beginning, achieving various stages, and completing construction; 
5.2 	and all zoning and building permits were applied for.
5.3 	(e) "Completion date" means the date on which a certificate of occupancy clearance 
5.4 	for the construction project is issued for a construction project, or if a certificate of 
5.5 	occupancy clearance for the construction project is not required, the date on which the 
5.6 	construction project is assets are available for facility use.
5.7 	(f) "Construction" means any erection, building, alteration, reconstruction, 
5.8 	modernization, or improvement necessary to comply with the nursing home licensure 
5.9 	rules.
5.10 	(g) "Construction project" means:
5.11 	(1) a capital asset addition to, or replacement of a nursing home or certified boarding 
5.12 	care home that results in new space or the remodeling of or renovations to existing 
5.13 	facility space; and
5.14 	(2) the remodeling or renovation of existing facility space the use of which is 
5.15 	modified as a result of the project described in clause (1). This existing space and the 
5.16 	project described in clause (1) must be used for the functions as designated on the 
5.17 	construction plans on completion of the project described in clause (1) for a period of 
5.18 	not less than 24 months.
5.19 	(h) "Depreciation guidelines" means the most recent publication of "The Estimated 
5.20 	Useful Lives of Depreciable Hospital Assets," issued by the American Hospital 
5.21 	Association, 840 North Lake Shore Drive, Chicago, Illinois, 60611.
5.22 	(i) "New licensed" or "new certified beds" means:
5.23 	(1) newly constructed beds in a facility or the construction of a new facility that 
5.24 	would increase the total number of licensed nursing home beds or certified boarding 
5.25 	care or nursing home beds in the state; or
5.26 	(2) newly licensed nursing home beds or newly certified boarding care or nursing 
5.27 	home beds that result from remodeling of the facility that involves relocation of beds but 
5.28 	does not result in an increase in the total number of beds, except when the project involves 
5.29 	the upgrade of boarding care beds to nursing home beds, as defined in section 144A.073, 
5.30 	subdivision 1. "Remodeling" includes any of the type of conversion, renovation, 
5.31 	replacement, or upgrading projects as defined in section 144A.073, subdivision 1.
5.32 	(j) "Project construction costs" means the cost of the following items that have 
5.33 	a completion date within 12 months before or after the completion date of the project 
5.34 	described in item (g), clause (1):
5.35 	(1) facility capital asset additions;
5.36 	(2) replacements;
6.1 	(3) renovations;
6.2 	(4) remodeling projects;
6.3 	(5) construction site preparation costs;
6.4 	(6) related soft costs; and
6.5 	(7) the cost of new technology implemented as part of the construction project 
6.6 	and depreciable equipment directly identified to the project, if the construction costs for 
6.7 	clauses (1) to (6) exceed the threshold for additions and replacements stated in section 
6.8 	256B.431, subdivision 16. Technology and depreciable equipment shall be included in the 
6.9 	project construction costs unless a written election is made by the facility, to not include 
6.10 	it in the facility's appraised value for purposes of Minnesota Rules, part 9549.0020, 
6.11 	subpart 5. Debt incurred for purchase of technology and depreciable equipment shall be 
6.12 	included as allowable debt for purposes of Minnesota Rules, part 9549.0060, subpart 5, 
6.13 	items A and C, unless the written election is to not include it. Any new technology and 
6.14 	depreciable equipment included in the project construction costs that the facility elects 
6.15 	not to include in its appraised value and allowable debt shall be treated as provided in 
6.16 	section 256B.431, subdivision 17, paragraph (b). Written election under this paragraph 
6.17 	must be included in the facility's request for the rate change related to the project, and 
6.18 	this election may not be changed.
6.19 	(k) "Technology" means information systems or devices that make documentation, 
6.20 	charting, and staff time more efficient or encourage and allow for care through alternative 
6.21 	settings including, but not limited to, touch screens, monitors, hand-helds, swipe cards, 
6.22 	motion detectors, pagers, telemedicine, medication dispensers, and equipment to monitor 
6.23 	vital signs and self-injections, and to observe skin and other conditions.

6.24 	Sec. 4. Minnesota Statutes 2004, section 181.9413, is amended to read:
6.25 	181.9413 SICK OR INJURED CHILD CARE LEAVE BENEFITS; USE TO 
6.26 	CARE FOR CERTAIN RELATIVES.
6.27 	(a) An employee may use personal sick leave benefits provided by the employer for 
6.28 	absences due to an illness of or injury to the employee's child, spouse, sibling, parent, 
6.29 	grandparent, stepparent, or other dependent residing in the employee's household for such 
6.30 	reasonable periods as the employee's attendance with the child may be necessary, on the 
6.31 	same terms upon which the employee is able to use sick leave benefits for the employee's 
6.32 	own illness or injury. This section applies only to personal sick leave benefits payable to 
6.33 	the employee from the employer's general assets.
6.34 	(b) For purposes of this section, "personal sick leave benefits" means time accrued 
6.35 	and available to an employee to be used as a result of absence from work due to personal 
7.1 	illness or injury, but does not include short-term or long-term disability or other salary 
7.2 	continuation benefits.

7.3 	EFFECTIVE DATE. This section is effective August 1, 2006, and applies to sick 
7.4 	leave used on or after that date.

7.5 	Sec. 5. Minnesota Statutes 2005 Supplement, section 256B.434, subdivision 4, is 
7.6 	amended to read:
7.7 		Subd. 4.Alternate rates for nursing facilities. (a) For nursing facilities which 
7.8 	have their payment rates determined under this section rather than section 256B.431, the 
7.9 	commissioner shall establish a rate under this subdivision. The nursing facility must enter 
7.10 	into a written contract with the commissioner.
7.11 	(b) A nursing facility's case mix payment rate for the first rate year of a facility's 
7.12 	contract under this section is the payment rate the facility would have received under 
7.13 	section 256B.431.
7.14 	(c) A nursing facility's case mix payment rates for the second and subsequent years 
7.15 	of a facility's contract under this section are the previous rate year's contract payment 
7.16 	rates plus an inflation adjustment and, for facilities reimbursed under this section or 
7.17 	section 256B.431, an adjustment to include the cost of any increase in Health Department 
7.18 	licensing fees for the facility taking effect on or after July 1, 2001. The index for the 
7.19 	inflation adjustment must be based on the change in the Consumer Price Index-All Items 
7.20 	(United States City average) (CPI-U) forecasted by the commissioner of finance's national 
7.21 	economic consultant, as forecasted in the fourth quarter of the calendar year preceding 
7.22 	the rate year. The inflation adjustment must be based on the 12-month period from the 
7.23 	midpoint of the previous rate year to the midpoint of the rate year for which the rate is 
7.24 	being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1, 2001, 
7.25 	July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July 
7.26 	1, 2008, this paragraph shall apply only to the property-related payment rate, except 
7.27 	that adjustments to include the cost of any increase in Health Department licensing fees 
7.28 	taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to 
7.29 	the property payment rate under this section and section 256B.431 shall be effective on 
7.30 	October 1. In determining the amount of the property-related payment rate adjustment 
7.31 	under this paragraph, the commissioner shall determine the proportion of the facility's 
7.32 	rates that are property-related based on the facility's most recent cost report. Beginning 
7.33 	October 1, 2006, facilities reimbursed under this section shall be allowed to receive a 
7.34 	property rate adjustment for building projects under section 144A.071, subdivision 2.

8.1 	Sec. 6. Minnesota Statutes 2004, section 256B.434, is amended by adding a 
8.2 	subdivision to read:
8.3 		Subd. 4f.Construction project rate adjustments effective October 1, 2006. (a) 
8.4 	Effective October 1, 2006, facilities reimbursed under this section may receive a property 
8.5 	rate adjustment for construction projects exceeding the threshold in section 256B.431, 
8.6 	subdivision 16, and below the threshold in section 144A.071, subdivision 2, clause (a). 
8.7 	For these projects, capital assets purchased shall be counted as construction project costs 
8.8 	for a rate adjustment request made by a facility if they are:
8.9 	(1) purchased within 24 months of the completion of the construction project;
8.10 	(2) purchased after the completion date of any prior construction project; and 
8.11 	(3) not purchased prior to July 14, 2005.
8.12 	Except as otherwise provided in this subdivision, the definitions, rate calculation methods, 
8.13 	and principles in sections 144A.071 and 256B.431, and Minnesota Rules, parts 9549.0010 
8.14 	to 9549.0080, shall be used to calculate rate adjustments for allowable construction 
8.15 	projects under this subdivision and section 144A.073. Facilities completing construction 
8.16 	projects between October 1, 2005, and October 1, 2006, are eligible to have a property 
8.17 	rate adjustment effective October 1, 2006. Facilities completing projects after October 
8.18 	1, 2006, are eligible for a property rate adjustment effective on the first of the month 
8.19 	following the completion date.
8.20 	(b) Notwithstanding subdivision 18, as of July 14, 2005, facilities with rates set 
8.21 	under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, that 
8.22 	commenced a construction project on or after October 1, 2004, and do not have a contract 
8.23 	under subdivision 3 by September 30, 2006, are eligible to request a rate adjustment under 
8.24 	section 256B.431, subdivision 10, through September 30, 2006. If the request results 
8.25 	in the commissioner determining a rate adjustment is allowable, the rate adjustment is 
8.26 	effective on the first of the month following project completion. These facilities shall 
8.27 	be allowed to accumulate construction project costs for the period October 1, 2004, to 
8.28 	September 30, 2006.
8.29 	(c) Facilities shall be allowed construction project rate adjustments no sooner than 
8.30 	12 months after completing a previous construction project. Facilities must request the 
8.31 	rate adjustment according to section 256B.431, subdivision 10.
8.32 	(d) Capacity days shall be computed according to Minnesota Rules, part 9549.0060, 
8.33 	subpart 11. For rate calculations under this section, the number of licensed beds in the 
8.34 	nursing facility shall be the number existing after the construction project is completed 
8.35 	and the number of days in the nursing facility's reporting period shall be 365.
9.1 	(e) The value of assets to be recognized for a total replacement project as defined 
9.2 	in section 256B.431, subdivision 17d, shall be computed as described in clause (1). The 
9.3 	value of assets to be recognized for all other projects shall be computed as described 
9.4 	in clause (2):
9.5 	(1) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the 
9.6 	number of beds allowed under subdivision 3a, paragraph (c), shall be used to compute the 
9.7 	maximum amount of assets allowable in a facility's property rate calculation. If a facility's 
9.8 	current request for a rate adjustment results from the completion of a construction 
9.9 	project that was previously approved under section 144A.073, the assets to be used in 
9.10 	the rate calculation cannot exceed the lesser of the amount determined under sections 
9.11 	144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable costs of 
9.12 	the construction project. A current request that is not the result of a project under section 
9.13 	144A.073 cannot exceed the limit under section 144A.071, subdivision 2, paragraph (a). 
9.14 	Applicable credits must be deducted from the cost of the construction project.
9.15 	(2) (i) Replacement-cost-new limits under section 256B.431, subdivision 17e, and 
9.16 	the number of beds allowed under section 256B.431, subdivision 3a, paragraph (c), shall 
9.17 	be used to compute the maximum amount of assets allowable in a facility's property 
9.18 	rate calculation.
9.19 	(ii) The value of a facility's assets to be compared to the amount in (i) begins with 
9.20 	the total appraised value from the last rate notice a facility received when its rates were set 
9.21 	under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080. This value 
9.22 	shall be indexed by the factor in section 256B.431, subdivision 3f, paragraph (a), for each 
9.23 	rate year the facility received an inflation factor on its property-related rate when its rates 
9.24 	were set under this section. The value of assets listed as previous capital additions, capital 
9.25 	additions, and special projects on the facility's base year rate notice and the value of assets 
9.26 	related to a construction project for which the facility received a rate adjustment when its 
9.27 	rates were determined under this section shall be added to the indexed appraised value.
9.28 	(iii) The maximum amount of assets to be recognized in computing a facility's rate 
9.29 	adjustment after a project is completed is the lesser of the aggregate replacement-cost-new 
9.30 	limit computed in (i) minus the assets recognized in (ii) or the actual allowable costs of 
9.31 	the construction project.
9.32 	(iv) If a facility's current request for a rate adjustment results from the completion of 
9.33 	a construction project that was previously approved under section 144A.073, the assets to 
9.34 	be added to the rate calculation cannot exceed the lesser of the amount determined under 
9.35 	sections 144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable 
9.36 	costs of the construction project. A current request that is not the result of a project under 
10.1 	section 144A.073 cannot exceed the limit stated in section 144A.071, subdivision 2, 
10.2 	paragraph (a). Assets disposed of as a result of a construction project and applicable 
10.3 	credits must be deducted from the cost of the construction project.
10.4 	(f) For construction projects approved under section 144A.073, allowable debt 
10.5 	may never exceed the lesser of the cost of the assets purchased, the threshold limit in 
10.6 	section 144A.071, subdivision 2, or the replacement-cost-new limit less previously 
10.7 	existing capital debt.
10.8 	(g) For construction projects that were not approved under section 144A.073, 
10.9 	allowable debt is limited to the lesser of the threshold in section 144A.071, subdivision 2, 
10.10 	for such construction projects or the applicable limit in paragraph (e), clause (1) or (2), 
10.11 	less previously existing capital debt. Amounts of debt taken out that exceed the costs of a 
10.12 	construction project shall not be allowed regardless of the use of the funds.
10.13 	For all construction projects being recognized, interest expense and average debt 
10.14 	shall be computed based on the first 12 months following project completion. "Previously 
10.15 	existing capital debt" means capital debt recognized on the last rate determined under 
10.16 	section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, and the amount of 
10.17 	debt recognized for a construction project for which the facility received a rate adjustment 
10.18 	when its rates were determined under this section.
10.19 	For a total replacement project as defined in section 256B.431, subdivision 17d, the 
10.20 	value of previously existing capital debt shall be zero.
10.21 	(h) In addition to the interest expense allowed from the application of paragraph (f), 
10.22 	the amounts allowed under section 256B.431, subdivision 17a, paragraph (a), clauses (2) 
10.23 	and (3), will be added to interest expense.
10.24 	(i) The equity portion of the construction project shall be computed as the allowable 
10.25 	assets in paragraph (e), less the average debt in paragraph (f). The equity portion must 
10.26 	be multiplied by 5.66 percent and the allowable interest expense in paragraph (f) must 
10.27 	be added. This sum must be divided by 95 percent of capacity days to compute the 
10.28 	construction project rate adjustment.
10.29 	(j) For projects that are not a total replacement of a nursing facility, the amount 
10.30 	in paragraph (i) is adjusted for nonreimbursable areas and then added to the current 
10.31 	property-related per diem of the facility.
10.32 	(k) For projects that are a total replacement of a nursing facility, the amount 
10.33 	in paragraph (i) becomes the new property-related per diem after being adjusted for 
10.34 	nonreimbursable areas. Any amounts existing in a facility's rate before the effective date 
10.35 	of the construction project for equity incentives under section 256B.431, subdivision 16; 
10.36 	capital repairs and replacements under section 256B.431, subdivision 15; or refinancing 
11.1 	incentives under section 256B.431, subdivision 19, shall be removed from the facility's 
11.2 	rates.
11.3 	(l) No additional equipment allowance is allowed under Minnesota Rules, part 
11.4 	9549.0060, subpart 10, as the result of construction projects under this section. Allowable 
11.5 	equipment shall be included in the construction project costs.
11.6 	(m) Capital assets purchased after the completion date of a construction project shall 
11.7 	be counted as construction project costs for any future rate adjustment request made by a 
11.8 	facility under section 144A.071, subdivision 2, clause (a), if they are purchased within 24 
11.9 	months of the completion of the future construction project.
11.10 	(n) In subsequent rate years, the property-related rate for a facility that results from 
11.11 	the application of this subdivision shall be the amount inflated in subdivision 4.
11.12 	(o) Construction projects are eligible for an equity incentive under section 256B.431, 
11.13 	subdivision 16. When computing the equity incentive for a construction project under 
11.14 	this subdivision, only the allowable costs and allowable debt related to the construction 
11.15 	project shall be used. The equity incentive shall not be a part of the property-related per 
11.16 	diem and not inflated under subdivision 4.
11.17 	(p) At the time of completion of a building project resulting in a rate increase under 
11.18 	this subdivision or section 144A.073, a facility may change its single-bed election for use 
11.19 	in calculating capacity days under Minnesota Rules, part 9549.0060, subpart 11. The 
11.20 	facility shall notify the commissioner of its desire to change its single-bed election at the 
11.21 	time the final cost of the project is submitted to the commissioner, and the change in the 
11.22 	election shall be effective the same date as the rate increase related to the building project.

11.23 	Sec. 7. Minnesota Statutes 2004, section 256B.438, subdivision 4, is amended to read:
11.24 		Subd. 4.Resident assessment schedule. (a) Nursing facilities shall conduct and 
11.25 	submit case mix assessments according to the schedule established by the commissioner 
11.26 	of health under section  144.0724, subdivisions 4 and 5. 
11.27 	(b) The resident reimbursement classifications established under section  144.0724, 
11.28 	subdivision 3, shall be effective the day of admission for new admission assessments. The 
11.29 	effective date for significant change assessments shall be the assessment reference date. 
11.30 	The effective date for annual and second quarterly assessments shall be the first day of the 
11.31 	month following assessment reference date. 
11.32 	(c) Effective October 1, 2006, the commissioner shall rebase payment rates to 
11.33 	account for the change in resident assessment schedule in section 144.0724, subdivision 
11.34 	4, paragraph (b), clause (4), in a facility specific budget neutral manner, according to 
11.35 	subdivision 7, paragraph (b).