Minnesota Legislature
HF 74
as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to state government; appropriating money and 1.3 reducing appropriations for educational, health, human 1.4 services, corrections, economic development, 1.5 transportation, public safety, environmental, natural 1.6 resources, agricultural, and state government 1.7 purposes; establishing and modifying certain programs; 1.8 providing for regulation of certain activities and 1.9 practices; providing for accounts, assessments, and 1.10 fees; providing for the payment of certain refunds; 1.11 amending Minnesota Statutes 2002, sections 16A.17, by 1.12 adding a subdivision; 16B.47; 16B.48, subdivision 2; 1.13 16B.49; 16C.08, subdivisions 2, 3; 16C.09; 116P.05, 1.14 subdivision 2; 116P.09, subdivisions 4, 5, 7; 116P.10; 1.15 116P.14, subdivision 2; 124D.135, subdivision 8; 1.16 124D.16, subdivision 6; 124D.20, by adding 1.17 subdivisions; 136A.121, subdivision 7; 256.9657, 1.18 subdivision 1; 256.969, subdivision 3a; 256B.0625, 1.19 subdivision 13; 256B.19, subdivision 1d; 256B.195, 1.20 subdivision 4; 256B.32, subdivision 1; 256B.431, 1.21 subdivision 23, by adding a subdivision; 256B.75; 1.22 268.186; 289A.50, subdivision 2a; 289A.56, subdivision 1.23 4; 297A.75, subdivisions 2, 4; 297F.10, subdivision 1; 1.24 Laws 2002, chapter 220, article 13, section 9, 1.25 subdivision 2, as amended; repealing Minnesota 1.26 Statutes 2002, sections 1.31; 16B.50; 16C.07; 43A.047; 1.27 115A.908, subdivision 2; 116P.13; 256.973; 256B.195, 1.28 subdivision 5. 1.29 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.30 ARTICLE 1 1.31 E-12 EDUCATION 1.32 Section 1. [E-12 EDUCATION APPROPRIATIONS AND REDUCTIONS.] 1.33 The dollar amounts in the columns under "APPROPRIATION 1.34 CHANGE" are added to or, if shown in parentheses, are subtracted 1.35 from the appropriations in Laws 2001, First Special Session 1.36 chapter 3 or 6, as amended, by Laws 2002, chapter 220 or 374, as 1.37 amended, or other law to the specified agencies. The 2.1 appropriations are from the general fund or other named fund and 2.2 are available for the fiscal years indicated for each purpose. 2.3 The figure "2003" means that the addition to or subtraction from 2.4 the appropriations listed under the figure is for the fiscal 2.5 year ending June 30, 2003. 2.6 2003 2.7 APPROPRIATION REDUCTIONS $ (4,787,000) 2.8 Sec. 2. Minnesota Statutes 2002, section 124D.135, 2.9 subdivision 8, is amended to read: 2.10 Subd. 8. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 2.11 the average balance, during the most recent three-year period in 2.12 a district's early childhood family education reserve account on 2.13 June 30 of each year, adjusted for any prior reductions under 2.14 this subdivision, must not be greater than 25 percent of the sum 2.15 of the district's maximum early childhood family education 2.16 annual revenue under subdivision 1, excluding adjustments under 2.17 this subdivision, plus any fees, grants or other revenue 2.18 received by the district for early childhood family education 2.19 programs for the prior year. 2.20 (b) If a district's adjusted average early childhood family 2.21 education reserve over the three-year period is in excess of252.22percent of the prior year annual revenuethe limit under 2.23 paragraph (a), the district's early childhood family education 2.24 state aid and levy authority for the current school year must be 2.25 reduced by the lesser of the current year revenue under 2.26 subdivision 1 or the excess reserve amount. The aid reduction 2.27 equals the product of the lesser of the excess reserve amount or 2.28 the current year revenue under subdivision 1 times the ratio of 2.29 the district's aid for thepriorcurrent year under subdivision 2.30 4 to the district's revenue for thepriorcurrent year under 2.31 subdivision 1. The levy reduction equals the excess reserve 2.32 amount minus the aid reduction.The commissioner must2.33reallocate aid and levy reduced under this subdivision to other2.34eligible early childhood family education programs in proportion2.35to each district's revenue for the prior year under subdivision2.361.For purposes of this paragraph, if a district does not levy 3.1 the entire amount permitted under subdivision 3, the revenue 3.2 under subdivision 1 must be reduced in proportion to the actual 3.3 amount levied. 3.4(b)(c) Notwithstanding paragraph (a), for fiscal year 3.5 2003, the excess reserve amount shall be computed using the 3.6 balance in a district's early childhood family education reserve 3.7 account on June 30, 2002. For fiscal year 2004, the excess 3.8 reserve amount shall be computed using the adjusted average 3.9 balance in a district's early childhood family education reserve 3.10 account on June 30, 2002, and June 30, 2003. 3.11 [EFFECTIVE DATE.] This section is effective for revenue for 3.12 fiscal year 2003. 3.13 Sec. 3. Minnesota Statutes 2002, section 124D.16, 3.14 subdivision 6, is amended to read: 3.15 Subd. 6. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 3.16 the average balance, during the most recent three-year period, 3.17 in a district's school readiness reserve account on June 30 of 3.18 each year, adjusted for any prior reductions under this 3.19 subdivision, must not be greater than 25 percent of the 3.20 district's school readiness annual revenue for the prior year, 3.21 excluding adjustments under this subdivision. 3.22 (b) If a district's adjusted average school readiness 3.23 reserve over the three-year period is in excess of25 percent of3.24the prior year annual revenuethe limit under paragraph (a), the 3.25 district's current year school readiness state aid must be 3.26 reduced by the lesser of the excess reserve amount or the 3.27 current year aid.The commissioner must reallocate aid reduced3.28under this subdivision to other eligible school readiness3.29programs in proportion to each district's aid for the prior year3.30under subdivision 2.3.31(b)(c) Notwithstanding paragraph (a), for fiscal year 3.32 2003, the excess reserve amount shall be computed using the 3.33 balance in a district's school readiness reserve account on June 3.34 30, 2002. For fiscal year 2004, the excess reserve amount shall 3.35 be computed using the adjusted average balance in a district's 3.36 school readiness reserve account on June 30, 2002, and June 30, 4.1 2003. 4.2 [EFFECTIVE DATE.] This section is effective for revenue for 4.3 fiscal year 2003. 4.4 Sec. 4. Minnesota Statutes 2002, section 124D.20, is 4.5 amended by adding a subdivision to read: 4.6 Subd. 11. [RESERVE ACCOUNT LIMIT.] (a) Under this section, 4.7 the sum of the average balances during the most recent 4.8 three-year period in a district's community education reserve 4.9 account and unreserved/undesignated community service fund 4.10 account on June 30 of each year, adjusted for any prior 4.11 reductions under this subdivision, must not be greater than 25 4.12 percent of the sum of the district's maximum total community 4.13 education revenue under subdivision 1, excluding adjustments 4.14 under this subdivision, plus the district's additional community 4.15 education levy under section 124D.21, plus any fees, grants, or 4.16 other revenue received by the district for community education 4.17 programs for the prior year. For purposes of this paragraph, 4.18 "community education programs" means programs according to 4.19 subdivisions 8, paragraph (a), and 9, and section 124D.19, 4.20 subdivision 12, excluding early childhood family education 4.21 programs under section 124D.13, school readiness programs under 4.22 sections 124D.15 and 124D.17, and adult basic education programs 4.23 under section 124D.52. 4.24 (b) If the sum of the average balances during the most 4.25 recent three-year period in a district's community education 4.26 reserve account and unreserved/undesignated community service 4.27 fund account on June 30 of each year, adjusted for any prior 4.28 reductions under this subdivision, is in excess of the limit 4.29 under paragraph (a), the district's community education state 4.30 aid and levy authority for the current school year must be 4.31 reduced by the lesser of the current year revenue under 4.32 subdivision 1 or the excess reserve amount. The aid reduction 4.33 equals the product of the lesser of the excess reserve amount or 4.34 the current year revenue under subdivision 1 times the ratio of 4.35 the district's aid for the current year under subdivision 7 to 4.36 the district's revenue for the current year under subdivision 5.1 1. The levy reduction equals the excess reserve amount minus 5.2 the aid reduction. For purposes of this paragraph, if a 5.3 district does not levy the entire amount permitted under 5.4 subdivision 5 or 6, the revenue under subdivision 1 must be 5.5 reduced in proportion to the actual amount levied. 5.6 (c) Notwithstanding paragraph (a), for fiscal year 2003, 5.7 the excess reserve amount shall be computed using the balances 5.8 in a district's community education reserve account and 5.9 unreserved/undesignated community service fund account on June 5.10 30, 2002. For fiscal year 2004, the excess reserve amount shall 5.11 be computed using the adjusted average balances in a district's 5.12 community education reserve account and unreserved/undesignated 5.13 community service fund account on June 30, 2002, and June 30, 5.14 2003. 5.15 [EFFECTIVE DATE.] This section is effective for revenue for 5.16 fiscal year 2003. 5.17 Sec. 5. Minnesota Statutes 2002, section 124D.20, is 5.18 amended by adding a subdivision to read: 5.19 Subd. 12. [WAIVER.] (a) If a district anticipates that the 5.20 reserve account may exceed the 25 percent limit established 5.21 under subdivision 11 because of extenuating circumstances, prior 5.22 approval to exceed the limit must be obtained in writing from 5.23 the commissioner. 5.24 (b) Notwithstanding paragraph (a), for fiscal year 2003, a 5.25 district may submit a waiver request within 30 days of the date 5.26 of final enactment. 5.27 APPROPRIATION CHANGE 5.28 2003 5.29 Sec. 6. APPROPRIATIONS; DEPARTMENT OF 5.30 CHILDREN, FAMILIES, AND LEARNING 5.31 Subdivision 1. The sums in this 5.32 subdivision are subtracted from the 5.33 general fund appropriations to the 5.34 department of children, families, and 5.35 learning for operating purposes. 5.36 (1,044,000) ..... 2003 5.37 Subd. 2. Department 5.38 The sums in this subdivision are 5.39 subtracted from the general fund 6.1 appropriation to the department of 6.2 children, families, and learning for 6.3 aids and grants. 6.4 (206,000) ..... 2003 6.5 Subd. 3. School Readiness 6.6 (791,000) ..... 2003 6.7 Subd. 4. Early Childhood and Community 6.8 Education 6.9 (769,000) ..... 2003 6.10 Subd. 5. Community Education 6.11 (1,807,000) ..... 2003 6.12 Sec. 7. APPROPRIATIONS; PERPICH CENTER 6.13 FOR ARTS EDUCATION 6.14 (130,000) ..... 2003 6.15 Sec. 8. APPROPRIATIONS; MINNESOTA STATE ACADEMIES 6.16 (40,000) ..... 2003 6.17 Sec. 9. [EFFECTIVE DATE.] 6.18 Sections 1 to 8 are effective the day following final 6.19 enactment, unless otherwise specified. 6.20 ARTICLE 2 6.21 HIGHER EDUCATION 6.22 Section 1. [HIGHER EDUCATION REDUCTIONS.] 6.23 The dollar amounts in the columns under "APPROPRIATION 6.24 CHANGE" are added to or, if shown in parentheses, are subtracted 6.25 from the appropriations in Laws 2001, First Special Session 6.26 chapter 1, as amended, by Laws 2002, chapter 220 or 374, as 6.27 amended, or other law to the specified agencies. The 6.28 appropriations are from the general fund or other named fund and 6.29 are available for the fiscal years indicated for each purpose. 6.30 The figure "2003" means that the addition to or subtraction from 6.31 the appropriations listed under the figure is for the fiscal 6.32 year ending June 30, 2003. 6.33 2003 6.34 TRANSFERS FROM OTHER FUNDS $ 30,000,000 6.35 APPROPRIATION REDUCTIONS (50,107,000) 6.36 APPROPRIATION CHANGE 6.37 Sec. 2. BOARD OF REGENTS 6.38 OF THE UNIVERSITY OF MINNESOTA (25,000,000) 7.1 Sec. 3. BOARD OF TRUSTEES OF 7.2 THE MINNESOTA STATE COLLEGES AND UNIVERSITIES (25,000,000) 7.3 Sec. 4. HIGHER EDUCATION 7.4 SERVICES OFFICE (107,000) 7.5 This amount is subtracted from the 7.6 general fund appropriations to the 7.7 higher education services office for 7.8 operating purposes. 7.9 Sec. 5. Minnesota Statutes 2002, section 136A.121, 7.10 subdivision 7, is amended to read: 7.11 Subd. 7. [INSUFFICIENT APPROPRIATION.] If the amount 7.12 appropriated is determined by the office to be insufficient to 7.13 make full awards to applicants under subdivision 5,before any7.14award for that year has been disbursed,awards must be reduced 7.15 by: 7.16 (1) adding a surcharge to the applicant's assigned family 7.17 responsibility, as defined in section 136A.101, subdivision 5a; 7.18and7.19 (2) a percentage increase in the applicant's assigned 7.20 student responsibility, as defined in subdivision 5; and 7.21 (3) eliminating state grant funding for summer school 7.22 programs. 7.23 Sec. 6. [SELF LOAN RESERVE FUND TRANSFER.] 7.24 Notwithstanding any law to the contrary, the higher 7.25 education services office shall transfer $30,000,000 of 7.26 uncommitted balances in the SELF loan reserve fund to the 7.27 general fund. 7.28 Sec. 7. [EFFECTIVE DATE.] 7.29 Sections 1 to 6 are effective the day following final 7.30 enactment, unless otherwise specified. 7.31 ARTICLE 3 7.32 HEALTH AND HUMAN SERVICES 7.33 Section 1. [HEALTH AND HUMAN SERVICES REDUCTIONS.] 7.34 The dollar amounts in the columns under "APPROPRIATION 7.35 CHANGE" are added to or, if shown in parentheses, are subtracted 7.36 from the appropriations in Laws 2001, First Special Session 7.37 chapter 9, as amended, by Laws 2002, chapter 220 or 374, as 7.38 amended, or other law to the specified agencies. The 8.1 appropriations are from the general fund or other named fund and 8.2 are available for the fiscal years indicated for each purpose. 8.3 The figure "2003" means that the addition to or subtraction from 8.4 the appropriations listed under the figure is for the fiscal 8.5 year ending June 30, 2003. 8.6 2003 8.7 TRANSFERS FROM OTHER FUNDS $ 9,900,000 8.8 APPROPRIATION REDUCTIONS (16,938,000) 8.9 APPROPRIATION CHANGE 8.10 Sec. 2. COMMISSIONER OF HUMAN SERVICES 8.11 Subdivision 1. Total 8.12 Appropriation Reductions (11,212,000) 8.13 Summary by Fund 8.14 General (11,212,000) 8.15 Subd. 2. Agency Management 8.16 General (3,333,000) 8.17 [ADMINISTRATION REDUCTION.] The 8.18 department's general fund fiscal year 8.19 2003 administrative appropriation is 8.20 reduced by $3,333,000. 8.21 [SPECIAL REVENUE FUND TRANSFER.] 8.22 Notwithstanding any law to the 8.23 contrary, excluding accounts authorized 8.24 under Minnesota Statutes, section 8.25 16A.1286 and chapter 254B, the 8.26 commissioner shall transfer $1,200,000 8.27 of uncommitted special revenue fund 8.28 balances to the general fund upon final 8.29 enactment. The actual transfers shall 8.30 be identified within the standard 8.31 information provided to the chairs of 8.32 the house health and human services 8.33 finance committee and the senate 8.34 health, human services, and corrections 8.35 budget division in December 2003. 8.36 [STATE-OPERATED SERVICES TRANSFER.] The 8.37 commissioner shall transfer $3,200,000 8.38 from the TBI enterprise, $1,000,000 8.39 from lease income, and $500,000 from 8.40 the ICF/MR depreciation accounts to the 8.41 general fund upon final enactment. 8.42 Subd. 3. Administrative 8.43 Reimbursement/Pass-through 8.44 Federal TANF 894,000 8.45 [TANF INDIRECT COSTS.] The fiscal year 8.46 2003 federal TANF appropriation for 8.47 TANF indirect costs is increased by 8.48 $894,000. Notwithstanding Minnesota 8.49 Statutes, section 256J.02, subdivision 8.50 5, the limit on TANF indirect cost 8.51 liability for fiscal year 2003 shall be 9.1 $2,929,000. For the calendar quarter 9.2 starting October 1, 2002, and until the 9.3 indirect cost liability limit is 9.4 reached, the commissioner shall 9.5 reimburse the general fund a rate of 9.6 100 percent of TANF-allowable indirect 9.7 costs. 9.8 Subd. 4. Children's Services Grants 9.9 General (750,000) 9.10 [CRIMINAL JUSTICE TRAINING GRANT.] The 9.11 fiscal year 2003 appropriation for the 9.12 criminal justice training grant is 9.13 reduced by $5,000. 9.14 [FETAL ALCOHOL SYNDROME GRANT.] The 9.15 fiscal year 2003 appropriation for the 9.16 fetal alcohol syndrome grant is reduced 9.17 by $106,000. 9.18 [FOSTER AND ADOPT RECRUITMENT GRANT.] 9.19 The fiscal year 2003 appropriation for 9.20 the foster and adopt recruitment grant 9.21 is reduced by $55,000. 9.22 [ADOPTION ASSISTANCE AND RELATIVE 9.23 CUSTODY ASSISTANCE GRANTS.] The fiscal 9.24 year 2003 appropriation for the 9.25 adoption assistance and relative 9.26 custody assistance grants is reduced by 9.27 $584,000. 9.28 Subd. 5. MA Basic Health Care Grants - 9.29 Families and Children 9.30 General (1,007,000) 9.31 Subd. 6. MA Basic Health Care Grants - 9.32 Elderly and Disabled 9.33 General (2,686,000) 9.34 Subd. 7. General Assistance Medical 9.35 Care Grants 9.36 General (457,000) 9.37 Subd. 8. Prescription Drug Program 9.38 General (143,000) 9.39 Subd. 9. Aging and Adult Service Grants 9.40 General (671,000) 9.41 [HOME SHARE GRANT.] The fiscal year 9.42 2003 appropriation for the home share 9.43 grant is reduced by $156,000. 9.44 [COMMUNITY SERVICE GRANT.] The fiscal 9.45 year 2003 appropriation for the 9.46 community service grant is reduced by 9.47 $515,000. 9.48 Subd. 10. Medical Assistance Long-term Care 9.49 Waivers and Home Care Grants 9.50 General 66,000 10.1 [TARGETED CASE MANAGEMENT FOR HOME CARE 10.2 RECIPIENTS.] Implementation of the 10.3 targeted case management benefit for 10.4 home care recipients, pursuant to Laws 10.5 2001, First Special Session chapter 9, 10.6 article 3, sections 20, 21, 23 to 25, 10.7 27, and 28 (Minnesota Statutes, section 10.8 256B.0621, subdivisions 2, 3, 5 to 7, 10.9 and 9, and 10) will be delayed until 10.10 July 1, 2005. 10.11 [COMMON SERVICE MENU.] Implementation 10.12 of the common service menu option 10.13 within the home- and community-based 10.14 waivers, pursuant to Laws 2001, First 10.15 Special Session chapter 9, article 3, 10.16 section 63 (Minnesota Statutes, section 10.17 256B.49, subdivision 16) will be 10.18 delayed until July 1, 2005. 10.19 Subd. 11. Medical Assistance Long-term 10.20 Care Facilities Grants 10.21 General (199,000) 10.22 [ICF/MR SPECIAL RATE PROVISIONS FOR 10.23 OCCUPANCY.] Notwithstanding Minnesota 10.24 Statutes, section 256B.5013, 10.25 subdivision 4, the commissioner will 10.26 suspend new authorizations of rate 10.27 adjustments to ICF/MR facilities for 10.28 the purposes of addressing occupancy. 10.29 This suspension will take effect as of 10.30 April 1, 2003, and will sunset on July 10.31 1, 2005. 10.32 Subd. 12. Alternative Care Grants 10.33 General (1,700,000) 10.34 [ALTERNATIVE CARE TARGETED FUNDS 10.35 REDUCTION.] The commissioner shall 10.36 adjust the allocation of targeted 10.37 alternative care funds to reduce net 10.38 general fund expenditures by $1,000,000 10.39 in fiscal year 2003. The reduction 10.40 shall be achieved by delaying 10.41 implementation of common service menu 10.42 provisions and by working with counties 10.43 to create efficiencies, including 10.44 moving medical assistance eligible 10.45 persons from alternative care to the 10.46 elderly waiver more quickly. 10.47 Subd. 13. Chemical Dependency 10.48 Nonentitlement Grants 10.49 General (268,000) 10.50 [CD NONENTITLEMENT GRANTS.] The fiscal 10.51 year 2003 appropriation for chemical 10.52 health nonentitlement grants shall be 10.53 reduced by $268,000. This reduction 10.54 affects only the chemical use 10.55 assessment of minors authorized under 10.56 Minnesota Statutes, section 260B.157, 10.57 subdivision 1, and the statewide 10.58 detoxification transportation program 10.59 authorized under Minnesota Statutes, 10.60 section 254A.17, subdivision 3. 11.1 Subd. 14. Work Grants 11.2 Federal TANF (894,000) 11.3 [SUPPORTIVE WORK GRANTS.] The fiscal 11.4 year 2003 federal TANF appropriation 11.5 for supportive work grants is reduced 11.6 by $894,000. 11.7 Subd. 15. Economic Support Grants - 11.8 Other Assistance 11.9 General (64,000) 11.10 [FRAUD PREVENTION INVESTIGATION 11.11 GRANTS.] The fiscal year 2003 general 11.12 fund appropriation for fraud prevention 11.13 investigation grants is reduced by 11.14 $64,000. 11.15 Sec. 3. COMMISSIONER OF HEALTH 11.16 Subdivision 1. Total General Fund 11.17 Appropriation Reductions (5,446,000) 11.18 Summary by Fund 11.19 General (5,446,000) 11.20 Transfers from 11.21 Other Funds (4,000,000) 11.22 $500,000 of the appropriation reduction 11.23 is from long-term care quality 11.24 demonstration grants authorized in Laws 11.25 2001, First Special Session chapter 9, 11.26 article 17, section 3. 11.27 $500,000 of the appropriation reduction 11.28 is from long-term care transition 11.29 planning grants authorized in Laws 11.30 2001, First Special Session chapter 9, 11.31 article 17, section 3. 11.32 $3,557,549 of the appropriation 11.33 reduction is from WIC grants 11.34 administration authorized in Laws 2001, 11.35 First Special Session chapter 9, 11.36 article 17, section 3. 11.37 $4,000,000 of the appropriation for 11.38 tobacco use and prevention is 11.39 transferred to the commissioner of 11.40 finance for cancellation to the general 11.41 fund. 11.42 Sec. 4. EMERGENCY MEDICAL SERVICES BOARD (45,000) 11.43 Sec. 5. COUNCIL ON DISABILITY (29,000) 11.44 Sec. 6. OMBUDSMAN FOR MENTAL HEALTH 11.45 AND MENTAL RETARDATION (73,000) 11.46 [CANCELLATION.] $14,500 of the amount 11.47 for crime victims oversight is canceled 11.48 to the general fund. 11.49 Sec. 7. OMBUDSMAN FOR FAMILIES (9,000) 11.50 Sec. 8. VETERANS HOME BOARD (124,000) 12.1 Sec. 9. Minnesota Statutes 2002, section 256.9657, 12.2 subdivision 1, is amended to read: 12.3 Subdivision 1. [NURSING HOME LICENSE SURCHARGE.] (a) 12.4 Effective July 1, 1993, each non-state-operated nursing home 12.5 licensed under chapter 144A shall pay to the commissioner an 12.6 annual surcharge according to the schedule in subdivision 4. 12.7 The surcharge shall be calculated as $620 per licensed bed. If 12.8 the number of licensed beds is reduced, the surcharge shall be 12.9 based on the number of remaining licensed beds the second month 12.10 following the receipt of timely notice by the commissioner of 12.11 human services that beds have been delicensed. The nursing home 12.12 must notify the commissioner of health in writing when beds are 12.13 delicensed. The commissioner of health must notify the 12.14 commissioner of human services within ten working days after 12.15 receiving written notification. If the notification is received 12.16 by the commissioner of human services by the 15th of the month, 12.17 the invoice for the second following month must be reduced to 12.18 recognize the delicensing of beds. Beds on layaway status 12.19 continue to be subject to the surcharge. The commissioner of 12.20 human services must acknowledge a medical care surcharge appeal 12.21 within 30 days of receipt of the written appeal from the 12.22 provider. 12.23 (b) Effective July 1, 1994, the surcharge in paragraph (a) 12.24 shall be increased to $625. 12.25 (c) Effective August 15, 2002, the surcharge under 12.26 paragraph (b) shall be increased to $990. 12.27 (d) Effective April 15, 2003, the surcharge under paragraph 12.28 (c) shall be increased to $2,741. 12.29 (e) Between April 1, 2002, and August 15,20032004, a 12.30 facility governed by this subdivision may elect to assume full 12.31 participation in the medical assistance program by agreeing to 12.32 comply with all of the requirements of the medical assistance 12.33 program, including the rate equalization law in section 256B.48, 12.34 subdivision 1, paragraph (a), and all other requirements 12.35 established in law or rule, and to begin intake of new medical 12.36 assistance recipients. Rates will be determined under Minnesota 13.1 Rules, parts 9549.0010 to 9549.0080. Notwithstanding section 13.2 256B.431, subdivision 27, paragraph (i), rate calculations will 13.3 be subject to limits as prescribed in rule and law. Other than 13.4 the adjustments in sections 256B.431, subdivisions 30 and 32; 13.5 256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 13.6 9549.0057, and any other applicable legislation enacted prior to 13.7 the finalization of rates, facilities assuming full 13.8 participation in medical assistance under this paragraph are not 13.9 eligible for any rate adjustments until the July 1 following 13.10 their settle-up period. 13.11 [EFFECTIVE DATE.] This section is effective February 28, 13.12 2003. 13.13 Sec. 10. Minnesota Statutes 2002, section 256.969, 13.14 subdivision 3a, is amended to read: 13.15 Subd. 3a. [PAYMENTS.] (a) Acute care hospital billings 13.16 under the medical assistance program must not be submitted until 13.17 the recipient is discharged. However, the commissioner shall 13.18 establish monthly interim payments for inpatient hospitals that 13.19 have individual patient lengths of stay over 30 days regardless 13.20 of diagnostic category. Except as provided in section 256.9693, 13.21 medical assistance reimbursement for treatment of mental illness 13.22 shall be reimbursed based on diagnostic classifications. 13.23 Individual hospital payments established under this section and 13.24 sections 256.9685, 256.9686, and 256.9695, in addition to third 13.25 party and recipient liability, for discharges occurring during 13.26 the rate year shall not exceed, in aggregate, the charges for 13.27 the medical assistance covered inpatient services paid for the 13.28 same period of time to the hospital. This payment limitation 13.29 shall be calculated separately for medical assistance and 13.30 general assistance medical care services. The limitation on 13.31 general assistance medical care shall be effective for 13.32 admissions occurring on or after July 1, 1991. Services that 13.33 have rates established under subdivision 11 or 12, must be 13.34 limited separately from other services. After consulting with 13.35 the affected hospitals, the commissioner may consider related 13.36 hospitals one entity and may merge the payment rates while 14.1 maintaining separate provider numbers. The operating and 14.2 property base rates per admission or per day shall be derived 14.3 from the best Medicare and claims data available when rates are 14.4 established. The commissioner shall determine the best Medicare 14.5 and claims data, taking into consideration variables of recency 14.6 of the data, audit disposition, settlement status, and the 14.7 ability to set rates in a timely manner. The commissioner shall 14.8 notify hospitals of payment rates by December 1 of the year 14.9 preceding the rate year. The rate setting data must reflect the 14.10 admissions data used to establish relative values. Base year 14.11 changes from 1981 to the base year established for the rate year 14.12 beginning January 1, 1991, and for subsequent rate years, shall 14.13 not be limited to the limits ending June 30, 1987, on the 14.14 maximum rate of increase under subdivision 1. The commissioner 14.15 may adjust base year cost, relative value, and case mix index 14.16 data to exclude the costs of services that have been 14.17 discontinued by the October 1 of the year preceding the rate 14.18 year or that are paid separately from inpatient services. 14.19 Inpatient stays that encompass portions of two or more rate 14.20 years shall have payments established based on payment rates in 14.21 effect at the time of admission unless the date of admission 14.22 preceded the rate year in effect by six months or more. In this 14.23 case, operating payment rates for services rendered during the 14.24 rate year in effect and established based on the date of 14.25 admission shall be adjusted to the rate year in effect by the 14.26 hospital cost index. 14.27 (b) For fee-for-service admissions occurring on or after 14.28 July 1, 2002, the total payment, before third-party liability 14.29 and spenddown, made to hospitals for inpatient services is 14.30 reduced by .5 percent from the current statutory rates. 14.31 (c) For fee-for-service admissions occurring on or after 14.32 March 1, 2003, the total payment, before third-party liability 14.33 and spenddown, made to hospitals for inpatient services is 14.34 reduced five percent from the current statutory rates. Mental 14.35 health services within diagnosis related groups 424 to 432 and 14.36 facilities defined under subdivision 16 are excluded from this 15.1 paragraph. 15.2 Sec. 11. Minnesota Statutes 2002, section 256B.0625, 15.3 subdivision 13, is amended to read: 15.4 Subd. 13. [DRUGS.] (a) Medical assistance covers drugs, 15.5 except for fertility drugs when specifically used to enhance 15.6 fertility, if prescribed by a licensed practitioner and 15.7 dispensed by a licensed pharmacist, by a physician enrolled in 15.8 the medical assistance program as a dispensing physician, or by 15.9 a physician or a nurse practitioner employed by or under 15.10 contract with a community health board as defined in section 15.11 145A.02, subdivision 5, for the purposes of communicable disease 15.12 control. The commissioner, after receiving recommendations from 15.13 professional medical associations and professional pharmacist 15.14 associations, shall designate a formulary committee to advise 15.15 the commissioner on the names of drugs for which payment is 15.16 made, recommend a system for reimbursing providers on a set fee 15.17 or charge basis rather than the present system, and develop 15.18 methods encouraging use of generic drugs when they are less 15.19 expensive and equally effective as trademark drugs. The 15.20 formulary committee shall consist of nine members, four of whom 15.21 shall be physicians who are not employed by the department of 15.22 human services, and a majority of whose practice is for persons 15.23 paying privately or through health insurance, three of whom 15.24 shall be pharmacists who are not employed by the department of 15.25 human services, and a majority of whose practice is for persons 15.26 paying privately or through health insurance, a consumer 15.27 representative, and a nursing home representative. Committee 15.28 members shall serve three-year terms and shall serve without 15.29 compensation. Members may be reappointed once. 15.30 (b) The commissioner shall establish a drug formulary. Its 15.31 establishment and publication shall not be subject to the 15.32 requirements of the Administrative Procedure Act, but the 15.33 formulary committee shall review and comment on the formulary 15.34 contents. 15.35 The formulary shall not include: 15.36 (i) drugs or products for which there is no federal 16.1 funding; 16.2 (ii) over-the-counter drugs, except for antacids, 16.3 acetaminophen, family planning products, aspirin, insulin, 16.4 products for the treatment of lice, vitamins for adults with 16.5 documented vitamin deficiencies, vitamins for children under the 16.6 age of seven and pregnant or nursing women, and any other 16.7 over-the-counter drug identified by the commissioner, in 16.8 consultation with the drug formulary committee, as necessary, 16.9 appropriate, and cost-effective for the treatment of certain 16.10 specified chronic diseases, conditions or disorders, and this 16.11 determination shall not be subject to the requirements of 16.12 chapter 14; 16.13 (iii) anorectics, except that medically necessary 16.14 anorectics shall be covered for a recipient previously diagnosed 16.15 as having pickwickian syndrome and currently diagnosed as having 16.16 diabetes and being morbidly obese; 16.17 (iv) drugs for which medical value has not been 16.18 established; and 16.19 (v) drugs from manufacturers who have not signed a rebate 16.20 agreement with the Department of Health and Human Services 16.21 pursuant to section 1927 of title XIX of the Social Security Act. 16.22 The commissioner shall publish conditions for prohibiting 16.23 payment for specific drugs after considering the formulary 16.24 committee's recommendations. An honorarium of $100 per meeting 16.25 and reimbursement for mileage shall be paid to each committee 16.26 member in attendance. 16.27 (c) The basis for determining the amount of payment shall 16.28 be the lower of the actual acquisition costs of the drugs plus a 16.29 fixed dispensing fee; the maximum allowable cost set by the 16.30 federal government or by the commissioner plus the fixed 16.31 dispensing fee; or the usual and customary price charged to the 16.32 public. The amount of payment basis must be reduced to reflect 16.33 all discount amounts applied to the charge by any 16.34 provider/insurer agreement or contract for submitted charges to 16.35 medical assistance programs. The net submitted charge may not 16.36 be greater than the patient liability for the service. The 17.1 pharmacy dispensing fee shall be $3.65, except that the 17.2 dispensing fee for intravenous solutions which must be 17.3 compounded by the pharmacist shall be $8 per bag, $14 per bag 17.4 for cancer chemotherapy products, and $30 per bag for total 17.5 parenteral nutritional products dispensed in one liter 17.6 quantities, or $44 per bag for total parenteral nutritional 17.7 products dispensed in quantities greater than one liter. Actual 17.8 acquisition cost includes quantity and other special discounts 17.9 except time and cash discounts. The actual acquisition cost of 17.10 a drug shall be estimated by the commissioner, at average 17.11 wholesale price minus nine percent, except that where a drug has 17.12 had its wholesale price reduced as a result of the actions of 17.13 the National Association of Medicaid Fraud Control Units, the 17.14 estimated actual acquisition cost shall be the reduced average 17.15 wholesale price, without the nine percent deduction. The 17.16 maximum allowable cost of a multisource drug may be set by the 17.17 commissioner and it shall be comparable to, but no higher than, 17.18 the maximum amount paid by other third-party payors in this 17.19 state who have maximum allowable cost programs.The17.20commissioner shall set maximum allowable costs for multisource17.21drugs that are not on the federal upper limit list as described17.22in United States Code, title 42, chapter 7, section 1396r-8(e),17.23the Social Security Act, and Code of Federal Regulations, title17.2442, part 447, section 447.332.Establishment of the amount of 17.25 payment for drugs shall not be subject to the requirements of 17.26 the Administrative Procedure Act. An additional dispensing fee 17.27 of $.30 may be added to the dispensing fee paid to pharmacists 17.28 for legend drug prescriptions dispensed to residents of 17.29 long-term care facilities when a unit dose blister card system, 17.30 approved by the department, is used. Under this type of 17.31 dispensing system, the pharmacist must dispense a 30-day supply 17.32 of drug. The National Drug Code (NDC) from the drug container 17.33 used to fill the blister card must be identified on the claim to 17.34 the department. The unit dose blister card containing the drug 17.35 must meet the packaging standards set forth in Minnesota Rules, 17.36 part 6800.2700, that govern the return of unused drugs to the 18.1 pharmacy for reuse. The pharmacy provider will be required to 18.2 credit the department for the actual acquisition cost of all 18.3 unused drugs that are eligible for reuse. Over-the-counter 18.4 medications must be dispensed in the manufacturer's unopened 18.5 package. The commissioner may permit the drug clozapine to be 18.6 dispensed in a quantity that is less than a 30-day supply. 18.7 Whenever a generically equivalent product is available, payment 18.8 shall be on the basis of the actual acquisition cost of the 18.9 generic drug, unless the prescriber specifically indicates 18.10 "dispense as written - brand necessary" on the prescription as 18.11 required by section 151.21, subdivision 2. 18.12 (d)For purposes of this subdivision, "multisource drugs"18.13means covered outpatient drugs, excluding innovator multisource18.14drugs for which there are two or more drug products, which:18.15(1) are related as therapeutically equivalent under the18.16Food and Drug Administration's most recent publication of18.17"Approved Drug Products with Therapeutic Equivalence18.18Evaluations";18.19(2) are pharmaceutically equivalent and bioequivalent as18.20determined by the Food and Drug Administration; and18.21(3) are sold or marketed in Minnesota.18.22"Innovator multisource drug" means a multisource drug that was18.23originally marketed under an original new drug application18.24approved by the Food and Drug Administration.18.25(e)The formulary committee shall review and recommend 18.26 drugs which require prior authorization. The formulary 18.27 committee may recommend drugs for prior authorization directly 18.28 to the commissioner, as long as opportunity for public input is 18.29 provided. Prior authorization may be requested by the 18.30 commissioner based on medical and clinical criteria and on cost 18.31 before certain drugs are eligible for payment. Before a drug 18.32 may be considered for prior authorization at the request of the 18.33 commissioner: 18.34 (1) the drug formulary committee must develop criteria to 18.35 be used for identifying drugs; the development of these criteria 18.36 is not subject to the requirements of chapter 14, but the 19.1 formulary committee shall provide opportunity for public input 19.2 in developing criteria; 19.3 (2) the drug formulary committee must hold a public forum 19.4 and receive public comment for an additional 15 days; 19.5 (3) the drug formulary committee must consider data from 19.6 the state Medicaid program if such data is available; and 19.7 (4) the commissioner must provide information to the 19.8 formulary committee on the impact that placing the drug on prior 19.9 authorization will have on the quality of patient care and on 19.10 program costs, and information regarding whether the drug is 19.11 subject to clinical abuse or misuse. 19.12 Prior authorization may be required by the commissioner 19.13 before certain formulary drugs are eligible for payment. If 19.14 prior authorization of a drug is required by the commissioner, 19.15 the commissioner must provide a 30-day notice period before 19.16 implementing the prior authorization. If a prior authorization 19.17 request is denied by the department, the recipient may appeal 19.18 the denial in accordance with section 256.045. If an appeal is 19.19 filed, the drug must be provided without prior authorization 19.20 until a decision is made on the appeal. 19.21(f)(e) The basis for determining the amount of payment for 19.22 drugs administered in an outpatient setting shall be the lower 19.23 of the usual and customary cost submitted by the provider; the 19.24 average wholesale price minus five percent; or the maximum 19.25 allowable cost set by the federal government under United States 19.26 Code, title 42, chapter 7, section 1396r-8(e), and Code of 19.27 Federal Regulations, title 42, section 447.332, or by the 19.28 commissioner under paragraph (c). 19.29(g)(f) Prior authorization shall not be required or 19.30 utilized for any antipsychotic drug prescribed for the treatment 19.31 of mental illness where there is no generically equivalent drug 19.32 available unless the commissioner determines that prior 19.33 authorization is necessary for patient safety. This paragraph 19.34 applies to any supplemental drug rebate program established or 19.35 administered by the commissioner. 19.36(h)(g) Prior authorization shall not be required or 20.1 utilized for any antihemophilic factor drug prescribed for the 20.2 treatment of hemophilia and blood disorders where there is no 20.3 generically equivalent drug available unless the commissioner 20.4 determines that prior authorization is necessary for patient 20.5 safety. This paragraph applies to any supplemental drug rebate 20.6 program established or administered by the commissioner. This 20.7 paragraph expires July 1, 2003. 20.8 [EFFECTIVE DATE.] This section is effective April 1, 2003. 20.9 Sec. 12. Minnesota Statutes 2002, section 256B.19, 20.10 subdivision 1d, is amended to read: 20.11 Subd. 1d. [PORTION OF NONFEDERAL SHARE TO BE PAID BY 20.12 CERTAIN COUNTIES.] (a) In addition to the percentage 20.13 contribution paid by a county under subdivision 1, the 20.14 governmental units designated in this subdivision shall be 20.15 responsible for an additional portion of the nonfederal share of 20.16 medical assistance cost. For purposes of this subdivision, 20.17 "designated governmental unit" means the counties of Becker, 20.18 Beltrami, Clearwater, Cook, Dodge, Hubbard, Itasca, Lake, 20.19 Pennington, Pipestone, Ramsey, St. Louis, Steele, Todd, 20.20 Traverse, and Wadena. 20.21 (b) Beginning in 1994, each of the governmental units 20.22 designated in this subdivision shall transfer before noon on May 20.23 31 to the state Medicaid agency an amount equal to the number of 20.24 licensed beds in any nursing home owned and operated by the 20.25 county on that date, with the county named as licensee, 20.26 multiplied by $5,723. If two or more counties own and operate a 20.27 nursing home, the payment shall be prorated. These sums shall 20.28 be part of the designated governmental unit's portion of the 20.29 nonfederal share of medical assistance costs. 20.30 (c) Beginning in 2002, in addition to any transfer under 20.31 paragraph (b), each of the governmental units designated in this 20.32 subdivision shall transfer before noon on May 31 to the state 20.33 Medicaid agency an amount equal to the number of licensed beds 20.34 in any nursing home owned and operated by the county on that 20.35 date, with the county named as licensee, multiplied by $10,784. 20.36 The provisions of paragraph (b) apply to transfers under this 21.1 paragraph. 21.2 (d) Beginning in 2003, in addition to any transfer under 21.3 paragraphs (b) and (c), each of the governmental units 21.4 designated in this subdivision shall transfer before noon on May 21.5 31 to the state Medicaid agency an amount equal to the number of 21.6 licensed beds in any nursing home owned and operated by the 21.7 county on that date, with the county named as licensee, 21.8 multiplied by $2,230. The provisions of paragraph (b) apply to 21.9 transfers under this paragraph. 21.10 (e) The commissioner may reduce the intergovernmental 21.11 transfers underparagraphparagraphs (c) and (d) based on the 21.12 commissioner's determination of the payment rate in section 21.13 256B.431, subdivision 23, paragraphs (c)and, (d), and (e). Any 21.14 adjustments must be made on a per-bed basis and must result in 21.15 an amount equivalent to the total amount resulting from the rate 21.16 adjustment in section 256B.431, subdivision 23, paragraphs (c) 21.17and, (d), and (e). 21.18 [EFFECTIVE DATE.] This section is effective February 28, 21.19 2003. 21.20 Sec. 13. Minnesota Statutes 2002, section 256B.195, 21.21 subdivision 4, is amended to read: 21.22 Subd. 4. [ADJUSTMENTS PERMITTED.] (a) The commissioner may 21.23 adjust the intergovernmental transfers under subdivision 2 and 21.24 the payments under subdivision 3,and payments and transfers21.25under subdivision 5,based on the commissioner's determination 21.26 of Medicare upper payment limits, hospital-specific charge 21.27 limits, and hospital-specific limitations on disproportionate 21.28 share payments. Any adjustments must be made on a proportional 21.29 basis. If participation by a particular hospital under this 21.30 section is limited, the commissioner shall adjust the payments 21.31 that relate to that hospital under subdivisions 2,and 3,and 521.32 on a proportional basis in order to allow the hospital to 21.33 participate under this section to the fullest extent possible 21.34 and shall increase other payments under subdivisions 2,and 3,21.35and 5to the extent allowable to maintain the overall level of 21.36 payments under this section. The commissioner may make 22.1 adjustments under this subdivision only after consultation with 22.2 the counties and hospitals identified in subdivisions 2 and 3,22.3and, if subdivision 5 receives federal approval, with the22.4hospital and educational institution identified in subdivision 5. 22.5 (b) The ratio of medical assistance payments specified in 22.6 subdivision 3 to the intergovernmental transfers specified in 22.7 subdivision 2 shall not be reduced except as provided under 22.8 paragraph (a). 22.9 (c) The increase in intergovernmental transfers and 22.10 payments that result from section 256.969, subdivision 3a, 22.11 paragraph (c), shall be paid to the general fund. 22.12 Sec. 14. Minnesota Statutes 2002, section 256B.32, 22.13 subdivision 1, is amended to read: 22.14 Subdivision 1. [FACILITY FEE PAYMENT.] (a) The 22.15 commissioner shall establish a facility fee payment mechanism 22.16 that will pay a facility fee to all enrolled outpatient 22.17 hospitals for each emergency room or outpatient clinic visit 22.18 provided on or after July 1, 1989. This payment mechanism may 22.19 not result in an overall increase in outpatient payment rates. 22.20 This section does not apply to federally mandated maximum 22.21 payment limits, department approved program packages, or 22.22 services billed using a nonoutpatient hospital provider number. 22.23 (b) For fee-for-service services provided on or after July 22.24 1, 2002, the total payment, before third-party liability and 22.25 spenddown, made to hospitals for outpatient hospital facility 22.26 services is reduced by .5 percent from the current statutory 22.27 rates. 22.28 (c) For fee-for-service services provided on or after March 22.29 1, 2003, the total payment before third-party liability and 22.30 spenddown, made to hospitals for outpatient hospital facility 22.31 services is reduced five percent from the current statutory 22.32 rates. Facilities defined under section 256.969, subdivision 22.33 16, are excluded from this paragraph. 22.34 Sec. 15. Minnesota Statutes 2002, section 256B.431, 22.35 subdivision 23, is amended to read: 22.36 Subd. 23. [COUNTY NURSING HOME PAYMENT ADJUSTMENTS.] (a) 23.1 Beginning in 1994, the commissioner shall pay a nursing home 23.2 payment adjustment on May 31 after noon to a county in which is 23.3 located a nursing home that, on that date, was county-owned and 23.4 operated, with the county named as licensee by the commissioner 23.5 of health, and had over 40 beds and medical assistance occupancy 23.6 in excess of 50 percent during the reporting year ending 23.7 September 30, 1991. The adjustment shall be an amount equal to 23.8 $16 per calendar day multiplied by the number of beds licensed 23.9 in the facilityas of September 30, 1991on that date. 23.10 (b) Payments under paragraph (a) are excluded from medical 23.11 assistance per diem rate calculations. These payments are 23.12 required notwithstanding any rule prohibiting medical assistance 23.13 payments from exceeding payments from private pay residents. A 23.14 facility receiving a payment under paragraph (a) may not 23.15 increase charges to private pay residents by an amount 23.16 equivalent to the per diem amount payments under paragraph (a) 23.17 would equal if converted to a per diem. 23.18 (c) Beginning in 2002, in addition to any payment under 23.19 paragraph (a), the commissioner shall pay to a nursing facility 23.20 described in paragraph (a) an adjustment in an amount equal to 23.21 $29.55 per calendar day multiplied by the number of beds 23.22 licensed in the facility on that date. The provisions of 23.23 paragraphs (a) and (b) apply to payments under this paragraph. 23.24 (d) Beginning in 2003, in addition to any payment under 23.25 paragraphs (a) and (c), the commissioner shall pay to a nursing 23.26 facility described in paragraph (a) an adjustment in an amount 23.27 equal to $6.11 per calendar day multiplied by the number of beds 23.28 licensed in the facility on that date. The provisions of 23.29 paragraphs (a) and (b) apply to payments under this paragraph. 23.30 (e) The commissioner may reduce payments under 23.31paragraphparagraphs (c) and (d) based on the commissioner's 23.32 determination of Medicare upper payment limits. Any adjustments 23.33 must be proportional to adjustments made under section 256B.19, 23.34 subdivision 1d, paragraph(d)(e). 23.35 [EFFECTIVE DATE.] This section is effective February 28, 23.36 2003. 24.1 Sec. 16. Minnesota Statutes 2002, section 256B.431, is 24.2 amended by adding a subdivision to read: 24.3 Subd. 38. [NURSING HOME RATE INCREASES EFFECTIVE IN FISCAL 24.4 YEAR 2003.] Effective the first day of the month after notice is 24.5 published in the state register, the commissioner shall provide 24.6 to each nursing home reimbursed under this section or section 24.7 256B.434, an increase in each case mix payment rate equal to the 24.8 increase in the per-bed surcharge paid under section 256.9657, 24.9 subdivision 1, paragraph (d), divided by 365 and further divided 24.10 by .80. The increase shall not be subject to any annual 24.11 percentage increase. The 30-day advance notice requirement in 24.12 section 256B.47, subdivision 2, shall not apply to rate 24.13 increases resulting from this section. 24.14 [EFFECTIVE DATE.] This section is effective February 28, 24.15 2003. 24.16 Sec. 17. Minnesota Statutes 2002, section 256B.75, is 24.17 amended to read: 24.18 256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 24.19 (a) For outpatient hospital facility fee payments for 24.20 services rendered on or after October 1, 1992, the commissioner 24.21 of human services shall pay the lower of (1) submitted charge, 24.22 or (2) 32 percent above the rate in effect on June 30, 1992, 24.23 except for those services for which there is a federal maximum 24.24 allowable payment. Effective for services rendered on or after 24.25 January 1, 2000, payment rates for nonsurgical outpatient 24.26 hospital facility fees and emergency room facility fees shall be 24.27 increased by eight percent over the rates in effect on December 24.28 31, 1999, except for those services for which there is a federal 24.29 maximum allowable payment. Services for which there is a 24.30 federal maximum allowable payment shall be paid at the lower of 24.31 (1) submitted charge, or (2) the federal maximum allowable 24.32 payment. Total aggregate payment for outpatient hospital 24.33 facility fee services shall not exceed the Medicare upper 24.34 limit. If it is determined that a provision of this section 24.35 conflicts with existing or future requirements of the United 24.36 States government with respect to federal financial 25.1 participation in medical assistance, the federal requirements 25.2 prevail. The commissioner may, in the aggregate, prospectively 25.3 reduce payment rates to avoid reduced federal financial 25.4 participation resulting from rates that are in excess of the 25.5 Medicare upper limitations. 25.6 (b) Notwithstanding paragraph (a), payment for outpatient, 25.7 emergency, and ambulatory surgery hospital facility fee services 25.8 for critical access hospitals designated under section 144.1483, 25.9 clause (11), shall be paid on a cost-based payment system that 25.10 is based on the cost-finding methods and allowable costs of the 25.11 Medicare program. 25.12 (c) Effective for services provided on or after July 1, 25.13 2003, rates that are based on the Medicare outpatient 25.14 prospective payment system shall be replaced by a budget neutral 25.15 prospective payment system that is derived using medical 25.16 assistance data. The commissioner shall provide a proposal to 25.17 the 2003 legislature to define and implement this provision. 25.18 (d) For fee-for-service services provided on or after July 25.19 1, 2002, the total payment, before third-party liability and 25.20 spenddown, made to hospitals for outpatient hospital facility 25.21 services is reduced by .5 percent from the current statutory 25.22 rate. 25.23 (e) For fee-for-service services provided on or after March 25.24 1, 2003, the total payment before third-party liability and 25.25 spenddown, made to hospitals for outpatient hospital facility 25.26 services is reduced five percent from the current statutory 25.27 rates. Facilities defined under section 256.969, subdivision 25.28 16, are excluded from this paragraph. 25.29 Sec. 18. Laws 2001, First Special Session chapter 9, 25.30 article 2, section 31, the effective date, is amended to read: 25.31 [EFFECTIVE DATE.] This section is effectiveJanuaryJuly 1, 25.32 2003. 25.33 Sec. 19. [REPEALER.] 25.34 Minnesota Statutes 2002, sections 256.973 and 256B.195, 25.35 subdivision 5, are repealed effective July 1, 2003. 25.36 Sec. 20. [EFFECTIVE DATE.] 26.1 Sections 1 to 19 are effective the day following final 26.2 enactment, unless otherwise specified. 26.3 ARTICLE 4 26.4 ENVIRONMENT AND AGRICULTURE 26.5 Section 1. [ENVIRONMENT AND AGRICULTURE REDUCTIONS.] 26.6 The dollar amounts in the columns under "APPROPRIATION 26.7 CHANGE" are added to or, if shown in parentheses, are subtracted 26.8 from the appropriations in Laws 2001, First Special Session 26.9 chapter 2, as amended, by Laws 2002, chapter 220 or 374, as 26.10 amended, or other law to the specified agencies. The 26.11 appropriations are from the general fund or other named fund and 26.12 are available for the fiscal years indicated for each purpose. 26.13 The figure "2003" means that the addition to or subtraction from 26.14 the appropriations listed under the figure is for the fiscal 26.15 year ending June 30, 2003. 26.16 2003 26.17 TRANSFERS FROM OTHER FUNDS $ 11,000,000 26.18 APPROPRIATION REDUCTIONS (37,087,000) 26.19 APPROPRIATION CHANGE 26.20 Sec. 2. POLLUTION CONTROL AGENCY (1,901,000) 26.21 Of this amount, $993,623 is from the 26.22 appropriation made in Laws 2002, 26.23 chapter 220, article 8, section 2, 26.24 subdivision 2, for clean water 26.25 partnership grants. 26.26 $468,000 is from that portion of grants 26.27 appropriated in Laws 2001, First 26.28 Special Session chapter 2, section 2, 26.29 subdivision 2, for county 26.30 administration of the feedlot permit 26.31 program that is transferred to the 26.32 board of water and soil resources. 26.33 $17,000 is from the amount appropriated 26.34 in Laws 2001, First Special Session 26.35 chapter 2, section 2, subdivision 2, 26.36 for individual sewage treatment system 26.37 (ISTS) administration that is 26.38 transferred to the board of water and 26.39 soil resources. 26.40 Sec. 3. OFFICE OF 26.41 ENVIRONMENTAL ASSISTANCE (409,000) 26.42 Of this amount, $209,680 is from the 26.43 appropriation made in Laws 2002, 26.44 chapter 220, article 8, section 3, for 26.45 office of environmental assistance 26.46 operation grants. 27.1 Sec. 4. MINNESOTA ZOO (270,000) 27.2 Sec. 5. NATURAL RESOURCES (4,022,000) 27.3 Of this amount, $25,000 is from the 27.4 appropriation made in Laws 2002, 27.5 chapter 220, article 8, section 5, 27.6 subdivision 5, for a grant to the city 27.7 of Taylors Falls for fire and rescue 27.8 operations in support of Interstate 27.9 park. 27.10 $171,323 is from the balance of the 27.11 appropriation made in Laws 2001, First 27.12 Special Session chapter 2, section 5, 27.13 subdivision 11, for grants to assist 27.14 local government units and 27.15 organizations in the metropolitan area 27.16 to acquire and develop natural areas 27.17 and greenways. 27.18 $6,657 is from the balance of the 27.19 appropriation made in Laws 1997, 27.20 chapter 216, section 5, subdivision 6, 27.21 for the Taconite Harbor safe harbor 27.22 project. 27.23 Sec. 6. BOARD OF WATER 27.24 AND SOIL RESOURCES (1,297,000) 27.25 Of this amount, $1,167,000 is from the 27.26 appropriation made in Laws 2001, First 27.27 Special Session chapter 2, section 6, 27.28 for natural resources block grants to 27.29 local governments. 27.30 Sec. 7. DEPARTMENT OF AGRICULTURE (28,198,000) 27.31 Of this amount, $357,000 is from the 27.32 appropriation made in Laws 2001, First 27.33 Special Session chapter 2, section 9, 27.34 subdivision 4, for grants to 27.35 agricultural societies and associations. 27.36 $26,812,271 is from the balance of the 27.37 appropriation made in Minnesota 27.38 Statutes, section 41A.09, subdivision 27.39 3a, for a 19 cents per gallon subsidy 27.40 for each gallon of ethanol produced 27.41 within the state. 27.42 $140,000 is from the balance of the 27.43 appropriation made in Laws 2001, First 27.44 Special Session chapter 2, section 9, 27.45 subdivision 3, for grants to farmers 27.46 for demonstration projects involving 27.47 sustainable agriculture as authorized 27.48 in Minnesota Statutes, section 17.116. 27.49 $60,000 is from the balance of the 27.50 appropriation made in Laws 2000, 27.51 chapter 488, article 3, section 5, for 27.52 grants to one or more cooperative 27.53 associations organized under Minnesota 27.54 Statutes, chapter 308A, primarily for 27.55 the purpose of facilitating the 27.56 production and marketing of short 27.57 rotation woody crops. 27.58 Any refunds received by the state from 27.59 the appropriation in Laws 2000, chapter 28.1 488, article 3, section 5, for short 28.2 rotation woody crops cancel to the 28.3 general fund. 28.4 Sec. 8. BOARD OF ANIMAL HEALTH (103,000) 28.5 Sec. 9. AGRICULTURAL 28.6 UTILIZATION RESEARCH INSTITUTE (887,000) 28.7 Sec. 10. [TRANSFER AND APPROPRIATION REDUCTION.] 28.8 Subdivision 1. [TRANSFER.] The commissioner of the 28.9 pollution control agency shall transfer $11,000,000 from the 28.10 unreserved balance of the solid waste fund to the commissioner 28.11 of finance for cancellation to the general fund. 28.12 Subd. 2. [APPROPRIATION REDUCTION.] After consultation 28.13 with the chair of the legislative commission on Minnesota 28.14 resources, the commissioner of finance shall reduce $2,400,000 28.15 from appropriations in the future resources fund in accordance 28.16 with Minnesota Statutes, section 16A.152, subdivision 4, 28.17 paragraph (c). 28.18 Sec. 11. Minnesota Statutes 2002, section 116P.05, 28.19 subdivision 2, is amended to read: 28.20 Subd. 2. [DUTIES.] (a) The commission shall recommend a 28.21 budget plan for expenditures from the environment and natural 28.22 resources trust fund and shall adopt a strategic plan as 28.23 provided in section 116P.08. 28.24 (b)The commission shall recommend expenditures to the28.25legislature from the Minnesota future resources fund under28.26section 116P.13.28.27(c)It is a condition of acceptance of the appropriations 28.28 made from theMinnesota future resources fund,Minnesota 28.29 environment and natural resources trust fund, and oil overcharge 28.30 money under section 4.071, subdivision 2, that the agency or 28.31 entity receiving the appropriation must submit a work program 28.32 and semiannual progress reports in the form determined by the 28.33 legislative commission on Minnesota resources. None of the 28.34 money provided may be spent unless the commission has approved 28.35 the pertinent work program. 28.36(d)(c) The peer review panel created under section 116P.08 28.37 must also review, comment, and report to the commission on 29.1 research proposals applying for an appropriation from the 29.2 Minnesota resources fund and from oil overcharge money under 29.3 section 4.071, subdivision 2. 29.4(e)(d) The commission may adopt operating procedures to 29.5 fulfill its duties undersectionssection 116P.01to 116P.13. 29.6 Sec. 12. Minnesota Statutes 2002, section 116P.09, 29.7 subdivision 4, is amended to read: 29.8 Subd. 4. [PERSONNEL.] Persons who are employed by a state 29.9 agency to work on a project and are paid by an appropriation 29.10 from the trust fundor Minnesota future resources fundare in 29.11 the unclassified civil service, and their continued employment 29.12 is contingent upon the availability of money from the 29.13 appropriation. When the appropriation has been spent, their 29.14 positions must be canceled and the approved complement of the 29.15 agency reduced accordingly. Part-time employment of persons for 29.16 a project is authorized. The use of classified employees is 29.17 authorized when approved as part of the work program required by 29.18 section 116P.05, subdivision 2, paragraph(c)(b). 29.19 Sec. 13. Minnesota Statutes 2002, section 116P.09, 29.20 subdivision 5, is amended to read: 29.21 Subd. 5. [ADMINISTRATIVE EXPENSE.] Theadministrative29.22expenses of the commission shall be paid from the various funds29.23administered by the commission as follows:29.24(1) Through June 30, 1993, theadministrative expenses of 29.25 the commission and the advisory committee shall be paid from the 29.26Minnesota future resources fund. After that time, the prorated29.27expenses related to administration of the trust fund shall be29.28paid from theearnings of the trust fund. 29.29(2) After June 30, 1993, the prorated expenses related to29.30administration of the trust fund may not exceed an amount equal29.31to four percent of the projected earnings of the trust fund for29.32the biennium.29.33 Sec. 14. Minnesota Statutes 2002, section 116P.09, 29.34 subdivision 7, is amended to read: 29.35 Subd. 7. [REPORT REQUIRED.] The commission shall, by 29.36 January 15 of each odd-numbered year, submit a report to the 30.1 governor, the chairs of the house appropriations and senate 30.2 finance committees, and the chairs of the house and senate 30.3 committees on environment and natural resources. Copies of the 30.4 report must be available to the public. The report must include: 30.5 (1) a copy of the current strategic plan; 30.6 (2) a description of each project receiving money from the 30.7 trust fundand Minnesota future resources fundduring the 30.8 preceding biennium; 30.9 (3) a summary of any research project completed in the 30.10 preceding biennium; 30.11 (4) recommendations to implement successful projects and 30.12 programs into a state agency's standard operations; 30.13 (5) to the extent known by the commission, descriptions of 30.14 the projects anticipated to be supported by the trust fundand30.15Minnesota future resources accountduring the next biennium; 30.16 (6) the source and amount of all revenues collected and 30.17 distributed by the commission, including all administrative and 30.18 other expenses; 30.19 (7) a description of the assets and liabilities of the 30.20 trust fundand the Minnesota future resources fund; 30.21 (8) any findings or recommendations that are deemed proper 30.22 to assist the legislature in formulating legislation; 30.23 (9) a list of all gifts and donations with a value over 30.24 $1,000; 30.25 (10) a comparison of the amounts spent by the state for 30.26 environment and natural resources activities through the most 30.27 recent fiscal year; and 30.28 (11) a copy of the most recent compliance audit. 30.29 Sec. 15. Minnesota Statutes 2002, section 116P.10, is 30.30 amended to read: 30.31 116P.10 [ROYALTIES, COPYRIGHTS, PATENTS.] 30.32 This section applies to projects supported by the trust 30.33 fund, the Minnesota future resources fund,and the oil 30.34 overcharge money referred to in section 4.071, subdivision 2, 30.35 each of which is referred to in this section as a "fund." The 30.36 fund owns and shall take title to the percentage of a royalty, 31.1 copyright, or patent resulting from a project supported by the 31.2 fund equal to the percentage of the project's total funding 31.3 provided by the fund. Cash receipts resulting from a royalty, 31.4 copyright, or patent, or the sale of the fund's rights to a 31.5 royalty, copyright, or patent, must be credited immediately to 31.6 the principal of the fund. Before a project is included in the 31.7 budget plan, the commission may vote to relinquish the ownership 31.8 or rights to a royalty, copyright, or patent resulting from a 31.9 project supported by the fund to the project's proposer when the 31.10 amount of the original grant or loan, plus interest, has been 31.11 repaid to the fund. 31.12 Sec. 16. Minnesota Statutes 2002, section 116P.14, 31.13 subdivision 2, is amended to read: 31.14 Subd. 2. [STATE LAND AND WATER CONSERVATION ACCOUNT; 31.15 CREATION.] A state land and water conservation account is 31.16 created in theMinnesota futurenatural resources fund. All of 31.17 the money made available to the state from funds granted under 31.18 subdivision 1 shall be deposited in the state land and water 31.19 conservation account. 31.20 Sec. 17. Minnesota Statutes 2002, section 297F.10, 31.21 subdivision 1, is amended to read: 31.22 Subdivision 1. [TAX AND USE TAX ON CIGARETTES.] Revenue 31.23 received from cigarette taxes, as well as related penalties, 31.24 interest, license fees, and miscellaneous sources of revenue 31.25 shall be deposited by the commissioner in the state treasury and 31.26 credited as follows: 31.27 (a) first to the general obligation special tax bond debt 31.28 service account in each fiscal year the amount required to 31.29 increase the balance on hand in the account on each December 1 31.30 to an amount equal to the full amount of principal and interest 31.31 to come due on all outstanding bonds whose debt service is 31.32 payable primarily from the proceeds of the tax to and including 31.33 the second following July 1; and 31.34 (b) after the requirements of paragraph (a) have been met:, 31.35(1) the revenue produced by one mill of the tax on31.36cigarettes weighing not more than three pounds a thousand and32.1two mills of the tax on cigarettes weighing more than three32.2pounds a thousand must be credited to the Minnesota future32.3resources fund; and32.4(2)the balance of the revenues derived from taxes, 32.5 penalties, and interest (under this chapter) and from license 32.6 fees and miscellaneous sources of revenue shall be credited to 32.7 the general fund. 32.8 Sec. 18. [REPEALER.] 32.9 Minnesota Statutes 2002, sections 1.31; 115A.908, 32.10 subdivision 2; and 116P.13, are repealed. 32.11 Sec. 19. [EFFECTIVE DATE.] 32.12 Sections 1 to 9 are effective the day following final 32.13 enactment. Sections 10 to 18 are effective March 1, 2003. 32.14 ARTICLE 5 32.15 ECONOMIC DEVELOPMENT 32.16 Section 1. [ECONOMIC DEVELOPMENT REDUCTIONS.] 32.17 The dollar amounts in the columns under "APPROPRIATION 32.18 CHANGE" are added to or, if shown in parentheses, are subtracted 32.19 from the appropriations in Laws 2001, First Special Session 32.20 chapter 4 or 10, as amended, by Laws 2002, chapter 220 or 374, 32.21 as amended, or other law to the specified agencies. The 32.22 appropriations are from the general fund or other named fund and 32.23 are available for the fiscal years indicated for each purpose. 32.24 The figure "2003" means that the addition to or subtraction from 32.25 the appropriations listed under the figure is for the fiscal 32.26 year ending June 30, 2003. 32.27 2003 32.28 TRANSFERS FROM OTHER FUNDS $ 54,000,000 32.29 APPROPRIATION REDUCTIONS (9,579,000) 32.30 APPROPRIATION CHANGE 32.31 Sec. 2. TRADE AND ECONOMIC DEVELOPMENT (3,831,000) 32.32 Of this amount $1,323,964 is from the 32.33 appropriation made in Laws 2001, First 32.34 Special Session chapter 4, article 1, 32.35 section 2, subdivision 2, for 32.36 contaminated site grants. 32.37 Of this amount, $35,000 is from the 32.38 appropriation made in Laws 2001, First 32.39 Special Session chapter 4, article 1, 33.1 section 2, subdivision 2, for a onetime 33.2 grant for a pilot project incubated by 33.3 Blue Earth county named the Rural 33.4 Advanced Business Facilitation Program. 33.5 Of this amount, $1,314,000 is from the 33.6 appropriation made in Laws 2001, First 33.7 Special Session chapter 4, article 1, 33.8 section 2, subdivision 2, for Minnesota 33.9 investment fund grants. 33.10 Of this amount, $480,000 is from the 33.11 appropriation made in Laws 2001, First 33.12 Special Session chapter 4, article 1, 33.13 section 2, subdivision 5, for grants to 33.14 the Minnesota Film Board for a film 33.15 production jobs fund to stimulate film 33.16 production in Minnesota. 33.17 Sec. 3. MINNESOTA TECHNOLOGY, INC. (1,071,000) 33.18 Sec. 4. ECONOMIC SECURITY (189,000) 33.19 Sec. 5. HOUSING FINANCE AGENCY (2,205,000) 33.20 Sec. 6. COMMERCE (434,000) 33.21 Sec. 7. BOARD OF ACCOUNTANCY (24,000) 33.22 Sec. 8. BOARD OF ARCHITECTURE, 33.23 ENGINEERING, LAND SURVEYING, LANDSCAPE 33.24 ARCHITECTURE, GEOSCIENCE, AND INTERIOR DESIGN (29,000) 33.25 Sec. 9. BOARD OF BARBERS EXAMINERS (6,000) 33.26 Sec. 10. LABOR AND INDUSTRY (118,000) 33.27 Sec. 11. BUREAU OF MEDIATION SERVICES (122,000) 33.28 Of this amount, $47,000 is from 33.29 labor-management cooperation grants 33.30 made to area labor-management 33.31 committees. 33.32 Sec. 12. MINNESOTA HISTORICAL SOCIETY (1,066,000) 33.33 Sec. 13. COUNCIL ON BLACK MINNESOTANS (13,000) 33.34 Sec. 14. COUNCIL ON CHICANO-LATINO AFFAIRS (13,000) 33.35 Sec. 15. COUNCIL ON ASIAN-PACIFIC MINNESOTANS (11,000) 33.36 Sec. 16. INDIAN AFFAIRS COUNCIL (23,000) 33.37 Sec. 17. BOARD OF THE ARTS (384,000) 33.38 Of this amount, $344,000 is from the 33.39 appropriation made in Laws 2001, First 33.40 Special Session chapter 10, article 1, 33.41 section 24, subdivision 3, for grants 33.42 programs. 33.43 Sec. 18. HUMANITIES COMMISSION (40,000) 33.44 Sec. 19. Laws 2002, chapter 220, article 13, section 9, 33.45 subdivision 2, as amended by Laws 2002, chapter 374, article 8, 33.46 section 6, is amended to read: 33.47 Subd. 2. [SPECIAL COMPENSATION FUND.] After June 1, 2003, 34.1 but no later than June 30, 2003, the commissioner of finance 34.2 shall transfer$250,000,000$265,000,000 in assets of the excess 34.3 surplus account of the special compensation fund created under 34.4 Minnesota Statutes, section 176.129, to the general fund. 34.5 Sec. 20. [MINNESOTA MINERALS 21ST CENTURY FUND.] 34.6 By June 30, 2003, the commissioner of finance shall 34.7 transfer $39,000,000 from the Minnesota minerals 21st century 34.8 fund established under Minnesota Statutes, section 116J.423, to 34.9 the commissioner of finance for cancellation to the general fund. 34.10 Sec. 21. [EFFECTIVE DATE.] 34.11 Sections 1 to 20 are effective the day following final 34.12 enactment, unless otherwise specified. 34.13 ARTICLE 6 34.14 TRANSPORTATION 34.15 Section 1. [TRANSPORTATION APPROPRIATIONS AND REDUCTIONS.] 34.16 The dollar amounts in the columns under "APPROPRIATION 34.17 CHANGE" are added to or, if shown in parentheses, are subtracted 34.18 from the appropriations in Laws 2001, First Special Session 34.19 chapter 8, as amended, or other law to the specified agencies. 34.20 The appropriations are from the general fund or other named fund 34.21 and are available for the fiscal years indicated for each 34.22 purpose. The figure "2003" means that the addition to or 34.23 subtraction from the appropriations listed under the figure is 34.24 for the fiscal year ending June 30, 2003. 34.25 2003 34.26 TRANSFERS FROM OTHER FUNDS $ 15,000,000 34.27 APPROPRIATION REDUCTIONS - GENERAL FUND (2,615,000) 34.28 CANCELLATIONS - GENERAL FUND (130,000,000) 34.29 TRUNK HIGHWAY BOND PROCEEDS ACCOUNT - 34.30 TRUNK HIGHWAY FUND 130,130,000 34.31 APPROPRIATION CHANGE 34.32 Sec. 2. TRANSPORTATION 130,000,000 34.33 This appropriation is from the trunk 34.34 highway bond proceeds account in the 34.35 trunk highway fund and is available for 34.36 expenditure beginning the day following 34.37 final enactment. It is for the same 34.38 purposes as specified in Laws 2000, 34.39 chapter 479, article 1, section 2, 34.40 subdivision 3. 35.1 Of the general fund appropriation in 35.2 Laws 2000, chapter 479, article 1, 35.3 section 2, subdivision 3, $130,000,000 35.4 cancels to the general fund. This 35.5 cancellation is effective the day 35.6 following final enactment. 35.7 By June 30, 2003, the commissioner of 35.8 finance shall transfer $15,000,000 of 35.9 the cash balance in the state airports 35.10 fund established in Minnesota Statutes, 35.11 section 360.017, to the general fund. 35.12 Sec. 3. BOND SALE EXPENSES 130,000 35.13 To the commissioner of finance for bond 35.14 sale expenses under Minnesota Statutes, 35.15 section 16A.641, subdivision 8. This 35.16 appropriation is from the trunk highway 35.17 bond proceeds account in the trunk 35.18 highway fund. 35.19 Sec. 4. BOND SALE AUTHORIZATION 35.20 To provide the money appropriated in 35.21 this act from the trunk highway bond 35.22 proceeds account in the trunk highway 35.23 fund, the commissioner of finance shall 35.24 sell and issue bonds of the state in an 35.25 amount up to $130,130,000 in the 35.26 manner, upon the terms, and with the 35.27 effect prescribed by Minnesota 35.28 Statutes, sections 167.50 to 167.52, 35.29 and by the Minnesota Constitution, 35.30 article XIV, section 11, at the times 35.31 and in the amount requested by the 35.32 commissioner of transportation. The 35.33 proceeds of the bonds, except accrued 35.34 interest and any premium received on 35.35 the sale of the bonds, must be credited 35.36 to the trunk highway bond proceeds 35.37 account in the trunk highway fund. 35.38 Sec. 5. METROPOLITAN COUNCIL TRANSIT (2,615,000) 35.39 Sec. 6. [EFFECTIVE DATE.] 35.40 Sections 1 to 5 are effective the day following final 35.41 enactment, unless otherwise specified. 35.42 ARTICLE 7 35.43 CRIMINAL JUSTICE 35.44 Section 1. [CRIMINAL JUSTICE REDUCTIONS.] 35.45 The dollar amounts in the columns under "APPROPRIATION 35.46 CHANGE" are added to or, if shown in parentheses, are subtracted 35.47 from the appropriations in Laws 2001, First Special Session 35.48 chapter 8 or 9, as amended, by Laws 2002, chapter 220 or 374, as 35.49 amended, or other law to the specified agencies. The 35.50 appropriations are from the general fund or other named fund and 35.51 are available for the fiscal years indicated for each purpose. 36.1 The figure "2003" means that the addition to or subtraction from 36.2 the appropriations listed under the figure is for the fiscal 36.3 year ending June 30, 2003. 36.4 2003 36.5 APPROPRIATION REDUCTIONS $ (13,142,000) 36.6 APPROPRIATION CHANGE 36.7 Sec. 2. BOARD OF PRIVATE DETECTIVE 36.8 AND PROTECTIVE AGENT SERVICES (6,000) 36.9 Sec. 3. PUBLIC SAFETY (4,418,000) 36.10 This amount includes a reduction of 36.11 $1,823,000 in agency operations; a 36.12 reduction of $2,500,000 in local 36.13 planning and implementation grants for 36.14 criminal justice information 36.15 integration under Minnesota Statutes, 36.16 section 299C.65, subdivisions 6 and 7; 36.17 a reduction of $56,000 in battered 36.18 women grants; and a reduction of 36.19 $39,000 for criminal gang strike force 36.20 grants under Minnesota Statutes, 36.21 section 299A.66. 36.22 Sec. 4. SUPREME COURT (1,733,000) 36.23 This amount includes a reduction of 36.24 $442,000 in civil legal services grants. 36.25 Sec. 5. COURT OF APPEALS (321,000) 36.26 Sec. 6. DISTRICT COURTS (3,844,000) 36.27 Sec. 7. BOARD OF PUBLIC DEFENSE (1,537,000) 36.28 Sec. 8. HUMAN RIGHTS (146,000) 36.29 Sec. 9. CORRECTIONS (1,108,000) 36.30 Sec. 10. CORRECTIONS OMBUDSMAN (7,000) 36.31 Sec. 11. SENTENCING GUIDELINES COMMISSION (20,000) 36.32 Sec. 12. UNIFORM LAWS COMMISSION (2,000) 36.33 Sec. 13. [EFFECTIVE DATE.] 36.34 Sections 1 to 12 are effective the day following final 36.35 enactment, unless otherwise specified. 36.36 ARTICLE 8 36.37 STATE GOVERNMENT 36.38 Section 1. [STATE GOVERNMENT REDUCTIONS.] 36.39 The dollar amounts in the columns under "APPROPRIATION 36.40 CHANGE" are added to or, if shown in parentheses, are subtracted 36.41 from the appropriations in Laws 2001, First Special Session 36.42 chapter 10, as amended, by Laws 2002, chapter 220 or 374, as 37.1 amended, or other law to the specified agencies. The 37.2 appropriations are from the general fund or other named fund and 37.3 are available for the fiscal years indicated for each purpose. 37.4 The figure "2003" means that the addition to or subtraction from 37.5 the appropriations listed under the figure is for the fiscal 37.6 year ending June 30, 2003. 37.7 2003 37.8 APPROPRIATION REDUCTIONS $(10,100,000) 37.9 APPROPRIATION CHANGE 37.10 Sec. 2. LEGISLATURE (2,561,000) 37.11 Sec. 3. SECRETARY OF STATE (291,000) 37.12 Sec. 4. GOVERNOR'S OFFICE (162,000) 37.13 Sec. 5. STATE AUDITOR (390,000) 37.14 Sec. 6. ATTORNEY GENERAL (1,038,000) 37.15 Sec. 7. OFFICE OF STRATEGIC 37.16 AND LONG-RANGE PLANNING (338,000) 37.17 Sec. 8. ADMINISTRATION (1,828,000) 37.18 This amount includes a reduction of 37.19 $418,100 for grants and contracts with 37.20 the senate and house of representatives 37.21 for public information television, 37.22 Internet, Intranet, and other 37.23 transmission of legislative activities; 37.24 $950,289 reduction from onetime funding 37.25 for the voting equipment grant account; 37.26 and $300 reduction from funding for the 37.27 state employees' band. 37.28 Sec. 9. FINANCE (639,000) 37.29 This amount includes a $65,000 37.30 reduction in the operations of state 37.31 treasurer, which were assumed by 37.32 finance on January 6, 2003. 37.33 Sec. 10. EMPLOYEE RELATIONS (305,000) 37.34 Sec. 11. REVENUE (1,810,000) 37.35 This amount includes a reduction of 37.36 $34,138 for taxpayer assistance grants 37.37 authorized under Laws 2001, First 37.38 Special Session chapter 5, article 9, 37.39 section 29. 37.40 Sec. 12. AMATEUR SPORTS COMMISSION (25,000) 37.41 Sec. 13. MILITARY AFFAIRS (301,000) 37.42 This amount includes a reduction of 37.43 $40,000 for the Minnesota national 37.44 guard youth camp at Camp Ripley. 37.45 Sec. 14. CAMPAIGN FINANCE AND 37.46 PUBLIC DISCLOSURE BOARD (25,000) 38.1 Sec. 15. INVESTMENT BOARD (90,000) 38.2 Sec. 16. CAPITOL AREA ARCHITECTURAL 38.3 AND PLANNING BOARD (6,000) 38.4 Sec. 17. VETERANS AFFAIRS (186,000) 38.5 This amount includes the greater amount 38.6 of the unobligated balance or $114,000 38.7 in grant funding for the Vinland Center. 38.8 Sec. 18. LAWFUL GAMBLING CONTROL BOARD (89,000) 38.9 Sec. 19. RACING COMMISSION (16,000) 38.10 Sec. 20. [EFFECTIVE DATE.] 38.11 Sections 1 to 19 are effective the day following final 38.12 enactment, unless otherwise specified. 38.13 ARTICLE 9 38.14 TAXES 38.15 Section 1. Minnesota Statutes 2002, section 289A.50, 38.16 subdivision 2a, is amended to read: 38.17 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 38.18 has collected from a purchaser a tax on a transaction that is 38.19 not subject to the tax imposed by chapter 297A, the purchaser 38.20 may apply directly to the commissioner for a refund under this 38.21 section if: 38.22 (a) the purchaser is currently registered to collect and 38.23 remit the sales tax or to remit the use tax; and 38.24 (b) the amount of the refund applied for exceeds $500. 38.25 The purchaser may not file more than two applications for 38.26 refund under this subdivision in a calendar year. The refund 38.27 under this subdivision must not be paid until 90 days after the 38.28 refund claim is filed with the commissioner. 38.29 [EFFECTIVE DATE.] This section is effective for refund 38.30 claims filed on or after the day following final enactment. 38.31 Sec. 2. Minnesota Statutes 2002, section 289A.56, 38.32 subdivision 4, is amended to read: 38.33 Subd. 4. [CAPITAL EQUIPMENT AND CERTAIN BUILDING MATERIALS 38.34 REFUNDS; REFUNDS TO PURCHASERS.] Notwithstanding subdivision 3, 38.35 for refunds payable under section 297A.75, subdivision 1, 38.36 clauses(1),(2), (3), and (5), interest is computed from the 38.37 date the refund claim is filed with the commissioner.For39.1refunds payable under section 289A.50, subdivision 2a, interest39.2is computed from the 20th day of the month following the month39.3of the invoice date for the purchase which is the subject of the39.4refund, if the refund claim includes a detailed schedule of39.5purchases made during each of the periods in the claim. If the39.6refund claim submitted does not contain a schedule reflecting39.7purchases made in each period, interest is computed from the39.8date the claim was filedFor refunds payable under sections 39.9 289A.50, subdivision 2a, and 297A.75, subdivision 1, clause (1), 39.10 interest is computed from 90 days after the refund claim is 39.11 filed with the commissioner. 39.12 [EFFECTIVE DATE.] This section is effective for refund 39.13 claims filed on or after the day following final enactment. 39.14 Sec. 3. Minnesota Statutes 2002, section 297A.75, 39.15 subdivision 2, is amended to read: 39.16 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 39.17 forms prescribed by the commissioner, a refund equal to the tax 39.18 paid on the gross receipts of the exempt items must be paid to 39.19 the applicant, but refunds for taxes paid under subdivision 1, 39.20 clause (1), must not be paid until 90 days after the refund 39.21 claim is filed with the commissioner. Only the following 39.22 persons may apply for the refund: 39.23 (1) for subdivision 1, clauses (1) to (3), the applicant 39.24 must be the purchaser; 39.25 (2) for subdivision 1, clauses (4), (7), and (8), the 39.26 applicant must be the governmental subdivision; 39.27 (3) for subdivision 1, clause (5), the applicant must be 39.28 the recipient of the benefits provided in United States Code, 39.29 title 38, chapter 21; 39.30 (4) for subdivision 1, clause (6), the applicant must be 39.31 the owner of the homestead property; and 39.32 (5) for subdivision 1, clause (9), the owner of the 39.33 qualified low-income housing project. 39.34 [EFFECTIVE DATE.] This section is effective for refund 39.35 claims filed on or after the day following final enactment. 39.36 Sec. 4. Minnesota Statutes 2002, section 297A.75, 40.1 subdivision 4, is amended to read: 40.2 Subd. 4. [INTEREST.] Interest must be paid on the refund 40.3 at the rate in section 270.76 from the date the refund claim is 40.4 filed for taxes paid under subdivision 1, clauses(1)40.5to(2), (3), and (5), and; from 60 days after the date the 40.6 refund claim is filed with the commissioner for claims filed 40.7 under subdivision 1, clauses (4), (6), (7), (8), and (9); and 40.8 from 90 days after the refund claim is filed with the 40.9 commissioner for taxes paid under subdivision 1, clause (1). 40.10 [EFFECTIVE DATE.] This section is effective for refund 40.11 claims filed on or after the day following final enactment. 40.12 ARTICLE 10 40.13 CAPITAL PROJECTS 40.14 Section 1. [CAPITAL PROJECT CANCELLATIONS.] 40.15 The capital projects and the general fund appropriations 40.16 for them listed in this article are canceled in whole or in 40.17 part, as specified in section 2. The balances are canceled and 40.18 returned to the general fund in the fiscal year ending June 30, 40.19 2003. 40.20 2003 40.21 Sec. 2. CAPITAL PROJECTS $ (7,643,274) 40.22 (a) The $1,000,000 appropriation in 40.23 Laws 1998, chapter 404, section 5, 40.24 subdivision 4, paragraph (i) (not 40.25 affected by the amendment to 40.26 subdivision 4 in Laws 1999, chapter 40.27 119, section 1), to the commissioner of 40.28 children, families, and learning for 40.29 the Hermantown community indoor sports 40.30 and physical education complex is 40.31 canceled to the general fund. 40.32 (b) The unencumbered balance of the 40.33 appropriation in Laws 1998, chapter 40.34 404, section 7, subdivision 26, as 40.35 amended twice by identical amendments 40.36 in Laws 1999, chapter 231, section 195, 40.37 and chapter 240, article 1, section 21 40.38 (and not affected by an appropriation 40.39 for a similar purpose from the natural 40.40 resources fund in Laws 2001, First 40.41 Special Session chapter 2, section 5, 40.42 as amended by Laws 2002, chapter 376, 40.43 section 12), to the commissioner of 40.44 natural resources for local initiative 40.45 grants, estimated to be $2,018,274, is 40.46 canceled to the general fund. 40.47 (c) The $500,000 appropriation in Laws 40.48 1998, chapter 404, section 7, 41.1 subdivision 33 (not affected by the 41.2 amendment to subdivision 33 in Laws 41.3 1998, First Special Session chapter 3, 41.4 section 9), to the commissioner of 41.5 administration for the Bald Eagle 41.6 Center in Wabasha, is canceled to the 41.7 general fund. 41.8 (d) The unencumbered balance of the 41.9 appropriation in Laws 1998, chapter 41.10 404, section 17, subdivision 3, 41.11 paragraph (c), clause (1) (not affected 41.12 by the amendment to subdivision 3 in 41.13 Laws 1999, chapter 230, section 43, or 41.14 Laws 1999, chapter 238, article 2, 41.15 section 79, and by the appropriation 41.16 added to Laws 1998, chapter 404, 41.17 section 17, subdivision 3, paragraph 41.18 (b), by Laws 1999, chapter 240, article 41.19 1, section 9, subdivision 5), to the 41.20 commissioner of transportation for the 41.21 Riverview corridor, estimated to be 41.22 $2,125,000, is canceled to the general 41.23 fund. 41.24 (e) The $2,000,000 appropriation in 41.25 Laws 1998, chapter 404, section 23, 41.26 subdivision 30 (not affected by the 41.27 amendment to subdivision 30 in Laws 41.28 2001, First Special Session chapter 12, 41.29 section 13), to the commissioner of 41.30 trade and economic development for the 41.31 Itasca county school-to-work technology 41.32 center is canceled to the general fund. 41.33 Sec. 3. [EFFECTIVE DATE.] 41.34 This article is effective the day after final enactment. 41.35 ARTICLE 11 41.36 MISCELLANEOUS 41.37 Section 1. Minnesota Statutes 2002, section 16A.17, is 41.38 amended by adding a subdivision to read: 41.39 Subd. 10. [DIRECT DEPOSIT.] Notwithstanding section 41.40 177.23, the commissioner may require direct deposit for all 41.41 state employees who are being paid by the state payroll system. 41.42 Sec. 2. Minnesota Statutes 2002, section 16B.47, is 41.43 amended to read: 41.44 16B.47 [MICROGRAPHICS.] 41.45 The commissionershallmay provide micrographics services 41.46 and products to meet agency needs. Within available resources, 41.47 the commissioner may also provide micrographic services to 41.48 political subdivisions. Agency plans and programs for 41.49 micrographics must be submitted to and receive the approval of 41.50 the commissioner prior to implementation. Upon the 42.1 commissioner's approval, subsidiary or independent microfilm 42.2 operations may be implemented in other state agencies. The 42.3 commissioner may direct that copies of official state documents 42.4 be distributed to official state depositories on microfilm. 42.5 Sec. 3. Minnesota Statutes 2002, section 16B.48, 42.6 subdivision 2, is amended to read: 42.7 Subd. 2. [PURPOSE OF FUNDS.] Money in the state treasury 42.8 credited to the general services revolving fund and money that 42.9 is deposited in the fund is appropriated annually to the 42.10 commissioner for the following purposes: 42.11 (1) to operate a central store and equipment service; 42.12 (2)to operate a central duplication and printing service;42.13(3)to operate the central mailing service, including 42.14 purchasing postage and related items and refunding postage 42.15 deposits; 42.16(4)(3) to operate a documents service as prescribed by 42.17 section 16B.51; 42.18(5)(4) to provide services for the maintenance, operation, 42.19 and upkeep of buildings and grounds managed by the commissioner 42.20 of administration; 42.21(6)(5) to operate a materials handling service, including 42.22 interagency mail and product delivery, solid waste removal, 42.23 courier service, equipment rental, and vehicle and equipment 42.24 maintenance; 42.25(7)(6) to provide analytical, statistical, and 42.26 organizational development services to state agencies, local 42.27 units of government, metropolitan and regional agencies, and 42.28 school districts; 42.29(8) to operate a records center and provide micrographics42.30products and services;and 42.31(9)(7) to perform services for any other agency. Money 42.32 may be expended for this purpose only when directed by the 42.33 governor. The agency receiving the services shall reimburse the 42.34 fund for their cost, and the commissioner shall make the 42.35 appropriate transfers when requested. The term "services" as 42.36 used in this clause means compensation paid officers and 43.1 employees of the state government; supplies, materials, 43.2 equipment, and other articles and things used by or furnished to 43.3 an agency; and utility services and other services for the 43.4 maintenance, operation, and upkeep of buildings and offices of 43.5 the state government. 43.6 Sec. 4. Minnesota Statutes 2002, section 16B.49, is 43.7 amended to read: 43.8 16B.49 [CENTRAL MAILING SYSTEM.] 43.9 The commissionershallmay maintain and operate for state 43.10 agencies, departments, institutions, and offices a central mail 43.11 handling unit. Official, outgoing mail for units in St. Paul 43.12mustmay be required to be delivered unstamped to the unit. The 43.13 unitshallmay also operate an interoffice mail distribution 43.14 system. The department may add personnel and acquire equipment 43.15 that may be necessary to operate the unit efficiently and 43.16 cost-effectively. Account must be kept of the postage required 43.17 on that mail, which is then a proper charge against the agency 43.18 delivering the mail. To provide funds for the payment of 43.19 postage, each agencyshallmay be required to make advance 43.20 payments to the commissioner sufficient to cover its postage 43.21 obligations for at least 60 days. For purposes of this section, 43.22 the Minnesota state colleges and universities is a state agency. 43.23 Sec. 5. Minnesota Statutes 2002, section 16C.08, 43.24 subdivision 2, is amended to read: 43.25 Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency 43.26 may seek approval of a professional or technical services 43.27 contract valued in excess of $5,000, it must certify to the 43.28 commissioner that: 43.29 (1)no current state employee is able and available to43.30perform the services called for by the contract;43.31(2)the normal competitive bidding mechanisms will not 43.32 provide for adequate performance of the services; 43.33(3)(2) the contractor has certified that the product of 43.34 the services will be original in character; 43.35(4)(3) reasonable efforts were made to publicize the 43.36 availability of the contract to the public; 44.1(5)(4) the agency has received, reviewed, and accepted a 44.2 detailed work plan from the contractor for performance under the 44.3 contract, if applicable; 44.4(6)(5) the agency has developed, and fully intends to 44.5 implement, a written plan providing for the assignment of 44.6 specific agency personnel to a monitoring and liaison function, 44.7 the periodic review of interim reports or other indications of 44.8 past performance, and the ultimate utilization of the final 44.9 product of the services; and 44.10(7)(6) the agency will not allow the contractor to begin 44.11 work before funds are fully encumbered. 44.12 Sec. 6. Minnesota Statutes 2002, section 16C.08, 44.13 subdivision 3, is amended to read: 44.14 Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 44.15 CONTRACTS.] Before approving a proposed contract for 44.16 professional or technical services, the commissioner must 44.17 determine, at least, that: 44.18 (1) all provisions of subdivision 2 and section 16C.16 have 44.19 been verified or complied with; 44.20 (2) the work to be performed under the contract is 44.21 necessary to the agency's achievement of its statutory 44.22 responsibilities and there is statutory authority to enter into 44.23 the contract; 44.24 (3) the contract will not establish an employment 44.25 relationship between the state or the agency and any persons 44.26 performing under the contract; 44.27 (4) the contractor and agents are not employees of the 44.28 state; 44.29 (5)no agency has previously performed or contracted for44.30the performance of tasks which would be substantially duplicated44.31under the proposed contract;44.32(6)the contracting agency has specified a satisfactory 44.33 method of evaluating and using the results of the work to be 44.34 performed; and 44.35(7)(6) the combined contract and amendments will not 44.36 exceed five years, unless otherwise provided for by law. The 45.1 term of the original contract must not exceed two years unless 45.2 the commissioner determines that a longer duration is in the 45.3 best interest of the state. 45.4 Sec. 7. Minnesota Statutes 2002, section 16C.09, is 45.5 amended to read: 45.6 16C.09 [PROCEDURE FOR SERVICE CONTRACTS.] 45.7(a)Before entering into or approving a service contract, 45.8 the commissioner must determine, at least, that: 45.9 (1)no current state employee is able and available to45.10perform the services called for by the contract;45.11(2)the work to be performed under the contract is 45.12 necessary to the agency's achievement of its statutory 45.13 responsibilities and there is statutory authority to enter into 45.14 the contract; 45.15(3)(2) the contract will not establish an employment 45.16 relationship between the state or the agency and any persons 45.17 performing under the contract; 45.18(4)(3) the contractor and agents are not employees of the 45.19 state; 45.20(5)(4) the contracting agency has specified a satisfactory 45.21 method of evaluating and using the results of the work to be 45.22 performed; and 45.23(6)(5) the combined contract and amendments will not 45.24 exceed five years without specific, written approval by the 45.25 commissioner according to established policy, procedures, and 45.26 standards, or unless otherwise provided for by law. The term of 45.27 the original contract must not exceed two years, unless the 45.28 commissioner determines that a longer duration is in the best 45.29 interest of the state. 45.30(b) For purposes of paragraph (a), clause (1), employees45.31are available if qualified and:45.32(1) are already doing the work in question; or45.33(2) are on layoff status in classes that can do the work in45.34question.45.35An employee is not available if the employee is doing other45.36work, is retired, or has decided not to do the work in question.46.1 Sec. 8. Minnesota Statutes 2002, section 268.186, is 46.2 amended to read: 46.3 268.186 [RECORDS.] 46.4 (a) Each employer shall keep true and accurate records for 46.5 the periods of time and containing the information the 46.6 commissioner may require. For the purpose of administering this 46.7 chapter, the commissioner has the power to examine, or cause to 46.8 be supplied or copied, any books, correspondence, papers, 46.9 records, or memoranda that are relevant, whether the books, 46.10 correspondence, papers, records, or memoranda are the property 46.11 of or in the possession of the employer or any other person at 46.12 any reasonable time and as often as may be necessary. 46.13 (b) The commissioner may make summaries, compilations, 46.14 photographs, duplications, or reproductions of any records, or 46.15 reports that the commissioner considers advisable for the 46.16 preservation of the information contained therein. Any 46.17 summaries, compilations, photographs, duplications, or 46.18 reproductions shall be admissible in any proceeding under this 46.19 chapter.Regardless of any restrictions contained in section46.2016B.50,The commissioner may duplicate records, reports, 46.21 summaries, compilations, instructions, determinations, or any 46.22 other written or recorded matter pertaining to the 46.23 administration of this chapter. 46.24 (c) Regardless of any law to the contrary, the commissioner 46.25 may provide for the destruction of any records, reports, or 46.26 reproductions thereof, or other papers, that are more than two 46.27 years old, and that are no longer necessary for determining 46.28 employer liability or an applicant's unemployment benefit rights 46.29 or for the administration of this chapter, including any 46.30 required audit. The commissioner may provide for the 46.31 destruction or disposition of any record, report, or other paper 46.32 that has been photographed, duplicated, or reproduced. 46.33 Sec. 9. [SALARY SAVINGS.] 46.34 Each appointing authority in the executive, legislative, 46.35 and judicial branches of state government, the Minnesota state 46.36 retirement system, the teachers retirement system, the public 47.1 employees retirement system, the metropolitan council, and the 47.2 state historical society shall determine whether use of 47.3 mandatory unpaid leave is necessary to meet its budget reduction 47.4 goals. Each appointing authority may require unpaid leave and 47.5 shall establish the number of hours to be used by its employees, 47.6 excluding intermittent and emergency appointments, which must 47.7 not exceed 80 hours for full-time employees and a proportional 47.8 share of 80 hours for less than full-time employees. Employees 47.9 may request and appointing authorities may approve additional 47.10 hours of unpaid leave. 47.11 Unpaid leave must be used between the effective date of 47.12 this section and June 30, 2003. Employees on unpaid leave under 47.13 this section shall continue to accrue vacation and sick leave, 47.14 seniority, and service credit in state retirement plans 47.15 permitting service credit for authorized leaves of absence and 47.16 shall be eligible for paid holidays and insurance benefits as if 47.17 the employee had worked the hours of unpaid leave. For purposes 47.18 of overtime, hours of unpaid leave must be treated as paid 47.19 vacation leave. For employees taking unpaid leave under this 47.20 section, any requirement to reduce vacation leave balances by 47.21 the end of the fiscal year is suspended for the year ending June 47.22 30, 2003. Appointing authorities retain discretion to approve 47.23 or disapprove when leave is used and to schedule leave for 47.24 employees who have not arranged by April 1, 2003, to take the 47.25 required number of hours. Unpaid leave under this section is 47.26 not subject to the provisions of collective bargaining 47.27 agreements and plans for unrepresented employees and is not 47.28 subject to collective bargaining under chapter 179A. 47.29 Sec. 10. [SEGIP TRANSFER.] 47.30 The commissioner of finance, in consultation with the 47.31 commissioner of employee relations, may require the employee 47.32 insurance trust fund to reimburse the general fund for all or 47.33 part of the appropriations made in Laws 1988, chapter 686, 47.34 article 1, section 9, and Laws 1999, chapter 250, article 1, 47.35 section 15. These funds are appropriated to the commissioner of 47.36 finance and are available for distribution to agencies to meet 48.1 budget reduction targets for fiscal year 2003. 48.2 Sec. 11. [REPEALER.] 48.3 Minnesota Statutes 2002, sections 16B.50; 16C.07; and 48.4 43A.047, are repealed. 48.5 Sec. 12. [EFFECTIVE DATE.] 48.6 Sections 1 to 11 are effective the day following final 48.7 enactment.