SF 175

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; modifying certain
provisions regarding medical assistance liens;
eliminating recovery efforts for alternative care
services; appropriating money; amending Minnesota
Statutes 2004, sections 256B.15, subdivisions 1, 1a,
1d, 1e, 1f, 1h, 1i, 1j, 2, 3, 4; 514.981, subdivision
6; 524.3-805; repealing Minnesota Statutes 2004,
sections 256B.15, subdivision 1g; 514.991; 514.992;
514.993; 514.994; 514.995.

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

Section 1.

Minnesota Statutes 2004, section 256B.15,
subdivision 1, is amended to read:

Subdivision 1.

deleted text begin policy, applicability, purpose, and
construction; deleted text end definition.

(a) It is the policy of this state
that individuals or couples, either or both of whom participate
in the medical assistance program, use their own assets to pay
their share of the total cost of their care during or after
their enrollment in the program according to applicable federal
law and the laws of this state. The following provisions apply:

(1) deleted text begin subdivisions 1c to 1k shall not apply to claims arising
under this section which are presented under section 525.313;
deleted text end

deleted text begin (2) deleted text end the provisions of subdivisions 1c to 1k expanding the
interests included in an estate for purposes of recovery under
this section give effect to the provisions of United States
Code, title 42, section 1396p, governing recoveries, but do not
give rise to any express or implied liens in favor of any other
parties not named in these provisions; new text begin and
new text end

deleted text begin (3) the continuation of a recipient's life estate or joint
tenancy interest in real property after the recipient's death
for the purpose of recovering medical assistance under this
section modifies common law principles holding that these
interests terminate on the death of the holder;
deleted text end

deleted text begin (4) deleted text end new text begin (2) new text end all laws, rules, and regulations governing or
involved with a recovery of medical assistance deleted text begin shall deleted text end new text begin must new text end be
liberally construed to accomplish their intended purposes deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (5) a deceased recipient's life estate and joint tenancy
interests continued under this section shall be owned by the
remaindermen or surviving joint tenants as their interests may
appear on the date of the recipient's death. They shall not be
merged into the remainder interest or the interests of the
surviving joint tenants by reason of ownership. They shall be
subject to the provisions of this section. Any conveyance,
transfer, sale, assignment, or encumbrance by a remainderman, a
surviving joint tenant, or their heirs, successors, and assigns
shall be deemed to include all of their interest in the deceased
recipient's life estate or joint tenancy interest continued
under this section; and
deleted text end

deleted text begin (6) the provisions of subdivisions 1c to 1k continuing a
recipient's joint tenancy interests in real property after the
recipient's death do not apply to a homestead owned of record,
on the date the recipient dies, by the recipient and the
recipient's spouse as joint tenants with a right of
survivorship. Homestead means the real property occupied by the
surviving joint tenant spouse as their sole residence on the
date the recipient dies and classified and taxed to the
recipient and surviving joint tenant spouse as homestead
property for property tax purposes in the calendar year in which
the recipient dies. For purposes of this exemption, real
property the recipient and their surviving joint tenant spouse
purchase solely with the proceeds from the sale of their prior
homestead, own of record as joint tenants, and qualify as
homestead property under section 273.124 in the calendar year in
which the recipient dies and prior to the recipient's death
shall be deemed to be real property classified and taxed to the
recipient and their surviving joint tenant spouse as homestead
property in the calendar year in which the recipient dies. The
surviving spouse, or any person with personal knowledge of the
facts, may provide an affidavit describing the homestead
property affected by this clause and stating facts showing
compliance with this clause. The affidavit shall be prima facie
evidence of the facts it states.
deleted text end

(b) For purposes of this section, "medical assistance"
includes the medical assistance program under this chapter and
the general assistance medical care program under chapter 256D
deleted text begin and deleted text end new text begin but does not include the new text end alternative care new text begin program new text end for
nonmedical assistance recipients under section 256B.0913.

new text begin EFFECTIVE DATE. new text end

new text begin The amendments in this section relating
to the alternative care program are effective retroactively from
July 1, 2003, and apply to the estates of decedents who die on
or after that date. The remaining amendments in this section
are effective retroactively from August 1, 2003, and apply to
the estates of decedents who die on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2004, section 256B.15,
subdivision 1a, is amended to read:

Subd. 1a.

Estates subject to claims.

If a person
receives any medical assistance hereunder, on the person's
death, if single, or on the death of the survivor of a married
couple, either or both of whom received medical assistance, deleted text begin or
as otherwise provided for in this section, deleted text end the total amount paid
for medical assistance rendered for the person and spouse shall
be filed as a claim against the estate of the person or the
estate of the surviving spouse in the court having jurisdiction
to probate the estate or to issue a decree of descent according
to sections 525.31 to 525.313.

A claim shall be filed if medical assistance was rendered
for either or both persons under one of the following
circumstances:

(a) the person was over 55 years of age, and received
services under this chapter new text begin , excluding alternative care new text end ;

(b) the person resided in a medical institution for six
months or longer, received services under this chapter new text begin ,
excluding alternative care new text end , and, at the time of
institutionalization or application for medical assistance,
whichever is later, the person could not have reasonably been
expected to be discharged and returned home, as certified in
writing by the person's treating physician. For purposes of
this section only, a "medical institution" means a skilled
nursing facility, intermediate care facility, intermediate care
facility for persons with mental retardation, nursing facility,
or inpatient hospital; or

(c) the person received general assistance medical care
services under chapter 256D.

The claim shall be considered an expense of the last
illness of the decedent for the purpose of section 524.3-805.
Any statute of limitations that purports to limit any county
agency or the state agency, or both, to recover for medical
assistance granted hereunder shall not apply to any claim made
hereunder for reimbursement for any medical assistance granted
hereunder. Notice of the claim shall be given to all heirs and
devisees of the decedent whose identity can be ascertained with
reasonable diligence. The notice must include procedures and
instructions for making an application for a hardship waiver
under subdivision 5; time frames for submitting an application
and determination; and information regarding appeal rights and
procedures. Counties are entitled to one-half of the nonfederal
share of medical assistance collections from estates that are
directly attributable to county effort. deleted text begin Counties are entitled
to ten percent of the collections for alternative care directly
attributable to county effort.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendments in this section relating
to the alternative care program are effective retroactively from
July 1, 2003, and apply to the estates of decedents who die on
or after that date. The remaining amendments in this section
are effective retroactively from August 1, 2003, and apply to
the estates of decedents who die on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2004, section 256B.15,
subdivision 1d, is amended to read:

Subd. 1d.

Effect of notice.

From the time it takes
effect, the notice shall be notice to deleted text begin remaindermen, joint
tenants, or to deleted text end anyone deleted text begin else deleted text end owning or acquiring an interest in or
encumbrance against the property described in the notice that
the medical assistance recipient's deleted text begin life estate, joint tenancy,
or other deleted text end interests in the real estate described in the notice:

(1) deleted text begin shall, in the case of life estate and joint tenancy
interests, continue to exist for purposes of this section, and
be subject to liens and claims as provided in this section;
deleted text end

deleted text begin (2) deleted text end shall be subject to a lien in favor of the claimant
effective upon the death of the recipient and dealt with as
provided in this section;

deleted text begin (3) deleted text end new text begin (2) new text end may be included in the recipient's estate, as
defined in this section; and

deleted text begin (4) deleted text end new text begin (3) new text end may be subject to administration and all other
provisions of chapter 524 and may be sold, assigned,
transferred, or encumbered free and clear of their interest or
encumbrance to satisfy claims under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 4.

Minnesota Statutes 2004, section 256B.15,
subdivision 1e, is amended to read:

Subd. 1e.

Full or partial release of notice.

(a) The
claimant may fully or partially release the notice and the lien
arising out of the notice of record in the real estate records
where the notice is filed or recorded at any time. deleted text begin The claimant
may give a full or partial release to extinguish any life
estates or joint tenancy interests which are or may be continued
under this section or whose existence or nonexistence may create
a cloud on the title to real property at any time whether or not
a notice has been filed. deleted text end The recorder or registrar of titles
shall accept the release for recording or filing. If the
release is a partial release, it must include a legal
description of the property being released.

(b) At any time, the claimant may, at the claimant's
discretion, wholly or partially release, subordinate, modify, or
amend the recorded notice and the lien arising out of the notice.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 5.

Minnesota Statutes 2004, section 256B.15,
subdivision 1f, is amended to read:

Subd. 1f.

Agency lien.

(a) The notice shall constitute a
lien in favor of the Department of Human Services against the
recipient's interests in the real estate it describes for a
period of 20 years from the date of filing or the date of the
recipient's death, whichever is later. deleted text begin Notwithstanding any law
or rule to the contrary, a recipient's life estate and joint
tenancy interests shall not end upon the recipient's death but
shall continue according to subdivisions 1h, 1i, and 1j. deleted text end The
amount of the lien shall be equal to the total amount of the
claims that could be presented in the recipient's estate under
this section.

(b) If no estate has been opened for the deceased
recipient, any holder of an interest in the property may apply
to the lien holder for a statement of the amount of the lien or
for a full or partial release of the lien. The application
shall include the applicant's name, current mailing address,
current home and work telephone numbers, and a description of
their interest in the property, a legal description of the
recipient's interest in the property, and the deceased
recipient's name, date of birth, and Social Security number.
The lien holder shall send the applicant by certified mail,
return receipt requested, a written statement showing the amount
of the lien, whether the lien holder is willing to release the
lien and under what conditions, and inform them of the right to
a hearing under section 256.045. The lien holder shall have the
discretion to compromise and settle the lien upon any terms and
conditions the lien holder deems appropriate.

(c) Any holder of an interest in property subject to the
lien has a right to request a hearing under section 256.045 to
determine the validity, extent, or amount of the lien. The
request must be in writing, and must include the names, current
addresses, and home and business telephone numbers for all other
parties holding an interest in the property. A request for a
hearing by any holder of an interest in the property shall be
deemed to be a request for a hearing by all parties owning
interests in the property. Notice of the hearing shall be given
to the lien holder, the party filing the appeal, and all of the
other holders of interests in the property at the addresses
listed in the appeal by certified mail, return receipt
requested, or by ordinary mail. Any owner of an interest in the
property to whom notice of the hearing is mailed shall be deemed
to have waived any and all claims or defenses in respect to the
lien unless they appear and assert any claims or defenses at the
hearing.

(d) If the claim the lien secures could be filed under
subdivision 1h, the lien holder may collect, compromise, settle,
or release the lien upon any terms and conditions it deems
appropriate. If the claim the lien secures could be filed under
subdivision 1i or 1j, the lien may be adjusted or enforced to
the same extent had it been filed under subdivisions 1i and 1j,
and the provisions of subdivisions 1i, clause deleted text begin (f) deleted text end new text begin (e) new text end , and lj,
clause (d), shall apply to voluntary payment, settlement, or
satisfaction of the lien.

(e) deleted text begin If no probate proceedings have been commenced for the
recipient as of the date the lien holder executes a release of
the lien on a recipient's life estate or joint tenancy interest,
created for purposes of this section, the release shall
terminate the life estate or joint tenancy interest created
under this section as of the date it is recorded or filed to the
extent of the release. If the claimant executes a release for
purposes of extinguishing a life estate or a joint tenancy
interest created under this section to remove a cloud on title
to real property, the release shall have the effect of
extinguishing any life estate or joint tenancy interests in the
property it describes which may have been continued by reason of
this section retroactive to the date of death of the deceased
life tenant or joint tenant except as provided for in section
514.981, subdivision 6.
deleted text end

deleted text begin (f) deleted text end If the deceased recipient's estate is probated, a claim
shall be filed under this section. The amount of the lien shall
be limited to the amount of the claim as finally allowed. If
the claim the lien secures is filed under subdivision 1h, the
lien may be released in full after any allowance of the claim
becomes final or according to any agreement to settle and
satisfy the claim. The release shall release the lien but shall
not extinguish or terminate the interest being released. If the
claim the lien secures is filed under subdivision 1i or 1j, the
lien shall be released after the lien under subdivision 1i or 1j
is filed or recorded, or settled according to any agreement to
settle and satisfy the claim. The release shall not extinguish
or terminate the interest being released. If the claim is
finally disallowed in full, the claimant shall release the
claimant's lien at the claimant's expense.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 6.

Minnesota Statutes 2004, section 256B.15,
subdivision 1h, is amended to read:

Subd. 1h.

Estates of specific persons receiving medical
assistance.

(a) For purposes of this section, paragraphs (b) deleted text begin to
(k) deleted text end new text begin and (c) new text end apply if a person received medical assistance for
which a claim may be filed under this section and died single,
or the surviving spouse of the couple and was not survived by
any of the persons described in subdivisions 3 and 4.

(b) For purposes of this section, the person's estate
consists of: (1) their probate estate; (2) deleted text begin all of the person's
interests or proceeds of those interests in real property the
person owned as a life tenant or as a joint tenant with a right
of survivorship at the time of the person's death; (3) deleted text end all of
the person's interests or proceeds of those interests in
securities the person owned in beneficiary form as provided
under sections 524.6-301 to 524.6-311 at the time of the
person's death, to the extent they become part of the probate
estate under section 524.6-307; and deleted text begin (4) deleted text end new text begin (3) new text end all of the person's
interests in joint accounts, multiple party accounts, and pay on
death accounts, or the proceeds of those accounts, as provided
under sections 524.6-201 to 524.6-214 at the time of the
person's death to the extent they become part of the probate
estate under section 524.6-207. Notwithstanding any law or rule
to the contrary, a state or county agency with a claim under
this section shall be a creditor under section 524.6-307.

deleted text begin (c) Notwithstanding any law or rule to the contrary, the
person's life estate or joint tenancy interest in real property
not subject to a medical assistance lien under sections 514.980
to 514.985 on the date of the person's death shall not end upon
the person's death and shall continue as provided in this
subdivision. The life estate in the person's estate shall be
that portion of the interest in the real property subject to the
life estate that is equal to the life estate percentage factor
for the life estate as listed in the Life Estate Mortality Table
of the health care program's manual for a person who was the age
of the medical assistance recipient on the date of the person's
death. The joint tenancy interest in real property in the
estate shall be equal to the fractional interest the person
would have owned in the jointly held interest in the property
had they and the other owners held title to the property as
tenants in common on the date the person died.
deleted text end

deleted text begin (d) The court upon its own motion, or upon motion by the
personal representative or any interested party, may enter an
order directing the remaindermen or surviving joint tenants and
their spouses, if any, to sign all documents, take all actions,
and otherwise fully cooperate with the personal representative
and the court to liquidate the decedent's life estate or joint
tenancy interests in the estate and deliver the cash or the
proceeds of those interests to the personal representative and
provide for any legal and equitable sanctions as the court deems
appropriate to enforce and carry out the order, including an
award of reasonable attorney fees.
deleted text end

deleted text begin (e) The personal representative may make, execute, and
deliver any conveyances or other documents necessary to convey
the decedent's life estate or joint tenancy interest in the
estate that are necessary to liquidate and reduce to cash the
decedent's interest or for any other purposes.
deleted text end

deleted text begin (f) Subject to administration, all costs, including
reasonable attorney fees, directly and immediately related to
liquidating the decedent's life estate or joint tenancy interest
in the decedent's estate, shall be paid from the gross proceeds
of the liquidation allocable to the decedent's interest and the
net proceeds shall be turned over to the personal representative
and applied to payment of the claim presented under this section.
deleted text end

deleted text begin (g) The personal representative shall bring a motion in the
district court in which the estate is being probated to compel
the remaindermen or surviving joint tenants to account for and
deliver to the personal representative all or any part of the
proceeds of any sale, mortgage, transfer, conveyance, or any
disposition of real property allocable to the decedent's life
estate or joint tenancy interest in the decedent's estate, and
do everything necessary to liquidate and reduce to cash the
decedent's interest and turn the proceeds of the sale or other
disposition over to the personal representative. The court may
grant any legal or equitable relief including, but not limited
to, ordering a partition of real estate under chapter 558
necessary to make the value of the decedent's life estate or
joint tenancy interest available to the estate for payment of a
claim under this section.
deleted text end

deleted text begin (h) Subject to administration, the personal representative
shall use all of the cash or proceeds of interests to pay an
allowable claim under this section. The remaindermen or
surviving joint tenants and their spouses, if any, may enter
into a written agreement with the personal representative or the
claimant to settle and satisfy obligations imposed at any time
before or after a claim is filed.
deleted text end

deleted text begin (i) The personal representative may, at their discretion,
provide any or all of the other owners, remaindermen, or
surviving joint tenants with an affidavit terminating the
decedent's estate's interest in real property the decedent owned
as a life tenant or as a joint tenant with others, if the
personal representative determines in good faith that neither
the decedent nor any of the decedent's predeceased spouses
received any medical assistance for which a claim could be filed
under this section, or if the personal representative has filed
an affidavit with the court that the estate has other assets
sufficient to pay a claim, as presented, or if there is a
written agreement under paragraph (h), or if the claim, as
allowed, has been paid in full or to the full extent of the
assets the estate has available to pay it. The affidavit may be
recorded in the office of the county recorder or filed in the
Office of the Registrar of Titles for the county in which the
real property is located. Except as provided in section
514.981, subdivision 6, when recorded or filed, the affidavit
shall terminate the decedent's interest in real estate the
decedent owned as a life tenant or a joint tenant with others.
The affidavit shall: (1) be signed by the personal
representative; (2) identify the decedent and the interest being
terminated; (3) give recording information sufficient to
identify the instrument that created the interest in real
property being terminated; (4) legally describe the affected
real property; (5) state that the personal representative has
determined that neither the decedent nor any of the decedent's
predeceased spouses received any medical assistance for which a
claim could be filed under this section; (6) state that the
decedent's estate has other assets sufficient to pay the claim,
as presented, or that there is a written agreement between the
personal representative and the claimant and the other owners or
remaindermen or other joint tenants to satisfy the obligations
imposed under this subdivision; and (7) state that the affidavit
is being given to terminate the estate's interest under this
subdivision, and any other contents as may be appropriate.
deleted text end

deleted text begin The recorder or registrar of titles shall accept the affidavit
for recording or filing. The affidavit shall be effective as
provided in this section and shall constitute notice even if it
does not include recording information sufficient to identify
the instrument creating the interest it terminates. The
affidavit shall be conclusive evidence of the stated facts.
deleted text end

deleted text begin (j) The holder of a lien arising under subdivision 1c shall
release the lien at the holder's expense against an interest
terminated under paragraph (h) to the extent of the termination.
deleted text end

deleted text begin (k) deleted text end new text begin (c) new text end If a lien arising under subdivision 1c is not
released deleted text begin under paragraph (j), deleted text end prior to closing the estate, the
personal representative shall deed the interest subject to the
lien to the deleted text begin remaindermen or surviving joint tenants as their
interests may appear. Upon recording or filing, the deed shall
work a merger of the recipient's life estate or joint tenancy
interest, subject to the lien, into the remainder interest or
interest the decedent and others owned jointly deleted text end new text begin heirs or devisees
subject to the lien new text end . The lien shall attach to and run with the
property to the extent of the decedent's interest at the time of
the decedent's death.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 7.

Minnesota Statutes 2004, section 256B.15,
subdivision 1i, is amended to read:

Subd. 1i.

Estates of persons receiving medical assistance
and survived by others.

(a) For purposes of this subdivision,
the person's estate deleted text begin consists of the person's probate estate and
all of the person's interests in real property the person owned
as a life tenant or a joint tenant at the time of the person's
death deleted text end new text begin is as defined in subdivision 1h, paragraph (b) new text end .

(b) Notwithstanding any law or rule to the contrary, this
subdivision applies if a person received medical assistance for
which a claim could be filed under this section but for the fact
the person was survived by a spouse or by a person listed in
subdivision 3, or if subdivision 4 applies to a claim arising
under this section.

(c) deleted text begin The person's life estate or joint tenancy interests in
real property not subject to a medical assistance lien under
sections 514.980 to 514.985 on the date of the person's death
shall not end upon death and shall continue as provided in this
subdivision. The life estate in the estate shall be the portion
of the interest in the property subject to the life estate that
is equal to the life estate percentage factor for the life
estate as listed in the Life Estate Mortality Table of the
health care program's manual for a person who was the age of the
medical assistance recipient on the date of the person's death.
The joint tenancy interest in the estate shall be equal to the
fractional interest the medical assistance recipient would have
owned in the jointly held interest in the property had they and
the other owners held title to the property as tenants in common
on the date the medical assistance recipient died.
deleted text end

deleted text begin (d) deleted text end The county agency shall file a claim in the estate
under this section on behalf of the claimant who shall be the
commissioner of human services, notwithstanding that the
decedent is survived by a spouse or a person listed in
subdivision 3. The claim, as allowed, shall not be paid by the
estate and shall be disposed of as provided in this paragraph.
The personal representative or the court shall make, execute,
and deliver a lien in favor of the claimant on the decedent's
interest in real property in the estate in the amount of the
allowed claim on forms provided by the commissioner to the
county agency filing the lien. The lien shall bear interest as
provided under section 524.3-806, shall attach to the property
it describes upon filing or recording, and shall remain a lien
on the real property it describes for a period of 20 years from
the date it is filed or recorded. The lien shall be a
disposition of the claim sufficient to permit the estate to
close.

deleted text begin (e) deleted text end new text begin (d) new text end The state or county agency shall file or record the
lien in the office of the county recorder or registrar of titles
for each county in which any of the real property is located.
The recorder or registrar of titles shall accept the lien for
filing or recording. All recording or filing fees shall be paid
by the Department of Human Services. The recorder or registrar
of titles shall mail the recorded lien to the Department of
Human Services. The lien need not be attested, certified, or
acknowledged as a condition of recording or filing. deleted text begin Upon
recording or filing of a lien against a life estate or a joint
tenancy interest, the interest subject to the lien shall merge
into the remainder interest or the interest the recipient and
others owned jointly. The lien shall attach to and run with the
property to the extent of the decedent's interest in the
property at the time of the decedent's death as determined under
this section.
deleted text end

deleted text begin (f) deleted text end new text begin (e) new text end The department shall make no adjustment or recovery
under the lien until after the decedent's spouse, if any, has
died, and only at a time when the decedent has no surviving
child described in subdivision 3. The estate, any owner of an
interest in the property which is or may be subject to the lien,
or any other interested party, may voluntarily pay off, settle,
or otherwise satisfy the claim secured or to be secured by the
lien at any time before or after the lien is filed or recorded.
Such payoffs, settlements, and satisfactions shall be deemed to
be voluntary repayments of past medical assistance payments for
the benefit of the deceased recipient, and neither the process
of settling the claim, the payment of the claim, or the
acceptance of a payment shall constitute an adjustment or
recovery that is prohibited under this subdivision.

deleted text begin (g) deleted text end new text begin (f) new text end The lien under this subdivision may be enforced or
foreclosed in the manner provided by law for the enforcement of
judgment liens against real estate or by a foreclosure by action
under chapter 581. When the lien is paid, satisfied, or
otherwise discharged, the state or county agency shall prepare
and file a release of lien at its own expense. No action to
foreclose the lien shall be commenced unless the lien holder has
first given 30 days' prior written notice to pay the lien to the
owners and parties in possession of the property subject to the
lien. The notice shall: (1) include the name, address, and
telephone number of the lien holder; (2) describe the lien; (3)
give the amount of the lien; (4) inform the owner or party in
possession that payment of the lien in full must be made to the
lien holder within 30 days after service of the notice or the
lien holder may begin proceedings to foreclose the lien; and (5)
be served by personal service, certified mail, return receipt
requested, ordinary first class mail, or by publishing it once
in a newspaper of general circulation in the county in which any
part of the property is located. Service of the notice shall be
complete upon mailing or publication.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256B.15,
subdivision 1j, is amended to read:

Subd. 1j.

Claims in estates of decedents survived by
other survivors.

For purposes of this subdivision, the
provisions in subdivision 1i, paragraphs (a) deleted text begin to (c) deleted text end new text begin and (b)
new text end apply.

(a) If payment of a claim filed under this section is
limited as provided in subdivision 4, and if the estate does not
have other assets sufficient to pay the claim in full, as
allowed, the personal representative or the court shall make,
execute, and deliver a lien on the property in the estate that
is exempt from the claim under subdivision 4 in favor of the
commissioner of human services on forms provided by the
commissioner to the county agency filing the claim. If the
estate pays a claim filed under this section in full from other
assets of the estate, no lien shall be filed against the
property described in subdivision 4.

(b) The lien shall be in an amount equal to the unpaid
balance of the allowed claim under this section remaining after
the estate has applied all other available assets of the estate
to pay the claim. The property exempt under subdivision 4 shall
not be sold, assigned, transferred, conveyed, encumbered, or
distributed until after the personal representative has
determined the estate has other assets sufficient to pay the
allowed claim in full, or until after the lien has been filed or
recorded. The lien shall bear interest as provided under
section 524.3-806, shall attach to the property it describes
upon filing or recording, and shall remain a lien on the real
property it describes for a period of 20 years from the date it
is filed or recorded. The lien shall be a disposition of the
claim sufficient to permit the estate to close.

(c) The state or county agency shall file or record the
lien in the office of the county recorder or registrar of titles
in each county in which any of the real property is located.
The department shall pay the filing fees. The lien need not be
attested, certified, or acknowledged as a condition of recording
or filing. The recorder or registrar of titles shall accept the
lien for filing or recording.

(d) The commissioner shall make no adjustment or recovery
under the lien until none of the persons listed in subdivision 4
are residing on the property or until the property is sold or
transferred. The estate or any owner of an interest in the
property that is or may be subject to the lien, or any other
interested party, may voluntarily pay off, settle, or otherwise
satisfy the claim secured or to be secured by the lien at any
time before or after the lien is filed or recorded. The
payoffs, settlements, and satisfactions shall be deemed to be
voluntary repayments of past medical assistance payments for the
benefit of the deceased recipient and neither the process of
settling the claim, the payment of the claim, or acceptance of a
payment shall constitute an adjustment or recovery that is
prohibited under this subdivision.

(e) A lien under this subdivision may be enforced or
foreclosed in the manner provided for by law for the enforcement
of judgment liens against real estate or by a foreclosure by
action under chapter 581. When the lien has been paid,
satisfied, or otherwise discharged, the claimant shall prepare
and file a release of lien at the claimant's expense. No action
to foreclose the lien shall be commenced unless the lien holder
has first given 30 days prior written notice to pay the lien to
the record owners of the property and the parties in possession
of the property subject to the lien. The notice shall: (1)
include the name, address, and telephone number of the lien
holder; (2) describe the lien; (3) give the amount of the lien;
(4) inform the owner or party in possession that payment of the
lien in full must be made to the lien holder within 30 days
after service of the notice or the lien holder may begin
proceedings to foreclose the lien; and (5) be served by personal
service, certified mail, return receipt requested, ordinary
first class mail, or by publishing it once in a newspaper of
general circulation in the county in which any part of the
property is located. Service shall be complete upon mailing or
publication.

(f) deleted text begin Upon filing or recording of a lien against a life
estate or joint tenancy interest under this subdivision, the
interest subject to the lien shall merge into the remainder
interest or the interest the decedent and others owned jointly,
effective on the date of recording and filing. The lien shall
attach to and run with the property to the extent of the
decedent's interest in the property at the time of the
decedent's death as determined under this section.
deleted text end

deleted text begin (g) deleted text end (1) An affidavit may be provided by a personal
representative, at their discretion, stating the personal
representative has determined in good faith that a decedent
survived by a spouse or a person listed in subdivision 3, or by
a person listed in subdivision 4, or the decedent's predeceased
spouse did not receive any medical assistance giving rise to a
claim under this section, or that the real property described in
subdivision 4 is not needed to pay in full a claim arising under
this section.

(2) The affidavit shall:

(i) describe the property and the interest being
extinguished;

(ii) name the decedent and give the date of death;

(iii) state the facts listed in clause (1);

(iv) state that the affidavit is being filed to terminate
the life estate or joint tenancy interest created under this
subdivision;

(v) be signed by the personal representative; and

(vi) contain any other information that the affiant deems
appropriate.

deleted text begin (3) Except as provided in section 514.981, subdivision 6,
when the affidavit is filed or recorded, the life estate or
joint tenancy interest in real property that the affidavit
describes shall be terminated effective as of the date of filing
or recording. The termination shall be final and may not be set
aside for any reason.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 9.

Minnesota Statutes 2004, section 256B.15,
subdivision 2, is amended to read:

Subd. 2.

Limitations on claims.

The claim shall include
only the total amount of medical assistance rendered after age
55 or during a period of institutionalization described in
subdivision 1a, clause (b), and the total amount of general
assistance medical care rendered, and shall not include
interest. Claims that have been allowed but not paid shall bear
interest according to section 524.3-806, paragraph (d). A claim
against the estate of a surviving spouse who did not receive
medical assistance, for medical assistance rendered for the
predeceased spouse, is limited to the value of the assets of the
estate that were marital property or jointly owned property at
any time during the marriage. deleted text begin Claims for alternative care shall
be net of all premiums paid under section 256B.0913, subdivision
12, on or after July 1, 2003, and shall be limited to services
provided on or after July 1, 2003.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from July 1, 2003, for decedents dying on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2004, section 256B.15,
subdivision 3, is amended to read:

Subd. 3.

deleted text begin surviving spouse, deleted text end minor, blind, or disabled
children.

If a decedent deleted text begin is survived by a spouse, or deleted text end new text begin who new text end was
single or new text begin who was new text end the surviving spouse of a married couple deleted text begin and
deleted text end is survived by a child who is under age 21 or blind or
permanently and totally disabled according to the supplemental
security income program criteria, deleted text begin a deleted text end new text begin no new text end claim shall be filed
against the estate deleted text begin according to this section deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003.
new text end

Sec. 11.

Minnesota Statutes 2004, section 256B.15,
subdivision 4, is amended to read:

Subd. 4.

Other survivors.

If the decedent who was single
or the surviving spouse of a married couple is survived by one
of the following persons, a claim exists against the estate in
an amount not to exceed the value of the nonhomestead property
included in the estate deleted text begin and the personal representative shall
make, execute, and deliver to the county agency a lien against
the homestead property in the estate for any unpaid balance of
the claim to the claimant as provided under this section deleted text end :

deleted text begin (a) deleted text end new text begin (1) new text end a sibling who resided in the decedent medical
assistance recipient's home at least one year before the
decedent's institutionalization and continuously since the date
of institutionalization; or

deleted text begin (b) deleted text end new text begin (2) new text end a son or daughter or a grandchild who resided in
the decedent medical assistance recipient's home for at least
two years immediately before the parent's or grandparent's
institutionalization and continuously since the date of
institutionalization, and who establishes by a preponderance of
the evidence having provided care to the parent or grandparent
who received medical assistance, that the care was provided
before institutionalization, and that the care permitted the
parent or grandparent to reside at home rather than in an
institution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003, and applies to decedents who die on or
after that date.
new text end

Sec. 12.

Minnesota Statutes 2004, section 514.981,
subdivision 6, is amended to read:

Subd. 6.

Time limits; claim limits deleted text begin ; liens on life estates
and joint tenancies deleted text end .

(a) A medical assistance lien is a lien on
the real property it describes for a period of ten years from
the date it attaches according to section 514.981, subdivision
2, paragraph (a), except as otherwise provided for in sections
514.980 to 514.985. The agency may renew a medical assistance
lien for an additional ten years from the date it would
otherwise expire by recording or filing a certificate of renewal
before the lien expires. The certificate shall be recorded or
filed in the office of the county recorder or registrar of
titles for the county in which the lien is recorded or filed.
The certificate must refer to the recording or filing data for
the medical assistance lien it renews. The certificate need not
be attested, certified, or acknowledged as a condition for
recording or filing. The registrar of titles or the recorder
shall file, record, index, and return the certificate of renewal
in the same manner as provided for medical assistance liens in
section 514.982, subdivision 2.

(b) A medical assistance lien is not enforceable against
the real property of an estate to the extent there is a
determination by a court of competent jurisdiction, or by an
officer of the court designated for that purpose, that there are
insufficient assets in the estate to satisfy the agency's
medical assistance lien in whole or in part because of the
homestead exemption under section 256B.15, subdivision 4, the
rights of the surviving spouse or minor children under section
524.2-403, paragraphs (a) and (b), or claims with a priority
under section 524.3-805, paragraph (a), clauses (1) to (4). For
purposes of this section, the rights of the decedent's adult
children to exempt property under section 524.2-403, paragraph
(b), shall not be considered costs of administration under
section 524.3-805, paragraph (a), clause (1).

deleted text begin (c) Notwithstanding any law or rule to the contrary, the
provisions in clauses (1) to (7) apply if a life estate subject
to a medical assistance lien ends according to its terms, or if
a medical assistance recipient who owns a life estate or any
interest in real property as a joint tenant that is subject to a
medical assistance lien dies.
deleted text end

deleted text begin (1) The medical assistance recipient's life estate or joint
tenancy interest in the real property shall not end upon the
recipient's death but shall merge into the remainder interest or
other interest in real property the medical assistance recipient
owned in joint tenancy with others. The medical assistance lien
shall attach to and run with the remainder or other interest in
the real property to the extent of the medical assistance
recipient's interest in the property at the time of the
recipient's death as determined under this section.
deleted text end

deleted text begin (2) If the medical assistance recipient's interest was a
life estate in real property, the lien shall be a lien against
the portion of the remainder equal to the percentage factor for
the life estate of a person the medical assistance recipient's
age on the date the life estate ended according to its terms or
the date of the medical assistance recipient's death as listed
in the Life Estate Mortality Table in the health care program's
manual.
deleted text end

deleted text begin (3) If the medical assistance recipient owned the interest
in real property in joint tenancy with others, the lien shall be
a lien against the portion of that interest equal to the
fractional interest the medical assistance recipient would have
owned in the jointly owned interest had the medical assistance
recipient and the other owners held title to that interest as
tenants in common on the date the medical assistance recipient
died.
deleted text end

deleted text begin (4) The medical assistance lien shall remain a lien against
the remainder or other jointly owned interest for the length of
time and be renewable as provided in paragraph (a).
deleted text end

deleted text begin (5) Subdivision 5, paragraph (a), clause (4), paragraph
(b), clauses (1) and (2); and subdivision 6, paragraph (b), do
not apply to medical assistance liens which attach to interests
in real property as provided under this subdivision.
deleted text end

deleted text begin (6) The continuation of a medical assistance recipient's
life estate or joint tenancy interest in real property after the
medical assistance recipient's death for the purpose of
recovering medical assistance provided for in sections 514.980
to 514.985 modifies common law principles holding that these
interests terminate on the death of the holder.
deleted text end

deleted text begin (7) Notwithstanding any law or rule to the contrary, no
release, satisfaction, discharge, or affidavit under section
256B.15 shall extinguish or terminate the life estate or joint
tenancy interest of a medical assistance recipient subject to a
lien under sections 514.980 to 514.985 on the date the recipient
dies.
deleted text end

deleted text begin (8) The provisions of clauses (1) to (7) do not apply to a
homestead owned of record, on the date the recipient dies, by
the recipient and the recipient's spouse as joint tenants with a
right of survivorship. Homestead means the real property
occupied by the surviving joint tenant spouse as their sole
residence on the date the recipient dies and classified and
taxed to the recipient and surviving joint tenant spouse as
homestead property for property tax purposes in the calendar
year in which the recipient dies. For purposes of this
exemption, real property the recipient and their surviving joint
tenant spouse purchase solely with the proceeds from the sale of
their prior homestead, own of record as joint tenants, and
qualify as homestead property under section 273.124 in the
calendar year in which the recipient dies and prior to the
recipient's death shall be deemed to be real property classified
and taxed to the recipient and their surviving joint tenant
spouse as homestead property in the calendar year in which the
recipient dies. The surviving spouse, or any person with
personal knowledge of the facts, may provide an affidavit
describing the homestead property affected by this clause and
stating facts showing compliance with this clause. The
affidavit shall be prima facie evidence of the facts it states.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from August 1, 2003. new text end

Sec. 13.

Minnesota Statutes 2004, section 524.3-805, is
amended to read:

524.3-805 CLASSIFICATION OF CLAIMS.

(a) If the applicable assets of the estate are insufficient
to pay all claims in full, the personal representative shall
make payment in the following order:

(1) costs and expenses of administration;

(2) reasonable funeral expenses;

(3) debts and taxes with preference under federal law;

(4) reasonable and necessary medical, hospital, or nursing
home expenses of the last illness of the decedent, including
compensation of persons attending the decedent deleted text begin , a claim filed
under section 256B.15 for recovery of expenditures for
alternative care for nonmedical assistance recipients under
section 256B.0913, deleted text end and including a claim filed pursuant to
section 256B.15;

(5) reasonable and necessary medical, hospital, and nursing
home expenses for the care of the decedent during the year
immediately preceding death;

(6) debts with preference under other laws of this state,
and state taxes;

(7) all other claims.

(b) No preference shall be given in the payment of any
claim over any other claim of the same class, and a claim due
and payable shall not be entitled to a preference over claims
not due, except that if claims for expenses of the last illness
involve only claims filed under section deleted text begin 256B.15 for recovery of
expenditures for alternative care for nonmedical assistance
recipients under section 256B.0913, section deleted text end 246.53 for costs of
state hospital care and claims filed under section 256B.15 deleted text begin ,
claims filed to recover expenditures for alternative care for
nonmedical assistance recipients under section 256B.0913 shall
have preference over claims filed under both sections 246.53 and
other claims filed under section 256B.15, and deleted text end new text begin . new text end Claims filed
under section 246.53 have preference over claims filed under
section 256B.15 deleted text begin for recovery of amounts other than those for
expenditures for alternative care for nonmedical assistance
recipients under section 256B.0913 deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively
from July 1, 2003, for decedents dying on or after that date.
new text end

Sec. 14. new text begin REFUNDS; NOTICES, AND IMMUNITY.
new text end

new text begin (a) The commissioner of human services and any county
agency that, after a recipient's death, has collected any sum
(1) from the estate of a recipient of alternative case services,
or (2) attributable to a life estate or joint tenancy interest
in real estate that was continued after the death of the
recipient, shall promptly refund the amount collected to the
person or persons who paid the amount collected, in proportion
to each person's contribution to the amount.
new text end

new text begin (b) If the commissioner determines a person entitled to a
refund is dead, the commissioner shall pay the refund to the
person's estate if it is open, or to their heirs or devisees as
finally determined in any completed probate proceedings or under
a final decree of descent. In all other cases, the refund shall
be deemed to be abandoned property and the commissioner shall
pay and deliver the refund to the commissioner of commerce. The
commissioner of commerce shall administer and dispose of the
refund in accordance with Minnesota Statutes, sections 345.42
through 345.60. The commissioner of human services shall not be
liable to anyone with respect to the refund after paying or
delivering the refund as provided for in this paragraph.
new text end

new text begin (c) Lien notices of record against life estate or joint
tenancy interests filed on and after August 1, 2003, shall have
no effect and shall not constitute record notice after the death
of the person named in the lien or notice unless continued after
that time by the terms of the instrument creating the interest,
shall be disregarded by examiners of title, and shall not be
carried forward to subsequent certificates of title.
new text end

new text begin (d) The commissioner of human services, county agencies,
elected officials, and their employees are immune from all
liability for actions taken or not taken in accordance with Laws
2003, First Special Session chapter 14, article 2, sections 47
to 52; article 12, sections 40 to 52 and 90; and sections 1 to
14 of this act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment.
new text end

Sec. 15. new text begin APPROPRIATIONS.
new text end

new text begin $....... is appropriated from the general fund to the
commissioner of human services for fiscal years 2004 and 2005
for the purposes of sections 1 to 14. $....... is appropriated
from the general fund to the commissioner of human services for
fiscal years 2006 and 2007 for the purposes of sections 1 to 14.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 256B.15, subdivision 1g;
514.991; 514.992; 514.993; 514.994; and 514.995, are repealed
retroactively from July 1, 2003.
new text end