1.1 	A bill for an act
1.2 	relating to human services; consolidating various nursing facility rate adjustment 
1.3 	effective dates to coincide with the annual operating payment rate adjustment on 
1.4 	January 1 and one mid-year adjustment on July 1; modifying notice requirements;
1.5 	amending Minnesota Statutes 2016, sections 144A.071, subdivision 4d; 256B.431, 
1.6 	subdivisions 10, 16, 30; 256B.434, subdivision 4f; 256R.40, subdivision 5; 256R.41.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2016, section 144A.071, subdivision 4d, is amended to 
1.9 	read:
1.10 		Subd. 4d.Consolidation of nursing facilities. (a) The commissioner of health, in 
1.11 	consultation with the commissioner of human services, may approve a request for 
1.12 	consolidation of nursing facilities which includes the closure of one or more facilities and 
1.13 	the upgrading of the physical plant of the remaining nursing facility or facilities, the costs 
1.14 	of which exceed the threshold project limit under subdivision 2, clause (a). The 
1.15 	commissioners shall consider the criteria in this section, section 144A.073, and section 
1.16 	256B.437 256R.40, in approving or rejecting a consolidation proposal. In the event the 
1.17 	commissioners approve the request, the commissioner of human services shall calculate an 
1.18 	external fixed costs rate adjustment according to clauses (1) to (3):
1.19 	(1) the closure of beds shall not be eligible for a planned closure rate adjustment under 
1.20 	section 256B.437, subdivision 6 256R.40, subdivision 5;
1.21 	(2) the construction project permitted in this clause shall not be eligible for a threshold 
1.22 	project rate adjustment under section 256B.434, subdivision 4f, or a moratorium exception 
1.23 	adjustment under section 144A.073; and
2.1 	(3) the payment rate for external fixed costs for a remaining facility or facilities shall 
2.2 	be increased by an amount equal to 65 percent of the projected net cost savings to the state 
2.3 	calculated in paragraph (b), divided by the state's medical assistance percentage of medical 
2.4 	assistance dollars, and then divided by estimated medical assistance resident days, as 
2.5 	determined in paragraph (c), of the remaining nursing facility or facilities in the request in 
2.6 	this paragraph. The rate adjustment is effective on the later of the first day of the month 
2.7 	following first day of the month of January or July, whichever date occurs immediately 
2.8 	after the completion of the construction upgrades in the consolidation plan or the first day 
2.9 	of the month following and the complete closure of a the facility or facilities designated for 
2.10 	closure in the consolidation plan. If more than one facility is receiving upgrades in the 
2.11 	consolidation plan, each facility's date of construction completion must be evaluated 
2.12 	separately.
2.13 	(b) For purposes of calculating the net cost savings to the state, the commissioner shall 
2.14 	consider clauses (1) to (7):
2.15 	(1) the annual savings from estimated medical assistance payments from the net number 
2.16 	of beds closed taking into consideration only beds that are in active service on the date of 
2.17 	the request and that have been in active service for at least three years;
2.18 	(2) the estimated annual cost of increased case load of individuals receiving services 
2.19 	under the elderly waiver;
2.20 	(3) the estimated annual cost of elderly waiver recipients receiving support under group 
2.21 	residential housing;
2.22 	(4) the estimated annual cost of increased case load of individuals receiving services 
2.23 	under the alternative care program;
2.24 	(5) the annual loss of license surcharge payments on closed beds;
2.25 	(6) the savings from not paying planned closure rate adjustments that the facilities would 
2.26 	otherwise be eligible for under section 256B.437 256R.40; and
2.27 	(7) the savings from not paying external fixed costs payment rate adjustments from 
2.28 	submission of renovation costs that would otherwise be eligible as threshold projects under 
2.29 	section 256B.434, subdivision 4f.
2.30 	(c) For purposes of the calculation in paragraph (a), clause (3), the estimated medical 
2.31 	assistance resident days of the remaining facility or facilities shall be computed assuming 
2.32 	95 percent occupancy multiplied by the historical percentage of medical assistance resident 
2.33 	days of the remaining facility or facilities, as reported on the facility's or facilities' most 
3.1 	recent nursing facility statistical and cost report filed before the plan of closure is submitted, 
3.2 	multiplied by 365.
3.3 	(d) For purposes of net cost of savings to the state in paragraph (b), the average occupancy 
3.4 	percentages will be those reported on the facility's or facilities' most recent nursing facility 
3.5 	statistical and cost report filed before the plan of closure is submitted, and the average 
3.6 	payment rates shall be calculated based on the approved payment rates in effect at the time 
3.7 	the consolidation request is submitted.
3.8 	(e) To qualify for the external fixed costs payment rate adjustment under this subdivision, 
3.9 	the closing facilities shall:
3.10 	(1) submit an application for closure according to section 256B.437, subdivision 3
3.11 	256R.40, subdivision 2; and
3.12 	(2) follow the resident relocation provisions of section 144A.161.
3.13 	(f) The county or counties in which a facility or facilities are closed under this subdivision 
3.14 	shall not be eligible for designation as a hardship area under subdivision 3 for five years 
3.15 	from the date of the approval of the proposed consolidation. The applicant shall notify the 
3.16 	county of this limitation and the county shall acknowledge this in a letter of support.

3.17 	EFFECTIVE DATE. This section is effective for consolidations occurring after July 
3.18 	1, 2017.

3.19 	Sec. 2. Minnesota Statutes 2016, section 256B.431, subdivision 10, is amended to read:
3.20 		Subd. 10.Property rate adjustments and construction projects. A nursing facility 
3.21 	completing a construction project that is eligible for a rate adjustment under section 
3.22 	256B.434, subdivision 4f, and that was not approved through the moratorium exception 
3.23 	process in section 144A.073 must request from the commissioner a property-related payment 
3.24 	rate adjustment. If the request is made within 60 days after the construction project's 
3.25 	completion date, The effective date of the rate adjustment is the first day of the month of 
3.26 	January or July, whichever date occurs immediately following the construction project's
3.27 	completion date and submission of the provider's rate adjustment request. If the request is 
3.28 	made more than 60 days after the completion date, the rate adjustment is effective on the 
3.29 	first of the month following the request. The commissioner shall provide a rate notice 
3.30 	reflecting the allowable costs within 60 days after receiving all the necessary information 
3.31 	to compute the rate adjustment. No sooner than the effective date of the rate adjustment for 
3.32 	the construction project, a nursing facility may adjust its rates by the amount anticipated to 
3.33 	be allowed. Any amounts collected from private pay residents in excess of the allowable 
4.1 	rate must be repaid to private pay residents with interest at the rate used by the commissioner 
4.2 	of revenue for the late payment of taxes and in effect on the date the rate increase is effective. 
4.3 	Construction projects with completion dates within one year of the completion date associated 
4.4 	with the property rate adjustment request and phased projects with project completion dates 
4.5 	within three years of the last phase of the phased project must be aggregated for purposes 
4.6 	of the minimum thresholds in subdivisions 16 and 17, and the maximum threshold in section 
4.7 	144A.071, subdivision 2. "Construction project" and "project construction costs" have the 
4.8 	meanings given them in Minnesota Statutes, section 144A.071, subdivision 1a.

4.9 	EFFECTIVE DATE. This section is effective for projects completed after January 1, 
4.10 	2018.

4.11 	Sec. 3. Minnesota Statutes 2016, section 256B.431, subdivision 16, is amended to read:
4.12 		Subd. 16.Major additions and replacements; equity incentive. For rate years beginning 
4.13 	after June 30, 1993, if a nursing facility acquires capital assets in connection with a project 
4.14 	approved under the moratorium exception process in section 144A.073 or in connection 
4.15 	with an addition to or replacement of buildings, attached fixtures, or land improvements 
4.16 	for which the total historical cost of those capital asset additions exceeds the lesser of 
4.17 	$150,000 or ten percent of the most recent appraised value, the nursing facility shall be 
4.18 	eligible for an equity incentive payment rate as in paragraphs (a) to (d). This computation 
4.19 	is separate from the determination of the nursing facility's rental rate. An equity incentive 
4.20 	payment rate as computed under this subdivision is limited to one in a 12-month period.
4.21 	(a) An eligible nursing facility shall receive an equity incentive payment rate equal to 
4.22 	the allowable historical cost of the capital asset acquired, minus the allowable debt directly 
4.23 	identified to that capital asset, multiplied by the equity incentive factor as described in 
4.24 	paragraphs (b) and (c), and divided by the nursing facility's occupancy factor under 
4.25 	subdivision 3f, paragraph (c). This amount shall be added to the nursing facility's total 
4.26 	payment rate and shall be effective the same day as the incremental increase in paragraph 
4.27 	(d) or subdivision 17. The allowable historical cost of the capital assets and the allowable 
4.28 	debt shall be determined as provided in Minnesota Rules, parts 9549.0010 to 9549.0080, 
4.29 	and this section.
4.30 	(b) The equity incentive factor shall be determined under clauses (1) to (4):
4.31 	(1) divide the initial allowable debt in paragraph (a) by the initial historical cost of the 
4.32 	capital asset additions referred to in paragraph (a), then cube the quotient,
4.33 	(2) subtract the amount calculated in clause (1) from the number one,
5.1 	(3) determine the difference between the rental factor and the lesser of two percentage 
5.2 	points above the posted yield for standard conventional fixed rate mortgages of the Federal 
5.3 	Home Loan Mortgage Corporation as published in the Wall Street Journal and in effect on 
5.4 	the first day of the month the debt or cost is incurred, or 16 percent,
5.5 	(4) multiply the amount calculated in clause (2) by the amount calculated in clause (3).
5.6 	(c) The equity incentive payment rate shall be limited to the term of the allowable debt 
5.7 	in paragraph (a), not greater than 20 years nor less than ten years. If no debt is incurred in 
5.8 	acquiring the capital asset, the equity incentive payment rate shall be paid for ten years. The 
5.9 	sale of a nursing facility under subdivision 14 shall terminate application of the equity 
5.10 	incentive payment rate effective on the date provided in subdivision 14, paragraph (f), for 
5.11 	the sale.
5.12 	(d) A nursing facility with an addition to or a renovation of its buildings, attached fixtures, 
5.13 	or land improvements meeting the criteria in this subdivision and not receiving the 
5.14 	property-related payment rate adjustment in subdivision 17, shall receive the incremental 
5.15 	increase in the nursing facility's rental rate as determined under Minnesota Rules, parts 
5.16 	9549.0010 to 9549.0080, and this section. The incremental increase shall be added to the 
5.17 	nursing facility's property-related payment rate. The effective date of this incremental 
5.18 	increase shall be the first day of the month of January or July, whichever occurs immediately
5.19 	following the month in date on which the addition or replacement is completed.

5.20 	EFFECTIVE DATE. This section is effective for additions or replacements completed 
5.21 	after January 1, 2018.

5.22 	Sec. 4. Minnesota Statutes 2016, section 256B.431, subdivision 30, is amended to read:
5.23 		Subd. 30.Bed layaway and delicensure. (a) For rate years beginning on or after July 
5.24 	1, 2000, a nursing facility reimbursed under this section which has placed beds on layaway 
5.25 	shall, for purposes of application of the downsizing incentive in subdivision 3a, paragraph 
5.26 	(c), and calculation of the rental per diem, have those beds given the same effect as if the 
5.27 	beds had been delicensed so long as the beds remain on layaway. At the time of a layaway, 
5.28 	a facility may change its single bed election for use in calculating capacity days under 
5.29 	Minnesota Rules, part 9549.0060, subpart 11. The property payment rate increase shall be 
5.30 	effective the first day of the month following the month in which the layaway of the beds 
5.31 	becomes effective under section 144A.071, subdivision 4b.
5.32 	(b) For rate years beginning on or after July 1, 2000, notwithstanding any provision to 
5.33 	the contrary under section 256B.434 or chapter 256R, a nursing facility reimbursed under 
6.1 	that section or chapter which has placed beds on layaway shall, for so long as the beds 
6.2 	remain on layaway, be allowed to:
6.3 	(1) aggregate the applicable investment per bed limits based on the number of beds 
6.4 	licensed immediately prior to entering the alternative payment system;
6.5 	(2) retain or change the facility's single bed election for use in calculating capacity days 
6.6 	under Minnesota Rules, part 9549.0060, subpart 11; and
6.7 	(3) establish capacity days based on the number of beds immediately prior to the layaway 
6.8 	and the number of beds after the layaway.
6.9 	The commissioner shall increase the facility's property payment rate by the incremental 
6.10 	increase in the rental per diem resulting from the recalculation of the facility's rental per 
6.11 	diem applying only the changes resulting from the layaway of beds and clauses (1), (2), and 
6.12 	(3). If a facility reimbursed under section 256B.434 completes a moratorium exception 
6.13 	project after its base year, the base year property rate shall be the moratorium project property 
6.14 	rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4, 
6.15 	paragraph (c). The property payment rate increase shall be effective the first day of the 
6.16 	month of January or July, whichever occurs immediately following the month in date on
6.17 	which the layaway of the beds becomes effective.
6.18 	(c) If a nursing facility removes a bed from layaway status in accordance with section 
6.19 	144A.071, subdivision 4b, the commissioner shall establish capacity days based on the 
6.20 	number of licensed and certified beds in the facility not on layaway and shall reduce the 
6.21 	nursing facility's property payment rate in accordance with paragraph (b).
6.22 	(d) For the rate years beginning on or after July 1, 2000, notwithstanding any provision 
6.23 	to the contrary under section 256B.434 or chapter 256R, a nursing facility reimbursed under 
6.24 	that section or chapter, which has delicensed beds after July 1, 2000, by giving notice of 
6.25 	the delicensure to the commissioner of health according to the notice requirements in section 
6.26 	144A.071, subdivision 4b, shall be allowed to:
6.27 	(1) aggregate the applicable investment per bed limits based on the number of beds 
6.28 	licensed immediately prior to entering the alternative payment system;
6.29 	(2) retain or change the facility's single bed election for use in calculating capacity days 
6.30 	under Minnesota Rules, part 9549.0060, subpart 11; and
6.31 	(3) establish capacity days based on the number of beds immediately prior to the 
6.32 	delicensure and the number of beds after the delicensure.
7.1 	The commissioner shall increase the facility's property payment rate by the incremental 
7.2 	increase in the rental per diem resulting from the recalculation of the facility's rental per 
7.3 	diem applying only the changes resulting from the delicensure of beds and clauses (1), (2), 
7.4 	and (3). If a facility reimbursed under section 256B.434 completes a moratorium exception 
7.5 	project after its base year, the base year property rate shall be the moratorium project property 
7.6 	rate. The base year rate shall be inflated by the factors in section 256B.434, subdivision 4, 
7.7 	paragraph (c). The property payment rate increase shall be effective the first day of the 
7.8 	month of January or July, whichever occurs immediately following the month in date on
7.9 	which the delicensure of the beds becomes effective.
7.10 	(e) For nursing facilities reimbursed under this section or, section 256B.434, or chapter 
7.11 	256R, any beds placed on layaway shall not be included in calculating facility occupancy 
7.12 	as it pertains to leave days defined in Minnesota Rules, part 9505.0415.
7.13 	(f) For nursing facilities reimbursed under this section or, section 256B.434, or chapter 
7.14 	256R, the rental rate calculated after placing beds on layaway may not be less than the rental 
7.15 	rate prior to placing beds on layaway.
7.16 	(g) A nursing facility receiving a rate adjustment as a result of this section shall comply 
7.17 	with section 256B.47, subdivision 2 256R.06, subdivision 5.
7.18 	(h) A facility that does not utilize the space made available as a result of bed layaway 
7.19 	or delicensure under this subdivision to reduce the number of beds per room or provide 
7.20 	more common space for nursing facility uses or perform other activities related to the 
7.21 	operation of the nursing facility shall have its property rate increase calculated under this 
7.22 	subdivision reduced by the ratio of the square footage made available that is not used for 
7.23 	these purposes to the total square footage made available as a result of bed layaway or 
7.24 	delicensure.

7.25 	EFFECTIVE DATE. This section is effective for layaways occurring after July 1, 2017.

7.26 	Sec. 5. Minnesota Statutes 2016, section 256B.434, subdivision 4f, is amended to read:
7.27 		Subd. 4f.Construction project rate adjustments effective October 1, 2006. (a) 
7.28 	Effective October 1, 2006, facilities reimbursed under this section may receive a property 
7.29 	rate adjustment for construction projects exceeding the threshold in section 256B.431, 
7.30 	subdivision 16, and below the threshold in section 144A.071, subdivision 2, clause (a). For 
7.31 	these projects, capital assets purchased shall be counted as construction project costs for a 
7.32 	rate adjustment request made by a facility if they are: (1) purchased within 24 months of 
7.33 	the completion of the construction project; (2) purchased after the completion date of any 
8.1 	prior construction project; and (3) are not purchased prior to July 14, 2005. Except as 
8.2 	otherwise provided in this subdivision, the definitions, rate calculation methods, and 
8.3 	principles in sections 144A.071 and 256B.431 and Minnesota Rules, parts 9549.0010 to 
8.4 	9549.0080, shall be used to calculate rate adjustments for allowable construction projects 
8.5 	under this subdivision and section 144A.073. Facilities completing construction projects 
8.6 	between October 1, 2005, and October 1, 2006, are eligible to have a property rate adjustment 
8.7 	effective October 1, 2006. Facilities completing projects after October 1, 2006, are eligible 
8.8 	for a property rate adjustment effective on the first day of the month following the completion 
8.9 	date. Facilities completing projects after January 1, 2018, are eligible for a property rate 
8.10 	adjustment effective on the first day of the month of January or July, whichever occurs 
8.11 	immediately following the completion date.
8.12 	(b) Notwithstanding subdivision 18, as of July 14, 2005, facilities with rates set under 
8.13 	section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, that commenced a 
8.14 	construction project on or after October 1, 2004, and do not have a contract under subdivision 
8.15 	3 by September 30, 2006, are eligible to request a rate adjustment under section 256B.431, 
8.16 	subdivision 10, through September 30, 2006. If the request results in the commissioner 
8.17 	determining a rate adjustment is allowable, the rate adjustment is effective on the first of 
8.18 	the month following project completion. These facilities shall be allowed to accumulate 
8.19 	construction project costs for the period October 1, 2004, to September 30, 2006.
8.20 	(c) Facilities shall be allowed construction project rate adjustments no sooner than 12 
8.21 	months after completing a previous construction project. Facilities must request the rate 
8.22 	adjustment according to section 256B.431, subdivision 10.
8.23 	(d) Capacity days shall be computed according to Minnesota Rules, part 9549.0060, 
8.24 	subpart 11. For rate calculations under this section, the number of licensed beds in the 
8.25 	nursing facility shall be the number existing after the construction project is completed and 
8.26 	the number of days in the nursing facility's reporting period shall be 365.
8.27 	(e) The value of assets to be recognized for a total replacement project as defined in 
8.28 	section 256B.431, subdivision 17d, shall be computed as described in clause (1). The value 
8.29 	of assets to be recognized for all other projects shall be computed as described in clause 
8.30 	(2).
8.31 	(1) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the 
8.32 	number of beds allowed under subdivision 3a, paragraph (c), shall be used to compute the 
8.33 	maximum amount of assets allowable in a facility's property rate calculation. If a facility's 
8.34 	current request for a rate adjustment results from the completion of a construction project 
9.1 	that was previously approved under section 144A.073, the assets to be used in the rate 
9.2 	calculation cannot exceed the lesser of the amount determined under sections 144A.071, 
9.3 	subdivision 2, and 144A.073, subdivision 3b, or the actual allowable costs of the construction 
9.4 	project. A current request that is not the result of a project under section 144A.073 cannot 
9.5 	exceed the limit under section 144A.071, subdivision 2, paragraph (a). Applicable credits 
9.6 	must be deducted from the cost of the construction project.
9.7 	(2)(i) Replacement-cost-new limits under section 256B.431, subdivision 17e, and the 
9.8 	number of beds allowed under section 256B.431, subdivision 3a, paragraph (c), shall be 
9.9 	used to compute the maximum amount of assets allowable in a facility's property rate 
9.10 	calculation.
9.11 	(ii) The value of a facility's assets to be compared to the amount in item (i) begins with 
9.12 	the total appraised value from the last rate notice a facility received when its rates were set 
9.13 	under section 256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080. This value 
9.14 	shall be indexed by the factor in section 256B.431, subdivision 3f, paragraph (a), for each 
9.15 	rate year the facility received an inflation factor on its property-related rate when its rates 
9.16 	were set under this section. The value of assets listed as previous capital additions, capital 
9.17 	additions, and special projects on the facility's base year rate notice and the value of assets 
9.18 	related to a construction project for which the facility received a rate adjustment when its 
9.19 	rates were determined under this section shall be added to the indexed appraised value.
9.20 	(iii) The maximum amount of assets to be recognized in computing a facility's rate 
9.21 	adjustment after a project is completed is the lesser of the aggregate replacement-cost-new 
9.22 	limit computed in (i) minus the assets recognized in (ii) or the actual allowable costs of the 
9.23 	construction project.
9.24 	(iv) If a facility's current request for a rate adjustment results from the completion of a 
9.25 	construction project that was previously approved under section 144A.073, the assets to be 
9.26 	added to the rate calculation cannot exceed the lesser of the amount determined under 
9.27 	sections 144A.071, subdivision 2, and 144A.073, subdivision 3b, or the actual allowable 
9.28 	costs of the construction project. A current request that is not the result of a project under 
9.29 	section 144A.073 cannot exceed the limit stated in section 144A.071, subdivision 2, 
9.30 	paragraph (a). Assets disposed of as a result of a construction project and applicable credits 
9.31 	must be deducted from the cost of the construction project.
9.32 	(f) For construction projects approved under section 144A.073, allowable debt may 
9.33 	never exceed the lesser of the cost of the assets purchased, the threshold limit in section 
10.1 	144A.071, subdivision 2, or the replacement-cost-new limit less previously existing capital 
10.2 	debt.
10.3 	(g) For construction projects that were not approved under section 144A.073, allowable 
10.4 	debt is limited to the lesser of the threshold in section 144A.071, subdivision 2, for such 
10.5 	construction projects or the applicable limit in paragraph (e), clause (1) or (2), less previously 
10.6 	existing capital debt. Amounts of debt taken out that exceed the costs of a construction 
10.7 	project shall not be allowed regardless of the use of the funds.
10.8 	For all construction projects being recognized, interest expense and average debt shall 
10.9 	be computed based on the first 12 months following project completion. "Previously existing 
10.10 	capital debt" means capital debt recognized on the last rate determined under section 
10.11 	256B.431 and Minnesota Rules, parts 9549.0010 to 9549.0080, and the amount of debt 
10.12 	recognized for a construction project for which the facility received a rate adjustment when 
10.13 	its rates were determined under this section.
10.14 	For a total replacement project as defined in section 256B.431, subdivision 17d, the 
10.15 	value of previously existing capital debt shall be zero.
10.16 	(h) In addition to the interest expense allowed from the application of paragraph (f), the 
10.17 	amounts allowed under section 256B.431, subdivision 17a, paragraph (a), clauses (2) and 
10.18 	(3), will be added to interest expense.
10.19 	(i) The equity portion of the construction project shall be computed as the allowable 
10.20 	assets in paragraph (e), less the average debt in paragraph (f). The equity portion must be 
10.21 	multiplied by 5.66 percent and the allowable interest expense in paragraph (f) must be added. 
10.22 	This sum must be divided by 95 percent of capacity days to compute the construction project 
10.23 	rate adjustment.
10.24 	(j) For projects that are not a total replacement of a nursing facility, the amount in 
10.25 	paragraph (i) is adjusted for nonreimbursable areas and then added to the current property 
10.26 	payment rate of the facility.
10.27 	(k) For projects that are a total replacement of a nursing facility, the amount in paragraph 
10.28 	(i) becomes the new property payment rate after being adjusted for nonreimbursable areas. 
10.29 	Any amounts existing in a facility's rate before the effective date of the construction project 
10.30 	for equity incentives under section 256B.431, subdivision 16; capital repairs and replacements 
10.31 	under section 256B.431, subdivision 15; or refinancing incentives under section 256B.431, 
10.32 	subdivision 19, shall be removed from the facility's rates.
11.1 	(l) No additional equipment allowance is allowed under Minnesota Rules, part 9549.0060, 
11.2 	subpart 10, as the result of construction projects under this section. Allowable equipment 
11.3 	shall be included in the construction project costs.
11.4 	(m) Capital assets purchased after the completion date of a construction project shall be 
11.5 	counted as construction project costs for any future rate adjustment request made by a facility 
11.6 	under section 144A.071, subdivision 2, clause (a), if they are purchased within 24 months 
11.7 	of the completion of the future construction project.
11.8 	(n) In subsequent rate years, the property payment rate for a facility that results from 
11.9 	the application of this subdivision shall be the amount inflated in subdivision 4.
11.10 	(o) Construction projects are eligible for an equity incentive under section 256B.431, 
11.11 	subdivision 16. When computing the equity incentive for a construction project under this 
11.12 	subdivision, only the allowable costs and allowable debt related to the construction project 
11.13 	shall be used. The equity incentive shall not be a part of the property payment rate and not 
11.14 	inflated under subdivision 4. Effective October 1, 2006, all equity incentives for nursing 
11.15 	facilities reimbursed under this section shall be allowed for a duration determined under 
11.16 	section 256B.431, subdivision 16, paragraph (c).

11.17 	EFFECTIVE DATE. This section is effective January 1, 2018.

11.18 	Sec. 6. Minnesota Statutes 2016, section 256R.40, subdivision 5, is amended to read:
11.19 		Subd. 5.Planned closure rate adjustment. (a) The commissioner shall calculate the 
11.20 	amount of the planned closure rate adjustment available under subdivision 6 according to 
11.21 	clauses (1) to (4):
11.22 	(1) the amount available is the net reduction of nursing facility beds multiplied by $2,080;
11.23 	(2) the total number of beds in the nursing facility or facilities receiving the planned 
11.24 	closure rate adjustment must be identified;
11.25 	(3) capacity days are determined by multiplying the number determined under clause 
11.26 	(2) by 365; and
11.27 	(4) the planned closure rate adjustment is the amount available in clause (1), divided by 
11.28 	capacity days determined under clause (3).
11.29 	(b) A planned closure rate adjustment under this section is effective on the first day of 
11.30 	the month of January or July, whichever occurs immediately following completion of closure 
11.31 	of the facility designated for closure in the application and becomes part of the nursing 
11.32 	facility's external fixed payment rate.
12.1 	(c) Upon the request of a closing facility, the commissioner must allow the facility a 
12.2 	closure rate adjustment as provided under section 144A.161, subdivision 10.
12.3 	(d) A facility that has received a planned closure rate adjustment may reassign it to 
12.4 	another facility that is under the same ownership at any time within three years of its effective 
12.5 	date. The amount of the adjustment is computed according to paragraph (a).
12.6 	(e) If the per bed dollar amount specified in paragraph (a), clause (1), is increased, the 
12.7 	commissioner shall recalculate planned closure rate adjustments for facilities that delicense 
12.8 	beds under this section on or after July 1, 2001, to reflect the increase in the per bed dollar 
12.9 	amount. The recalculated planned closure rate adjustment is effective from the date the per 
12.10 	bed dollar amount is increased.

12.11 	EFFECTIVE DATE. This section is effective for closures occurring after July 1, 2017.

12.12 	Sec. 7. Minnesota Statutes 2016, section 256R.41, is amended to read:
12.13 	256R.41 SINGLE-BED ROOM INCENTIVE.
12.14 	(a) Beginning July 1, 2005, the operating payment rate for nursing facilities reimbursed 
12.15 	under this chapter shall be increased by 20 percent multiplied by the ratio of the number of 
12.16 	new single-bed rooms created divided by the number of active beds on July 1, 2005, for 
12.17 	each bed closure that results in the creation of a single-bed room after July 1, 2005. The 
12.18 	commissioner may implement rate adjustments for up to 3,000 new single-bed rooms each 
12.19 	year. For eligible bed closures for which the commissioner receives a notice from a facility 
12.20 	during a calendar quarter that a bed has been delicensed and a new single-bed room has 
12.21 	been established, the rate adjustment in this paragraph shall be effective on the first day of 
12.22 	the second month of January or July, whichever occurs immediately following that calendar 
12.23 	quarter the date of the bed delicensure.
12.24 	(b) A nursing facility is prohibited from discharging residents for purposes of establishing 
12.25 	single-bed rooms. A nursing facility must submit documentation to the commissioner in a 
12.26 	form prescribed by the commissioner, certifying the occupancy status of beds closed to 
12.27 	create single-bed rooms. In the event that the commissioner determines that a facility has 
12.28 	discharged a resident for purposes of establishing a single-bed room, the commissioner shall 
12.29 	not provide a rate adjustment under paragraph (a).

12.30 	EFFECTIVE DATE. This section is effective for closures occurring after July 1, 2017.