SF 2972

1st Engrossment - 94th Legislature (2025 - 2026)

Posted on 07/18/2025 01:37 p.m.

A bill for an act
relating to health care facilities; regulating for-profit entity acquisitions of nursing
homes and assisted living facilities; amending Minnesota Statutes 2024, sections
144A.01, subdivision 4; 144G.08, subdivision 15; proposing coding for new law
in Minnesota Statutes, chapter 145D.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 144A.01, subdivision 4, is amended to read:

Subd. 4.

Controlling person.

(a) "Controlling person" means an owner and the following
individuals and entities, if applicable:

(1) each officer of the organization, including the chief executive officer and the chief
financial officer;

(2) the nursing home administrator; deleted text begin and
deleted text end

(3) any managerial official deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) if no individual has at least a five percent ownership interest, every individual with
an ownership interest in a privately held corporation, limited liability company, or other
business entity, including a business entity that is publicly traded or nonpublicly traded,
that collects capital investments from individuals or entities.
new text end

(b) "Controlling person" also means any entity or natural person who has any direct or
indirect ownership interest in:

(1) any corporation, partnership or other business association which is a controlling
person;

(2) the land on which a nursing home is located;

(3) the structure in which a nursing home is located;

(4) any entity with at least a five percent mortgage, contract for deed, deed of trust, or
other security interest in the land or structure comprising a nursing home; or

(5) any lease or sublease of the land, structure, or facilities comprising a nursing home.

(c) "Controlling person" does not include:

(1) a bank, savings bank, trust company, savings association, credit union, industrial
loan and thrift company, investment banking firm, or insurance company unless the entity
directly or through a subsidiary operates a nursing home;

(2) government and government-sponsored entities such as the United States Department
of Housing and Urban Development, Ginnie Mae, Fannie Mae, Freddie Mac, and the
Minnesota Housing Finance Agency which provide loans, financing, and insurance products
for housing sites;

(3) an individual who is a state or federal official, a state or federal employee, or a
member or employee of the governing body of a political subdivision of the state or federal
government that operates one or more nursing homes, unless the individual is also an officer,
owner, or managerial official of the nursing home, receives any remuneration from a nursing
home, or who is a controlling person not otherwise excluded in this subdivision;

(4) a natural person who is a member of a tax-exempt organization under section 290.05,
subdivision 2, unless the individual is also a controlling person not otherwise excluded in
this subdivision; and

(5) a natural person who owns less than five percent of the outstanding common shares
of a corporation:

(i) whose securities are exempt by virtue of section 80A.45, clause (6); or

(ii) whose transactions are exempt by virtue of section 80A.46, clause (7).

Sec. 2.

Minnesota Statutes 2024, section 144G.08, subdivision 15, is amended to read:

Subd. 15.

Controlling individual.

(a) "Controlling individual" means an owner and the
following individuals and entities, if applicable:

(1) each officer of the organization, including the chief executive officer and chief
financial officer;

(2) each managerial official; deleted text begin and
deleted text end

(3) any entity with at least a five percent mortgage, deed of trust, or other security interest
in the facility deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) if no individual has at least a five percent ownership interest, every individual with
an ownership interest in a privately held corporation, limited liability company, or other
business entity, including a business entity that is publicly traded or nonpublicly traded,
that collects capital investments from individuals or entities.
new text end

new text begin (b) "Controlling individual" also means any entity or natural person who has any direct
or indirect ownership interest in:
new text end

new text begin (1) any corporation, partnership, or other business association such as a limited liability
company that is a controlling individual;
new text end

new text begin (2) the land on which an assisted living facility is located; or
new text end

new text begin (3) the structure in which an assisted living facility is located.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end Controlling individual does not include:

(1) a bank, savings bank, trust company, savings association, credit union, industrial
loan and thrift company, investment banking firm, or insurance company unless the entity
operates a program directly or through a subsidiary;

(2) government and government-sponsored entities such as the U.S. Department of
Housing and Urban Development, Ginnie Mae, Fannie Mae, Freddie Mac, and the Minnesota
Housing Finance Agency which provide loans, financing, and insurance products for housing
sites;

(3) an individual who is a state or federal official, a state or federal employee, or a
member or employee of the governing body of a political subdivision of the state or federal
government that operates one or more facilities, unless the individual is also an officer,
owner, or managerial official of the facility, receives remuneration from the facility, or
owns any of the beneficial interests not excluded in this subdivision;

(4) an individual who owns less than five percent of the outstanding common shares of
a corporation:

(i) whose securities are exempt under section 80A.45, clause (6); or

(ii) whose transactions are exempt under section 80A.46, clause (2);

(5) an individual who is a member of an organization exempt from taxation under section
290.05, unless the individual is also an officer, owner, or managerial official of the license
or owns any of the beneficial interests not excluded in this subdivision. This clause does
not exclude from the definition of controlling individual an organization that is exempt from
taxation; or

(6) an employee stock ownership plan trust, or a participant or board member of an
employee stock ownership plan, unless the participant or board member is a controlling
individual.

Sec. 3.

new text begin [145D.40] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin For purposes of sections 145D.40 to 145D.44, the following
terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Assisted living facility. new text end

new text begin "Assisted living facility" has the meaning given in
section 144G.08, subdivision 7. Assisted living facility includes an assisted living facility
with dementia care as defined in section 144G.08, subdivision 8.
new text end

new text begin Subd. 3. new text end

new text begin Health care professional. new text end

new text begin "Health care professional" means an individual who
is licensed or registered by the state to provide health care services within the professional's
scope of practice and in accordance with state law.
new text end

new text begin Subd. 4. new text end

new text begin Nursing home. new text end

new text begin "Nursing home" means a facility licensed as a nursing home
under chapter 144A.
new text end

new text begin Subd. 5. new text end

new text begin Ownership or control. new text end

new text begin "Ownership or control" means the assumption of
governance or the acquisition of an ownership interest or direct or indirect control by a
for-profit entity over the operations of a nonprofit nursing home or a nonprofit assisted
living facility through any means, including but not limited to a purchase, lease, transfer,
exchange, option, conveyance, creation of a joint venture, or other manner of acquisition
of assets, governance, an ownership interest, or direct or indirect control of a nonprofit
nursing home or a nonprofit assisted living facility.
new text end

Sec. 4.

new text begin [145D.41] NOTICE, INFORMATION, AND AFFIDAVIT REQUIRED.
new text end

new text begin Subdivision 1. new text end

new text begin Notice and information. new text end

new text begin (a) At least 120 days prior to the transfer of
ownership or control of a nonprofit nursing home or nonprofit assisted living facility to a
for-profit entity, the nursing home or assisted living facility must provide written notice to
the attorney general, the commissioner of health, and the commissioner of human services
of its intent to transfer ownership or control to a for-profit entity.
new text end

new text begin (b) Together with the notice, the for-profit entity seeking to acquire ownership or control
of the nonprofit nursing home or nonprofit assisted living facility must provide the following
information to the attorney general, commissioner of health, and commissioner of human
services:
new text end

new text begin (1) the names of each individual with an interest in the for-profit entity and the percentage
of interest each individual holds in the for-profit entity;
new text end

new text begin (2) a complete and detailed description of the for-profit entity's corporate structure;
new text end

new text begin (3) the names of each individual holding an interest in, and the percentage of interest
held in, any affiliate, subsidiary, or otherwise related entity that the for-profit entity has a
contract to provide goods or services for the operation or maintenance of the nursing home
or assisted living facility or has a contract for goods and services to be provided to residents,
including any real estate investment trusts if permitted under section 145D.44, subdivision
1;
new text end

new text begin (4) for the previous five years, any filings required to be made to any federal or state
agency;
new text end

new text begin (5) the for-profit entity's current balance sheet;
new text end

new text begin (6) all application materials required under section 144A.03 or 144G.12, as applicable;
new text end

new text begin (7) a description of the condition of the buildings the for-profit entity seeks to acquire
or manage, identifying any cooling problems, electric medical devices present, recent exterior
additions and replacements, external building conditions, recent flush toilet breakdowns,
foreclosure status in the last 12 months, heat risk, heating problems, indoor air quality,
recent interior additions and replacements, and mold, as those terms are defined and described
in Appendix A of the American Housing Survey for the United States: 2023;
new text end

new text begin (8) an affidavit and evidence as required under subdivision 2; and
new text end

new text begin (9) other information required by the attorney general, commissioner of health, and
commissioner of human services.
new text end

new text begin Subd. 2. new text end

new text begin Affidavit and evidence. new text end

new text begin In addition to the notice required under subdivision
1, a for-profit entity seeking to acquire ownership or control of a nonprofit nursing home
or nonprofit assisted living facility must submit to the attorney general an affidavit and
evidence sufficient to demonstrate that:
new text end

new text begin (1) the for-profit entity has the financial, managerial, and operational ability to operate
or manage the nursing home or assisted living facility consistent with the requirements of
(i) for a nursing home, sections 144A.01 to 144A.1888, chapter 256R, and Minnesota Rules,
chapter 4658; or (ii) for an assisted living facility, chapter 144G and Minnesota Rules,
chapter 4659;
new text end

new text begin (2) neither the for-profit entity nor any of its owners, managerial officials, or managers
have committed a crime listed in, or been found civilly liable for an offense listed in section
144A.03, subdivision 1, clause (13), or 144G.12, subdivision 1, clause (13), as applicable;
new text end

new text begin (3) in the preceding ten years, there have been no judgments and no filed, pending, or
completed public or private litigations, tax liens, written complaints, administrative actions,
or investigations by a government agency against the for-profit entity or any of its owners,
managerial officials, or managers;
new text end

new text begin (4) in the preceding ten years, the for-profit entity has not defaulted in the payment of
money collected for others and has not discharged debts through bankruptcy proceedings;
new text end

new text begin (5) the for-profit entity will invest sufficient capital in the nursing home or assisted living
facility to maintain or improve the facility's infrastructure and staffing;
new text end

new text begin (6)(i) housing costs or costs for services in a nursing home or assisted living facility in
the United States over which the for-profit entity acquired ownership or control have not
increased by more than the increase in the Consumer Price Index for all urban consumers
published by the federal Bureau of Labor Statistics for the 12 months preceding the month
in which the increase became effective; or (ii) if housing costs or costs for services in the
nursing home or assisted living facility increased by more than the increase in the Consumer
Price Index as described in item (i), the increase was justified;
new text end

new text begin (7) within five years after acquiring ownership or control of any other nursing home or
assisted living facility in the United States, the for-profit entity did not sell or otherwise
transfer ownership or control of the nursing home or assisted living facility to another person;
and
new text end

new text begin (8) after acquiring ownership or control of another nursing home in the United States,
that nursing home, with respect to the Centers for Medicare and Medicaid Services rating
system:
new text end

new text begin (i) maintained or improved the nursing home's rating if upon acquisition of ownership
or control the rating was three or more stars; or
new text end

new text begin (ii) improved the nursing home's rating to at least three stars if upon acquisition of
ownership or control the rating was one or two stars.
new text end

Sec. 5.

new text begin [145D.43] PROHIBITED PRACTICES.
new text end

new text begin A for-profit entity that acquires ownership or control of a nonprofit nursing home or
nonprofit assisted living facility is prohibited from:
new text end

new text begin (1) interfering with the professional judgment of a health care professional providing
care in the nursing home or assisted living facility or with a health care professional's
diagnosis or treatment of residents in the nursing home or assisted living facility;
new text end

new text begin (2) providing unequal treatment with regard to charges for housing or services based on
whether the resident pays for housing or services with private funds or through a public
program;
new text end

new text begin (3) engaging in any act, practice, or course of business that would strip an asset from an
acquired nursing home or assisted living facility or that would otherwise undermine the
quality of, safety of, or access to care and services provided by the nursing home or assisted
living facility;
new text end

new text begin (4) engaging in self-dealing;
new text end

new text begin (5) engaging in any acts, practices, or courses of business that result in an adverse impact
on the health, safety, and well-being and quality of care of the residents of the nursing home
or assisted living facility;
new text end

new text begin (6) spending less than 75 percent of the funds received by the nursing home or assisted
living facility from public programs and state appropriations on the direct care of residents;
new text end

new text begin (7) raising resident housing costs beyond the Consumer Price Index for all urban
consumers published by the federal Bureau of Labor Statistics for the 12 months preceding
the month in which the increase became effective unless the for-profit entity can demonstrate
that the increase was justified by legitimate business expenses;
new text end

new text begin (8) allowing a diminution of maintenance or a deterioration in the operations and
infrastructure of the nursing home or assisted living facility that results in unsafe conditions
or violations of building and other relevant codes, diminishes the property value of the
facility, or jeopardizes the health and well-being of the residents; or
new text end

new text begin (9) for a nursing home:
new text end

new text begin (i) failing to improve in the Centers for Medicare and Medicaid Services rating if the
nursing home's current rating is one or two stars; or
new text end

new text begin (ii) allowing a decline in the Centers for Medicare and Medicaid Services rating if the
nursing home's current rating is at least three stars.
new text end

Sec. 6. new text begin ATTORNEY GENERAL ENFORCEMENT.
new text end

new text begin A violation of Minnesota Statutes, section 145D.43, is an unfair and unconscionable
practice in violation of Minnesota Statutes, section 325F.69, subdivision 1. The attorney
general may enforce this section under Minnesota Statutes, section 8.31.
new text end