1.1 	A bill for an act
1.2 	relating to health; setting policy goals for health care reform; providing health 
1.3 	insurance reform; establishing health savings accounts for state employees; 
1.4 	setting spending targets for health and human services programs; establishing 
1.5 	the MinnesotaCare CMF program; modifying procedures for assessing 
1.6 	MinnesotaCare taxes; making changes in the tax treatment of premiums and 
1.7 	medical expenditures; increasing a tax credit for long-term care insurance; 
1.8 	limiting punitive damages and attorney fees for certain medical liability claims; 
1.9 	appropriating money;amending Minnesota Statutes 2006, sections 62J.2930, by 
1.10 	adding a subdivision; 290.0672, subdivision 2; 295.52, by adding a subdivision; 
1.11 	Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as 
1.12 	amended; proposing coding for new law in Minnesota Statutes, chapters 43A; 
1.13 	62J; 62Q; 256; 256L; 290; 604.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	GOALS OF REFORM

1.17 	Section 1. POLICY GOALS OF HEALTH CARE REFORM.
 1.18 	It is the policy and intent of the state of Minnesota to enact and promote 
1.19 	consumer-driven, market-based solutions within the health care sector, to achieve the 
1.20 	greatest access to the highest quality of care. It is not the intent of this act to shift, in part or 
1.21 	in whole, any care provided in the private market to public programs or to a single-payer 
1.22 	government-managed system. Any policies enacted must be patient-centered, and offer 
1.23 	choice and competition through the free market. Any policies enacted must inform and 
1.24 	empower consumer decision-making, prevent health care rationing, provide effective 
1.25 	accountability, and advance and provide access to high-quality, affordable care.

2.1 	ARTICLE 2
2.2 	INSURANCE REFORM

2.3 	Section 1. [43A.221] BENEFIT STRUCTURE; HEALTH SAVINGS ACCOUNTS.
2.4 	(a) The state employee group insurance plan must be structured as a high-deductible 
2.5 	health plan that would allow both the employer and participants to qualify under federal 
2.6 	law to use health savings accounts to:
2.7 	(1) provide open access to health care services and unlimited patient choice;
2.8 	(2) save on health care costs by encouraging price comparison shopping; and
2.9 	(3) create a tax-free, interest-earning fund for future medical expenses.
2.10 	(b) The plan must include an option for the employer to contribute at least 60 
2.11 	percent of the cost of the chosen high-deductible health plan and a maximum of 100 
2.12 	percent of the chosen deductible for both single and family coverage per year. Preventive 
2.13 	care coverage must be 100 percent covered by the insurance portion of the plan with a 
2.14 	waiver of the deductible.
2.15 	(c) The goal of the employer is to expand coverage through the health savings 
2.16 	account for eligible items, including but not limited to:
2.17 	(1) all preventive and medical care services;
2.18 	(2) eyeglasses, contact lenses, and laser eye surgery;
2.19 	(3) preventive and restorative dental procedures, including orthodontics;
2.20 	(4) all over-the-counter medications and supplies;
2.21 	(5) future long-term care policy premiums; and
2.22 	(6) future Medicare Part B premiums.
2.23 	(d) The goal of the employer is to enable a dramatic reduction in potential 
2.24 	out-of-pocket financial liability to the employee with both single and family coverage 
2.25 	as compared to the present plan.
2.26 	(e) The goal of the employer is to eliminate the employee's net out-of-pocket plan 
2.27 	liability through the tax-free accumulation of both employee elective pretax payroll 
2.28 	contributions, and the accumulation of unused health savings account funds from year to 
2.29 	year.
2.30 	(f) It is the employer's goal to allow for the portability of employee-owned pretax 
2.31 	health savings account accumulations into retirement for the purpose of financing health 
2.32 	care needs of the retired employee postretirement on a tax-free basis.
2.33 	(g) Any future premium reductions of the high-deductible health plan shall be 
2.34 	reinvested back into employee health savings accounts as a reward for successful efforts 
2.35 	in achieving the goals of this new plan.

3.1 	EFFECTIVE DATE. This section is effective for the insurance plan year beginning 
3.2 	January 1, 2010.

3.3 	Sec. 2. [62J.261] HEALTH COVERAGE MANDATE COST INFORMATION.
3.4 	The commissioner of commerce shall post, and update at least annually, on the 
3.5 	Department of Commerce Web site information for consumers regarding health coverage 
3.6 	mandates required under Minnesota law. The information must list separately each current 
3.7 	mandate and an estimate of its cost as a percentage of the premium, if available. The 
3.8 	estimated cost must be based on the assumption that the benefit would not be covered in 
3.9 	the absence of a mandate. A health plan company shall, upon request of the commissioner, 
3.10 	provide information it has, if any, regarding the estimated cost of a mandate based upon 
3.11 	the health plan company's experience. Cost estimates posted on the Web site may be 
3.12 	an average or may specify a range of costs, but must not identify particular health plan 
3.13 	companies.

3.14 	Sec. 3. Minnesota Statutes 2006, section 62J.2930, is amended by adding a subdivision 
3.15 	to read:
3.16 		Subd. 5.Virtual health pretax benefits exchange. The commissioner shall create a 
3.17 	Web site to assist employers and employees in obtaining health benefits on a pretax basis. 
3.18 	The Web site must focus on providing a cost-effective means of connecting employers and 
3.19 	employees with providers of pretax health benefit plans. The Web site must also focus on 
3.20 	educating employees and employers on the tax advantage of pretax health benefits.

3.21 	Sec. 4. [62J.85] PROVIDER PRICE AND QUALITY DISCLOSURE.
3.22 	(a) By January 1, 2009, and annually thereafter, each physician clinic and hospital 
3.23 	shall establish a list of prices for each health care procedure, service, or basket of care 
3.24 	the provider provides and provide this information electronically to the commissioner of 
3.25 	health in the form and manner specified by the commissioner, and the commissioner shall 
3.26 	provide this information at no cost to the public, upon request.
3.27 	(b) The commissioner shall develop a plan to expand the provisions of paragraph (a) 
3.28 	to all health care providers by January 1, 2010. Notwithstanding this provision, health plan 
3.29 	companies shall submit provider price information to the commissioner for the purposes 
3.30 	of paragraph (a), for providers who do not submit prices to the commission for analysis 
3.31 	and provider cost performance purposes.
4.1 	(c) By January 1, 2009, the commissioner shall require physician clinics and 
4.2 	hospitals to submit standardized electronic information on the outcomes and processes 
4.3 	associated with patient care.
4.4 	(d) By January 15, 2009, the commissioner shall make recommendations to the 
4.5 	legislative committees with jurisdiction over health care policy and finance on the 
4.6 	feasibility of collecting standardized electronic information on the outcomes and processes 
4.7 	associated with patient care from health care providers not included under paragraph (c).

4.8 	Sec. 5. [62Q.022] HEALTH PLAN COMPANIES AUTHORIZED IN OTHER 
4.9 	STATES.
4.10 	(a) Health plan companies authorized to issue health coverage in other states may 
4.11 	issue health coverage in this state under this section.
4.12 	(b) Out-of-state health plan companies authorized under this section are not required 
4.13 	to provide benefits mandated under the laws of this state in coverage sold to residents of 
4.14 	this state.
4.15 	(c) Each written application for participation in an out-of-state health benefit plan 
4.16 	shall contain the following language in boldface type at the beginning of the document: 
4.17 	"This policy is primarily governed by the laws of [insert state where the master policy is 
4.18 	filed]; therefore, all of the rating laws applicable to policies filed in this state do not apply 
4.19 	to this policy, which may result in increases in your premium at renewal that would not be 
4.20 	permissible in a Minnesota-approved policy. Any purchase of individual health insurance 
4.21 	should be considered carefully since future medical conditions may make it impossible to 
4.22 	qualify for another individual health policy. For information concerning individual health 
4.23 	coverage under a Minnesota-approved policy, please consult your insurance agent or the 
4.24 	Minnesota Department of Commerce or Minnesota Department of Health."
4.25 	(d) Each out-of-state health benefit plan shall contain the following language in 
4.26 	boldface type at the beginning of the document: "The benefits of this policy providing 
4.27 	your coverage are governed primarily by the laws of a state other than Minnesota. While 
4.28 	this health benefit plan may provide you a more affordable health insurance policy, it 
4.29 	may also provide fewer health benefits than those included as state mandated health 
4.30 	benefits in policies in Minnesota. Please consult your insurance agent to determine which 
4.31 	state-mandated health benefits are excluded under this policy."
4.32 	(e) The commissioner of commerce or health, as appropriate, shall be authorized to 
4.33 	conduct market conduct and solvency examinations of all out-of-state companies seeking 
4.34 	to offer health benefit plans in this state or who have been given approval to offer health 
5.1 	benefit plans in this state. Such examinations shall be conducted in the same manner and 
5.2 	under the same terms and conditions as for companies located in this state.
5.3 	(f) The commissioners of commerce and health shall adopt rules necessary to 
5.4 	implement this chapter, including, but not limited to, determining which health plan 
5.5 	companies located in other states shall be authorized to offer plans to Minnesota residents 
5.6 	and determining the manner of approving the health benefit plans offered by such 
5.7 	companies.

5.8 	Sec. 6. [604.111] EMERGENCY HEALTH CARE AND OB/GYN ACTIONS; 
5.9 	LIMITS ON DAMAGES.
5.10 		Subdivision 1.Definitions. (a) For the purposes of this section, the terms in 
5.11 	paragraphs (b) to (d) have the meanings given them.
5.12 	(b) "Economic loss" means all harm for which damages are recoverable, other 
5.13 	than noneconomic losses.
5.14 	(c) "Health care provider" has the meaning given in section 541.076, paragraph 
5.15 	(a), except that health care provider also includes a physician assistant registered under 
5.16 	chapter 147A and ambulance services, medical directors, and personnel regulated under 
5.17 	chapter 144E.
5.18 	(d) "Noneconomic loss" means all nonpecuniary harm for which damages are 
5.19 	recoverable, including, but not limited to, pain, disability, disfigurement, embarrassment, 
5.20 	emotional distress, and loss of consortium.
5.21 		Subd. 2.Limitation. (a) In an action for injury or death against a health care 
5.22 	provider alleging malpractice, error, mistake, or failure to cure, whether based in contract 
5.23 	or tort, in which the health care services at issue were provided for:
5.24 	(1) pregnancy or labor and delivery, including the immediate postpartum period; or
5.25 	(2) emergency care in the emergency room of a hospital; the amount of damages 
5.26 	awarded for noneconomic losses must not exceed $250,000, regardless of the number of 
5.27 	parties against whom the action is brought or the number of separate claims or actions 
5.28 	brought with respect to the same occurrence.
5.29 	(b) The limitation imposed by this subdivision must not be disclosed to the trier of 
5.30 	fact by any person at trial.
5.31 		Subd. 3.Findings. (a) A court in an action tried without a jury shall make a finding 
5.32 	as to noneconomic loss without regard to the limit under subdivision 2. If noneconomic 
5.33 	loss in excess of the limit is found, the court shall make any reduction required under 
5.34 	this section and shall award as damages for noneconomic loss the lesser of the reduced 
5.35 	amount or the limit.
6.1 	(b) If an action is before a jury, the jury shall make a finding as to noneconomic loss 
6.2 	without regard to the limit under subdivision 2. If the jury finds that noneconomic loss 
6.3 	exceeds the limit, the court shall make any reduction required under this section and shall 
6.4 	award as damages for noneconomic loss the lesser of the reduced amount or the limit.
6.5 		Subd. 4.Punitive damages limited. Punitive, exemplary, and similar damages 
6.6 	recoverable against a health care provider in a cause of action described in subdivision 2 
6.7 	must not exceed $250,000. The jury must not be informed of this limitation.
6.8 		Subd. 5.Excessive attorney fees prohibited. (a) Attorney fees payable by a 
6.9 	plaintiff in any cause of action referred to in subdivision 2 must not exceed the following 
6.10 	percentage of damages:
6.11 	(1) 40 percent of the first $50,000;
6.12 	(2) 33-1/3 percent of the next $50,000;
6.13 	(3) 25 percent of the next $500,000; plus
6.14 	(4) 15 percent of that portion of damages that exceeds $600,000.
6.15 	(b) This subdivision applies to the net damages actually recovered by that plaintiff 
6.16 	under the cause of action, whether through settlement, alternative dispute resolution, court 
6.17 	judgment, or otherwise. "Net damages actually recovered" means the net sum recovered 
6.18 	after deducting any disbursements or costs incurred in connection with prosecution or 
6.19 	settlement of the claim, including all costs paid or advanced by any person. Costs of 
6.20 	health care incurred by the plaintiff and the attorney's office overhead costs or charges for 
6.21 	legal services are not deductible disbursements of costs for such purpose.
6.22 	(c) A fee agreement that violates this subdivision is void and unenforceable to 
6.23 	the extent of the violation.
6.24 		Subd. 6.Intentional discriminatory denial of treatment. Except for the purposes 
6.25 	of subdivision 5, an action described in subdivision 2 shall not be construed to include any 
6.26 	claim in a civil action that is based solely on intentional denial of medical treatment that a 
6.27 	patient is otherwise qualified to receive, against the wishes of a patient, or, if the patient 
6.28 	is incompetent, against the wishes of the patient's guardian, on the basis of the patient's 
6.29 	present or predicted age, disability, degree of medical dependency, or quality of life. 

6.30 	EFFECTIVE DATE. This section is effective August 1, 2008, and applies to 
6.31 	actions arising from incidents occurring on or after that date.

7.1 	ARTICLE 3
7.2 	STATE HEALTH CARE PROGRAMS AND FINANCING

7.3 	Section 1. [256.0122] HEALTH AND HUMAN SERVICES SPENDING 
7.4 	TARGETS.
7.5 	During each fiscal year, beginning July 1, 2009, the commissioners of health and 
7.6 	human services shall manage spending on health and human services programs receiving 
7.7 	general fund appropriations to ensure that the annual aggregate spending growth for 
7.8 	these programs for the next fiscal year does not exceed spending for the previous fiscal 
7.9 	year plus an annual growth rate equal to the change in the Consumer Price Index for all 
7.10 	urban consumers (CPI-U). The annual spending growth for specific programs may differ 
7.11 	from this aggregate spending target. The commissioners shall take all steps necessary to 
7.12 	manage program spending growth to ensure compliance with spending targets, including 
7.13 	but not limited to reducing administrative costs and modifying program eligibility, 
7.14 	covered services, and grant levels, and shall seek any necessary federal approvals. The 
7.15 	commissioners shall annually report to the legislature any actions that have been or will 
7.16 	be taken to comply with this section, beginning June 1, 2009, and each June 1 thereafter. 
7.17 	The commissioners shall also provide the chairs and ranking minority members of the 
7.18 	legislative committees with jurisdiction over health and human services policy and 
7.19 	spending with at least seven days' notice of specific actions the commissioners plan to 
7.20 	take to comply with this section.

7.21 	Sec. 2. [256L.20] MINNESOTACARE FOR MORE FAMILIES PROGRAM.
7.22 		Subdivision 1.Establishment. The commissioner shall establish the MinnesotaCare 
7.23 	for More Families (CMF) program.  The commissioner shall implement the program on 
7.24 	January 1, 2010, or upon federal approval, whichever is later.  Upon implementation, the 
7.25 	MinnesotaCare CMF program shall replace MinnesotaCare coverage provided to families 
7.26 	and children under this chapter.
7.27 		Subd. 2.Eligibility. Families and children with family income equal to or less than 
7.28 	300 percent of the federal poverty guidelines for the applicable family size are eligible for 
7.29 	the MinnesotaCare CMF program. Families and children must meet all other eligibility 
7.30 	criteria of this chapter, unless the legislature modifies the eligibility criteria based upon the 
7.31 	recommendation of the commissioner under subdivision 7.
7.32 		Subd. 3.Program design. (a) Enrollees covered under the MinnesotaCare CMF 
7.33 	program must purchase a high-deductible health plan, and must manage a medical 
7.34 	benefit account.  Money in the account may be used to pay for health care services 
8.1 	subject to a deductible, qualified health care expenses, and other expenses specified by 
8.2 	the commissioner.
8.3 	(b) Covered services under the program consist of all comprehensive health 
8.4 	maintenance services covered under a standard HMO contract, as defined under section 
8.5 	62D.02, subdivision 7, and Minnesota Rules, chapter 4685.
8.6 		Subd. 4.Premiums. Families and children shall pay a premium based on the 
8.7 	sliding scale specified in section 256L.15, except that the commissioner shall extend the 
8.8 	premium scale to include families and children with income up to 300 percent of the 
8.9 	federal poverty guidelines.
8.10 		Subd. 5.Program criteria.  (a) The MinnesotaCare CMF program must meet 
8.11 	the criteria specified in this subdivision.
8.12 	(b) Payments to health care providers for covered services must be substantially 
8.13 	equivalent to the average payment paid to providers by health plan companies in the 
8.14 	private sector.
8.15 	(c) The high-deductible health plan purchased by an enrollee must be a plan 
8.16 	approved by the commissioner prior to purchase as in compliance with this section and 
8.17 	must meet requirements of the Internal Revenue Code, sections 220 and 223, and related 
8.18 	federal regulations.
8.19 	(d) The high-deductible health plan must be linked to a health savings account that 
8.20 	qualifies under sections 220 and 223 of the Internal Revenue Code. The commissioner 
8.21 	shall recommend to the legislature any special administrative or other provisions necessary 
8.22 	regarding access by enrollees to those accounts.
8.23 	(e) The MinnesotaCare CMF program shall deposit a minimum of 50 percent of the 
8.24 	enrollee deductible into each health savings account for each year, which must comply 
8.25 	with federal limits and other provisions. Funds in the account may be used to cover 
8.26 	deductibles, co-pays, coinsurance, and other enrollee out-of-pocket costs, and amounts not 
8.27 	so spent may accumulate from year to year and accrue earnings from investments.
8.28 	(f) The MinnesotaCare CMF program shall subsidize the premium for the enrollee's 
8.29 	high-deductible health plan based upon the sliding fee scale referenced in subdivision 4.
8.30 	(g) The program must be designed to achieve a balance of affordability, access to 
8.31 	care, choice of providers, and incentives to use health care in a cost-effective manner.
8.32 		Subd. 6.Waivers and federal approval. The commissioner shall seek all necessary 
8.33 	federal approvals to implement the MinnesotaCare CMF program and to use federal 
8.34 	medical assistance and state children's health insurance program dollars to pay for services 
8.35 	covered under the MinnesotaCare CMF program.
9.1 		Subd. 7.Legislative changes. The commissioner shall present to the legislature, by 
9.2 	December 15, 2008, all legislative changes necessary to implement the MinnesotaCare 
9.3 	CMF program.

9.4 	Sec. 3. Minnesota Statutes 2006, section 295.52, is amended by adding a subdivision 
9.5 	to read:
9.6 		Subd. 8.Contingent reduction in tax rate. On September 1 of each odd-numbered 
9.7 	year, beginning September 1, 2009, the commissioner of finance shall determine the 
9.8 	projected balance of the health care access fund at the end of the current biennium, based 
9.9 	on the most recent February forecast adjusted for any legislative session changes. If the 
9.10 	commissioner of finance projects a surplus in the health care access fund at the end of the 
9.11 	current biennium, the commissioner of finance, in consultation with the commissioners of 
9.12 	health and human services, shall reduce the tax rates specified in subdivisions 1, 1a, 2, 3, 
9.13 	and 4 in one-tenth of one percent increments, making the largest reduction in tax rates 
9.14 	consistent with ensuring that the health care access fund retains a surplus at the end of the 
9.15 	current biennium. The reduced tax rates take effect on the January 1 that immediately 
9.16 	follows the September 1 on which the commissioner of finance determines the projected 
9.17 	balance and shall remain in effect for two tax years. The tax rates specified in subdivisions 
9.18 	1, 1a, 2, 3, and 4 apply for subsequent tax years, unless the commissioner of finance, 
9.19 	based on a determination of the projected balance of the health care access fund made 
9.20 	on September 1 of an odd-numbered year, reduces the tax rates. If the commissioner of 
9.21 	finance does not project a surplus in the health care access fund at the end of the current 
9.22 	biennium, the tax rates specified in subdivisions 1, 1a, 2, 3, and 4 continue to apply. 
9.23 	The commissioner of finance shall publish in the State Register by October 1 of each 
9.24 	odd-numbered year the amount of tax to be imposed for the next two calendar years.

9.25 	ARTICLE 4
9.26 	TAX CHANGES

9.27 	Section 1. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as 
9.28 	amended by Laws 2008, chapter 154, article 3, section 3, and Laws 2008, chapter 154, 
9.29 	article 11, section 11, is amended to read:
9.30 		Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 
9.31 	and trusts, there shall be subtracted from federal taxable income:
9.32 	(1) net interest income on obligations of any authority, commission, or 
9.33 	instrumentality of the United States to the extent includable in taxable income for federal 
9.34 	income tax purposes but exempt from state income tax under the laws of the United States;
10.1 	(2) if included in federal taxable income, the amount of any overpayment of income 
10.2 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
10.3 	is received as a refund or as a credit to another taxable year's income tax liability;
10.4 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
10.5 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
10.6 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
10.7 	transportation of each qualifying child in attending an elementary or secondary school 
10.8 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
10.9 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
10.10 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
10.11 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
10.12 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
10.13 	"textbooks" includes books and other instructional materials and equipment purchased 
10.14 	or leased for use in elementary and secondary schools in teaching only those subjects 
10.15 	legally and commonly taught in public elementary and secondary schools in this state. 
10.16 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
10.17 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
10.18 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
10.19 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
10.20 	or materials for, or transportation to, extracurricular activities including sporting events, 
10.21 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
10.22 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
10.23 	given in section 32(c)(3) of the Internal Revenue Code;
10.24 	(4) income as provided under section 290.0802;
10.25 	(5) to the extent included in federal adjusted gross income, income realized on 
10.26 	disposition of property exempt from tax under section 290.491;
10.27 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
10.28 	of the Internal Revenue Code in determining federal taxable income by an individual 
10.29 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
10.30 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
10.31 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
10.32 	under the provisions of Public Law 109-1;
10.33 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
10.34 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
10.35 	which is included in gross income under section 87 of the Internal Revenue Code;
11.1 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
11.2 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
11.3 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
11.4 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
11.5 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
11.6 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
11.7 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
11.8 	the extent they exceed the federal foreign tax credit;
11.9 	(9) in each of the five tax years immediately following the tax year in which an 
11.10 	addition is required under subdivision 19a, clause (7), or 19c, clause (14), in the case 
11.11 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
11.12 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
11.13 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
11.14 	subdivision 19c, clause (14), in the case of a shareholder of an S corporation, minus the 
11.15 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
11.16 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
11.17 	less than zero;
11.18 	(10) job opportunity building zone income as provided under section 469.316;
11.19 	(11) to the extent included in federal taxable income, the amount of compensation 
11.20 	paid to members of the Minnesota National Guard or other reserve components of the 
11.21 	United States military for active service performed in Minnesota, excluding compensation 
11.22 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
11.23 	this clause, "active service" means (i) state active service as defined in section 190.05, 
11.24 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
11.25 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
11.26 	subdivision 5c, but "active service" excludes services performed exclusively for purposes 
11.27 	of basic combat training, advanced individual training, annual training, and periodic 
11.28 	inactive duty training; special training periodically made available to reserve members; 
11.29 	and service performed in accordance with section 190.08, subdivision 3;
11.30 	(12) to the extent included in federal taxable income, the amount of compensation 
11.31 	paid to Minnesota residents who are members of the armed forces of the United States or 
11.32 	United Nations for active duty performed outside Minnesota under United States Code, 
11.33 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
11.34 	the United Nations;
11.35 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
11.36 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
12.1 	to another person for human organ transplantation. For purposes of this clause, "organ" 
12.2 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
12.3 	"human organ transplantation" means the medical procedure by which transfer of a human 
12.4 	organ is made from the body of one person to the body of another person; "qualified 
12.5 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
12.6 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
12.7 	may be subtracted under this clause only once; and "qualified donor" means the individual 
12.8 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
12.9 	individual may claim the subtraction in this clause for each instance of organ donation for 
12.10 	transplantation during the taxable year in which the qualified expenses occur;
12.11 	(14) in each of the five tax years immediately following the tax year in which an 
12.12 	addition is required under subdivision 19a, clause (8), or 19c, clause (15), in the case of a 
12.13 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
12.14 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (15), in the 
12.15 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
12.16 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
12.17 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
12.18 	subtraction is not allowed under this clause;
12.19 	(15) to the extent included in federal taxable income, compensation paid to a 
12.20 	nonresident who is a service member as defined in United States Code, title 10, section 
12.21 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
12.22 	Law 108-189, section 101(2); and
12.23 	(16) international economic development zone income as provided under section 
12.24 	469.325.; and
12.25 	(17) to the extent not deducted in computing or otherwise excluded from federal 
12.26 	taxable income or used to compute the credit under section 290.0672 or 290.0678, 
12.27 	amounts paid during the taxable year for insurance as defined in section 213(d)(1)(D) of 
12.28 	the Internal Revenue Code.

12.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
12.30 	December 31, 2007.

12.31 	Sec. 2. Minnesota Statutes 2006, section 290.0672, subdivision 2, is amended to read:
12.32 		Subd. 2.Credit. A taxpayer is allowed a credit against the tax imposed by this 
12.33 	chapter for long-term care insurance policy premiums paid during the tax year. The 
12.34 	credit for each policy equals 25 percent of premiums paid to the extent not deducted in 
12.35 	determining federal taxable income. A taxpayer may claim a credit for only one policy 
13.1 	for each qualified beneficiary. A maximum of $100$1,000 applies to each qualified 
13.2 	beneficiary. The maximum total credit allowed per year is $200$2,000 for married 
13.3 	couples filing joint returns and $100$1,000 for all other filers. For a nonresident or 
13.4 	part-year resident, the credit determined under this section must be allocated based on the 
13.5 	percentage calculated under section 290.06, subdivision 2c, paragraph (e). 

13.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
13.7 	December 31, 2007.

13.8 	Sec. 3. [290.0678] HEALTH CARE AND HEALTH COVERAGE CREDIT.
13.9 		Subdivision 1.Definitions. (a) "Health insurance premiums" means insurance as 
13.10 	defined in section 213(d)(1)(D) of the Internal Revenue Code.
13.11 	(b) "Medical expenses" means expenditures that qualify for a deduction under 
13.12 	section 213 of the Internal Revenue Code, other than health insurance premiums.
13.13 	(c) "Paid" means expenditures by the taxpayer on behalf of the taxpayer, the 
13.14 	taxpayer's spouse, or the taxpayer's tax-qualified dependents, and not reimbursed by any 
13.15 	other person or paid by an employee from income on which income tax was not paid.
13.16 		Subd. 2.Credit. (a) A taxpayer is allowed a credit against the tax imposed by this 
13.17 	chapter of 50 percent of:
13.18 	(1) medical expenses paid; and
13.19 	(2) health insurance premiums paid.
13.20 	(b) The credit does not apply to amounts deducted in determining federal taxable 
13.21 	income or used as a deduction or as another credit against the tax imposed by this chapter.

13.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
13.23 	December 31, 2007.