SF 1933

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; providing for a statewide plan for
improving health and a grant program for collaborative
health improvement projects; requiring persons to
refrain from smoking in certain areas; requiring all
persons to maintain health coverage; requiring health
plans to issue coverage to all applicants and charge
community rates; increasing the tax on cigarettes and
tobacco products; modifying price of cigarette stamps
and disposition of revenue received from cigarette
taxes; establishing an essential benefit set for all
health plans; creating an income tax deduction for
health plan premiums; limiting corporate income tax
deductions for employee health coverage to the value
of the essential benefit set; amending laws promoting
high-quality, evidence-based health care; providing
for public information on health care cost and
quality; creating a revolving loan fund for electronic
medical record systems; authorizing the sale of state
revenue bonds; requiring reports; appropriating money;
amending Minnesota Statutes 2004, sections 62J.43;
144.412; 144.413, subdivisions 2, 4, by adding
subdivisions; 144.414; 144.416; 144.417; 145A.12, by
adding subdivisions; 290.01, subdivisions 19b, 19c;
297F.05, subdivisions 1, 3, 4; 297F.08, subdivision 7;
297F.09, subdivision 2; 297F.10; proposing coding for
new law in Minnesota Statutes, chapters 62J; 62Q; 144;
repealing Minnesota Statutes 2004, section 144.415.

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

ARTICLE 1

INVESTMENT IN PREVENTION AND WELLNESS

Section 1.

Minnesota Statutes 2004, section 145A.12, is
amended by adding a subdivision to read:

new text begin Subd. 8. new text end

new text begin Coordinated statewide health improvement action
plan. new text end

new text begin The commissioner, in consultation with the Minnesota
Health Improvement Partnership, shall develop and implement a
statewide action plan for improving the health status of
Minnesotans and promoting primary prevention through strategic
and coordinated action of communities, businesses, health care
professionals, health care organizations, health plans, schools,
and other public and private entities. The plan must identify
up to three of the statewide public health outcomes as
determined under subdivision 7 and provide for specific steps to
be taken that will produce measurable improvements in health
status and corresponding reductions in the incidence of disease
or injury and related health care costs. The plan must
encourage and facilitate the formation of local public-private
partnerships to take action on the statewide goals.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 2.

Minnesota Statutes 2004, section 145A.12, is
amended by adding a subdivision to read:

new text begin Subd. 9. new text end

new text begin Health improvement grant fund. new text end

new text begin The commissioner
shall establish a public health grant fund and program to award
grants to statewide and local health improvement public-private
partnerships to support collaborative actions that will reduce
the rate of increase in health care costs through improvements
in the health status or the prevention of illness and injury in
the population of the state or a local community. The
commissioner shall require grantees to provide an equal match of
local funding provided from public or private sources. Each
grant program must include a methodology approved by the
commissioner for measuring the financial and health improvement
impact of the grantees' actions. The commissioner must submit a
report to the legislature by June 30, 2009, describing the
impact of the programs funded under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 3. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund to the
commissioner of health for the health improvement grant fund for
the fiscal year ending June 30, 2006.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

ARTICLE 2

HEALTHIER MINNESOTANS

Section 1.

Minnesota Statutes 2004, section 144.412, is
amended to read:

144.412 PUBLIC POLICY.

The purpose of sections 144.411 to 144.417 is to protect
deleted text begin the public health, comfort and environment by prohibiting
smoking in areas where children or ill or injured persons are
present, and deleted text end new text begin employees and the general public from the known
hazards of secondhand smoke new text end by deleted text begin limiting deleted text end new text begin eliminating new text end smoking in
public places new text begin , places of employment, and public transportation
new text end and at public meetings deleted text begin to designated smoking areas deleted text end .

Sec. 2.

Minnesota Statutes 2004, section 144.413, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Place of employment. new text end

new text begin "Place of employment"
means any indoor area at which two or more individuals perform
any type of a service for consideration of payment under any
type of employment relationship, including, but not limited to,
an employment relationship with or for a private corporation,
partnership, individual, or government agency. Place of
employment includes any location where two or more individuals
gratuitously perform services for which individuals are
ordinarily paid. Examples of a place of employment include
public conveyances, factories, warehouses, offices, retail
stores, restaurants, bars, banquet facilities, theaters, food
stores, banks, financial institutions, employee cafeterias,
lounges, auditoriums, gymnasiums, restrooms, elevators,
hallways, museums, libraries, bowling establishments, employee
medical facilities, rooms or areas containing photocopying
equipment or other office equipment used in common, vehicles
owned or leased by a company if a nonsmoking employee is
present, government-owned vehicles, or a similar place of
employment.
new text end

Sec. 3.

Minnesota Statutes 2004, section 144.413,
subdivision 2, is amended to read:

Subd. 2.

Public place.

"Public place" means any
enclosed, indoor area used by the general public deleted text begin or serving as a
place of work deleted text end , including, but not limited to, restaurants deleted text begin , deleted text end new text begin ;
bars; outdoor seating at restaurants and bars; new text end retail stores deleted text begin ,
offices deleted text end and other commercial establishments deleted text begin , public
conveyances, deleted text end new text begin ; new text end educational facilities other than public schools,
as defined in section 120A.05, subdivisions 9, 11, and 13 deleted text begin , deleted text end new text begin ;
new text end hospitals deleted text begin , deleted text end new text begin ; new text end nursing homes deleted text begin , deleted text end new text begin ; new text end auditoriums deleted text begin , deleted text end new text begin ; new text end arenas deleted text begin , deleted text end new text begin ;
new text end meeting rooms deleted text begin , deleted text end new text begin ; new text end and common areas of rental apartment buildings deleted text begin ,
but excluding private, enclosed offices occupied exclusively by
smokers even though such offices may be visited by nonsmokers deleted text end .

Sec. 4.

Minnesota Statutes 2004, section 144.413,
subdivision 4, is amended to read:

Subd. 4.

Smoking.

"Smoking" new text begin means the inhaling,
exhaling, or combustion of any cigar, cigarette, pipe, or other
lighted smoking equipment. Smoking new text end includes carrying a lighted
cigar, cigarette, pipe, or any other lighted smoking equipment.

Sec. 5.

Minnesota Statutes 2004, section 144.413, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Public transportation. new text end

new text begin "Public transportation"
means a public means of transportation, including light and
commuter rail transit; buses; enclosed bus and transit stops;
taxis, vans, limousines, and other for-hire vehicles other than
those being operated by the lessee; and ticketing, boarding, and
waiting areas in public transportation terminals.
new text end

Sec. 6.

Minnesota Statutes 2004, section 144.414, is
amended to read:

144.414 PROHIBITIONS AND EXCEPTIONS.

Subdivision 1.

Public places new text begin , places of employment,
public transportation, and public meetings new text end .

new text begin Smoking shall not
be permitted in and new text end no person shall smoke in a public place deleted text begin or deleted text end new text begin ,
new text end at a public meeting deleted text begin except in designated smoking areas deleted text end new text begin , in a
place of employment, or in public transportation, except as
provided in this section or section 144.4167 new text end . deleted text begin This prohibition
does not apply in cases in which an entire room or hall is used
for a private social function and seating arrangements are under
the control of the sponsor of the function and not of the
proprietor or person in charge of the place. Furthermore, this
prohibition shall not apply to places of work not usually
frequented by the general public, except that the state
commissioner of health shall establish rules to restrict or
prohibit smoking in factories, warehouses, and those places of
work where the close proximity of workers or the inadequacy of
ventilation causes smoke pollution detrimental to the health and
comfort of nonsmoking employees.
deleted text end

Subd. 2.

Day care premises.

Smoking is prohibited in a
day care center licensed under Minnesota Rules, parts 9503.0005
to 9503.0175, or in a family home or in a group family day care
provider home licensed under Minnesota Rules, parts 9502.0300 to
9502.0445, during its hours of operation. new text begin The proprietor of a
family home or group family day care provider must disclose to
parents or guardians of children cared for on the premises if
the proprietor permits smoking outside of its hours of
operation. Disclosure must include posting on the premises a
conspicuous written notice and orally informing parents or
guardians.
new text end

Subd. 3.

Health care facilities and clinics.

deleted text begin (a) deleted text end Smoking
is prohibited in any area of a hospital, health care clinic,
doctor's office, new text begin licensed residential facility for children, new text end or
other health care-related facility, deleted text begin other than deleted text end new text begin except that a
patient or resident in new text end a nursing home, boarding care facility,
or licensed residential facility deleted text begin , except as allowed in this
subdivision.
deleted text end

deleted text begin (b) Smoking by participants in peer reviewed scientific
studies related to the health effects of smoking may be allowed
in a separated room ventilated at a rate of 60 cubic feet per
minute per person pursuant to a policy that is approved by the
commissioner and is established by the administrator of the
program to minimize exposure of nonsmokers to deleted text end new text begin for adults may
new text end smoke new text begin in a designated separate, enclosed room if the room has a
separate ventilation system from the rest of the facility new text end .

new text begin Subd. 4. new text end

new text begin Public transportation vehicles. new text end

new text begin Smoking is
prohibited in public transportation vehicles except that the
driver of a public transportation vehicle may smoke when the
vehicle is being used for personal use. For purposes of this
subdivision, "personal use" means that the public transportation
vehicle is being used by the driver for private purposes and no
for-hire passengers are present. If a driver smokes as
permitted under this subdivision, the driver must post a
conspicuous sign inside the vehicle to inform passengers.
new text end

new text begin Subd. 5. new text end

new text begin Outdoor seating. new text end

new text begin Smoking is prohibited in the
outdoor seating area of a restaurant or bar, except that the
proprietor may designate for smoking up to 50 percent of the
outdoor seating capacity of the restaurant or bar provided the
location is appropriately signed as a smoking area.
new text end

Sec. 7.

Minnesota Statutes 2004, section 144.416, is
amended to read:

144.416 RESPONSIBILITIES OF PROPRIETORS.

new text begin (a) new text end The proprietor or other person in charge of a public
place new text begin , public transportation, place of employment, or public
meeting new text end shall make reasonable efforts to prevent smoking in the
public place new text begin , public transportation, place of employment, or
public meeting new text end by new text begin :
new text end

deleted text begin (a) deleted text end new text begin (1) new text end posting appropriate signs new text begin or by any other means
which may be appropriate new text end ; new text begin and
new text end

deleted text begin (b) arranging seating to provide a smoke-free area;
deleted text end

deleted text begin (c) asking smokers to refrain from smoking upon request of
a client or employee suffering discomfort from the smoke; or
deleted text end

deleted text begin (d) any other means which may be appropriate.
deleted text end

new text begin (2) asking any person who smokes in an area where smoking
is prohibited to refrain from smoking and, if the person does
not refrain from smoking after being asked to do so, asking the
person to leave. If the offending party refuses to leave, the
proprietor or other person in charge shall handle the situation
consistent with lawful methods for handling other persons acting
in a disorderly manner or as a trespasser.
new text end

new text begin (b) The proprietor or other person in charge of a public
place, public meeting, public transportation, or place of
employment must not provide smoking equipment, including
ashtrays or matches, in areas where smoking is prohibited.
Nothing in this section prohibits the proprietor or other person
in charge from taking more stringent measures than those under
sections 144.414 to 144.417 to protect individuals from
secondhand smoke. The proprietor or other person in charge of a
restaurant or bar may not serve an individual who is in
violation of sections 144.411 to 144.417.
new text end

Sec. 8.

new text begin [144.4167] PERMITTED SMOKING.
new text end

new text begin Subdivision 1. new text end

new text begin Scientific study participants. new text end

new text begin Smoking by
participants in peer reviewed scientific studies related to the
health effects of smoking may be allowed in a separated room
ventilated at a rate of 60 cubic feet per minute per person
pursuant to a policy that is approved by the commissioner and is
established by the administrator of the program to minimize
exposure of nonsmokers to smoke.
new text end

new text begin Subd. 2. new text end

new text begin Traditional native american
ceremonies. new text end

new text begin Sections 144.414 to 144.417 do not prohibit the
lighting of tobacco by an Indian adult as part of a traditional
Indian spiritual or cultural ceremony. For purposes of this
section, an Indian is a person who is a member of an Indian
tribe as defined in section 260.755, subdivision 12.
new text end

new text begin Subd. 3. new text end

new text begin Private places. new text end

new text begin Except as provided in section
144.414, subdivision 2, nothing in sections 144.411 to 144.417
prohibits smoking in:
new text end

new text begin (1) private homes, private residences, or private
automobiles; or
new text end

new text begin (2) a hotel or motel sleeping room rented to one or more
guests.
new text end

Sec. 9.

Minnesota Statutes 2004, section 144.417, is
amended to read:

144.417 COMMISSIONER OF HEALTH, ENFORCEMENT,
deleted text begin PENALTIES deleted text end new text begin VIOLATIONS new text end .

Subdivision 1.

Rules.

deleted text begin (a) deleted text end The state commissioner of
health shall adopt rules necessary and reasonable to implement
the provisions of sections 144.411 to 144.417 deleted text begin , except as
provided for in section 144.414 deleted text end .

deleted text begin (b) Rules implementing sections 144.411 to 144.417 adopted
after January 1, 2002, may not take effect until approved by a
law enacted after January 1, 2002. This paragraph does not
apply to a rule or severable portion of a rule governing smoking
in office buildings, factories, warehouses, or similar places of
work, or in health care facilities. This paragraph does not
apply to a rule changing the definition of "restaurant" to make
it the same as the definition in section 157.15, subdivision 12.
deleted text end

Subd. 2.

deleted text begin penalties deleted text end new text begin violations new text end .

new text begin (a) It is unlawful for
any person, firm, limited liability company, corporation, or
other entity that owns, manages, operates, or otherwise controls
the use of an area in which smoking is prohibited under sections
144.414 to 144.417 to fail to comply with sections 144.414 to
144.417. For violations of this subdivision, it is an
affirmative defense that during the relevant time period, actual
control of the area was not exercised by the respondent, but
rather by a lessee, a sublessee, or any other person. To
establish an affirmative defense, the respondent shall submit an
affidavit and may submit any other relevant proof indicating
that the respondent did not exercise actual control of the area
during the relevant time period. The affidavit and other proof
shall be mailed by certified mail to the appropriate enforcement
officer within 30 days of receipt of a notice of violation.
new text end

new text begin (b) It is unlawful for an employer whose place of
employment is subject to sections 144.414 to 144.417 to fail to
comply with sections 144.414 to 144.417. For violations of
sections 144.414 to 144.417, it is an affirmative defense that
the employer has made good faith efforts to ensure that
employees comply with sections 144.414 to 144.417.
new text end

new text begin (c) It is unlawful for any person to smoke in an area where
smoking is prohibited or restricted under sections 144.414 to
144.417.
new text end

new text begin (d) new text end Any person who violates deleted text begin section 144.414 or
144.4165 deleted text end new text begin paragraph (c) new text end is guilty of a petty misdemeanor.

new text begin (e) A proprietor or person in charge of a public place, a
public meeting, a place of employment, or public transportation
must not retaliate or take adverse action against an employee or
anyone else who, in good faith, reports a violation of sections
144.414 to 144.417 to the proprietor or person in charge of the
public place, public meeting, place of employment, or public
transportation or to the commissioner of health or other
designee responsible for enforcing sections 144.414 to 144.417.
new text end

new text begin (f) No person or employer shall discharge, refuse to hire,
penalize, discriminate against, or in any manner retaliate
against any employee, applicant for employment, or customer
because the employee, applicant, or customer exercises any right
to a smoke-free environment provided by sections 144.414 to
144.417 or other law.
new text end

Subd. 3.

Injunction.

The state commissioner of health, a
board of health as defined in section 145A.02, subdivision 2, or
any affected party may institute an action in any court with
jurisdiction to enjoin repeated violations of deleted text begin section 144.416 or
144.4165 deleted text end new text begin sections 144.414 to 144.417 new text end .

Sec. 10.

Minnesota Statutes 2004, section 297F.05,
subdivision 1, is amended to read:

Subdivision 1.

Rates; cigarettes.

A tax is imposed upon
the sale of cigarettes in this state, upon having cigarettes in
possession in this state with intent to sell, upon any person
engaged in business as a distributor, and upon the use or
storage by consumers, at the following rates:

(1) on cigarettes weighing not more than three pounds per
thousand, deleted text begin 24 deleted text end new text begin 74 new text end mills on each such cigarette; and

(2) on cigarettes weighing more than three pounds per
thousand, deleted text begin 48 deleted text end new text begin 148 new text end mills on each such cigarette.

Sec. 11.

Minnesota Statutes 2004, section 297F.05,
subdivision 3, is amended to read:

Subd. 3.

Rates; tobacco products.

A tax is imposed upon
all tobacco products in this state and upon any person engaged
in business as a distributor, at the rate of deleted text begin 35 deleted text end new text begin 108 new text end percent of
the wholesale sales price of the tobacco products. The tax is
imposed at the time the distributor:

(1) brings, or causes to be brought, into this state from
outside the state tobacco products for sale;

(2) makes, manufactures, or fabricates tobacco products in
this state for sale in this state; or

(3) ships or transports tobacco products to retailers in
this state, to be sold by those retailers.

Sec. 12.

Minnesota Statutes 2004, section 297F.05,
subdivision 4, is amended to read:

Subd. 4.

Use tax; tobacco products.

A tax is imposed
upon the use or storage by consumers of tobacco products in this
state, and upon such consumers, at the rate of deleted text begin 35 deleted text end new text begin 108 new text end percent of
the cost to the consumer of the tobacco products.

Sec. 13.

Minnesota Statutes 2004, section 297F.08,
subdivision 7, is amended to read:

Subd. 7.

Price of stamps.

The commissioner shall sell
stamps to any person licensed as a distributor new text begin at a discount of
.32 percent from the face amount of the stamps for the first
$1,500,000 of such stamps purchased in any fiscal year and at a
discount of .19 percent on the remainder of such stamps
purchased in any fiscal year new text end . The commissioner shall not sell
stamps to any other person. The commissioner may prescribe the
method of shipment of the stamps to the distributor as well as
the quantities of stamps purchased.

Sec. 14.

Minnesota Statutes 2004, section 297F.09,
subdivision 2, is amended to read:

Subd. 2.

Monthly return; tobacco products distributor.

On or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity and wholesale sales price
of each tobacco product:

(1) brought, or caused to be brought, into this state for
sale; and

(2) made, manufactured, or fabricated in this state for
sale in this state, during the preceding calendar month.

Every licensed distributor outside this state shall in like
manner file a return showing the quantity and wholesale sales
price of each tobacco product shipped or transported to
retailers in this state to be sold by those retailers, during
the preceding calendar month. Returns must be made in the form
and manner prescribed by the commissioner and must contain any
other information required by the commissioner. The return must
be accompanied by a remittance for the full tax liability shown new text begin ,
less .49 percent of the liability as compensation to reimburse
the distributor for expenses incurred in the administration of
this chapter new text end . The return for the May liability and 85 percent
of the estimated June liability is due on the date payment of
the tax is due.

Sec. 15.

Minnesota Statutes 2004, section 297F.10, is
amended to read:

297F.10 DEPOSIT OF PROCEEDS.

Subdivision 1.

Tax and use tax on cigarettes.

Revenue
received from cigarette taxes, as well as related penalties,
interest, license fees, and miscellaneous sources of revenue
shall be deposited by the commissioner in the state treasury and
credited as follows:

(1) the revenue produced by 3.25 mills of the tax on
cigarettes weighing not more than three pounds a thousand and
6.5 mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the Academic Health Center
special revenue fund hereby created and is annually appropriated
to the Board of Regents at the University of Minnesota for
Academic Health Center funding at the University of Minnesota;
and

(2) the revenue produced by 1.25 mills of the tax on
cigarettes weighing not more than three pounds a thousand and
2.5 mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the medical education and
research costs account hereby created in the special revenue
fund and is annually appropriated to the commissioner of health
for distribution under section 62J.692, subdivision 4; and

(3) the balance of the revenues derived from taxes,
penalties, and interest (under this chapter) and from license
fees and miscellaneous sources of revenue shall be credited to
the general fund new text begin , except that the revenue produced by 50 mills
of the tax on cigarettes weighing not more than three pounds a
thousand and 100 mills of the tax on cigarettes weighing more
than three pounds a thousand must be credited to the health care
access fund new text end .

Subd. 2.

Tax and use tax on tobacco products.

Revenue
received from taxes on tobacco products, as well as related
penalties, interest, and license fees shall be deposited by the
commissioner in the state treasury and credited to the general
fund new text begin , except that the revenue produced by 73 percent of the
wholesale price of taxable tobacco products must be credited to
the health care access fund new text end .

Sec. 16. new text begin FLOOR STOCKS TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Cigarettes. new text end

new text begin (a) A floor stocks tax is
imposed on every person engaged in business in this state as a
distributor, retailer, subjobber, vendor, manufacturer, or
manufacturer's representative of cigarettes, on the stamped
cigarettes and unaffixed stamps in the person's possession or
under the person's control at 12:01 a.m. on January 1, 2006.
The tax is imposed at the following rates, subject to the
discounts in Minnesota Statutes, section 297F.08, subdivision 7:
new text end

new text begin (1) on cigarettes weighing not more than three pounds per
thousand, 50 mills on each cigarette; and
new text end

new text begin (2) on cigarettes weighing more than three pounds per
thousand, 100 mills on each cigarette.
new text end

new text begin (b) Each distributor, by January .., 2006, shall file a
report with the commissioner of revenue, in the form the
commissioner prescribes, showing the stamped cigarettes and
unaffixed stamps on hand at 12:01 a.m. on January 1, 2006, and
the amount of tax due on the cigarettes and unaffixed stamps.
The tax imposed by this section is due and payable by February
1, 2006, and after that date bears interest as provided in
Minnesota Statutes, section 270.75. Each retailer, subjobber,
vendor, manufacturer, or manufacturer's representative shall
file a return with the commissioner, in the form the
commissioner prescribes, showing the cigarettes on hand at 12:01
a.m. on January 1, 2006, and pay the tax due on them by February
1, 2006. Tax not paid by the due date bears interest as
provided in Minnesota Statutes, section 270.75.
new text end

new text begin Subd. 2. new text end

new text begin Tobacco products. new text end

new text begin A floor stocks tax is imposed
on every person engaged in business in this state as a
distributor of tobacco products, at the rate of 73 percent of
the wholesale sales price of each tobacco product in the
person's possession or under the person's control at 12:01 a.m.
on January 1, 2006, and the amount of tax due on them. The tax
imposed by this section, less the discount provided in Minnesota
Statutes, section 297F.09, subdivision 2, is due and payable by
February 1, 2006, and thereafter bears interest as provided in
Minnesota Statutes, section 270.75.
new text end

new text begin Subd. 3. new text end

new text begin Audit and enforcement. new text end

new text begin The tax imposed by this
section is subject to the audit, assessment, and collection
provisions applicable to the taxes imposed under Minnesota
Statutes, chapter 297F. The commissioner of revenue shall
deposit the revenue from the tax imposed under this section in
the health care access fund in the state treasury.
new text end

Sec. 17. new text begin LOCAL GOVERNMENT ORDINANCES.
new text end

new text begin Nothing in Minnesota Statutes, sections 144.414 to 144.417,
prohibits a statutory or home rule charter city or county from
enacting and enforcing more stringent measures to protect
individuals from secondhand smoke.
new text end

Sec. 18. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 144.415, is repealed.
new text end

Sec. 19. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 18 are effective January 1, 2006.
new text end

ARTICLE 3

HEALTH INSURANCE REFORM

Section 1.

new text begin [62Q.166] UNIVERSAL HEALTH COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement of coverage. new text end

new text begin (a) Each
Minnesota resident shall obtain and maintain health coverage
that includes at least the essential benefit set described in
section 62Q.167.
new text end

new text begin (b) A person who becomes a Minnesota resident must obtain
the coverage no later than 30 days after becoming a Minnesota
resident.
new text end

new text begin (c) A child must have the coverage from the moment of birth.
new text end

new text begin Subd. 2. new text end

new text begin Essential benefit set. new text end

new text begin (a) Every health plan
offered, issued, sold, or renewed to cover a Minnesota resident
must include the essential benefit set described in section
62Q.167.
new text end

new text begin (b) A health plan may include coverage in addition to the
essential benefit set, provided that the additional coverages
are provided as optional coverage, for a separately stated
premium.
new text end

new text begin Subd. 3. new text end

new text begin Guaranteed issue. new text end

new text begin (a) Each health plan company
shall offer, sell, issue, or renew the essential benefit set on
a guaranteed issue basis, as defined in section 62Q.18,
subdivision 1, clause (2).
new text end

new text begin (b) Optional coverages under subdivision 2, paragraph (b),
need not be provided on a guaranteed issue basis.
new text end

new text begin Subd. 4. new text end

new text begin Community rating. new text end

new text begin (a) The premium rate for the
essential benefit set must not vary based upon age, health
history, or status, whether coverage is group or individual,
gender, geographic location, purchase of additional coverage, or
any other factor except as permitted under paragraph (b).
new text end

new text begin (b) Premium rates for the essential benefit set may vary to
reflect actuarially valid differences attributable to nonuse of
tobacco, compliance with recommended health screenings and
preventive care, or other health-promoting behaviors. Premium
rate variations must be approved by the commissioner prior to
their use.
new text end

new text begin (c) Paragraphs (a) and (b) do not apply to optional
coverage provided as an addition to the essential benefit set.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007.
new text end

Sec. 2.

new text begin [62Q.167] ESSENTIAL HEALTH CARE BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Report and draft legislation. new text end

new text begin (a) The
commissioners of commerce, health, and human services shall
convene an expert advisory committee, including physicians,
researchers, actuaries, human resources professionals, medical
educators, quality improvement professionals, and other persons
with expertise in assessing evidence of treatment effectiveness,
determining health plan benefits, and determining the costs of
health plan benefits to develop a report, recommendations, and
proposed legislation to establish an essential health care
benefit set that will serve as the consistent core of coverage
for all licensed health plan products. The essential benefits
must cover those health care services that are essential for the
protection of individual and public health and effective in
treating a health condition.
new text end

new text begin (b) The legislation must include at least the following:
new text end

new text begin (1) the criteria and methods for determining whether the
covered services, drugs, and equipment are essential;
new text end

new text begin (2) the criteria and methods for determining effectiveness,
which must be consistent with those established under section
62J.43;
new text end

new text begin (3) a list of the services, drugs, and equipment that must
be covered based on the criteria in paragraph (a).
Age-appropriate health risk assessment must be covered for all
patients and behavioral health services must be covered on the
same basis as any other health care service; and
new text end

new text begin (4) a process for continuous review and updating of the
essential health care benefit set.
new text end

new text begin Subd. 2. new text end

new text begin Relation to other health coverage plans. new text end

new text begin The
proposed legislation must include changes to existing laws
governing health plans to require that all health plan companies
as defined in section 62A.011, subdivision 3, must offer among
their other products a product that covers only the essential
benefits. All other products offered must cover at least the
essential benefits. Products that offer additional coverage
must separately itemize the cost of the essential benefits and
the cost of the additional coverage.
new text end

new text begin Subd. 3. new text end

new text begin Public programs. new text end

new text begin In conjunction with the
report, recommendations, and proposed legislation required under
subdivision 1, the commissioner of human services shall submit
recommendations and proposed legislation for establishing the
essential benefits as the core coverage for medical assistance,
general assistance medical care, and MinnesotaCare.
new text end

new text begin Subd. 4. new text end

new text begin Community input. new text end

new text begin During the process of
preparing the reports, recommendations, and proposed legislation
required under this section, the commissioners shall obtain
community input through public meetings, surveys, focus groups,
and other appropriate means. The report must include a
description of community input activities, a description of the
input received, the commissioners' findings and conclusions, and
how community input was used in the preparation of the report,
recommendations, and proposed legislation.
new text end

new text begin Subd. 5. new text end

new text begin Timeline. new text end

new text begin The report and proposed legislation
must be submitted to the legislature by November 15, 2005. The
proposed legislation must call for an effective date of January
1, 2007, for the implementation of requirements related to the
essential benefit set.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 3.

Minnesota Statutes 2004, section 290.01,
subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:

(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;

(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;

(3) the amount paid to others, less the amount used to
claim the credit allowed under section 290.0674, not to exceed
$1,625 for each qualifying child in grades kindergarten to 6 and
$2,500 for each qualifying child in grades 7 to 12, for tuition,
textbooks, and transportation of each qualifying child in
attending an elementary or secondary school situated in
Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin,
wherein a resident of this state may legally fulfill the state's
compulsory attendance laws, which is not operated for profit,
and which adheres to the provisions of the Civil Rights Act of
1964 and chapter 363A. For the purposes of this clause,
"tuition" includes fees or tuition as defined in section
290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and
equipment purchased or leased for use in elementary and
secondary schools in teaching only those subjects legally and
commonly taught in public elementary and secondary schools in
this state. Equipment expenses qualifying for deduction
includes expenses as defined and limited in section 290.0674,
subdivision 1, clause (3). "Textbooks" does not include
instructional books and materials used in the teaching of
religious tenets, doctrines, or worship, the purpose of which is
to instill such tenets, doctrines, or worship, nor does it
include books or materials for, or transportation to,
extracurricular activities including sporting events, musical or
dramatic events, speech activities, driver's education, or
similar programs. For purposes of the subtraction provided by
this clause, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;

(6) to the extent included in federal taxable income,
postservice benefits for youth community service under section
124D.42 for volunteer service under United States Code, title
42, sections 12601 to 12604;

(7) to the extent not deducted in determining federal
taxable income by an individual who does not itemize deductions
for federal income tax purposes for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions
allowable as a deduction for the taxable year under section
170(a) of the Internal Revenue Code over $500;

(8) for taxable years beginning before January 1, 2008, the
amount of the federal small ethanol producer credit allowed
under section 40(a)(3) of the Internal Revenue Code which is
included in gross income under section 87 of the Internal
Revenue Code;

(9) for individuals who are allowed a federal foreign tax
credit for taxes that do not qualify for a credit under section
290.06, subdivision 22, an amount equal to the carryover of
subnational foreign taxes for the taxable year, but not to
exceed the total subnational foreign taxes reported in claiming
the foreign tax credit. For purposes of this clause, "federal
foreign tax credit" means the credit allowed under section 27 of
the Internal Revenue Code, and "carryover of subnational foreign
taxes" equals the carryover allowed under section 904(c) of the
Internal Revenue Code minus national level foreign taxes to the
extent they exceed the federal foreign tax credit;

(10) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19a, clause (7), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the
taxpayer under subdivision 19a, clause (7), minus the positive
value of any net operating loss under section 172 of the
Internal Revenue Code generated for the tax year of the
addition. The resulting delayed depreciation cannot be less
than zero; deleted text begin and
deleted text end

(11) job opportunity building zone income as provided under
section 469.316 new text begin ; and
new text end

new text begin (12) to the extent not deducted in determining federal
taxable income, amounts paid for health coverage described as
the essential benefit set in subdivision 19c new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2004, section 290.01,
subdivision 19c, is amended to read:

Subd. 19c.

Corporations; additions to federal taxable
income.

For corporations, there shall be added to federal
taxable income:

(1) the amount of any deduction taken for federal income
tax purposes for income, excise, or franchise taxes based on net
income or related minimum taxes, including but not limited to
the tax imposed under section 290.0922, paid by the corporation
to Minnesota, another state, a political subdivision of another
state, the District of Columbia, or any foreign country or
possession of the United States;

(2) interest not subject to federal tax upon obligations
of: the United States, its possessions, its agencies, or its
instrumentalities; the state of Minnesota or any other state,
any of its political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or
instrumentalities; the District of Columbia; or Indian tribal
governments;

(3) exempt-interest dividends received as defined in
section 852(b)(5) of the Internal Revenue Code;

(4) the amount of any net operating loss deduction taken
for federal income tax purposes under section 172 or 832(c)(10)
of the Internal Revenue Code or operations loss deduction under
section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal
income tax purposes under sections 241 to 247 of the Internal
Revenue Code;

(6) losses from the business of mining, as defined in
section 290.05, subdivision 1, clause (a), that are not subject
to Minnesota income tax;

(7) the amount of any capital losses deducted for federal
income tax purposes under sections 1211 and 1212 of the Internal
Revenue Code;

(8) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal
Revenue Code;

(9) the amount of percentage depletion deducted under
sections 611 through 614 and 291 of the Internal Revenue Code;

(10) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986,
and for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, as amended through
December 31, 1985, the amount of the amortization deduction
allowed in computing federal taxable income for those
facilities;

(11) the amount of any deemed dividend from a foreign
operating corporation determined pursuant to section 290.17,
subdivision 4, paragraph (g);

(12) the amount of any environmental tax paid under section
59(a) of the Internal Revenue Code;

(13) the amount of a partner's pro rata share of net income
which does not flow through to the partner because the
partnership elected to pay the tax on the income under section
6242(a)(2) of the Internal Revenue Code;

(14) the amount of net income excluded under section 114 of
the Internal Revenue Code;

(15) any increase in subpart F income, as defined in
section 952(a) of the Internal Revenue Code, for the taxable
year when subpart F income is calculated without regard to the
provisions of section 614 of Public Law 107-147; deleted text begin and
deleted text end

(16) 80 percent of the depreciation deduction allowed under
section 168(k) of the Internal Revenue Code. For purposes of
this clause, if the taxpayer has an activity that in the taxable
year generates a deduction for depreciation under section 168(k)
and the activity generates a loss for the taxable year that the
taxpayer is not allowed to claim for the taxable year, "the
depreciation allowed under section 168(k)" for the taxable year
is limited to excess of the depreciation claimed by the activity
under section 168(k) over the amount of the loss from the
activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year
are allowed, the depreciation under section 168(k) is allowed new text begin ;
and
new text end

new text begin (17) the amount of expense claimed for payment of employee
health benefits that exceeds the value of the amount paid for
the essential health care benefits established under section
62Q.167 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007.
new text end

Sec. 5. new text begin DESIGN OF HEALTH REINSURANCE POOL.
new text end

new text begin The commissioner of commerce shall, no later than November
15, 2005, present to the legislature a plan for reactivating the
reinsurance pool established under Minnesota Statutes, sections
62L.13 to 62L.23, and converting it to a reinsurance pool for
high-cost cases in the entire individual and group market in
this state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 6. new text begin NETWORK HEALTH PLANS.
new text end

new text begin The commissioner of commerce shall, no later than January
1, 2006, prepare a report, recommendations, and proposed
legislation to prohibit health plan companies from offering
coverage plans that limit or restrict a member's ability to
obtain coverage from a qualified provider of the member's
choosing. The report, recommendations, and proposed legislation
must include recommended changes to laws and rules governing
health plan limits on balance billing, co-payments, deductibles,
and out-of-pocket maximum benefits that are deemed by the
commissioner to be appropriate. The report shall be based upon
an effective date of the proposed legislation of January 1, 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 7. new text begin ENFORCEMENT OF COVERAGE REQUIREMENT.
new text end

new text begin The commissioner of health shall prepare and submit to the
legislature by December 15, 2005, a report with recommendations
and proposed legislation for enforcing the requirement that all
individuals maintain continuous health coverage under Minnesota
Statutes, section 62Q.166, subdivision 1. In preparing the
report, the commissioner shall consider whether to require
evidence of coverage for applying for a driver's license,
registering for school, or filing state income tax returns.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 8. new text begin APPROPRIATIONS.
new text end

new text begin The following amounts are appropriated from the general
fund to the respective commissioners for the fiscal year ending
June 30, 2006, to implement this article:
new text end

new text begin (1) commissioner of commerce: $.......;
new text end

new text begin (2) commissioner of human services: $.......; and
new text end

new text begin (3) commissioner of health: $........
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

ARTICLE 4

IMPROVING VALUE IN HEALTH CARE PURCHASING

Section 1. new text begin INFORMATION FOR HEALTH CARE PURCHASING.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin It is the intent of the
legislature to promote and support a health care purchasing
system for public and private purchasers of health care that
promotes individual consumer choice based on the value of health
care services, drugs, and equipment. A necessary component of
value-based health care purchasing is convenient access to
information about differences in quality and costs.
new text end

new text begin Subd. 2. new text end

new text begin Quality disclosure. new text end

new text begin The state agency
commissioners serving on the governor's Health Care Cabinet, in
cooperation with organizations representing consumers,
employers, physicians and other health professionals, hospitals,
long-term care facilities, health plan companies, quality
improvement organizations, research and education institutions,
and other appropriate constituencies, shall identify and
contract with a private, nonprofit organization to serve as a
statewide source of comparative information on health care
quality.
new text end

new text begin Subd. 3. new text end

new text begin Cost information. new text end

new text begin The commissioner of health,
in cooperation with other appropriate state agencies and in
consultation with an advisory committee representing purchasers,
consumers, physicians and other health care professionals,
health plan companies, health care facilities and other health
care organizations, and other interested persons and groups,
shall develop a plan, no later than January 1, 2006, for the
development of useful, reliable, and valid information on cost
to support purchasing of health care based on value.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

ARTICLE 5

HIGH-QUALITY CARE

Section 1.

Minnesota Statutes 2004, section 62J.43, is
amended to read:

62J.43 deleted text begin BEST PRACTICES deleted text end new text begin EVIDENCE-BASED HEALTH CARE
GUIDELINES new text end AND QUALITY IMPROVEMENT.

deleted text begin (a) deleted text end new text begin Subdivision 1. new text end [ADOPTION OF GUIDELINES.] To improve
quality and reduce health care costs, state agencies shall
encourage the deleted text begin adoption deleted text end new text begin use new text end of deleted text begin best practice deleted text end new text begin evidence-based
health care new text end guidelines and participation in deleted text begin best practices
deleted text end new text begin quality new text end measurement activities by physicians, other health care
providers, and health plan companies. The commissioner of
health shall facilitate access to deleted text begin best practice deleted text end new text begin evidence-based
health care new text end guidelines and quality of care measurement
information to providers, purchasers, and consumers by:

(1) identifying and promoting local community-based,
physician-designed deleted text begin best practices care deleted text end new text begin evidence-based health
care guidelines new text end across the Minnesota health care system;

(2) disseminating information available to the commissioner
on adherence to deleted text begin best practices care deleted text end new text begin evidence-based health care
guidelines new text end by physicians and other health care providers in
Minnesota;

(3) educating consumers and purchasers on how to
effectively use this information in choosing their providers and
in making purchasing decisions; and

(4) making deleted text begin best practices deleted text end new text begin evidence-based health care
guidelines new text end and quality care measurement information available to
enrollees and program participants through the Department of
Health's Web site. The commissioner may convene an advisory
committee to ensure that the Web site is designed to provide
user friendly and easy accessibility.

deleted text begin (b) deleted text end new text begin Subd. 2. new text end [COLLABORATION WITH MINNESOTA NONPROFIT
ORGANIZATION.] The commissioner of health shall collaborate with
a nonprofit Minnesota quality improvement organization
specializing in deleted text begin best practices and deleted text end quality of care measurements
to provide deleted text begin best practices deleted text end new text begin evidence-based health care guidelines
new text end criteria and assist in the collection of the data.

deleted text begin (c) deleted text end new text begin Subd. 3. new text end [CRITERIA FOR EVIDENCE-BASED
GUIDELINES.] new text begin Guidelines identified under this section must meet
the following criteria:
new text end

new text begin (1) the scope and application are clear;
new text end

new text begin (2) authorship is stated and any conflicts of interest
disclosed;
new text end

new text begin (3) authors represent all pertinent clinical fields or
other means of input have been used;
new text end

new text begin (4) the development process is explicitly stated;
new text end

new text begin (5) the guideline is grounded in evidence;
new text end

new text begin (6) the evidence is cited and graded;
new text end

new text begin (7) the document itself is clear and practical;
new text end

new text begin (8) the document is flexible in use, with exceptions noted
or provided for with general statements;
new text end

new text begin (9) measures are included for use in systems improvement;
and
new text end

new text begin (10) the guideline has scheduled reviews and updating.
new text end

new text begin Subd. 4. new text end

new text begin Initial evidence-based health care guidelines.
new text end

The initial deleted text begin best practices deleted text end new text begin evidence-based health care guidelines
new text end and quality of care measurement criteria developed shall include
asthma, diabetes, and at least two other preventive health
measures. Hypertension and coronary artery disease shall be
included within one year following availability.

deleted text begin (d) deleted text end new text begin Subd. 5. new text end [USE IN STATE CONTRACTS WITH HEALTH PLANS.]
The commissioners of human services and employee relations may
use the data to make decisions about contracts they enter into
with health plan companies new text begin and shall develop a financial reward
program that compensates health care practices that implement
effective quality improvement programs or systems in their
practices, including, but not limited to, clinical information
systems, patient education and support, and case and disease
management new text end .

deleted text begin (e) deleted text end new text begin Subd. 6. new text end [LIMITATIONS.] This section does not apply if
the deleted text begin best practices deleted text end new text begin evidence-based health care new text end guidelines
authorize or recommend denial of treatment, food, or fluids
necessary to sustain life on the basis of the patient's age or
expected length of life or the patient's present or predicted
disability, degree of medical dependency, or quality of life.

deleted text begin (f) The commissioner of health, human services, and
employee relations shall report to the legislature by January
15, 2005, on the status of best practices and quality of care
initiatives, and shall present recommendations to the
legislature on any statutory changes needed to increase the
effectiveness of these initiatives.
deleted text end

deleted text begin (g) This section expires June 30, 2006.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 2.

new text begin [62J.82] ELECTRONIC MEDICAL RECORD SYSTEM LOAN
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner shall
establish and implement a loan program to help physicians or
physician group practices obtain the necessary finances to
install an electronic medical record system.
new text end

new text begin Subd. 2. new text end

new text begin Rules. new text end

new text begin The commissioner may adopt rules to
administer the loan program.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin To be eligible for a loan under
this section, the borrower must:
new text end

new text begin (1) have a signed contract with a vendor;
new text end

new text begin (2) be a physician licensed in this state or a physician
group practice located in this state;
new text end

new text begin (3) provide evidence of financial stability;
new text end

new text begin (4) demonstrate an ability to repay the loan;
new text end

new text begin (5) demonstrate that the borrower has explored possible
alliances or contractual opportunities with other provider
groups located in the same geographical area to become part of
the larger provider group's system; and
new text end

new text begin (6) meet any other requirement the commissioner imposes by
administrative procedure or by rule.
new text end

new text begin Subd. 4. new text end

new text begin Loans. new text end

new text begin (a) The commissioner may make a direct
loan to a provider or provider group who is eligible under
subdivision 3. The total accumulative loan principal must not
exceed $65,000 per loan.
new text end

new text begin (b) The commissioner may prescribe forms and establish an
application process and, notwithstanding section 16A.1283, may
impose a reasonable nonrefundable application fee to cover the
cost of administering the loan program.
new text end

new text begin (c) Loan principal balance outstanding plus all assessed
interest must be repaid no later than 15 years from the date of
the loan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 3.

new text begin [62J.83] ELECTRONIC MEDICAL RECORD SYSTEM LOAN
FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin The electronic medical record
system loan fund is established as a special account in the
state treasury. All application fees, loan repayments, and
other revenue received under section 62J.82 must be credited to
the fund.
new text end

new text begin Subd. 2. new text end

new text begin Bond proceeds account. new text end

new text begin An electronic medical
record system revenue bond proceeds account is established in
the electronic medical record system loan fund. The proceeds of
any bonds issued under section 62J.84 must be credited to the
account. Money in the account is appropriated to the
commissioner to make loans under section 62J.82.
new text end

new text begin Subd. 3. new text end

new text begin Debt service account. new text end

new text begin An electronic medical
record system revenue bond debt service account is established
in the electronic medical record system loan fund. There must
be credited to this debt service account in each fiscal year
from the income to the electronic medical record system loan
fund an amount sufficient to increase the balance on hand in the
debt service account on each December 1 to an amount equal to
the full amount of principal and interest to come due on all
outstanding bonds issued under section 62J.84 to and including
the second following July 1. The assets of the account are
pledged to and may only be used to pay principal and interest on
bonds issued under section 62J.84. Money in the debt service
account is appropriated to the commissioner of finance to pay
principal and interest on bonds issued under section 62J.84.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin Money in the electronic medical
record system loan fund not otherwise appropriated is
appropriated to the commissioner to administer the loan program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 4.

new text begin [62J.84] ELECTRONIC MEDICAL RECORD SYSTEM REVENUE
BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Bonding authority. new text end

new text begin Upon request of the
commissioner, the commissioner of finance may sell and issue
state revenue bonds to make loans under section 62J.82, to
establish a reserve fund or funds, and to pay the cost of
issuance of the bonds.
new text end

new text begin Subd. 2. new text end

new text begin Amount. new text end

new text begin The principal amount of the bonds
issued for the purposes specified in subdivision 1 must not
exceed $5,000,000.
new text end

new text begin Subd. 3. new text end

new text begin Procedure. new text end

new text begin The commissioner of finance may sell
and issue the bonds on the terms and conditions the commissioner
determines to be in the best interests of the state. The bonds
may be sold at public or private sale. The commissioner of
finance may enter any agreements or pledges the commissioner
determines necessary or useful to sell the bonds that are not
inconsistent with sections 62J.82 to 62J.84. Sections 16A.672
to 16A.675 apply to the bonds.
new text end

new text begin Subd. 4. new text end

new text begin Revenue sources. new text end

new text begin The bonds are payable only
from the following sources:
new text end

new text begin (1) loan repayments credited to the electronic medical
record system loan fund;
new text end

new text begin (2) the principal and any investment earnings on the assets
of the debt service account; and
new text end

new text begin (3) other revenues pledged to the payment of the bonds.
new text end

new text begin Subd. 5. new text end

new text begin Refunding bonds. new text end

new text begin The commissioner of finance
may issue bonds to refund outstanding bonds issued under
subdivision 1, including the payment of any redemption premiums
on the bonds and any interest accrued or to accrue to the first
redemption date after delivery of the refunding bonds. The
proceeds of the refunding bonds may, in the discretion of the
commissioner of finance, be applied to the purchases or payment
at maturity of the bonds to be refunded, or the redemption of
the outstanding bonds on the first redemption date after
delivery of the refunding bonds and may, until so used, be
placed in escrow to be applied to the purchase, retirement, or
redemption. Refunding bonds issued under this subdivision must
be issued and secured in the manner provided by the commissioner
of finance.
new text end

new text begin Subd. 6. new text end

new text begin Not a general or moral obligation. new text end

new text begin Bonds issued
under this section are not public debt, and the full faith,
credit, and taxing powers of the state are not pledged for their
payment. The bonds may not be paid directly in whole or part
from a tax of statewide application on any class of property,
income, transaction, or privilege. Payment of the bonds is
limited to the revenues explicitly authorized to be pledged
under this section. The state neither makes nor has a moral
obligation to pay the bonds if the pledged revenues and other
legal security for them is insufficient.
new text end

new text begin Subd. 7. new text end

new text begin Trustee. new text end

new text begin The commissioner of finance may
contract with and appoint a trustee for bondholders. The
trustee has the powers and authority vested in it by the
commissioner of finance under the bond and trust indentures.
new text end

new text begin Subd. 8. new text end

new text begin Pledges. new text end

new text begin Any pledge made by the commissioner of
finance is valid and binding from the time the pledge is made.
The money or property pledged and later received by the
commissioner of finance is immediately subject to the lien of
the pledge without any physical delivery of the property or
money or further act, and the lien of any pledge is valid and
binding as against all parties having claims of any kind in
tort, contract, or otherwise against the commissioner, whether
or not those parties have notice of the lien or pledge. Neither
the order nor any other instrument by which a pledge is created
need be recorded.
new text end

new text begin Subd. 9. new text end

new text begin Bonds; purchase and cancellation. new text end

new text begin The
commissioner of finance, subject to agreements with bondholders
that may then exist, may, out of any money available for the
purpose, purchase bonds of the commissioner at a price not
exceeding:
new text end

new text begin (1) if the bonds are then redeemable, the redemption price
then applicable plus accrued interest to the next interest
payment date thereon; or
new text end

new text begin (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase upon which the
bonds become subject to redemption plus accrued interest to that
date.
new text end

new text begin Subd. 10. new text end

new text begin State pledge against impairment of contracts.
new text end

new text begin The state pledges and agrees with the holders of any bonds that
the state will not limit or alter the rights vested in the
commissioner of finance to fulfill the terms of any agreements
made with the bondholders, or in any way impair the rights and
remedies of the holders until the bonds, together with interest
on them, with interest on any unpaid installments of interest,
and all costs and expenses in connection with any action or
proceeding by or on behalf of the bondholders, are fully met and
discharged. The commissioner of finance may include this pledge
and agreement of the state in any agreement with the holders of
bonds issued under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 5. new text begin QUALITY IMPROVEMENT INVESTMENT PROGRAM.
new text end

new text begin The commissioner of health, in consultation with the
commissioners of finance and administration, shall submit
recommendations to the legislature by December 15, 2005, to
establish a quality improvement investment program to provide
technical assistance, grants, and low-interest loans to health
care organizations and health professional associations to
support establishing or updating electronic information systems
in all health care settings to support the efficient and
effective delivery of safe, evidence-based health care services
and to reduce administrative costs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 6. new text begin APPROPRIATIONS.
new text end

new text begin (a) $....... is appropriated from the general fund to the
commissioner of finance for transfer to the electronic medical
record system loan fund to capitalize the fund. The
appropriation is available until expended.
new text end

new text begin (b) $....... is appropriated from the general fund to the
commissioner of health for the fiscal year ending June 30, 2006,
for the report required under section 5.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end