SF 3781

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

A bill for an act
relating to the financing of state government; making supplemental
appropriations for education, environment and agriculture, economic
development, transportation, public safety, state government, and health and
human services; modifying certain statutory provisions and laws; providing for
certain programs; fixing and limiting fees; authorizing rulemaking; requiring
reports; providing for penalties; appropriating money; amending Minnesota
Statutes 2004, sections 13.6905, by adding a subdivision; 47.58, subdivision 8;
62A.045; 62S.05, by adding a subdivision; 62S.08, subdivision 3; 62S.081,
subdivision 4; 62S.10, subdivision 2; 62S.13, by adding a subdivision; 62S.14,
subdivision 2; 62S.15; 62S.20, subdivision 1; 62S.24, subdivisions 1, 3, 4, by
adding subdivisions; 62S.25, subdivision 6, by adding a subdivision; 62S.26;
62S.266, subdivision 2; 62S.29, subdivision 1; 62S.30; 84.0835, subdivision
3; 85.053, by adding a subdivision; 85.054, by adding a subdivision; 85.32,
subdivision 1; 97A.028, subdivision 3; 115E.01, subdivisions 5, 6, 7, 13, by
adding subdivisions; 115E.04, subdivision 2, by adding subdivisions; 115E.05,
subdivisions 1, 2; 115E.08, subdivision 3; 116J.543; 119B.011, by adding a
subdivision; 119B.05, subdivision 1; 119B.13, by adding a subdivision; 122A.09,
subdivision 4; 123B.57, subdivision 6; 124D.518, subdivision 4; 124D.52,
subdivision 1; 125A.27, subdivisions 3, 7, 8, 11, 15, 18; 125A.29; 125A.30;
125A.32; 125A.33; 125A.48; 126C.10, by adding subdivisions; 136A.101,
subdivisions 4, 8; 136A.15, subdivisions 6, 9; 136A.1701, subdivisions 4, 7;
137.17, subdivisions 1, 3; 144.6501, subdivision 6; 144A.071, subdivision
4c; 144A.4605; 144D.01, by adding a subdivision; 144D.015; 144D.02;
144D.03, subdivision 2; 144D.04; 144D.05; 144D.065; 245.465, by adding
a subdivision; 245.771, by adding a subdivision; 246.54, subdivision 1, by
adding a subdivision; 253B.02, subdivision 2; 256.01, by adding subdivisions;
256.975, subdivision 7; 256B.02, subdivision 9; 256B.056, subdivision 2, by
adding subdivisions; 256B.0595, subdivisions 1, 3, 4; 256B.0625, subdivisions
20, 28, by adding a subdivision; 256B.0911, subdivision 3a; 256B.0913, by
adding a subdivision; 256B.0945, subdivisions 1, 4; 256B.15, by adding a
subdivision; 256B.437, subdivision 3; 256B.69, subdivisions 5g, 5h, 9, by adding
a subdivision; 256B.76; 256J.01, by adding a subdivision; 256J.02, subdivision
1; 256J.021; 256J.08, subdivision 65; 256J.37, subdivision 3a; 256J.521,
subdivisions 1, 2; 256J.53, subdivision 2, by adding a subdivision; 256J.626,
subdivisions 1, 2, 3, 4, 5; 256L.03, subdivision 3; 256L.04, subdivisions 7,
10, by adding a subdivision; 256L.07, subdivision 2; 256L.11, subdivision
1, by adding subdivisions; 256L.12, subdivision 9a; 256L.15, subdivision 1;
259.87; 326.105; 462A.05, by adding a subdivision; 488A.03, subdivisions 6, 11;
518.551, subdivision 7; Minnesota Statutes 2005 Supplement, sections 35.05;
85.053, subdivision 2; 85.055, subdivision 1; 116J.551, subdivision 1; 119B.13,
subdivision 1; 121A.19; 124D.111, subdivision 1; 124D.135, subdivision
1; 124D.175; 124D.531, subdivision 1; 125A.28; 126C.10, subdivision 31;
136A.121, subdivision 7a; 245.4874; 256B.0571; 256B.0595, subdivision 2;
256B.06, subdivision 4; 256B.0625, subdivision 1a; 256B.075, subdivision
2; 256B.0911, subdivision 1a; 256B.0918, subdivisions 1, 3, 4; 256B.0946,
subdivision 1; 256B.434, subdivision 4; 256B.69, subdivision 23; 256D.03,
subdivisions 3, 4; 256J.626, subdivision 6; 256L.01, subdivision 4; 256L.03,
subdivisions 1, 5; 256L.035; 256L.04, subdivision 1a; 256L.07, subdivisions 1,
3; 256L.15, subdivision 2; 299A.78; Laws 2005, chapter 136, article 1, section
10; Laws 2005, First Special Session chapter 1, article 2, section 3, subdivision
2; article 3, section 2, subdivision 4; Laws 2005, First Special Session chapter 4,
article 9, sections 3, subdivision 2; 5, subdivision 8; Laws 2005, First Special
Session chapter 5, article 1, sections 47; 54, subdivisions 2, 3, 5, 6, 7, 8; article
2, section 84, subdivisions 2, 3, 4, 6, 7, 10; article 3, section 18, subdivisions 2,
3, 4, 5, 6, 7; article 4, section 25, subdivisions 2, 3, 4, 6; article 5, section 17,
subdivisions 2, 3; article 6, section 1, subdivisions 2, 3, 5; article 7, section 20,
subdivisions 2, 3, 4; article 8, section 8, subdivisions 2, 3, 5; article 9, section 4,
subdivision 2; article 10, section 5, subdivision 2; proposing coding for new law
in Minnesota Statutes, chapters 3; 16E; 43A; 62S; 85; 115E; 116J; 122A; 124D;
144; 144A; 144D; 245; 254A; 256; 256B; 256D; 256J; 256L; 259; 299A; 341;
proposing coding for new law as Minnesota Statutes, chapter 144G; repealing
Minnesota Statutes 2004, sections 62J.694, subdivision 5; 137.17, subdivisions
2, 4; 245.465, subdivision 2; 256B.0945, subdivisions 5, 6, 7, 8, 9; 256B.83;
256J.626, subdivision 9; 488A.03, subdivision 11b; Minnesota Statutes 2005
Supplement, sections 119B.13, subdivision 7; 256B.0571, subdivisions 2, 5, 11;
256J.626, subdivision 7; 256L.035; Laws 2003, First Special Session chapter 14,
article 9, section 36; Minnesota Rules, part 4668.0215.

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

ARTICLE 1

SUMMARY

Section 1. APPROPRIATIONS SUMMARY.

(General Fund Only, Excluding Forecast Adjustments)
APPROPRIATIONS		2006		2007		TOTAL
Early Childhood Education	$	124,000	$	23,294,000	$	23,418,000
K-12 Education		463,000		34,437,000		34,900,000
Higher Education				4,700,000		4,700,000
Environment & Agriculture		523,000		2,363,000		2,886,000
Clean Water Legacy				20,000,000		20,000,000
Economic Development		1,750,000		2,850,000		4,600,000
Transportation				4,320,000		4,320,000
Public Safety		3,562,000		6,650,000		10,212,000
State Government		4,250,000		5,057,000		9,307,000
Health and Human Services		26,673,000		66,463,000		93,136,000
SUBTOTAL	$	37,345,000	$	170,134,000	$	207,479,000
TRANSFERS IN		2,933,000		900,000		3,833,000
TOTAL	$	34,412,000	$	169,234,000	$	203,646,000

ARTICLE 2

EARLY CHILDHOOD EDUCATION

Section 1. EARLY EDUCATION APPROPRIATIONS.

Subdivision 1.

Summary

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	124,000	$	23,294,000	$	23,418,000
TANF		-0-		1,475,000		1,475,000
TOTAL	$	124,000	$	24,769,000	$	24,893,000

Subd. 2. Department of Human Services; basic sliding fee child care waiting list

(a) For child care assistance for eligible
families on the basic sliding fee waiting list
under Minnesota Statutes, section 119B.03,
subdivision 2, as of July 1, 2006.

Summary by Fund
General Fund	-0-	2,672,000
TANF	-0-	1,475,000
TOTAL	-0-	4,147,000

The TANF appropriation is a onetime
appropriation for fiscal year 2007 only. The
general fund base for the basic sliding fee
program is increased by $4,147,000 in fiscal
years 2008 and 2009.

(b) For basic sliding fee child care assistance grants in fiscal year 2007

-0-

9,603,000

The general fund base is increased by
$13,348,000 in fiscal year 2008 and
$13,607,000 in fiscal year 2009 for basic
sliding fee child care assistance grants.

(c) For the state share of systems cost to implement the provider rate differential for accreditation

-0-

3,000

(d) As determined by the commissioner,
counties may use up to six percent of either
calendar year 2008 or 2009 allocations under
Minnesota Statutes, section 119B.03, to
fund accelerated payments that may occur
during the preceding calendar year during
conversion to the automated child care
assistance program system. If conversion
occurs over two calendar years, counties
may use up to three percent of the combined
calendar year allocations to fund accelerated
payments. Funding advanced under this
subdivision shall be considered part of the
allocation from which it was originally
advanced for purposes of setting future
allocations under Minnesota Statutes, section
119B.03, subdivisions 6, 6a, 6b, and 8, and
shall include funding for administrative costs
under Minnesota Statutes, section 119B.15.
Notwithstanding the provisions of any
section to the contrary, this provision shall
sunset December 31, 2009.

Sec. 2.

Minnesota Statutes 2005 Supplement, section 119B.13, subdivision 1, is
amended to read:

Subdivision 1.

Subsidy restrictions.

(a)(i) Effective July 1, 2005, the commissioner
of human services shall modify the rate tables for child care centers published in
Department of Human Services Bulletin No. 03-68-07 so that in counties with regional or
statewide cells, the higher of the 100th percentile of the 2002 market rate survey data or
the rate currently identified in the bulletin will be the maximum rate. The rates established
in this clause will be considered as the previous year's rates for purposes of the increase in
item (iii), and shall be compared to the 100th percentile of current market rates.

(ii) For the period between July 1, 2005, and through the full implementation of the
new rates under item (iii), the rates published in Department of Human Services Bulletin
No. 03-68-07 as adjusted by item (i) shall remain in effect.

(iii) (a) Beginning January July 1, 2006, the maximum rate paid for child care
assistance in any county or multicounty region under the child care fund shall be the lesser
of the 75th percentile rate for like-care arrangements in the county or multicounty region
as surveyed by the commissioner or the previous year's rate for like-care arrangements in
the county increased by 1.75 percent except that in counties where the maximum rate is
set at the 100th percentile on January 1, 2006, as published in Policy Bulletin 05-68-15,
the maximum rate shall continue to be set at the 100th percentile.

(iv) (b) Rate changes shall be implemented for services provided in March
September 2006 unless a participant eligibility redetermination or a new provider
agreement is completed between January July 1, 2006, and February 28 August 31, 2006.

As necessary, appropriate notice of adverse action must be made according to
Minnesota Rules, part 3400.0185, subparts 3 and 4.

New cases approved on or after January July 1, 2006, shall have the maximum rates
under item (iii) paragraph (a), implemented immediately.

(b) (c) Not less than once every two years, the commissioner shall survey rates
charged by child care providers in Minnesota to determine the 75th percentile for
like-care arrangements in counties. When the commissioner determines that, using the
commissioner's established protocol, the number of providers responding to the survey is
too small to determine the 75th percentile rate for like-care arrangements in a county or
multicounty region, the commissioner may establish the 75th percentile maximum rate
based on like-care arrangements in a county, region, or category that the commissioner
deems to be similar.

(c) (d) A rate which includes a special needs rate paid under subdivision 3 may be in
excess of the maximum rate allowed under this subdivision.

(d) (e) The department shall monitor the effect of this paragraph on provider rates.
The county shall pay the provider's full charges for every child in care up to the maximum
established. The commissioner shall determine the maximum rate for each type of care on
an hourly, full-day, and weekly basis, including special needs and handicapped care. The
commissioner shall also determine the maximum rate for school age care on a half-day
basis.

(e) (f) When the provider charge is greater than the maximum provider rate allowed,
the parent is responsible for payment of the difference in the rates in addition to any
family co-payment fee.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 3.

Minnesota Statutes 2004, section 119B.13, is amended by adding a subdivision
to read:

Subd. 3a.

Provider rate differential for accreditation.

A family child care
provider or child care center shall be paid a 15 percent differential above the maximum rate
established in subdivision 1, up to the actual provider rate, if the provider or center holds a
current early childhood development credential or is accredited. For a family child care
provider, early childhood development credential and accreditation includes an individual
who has earned a child development associate degree, a diploma in child development from
a Minnesota state technical college, or a bachelor's degree in early childhood education
from an accredited college or university, or who is accredited by the National Association
for Family Child Care or the Competency Based Training and Assessment Program. For a
child care center, accreditation includes accreditation by the National Association for the
Education of Young Children, the Council on Accreditation, the National Early Childhood
Program Accreditation, the National School-Age Care Association, or the National Head
Start Association Program of Excellence. For Montessori programs, accreditation includes
the American Montessori Society, Association of Montessori International-USA, or the
National Center for Montessori Education.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 4.

Minnesota Statutes 2005 Supplement, section 121A.19, is amended to read:

121A.19 DEVELOPMENTAL SCREENING AID.

Each school year, the state must pay a district $50 for each three-year-old child
screened; $40 for each four-year-old child screened; and $30 for each five-year-old child
or student screened by the district prior to kindergarten according to the requirements of
section 121A.17. The amount of state aid for each child or student screened shall be: (1)
$50 for a child screened at age three; (2) $40 for a child screened at age four; (3) $30
for a child screened at age five or six prior to kindergarten; and (4) $30 for a student
screened within 30 days after first enrolling in a public school kindergarten if the student
has not previously been screened according to the requirements of section 121A.17. If this
amount of aid is insufficient, the district may permanently transfer from the general fund
an amount that, when added to the aid, is sufficient. Developmental screening aid shall not
be paid for any student who is screened more than 30 days after the first day of attendance
at a public school kindergarten, except if a student transfers to another public school
kindergarten within 30 days after first enrolling in a Minnesota public school kindergarten
program. In this case, if the student has not been screened, the district to which the student
transfers may receive developmental screening aid for screening that student when the
screening is performed within 30 days of the transfer date.

Sec. 5.

[124D.129] EDUCATE PARENTS PARTNERSHIP.

The commissioner must work in partnership with health care providers and
community organizations to provide parent education information to parents of newborns
at the time of birth. The commissioner must coordinate the partnership and the distribution
of informational material to the parents of newborns before they leave the hospital with
early childhood organizations, including, but not limited to, early childhood family
education, child care resource and referral, and interagency early intervention committees.
The commissioner must develop a resource Web site that promotes, at a minimum, the
department Web site for information and links to resources on child development, parent
education, child care, and consumer safety information.

Sec. 6.

Minnesota Statutes 2005 Supplement, section 124D.135, subdivision 1, is
amended to read:

Subdivision 1.

Revenue.

The revenue for early childhood family education
programs for a school district equals $96 for fiscal year 2005 and $104 $120 for fiscal year
2006 2007 and later, times the greater of:

(1) 150; or

(2) the number of people under five years of age residing in the district on October 1
of the previous school year.

Sec. 7. [124D.136] KINDERGARTEN ENTRANCE ASSESSMENT INITIATIVE;
INTERVENTION PROGRAM.

Subdivision 1.

Kindergarten entrance assessment initiative.

(a) The
commissioner of education shall establish a method for assessing the school readiness of
children entering kindergarten, building on the two school readiness studies conducted by
the Department of Education in 2002 and 2003.

(b) Over a three-year period, school sites may implement the kindergarten entrance
assessment initiative based on the school rank under section 124D.081, starting with
the school sites with the highest rank. Under section 124D.081, the commissioner of
education ranks all school sites based on the incidence of free and reduced lunch. The
school sites with the highest incidence of free and reduced lunch receive the highest rank.
The schedule for implementation is as follows:

(1) fiscal year 2008, 30 percent of children entering kindergarten;

(2) fiscal year 2009, 50 percent of children entering kindergarten; and

(3) fiscal year 2010, 100 percent of children entering kindergarten.

Subd. 2.

Intervention program.

A school site that participates in the kindergarten
entrance assessment initiative under subdivision 1 must work with the school district and
other community partners to establish a kindergarten readiness intervention program to
provide additional instruction to children who are assessed and identified as being not
yet ready for kindergarten. A school site that participates in the kindergarten entrance
assessment initiative under subdivision 1 must complete the requirements of this section
within available K-12 funding sources. Each child will have a locally determined
intervention strategy focusing the curriculum content on the individualized needs of that
child. The commissioner, at a district's request, must assist the district and the school to
develop the intervention program. At the end of the kindergarten school year, the district
must reassess each child who receives an intervention to evaluate the progress of the child
over the kindergarten year and the success of the intervention strategy developed for that
child. The district must report the results of the intervention and year-end assessment to
the commissioner.

Subd. 3.

Report to legislature.

The commissioner shall report annually to the
senate and house of representatives committees having jurisdiction over early childhood
education on the results of the kindergarten entrance assessment initiative, and the results
of the intervention program.

Sec. 8.

Minnesota Statutes 2005 Supplement, section 124D.175, is amended to read:

124D.175 MINNESOTA EARLY LEARNING FOUNDATION PROPOSAL.

(a) The commissioner must implement an early childhood development grant
program for low-income and other challenged families that increases the effectiveness
and expands the capacity of public and nonpublic early childhood development programs,
which may include child care programs, and leads to improved early childhood parent
education and children's kindergarten readiness. The program must include:

(1) grant awards to existing early childhood development program providers that
also provide parent education programs and to qualified providers proposing to implement
pilot programs for this same purpose;

(2) grant awards to enable low-income families to participate in these programs;

(3) grant awards to improve overall programmatic quality; and

(4) an evaluation of the programmatic and financial efficacy of all these programs,
which may be performed using measures of services, staffing, and management systems
that provide consistent information about system performance, show trends, confirm
successes, and identify potential problems in early childhood development programs.

This grant program must not supplant existing early childhood development programs
or child care funds.

(b) The commissioner must contract with a private nonprofit, section 501(c)(3)
organization to implement the requirements of paragraph (a). The private nonprofit
organization must be governed by a board of directors composed of members from the
public and nonpublic sectors, where the nonpublic sector members compose a simple
majority of board members and where the public sector members are state and local
government officials, kindergarten through grade 12 or postsecondary educators, and early
childhood providers appointed by the governor. Membership on the board of directors
by a state agency official are work duties for the official and are not a conflict of interest
under section 43A.38. The board of directors must appoint an executive director and must
seek advice from geographically and ethnically diverse parents of young children and
representatives of early childhood development providers, kindergarten through grade 12
and postsecondary educators, public libraries, and the business sector.

The board of directors is subject to the open meeting law under chapter 13D.
All other terms and conditions under which board members serve and operate must be
described in the articles and bylaws of the organization. The private nonprofit organization
is not a state agency and is not subject to laws governing public agencies except the
provisions of chapter 13, salary limits under section 15A.0815, subdivision 2, and audits
by the legislative auditor under chapter 3 apply.

(c) In addition to the duties under paragraph (a), the Minnesota Early Learning
Foundation (MELF) shall evaluate the effectiveness of the voluntary NorthStar Quality
Improvement and Rating System. The NorthStar Quality Improvement and Rating System
must:

(1) provide consumer information for parents on child care and early education
program quality and ratings;

(2) set indicators to identify quality in care and early education settings, including
licensed family child care and centers, tribal providers and programs, Head Start and
school-age programs, and identify quality programs through ratings and ongoing
monitoring of programs;

(3) provide funds for provider improvement grants and quality achievement grants;

(4) require participating providers to incorporate the state's early learning standards
in their curriculum activities and develop appropriate child assessments aligned with the
kindergarten readiness assessment;

(5) provide accountability for the NorthStar Quality Improvement and Rating
System's effectiveness in improving child outcomes and kindergarten readiness; and

(6) align current and new state investments to improve the quality of child care
with the NorthStar Quality Improvement and Rating System framework, by providing
accountability and informed parent choice.

The Minnesota Early Learning Foundation shall report back to the legislature by
January 15, 2008, on the progress being made under this paragraph.

(d) The MELF shall convene a workgroup to analyze barriers to Head Start/child
care partnerships, and to develop recommendations for cost-effective strategies to help
Head Start and child care providers develop partnerships to offer full-day, full-year
services to at-risk children who qualify for Head Start and child care assistance.

(1) The workgroup must include representatives from each of the following groups:

(i) state agency staff administering child care and Head Start programs;

(ii) local Head Start programs and child care providers working in partnership;

(iii) statewide organizations representing Head Start programs and child care
providers;

(iv) county agencies administering child care assistance and Minnesota
family-investment programs; and

(v) participants and others who are eligible for Head Start and child care assistance
programs.

(2) A report outlining the workgroup's recommendations must be provided to the
senate and house of representatives committees having jurisdiction over child care and
Head Start issues by January 15, 2007.

(e) This section expires June 30, 2011. If no state appropriation is made for purposes
of this section, the commissioner must not implement paragraphs (a) and (b).

Sec. 9.

Minnesota Statutes 2004, section 124D.518, subdivision 4, is amended to read:

Subd. 4.

First prior program year.

"First prior program year" means the period
from May 1 of the second prior fiscal year through April 30 of the first prior fiscal year
specific time period defined by the commissioner that aligns to a program academic year.

Sec. 10.

Minnesota Statutes 2004, section 124D.52, subdivision 1, is amended to read:

Subdivision 1.

Program requirements.

(a) An adult basic education program is a
day or evening program offered by a district that is for people over 16 years of age who do
not attend an elementary or secondary school. The program offers academic instruction
necessary to earn a high school diploma or equivalency certificate.

(b) Notwithstanding any law to the contrary, a school board or the governing body of
a consortium offering an adult basic education program may adopt a sliding fee schedule
based on a family's income, but must waive the fee for participants who are under the
age of 21 or unable to pay. The fees charged must be designed to enable individuals of
all socioeconomic levels to participate in the program. A program may charge a security
deposit to assure return of materials, supplies, and equipment.

(c) Each approved adult basic education program must develop a memorandum of
understanding with the local workforce development centers located in the approved
program's service delivery area. The memorandum of understanding must describe how
the adult basic education program and the workforce development centers will cooperate
and coordinate services to provide unduplicated, efficient, and effective services to clients.

(d) Adult basic education aid must be spent for adult basic education purposes as
specified in sections 124D.518 to 124D.531.

(e) A state-approved adult basic education program must count and submit student
contact hours for a program that offers high school credit toward an adult high school
diploma according to student eligibility requirements and competency demonstration
requirements established by the commissioner.

Sec. 11.

Minnesota Statutes 2005 Supplement, section 124D.531, subdivision 1,
is amended to read:

Subdivision 1.

State total adult basic education aid.

(a) The state total adult basic
education aid for fiscal year 2005 is $36,509,000. The state total adult basic education aid
for fiscal year 2006 and later is $36,509,000 equals $36,587,000 plus any amount that is
not paid for during the previous fiscal year, as a result of adjustments under subdivision 4,
paragraph (a), or section 124D.52, subdivision 3. The state total adult basic education
aid for fiscal year 2007 equals $37,673,000 plus any amount that is not paid for during
the previous fiscal year, as a result of adjustments under subdivision 4, paragraph (a), or
section 124D.52, subdivision 3. The state total adult basic education aid for later fiscal
years equals:

(1) the state total adult basic education aid for the preceding fiscal year plus any
amount that is not paid for during the previous fiscal year, as a result of adjustments under
subdivision 4, paragraph (a), or section 124D.52, subdivision 3; times

(2) the lesser of:

(i) 1.03; or

(ii) the greater of 1.00 or the ratio of the state total contact hours in the first prior
program year to the state total contact hours in the second prior program year.

Beginning in fiscal year 2002, two percent of the state total adult basic education
aid must be set aside for adult basic education supplemental service grants under section
124D.522.

(b) The state total adult basic education aid, excluding basic population aid, equals
the difference between the amount computed in paragraph (a), and the state total basic
population aid under subdivision 2.

Sec. 12.

Minnesota Statutes 2004, section 125A.27, subdivision 3, is amended to read:

Subd. 3.

Core early intervention services.

"Core early intervention services"
means services that are available at no cost to children and families. These services
include:

(1) identification and referral;

(2) screening;

(3) evaluation;

(4) assessment;

(5) service coordination;

(6) special education and related services provided under section 125A.08, and
United States Code, title 20, section 1401 for children who qualify for these services
under Minnesota Rules; and

(7) protection of parent and child rights by means of procedural safeguards.

Sec. 13.

Minnesota Statutes 2004, section 125A.27, subdivision 7, is amended to read:

Subd. 7.

Early intervention system.

"Early intervention system" means the total
effort in the state to meet the needs of eligible children and their families, including,
but not limited to:

(1) any public agency in the state that receives funds under the Individuals with
Disabilities Education Act, United States Code, title 20, sections 1471 to 1485 (Part
C, Public Law 102-119);

(2) other state and local agencies administering programs involved in the provision
of early intervention services, including, but not limited to:

(i) the Maternal and Child Health program under title V of the Social Security Act,
United States Code, title 42, sections 701 to 709;

(ii) the Individuals with Disabilities Education Act, United States Code, title 20,
sections 1411 to 1420 (Part B);

(iii) medical assistance under the Social Security Act, United States Code, title
42, section 1396 et seq.;

(iv) the Developmental Disabilities Assistance and Bill of Rights Act, United States
Code, title 42, sections 6021 to 6030 (Part B); and

(v) the Head Start Act, United States Code, title 42, sections 9831 to 9852; and

(3) services provided by private groups or third-party payers in conformity with an
individualized family service plan.

Sec. 14.

Minnesota Statutes 2004, section 125A.27, subdivision 8, is amended to read:

Subd. 8.

Eligibility for Part C.

"Eligibility for Part C" means eligibility for early
childhood special education under section 125A.02 and Minnesota Rules, part 3525.2335,
subpart 1, items A and B.

Sec. 15.

Minnesota Statutes 2004, section 125A.27, subdivision 11, is amended to read:

Subd. 11.

Interagency child find systems.

"Interagency child find systems"
means activities developed on an interagency basis with the involvement of interagency
early intervention committees and other relevant community groups using rigorous
standards to actively seek out, identify, and refer infants and young children, with, or at
risk of, disabilities, and their families, including a child under the age of three who: (1)
is involved in a substantiated case of abuse or neglect, or (2) is identified as affected by
illegal substance abuse, or withdrawal symptoms resulting from prenatal drug exposure, to
reduce the need for future services.

Sec. 16.

Minnesota Statutes 2004, section 125A.27, subdivision 15, is amended to read:

Subd. 15.

Part C state plan.

"Part C state plan" means the annual state plan
application approved by the federal government under the Individuals with Disabilities
Education Act, United States Code, title 20, section 1471 et seq. (Part C, Public Law
105-117).

Sec. 17.

Minnesota Statutes 2004, section 125A.27, subdivision 18, is amended to read:

Subd. 18.

State lead agency.

"State lead agency" means the state agency receiving
federal funds under the Individuals with Disabilities Education Act, United States Code,
title 20, section 1471 et seq. (Part H, Public Law 102-119) for the purposes of providing
early intervention services.

Sec. 18.

Minnesota Statutes 2005 Supplement, section 125A.28, is amended to read:

125A.28 STATE INTERAGENCY COORDINATING COUNCIL.

An Interagency Coordinating Council of at least 17, but not more than 25 members
is established, in compliance with Public Law 102-119 108-446, section 682 641. The
members must be appointed by the governor. Council members must elect the council
chair. The representative of the commissioner may not serve as the chair. The council
must be composed of at least five parents, including persons of color, of children with
disabilities under age 12, including at least three parents of a child with a disability
under age seven, five representatives of public or private providers of services for
children with disabilities under age five, including a special education director, county
social service director, local Head Start director, and a community health services or
public health nursing administrator, one member of the senate, one member of the
house of representatives, one representative of teacher preparation programs in early
childhood-special education or other preparation programs in early childhood intervention,
at least one representative of advocacy organizations for children with disabilities under
age five, one physician who cares for young children with special health care needs, one
representative each from the commissioners of commerce, education, health, human
services, a representative from the state agency responsible for child care, foster care,
mental health, homeless coordinator of education of homeless children and youth, and a
representative from Indian health services or a tribal council. Section 15.059, subdivisions
2 to 5, apply to the council. The council must meet at least quarterly.

The council must address methods of implementing the state policy of developing
and implementing comprehensive, coordinated, multidisciplinary interagency programs of
early intervention services for children with disabilities and their families.

The duties of the council include recommending policies to ensure a comprehensive
and coordinated system of all state and local agency services for children under age five
with disabilities and their families. The policies must address how to incorporate each
agency's services into a unified state and local system of multidisciplinary assessment
practices, individual intervention plans, comprehensive systems to find children in need of
services, methods to improve public awareness, and assistance in determining the role of
interagency early intervention committees.

On the date that Minnesota Part C Annual Performance Report is submitted to the
federal Office of Special Education, the council must recommend to the governor and the
commissioners of education, health, human services, commerce, and employment and
economic development policies for a comprehensive and coordinated system.

Notwithstanding any other law to the contrary, the State Interagency Coordinating
Council expires on June 30, 2009.

Sec. 19.

Minnesota Statutes 2004, section 125A.29, is amended to read:

125A.29 RESPONSIBILITIES OF COUNTY BOARDS AND SCHOOL
BOARDS.

(a) It is the joint responsibility of county boards and school boards to coordinate,
provide, and pay for appropriate services, and to facilitate payment for services from public
and private sources. Appropriate services for children eligible under section 125A.02 must
be determined in consultation with parents, physicians, and other educational, medical,
health, and human services providers. The services provided must be in conformity with:

(1) an IFSP for each eligible infant and toddler from birth through age two and its
the infant's or toddler's family, including:

(i) Indian infants and toddlers with disabilities and their families residing on a
reservation geographically located in the state;

(ii) infants and toddlers with disabilities who are homeless children and their
families; and

(iii) infants and toddlers with disabilities who are wards of the state; or

(2) an individual education plan (IEP) or individual service plan (ISP) for each
eligible child ages three through four.

(b) Appropriate services include family education and counseling, home visits,
occupational and physical therapy, speech pathology, audiology, psychological services,
special instruction, nursing, respite, nutrition, assistive technology, transportation
and related costs, social work, vision services, case management including service
coordination under section 125A.33, medical services for diagnostic and evaluation
purposes, early identification, and screening, assessment, and health services necessary to
enable children with disabilities to benefit from early intervention services.

(c) School and county boards shall coordinate early intervention services. In the
absence of agreements established according to section 125A.39, service responsibilities
for children birth through age two are as follows:

(1) school boards must provide, pay for, and facilitate payment for special education
and related services required under sections 125A.05 and 125A.06;

(2) county boards must provide, pay for, and facilitate payment for noneducational
services of social work, psychology, transportation and related costs, nursing, respite, and
nutrition services not required under clause (1).

(d) School and county boards may develop an interagency agreement according
to section 125A.39 to establish agency responsibility that assures early intervention
services are coordinated, provided, paid for, and that payment is facilitated from public
and private sources.

(e) County and school boards must jointly determine the primary agency in this
cooperative effort and must notify the commissioner of the state lead agency of their
decision.

Sec. 20.

Minnesota Statutes 2004, section 125A.30, is amended to read:

125A.30 INTERAGENCY EARLY INTERVENTION COMMITTEES.

(a) A school district, group of districts, or special education cooperative, in
cooperation with the health and human service agencies located in the county or counties
in which the district or cooperative is located, must establish an Interagency Early
Intervention Committee for children with disabilities under age five and their families
under this section, and for children with disabilities ages three to 22 consistent with
the requirements under sections 125A.023 and 125A.027. Committees must include
representatives of local health, education, and county human service agencies, county
boards, school boards, early childhood family education programs, Head Start, parents of
young children with disabilities under age 12, child care resource and referral agencies,
school readiness programs, current service providers, and may also include representatives
from other private or public agencies and school nurses. The committee must elect a chair
from among its members and must meet at least quarterly.

(b) The committee must develop and implement interagency policies and procedures
concerning the following ongoing duties:

(1) develop public awareness systems designed to inform potential recipient
families, especially parents with premature infants, or infants with other physical risk
factors associated with learning or development complications, of available programs
and services;

(2) implement interagency child find systems designed to actively seek out, identify,
and refer infants and young children with, or at risk of, disabilities, including a child
under the age of three who: (i) is involved in a substantiated case of abuse or neglect or
(ii) is identified as affected by illegal substance abuse, or withdrawal symptoms resulting
from prenatal drug exposure, to reduce the need for future services; and their families,
especially parents with premature infants, or infants with other physical risk factors
associated with learning or development complications;

(3) establish and evaluate the identification, referral, child and family assessment
systems, procedural safeguard process, and community learning systems to recommend,
where necessary, alterations and improvements;

(4) assure the development of individualized family service plans for all eligible
infants and toddlers with disabilities from birth through age two, and their families, and
individual education plans and individual service plans when necessary to appropriately
serve children with disabilities, age three and older, and their families and recommend
assignment of financial responsibilities to the appropriate agencies;

(5) encourage agencies to develop individual family service plans for children with
disabilities, age three and older;

(6) implement a process for assuring that services involve cooperating agencies at all
steps leading to individualized programs;

(7) (6) facilitate the development of a transitional plan if a service provider is not
recommended to continue to provide services;

(8) (7) identify the current services and funding being provided within the
community for children with disabilities under age five and their families;

(9) (8) develop a plan for the allocation and expenditure of additional state and
federal early intervention funds under United States Code, title 20, section 1471 et seq.
(Part C, Public Law 102-119 108-446) and United States Code, title 20, section 631, et
seq. (Chapter I, Public Law 89-313); and

(10) (9) develop a policy that is consistent with section 13.05, subdivision 9, and
federal law to enable a member of an interagency early intervention committee to allow
another member access to data classified as not public.

(c) The local committee shall also:

(1) participate in needs assessments and program planning activities conducted by
local social service, health and education agencies for young children with disabilities and
their families; and

(2) review and comment on the early intervention section of the total special
education system for the district, the county social service plan, the section or sections of
the community health services plan that address needs of and service activities targeted
to children with special health care needs, the section on children with special needs in
the county child care fund plan, sections in Head Start plans on coordinated planning and
services for children with special needs, any relevant portions of early childhood education
plans, such as early childhood family education or school readiness, or other applicable
coordinated school and community plans for early childhood programs and services, and
the section of the maternal and child health special project grants that address needs of and
service activities targeted to children with chronic illness and disabilities.

Sec. 21.

Minnesota Statutes 2004, section 125A.32, is amended to read:

125A.32 INDIVIDUALIZED FAMILY SERVICE PLAN (IFSP).

(a) A team must participate in IFSP meetings to develop the IFSP. The team shall
include:

(1) a parent or parents of the child;

(2) other family members, as requested by the parent, if feasible to do so;

(3) an advocate or person outside of the family, if the parent requests that the
person participate;

(4) the service coordinator who has been working with the family since the
initial referral, or who has been designated by the public agency to be responsible for
implementation of the IFSP and coordination with other agencies including transition
services; and

(5) a person or persons involved in conducting evaluations and assessments.

(b) The IFSP must include:

(1) information about the child's developmental status;

(2) family information, with the consent of the family;

(3) measurable results or major outcomes expected to be achieved by the child and
the family that include preliteracy and language skills, as developmentally appropriate
for the child, and the criteria, procedures, and timelines;

(4) specific early intervention services based on peer-reviewed research, to the
extent practicable, necessary to meet the unique needs of the child and the family to
achieve the outcomes;

(5) payment arrangements, if any;

(6) medical and other services that the child needs, but that are not required under
the Individual with Disabilities Education Act, United States Code, title 20, section 1471
et seq. (Part C, Public Law 102-119 108-446) including funding sources to be used in
paying for those services and the steps that will be taken to secure those services through
public or private sources;

(7) dates and duration of early intervention services;

(8) name of the service coordinator;

(9) steps to be taken to support a child's transition from early intervention services to
other appropriate services, including convening a transition conference at least 90 days or,
at the discretion of all parties, not more than nine months prior to the child's eligibility for
preschool services; and

(10) signature of the parent and authorized signatures of the agencies responsible
for providing, paying for, or facilitating payment, or any combination of these, for early
intervention services.

Sec. 22.

Minnesota Statutes 2004, section 125A.33, is amended to read:

125A.33 SERVICE COORDINATION.

(a) The team developing the IFSP under section 125A.32 must select a service
coordinator to carry out service coordination activities on an interagency basis. Service
coordination must actively promote a family's capacity and competency to identify,
obtain, coordinate, monitor, and evaluate resources and services to meet the family's
needs. Service coordination activities include:

(1) coordinating the performance of evaluations and assessments;

(2) facilitating and participating in the development, review, and evaluation of
individualized family service plans;

(3) assisting families in identifying available service providers;

(4) coordinating and monitoring the delivery of available services;

(5) informing families of the availability of advocacy services;

(6) coordinating with medical, health, and other service providers;

(7) facilitating the development of a transition plan at least 90 days before the time
the child is no longer eligible for early intervention services or, at the discretion of all
parties, not more than nine months prior to the child's eligibility for preschool services,
if appropriate;

(8) managing the early intervention record and submitting additional information to
the local primary agency at the time of periodic review and annual evaluations; and

(9) notifying a local primary agency when disputes between agencies impact service
delivery required by an IFSP.

(b) A service coordinator must be knowledgeable about children and families
receiving services under this section, requirements of state and federal law, and services
available in the interagency early childhood intervention system.

Sec. 23.

Minnesota Statutes 2004, section 125A.48, is amended to read:

125A.48 STATE INTERAGENCY AGREEMENT.

(a) The commissioners of the Departments of Education, Health, and Human
Services must enter into an agreement to implement this section and Part H C, Public
Law 102-119 108-446, and as required by Code of Federal Regulations, title 34, section
303.523, to promote the development and implementation of interagency, coordinated,
multidisciplinary state and local early childhood intervention service systems for serving
eligible young children with disabilities, birth through age two, and their families and
to ensure the meaningful involvement of underserved groups, including minority,
low-income, homeless, and rural families and children with disabilities who are wards
of the state. The agreement must be reviewed annually.

(b) The state interagency agreement must outline at a minimum the conditions,
procedures, purposes, and responsibilities of the participating state and local agencies
for the following:

(1) membership, roles, and responsibilities of a state interagency committee for
the oversight of priorities and budget allocations under Part H C, Public Law 102-119
108-446, and other state allocations for this program;

(2) child find;

(3) establishment of local interagency agreements;

(4) review by a state interagency committee of the allocation of additional state and
federal early intervention funds by local agencies;

(5) fiscal responsibilities of the state and local agencies;

(6) intraagency and interagency dispute resolution;

(7) payor of last resort;

(8) maintenance of effort;

(9) procedural safeguards, including mediation;

(10) complaint resolution;

(11) quality assurance;

(12) data collection;

(13) an annual summary to the state Interagency Coordinating Council regarding
conflict resolution activities including disputes, due process hearings, and complaints; and

(14) other components of the state and local early intervention system consistent
with Public Law 102-119 108-446.

Written materials must be developed for parents, IEIC's, and local service providers
that describe procedures developed under this section as required by Code of Federal
Regulations, title 34, section 303.

Sec. 24.

Laws 2005, First Special Session chapter 5, article 7, section 20, subdivision
3, is amended to read:

Subd. 3. Early childhood family education aid. For early childhood family
education aid under Minnesota Statutes, section 124D.135:

		14,356,000
	$	15,105,000	.......	2006
		15,137,000
	$	20,312,000	.......	2007

The 2006 appropriation includes $1,861,000 $1,859,000 for 2005 and $12,495,000
$13,246,000 for 2006.

The 2007 appropriation includes $2,327,000 $1,471,000 for 2006 and $12,810,000
$18,842,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 25.

Laws 2005, First Special Session chapter 5, article 7, section 20, subdivision
4, is amended to read:

Subd. 4. Health and developmental screening aid. For health and developmental
screening aid under Minnesota Statutes, sections 121A.17 and 121A.19:

		3,076,000
	$	3,000,000	.......	2006
		3,511,000
	$	2,997,000	.......	2007

The 2006 appropriation includes $417,000 for 2005 and $2,659,000 $2,583,000
for 2006.

The 2007 appropriation includes $494,000 $287,000 for 2006 and $3,017,000
$2,710,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 26.

Laws 2005, First Special Session chapter 5, article 9, section 4, subdivision 2,
is amended to read:

Subd. 2. Adult basic education aid. For adult basic education aid under Minnesota
Statutes:

		36,518,000
	$	38,636,000	.......	2006
		36,540,000
	$	37,564,000	.......	2007

The 2006 appropriation includes $5,707,000 for 2005 and $30,811,000 $32,929,000
for 2006.

The 2007 appropriation includes $5,737,000 $3,658,000 for 2006 and $30,803,000
$33,906,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 27. ADULT LITERACY GRANTS FOR RECENT IMMIGRANTS TO
MINNESOTA.

Subdivision 1.

Establishment.

An adult literacy grant program for recent
immigrants to Minnesota is established in fiscal years 2007 and 2008 only in order to
meet the English language needs of the unanticipated refugees and immigrants to the
state of Minnesota.

Subd. 2.

Grants.

The commissioner of education shall consult adult basic
education service providers in establishing the form and manner of the grant program.
The commissioner shall award grants to organizations providing adult literacy services in
order to help offset the additional costs due to unanticipated high enrollments of recent
refugees and immigrants.

Sec. 28. STUDY; CERTIFICATION OF SCHOOL READINESS AND CHILD
CARE PROGRAMS.

The commissioner of education, in consultation with the commissioner of human
services, shall contract with a qualified independent contractor to determine appropriate
criteria and structure for certifying child care programs and providers based on a high
quality school readiness component in the child care setting that adequately prepares
children for school.

The contractor must research appropriate criteria for certifying a program or
provider and the structure by which a program or provider would be certified, explore
specific service needs and unique resources available to individual communities, and
explore flexibility in implementing a program or provider plan that prepares children for
kindergarten. The contractor also must evaluate the impact of implementing a school
readiness component in child care settings on providers and families using certified child
care.

The commissioner of education must submit a written report of the contractor's
findings and any recommendations about appropriate criteria and structure for establishing
certified child care programs and providers to the senate and house of representatives
committees having jurisdiction over child care issues by December 15, 2006.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 29. PARENT FEE SCHEDULE.

Notwithstanding Minnesota Rules, part 3400.0100, subpart 4, the parent fee
schedule for the child care assistance program is as follows:

Income Range (as a percentage of the federal poverty guidelines)	Co-payment (as a percentage of adjusted gross income)
0-74.99%	$0/month
75.00-99.99%	$5/month
100.00-104.99%	2.61%
105.00-109.99%	2.61%
110.00-114.99%	2.61%
115.00-119.99%	2.61%
120.00-124.99%	2.91%
125.00-129.99%	2.91%
130.00-134.99%	2.91%
135.00-139.99%	2.91%
140.00-144.99%	3.21%
145.00-149.99%	3.21%
150.00-154.99%	3.21%
155.00-159.99%	3.84%
160.00-164.99%	3.84%
165.00-169.99%	4.46%
170.00-174.99%	4.76%
175.00-179.99%	5.05%
180.00-184.99%	5.65%
185.00-189.99%	5.95%
190.00-194.99%	6.24%
195.00-199.99%	6.84%
200.00-204.99%	7.58%
205.00-209.99%	8.33%
210.00-214.99%	9.20%
215.00-219.99%	10.07%
220.00-224.99%	10.94%
225.00-229.99%	11.55%
230.00-234.99%	12.16%
235.00-239.99%	12.77%
240.00-244.99%	13.38%
245.00-249.99%	14.00%
250%	ineligible

A family's monthly co-payment fee is the fixed percentage established for the
income range multiplied by the highest possible income within that income range.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 30. LEGISLATIVE COMMISSION TO END POVERTY IN MINNESOTA
BY 2020.

Subdivision 1.

Membership.

The Legislative Commission to End Poverty in
Minnesota by 2020 consists of nine members of the senate appointed by the Subcommittee
on Committees of the Committee on Rules and Administration, including four members of
the minority, and nine members of the house of representatives appointed by the speaker,
including four members of the minority. Appointments must be made by members elected
to the 85th session of the legislature and no later than February 15, 2007. The governor
may appoint two nonvoting members to sit with the commission.

Subd. 2.

Guiding principles.

In preparing recommendations on how to end poverty
in Minnesota by 2020, the commission must be guided by the following principles:

(a) There should be a consistent and persistent approach that includes participation
of people of faith, nonprofit agencies, government, and business.

(b) All people should be provided with those things that protect human dignity
and make for a healthy life, including adequate food and shelter, meaningful work, safe
communities, health care, and education.

(c) All people are intended to live well together as a whole community, seeking the
common good, avoiding wide disparities between those who have too little to live on and
those who have a disproportionate share of the nation's goods.

(d) All people need to work together to overcome poverty, and this work transcends
both any particular political theory or party and any particular economic theory or
structure. Overcoming poverty requires the use of private and public resources.

(e) Alliances are needed between the faith community, nonprofit agencies,
government, business, and others with a commitment to overcoming poverty.

(f) Overcoming poverty involves both acts of direct service to alleviate the outcomes
of poverty and advocacy to change those structures that result in people living in poverty.

(g) Government is neither solely responsible for alleviating poverty nor removed
from that responsibility. Government is the vehicle by which people order their lives
based on their shared vision. Society is well served when people bring their values into
the public arena. This convergence around issues of poverty and the common good
leads people of varying traditions to call on government to make a critical commitment
to overcoming poverty.

Subd. 3.

Report.

The commission shall report its recommendations on how to end
poverty in Minnesota by 2020 to the legislature by December 15, 2008.

Subd. 4.

Expiration.

The commission expires December 31, 2008.

Sec. 31. APPROPRIATIONS.

Subdivision 1.

Department of Education.

The sums indicated in this section are
appropriated from the general fund to the Department of Education, unless otherwise
specified, for the fiscal years designated.

Subd. 2.

School readiness and child care programs study.

For a school readiness
and child care programs study under section 28:

$

75,000

.....

2007

This is a onetime appropriation.

Subd. 3.

Head Start/child care partnerships study.

For a grant to the Minnesota
Early Learning Foundation to study partnerships between Head Start and child care
providers under Minnesota Statutes, section 124D.175, paragraph (d):

$

25,000

.....

2007

This is a onetime appropriation.

Subd. 4.

Educate parents partnership.

For the educate parents partnership under
Minnesota Statutes, section 124D.129:

$

80,000

.....

2007

The base for this program in fiscal year 2008 and later is $50,000.

Subd. 5.

Kindergarten entrance assessment initiative and intervention
program.

For the kindergarten entrance assessment initiative and intervention program
under Minnesota Statutes, section 124D.136:

$

258,000

.....

2007

Subd. 6.

Early childhood Part C.

For the expansion of early childhood Part C
services:

$

1,049,000

.....

2007

Subd. 7.

Adult literacy grants for recent immigrants.

For adult literacy grants for
recent immigrants to Minnesota under section 27:

$

1,500,000

.....

2007

The base for this program is $1,500,000 in fiscal year 2008 and $0 in fiscal year 2009.

Subd. 8.

NorthStar Quality Improvement and Rating System.

For a grant to the
Minnesota Early Learning Foundation for the NorthStar Quality Improvement and Rating
System under Minnesota Statutes, section 124D.175, paragraph (c):

$

1,500,000

.....

2007

This appropriation must be used to implement phase one of the NorthStar Quality
Improvement and Rating System including start-up costs, participation of 200 providers,
parent information, and materials and evaluation by the Minnesota Early Learning
Foundation in consultation with the University of Minnesota.

This onetime appropriation is available to June 30, 2008.

Subd. 9.

Legislative Commission to End Poverty by 2020.

To the Legislative
Coordinating Commission for the Legislative Commission to End Poverty by 2020 under
section 30:

$

250,000

.....

2007

Sec. 32. REPEALER.

Minnesota Statutes 2005 Supplement, section 119B.13, subdivision 7, and Laws
2003, First Special Session chapter 14, article 9, section 36, are repealed.

ARTICLE 3

GENERAL EDUCATION

Section 1.

Minnesota Statutes 2005 Supplement, section 126C.10, subdivision 31,
is amended to read:

Subd. 31.

Transition revenue.

(a) A district's transition allowance equals the
greater of zero or the product of the ratio of the number of adjusted marginal cost pupil
units the district would have counted for fiscal year 2004 under Minnesota Statutes 2002
to the district's adjusted marginal cost pupil units for fiscal year 2004, times the difference
between: (1) the lesser of the district's general education revenue per adjusted marginal
cost pupil unit for fiscal year 2003 or the amount of general education revenue the district
would have received per adjusted marginal cost pupil unit for fiscal year 2004 according
to Minnesota Statutes 2002, and (2) the district's general education revenue for fiscal year
2004 excluding transition revenue divided by the number of adjusted marginal cost pupil
units the district would have counted for fiscal year 2004 under Minnesota Statutes 2002.

(b) A district's transition revenue for fiscal year 2006 and later equals the sum of
(1) the product of the district's transition allowance times the district's adjusted marginal
cost pupil units plus (2) the amount of referendum revenue under section 126C.17 and
general education revenue, excluding transition revenue, for fiscal year 2004 attributable
to pupils four or five years of age on September 1, 2003, enrolled in a prekindergarten
program implemented by the district before July 1, 2003, and reported as kindergarten
pupils under section 126C.05, subdivision 1, for fiscal year 2004, plus (3) the amount of
compensatory education revenue under subdivision 3 for fiscal year 2005 attributable to
pupils four years of age on September 1, 2003, enrolled in a prekindergarten program
implemented by the district before July 1, 2003, and reported as kindergarten pupils
under section 126C.05, subdivision 1, for fiscal year 2004 multiplied by .04 the district's
transition for prekindergarten revenue under subdivision 31a.

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2007
and later.

Sec. 2.

Minnesota Statutes 2004, section 126C.10, is amended by adding a subdivision
to read:

Subd. 31a.

Transition for prekindergarten revenue.

For fiscal year 2007 and
later, a school district's transition for prekindergarten revenue equals the sum of (1) the
amount of referendum revenue under section 126C.17 and general education revenue,
excluding transition revenue, for fiscal year 2004 attributable to pupils four or five years
of age on September 1, 2003, enrolled in a prekindergarten program implemented by the
district before July 1, 2003, and reported as kindergarten pupils under section 126C.05,
subdivision 1, for fiscal year 2004, plus (2) the amount of compensatory education
revenue under subdivision 3 for fiscal year 2005 attributable to pupils four years of
age on September 1, 2003, enrolled in a prekindergarten program implemented by the
district before July 1, 2003, and reported as kindergarten pupils under section 126C.05,
subdivision 1, for fiscal year 2004 multiplied by .04.

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2007
and later.

Sec. 3.

Minnesota Statutes 2004, section 126C.10, is amended by adding a subdivision
to read:

Subd. 31b.

Uses of transition for prekindergarten revenue.

A school district that
receives revenue under subdivision 31a must reserve that revenue for prekindergarten
programs serving students who turn age four by September 1 and who will enter
kindergarten the following year.

EFFECTIVE DATE.

This section is effective for fiscal year 2007 and later.

Sec. 4.

Laws 2005, First Special Session chapter 5, article 1, section 47, is amended to
read:

Sec. 47. ALTERNATIVE TEACHER COMPENSATION REVENUE
GUARANTEE.

Notwithstanding Minnesota Statutes, sections 122A.415, subdivision 1, and
126C.10, subdivision 34, paragraphs (a) and (b), a school district that received alternative
teacher compensation aid for fiscal year 2005, but does not qualify for alternative
teacher compensation revenue for all sites in the district for fiscal year 2006 or, 2007,
2008, or 2009, shall receive additional basic alternative teacher compensation aid for
that fiscal year equal to the lesser of the amount of alternative teacher compensation
aid it received for fiscal year 2005 or the amount it would have received for that fiscal
year under Minnesota Statutes 2004, section 122A.415, subdivision 1, for teachers at
sites not qualifying for alternative teacher compensation revenue for that fiscal year, if
the district submits a timely application and the commissioner determines that the district
continues to implement an alternative teacher compensation system, consistent with its
application under Minnesota Statutes 2004, section 122A.415, for fiscal year 2005. The
additional basic alternative teacher compensation aid under this section must not be used
in calculating the alternative teacher compensation levy under Minnesota Statutes, section
126C.10, subdivision 35. This section applies only to fiscal years 2006 and 2007 through
2009 and does not apply to later fiscal years.

Sec. 5.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision 2,
is amended to read:

Subd. 2. General education aid. For general education aid under Minnesota
Statutes, section 126C.13, subdivision 4:

	$	5,136,578,000 5,819,153,000	.....	2006
	$	5,390,196,000 5,472,238,000	.....	2007

The 2006 appropriation includes $784,978,000 $787,978,000 for 2005 and
$4,351,600,000 $5,031,175,000 for 2006.

The 2007 appropriation includes $817,588,000 $513,848,000 for 2006 and
$4,572,608,000 $4,958,390,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6. ONETIME SUPPLEMENTAL AID.

(a) For fiscal year 2007 only, a school district's onetime supplemental aid is equal to
$34.50 times its adjusted marginal cost pupil units. For fiscal year 2007 only, a charter
school's onetime supplemental aid is equal to $15 times its adjusted marginal cost pupil
units.

(b) A district that receives revenue under Minnesota Statutes, section 126C.10,
subdivision 31a, must reserve its onetime supplemental aid according to Minnesota
Statutes, section 126C.10, subdivision 31b.

(c) A school district or charter school that does not receive revenue under Minnesota
Statutes, section 126C.10, subdivision 31a, may use its onetime supplemental aid to
reduce class sizes in kindergarten through grade 6, provide all-day kindergarten, reduce its
statutory operating debt, pay for heating and fuel costs, pay for technology costs, provide
prekindergarten programs serving students who turn age four by September 1 and who will
enter kindergarten the following year, or provide limited English proficiency programs.

(d) If a district that is required to reserve its onetime supplemental aid under
paragraph (b) adopts a school board resolution to reallocate its funds, the district may use
its onetime supplemental aid according to paragraph (c). A district that adopts a board
resolution to reallocate the onetime supplemental aid reserve under paragraph (b) must
notify the commissioner of education.

(e) This aid is paid entirely in fiscal year 2007 based on estimated data. By January
31, 2008, the Department of Education shall recalculate the aid for each district using
actual data, and shall adjust the general education aid paid to school districts for fiscal year
2008 by the amount of the difference between the estimated aid and the actual aid.

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2007 only.

Sec. 7. APPROPRIATION.

Subdivision 1.

Department of Education.

The sum indicated in this section is
appropriated from the general fund to the Department of Education for the fiscal year
designated.

Subd. 2.

Onetime supplemental aid.

For onetime supplemental aid according to
section 6:

$

32,229,000

.....

2007

ARTICLE 4

EDUCATION EXCELLENCE

Section 1.

Minnesota Statutes 2004, section 122A.09, subdivision 4, is amended to
read:

Subd. 4.

License and rules.

(a) The board must adopt rules to license public school
teachers and interns subject to chapter 14.

(b) The board must adopt rules requiring a person to successfully complete a skills
examination in reading, writing, and mathematics as a requirement for initial teacher
licensure. Such rules must require college and universities offering a board-approved
teacher preparation program to provide remedial assistance to persons who did not
achieve a qualifying score on the skills examination, including those for whom English is
a second language.

(c) The board must adopt rules to approve teacher preparation programs. The board,
upon the request of a postsecondary student preparing for teacher licensure or a licensed
graduate of a teacher preparation program, shall assist in resolving a dispute between the
person and a postsecondary institution providing a teacher preparation program when the
dispute involves an institution's recommendation for licensure affecting the person or the
person's credentials. At the board's discretion, assistance may include the application
of chapter 14.

(d) The board must provide the leadership and shall adopt rules for the redesign of
teacher education programs to implement a research based, results-oriented curriculum that
focuses on the skills teachers need in order to be effective. The board shall implement new
systems of teacher preparation program evaluation to assure program effectiveness based
on proficiency of graduates in demonstrating attainment of program outcomes. The board
must require that persons enrolled in a teacher preparation program receive instruction
in historical and cultural competencies related to Minnesota American Indian tribes and
communities and their contributions to Minnesota, consistent with sections 124D.71 to
124D.82. The competencies related to Minnesota American Indian tribes and communities
must include, among other components, standards for instructional practices most effective
for successfully teaching elementary and secondary American Indian students.

(e) The board must adopt rules requiring successful completion of an examination
of general pedagogical knowledge and examinations of licensure-specific teaching
skills. The rules shall be effective on the dates determined by the board but not later
than September 1, 2001.

(f) The board must adopt rules requiring teacher educators to work directly with
elementary or secondary school teachers in elementary or secondary schools to obtain
periodic exposure to the elementary or secondary teaching environment.

(g) The board must grant licenses to interns and to candidates for initial licenses.

(h) The board must design and implement an assessment system which requires a
candidate for an initial license and first continuing license to demonstrate the abilities
necessary to perform selected, representative teaching tasks at appropriate levels.

(i) The board must receive recommendations from local committees as established
by the board for the renewal of teaching licenses.

(j) The board must grant life licenses to those who qualify according to requirements
established by the board, and suspend or revoke licenses pursuant to sections 122A.20 and
214.10. The board must not establish any expiration date for application for life licenses.

(k) The board must adopt rules that require all licensed teachers who are renewing
their continuing license to include in their renewal requirements further preparation in
the areas of using positive behavior interventions and in accommodating, modifying, and
adapting curricula, materials, and strategies to appropriately meet the needs of individual
students and ensure adequate progress toward the state's graduation rule.

(l) In adopting rules to license public school teachers who provide health-related
services for disabled children, the board shall adopt rules consistent with license or
registration requirements of the commissioner of health and the health-related boards who
license personnel who perform similar services outside of the school.

(m) The board must adopt rules that require all licensed teachers who are renewing
their continuing license to include in their renewal requirements further reading
preparation, consistent with section 122A.06, subdivision 4. The rules do not take effect
until they are approved by law. Teachers who do not provide direct instruction including, at
least, counselors, school psychologists, school nurses, school social workers, audiovisual
directors and coordinators, and recreation personnel are exempt from this section.

(n) The board must adopt rules that require all licensed teachers who are renewing
their continuing license to include in their renewal requirements further preparation
in understanding the key warning signs of early-onset mental illness in children and
adolescents.

(o) The board must adopt rules to include instruction and other development
activities to improve the understanding and effective instruction of and communication
with Minnesota American Indian tribes and communities, consistent with paragraph (d)
and sections 124D.71 to 124D.82, in the 125 clock hours of professional development that
teachers must complete to renew their professional teaching license.

EFFECTIVE DATE.

This section is effective for the 2006-2007 school year and
later.

Sec. 2.

[122A.416] ALTERNATIVE TEACHER COMPENSATION REVENUE
FOR PERPICH CENTER FOR ARTS EDUCATION AND MULTIDISTRICT
INTEGRATION COLLABORATIVES.

Notwithstanding sections 122A.413, 122A.414, 122A.415, and 126C.10,
multidistrict integration collaboratives and the Perpich Center for Arts Education are
eligible to receive alternative teacher compensation revenue as if they were intermediate
school districts. To qualify for alternative teacher compensation revenue, a multidistrict
integration collaborative or the Perpich Center for Arts Education must meet all of the
requirements of sections 122A.413, 122A.414, and 122A.415 that apply to intermediate
school districts, must report its enrollment as of October 1 of each year to the department,
and must annually report its expenditures for the alternative teacher professional pay
system consistent with the uniform financial accounting and reporting standards to the
department by November 30 of each year.

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2007.

Sec. 3. PILOT PROGRAM TO FACILITATE YOUNG CHILDREN'S SECOND
LANGUAGE LEARNING AND STRONGER LITERACY AND VERBAL SKILLS.

(a) A pilot program for fiscal year 2007 is established to allow school districts to
use child-relevant American sign language to encourage children in kindergarten through
grade 3 to learn a second language and develop stronger literacy and verbal skills and
better classroom attention. School districts that have (1) child care centers or Head Start
classrooms, (2) English language learners, foreign language classrooms, or language
immersion programs, (3) resident families with internationally adopted children, or (4)
classrooms in which children with special needs are served may apply to the education
commissioner, in the form and manner the commissioner determines, for a pilot program
grant. School districts that receive a grant under this section must use the grant to train
education staff who work with children in kindergarten through grade 3, including
at least classroom teachers, teachers' assistants, ESL teachers, and special education
teachers to use 600 child-relevant signs in sign language to help hearing students acquire
vocabulary quickly and easily, become better problem solvers, become creative thinkers
and communicators and better prepared academically, and to use effective strategies to
incorporate sign language into classroom instruction.

(b) The commissioner may award grants to qualified school districts on a first-come
first-served basis to allow training for 1,000 education staff under this section.

(c) The commissioner shall provide for an independent evaluation of the efficacy
of the pilot program under this section and shall recommend to the education policy and
finance committees of the legislature by February 15, 2008, whether or not the program
should be continued and expanded.

Sec. 4. CHINESE LANGUAGE PROGRAMS; CURRICULUM
DEVELOPMENT PROJECT.

Subdivision 1.

Project parameters.

(a) Notwithstanding other law to the contrary,
the commissioner of education may contract with the Board of Regents of the University
of Minnesota or other Minnesota public entity the commissioner determines is qualified
to undertake the development of an articulated K-12 Chinese curriculum for Minnesota
schools that involves:

(1) creating a network of Chinese teachers and educators able to develop new and
modify or expand existing world languages K-12 curricula, materials, assessments, and
best practices needed to provide Chinese language instruction to students; and

(2) coordinating statewide efforts to develop and expand Chinese language
instruction so that it is uniformly available to students throughout the state, and making
innovative use of media and technology, including television, distance learning, and online
courses to broaden students' access to the instruction.

(b) The entity with which the commissioner contracts under paragraph (a) must have
sufficient knowledge and expertise to ensure the professional development of appropriate,
high-quality curricula, supplementary materials, aligned assessments, and best practices
that accommodate different levels of student ability and types of programs.

(c) Project participants must:

(1) work throughout the project to develop curriculum, supplementary materials,
aligned assessments, and best practices; and

(2) make curriculum, supplementary materials, aligned assessments, and best
practices equitably available to Minnesota schools and students.

Subd. 2.

Project participants.

The entity with which the commissioner contracts
must work with the network of Chinese teachers and educators to:

(1) conduct an inventory of Chinese language curricula, supplementary materials,
and professional development initiatives currently used in Minnesota or other states;

(2) develop Chinese language curricula and benchmarks aligned to local world
language standards and classroom-based assessments; and

(3) review and recommend to the commissioner how best to build an educational
infrastructure to provide more students with Chinese language instruction, including
how to develop and provide: (i) an adequate supply of Chinese language teachers; (ii)
an adequate number of high-quality school programs; (iii) appropriate curriculum,
instructional materials, and aligned assessments that include technology-based delivery
systems; (iv) teacher preparation programs to train Chinese language teachers; (v)
expedited licensing of Chinese language teachers; (vi) best practices in existing
educational programs that can be used to establish K-12 Chinese language programs;
and (vii) technical assistance resources.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5. NORTHWESTERN ONLINE COLLEGE IN THE HIGH SCHOOL
PROGRAM.

For fiscal year 2007 only, the Northwestern Online College in the High School
program is eligible for $50,000 for professional development and to develop Web-based
technology.

Sec. 6. APPROPRIATION.

Subdivision 1.

Department of Education.

The sums indicated in this section are
appropriated from the general fund to the Department of Education for the fiscal years
designated.

Subd. 2.

Northwestern Online College in the High School program.

For
Northwestern Online College in the High School program under section 5:

$

50,000

.....

2007

Subd. 3.

Chinese language.

For the Chinese language curriculum project under
section 4:

$

250,000

.....

2007

The commissioner must report to the house of representatives and senate committees
having jurisdiction over kindergarten through grade 12 education policy and finance on
the range of the program by February 15, 2007. The report shall address the applicability
of the Chinese language curriculum project to other world languages and include the
availability of instructors, curriculum, high-quality school programs, assessments, and
best practices as they apply to world languages.

This is a onetime appropriation.

Subd. 4.

Child-relevant American sign language.

For a contract with a qualified
provider to train education staff to use child-relevant American sign language to facilitate
young children's development of second language learning and stronger literacy and
verbal skills under section 3:

$

225,000

.....

2007

Of this appropriation, $150,000 is for actual training costs, $35,000 is for
an independent evaluation of the efficacy of the pilot program, and $40,000 is for
administrative and marketing costs incurred by the Department of Education.

Subd. 5.

Scholars of distinction.

For the scholars of distinction program:

$

25,000

.....

2007

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 5

SPECIAL EDUCATION

Section 1. SPECIAL EDUCATION FORECAST MAINTENANCE OF EFFORT.

(a) If, on the basis of a forecast of general fund revenues and expenditures under
Minnesota Statutes, section 16A.103; expenditures for special education aid under
Minnesota Statutes, section 125A.76; transition for disabled students under Minnesota
Statutes, section 124D.454; travel for home-based services under Minnesota Statutes,
section 124A.75, subdivision 1; aid for students with disabilities under Minnesota Statutes,
section 125A.75, subdivision 3; court-placed special education under Minnesota Statutes,
section 125A.79, subdivision 4; or out-of-state tuition under Minnesota Statutes, section
125A.79, subdivision 8, are projected to be less than the amount previously forecast for an
enacted budget, the forecast excess from these programs, up to an amount sufficient to
meet federal special education maintenance of effort, is added to the state total special
education aid in Minnesota Statutes, section 125A.76, subdivision 4.

(b) If, on the basis of a forecast of general fund revenues and expenditures under
Minnesota Statutes, section 16A.103, expenditures in the programs in this section are
projected to be greater than previously forecast for an enacted budget, and an addition to
state total special education aid has been made under paragraph (a), the state total special
education aid must be reduced by the lesser of the amount of the expenditure increase or
the amount previously added to state total special education aid, and this amount must be
taken from the programs that were forecast to have a forecast excess.

(c) For the purpose of this section, "previously forecast for an enacted budget" means
the allocation of funding for these programs in the most recent forecast of general fund
revenues and expenditures or the act appropriating money for these programs, whichever
occurred most recently. It does not include planning estimates for a future biennium.

Sec. 2. SPECIAL EDUCATION STUDY.

(a) The commissioner of education must contract with an independent consultant that
has extensive experience working with various states on special education finance systems
to evaluate Minnesota's special education funding structure and make recommendations
to improve its effectiveness. The recommendations must be in conformance with Public
Law 108-446, section 612(a) (5) (B) (i).

(b) The consultant must:

(1) conduct an in-depth analysis of the current special education finance system
in Minnesota;

(2) convene a task force in Minnesota consisting of superintendents, special
education directors, representatives from special education advocacy organizations,
and parents of children receiving special education services to help formulate
recommendations for improvement; and

(3) prepare a report to be submitted to the Department of Education and the
legislature.

(c) In addition to the requirements in paragraph (b), the consultant must analyze
and report on the effectiveness of the current special education program in educating
Minnesota students. The consultant must use a statistical analysis to help explain
differences in spending across school districts while controlling for student performance.

(d) The commissioner must report on the findings on the contract to the legislative
committees having jurisdiction over kindergarten through grade 12 finance before
December 15, 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3. APPROPRIATION.

Subdivision 1.

Department of Education.

The sum indicated in this section is
appropriated from the general fund to the Department of Education for the fiscal year
designated.

Subd. 2.

Special education study contract.

For a contract to examine Minnesota's
special education funding structure under section 2:

$

250,000

.....

2007

ARTICLE 6

FACILITIES, ACCOUNTING, AND TECHNOLOGY

Section 1.

Minnesota Statutes 2004, section 123B.57, subdivision 6, is amended to read:

Subd. 6.

Uses of health and safety revenue.

(a) Health and safety revenue may
be used only for approved expenditures necessary to correct fire and life safety hazards,
or for the removal or encapsulation of asbestos from school buildings or property
owned or being acquired by the district, asbestos-related repairs, cleanup and disposal
of polychlorinated biphenyls found in school buildings or property owned or being
acquired by the district, or the cleanup, removal, disposal, and repairs related to storing
heating fuel or transportation fuels such as alcohol, gasoline, fuel oil, and special fuel,
as defined in section 296A.01, Minnesota occupational safety and health administration
regulated facility and equipment hazards, indoor air quality mold abatement, upgrades
or replacement of mechanical ventilation systems to meet American Society of Heating,
Refrigerating and Air Conditioning Engineers standards and State Mechanical Code,
Department of Health Food Code and swimming pool hazards excluding depth correction,
and health, safety, and environmental management. Testing and calibration activities are
permitted for existing mechanical ventilation systems at intervals no less than every five
years. Health and safety revenue must not be used to finance a lease purchase agreement,
installment purchase agreement, or other deferred payments agreement. Health and safety
revenue must not be used for the construction of new facilities or the purchase of portable
classrooms, for interest or other financing expenses, or for energy efficiency projects
under section 123B.65. The revenue may not be used for a building or property or part
of a building or property used for postsecondary instruction or administration or for a
purpose unrelated to elementary and secondary education.

(b) Notwithstanding paragraph (a), health and safety revenue must not be used for
replacement of building materials or facilities including roof, walls, windows, internal
fixtures and flooring, nonhealth and safety costs associated with demolition of facilities,
structural repair or replacement of facilities due to unsafe conditions, violence prevention
and facility security, ergonomics, building and heating, ventilating and air conditioning
supplies, maintenance, and cleaning, testing, and calibration activities. All assessments,
investigations, inventories, and support equipment not leading to the engineering or
construction of a project shall be included in the health, safety, and environmental
management costs in subdivision 8, paragraph (a).

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2008
and later.

Sec. 2.

Laws 2005, First Special Session chapter 5, article 4, section 25, subdivision 3,
is amended to read:

Subd. 3. Debt service equalization. For debt service aid according to Minnesota
Statutes, section 123B.53, subdivision 6:

	$	25,654,000 27,194,000	.....	2006
	$	24,134,000 18,410,000	.....	2007

The 2006 appropriation includes $4,654,000 $4,653,000 for 2005 and $21,000,000
$22,541,000 for 2006.

The 2007 appropriation includes $3,911,000 $2,504,000 for 2006 and $20,223,000
$15,906,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Laws 2005, First Special Session chapter 5, article 4, section 25, subdivision 6,
is amended to read:

Subd. 6. Emergency aid, Red Lake. For Independent School District No. 38, Red
Lake, for onetime emergency aid to repair infrastructure damage to the Red Lake High
School as a result of the March 21, 2005, school shooting:

		50,000
	$	524,000	.....	2006

The school district must submit proposed expenditures for these funds for review
and comment approval under Minnesota Statutes, section 123B.71 actual expenditure
information to support this appropriation to the Department of Education, before the
commissioner releases the funds to the district. The district must report the amount of its
unreimbursed costs to the commissioner.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4. LEVY; RED WING.

For taxes payable in 2007 only, Independent School District No. 256, Red Wing,
may levy an amount up to $158,000 for the construction deficit for building the community
ice arena.

EFFECTIVE DATE.

This section is effective for revenue for fiscal year 2007.

Sec. 5. APPROPRIATION; WASECA LEVY.

Independent School District No. 829, Waseca, may levy up to $343,550 beginning
in 2006 over five years for health and safety revenue lost due to miscalculation. $316,000
is appropriated in fiscal year 2007 to the commissioner of education for payment of the aid
portion of lost revenue. If the district does not levy the full amount authorized within the
five-year period, other state aid due to the district shall be reduced proportionately. This is
a onetime appropriation for fiscal year 2007.

Sec. 6. APPROPRIATION; ROCORI SCHOOL DISTRICT.

$137,000 is appropriated in fiscal year 2007 from the general fund to the
commissioner of education for a grant to Independent School District No. 750, Rocori.
The grant is for a continuation of district activities that were developed in concert with
the district's federal School Emergency Response to Violence, or Project SERV, grant.
The grant may be used to continue the district's recovery efforts, and uses include: an
academic program and impact of tragedy or program assessment of educational adequacy;
an organizational analysis; a strategic planning overview; a district assessment survey;
continued recovery support; staff development initiatives; and any other activities
developed in response to the federal Project SERV grant.

The base budget for this program for fiscal year 2008 only is $53,000.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7. FUND TRANSFERS.

Subdivision 1.

A.C.G.C.

Notwithstanding Minnesota Statutes, sections 123B.79,
123B.80, and 475.61, subdivision 4, Independent School District No. 2396, A.C.G.C., on
June 30, 2006, may permanently transfer up to $219,000 from its debt redemption fund
to its reserved for operating capital account in its general fund and up to $203,000 from
its reserved account for disabled accessibility to its unrestricted general fund without
making a levy reduction.

Subd. 2.

Alden-Conger.

Notwithstanding Minnesota Statutes, sections 123B.79 and
123B.80, as of June 30, 2006, Independent School District No. 242, Alden-Conger, may
permanently transfer up to $164,000 from its reserved for disabled accessibility account to
its unrestricted general fund account without making a levy reduction.

Subd. 3.

Eden Valley-Watkins.

Notwithstanding Minnesota Statutes, sections
123B.79, 123B.80, and 475.61, subdivision 4, Independent School District No. 463, Eden
Valley-Watkins, as of June 30, 2006, may permanently transfer up to $50,000 from its debt
redemption fund to the capital account in its general fund without making a levy reduction.

Subd. 4.

Fosston.

Notwithstanding Minnesota Statutes, sections 123B.79 and
123B.80, as of June 30, 2006, Independent School District No. 601, Fosston, may
permanently transfer up to $80,000 from its reserved for disabled accessibility account to
its unrestricted general fund account without making a levy reduction.

Subd. 5.

Hopkins.

Notwithstanding Minnesota Statutes, section 123B.79 or
123B.80, on June 30, 2006, Independent School District No. 270, Hopkins, may
permanently transfer up to $300,000 from its community education reserve fund balance
to its undesignated general fund balance to assist the district in decreasing its statutory
operating debt.

Subd. 6.

Lester Prairie.

Notwithstanding Minnesota Statutes, sections 123B.79
or 123B.80, on June 30, 2006, Independent School District No. 424, Lester Prairie, may
permanently transfer up to $150,000 from its reserved for operating capital account and up
to $107,000 from its reserved for severance account, to its undesignated balance in the
general fund.

Subd. 7.

Milroy.

Notwithstanding Minnesota Statutes, section 123B.79 or 123B.80,
on June 30, 2006, Independent School District No. 635, Milroy, may permanently transfer
up to $26,000 from its reserved for disability accessibility account to its undesignated
general fund balance without making a levy reduction.

Subd. 8.

New London-Spicer.

Notwithstanding Minnesota Statutes, sections
123B.79, 123B.80, and 475.61, subdivision 4, Independent School District No. 345, New
London-Spicer, may permanently transfer up to $150,000 each year for five years from its
debt redemption fund to its general fund without making a levy reduction for the purpose
of replacing the roof on the Prairie Woods Elementary School. The district must make its
initial transfer according to this section on June 30, 2006. The subsequent four transfers
must be made on June 30 of each subsequent year.

Subd. 9.

Northland Community Schools.

Notwithstanding Minnesota Statutes,
section 123B.79 or 123B.80, on or before June 30, 2006, Independent School District No.
118, Northland Community Schools, may permanently transfer up to $197,000 from its
reserved for disabled accessibility account to its reserved for operating capital account in
its general fund without making a levy reduction.

Subd. 10.

Rocori.

Notwithstanding Minnesota Statutes, sections 123B.79, 123B.80,
and 475.61, subdivision 4, on June 30, 2006, Independent School District No. 750, Rocori,
may permanently transfer up to $250,000 from its debt redemption fund to the operating
capital account in its general fund without making a levy reduction.

Subd. 11.

Roseville.

Notwithstanding Minnesota Statutes, sections 123B.79,
123B.80, and 475.61, subdivision 4, on June 30, 2006, Independent School District No.
623, Roseville, may permanently transfer up to $90,000 from its debt redemption fund to
its general fund without making a levy reduction.

Subd. 12.

Tyler.

Notwithstanding Minnesota Statutes, section 123B.79 or 123B.80,
Independent School District No. 409, Tyler, on June 30, 2006, may permanently transfer
up to $451,000 from its reserved for capital operating account to its debt redemption fund.

Subd. 13.

Willmar.

Notwithstanding Minnesota Statutes, sections 123B.79,
123B.80, and 475.61, subdivision 4, Independent School District No. 347, Willmar, on
June 30, 2006, may permanently transfer up to $335,200 from its debt redemption fund to
its unrestricted general fund without making a levy reduction.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 7

NUTRITION AND LIBRARIES

Section 1.

Minnesota Statutes 2005 Supplement, section 124D.111, subdivision 1,
is amended to read:

Subdivision 1.

School lunch aid computation.

Each school year, the state must pay
participants in the national school lunch program the amount of ten 10.5 cents for each full
paid, reduced, and free student lunch served to students.

Sec. 2.

Laws 2005, First Special Session chapter 5, article 5, section 17, subdivision 2,
is amended to read:

Subd. 2. School lunch. For school lunch aid according to Minnesota Statutes,
section 124D.111, and Code of Federal Regulations, title 7, section 210.17:

	$	8,998,000 9,760,000	.....	2006
	$	9,076,000 10,391,000	.....	2007

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Laws 2005, First Special Session chapter 5, article 6, section 1, subdivision 2,
is amended to read:

Subd. 2. Basic system support. For basic system support grants under Minnesota
Statutes, section 134.355:

	$	8,570,000 9,058,000	.....	2006
	$	8,570,000 9,020,000	.....	2007

The 2006 appropriation includes $1,345,000 for 2005 and $7,225,000 $7,713,000
for 2006.

The 2007 appropriation includes $1,345,000 $857,000 for 2006 and $7,225,000
$8,163,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 8

STATE AGENCIES

Section 1.

Laws 2005, First Special Session chapter 5, article 10, section 5, subdivision
2, is amended to read:

Subd. 2. Department. (a) For the Department of Education:

	$	21,997,000	.....	2006
	$	22,847,000 22,867,000	.....	2007

Any balance in the first year does not cancel but is available in the second year.

(b) $260,000 each year is for the Minnesota Children's Museum.

(c) $41,000 each year is for the Minnesota Academy of Science.

(d) $605,000 each year is for the Board of Teaching.

(e) $160,000 each year is for the Board of School Administrators.

(f) $300,000 in fiscal year 2006 and $1,150,000 in fiscal year 2007 are for the
value-added index assessment model.

(g) The expenditures of federal grants and aids as shown in the biennial budget
document and its supplements are approved and appropriated and shall be spent as
indicated.

(h) The base for fiscal years 2008 and 2009 is $22,847,000.

ARTICLE 9

EDUCATION FORECAST ADJUSTMENTS

A. GENERAL EDUCATION

Section 1.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision
3, is amended to read:

Subd. 3. Referendum tax base replacement aid. For referendum tax base
replacement aid under Minnesota Statutes, section 126C.17, subdivision 7a:

	$	8,704,000 9,200,000	.....	2006
	$	8,704,000	.....	2007

The 2006 appropriation includes $1,366,000 for 2005 and $7,338,000 $7,834,000
for 2006.

The 2007 appropriation includes $1,366,000 $870,000 for 2006 and $7,338,000
$7,834,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision 5,
is amended to read:

Subd. 5. Abatement revenue. For abatement aid under Minnesota Statutes, section
127A.49:

	$	903,000 909,000	.....	2006
	$	955,000 1,026,000	.....	2007

The 2006 appropriation includes $187,000 for 2005 and $716,000 $722,000 for 2006.

The 2007 appropriation includes $133,000 $80,000 for 2006 and $822,000 $946,000
for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision 6,
is amended to read:

Subd. 6. Consolidation transition. For districts consolidating under Minnesota
Statutes, section 123A.485:

$

253,000 527,000

.....

2007

The 2007 appropriation includes $0 for 2006 and $253,000 $527,000 for 2007.

Sec. 4.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision 7,
is amended to read:

Subd. 7. Nonpublic pupil education aid. For nonpublic pupil education aid under
Minnesota Statutes, sections 123B.87 and 123B.40 to 123B.43:

	$	15,370,000 15,458,000	.....	2006
	$	16,434,000 15,991,000	.....	2007

The 2006 appropriation includes $2,305,000 $1,864,000 for 2005 and $13,065,000
$13,594,000 for 2006.

The 2007 appropriation includes $2,433,000 $1,510,000 for 2006 and $14,001,000
$14,481,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Laws 2005, First Special Session chapter 5, article 1, section 54, subdivision 8,
is amended to read:

Subd. 8. Nonpublic pupil transportation. For nonpublic pupil transportation aid
under Minnesota Statutes, section 123B.92, subdivision 9:

	$	21,451,000 21,371,000	.....	2006
	$	23,043,000 20,843,000	.....	2007

The 2006 appropriation includes $3,274,000 for 2005 and $18,177,000 $18,097,000
for 2006.

The 2007 appropriation includes $3,385,000 $2,010,000 for 2006 and $19,658,000
$18,833,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

B. EDUCATION EXCELLENCE

Sec. 6.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision 2,
is amended to read:

Subd. 2. Charter school building lease aid. For building lease aid under Minnesota
Statutes, section 124D.11, subdivision 4:

	$	25,465,000 25,331,000	.....	2006
	$	30,929,000 27,806,000	.....	2007

The 2006 appropriation includes $3,324,000 $3,173,000 for 2005 and $22,141,000
$22,158,000 for 2006.

The 2007 appropriation includes $4,123,000 $2,462,000 for 2006 and $26,806,000
$25,344,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision 3,
is amended to read:

Subd. 3. Charter school startup aid. For charter school startup cost aid under
Minnesota Statutes, section 124D.11:

	$	1,393,000 1,291,000	.....	2006
	$	3,185,000 2,347,000	.....	2007

The 2006 appropriation includes $0 for 2005 and $1,393,000 $1,291,000 for 2006.

The 2007 appropriation includes $259,000 $143,000 for 2006 and $2,926,000
$2,204,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 8.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision 4,
is amended to read:

Subd. 4. Integration aid. For integration aid under Minnesota Statutes, section
124D.86, subdivision 5:

	$	57,801,000 59,404,000	.....	2006
	$	57,536,000 58,405,000	.....	2007

The 2006 appropriation includes $8,545,000 for 2005 and $49,256,000 $50,859,000
for 2006.

The 2007 appropriation includes $9,173,000 $5,650,000 for 2006 and $48,363,000
$52,755,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 9.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision 6,
is amended to read:

Subd. 6. Interdistrict desegregation or integration transportation grants. For
interdistrict desegregation or integration transportation grants under Minnesota Statutes,
section 124D.87:

	$	7,768,000 6,032,000	.....	2006
	$	9,908,000 10,134,000	.....	2007

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 10.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision
7, is amended to read:

Subd. 7. Success for the future. For American Indian success for the future grants
under Minnesota Statutes, section 124D.81:

	$	2,137,000 2,240,000	.....	2006
	$	2,137,000	.....	2007

The 2006 appropriation includes $335,000 $316,000 for 2005 and $1,802,000
$1,924,000 for 2006.

The 2007 appropriation includes $335,000 $213,000 for 2006 and $1,802,000
$1,924,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 11.

Laws 2005, First Special Session chapter 5, article 2, section 84, subdivision
10, is amended to read:

Subd. 10. Tribal contract schools. For tribal contract school aid under Minnesota
Statutes, section 124D.83:

	$	2,389,000 2,338,000	.....	2006
	$	2,603,000 2,357,000	.....	2007

The 2006 appropriation includes $348,000 for 2005 and $2,041,000 $1,990,000
for 2006.

The 2007 appropriation includes $380,000 $221,000 for 2006 and $2,223,000
$2,136,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

C. SPECIAL PROGRAMS

Sec. 12.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
2, is amended to read:

Subd. 2. Special education; regular. For special education aid under Minnesota
Statutes, section 125A.75:

	$	528,846,000 559,485,000	.....	2006
	$	527,446,000 528,106,000	.....	2007

The 2006 appropriation includes $83,078,000 for 2005 and $445,768,000
$476,407,000 for 2006.

The 2007 appropriation includes $83,019,000 $52,934,000 for 2006 and
$444,427,000 $475,172,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 13.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
3, is amended to read:

Subd. 3. Aid for children with disabilities. For aid under Minnesota Statutes,
section 125A.75, subdivision 3, for children with disabilities placed in residential facilities
within the district boundaries for whom no district of residence can be determined:

	$	2,212,000 1,527,000	.....	2006
	$	2,615,000 1,624,000	.....	2007

If the appropriation for either year is insufficient, the appropriation for the other
year is available.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 14.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
4, is amended to read:

Subd. 4. Travel for home-based services. For aid for teacher travel for home-based
services under Minnesota Statutes, section 125A.75, subdivision 1:

	$	187,000 198,000	.....	2006
	$	195,000	.....	2007

The 2006 appropriation includes $28,000 for 2005 and $159,000 $170,000 for 2006.

The 2007 appropriation includes $29,000 $18,000 for 2006 and $166,000 $177,000
for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 15.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
5, is amended to read:

Subd. 5. Special education; excess costs. For excess cost aid under Minnesota
Statutes, section 125A.79, subdivision 7:

	$	102,083,000 106,453,000	.....	2006
	$	104,286,000 104,333,000	.....	2007

The 2006 appropriation includes $37,455,000 for 2005 and $64,628,000 $68,998,000
for 2006.

The 2007 appropriation includes $38,972,000 $34,602,000 for 2006 and $65,314,000
$69,731,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 16.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
6, is amended to read:

Subd. 6. Transition for disabled students. For aid for transition programs for
children with disabilities under Minnesota Statutes, section 124D.454:

	$	8,788,000 9,300,000	.....	2006
	$	8,765,000 8,781,000	.....	2007

The 2006 appropriation includes $1,380,000 for 2005 and $7,408,000 $7,920,000
for 2006.

The 2007 appropriation includes $1,379,000 $880,000 for 2006 and $7,386,000
$7,901,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 17.

Laws 2005, First Special Session chapter 5, article 3, section 18, subdivision
7, is amended to read:

Subd. 7. Court-placed special education revenue. For reimbursing serving
school districts for unreimbursed eligible expenditures attributable to children placed in
the serving school district by court action under Minnesota Statutes, section 125A.79,
subdivision 4:

	$	65,000 46,000	.....	2006
	$	70,000	.....	2007

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18.

Laws 2005, First Special Session chapter 5, article 4, section 25, subdivision
2, is amended to read:

Subd. 2. Health and safety revenue. For health and safety aid according to
Minnesota Statutes, section 123B.57, subdivision 5:

	$	802,000 823,000	.....	2006
	$	578,000 352,000	.....	2007

The 2006 appropriation includes $211,000 for 2005 and $591,000 $612,000 for 2006.

The 2007 appropriation includes $109,000 $68,000 for 2006 and $469,000 $284,000
for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 19.

Laws 2005, First Special Session chapter 5, article 4, section 25, subdivision
4, is amended to read:

Subd. 4. Alternative facilities bonding aid. For alternative facilities bonding aid,
according to Minnesota Statutes, section 123B.59, subdivision 1:

	$	19,287,000 20,387,000	.....	2006
	$	19,287,000	.....	2007

The 2006 appropriation includes $3,028,000 for 2005 and $16,259,000 $17,359,000
for 2006.

The 2007 appropriation includes $3,028,000 $1,928,000 for 2006 and $16,259,000
$17,359,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

D. NUTRITION AND ACCOUNTING

Sec. 20.

Laws 2005, First Special Session chapter 5, article 5, section 17, subdivision
3, is amended to read:

Subd. 3. Traditional school breakfast; kindergarten milk. For traditional school
breakfast aid and kindergarten milk under Minnesota Statutes, sections 124D.1158 and
124D.118:

	$	4,878,000 4,856,000	.....	2006
	$	4,968,000 5,044,000	.....	2007

EFFECTIVE DATE.

This section is effective the day following final enactment.

E. LIBRARIES

Sec. 21.

Laws 2005, First Special Session chapter 5, article 6, section 1, subdivision 3,
is amended to read:

Subd. 3. Multicounty, multitype library systems. For grants under Minnesota
Statutes, sections 134.353 and 134.354, to multicounty, multitype library systems:

	$	903,000 954,000	.....	2006
	$	903,000	.....	2007

The 2006 appropriation includes $141,000 for 2005 and $762,000 $813,000 for 2006.

The 2007 appropriation includes $141,000 $90,000 for 2006 and $762,000 $813,000
for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 22.

Laws 2005, First Special Session chapter 5, article 6, section 1, subdivision 5,
is amended to read:

Subd. 5. Regional library telecommunications aid. For regional library
telecommunications aid under Minnesota Statutes, section 134.355:

	$	1,200,000 1,268,000	.....	2006
	$	1,200,000	.....	2007

The 2006 appropriation includes $188,000 for 2005 and $1,012,000 $1,080,000
for 2006.

The 2007 appropriation includes $188,000 $120,000 for 2006 and $1,012,000
$1,080,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

F. EARLY CHILDHOOD EDUCATION

Sec. 23.

Laws 2005, First Special Session chapter 5, article 7, section 20, subdivision
2, is amended to read:

Subd. 2. School readiness. For revenue for school readiness programs under
Minnesota Statutes, sections 124D.15 and 124D.16:

	$	9,020,000 9,528,000	.....	2006
	$	9,042,000 9,020,000	.....	2007

The 2006 appropriation includes $1,417,000 $1,415,000 for 2005 and $7,603,000
$8,113,000 for 2006.

The 2007 appropriation includes $1,415,000 $901,000 for 2006 and $7,627,000
$8,119,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

G. PREVENTION

Sec. 24.

Laws 2005, First Special Session chapter 5, article 8, section 8, subdivision 2,
is amended to read:

Subd. 2. Community education aid. For community education aid under
Minnesota Statutes, section 124D.20:

	$	1,918,000 2,043,000	.....	2006
	$	1,837,000 1,949,000	.....	2007

The 2006 appropriation includes $390,000 $385,000 for 2005 and $1,528,000
$1,658,000 for 2006.

The 2007 appropriation includes $284,000 $184,000 for 2006 and $1,553,000
$1,765,000 for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 25.

Laws 2005, First Special Session chapter 5, article 8, section 8, subdivision 3,
is amended to read:

Subd. 3. Adults with disabilities program aid. For adults with disabilities
programs under Minnesota Statutes, section 124D.56:

	$	710,000 750,000	.....	2006
	$	710,000	.....	2007

The 2006 appropriation includes $111,000 for 2005 and $599,000 $639,000 for 2006.

The 2007 appropriation includes $111,000 $71,000 for 2006 and $599,000 $639,000
for 2007.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 26.

Laws 2005, First Special Session chapter 5, article 8, section 8, subdivision 5,
is amended to read:

Subd. 5. School-age care revenue. For extended day aid under Minnesota Statutes,
section 124D.22:

	$	17,000	.....	2006
		7,000
	$	4,000	.......	2007

The 2006 appropriation includes $4,000 for 2005 and $13,000 for 2006.

The 2007 appropriation includes $2,000 $1,000 for 2006 and $5,000 $3,000 for 2007.

ARTICLE 10

HIGHER EDUCATION

Section 1. HIGHER EDUCATION APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to or, if
shown in parentheses, subtracted from the appropriations in Laws 2005, chapter 107,
article 1, or other law to the agencies and for the purposes specified in this article. The
appropriations are from the general fund or another named fund and are available for the
fiscal years indicated for each purpose. The figures "2006" and "2007" used in this article
mean that the addition to the appropriation listed under them is available for the fiscal year
ending June 30, 2006, or June 30, 2007, respectively. "The first year" is fiscal year 2006.
"The second year" is fiscal year 2007. "The biennium" is fiscal years 2006 and 2007.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	-0-	$	4,700,000	$	4,700,000

SUMMARY BY AGENCY - ALL FUNDS
		2006		2007		TOTAL
Office of Higher Education	$	-0-	$	(300,000)	$	(300,000)
Board of Regents of the University of Minnesota		-0-		5,000,000		5,000,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. OFFICE OF HIGHER EDUCATION

-0-

(300,000)

State grant program

The appropriation base is $144,406,000 for
fiscal year 2008 and $144,406,000 for fiscal
year 2009.

Sec. 3. BOARD OF REGENTS OF THE UNIVERSITY OF MINNESOTA

-0-

5,000,000

University of Minnesota - Rochester

For academic programs supporting the
University of Minnesota - Rochester,
including faculty, staff, and program
planning and development in the areas
of biomedical technologies, engineering
and computer technologies, health care
administration, and allied health programs;
ongoing operations of industrial liaison
activities; and operation of leased facilities.
The appropriation base is $5,000,000 for
fiscal year 2008 and $6,330,000 for fiscal
year 2009.

Sec. 4.

Minnesota Statutes 2004, section 136A.101, subdivision 4, is amended to read:

Subd. 4.

Eligible institution.

"Eligible institution" means a postsecondary
educational institution that:

(1) is located in this state or in a state with which the office has entered into a higher
education reciprocity agreement on state student aid programs that either (1);

(2) is operated by this state or by the University of Minnesota, or (2) is operated
publicly or privately and, as determined by the office, maintains academic standards
substantially equivalent to those of comparable institutions operated in this state.; and

(3) is licensed or registered as a postsecondary institution by the Office of Higher
Education or another state agency.

Eligible institutions must, within four years of being licensed or registered as a
postsecondary institution by the Office of Higher Education or another state agency,
participate in federal student aid programs under Title IV of the Higher Education Act of
1965, as amended. An institution that participated in the state grant program in fiscal year
2007 but did not participate in federal student aid programs under Title IV of the Higher
Education Act of 1965, as amended, must become a participant in the federal student aid
programs by July 1, 2010, or lose eligibility to participate in the state grant program.

Sec. 5.

Minnesota Statutes 2004, section 136A.101, subdivision 8, is amended to read:

Subd. 8.

Resident student.

"Resident student" means a student who meets one of
the following conditions:

(1) a student who has resided in Minnesota for purposes other than postsecondary
education for at least 12 months without being enrolled at a postsecondary educational
institution for more than five credits in any term;

(2) a dependent student whose parent or legal guardian resides in Minnesota at the
time the student applies;

(3) a student who graduated from a Minnesota high school, if the student was a
resident of Minnesota during the student's period of attendance at the Minnesota high
school and the student is physically attending a Minnesota postsecondary educational
institution; or

(4) a student who, after residing in the state for a minimum of one year, earned a
high school equivalency certificate in Minnesota.;

(5) a member, spouse, or dependent of a member of the armed forces of the United
States stationed in Minnesota on active federal military service as defined in section
190.05, subdivision 5c;

(6) a person or spouse of a person who relocated to Minnesota from an area that
is declared a presidential disaster area within the preceding 12 months if the disaster
interrupted the person's postsecondary education; or

(7) a person defined as a refugee under United States Code, title 8, section
1101(a)(42), who, upon arrival in the United States, moved to Minnesota and has
continued to reside in Minnesota.

Sec. 6.

Minnesota Statutes 2005 Supplement, section 136A.121, subdivision 7a,
is amended to read:

Subd. 7a.

Surplus appropriation.

If the amount appropriated is determined by the
office to be more than sufficient to fund projected grant demand in the second year of the
biennium, the office may increase the living and miscellaneous expense allowance in the
second year of the biennium by up to an amount that retains sufficient appropriations
to fund the projected grant demand. The adjustment may be made one or more times.
In making the determination that there are more than sufficient funds, the office shall
balance the need for sufficient resources to meet the projected demand for grants with the
goal of fully allocating the appropriation for state grants. An increase in the living and
miscellaneous expense allowance under this subdivision does not carry forward into a
subsequent biennium. This subdivision expires June 30, 2007 2009.

Sec. 7.

Minnesota Statutes 2004, section 136A.15, subdivision 6, is amended to read:

Subd. 6.

Eligible institution.

"Eligible institution" means a postsecondary
educational institution that either:

(1) is operated or regulated by this state or by the University of Minnesota, or (2) is
operated publicly or privately in another state, is approved by the United States Secretary
of Education, and, as determined by the office, maintains academic standards substantially
equal to those of comparable institutions operated in this state. It also includes any
institution chartered in a province.; or

(2) is licensed or registered as a postsecondary institution by the Office of Higher
Education or another state agency.

Eligible institutions must, within four years of being licensed or registered as a
postsecondary institution by the Office of Higher Education or another state agency,
participate in federal student aid programs under Title IV of the Higher Education Act
of 1965, as amended. An institution that participated in the SELF program in fiscal year
2007 but did not participate in federal student aid programs under Title IV of the Higher
Education Act of 1965, as amended, must become a participant in the federal student aid
programs by July 1, 2010, or lose eligibility to participate in the SELF program.

An eligible institution must sign an institutional loan participation agreement with
the office that lists the duties and responsibilities of both the institution and the office.

Sec. 8.

Minnesota Statutes 2004, section 136A.15, subdivision 9, is amended to read:

Subd. 9.

Minnesota resident student.

"Minnesota resident student" means a
student who meets one of the following conditions in section 136A.101, subdivision 8.:

(1) a student who has resided in Minnesota for purposes other than postsecondary
education for at least 12 months without being enrolled at a postsecondary educational
institution for more than five credits in any term;

(2) a dependent student whose parent or legal guardian resides in Minnesota at the
time the student applies;

(3) a student who graduated from a Minnesota high school, if the student was a
resident of Minnesota during the student's period of attendance at the Minnesota high
school and the student is physically attending a Minnesota postsecondary educational
institution; or

(4) a student who, after residing in the state for a minimum of one year, earned a
high school equivalency certificate in Minnesota.

Sec. 9.

Minnesota Statutes 2004, section 136A.1701, subdivision 4, is amended to read:

Subd. 4.

Terms and conditions of loans.

(a) The office may loan money upon such
terms and conditions as the office may prescribe. The principal amount of a loan to an
undergraduate student for a single academic year shall not exceed $6,000 for grade levels
1 and 2 effective July 1, 2006, through June 30, 2007. Effective July 1, 2007, the principal
amount of a loan for grade levels 1 and 2 shall not exceed $7,500. The principal amount
of a loan for grade levels 3, 4, and 5 shall not exceed $7,500 effective July 1, 2006. The
aggregate principal amount of all loans made under this section to an undergraduate
student shall not exceed $25,000 $34,500 through June 30, 2007, and $37,500 after June
30, 2007. The principal amount of a loan to a graduate student for a single academic year
shall not exceed $9,000. The aggregate principal amount of all loans made under this
section to a student as a an undergraduate and graduate student shall not exceed $40,000.
$52,500 through June 30, 2007, and $55,500 after June 30, 2007. The amount of the loan
may not exceed the cost of attendance less all other financial aid, including PLUS loans or
other similar parent loans borrowed on the student's behalf. The cumulative SELF loan
debt must not exceed the borrowing maximums in paragraph (b).

(b) The cumulative undergraduate borrowing maximums for SELF loans are:

(1) effective July 1, 2006, through June 30, 2007:

(i) grade level 1, $6,000;

(ii) grade level 2, $12,000;

(iii) grade level 3, $19,500;

(iv) grade level 4, $27,000; and

(v) grade level 5, $34,500; and

(2) effective July 1, 2007:

(i) grade level 1, $7,500;

(ii) grade level 2, $15,000;

(iii) grade level 3, $22,500;

(iv) grade level 4, $30,000; and

(v) grade level 5, $37,500.

Sec. 10.

Minnesota Statutes 2004, section 136A.1701, subdivision 7, is amended to
read:

Subd. 7.

Repayment of loans.

(a) The office shall establish repayment procedures
for loans made under this section, but in no event shall the period of permitted repayment
for SELF II or SELF III loans exceed ten years from the eligible student's termination of
the student's postsecondary academic or vocational program, or 15 years from the date of
the student's first loan under this section, whichever is less.

(b) For SELF loans from phases after SELF III, eligible students with aggregate
principal loan balances from all SELF phases that are less than $18,750 shall have a
repayment period not exceeding ten years from the eligible student's graduation or
termination date. For SELF loans from phases after SELF III, eligible students with
aggregate principal loan balances from all SELF phases of $18,750 or greater shall
have a repayment period not exceeding 15 years from the eligible student's graduation
or termination date. For SELF loans from phases after SELF III, the loans shall enter
repayment no later than seven years after the first disbursement date on the loan.

Sec. 11.

Minnesota Statutes 2004, section 137.17, subdivision 1, is amended to read:

Subdivision 1.

Establish.

The Board of Regents may establish a school of
professional and graduate studies as a nonresidential branch campus of the University of
Minnesota, in Rochester, to serve the educational needs of working adults and other
nontraditional students in southeastern Minnesota. The campus shall be a joint partnership
of the University of Minnesota with Rochester Community and Technical College, and
Winona State University. and to foster the economic goals of the region and the state. The
legislature intends that the University of Minnesota expand higher education offerings in
Rochester. It is the intent of the legislature that this be achieved in part by developing new
and strengthening existing partnerships with higher education institutions in Rochester
and the region in which the state already has a significant investment.

The Board of Trustees of the Minnesota State Colleges and Universities shall
cooperate to achieve the foregoing.

Sec. 12.

Minnesota Statutes 2004, section 137.17, subdivision 3, is amended to read:

Subd. 3.

Missions.

The legislature intends that the mission of the expanded
education offerings in Rochester be congruent with the university's unique core mission of
teaching, research, and outreach in order to support the educational needs and economic
development of this region and the state. The legislature recognizes that the distinctiveness
of each of the partner higher education institutions in Rochester must be maintained to
achieve success in serving the higher education needs of the community and the economic
goals of the state. Further, the legislature intends that the University of Minnesota and the
other partner institutions avoid duplicative offerings of courses and programs. Therefore,
the University of Minnesota, Winona State University, and Rochester Community and
Technical College shall develop jointly a statement of missions, roles, and responsibilities
for the programs and services at Rochester which shall be submitted to the legislature by
January 30, 2000, and any time thereafter that the missions, roles, and responsibilities
change.

Sec. 13. REPEALER.

Minnesota Statutes 2004, section 137.17, subdivisions 2 and 4, are repealed.

ARTICLE 11

ENVIRONMENT, NATURAL RESOURCES, AND AGRICULTURE

Section 1. ENVIRONMENTAL, NATURAL RESOURCES, AND AGRICULTURAL APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to the
appropriations in Laws 2005, First Special Session chapter 1, articles 1 and 2, or other
specified law, to the named agencies and for the specified programs or activities. The sums
shown are appropriated from the general fund, or another named fund, to be available for
the fiscal years indicated for each purpose. The figures "2006" and "2007" used in this
article mean that the appropriation or appropriations listed under them are available for
the fiscal year ending June 30, 2006, or June 30, 2007, respectively. Appropriations in
this article for the fiscal year ending June 30, 2006, are effective the day following final
enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	523,000	$	2,363,000	$	2,886,000
Natural Resources		-0-		465,000		465,000
Game and Fish		340,000		60,000		400,000
TOTAL	$	863,000	$	2,888,000	$	3,751,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. DEPARTMENT OF AGRICULTURE

$

158,000

$

1,073,000

This appropriation includes money for the
following purposes:

(a) Invasive species control activities

118,000

130,000

(b) Compensation payments for livestock depredation and crop damage

40,000

53,000

(c) Plant pathology and biological control facility operations

-0-

190,000

(d) Grant to Second Harvest Heartland on behalf of Minnesota's six Second Harvest food banks

-0-

200,000

For the purchase of milk for distribution
to Minnesota's food shelves and other
charitable organizations that are eligible
to receive food from the food banks. This
appropriation becomes base-level funding.

Milk purchased under the grants must be
acquired from Minnesota milk processors
and based on low-cost bids. The milk
must be allocated to each Second Harvest
food bank serving Minnesota according
to the formula used in the distribution of
United States Department of Agriculture
commodities under the Emergency Food
Assistance Program. Second Harvest
Heartland must submit quarterly reports
to the commissioner on forms prescribed
by the commissioner. The reports must
include, but are not limited to, information
on the expenditure of money, the amount
of milk purchased, and the organizations
to which the milk was distributed. Second
Harvest Heartland may enter into contracts
or agreements with food banks for shared
funding or reimbursement of the direct
purchase of milk. Each food bank receiving
money from this appropriation may use up to
two percent of the grant for administrative
expenses.

(e) E85 pump installation grants

-0-

500,000

For grants to gasoline service station owners
who, after the effective date of this section,
install pumps in this state for dispensing E85
gasoline. The commissioner may reimburse
owners of gasoline service stations for up to
50 percent of the total cost of installing an
E85 pump, including the tank and any related
components, up to a maximum of $15,000
per E85 pump. The commissioner shall grant
priority for E85 pumps installed in areas of
the state where gasoline service stations with
E85 pumps are not reasonably available to the
general public. $75,000 of this appropriation
is for grants to organizations that promote
the installation of E85 pumps in service
stations. This is a onetime appropriation and
is available until spent.

Sec. 3. BOARD OF ANIMAL HEALTH

277,000

408,000

To eliminate bovine tuberculosis from cattle
herds in Minnesota. This is a onetime
appropriation.

Sec. 4. NATURAL RESOURCES

428,000

1,407,000

Summary by Fund
	2006	2007
General	88,000	882,000
Natural Resources	-0-	465,000
Game and Fish	340,000	60,000

(a) Bovine tuberculosis surveillance and diagnosis

88,000

132,000

To diminish the risk of disease transmission
in domestic livestock. This is a onetime
appropriation.

(b) Prevention and control of harmful invasive species

-0-

550,000

Of this amount, $150,000 is for educational
and enforcement efforts with commercial
businesses to reduce the risk of introducing
harmful invasive species; $150,000 is
for reducing the impact of terrestrial
invasive species on state recreational and
forest lands; $50,000 is for implementing
best management practices designed to
prevent the spread of invasive species from
department field operations; $50,000 is
for prevention education and awareness
programs; and $150,000 is for grants to local
units of government and lake associations
to reduce the impacts of aquatic invasive
species. This appropriation includes money
for the control of curly leaf pondweed in
Lake Osakis.

(c) Minnesota Shooting Sports Education Center

-0-

100,000

The commissioner may make direct
expenditures for the operation of the center
or contract with another entity to operate the
center. This appropriation is available only
to the extent it is matched by at least $1 of
nonstate money from gifts or grants for each
$2 of state money. This appropriation is
added to the agency base of the Department
of Natural Resources.

(d) Canoe routes

-0-

65,000

This appropriation is from the water
recreation account in the natural resources
fund to the commissioner of natural resources
to cooperate with local units of government
in marking routes and designating river
accesses and campsites under Minnesota
Statutes, section 85.32. This is a onetime
appropriation and is available until spent.

(e) Emergency deterrent materials assistance

340,000

60,000

This appropriation is from the game and fish
fund for the emergency deterrent materials
assistance program under Minnesota
Statutes, section 97A.028, subdivision 3.

(f) Federal recreation area operation

-0-

500,000

$100,000 is from the general fund and
$400,000 is from the state parks account
in the natural resources fund to operate
and maintain the U.S. Army Corps of
Engineers recreation sites on Cross Lake,
Gull Lake, Sandy Lake, Leech Lake, Lake
Pokegama, and Lake Winnibigoshish. This
appropriation is contingent upon acceptance
of a long-term agreement with the U.S.
Army Corps of Engineers. Acceptance may
be through a lease arrangement, a transfer
of the recreation lands, or other agreement
with the U.S. Army Corps of Engineers. The
commissioner shall establish fees for these
recreation sites as provided in Minnesota
Statutes, section 85.052, subdivision 3. The
money collected from fees established under
this section shall be deposited in the natural
resources fund and credited to the state parks
account. This is a onetime appropriation and
is available until spent.

Sec. 5.

Minnesota Statutes 2005 Supplement, section 35.05, is amended to read:

35.05 AUTHORITY OF STATE BOARD.

(a) The state board may quarantine or kill any domestic animal infected with, or
which has been exposed to, a contagious or infectious dangerous disease if it is necessary
to protect the health of the domestic animals of the state.

(b) The board may regulate or prohibit the arrival in and departure from the state of
infected or exposed animals and, in case of violation of any rule or prohibition, may detain
any animal at its owner's expense. The board may regulate or prohibit the importation of
domestic animals which, in its opinion, may injure the health of Minnesota livestock.

(c) When the governor declares an emergency under section 35.0661, the board,
through its executive director, may assume control of such resources within the University
of Minnesota's Veterinary Diagnostic Laboratory as necessary to effectively address the
disease outbreak. The director of the laboratory and other laboratory personnel must
cooperate fully in performing necessary functions related to the outbreak or threatened
outbreak.

(d) Rules adopted by the board under authority of this chapter must be published
in the State Register The board may test or require tests of any bovine or cervidae in
the state when the board deems it necessary to achieve or maintain bovine tuberculosis
accredited free state or zone status under the regulations and laws administered by the
United States Department of Agriculture.

Sec. 6.

Minnesota Statutes 2004, section 84.0835, subdivision 3, is amended to read:

Subd. 3.

Citation authority.

Employees designated by the commissioner under
subdivision 1 may issue citations, as specifically authorized under this subdivision, for
violations of:

(1) sections 85.052, subdivision 3 (payment of camping fees in state parks) and,
85.45, subdivision 1 (cross-country ski pass), and 85.46 (horse trail pass);

(2) rules relating to hours and days of operation, restricted areas, noise, fireworks,
environmental protection, fires and refuse, pets, picnicking, camping and dispersed
camping, nonmotorized uses, construction of unauthorized permanent trails, mooring of
boats, fish cleaning, swimming, storage and abandonment of personal property, structures
and stands, animal trespass, state park individual and group motor vehicle permits,
licensed motor vehicles, designated roads, and snowmobile operation off trails;

(3) rules relating to off-highway vehicle registration, display of registration numbers,
required equipment, operation restrictions, off-trail use for hunting and trapping, and
operation in lakes, rivers, and streams;

(4) rules relating to off-highway vehicle and snowmobile operation causing damage
or in closed areas within the Richard J. Dorer Memorial Hardwood State Forest;

(5) rules relating to parking, snow removal, and damage on state forest roads; and

(6) rules relating to controlled hunting zones on major wildlife management units.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 7.

Minnesota Statutes 2005 Supplement, section 85.053, subdivision 2, is
amended to read:

Subd. 2.

Requirement.

Except as provided in section 85.054, a motor vehicle
may not enter a state park, state recreation area, or state wayside over 50 acres in area,
without a state park permit issued under this section. Except for vehicles permitted under
subdivision subdivisions 7, paragraph (a), clause (2), and 8, the state park permit must be
affixed to the lower right corner windshield of the motor vehicle and must be completely
affixed by its own adhesive to the windshield, or the commissioner may, by written order,
provide an alternative means to display and validate annual permits.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 8.

Minnesota Statutes 2004, section 85.053, is amended by adding a subdivision
to read:

Subd. 8.

Towed vehicles.

The commissioner shall prescribe and issue a temporary
permit for a vehicle that enters a park towed by a vehicle used for camping. The temporary
permit must be issued with the camping permit and allows the towed vehicle to be driven
in state parks until the camping permit expires.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 9.

Minnesota Statutes 2004, section 85.054, is amended by adding a subdivision
to read:

Subd. 12.

Soudan Underground Mine State Park.

A state park permit is not
required and a fee may not be charged for motor vehicle entry or parking at the visitor
parking area of Soudan Underground Mine State Park.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 10.

Minnesota Statutes 2005 Supplement, section 85.055, subdivision 1, is
amended to read:

Subdivision 1.

Fees.

The fee for state park permits for:

(1) an annual use of state parks is $25;

(2) a second vehicle state park permit is $18;

(3) a state park permit valid for one day is $7 $5;

(4) a daily vehicle state park permit for groups is $5 $3;

(5) an annual permit for motorcycles is $20;

(6) an employee's state park permit is without charge; and

(6) (7) a state park permit for handicapped disabled persons under section 85.053,
subdivision 7, clauses (1) and (2), is $12.

The fees specified in this subdivision include any sales tax required by state law.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 11.

Minnesota Statutes 2004, section 85.32, subdivision 1, is amended to read:

Subdivision 1.

Areas marked.

The commissioner of natural resources is authorized
in cooperation with local units of government and private individuals and groups when
feasible to mark canoe and boating routes on the Little Fork, Big Fork, Minnesota,
St. Croix, Snake, Mississippi, Red Lake, Cannon, Straight, Des Moines, Crow Wing,
St. Louis, Pine, Rum, Kettle, Cloquet, Root, Zumbro, Pomme de Terre within Swift
County, Watonwan, Cottonwood, Whitewater, Chippewa from Benson in Swift County
to Montevideo in Chippewa County, Long Prairie, Red River of the North, Sauk, and
Crow Rivers which have historic and scenic values and to mark appropriately points of
interest, portages, camp sites, and all dams, rapids, waterfalls, whirlpools, and other
serious hazards which are dangerous to canoe and watercraft travelers.

Sec. 12.

[85.46] HORSE TRAIL PASS.

Subdivision 1.

Pass in possession.

While riding, leading, or driving a horse on
horse trails and associated day use areas on state trails, in state parks, in state recreation
areas, and in state forests, a person 16 years of age or over shall carry in immediate
possession and visibly display on person or horse tack, a valid horse trail pass. The pass
must be available for inspection by a peace officer, a conservation officer, or an employee
designated under section 84.0835.

Subd. 2.

License agents.

(a) The commissioner of natural resources may appoint
agents to issue and sell horse trail passes. The commissioner may revoke the appointment
of an agent at any time.

(b) The commissioner may adopt additional rules as provided in section 97A.485,
subdivision 11. An agent shall observe all rules adopted by the commissioner for the
accounting and handling of passes according to section 97A.485, subdivision 11.

(c) An agent must promptly deposit and remit all money received from the sale of
passes, except issuing fees, to the commissioner.

Subd. 3.

Issuance.

The commissioner of natural resources and agents shall issue
and sell horse trail passes. The pass shall include the applicant's signature and other
information deemed necessary by the commissioner. To be valid, a pass must be signed by
the person riding, leading, or driving the horse.

Subd. 4.

Pass fees.

(a) The fee for an annual horse trail pass is $20 for an individual
16 years of age and over. The fee shall be collected at the time the pass is purchased.
Annual passes are valid for one year beginning January 1 and ending December 31.

(b) The fee for a daily horse trail pass is $4 for an individual 16 years of age and
over. The fee shall be collected at the time the pass is purchased. The daily pass is valid
only for the date designated on the pass form.

Subd. 5.

Issuing fee.

In addition to the fee for a horse trail pass, an issuing fee of
$1 per pass shall be charged. The issuing fee shall be retained by the seller of the pass.
Issuing fees for passes sold by the commissioner of natural resources shall be deposited in
the state treasury and credited to the horse trail account in the natural resources fund and
are appropriated to the commissioner for the operation of the electronic licensing system.
A pass shall indicate the amount of the fee that is retained by the seller.

Subd. 6.

Disposition of receipts.

Fees collected under this section, except for the
issuing fee, shall be deposited in the state treasury and credited to the horse trail account
in the natural resources fund. Except for the electronic licensing system commission
established by the commissioner under section 84.027, subdivision 15, the fees are
appropriated to the commissioner of natural resources for trail acquisition, trail and facility
development, and maintenance, enforcement, and rehabilitation of horse trails or trails
authorized for horse use, whether for riding, leading, or driving, on state trails and in state
parks, state recreation areas, and state forests.

Subd. 7.

Duplicate horse trail passes.

The commissioner of natural resources and
agents shall issue a duplicate pass to a person whose pass is lost or destroyed using the
process established under section 97A.405, subdivision 3, and rules adopted thereunder.
The fee for a duplicate horse trail pass is $2, with an issuing fee of 50 cents.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 13.

Minnesota Statutes 2004, section 97A.028, subdivision 3, is amended to read:

Subd. 3.

Emergency deterrent materials assistance.

(a) For the purposes of this
subdivision, "cooperative damage management agreement" means an agreement between
a landowner or tenant and the commissioner that establishes a program for addressing the
problem of destruction of the landowner's or tenant's specialty crops or stored forage
crops by wild animals, or destruction of agricultural crops by flightless Canada geese.

(b) A landowner or tenant may apply to the commissioner for emergency deterrent
materials assistance in controlling destruction of the landowner's or tenant's specialty
crops or stored forage crops by wild animals, or destruction of agricultural crops by
flightless Canada geese. Subject to the availability of money appropriated for this purpose,
the commissioner shall provide suitable deterrent materials when the commissioner
determines that:

(1) immediate action is necessary to prevent significant damage from continuing
or to prevent the spread of disease in wild animals; and

(2) a cooperative damage management agreement cannot be implemented
immediately.

(c) A person may receive emergency deterrent materials assistance under this
subdivision more than once, but the cumulative total value of deterrent materials provided
to a person, or for use on a parcel, may not exceed $3,000 for specialty crops or measures
to prevent the spread of disease in wild animals in animal disease quarantine areas
established by the Board of Animal Health, or $750 for protecting stored forage crops,
or $500 for agricultural crops damaged by flightless Canada geese. If a person is a
co-owner or cotenant with respect to the specialty crops for which the deterrent materials
are provided, the deterrent materials are deemed to be "provided" to the person for the
purposes of this paragraph.

(d) As a condition of receiving emergency deterrent materials assistance under this
subdivision, a landowner or tenant shall enter into a cooperative damage management
agreement with the commissioner. Deterrent materials provided by the commissioner may
include repellents, fencing materials, or other materials recommended in the agreement
to alleviate the damage problem. If requested by a landowner or tenant, any fencing
materials provided must be capable of providing long-term protection of specialty crops.
A landowner or tenant who receives emergency deterrent materials assistance under
this subdivision shall comply with the terms of the cooperative damage management
agreement.

Sec. 14.

Laws 2005, First Special Session chapter 1, article 2, section 3, subdivision 2,
is amended to read:

Subd. 2. Land and Mineral Resources Management
8,903,000	8,675,000

Summary by Fund
General	5,498,000	5,248,000
Natural Resources	2,222,000	2,222,000
Game and Fish	983,000	1,005,000
Permanent School	200,000	200,000

$275,000 the first year and $275,000 the
second year are for iron ore cooperative
research, of which $137,500 the first year
and $137,500 the second year are available
only as matched by $1 of nonstate money for
each $1 of state money. The match may be
cash or in-kind.

$86,000 the first year and $86,000 the
second year are for minerals cooperative
environmental research, of which $43,000
the first year and $43,000 the second year are
available only as matched by $1 of nonstate
money for each $1 of state money. The
match may be cash or in-kind.

$2,046,000 the first year and $2,046,000
the second year are from the minerals
management account in the natural resources
fund for only the purposes specified in
new Minnesota Statutes, section 93.2236,
paragraph (c). Of this amount, $1,526,000
the first year and $1,526,000 the second
year are for mineral resource management,
$420,000 the first year and $420,000 the
second year are for projects to enhance future
income and promote new opportunities,
including value-added iron products,
geological mapping, and mercury research,
and $100,000 the first year and $100,000 the
second year are for environmental review and
the processing of permits for mining projects
that involve state-owned mineral rights. The
appropriation is from the revenue deposited
in the minerals management account
under Minnesota Statutes, section 93.22,
subdivision 1, paragraph (b). $100,000 each
year is a onetime appropriation.

$150,000 the first year and $150,000
the second year are from the state forest
suspense account in the permanent school
fund to accelerate land exchanges, land
sales, and commercial leasing of school
trust lands. This appropriation is to be used
toward meeting the provisions of Minnesota
Statutes, section 92.121, to exchange school
trust lands or put alternatives in effect when
management practices have diminished
or prohibited revenue generation, and the
direction of Minnesota Statutes, section
127A.31, to secure maximum long-term
economic return from the school trust lands
consistent with fiduciary responsibilities and
sound natural resources conservation and
management principles.

$50,000 the first year and $50,000 the second
year are from the state forest suspense
account in the permanent school fund to
identify, evaluate, and lease construction
aggregate located on school trust lands.

$250,000 the first year is for a grant to
the Board of Regents of the University of
Minnesota to drill a 5,000 foot core sampling
bore hole at the Tower-Soudan mine complex
in support of a National Science Foundation
grant building renovations at the International
Wolf Center. This is a onetime appropriation
and is available until June 30, 2007.

Sec. 15. EFFECTIVE DATE.

Unless otherwise specified, this article is effective the day following final enactment.

ARTICLE 12

CLEAN WATER LEGACY

Section 1. CLEAN WATER LEGACY APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are appropriated
from the general fund to the agencies and for the purposes specified in this article. Unless
otherwise specified, the appropriations in this article are available for the fiscal year
ending June 30, 2007. Appropriations in this article that are encumbered under contract,
including grant contracts, on or before June 30, 2007, are available until June 30, 2009.
All the appropriations in this article are onetime appropriations.

Notwithstanding any other law enacted during the 2006 regular legislative session,
the maximum total general fund appropriation authorized for the purposes of this article
under all laws enacted during the 2006 regular legislative session is $20,000,000. Any
amounts appropriated from the general fund in any other law enacted during the 2006
regular legislative session that would cause the general fund appropriations to exceed
$20,000,000 are canceled.

The appropriations in this article must be used to protect, restore, and preserve
the quality of Minnesota's surface waters. Allowable activities include surface water
assessments, program activities that target identified impairments, and development of
total maximum daily load studies (TMDL's) as required by section 303(d) of the federal
Clean Water Act, United States Code, title 33, section 1313(d), and applicable federal
regulations.

SUMMARY BY FUND
				2007		TOTAL
General			$	20,000,000	$	20,000,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
						2007

Sec. 2. POLLUTION CONTROL AGENCY

$

5,030,000

This appropriation may be spent for the
following purposes:

(a) Statewide assessment of surface water quality and trends

1,860,000

Up to $1,010,000 is available for grants or
contracts to support citizen monitoring of
surface waters.

(b) Develop TMDL's and TMDL implementation plans for waters listed on the United States Environmental Protection Agency approved 2004 impaired waters list

3,170,000

Up to $1,740,000 is available for grants or
contracts to develop TMDL's.

Sec. 3. PUBLIC FACILITIES AUTHORITY

4,310,000

This appropriation may be spent for the
following purposes and is available until
spent:

(a) Phosphorus reduction grants

2,000,000

This appropriation is for phosphorus
reduction grants up to a maximum of
$500,000 per project.

(b) Small community wastewater treatment loans and grants

1,000,000

(c) Wastewater, storm water, and TMDL grants

1,310,000

To the water pollution control revolving fund
under Minnesota Statutes, section 446A.07,
for wastewater treatment and storm water
projects and for total maximum daily load
grants under Minnesota Statutes, section
446A.073.

Sec. 4. AGRICULTURE DEPARTMENT

2,600,000

This appropriation may be spent for the
following purposes:

(a) Agricultural best management practices loan program

1,400,000

For loans to producers and rural landowners.
This appropriation is available until spent.

$1,200,000 is available for pass-through
to local governments and lenders for
low-interest loans.

(b) Technical assistance

800,000

To expand technical assistance to producers
and conservation professionals on nutrient
and pasture management, target practices to
sources of water impairments, coordinate
federal and state farm conservation programs
to fully utilize federal conservation funds,
and expand conservation planning assistance
for producers.

$210,000 is available for grants or contracts
to develop nutrient and conservation
planning assistance information materials.

(c) Research, evaluation, and effectiveness monitoring of agricultural practices in restoring impaired waters

400,000

Sec. 5. BOARD OF WATER AND SOIL RESOURCES

5,930,000

All of the money appropriated in this section
as grants to local governments shall be
administered through the Board of Water
and Soil Resources' local water resources
protection and management program under
Minnesota Statutes, section 103B.3369.

This appropriation may be spent for the
following purposes:

(a) Targeted nonpoint restoration cost-share and incentive payments

1,500,000

Up to $1,400,000 is available for grants.

(b) Targeted nonpoint restoration technical, compliance, and engineering assistance activities

2,000,000

Up to $1,900,000 is available for grants.

(c) Reporting and evaluation of applied soil and water conservation practices

200,000

(d) Grants to implement county individual sewage treatment system programs

730,000

(e) Grants to support local nonpoint source protection activities related to lake and river protection and management

1,500,000

Sec. 6. DEPARTMENT OF NATURAL RESOURCES

2,130,000

This appropriation may be spent for the
following purposes:

(a) Statewide assessment of surface water quality and trends

280,000

(b) Acquire high priority, sensitive riparian lands

1,000,000

(c) Forest stewardship planning and implementation; research, evaluation, and monitoring; and technical assistance to local units of government

850,000

ARTICLE 13

ECONOMIC DEVELOPMENT

Section 1. ECONOMIC DEVELOPMENT APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to the
appropriations in Laws 2005, First Special Session chapter 1, article 3, or other law to the
agencies and for the purposes specified in this article. The appropriations are from the
general fund or another named fund and are available for the fiscal years indicated for
each purpose. The figures "2006" and "2007" used in this article mean that the addition
to the appropriation listed under them is available for the fiscal year ending June 30,
2006, or June 30, 2007, respectively. "The first year" is fiscal year 2006. "The second
year" is fiscal year 2007. "The biennium" is fiscal years 2006 and 2007. Supplementary
appropriations and reductions to appropriations for the fiscal year ending June 30, 2006,
are effective the day following final enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	1,750,000	$	2,850,000	$	4,600,000
Special Revenue				300,000		300,000
Workforce Development		1,920,000		2,170,000		4,090,000
Petroleum Tank Cleanup		450,000		450,000		900,000
Telecommunications Access				240,000		240,000
TOTAL	$	4,120,000	$	6,010,000	$	10,130,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT

Subdivision 1. Total appropriation

$

1,920,000

$

4,970,000

This appropriation includes money for the
purposes in subdivisions 2 to 8.

Subd. 2. Business and community development

500,000

For a grant to BioBusiness Alliance
of Minnesota for bioscience business
development programs that will work to grow
and create bioscience jobs in this state and
position Minnesota as a global biobusiness
leader. An annual report on the expenditure
of the appropriation must be submitted to
the senate Environment, Agriculture, and
Economic Development Budget Division,
and the house of representatives Jobs and
Economic Opportunity Policy and Finance
Committee by June 30 of each fiscal year
until the appropriation is expended. The
report must include the impact, if available,
of the subsidy on reducing consumer costs of
bioengineered products, and the jobs created,
including wages and benefits. This is a
onetime appropriation.

Subd. 3. Biotech partnership

2,000,000

For direct and indirect expenses of the
collaborative research partnership between
the University of Minnesota and the Mayo
Foundation for research in biotechnology
and medical genomics. This is a onetime
appropriation. An annual report on the
expenditure of this appropriation must be
submitted to the governor and the chairs
of the senate Higher Education Budget
Division, the house of representatives
Higher Education Finance Committee,
the senate Environment, Agriculture, and
Economic Development Budget Division,
and the house of representatives Jobs and
Economic Opportunity Policy and Finance
Committee by June 30 of each fiscal year
until the appropriation is expended. The
report must include the impact, if available,
of the subsidy on reducing consumer costs
of bioengineered products and the jobs
created, including wages and benefits. This
appropriation is available until expended.

Subd. 4. Programs for persons with developmental and mental disabilities

150,000

For a grant to Advocating Change Together.
The grant must be used to provide training,
technical assistance, and resource materials
to persons with developmental and mental
health disabilities. This appropriation
becomes part of the base appropriation
for the Department of Employment and
Economic Development.

Subd. 5. Wastewater treatment

100,000

For a grant to the city of Cedar Mills for costs
it incurred in construction of a wastewater
treatment system for 28 properties. The
city must use the money to reduce its
indebtedness for additional costs of the
system that was not part of the originally
planned project and resulted in excessive
costs to homeowners. This is a onetime
appropriation.

Subd. 6. Pilot workforce program

250,000

This appropriation is from the workforce
development fund for grants to the West
Central Initiative in Fergus Falls. These
grants must be used to implement and operate
Northern Connections, a pilot workforce
program that provides one-stop supportive
services to assist individuals as they transition
into the workforce. This appropriation is
available to the extent matched by $1 of
nonstate money for each $1 of state money.
This is a onetime appropriation.

Subd. 7. Summer youth employment

1,920,000

1,920,000

This appropriation is from the workforce
development fund for grants to fund summer
youth employment in Minneapolis. The
grants shall be used to fund up to 500 jobs for
youth each summer. Of this appropriation,
$250,000 the first year and $250,000 the
second year are for a grant to the learn-to-earn
summer youth employment program. The
commissioner shall establish criteria for
awarding the grants. This appropriation is
available in either year of the biennium and
is available until spent.

Subd. 8. Veterans' memorial

50,000

For a grant to the city of Worthington for
the construction of a veterans' memorial in
Freedom Veterans' Memorial Park. This
appropriation is contingent upon the receipt
of local matching money on a $1 to $1 basis.
This is a onetime appropriation.

Sec. 3. DEPARTMENT OF COMMERCE

450,000

450,000

Notwithstanding Minnesota Statutes, section
115C.09, subdivision 2a, this appropriation
is from the petroleum tank release cleanup
fund for costs reimbursable under Minnesota
Statutes, section 115C.09, that were incurred
before January 1, 2004.

Sec. 4. HOUSING FINANCE AGENCY

300,000

This appropriation is from the real estate
education, research, and recovery fund
under Minnesota Statutes, section 82.43, for
mortgage foreclosure prevention under the
homeownership education, counseling, and
training program under Minnesota Statutes,
section 462A.209.

Sec. 5. DEPARTMENT OF HUMAN SERVICES

240,000

This appropriation is from the
telecommunications access Minnesota fund
under Minnesota Statutes, section 237.52,
to supplement the ongoing operational
expenses of the Commission Serving
Deaf and Hard-of-Hearing People. This
appropriation shall become part of base level
funding for the commission for the biennium
beginning July 1, 2007.

Sec. 6. BOXING COMMISSION

50,000

To operate and administer the commission.
This appropriation is the annual base for
future years. This appropriation is contingent
upon enactment of new Minnesota Statutes,
sections 341.21 to 341.37.

Sec. 7. EXPLORE MINNESOTA TOURISM

1,750,000

For a grant to the Minnesota Film and
TV Board for reimbursements of up to 15
percent of film production costs incurred in
Minnesota, under Minnesota Statutes, section
116J.543. This appropriation is available for
films that begin filming on or after May 1,
2006, and is available until June 30, 2007.

Sec. 8.

Laws 2005, First Special Session chapter 1, article 3, section 2, subdivision 4,
is amended to read:

Subd. 4. Workforce Services

27,960,000

28,160,000

Summary by Fund
General	20,165,000	20,165,000
Workforce Development	7,795,000	7,995,000

$4,864,000 the first year and $4,864,000 the
second year are from the general fund and
$7,420,000 the first year and $7,420,000
the second year are from the workforce
development fund for extended employment
services for persons with severe disabilities
or related conditions under Minnesota
Statutes, section 268A.15. Of the amount
from the workforce development fund,
$500,000 each year is onetime.

$1,690,000 the first year and $1,690,000
the second year are from the general
fund for grants under Minnesota Statutes,
section 268A.11, for the eight centers for
independent living. Money not expended the
first year is available the second year.

$150,000 the first year and $150,000 the
second year are from the general fund
and $175,000 the first year and $175,000
the second year are from the workforce
development fund for grants under Minnesota
Statutes, section 268A.03, to Rise, Inc.
for the Minnesota Employment Center for
People Who are Deaf or Hard-of-Hearing.
Money not expended the first year is available
the second year. Of the amount from the
workforce development fund, $150,000 each
year is onetime added to the budget base.

$1,000,000 the first year and $1,000,000
the second year are from the general fund
and $200,000 the first year and $400,000
the second year are from the workforce
development fund for grants for programs
that provide employment support services to
persons with mental illness under Minnesota
Statutes, sections 268A.13 and 268A.14.
Up to $77,000 each year may be used
for administrative and salary expenses.
The appropriation from the workforce
development fund is onetime.

$4,940,000 the first year and $4,940,000 the
second year are from the general fund for
state services for the blind activities.

$7,521,000 the first year and $7,521,000 the
second year are from the general fund for the
state's vocational rehabilitation program for
people with significant disabilities to assist
with employment, under Minnesota Statutes,
chapter 268A.

On or after July 1, 2005, the commissioner
of finance shall cancel the unencumbered
balance in the contaminated site cleanup and
development account to the unrestricted fund
balance in the general fund.

Sec. 9.

Minnesota Statutes 2004, section 116J.543, is amended to read:

116J.543 FILM PRODUCTION JOBS PROGRAM.

(a) The film production jobs program is created. The program shall be operated
by the Minnesota Film and TV Board with administrative oversight and control by the
commissioner of employment and economic development. The program shall make
payment to producers of long-form and narrative film productions feature films, national
television programs, documentaries, music videos, and commercials that directly create
new film jobs in Minnesota. To be eligible for a payment, a producer must submit
documentation to the Minnesota Film and TV Board of expenditures for wages for work
on new film production jobs in Minnesota by resident Minnesotans. The film jobs include
work such as technical crews, acting talent, set construction, soundstage or equipment
rental, local postproduction film processing, and other film production jobs production
costs incurred in Minnesota that are directly attributable to the production in Minnesota of
a film product.

The Minnesota Film and TV Board must shall make recommendations to the
commissioner about program payment, but the recommendations are not binding and
the commissioner has the authority to make the final determination on payments. The
commissioner's determination must be based on the amount of wages documented to the
Film Board and the likelihood that the payment will lead to further documentable wage
payments. Payment may not exceed $100,000 for a single long-form and narrative film
proper documentation of eligible production costs submitted for payments. No more than
five percent of the funds appropriated for the program in any year may be expended for
administration. Individual feature film projects shooting on or after January 1, 1997, will
be eligible for fund allocations.

(b) For the purposes of this section:

(1) "production costs" means the cost of the following:

(i) a story and scenario to be used for a film;

(ii) salaries of talent, management, and labor, including payments to personal
services corporations for the services of a performing artist;

(iii) set construction and operations, wardrobe, accessories, and related services;

(iv) photography, sound synchronization, lighting, and related services;

(v) editing and related services;

(vi) rental of facilities and equipment; or

(vii) other direct costs of producing the film in accordance with generally accepted
entertainment industry practice; and

(2) "film" means a movie, television show, documentary, music video, or television
commercial, whether on film or video. Film does not include news, current events, public
programming, or a program that includes weather or market reports; a talk show; a
production with respect to a questionnaire or contest; a sports event or sports activity; a
gala presentation or awards show; a finished production that solicits funds; or a production
for which the production company is required under United States Code, title 18, section
2257, to maintain records with respect to a performer portrayed in a single-media or
multimedia program.

Sec. 10.

Minnesota Statutes 2005 Supplement, section 116J.551, subdivision 1, is
amended to read:

Subdivision 1.

Grant account.

A contaminated site cleanup and development grant
account is created in the general fund. Money in the account may be used, as appropriated
by law, to make grants as provided in section 116J.554 and to pay for the commissioner's
costs in reviewing applications and making grants. Notwithstanding section 16A.28,
money appropriated to the account is available for four years grant money appropriated
for this program, from any source, is available until spent.

Sec. 11.

[116J.656] SMALL BUSINESS ACCESS TO FEDERAL RESEARCH
FUNDS.

(a) The commissioner shall assist small businesses to access federal money through
the federal Small Business Innovation Research program and the Small Business
Technology Transfer program. In providing this assistance, the commissioner shall
maintain connections to eligible federal programs, assess specific funding opportunities,
review funding proposals, provide referrals to specific consulting services, and hold
training workshops throughout the state.

(b) Unless prohibited by federal law, the commissioner must implement fees for
services that help companies seek federal Phase II Small Business Innovation Research
grants. The fees must be deposited in a special revenue account and are annually
appropriated to the commissioner for the Small Business Innovation Research and Small
Business Technology Transfer programs.

Sec. 12.

Minnesota Statutes 2004, section 326.105, is amended to read:

326.105 FEES.

The fee for licensure or renewal of licensure as an architect, professional engineer,
land surveyor, landscape architect, or geoscience professional is $120 per biennium.
The fee for certification as a certified interior designer or for renewal of the certificate
is $120 per biennium. The fee for an architect applying for original certification as a
certified interior designer is $50 per biennium. The initial license or certification fee for
all professions is $120. The renewal fee shall be paid biennially on or before June 30 of
each even-numbered year. The renewal fee, when paid by mail, is not timely paid unless it
is postmarked on or before June 30 of each even-numbered year. The application fee is
$25 for in-training applicants and $75 for professional license applicants.

The fee for monitoring licensing examinations for applicants is $25, payable by
the applicant.

Sec. 13.

[341.21] DEFINITIONS.

Subdivision 1.

Applicability.

The definitions in this section apply to this chapter.

Subd. 2.

Boxing.

"Boxing" means the act of attack and defense with the fists, using
padded gloves, that is practiced as a sport under the rules of the World Boxing Association,
the World Boxing Council, the International Boxing Federation, or equivalent. Where
applicable, boxing includes full contact karate.

Subd. 3.

Commission.

"Commission" means the Minnesota Boxing Commission.

Subd. 4.

Contest.

"Contest" means any boxing or nontraditional fighting contest,
match, or exhibition.

Subd. 5.

Nontraditional fighting contest.

"Nontraditional fighting contest" means
any competition between two or more persons, with or without gloves, who use any
combination of fighting skills, including boxing, wrestling, hitting, kicking, martial arts,
and other combative full contact techniques. Nontraditional fighting contests include, but
are not limited to, ultimate fighting, extreme fighting, elimination contests, cage fighting,
mixed martial arts fighting, tough man contests, shoot fighting, but do not include kick
boxing or any recognized martial arts competition.

Subd. 6.

Professional.

"Professional" means any person who competes for any
money prize or a prize that exceeds the value of $50 or teaches, pursues, or assists in
the practice of boxing or nontraditional fighting as a means of obtaining a livelihood
or pecuniary gain.

Subd. 7.

Director.

"Director" means the executive director of the commission.

Subd. 8.

Tough man contest.

"Tough man contest" means any boxing match
consisting of one-minute rounds between two or more persons who use their hands,
wearing padded gloves that weigh not less than 12 ounces, or their feet, or both, in any
manner. Tough man contest does not include kick boxing, any recognized martial arts
competition, or boxing as defined in subdivision 2.

Sec. 14.

[341.22] BOXING COMMISSION.

There is created the Minnesota Boxing Commission consisting of seven members
who are citizens of this state. Three members of the commission must be retired judges
of the Minnesota district court, Minnesota Court of Appeals, Minnesota Supreme Court,
the United States District Court for the District of Minnesota, or the Eighth Circuit Court
of Appeals; two members must be licensed medical doctors; and two members must
be boxers. No member may fulfill more than one of these requirements at the same
time. Membership terms, compensation of members, removal of members, the filling of
membership vacancies, and fiscal year and reporting requirements must be as provided
in sections 214.07 to 214.09. The provision of staff, administrative services, and office
space; the review and processing of complaints; the setting of fees; and other provisions
relating to commission operations must be as provided in chapter 214.

Sec. 15.

[341.23] LIMITATIONS.

No member of the Boxing Commission may directly or indirectly promote a boxing
or nontraditional fighting contest, or directly or indirectly engage in the managing of a
boxer or fighter, or have an interest in any manner in the proceeds from a boxing match or
nontraditional fighting contest.

Sec. 16.

[341.24] EXECUTIVE DIRECTOR.

The commission may appoint, and at its pleasure remove, an executive director and
prescribe the powers and duties of the office. The executive director is not a member of
the commission. The commission may employ personnel necessary to the performance of
its duties.

Sec. 17.

[341.25] RULES.

(a) The commission may adopt rules that include standards for the physical
examination and condition of boxers, nontraditional fighters, and referees.

(b) The commission may adopt other rules necessary to carry out the purposes of this
chapter, including, but not limited to, the conduct of boxing exhibitions, bouts, fights, and
nontraditional fighting contests and events, and their manner, supervision, time, and place.

Sec. 18.

[341.26] MEETINGS.

The commission shall hold a regular meeting quarterly and may hold special
meetings. Except as otherwise provided in law, all meetings of the commission must be
open to the public and reasonable notice of the meetings must be given under chapter 13D.

Sec. 19.

[341.27] COMMISSION DUTIES.

The commission shall:

(1) issue, deny, renew, suspend, or revoke licenses;

(2) make and maintain records of its acts and proceedings including the issuance,
denial, renewal, suspension, or revocation of licenses;

(3) keep public records of the commission open to inspection at all reasonable times;

(4) assist the director in the development of rules to be implemented under this
chapter; and

(5) conform to the rules adopted under this chapter.

Sec. 20.

[341.28] REGULATION OF BOXING AND NONTRADITIONAL
FIGHTING CONTESTS.

Subdivision 1.

Regulatory authority; boxing.

All boxing contests are subject to
this chapter. Every contestant in a boxing contest shall wear padded gloves that weigh at
least eight ounces. The commission shall, for every boxing contest:

(1) direct a commission member to be present; and

(2) direct the attending commission member to make a written report of the contest.

All boxing contests must be conducted according to the provisions of this chapter.

Subd. 2.

Regulatory authority; tough man contests.

All tough man contests,
including amateur tough man contests, are subject to this chapter. Every contestant in a
tough man contest shall wear padded gloves that weight at least 12 ounces.

Subd. 3.

Regulatory authority; nontraditional fighting.

All nontraditional
fighting, including amateur nontraditional fighting contests, is subject to this chapter and
the rules adopted by the commission. Contestants in nontraditional fighting contests shall
not strike other contestants in the spinal column or in the back of the head, and shall not
strike with their knees or elbows.

Sec. 21.

[341.29] JURISDICTION OF COMMISSION.

The commission shall:

(1) have sole direction, supervision, regulation, control, and jurisdiction over all
boxing contests, tough man contests, and nontraditional fighting contests held within this
state unless a contest is exempt from the application of this chapter under federal law;

(2) have sole control, authority, and jurisdiction over all licenses required by this
chapter; and

(3) grant a license to an applicant if, in the judgment of the commission, the financial
responsibility, experience, character, and general fitness of the applicant are consistent
with the public interest, convenience, or necessity and the best interests of boxing and
conforms with this chapter and the commission's rules.

Sec. 22.

[341.30] LICENSURE; PERSONS REQUIRED TO OBTAIN
LICENSES; REQUIREMENTS; BACKGROUND INFORMATION; FEE; BOND.

Subdivision 1.

Licensure; individuals.

All referees, judges, matchmakers,
promoters, trainers, ring announcers, timekeepers, ringside physicians, boxers,
nontraditional fighters, boxers' managers, and boxers' seconds are required to be licensed
by the commission. The commission shall not permit any of these persons to participate
in the holding or conduct of any boxing contest unless the commission has first issued
the person a license.

Subd. 2.

Entity licensure.

Before participating in the holding or conduct of any
boxing or nontraditional fighting contest, a corporation, partnership, limited liability
company, or other business entity organized and existing under law, its officers and
directors, and any person holding 25 percent or more of the ownership of the corporation
shall obtain a license from the commission and must be authorized to do business under
the laws of this state.

Subd. 3.

Background investigation.

The commission shall require referees,
judges, matchmakers, promoters, boxers, and nontraditional fighters' managers to furnish
fingerprints and background information under commission rules before licensure. The
commission shall charge a fee for receiving fingerprints and background information
in an amount determined by the commission. The commission may require referees,
judges, matchmakers, promoters, boxers, and nontraditional fighters' managers to furnish
fingerprints and background information before license renewal. The fee may include a
reasonable charge for expenses incurred by the commission or the Department of Public
Safety. For this purpose, the commission and the Department of Public Safety may enter
into an interagency agreement.

Subd. 4.

Prelicensure requirements.

(a) Before the commission issues a license to
a promoter, matchmaker, corporation, or other business entity, the applicant shall:

(1) provide the commission with a copy of any agreement between a contestant and
the applicant that binds the applicant to pay the contestant a certain fixed fee or percentage
of the gate receipts;

(2) show on the application the owner or owners of the applicant entity and the
percentage of interest held by each owner holding a 25 percent or more interest in the
applicant;

(3) provide the commission with a copy of the latest financial statement of the
entity; and

(4) provide the commission with a copy or other proof acceptable to the commission
of the insurance contract or policy required by this chapter.

(b) Before the commission issues a license to a promoter, the applicant shall deposit
with the commission a cash bond or surety bond in an amount set by the commission.
The bond shall be executed in favor of this state and shall be conditioned on the faithful
performance by the promoter of the promoter's obligations under this chapter and the
rules adopted under it.

(c) Before the commission issues a license to a boxer or nontraditional fighter, the
applicant shall submit to the commission the results of a current medical examination on
forms furnished or approved by the commission. The medical examination must include
an ophthalmological and neurological examination. The ophthalmological examination
must be designed to detect any retinal defects or other damage or condition of the
eye that could be aggravated by boxing or nontraditional fighting. The neurological
examination must include an electroencephalogram or medically superior test if the
boxer or nontraditional fighter has been knocked unconscious in a previous boxing,
nontraditional fighting, or other athletic competition. The commission may also order an
electroencephalogram or other appropriate neurological or physical examination before
any contest, match, or exhibition if it determines that the examination is desirable to
protect the health of the boxer or nontraditional fighter.

Sec. 23.

[341.31] SIMULCAST LICENSES.

The commission shall issue a license to a person or organization holding, showing,
or exhibiting a simultaneous telecast of any live, current, or spontaneous boxing or
sparring match or nontraditional fighting exhibition or performance on a closed circuit
telecast or subscription television program viewed within the state, whether originating
in this state or elsewhere, and for which a charge is made. Each person or organization
shall apply for such a license in advance of each showing. No showing may be licensed
unless the person or organization applying for the license:

(1) certifies that the match is subject to the jurisdiction and regulation of a boxing or
athletic regulatory authority in another state or country;

(2) certifies the match is in compliance with the requirements of the authority;

(3) identifies the authority; and

(4) provides any information the commission may require.

Sec. 24.

[341.32] LICENSE FEES; EXPIRATION; RENEWAL.

Subdivision 1.

Annual licensure.

The commission may establish and issue annual
licenses subject to the collection of advance fees by the commission for promoters,
matchmakers, managers, judges, referees, ring announcers, ringside physicians,
timekeepers, boxers, nontraditional fighters, boxers' trainers, boxers' seconds, business
entities filing for a license to participate in the holding of any boxing contest, and officers,
directors, or other persons affiliated with the business entity.

Subd. 2.

Expiration and renewal.

A license expires December 31 at midnight in
the year of its issuance and may be renewed by filing an application for renewal with the
commission and payment of the license fee. An application for a license and renewal of a
license must be on a form provided by the commission. There is a 30-day grace period
during which a license may be renewed if a late filing penalty fee equal to the license fee
is submitted with the regular license fee. A licensee that files late shall not conduct any
activity regulated by this chapter until the commission has renewed the license. If the
licensee fails to apply to the commission within the 30-day grace period, the licensee must
apply for a new license under subdivision 1.

Sec. 25.

[341.33] CONTESTANTS AND REFEREES; PHYSICAL
EXAMINATION; ATTENDANCE OF PHYSICIAN; PAYMENT OF FEES;
INSURANCE.

Subdivision 1.

Examination by physician.

All boxers, nontraditional fighters,
and referees shall be examined by a physician licensed by this state within three hours
before entering the ring, and the examining physician shall immediately file with the
commission a written report of the examination. The physician's examination shall report
on the condition of the boxer's heart and general physical and neurological condition. The
physician's report may record the condition of the boxer's nervous system and brain as
required by the commission. The physician may prohibit the boxer from entering the ring
if, in the physician's professional opinion, it is in the best interest of the boxer's health.
The cost of the examination is payable by the person or entity conducting the contest
or exhibition.

Subd. 2.

Attendance of physician.

A person holding or sponsoring a boxing or
nontraditional fighting contest shall have in attendance a physician licensed by this state.
The commission may establish a schedule of fees to be paid to each attending physician
by the person holding or sponsoring the contest.

Sec. 26.

[341.34] INSURANCE.

Subdivision 1.

Required insurance.

The commission shall:

(1) require insurance coverage for a boxer or nontraditional fighter to provide
for medical, surgical, and hospital care for injuries sustained in the ring in an amount
of $100,000 with $25 deductible and payable to the boxer or nontraditional fighter as
beneficiary; and

(2) require life insurance for a boxer or nontraditional fighter in the amount of
$50,000 payable in case of accidental death resulting from injuries sustained in the ring.

Subd. 2.

Payment for insurance.

The cost of the insurance required by this section
is payable by the promoter.

Sec. 27.

[341.35] PENALTIES FOR NONLICENSED EXHIBITIONS.

Any person or persons who send or cause to be sent, published, or otherwise made
known, any challenge to fight what is commonly known as a prize fight, or engage in any
public boxing or sparring match, or nontraditional exhibition or contest, with or without
gloves, for any prize, reward, or compensation, or for which any admission fee is charged
directly or indirectly, or go into training preparatory for the fight, exhibition, or contest,
or act as a trainer, aider, abettor, backer, umpire, referee, second, surgeon, assistant, or
attendant at the fight, exhibition, or contest, or in any preparation for same, and any owner
or lessee of any ground, building, or structure of any kind permitting the same to be
used for any fight, exhibition, or contest, is guilty of a misdemeanor unless a license
for the holding of the fight, exhibition, or contest has been issued by the commission in
compliance with the rules adopted by it.

Sec. 28.

[341.37] APPROPRIATION.

A Boxing Commission account is created in the special revenue fund. Money in
the account is annually appropriated to the Boxing Commission for the purposes of
conducting its statutory responsibilities and obligations.

ARTICLE 14

TRANSPORTATION

Section 1. TRANSPORTATION APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to
the appropriations in Laws 2005, First Special Session chapter 6, article 1, or other
specified law, to the named agencies and for the specified purposes. The sums shown are
appropriated from the general fund, or another named fund, to be available for the fiscal
years indicated for each purpose. The figures "2006" and "2007" used in this article mean
that the appropriation or appropriations listed under them are available for the fiscal year
ending June 30, 2006, or June 30, 2007, respectively. Appropriations in this article for the
fiscal year ending June 30, 2006, are effective the day following final enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	-0-	$	4,320,000	$	4,320,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007
			$		$

Sec. 2. TRANSPORTATION

-0-

1,880,000

This onetime appropriation includes money
for the following purposes:

(a) Town road sign replacement program

1,500,000

To implement the town road sign replacement
program established in Laws 2005, First
Special Session chapter 6, article 3, section
89. For the purpose of this appropriation,
implementation includes the purchase and
installation of new signs. This appropriation
may be used to satisfy any local matching
requirement for the receipt of federal
funds. This appropriation is available until
expended.

(b) Department of Transportation radio tower

380,000

To design and construct a new radio tower
in Roseau County. This appropriation is
available until expended.

Sec. 3. METROPOLITAN COUNCIL

2,040,000

This onetime appropriation includes money
for the following purposes:

(a) Bus transit

1,540,000

For bus system operations.

(b) Light rail transit feasibility study

500,000

For a study of and report on the feasibility
of the use of light rail transit in the marked
Interstate Highway 394 corridor between
downtown Minneapolis and Ridgedale
Drive in Minnetonka, with the alternative
of extending to Wayzata. The Metropolitan
Council may hire a consultant to assist in the
study and report.

The light rail transit feasibility study shall
include, without limitation:

(1) an identification of major operational
characteristics of light rail transit in the
corridor;

(2) a quantification of capital and operating
costs;

(3) an evaluation of the interface of the light
rail transit system with other transportation
systems in the corridor;

(4) an evaluation of the impact of the light
rail transit system on land-use and urban
development;

(5) an estimate of the cost and impact of
necessary associated exercise of eminent
domain;

(6) an evaluation of the impact of the
light rail transit system on energy and the
environment;

(7) a comparison of the light rail transit
system with multipassenger alternatives such
as buses and carpools;

(8) an estimate of ridership potential;

(9) a cost-benefit analysis that compares the
total cost of the project with the benefits of
the light rail transit line to its users, other
users of the highway, and adjacent property
owners;

(10) an identification of potential sources of
federal, state, local, private, and other funds;
and

(11) an identification of the conditions
necessary for light rail transit to be feasible in
the marked Interstate Highway 394 corridor.

Sec. 4. STATE PATROL

400,000

For purchase of automated external
defibrillators for State Patrol vehicles. This
is a onetime appropriation.

Sec. 5. EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 15

PUBLIC SAFETY

Section 1. PUBLIC SAFETY APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to the
appropriations in Laws 2005, chapter 136, article 1, or other law to the agencies and for
the purposes specified in this article. The appropriations are from the general fund or
another named fund and are available for the fiscal years indicated for each purpose. The
figures "2006" and "2007" used in this article mean that the addition to the appropriation
listed under them is available for the fiscal year ending June 30, 2006, or June 30,
2007, respectively. "The first year" is fiscal year 2006. "The second year" is fiscal year
2007. "The biennium" is fiscal years 2006 and 2007. Supplementary appropriations and
reductions to appropriations for the fiscal year ending June 30, 2006, are effective the
day following final enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	3,562,000	$	6,650,000	$	10,212,000
Special Revenue		-0-		200,000		200,000
TOTAL	$	3,562,000	$	6,850,000	$	10,412,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. SUPREME COURT

$

-0-

$

600,000

AOD offenders

For the first phase of a judicial initiative
to more effectively address the increasing
numbers of alcohol and other drug (AOD)
offenders coming into Minnesota courts,
including the increase in methamphetamine
offenders. This is a onetime appropriation.
Of this amount:

(1) $300,000 is for a study to recommend a
more uniform and cost-effective structure
for creating statewide applications of the
problem-solving court model;

(2) $100,000 is to augment treatment services
for problem-solving courts; and

(3) $200,000 is for development of a
multicounty pilot problem-solving court.

Sec. 3. BOARD ON JUDICIAL STANDARDS

172,000

-0-

Special hearings

For costs of special hearings and an
investigation regarding complaints of judicial
misconduct. This is a onetime appropriation
and is available until June 30, 2007.

Sec. 4. BOARD OF PUBLIC DEFENSE

-0-

60,000

Appellate transcripts

For additional costs associated with appellate
transcripts.

Sec. 5. PUBLIC SAFETY

Subdivision 1. Total appropriation

177,000

2,160,000

These appropriations are added to the
appropriations in Laws 2005, chapter 136,
article 1, section 9. The amounts that may
be spent from these appropriations for each
program are specified in subdivisions 2 to 4.

Subd. 2. Emergency management

Extraordinarily hazardous substances

-0-

60,000

To implement the changes made in this article
to Minnesota Statutes, chapter 115E, relating
to extraordinarily hazardous substances.

Subd. 3. Criminal apprehension

(a) Predatory offender database

-0-

125,000

To enhance the predatory offender database
to facilitate notification of noncompliant sex
offenders on the Internet. The base budget
for this activity is $116,000 in fiscal year
2008 and fiscal year 2009.

(b) Missing persons and unidentified bodies backlog

-0-

100,000

To address the missing persons and
unidentified bodies backlog. This is a
onetime appropriation.

The superintendent shall coordinate with
federal and local units of government;
federal, state, and local law enforcement
agencies; medical examiners; coroners;
odontologists; and other entities to reduce
the state's reporting, data entry, and
record-keeping backlog relating to missing
persons and unidentified bodies. To the
degree feasible, the superintendent shall
ensure that all necessary data and samples,
including, but not limited to, DNA samples
and dental records get entered into all
relevant federal and state databases.

By February 1, 2007, the superintendent shall
report to the chairs and ranking minority
members of the senate and house committees
and divisions having jurisdiction over
criminal justice policy and funding on the
efforts to reduce the state's backlog. The
report must give detailed information on how
this appropriation was spent and how this
affected the backlog. In addition, the report
must make recommendations for changes
to state law, including suggested legislative
language, to improve reporting, data entry,
and record keeping relating to future cases
involving missing persons and unidentified
bodies.

(c) Missing adults model policy

The superintendent, in consultation with
the Minnesota Sheriffs Association and the
Minnesota Chiefs of Police Association,
shall develop a model policy to address law
enforcement efforts and duties regarding
missing adults and provide training to local
law enforcement agencies on this model
policy.

By February 1, 2007, the superintendent shall
report to the chairs and ranking minority
members of the senate and house committees
and divisions having jurisdiction over
criminal justice policy and funding on the
model policy and training.

Subd. 4. Office of justice programs

(a) Gang strike force and narcotic task forces

-0-

800,000

For expanded operations of the criminal gang
strike force and narcotics task forces. This
money is to be used to expand the activities
of the criminal gang strike force and narcotics
task forces to include investigations of gang
or narcotics-related human trafficking and
domestic or international drug trafficking
cases. This appropriation must be used to
increase the complement of individuals
assigned to the criminal gang strike force and
narcotics task forces throughout the state.

(b) Safe harbor for sexually exploited youth pilot project

-0-

98,000

For a grant to Ramsey County to implement
the safe harbor for sexually exploited youth
pilot project. The project must develop a
victim services model to address the needs
of sexually exploited youth. The project
must focus on intervention and prevention
methods; training for law enforcement,
educators, social services providers, health
care workers, advocates, court officials,
prosecutors, and public defenders; and
programs promoting positive outcomes
for victims. The project must include
development and implementation of a
statewide model protocol for intervention
and response methods for professionals,
individuals, and agencies that may encounter
sexually exploited youth. "Sexually
exploited youth" include juvenile runaways,
truants, and victims of criminal sexual
conduct, prostitution, labor trafficking, sex
trafficking, domestic abuse, and assault. This
is a onetime appropriation.

By January 15, 2008, Ramsey County shall
report to the chairs and ranking minority
members of the senate and house committees
and divisions having jurisdiction over
criminal justice funding and policy on the
results of the pilot project.

(c) Human trafficking task force and plan

-0-

75,000

To implement Minnesota Statutes, sections
299A.78 to 299A.7955, relating to the human
trafficking task force and plan. This is a
onetime appropriation.

(d) Legal advocacy trafficking victims

-0-

60,000

For grants to three weekly clinics in
Hennepin County that are staffed by
attorneys from a nonprofit organization that
provides free legal services to immigrants.
This is a onetime appropriation.

(e) Toll-free hotline

-0-

35,000

To implement the toll-free hotline for
trafficking victims described in Minnesota
Statutes, section 299A.7957. The base
budget for this activity is $15,000 in fiscal
year 2008 and fiscal year 2009.

(f) Youth intervention programs

-0-

200,000

For youth intervention programs under
Minnesota Statutes, section 299A.73.
This money must be used to help existing
programs serve unmet needs in communities
and to create new programs in underserved
areas of the state. This appropriation is added
to the program's base budget and is available
until spent.

(g) Crime victim support grant

-0-

150,000

For a grant to a private, nonprofit
organization dedicated to providing
immediate and long-term emotional support
and practical help for the families and friends
of individuals who have died by homicide,
suicide, or accident. This is a onetime
appropriation.

(h) Minneapolis Security Collaborative

-0-

180,000

For a grant to the city of Minneapolis. This
grant money is to be used by the Minneapolis
Police Department to expand the worksite
system throughout the city that supports the
downtown security collaborative currently in
use in the city's first precinct. The city shall
give the highest priority to expanding the
system to neighborhoods having the highest
crime rate per capita.

(i) Additional Minneapolis peace officers

-0-

100,000

For a grant to the city of Minneapolis.
This grant money is to be used by the
Minneapolis Police Department to hire
additional peace officers to be assigned to
downtown Minneapolis.

The commissioner shall work with
the Bureau of Criminal Apprehension,
the State Patrol, the Hennepin County
Sheriff's Office, the Minneapolis Police
Department, and the Metro Transit Police,
in a collaborative manner to increase and
coordinate law enforcement efforts in
downtown Minneapolis.

(j) Financial Crimes Task Force

177,000

177,000

Sec. 6. CORRECTIONS

Subdivision 1. Total appropriation

3,213,000

3,830,000

These appropriations are added to the
appropriations in Laws 2005, chapter 136,
article 1, section 13. The amounts that may
be spent from these appropriations for each
program are specified in subdivisions 2 and
3.

Subd. 2. Correctional institutions

2,668,000

3,109,000

The commissioner may not cut correctional
officer positions. To the degree feasible,
the commissioner shall maintain chemical
dependency programs at or near current
levels. If cuts to chemical dependency
programs are necessary, the commissioner
shall attempt to preserve the state match for
federal funding.

Subd. 3. Community services

(a) General operations

545,000

-0-

(b) Mentoring program

-0-

250,000

For a grant to a nonprofit organization that
is located in the greater Twin Cities and
provides one-to-one mentoring relationships
to youth enrolled between the ages of seven
to 13 whose parent or other significant
family member is incarcerated in a county
workhouse, county jail, state prison, or other
type of correctional facility or is subject to
correctional supervision. The grant must be
used to provide children with adult mentors
to strengthen developmental outcomes,
including enhanced self-confidence and
esteem; improved academic performance;
and improved relationships with peers,
family, and other adults designed to prevent
the mentored youth from entering the
juvenile justice system.

As a condition of receiving the grant, the
grant recipient must:

(1) collaborate with other organizations
that have a demonstrated history of
providing services to youth and families in
disadvantaged situations;

(2) implement procedures to ensure that the
mentors pose no safety risk to the child and
have the skills to participate in a mentoring
relationship;

(3) provide enhanced training to mentors
focusing on asset building and family
dynamics when a parent is incarcerated; and

(4) provide individual family plan and
aftercare.

The grant recipient must submit an evaluation
plan to the commissioner delineating the
program and student outcome goals and
activities implemented to achieve the stated
outcomes. The goals must be clearly stated
and measurable. The grant recipient must
collect, analyze, and report on participation
and outcome data that enable the department
to verify that the program goals were met.

(c) Scott County

-0-

196,000

To increase the Community Corrections Act
subsidy for the addition of Scott County.
The money must be distributed according
to the community corrections aid formula
contained in Minnesota Statutes, section
401.10.

(d) Discharge planning

-0-

200,000

For discharge planning for inmates with
mental illness.

(e) Immigration specialist

-0-

75,000

For a departmental immigration specialist to
serve as a statewide resource for counties
with noncitizens convicted of criminal
offenses. The specialist shall provide
information on, and actively seek, any
federal reimbursement programs that provide
funding to states and localities for both the
direct costs under the state criminal alien
assistance program and indirect costs related
to the incarceration of noncitizens convicted
of criminal offenses.

Sec. 7. PEACE OFFICER STANDARDS AND TRAINING BOARD (POST)

The board shall conduct a training audit of its
practitioners, including chiefs of police and
county sheriffs, to determine what training
is currently offered, what new training is
necessary, and how it should be implemented.
Training topics shall include the policing of
immigrant communities and racial profiling.

Sec. 8.

Laws 2005, chapter 136, article 1, section 10, is amended to read:

Sec. 10.PEACE OFFICER STANDARDS AND TRAINING BOARD (POST)

4,154,000

4,014,000 4,214,000

EXCESS AMOUNTS TRANSFERRED.
This appropriation is from the peace officer
training account in the special revenue fund.
Any new receipts credited to that account in
the first year in excess of $4,154,000 must be
transferred and credited to the general fund.
Any new receipts credited to that account
in the second year in excess of $4,014,000
$4,214,000 must be transferred and credited
to the general fund.

TECHNOLOGY IMPROVEMENTS.
$140,000 the first year is for technology
improvements.

PEACE OFFICER TRAINING
REIMBURSEMENT. $2,909,000 each the
first year and $3,109,000 the second year is
for reimbursements to local governments for
peace officer training costs.

Sec. 9.

Minnesota Statutes 2004, section 13.6905, is amended by adding a subdivision
to read:

Subd. 1a.

Facility security assessments and plans.

Hazardous substance or oil
facility security assessments and plans are classified under section 115E.04, subdivision
4b.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 10.

Minnesota Statutes 2004, section 115E.01, subdivision 5, is amended to read:

Subd. 5.

Facility.

"Facility" means a structure, group of structures, equipment,
or device, other than a vessel, that is used for one or more of the following purposes:
exploring for, drilling for, producing, storing, handling, transferring, processing, or
transporting oil or a hazardous substance. Facility includes a motor vehicle, rolling stock,
or pipeline used for one or more of these purposes. Facility also includes a research and
development laboratory, which means a specially designated area used primarily for
research, development, and testing activity and not primarily involved in the production of
goods for commercial sale. A facility may be in, on, or under land, or in, on, or under
waters of the state as defined in section 115.01, subdivision 22.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 11.

Minnesota Statutes 2004, section 115E.01, subdivision 6, is amended to read:

Subd. 6.

Hazardous substance.

"Hazardous substance" has the meaning given
in section 115B.02, subdivision 8. In addition, hazardous substance includes the
substances listed under section 112r of the Clean Air Act, as provided by Code of Federal
Regulations, title 40, part 68.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 12.

Minnesota Statutes 2004, section 115E.01, subdivision 7, is amended to read:

Subd. 7.

Lead agency.

"Lead agency" means:

(1) the Department of Agriculture, with respect to agricultural chemicals; or

(2) the Pollution Control Agency, for other hazardous substances or oil; or

(3) the Department of Public Safety, with respect to the security planning and
security measures.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 13.

Minnesota Statutes 2004, section 115E.01, is amended by adding a subdivision
to read:

Subd. 11d.

Security measure.

"Security measure" means an action carried out to
increase the security of a facility, including employee training and background checks,
limitation and prevention of access to controls of the facility, protection of the perimeter
of the facility, installation and operation of an intrusion detection sensor, or a measure to
increase computer or computer network security.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 14.

Minnesota Statutes 2004, section 115E.01, is amended by adding a subdivision
to read:

Subd. 11e.

Use of inherently safer technology.

"Use of inherently safer
technology" means the use of a technology, product, raw material, or practice that, as
compared with the technologies, products, raw materials, or practices currently in use,
reduces or eliminates the possibility of a release, and reduces or eliminates the threats to the
public health or safety and environment associated with the release or threatened release.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 15.

Minnesota Statutes 2004, section 115E.01, subdivision 13, is amended to read:

Subd. 13.

Worst case discharge.

"Worst case discharge" means:

(1) in the case of a vessel, sudden loss of the entire contents of the vessel in weather
conditions that impede cleanup;

(2) for each tank of a storage tank facility, sudden loss of the entire contents of the
tank in weather conditions that impede cleanup;

(3) in the case of railroad rolling stock facilities, sudden loss of the contents of the
maximum expected number of the rail cars containing oil or hazardous substance of a train
onto land or into water in weather conditions that impede cleanup;

(4) in the case of truck and trailer rolling stock facilities, sudden loss of the entire
contents of the truck or trailer onto land or into water in weather conditions that impede
cleanup;

(5) in the case of a pipeline facility, sudden loss of the contents of the pipeline
which would be expected from complete failure of the pipeline onto land or into water in
weather conditions that impede cleanup;

(6) in the case of oil or hazardous substance transfer facilities, sudden loss of the
largest volume which could occur during transfer into or out of a facility; or

(7) in the case of a facility with more than the threshold quantity of any substance
listed in Code of Federal Regulations, title 40, part 68, under section 112r of the Clean
Air Act, on the property at any point in the year, sudden loss of the maximum expected
inventory of the substances; or

(8) the worst case discharge for the facility as described by regulations under the
Oil Pollution Act of 1990 if the regulations, when adopted, describe a discharge worse
than one described in clauses (1) to (6) (7).

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 16.

[115E.025] DUTY TO SECURE FACILITIES.

Subdivision 1.

General security.

A person who owns or operates a vessel or
facility transporting, storing, or otherwise handling hazardous substances or oil, or who
is otherwise in control of hazardous substances or oil, shall take reasonable security
measures to prevent the unauthorized access of persons to the facilities or to the control
mechanisms of the facilities.

Subd. 2.

Specific security measures.

The following persons shall comply with the
specific requirements of section 115E.04, subdivision 1a:

(1) persons who own or operate facilities subject to Code of Federal Regulations,
title 40, part 68, under section 112r of the Clean Air Act, except for retail facilities at
which more than one-half of the income is obtained from direct sales of ammonia or
propane to end users; and

(2) persons who own or operate facilities containing 1,000,000 gallons or more of
oil or hazardous substance in tank storage at any time.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 17.

Minnesota Statutes 2004, section 115E.04, is amended by adding a subdivision
to read:

Subd. 1a.

Security plan.

Persons required to show specific security measures
under section 115E.025, subdivision 2, shall prepare and maintain a facility security
plan. The security plan must be completed in consultation with local law enforcement
agencies. The security plan must:

(1) summarize the methods used and results of an assessment of vulnerability of
the facility to a terrorist attack or other unauthorized entry and release, the expertise
and affiliation of the evaluators, and any direct or indirect relationship between the
vulnerability evaluators and the owner or operator of the facility;

(2) provide an inventory of the hazardous substance or oil subject to the security
plan, with ranges of the quantity of each substance expected to be in the facility and
entering and leaving the facility during the course of a year;

(3) assess the use of inherently safer technology in reducing or eliminating the
vulnerability of the facility and the possibility of an unauthorized release;

(4) describe actions and procedures, including safer design and maintenance of
the facility, use of inherently safer technology, and all appropriate security measures
undertaken to eliminate or significantly lessen the vulnerability to an unauthorized entry to
the facility or an unauthorized release of oil or a hazardous substance; and

(5) list the names of all insurance carriers underwriting the facility's environmental
liability and workers' compensation insurance policies and the scope of the policies,
including any limitations and exclusions.

A plan submitted to the federal government under the Oil Pollution Act of 1990 or
prepared under any other law may be used to satisfy the security plan requirement, if the
information required by this subdivision is included in the plan. A community water
system vulnerability assessment and emergency response plan prepared under the Public
Health Security and Bioterrorism Preparedness and Response Act of 2002 may be used
to satisfy the security plan requirement.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 18.

Minnesota Statutes 2004, section 115E.04, subdivision 2, is amended to read:

Subd. 2.

Timing.

(a) A person required to be prepared under section 115E.03, other
than a person who owns or operates a motor vehicle, rolling stock, or a facility that stores
less than 250,000 gallons of oil or a hazardous substance, shall complete the response plan
required by this section by March 1, 1993, unless one of the commissioners orders the
person to demonstrate preparedness at an earlier date under section 115E.05.

(b) A person who owns or operates a motor vehicle, rolling stock, or a facility
that stores less than 250,000 gallons of oil or a hazardous substance shall complete the
response plan required by this section by January 1, 1994.

(c) A person required to prepare a security plan shall complete it within 90 days of
the effective date of this section. The security plan must be amended following significant
change in the security measures, vulnerability, or presence of hazardous substances on
the facility.

(d) Plans required under section 115E.04 or 115E.045 must be updated every three
years. Plans must be updated before three years following a significant discharge, upon
significant change in vessel or facility operation or ownership, upon significant change in
the national or area contingency plans under the Oil Pollution Act of 1990, or upon change
in the capabilities or role of a person named in a plan who has an important response role.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 19.

Minnesota Statutes 2004, section 115E.04, is amended by adding a subdivision
to read:

Subd. 4a.

Review of security plans.

(a) A person required to complete a security
plan under section 115E.025, subdivision 2, must submit a copy of the security plan to the
commissioner of public safety within five business days of its completion.

(b) The commissioner of public safety or a person authorized by the commissioner
must be granted access to the facility for the purpose of inspecting security measures.

(c) Upon the request of the commissioner of public safety or a person authorized
by the commissioner, a person shall demonstrate the adequacy of the security plan and
security measures by conducting announced or unannounced drills, calling persons and
organizations named in a security plan and verifying roles and capabilities, locating and
testing security measure procedures or equipment, questioning facility personnel, or other
means that in the judgment of the commissioner or sheriff demonstrate security. Before
requesting an unannounced security drill, the commissioner of public safety or authorized
person shall invite the county sheriff to participate in or witness the drill. If an announced
drill is conducted to the satisfaction of the commissioner, the person conducting the
security drill may not be required to conduct an additional unannounced security drill in
the same calendar year.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 20.

Minnesota Statutes 2004, section 115E.04, is amended by adding a subdivision
to read:

Subd. 4b.

Data.

Assessments and plans prepared under this section and material
specifically related to preparation, review, or approval of a plan are nonpublic data as
defined in section 13.02, except that the data may be provided to law enforcement,
firefighters, members of the National Guard, or other representatives of a government
entity responding to a request for services at a facility that is the subject of the assessment
and plan.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 21.

Minnesota Statutes 2004, section 115E.05, subdivision 1, is amended to read:

Subdivision 1.

Amendment to plan.

If one or more of the commissioners finds
the prevention and response plans or preparedness measures of a person do not meet the
requirements of this chapter, or if the commissioner of public safety finds that the security
plan does not meet the requirements of this chapter, the commissioner or commissioners
making the finding may by order require that reasonable amendments to the plan or
reasonable additional preventive or, preparedness, or security measures be implemented
in a timely fashion. If more than one commissioner makes the finding, the order must
be a joint order.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 22.

Minnesota Statutes 2004, section 115E.05, subdivision 2, is amended to read:

Subd. 2.

Compliance.

If oil or a hazardous substance is discharged while it is under
the control of a person not identified in section 115E.025 or 115E.03, subdivision 2, any
one of the commissioners with appropriate jurisdiction may by order require the person to
comply with the prevention and response plan or security plan requirements of sections
115E.03 and 115E.04 in a timely manner if:

(1) land, water, or air of the state is polluted or threatened; or

(2) human life, safety, health, natural resources, or property is damaged or threatened.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 23.

Minnesota Statutes 2004, section 115E.08, subdivision 3, is amended to read:

Subd. 3.

Jurisdiction.

Except as otherwise provided, the following agencies have
primary responsibility for the specified areas in carrying out the duties and authorities
of this chapter:

(1) the Department of Agriculture, for agricultural chemicals;

(2) the Department of Public Safety, for public safety and, protection of property,
and security measures;

(3) the Department of Natural Resources, for assessment and rehabilitation of water
resources;

(4) the Pollution Control Agency, for all other matters subject to this chapter; and

(5) the Department of Transportation, with respect to requirements related to the
packaging, labeling, placarding, routing, and written reporting on releases of hazardous
materials that are being transported.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 24.

Minnesota Statutes 2005 Supplement, section 299A.78, is amended to read:

299A.78 STATEWIDE HUMAN TRAFFICKING ASSESSMENT.

Subdivision 1.

Definitions.

For purposes of sections 299A.78 to , the following definitions apply:

(a) "Commissioner" means the commissioner of the Department of Public Safety.

(b) "Nongovernmental organizations" means nonprofit, nongovernmental
organizations that provide legal, social, or other community services.

(c) "Blackmail" has the meaning given in section 609.281, subdivision 2.

(d) "Debt bondage" has the meaning given in section 609.281, subdivision 3.

(e) "Forced labor or services" has the meaning given in section 609.281, subdivision
4.

(f) "Labor trafficking" has the meaning given in section 609.281, subdivision 5.

(g) "Labor trafficking victim" has the meaning given in section 609.281, subdivision
6.

(h) "Sex trafficking" has the meaning given in section 609.321, subdivision 7a.

(i) "Sex trafficking victim" has the meaning given in section 609.321, subdivision 7b.

(j) "Trafficking" includes "labor trafficking" and "sex trafficking."

(k) "Trafficking victim" includes "labor trafficking victim" and "sex trafficking
victim."

Subd. 2.

General duties.

The commissioner of public safety, in cooperation with
local authorities, shall:

(1) collect, share, and compile trafficking data among government agencies to assess
the nature and extent of trafficking in Minnesota.; and

(2) analyze the collected data to develop a plan to address and prevent human
trafficking.

Subd. 3.

Outside services.

As provided for in section 15.061, the commissioner of
public safety may contract with professional or technical services in connection with the
duties to be performed under section sections 299A.785, 299A.79, and 299A.795. The
commissioner may also contract with other outside organizations to assist with the duties
to be performed under section sections 299A.785, 299A.79, and 299A.795.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 25.

[299A.79] TRAFFICKING STUDY; ANALYSIS AND USE OF DATA.

Subdivision 1.

Data analysis.

The commissioner shall analyze the data collected
in section 299A.785 to develop a plan to address current trafficking and prevent future
trafficking in this state. The commissioner may evaluate various approaches used by
other state and local governments to address trafficking. The plan must include, but not
be limited to:

(1) ways to train agencies, organizations, and officials involved in law enforcement,
prosecution, and social services;

(2) ways to increase public awareness of trafficking; and

(3) procedures to enable the state government to work with nongovernmental
organizations to prevent trafficking.

Subd. 2.

Training plan.

The training plan required in subdivision 1 must include:

(1) methods used in identifying trafficking victims, including preliminary interview
techniques and appropriate interrogation methods;

(2) methods for prosecuting traffickers;

(3) methods for protecting the rights of trafficking victims, taking into account
the need to consider human rights and special needs of women and children trafficking
victims; and

(4) methods for promoting the safety of trafficking victims.

Subd. 3.

Public awareness initiative.

The public awareness initiative required in
subdivision 1 must address, at a minimum, the following subjects:

(1) the risks of becoming a trafficking victim;

(2) common recruitment techniques; use of debt bondage, blackmail, forced labor
and services, prostitution, and other coercive tactics; and risks of assault, criminal sexual
conduct, exposure to sexually transmitted diseases, and psychological harm;

(3) crime victims' rights; and

(4) reporting recruitment activities involved in trafficking.

Subd. 4.

Report to legislature.

The commissioner shall report the plan to the chairs
and ranking minority members of the senate and house committees and divisions having
jurisdiction over criminal justice policy and funding by December 15, 2006.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 26.

[299A.795] TRAFFICKING VICTIM ASSISTANCE.

The commissioner may review the existing services and facilities to meet trafficking
victims' needs and recommend a plan that would coordinate the services including, but
not limited to:

(1) medical and mental health services;

(2) housing;

(3) education and job training;

(4) English as a second language;

(5) interpreting services;

(6) legal and immigration services; and

(7) victim compensation.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 27.

[299A.7955] HUMAN TRAFFICKING TASK FORCE.

Subdivision 1.

Creation and duties.

By September 1, 2006, the commissioner shall
appoint a 22-member task force on human trafficking to advise the commissioner on the
commissioner's duties in sections 299A.78 to 299A.795. The task force shall also serve as
a liaison between the commissioner and agencies and nongovernmental organizations that
provide services to trafficking victims. The members must receive expense reimbursement
as specified in section 15.059.

Subd. 2.

Membership.

To the extent possible, the human trafficking task force
consists of the following individuals, or their designees, who are knowledgeable in
trafficking, crime victims' rights, or violence protection:

(1) a representative of the Minnesota Chiefs of Police Association;

(2) a representative of the Bureau of Criminal Apprehension;

(3) a representative of the Minnesota Sheriffs' Association;

(4) a peace officer who works and resides in the metropolitan area, composed of
Hennepin, Ramsey, Anoka, Dakota, Scott, Washington, and Carver Counties;

(5) a peace officer who works and resides in the nonmetropolitan area;

(6) a county attorney who works in Hennepin County;

(7) a county attorney who works in Ramsey County;

(8) a representative of the attorney general's office;

(9) a representative of the Department of Public Safety's office of justice program;

(10) a representative of the federal Homeland Security Department;

(11) a representative of the Department of Health and Human Services;

(12) the chair or executive director of the Council on Asian-Pacific Minnesotans;

(13) the chair or executive director of the Minnesota Chicano-Latino Affairs Council;

(14) a representative of the United States Attorney's Office; and

(15) eight representatives from nongovernmental organizations, which may include
representatives of:

(i) the Minnesota Coalition for Battered Women;

(ii) the Minnesota Coalition Against Sexual Assault;

(iii) a statewide or local organization that provides civil legal services to women
and children;

(iv) a statewide or local organization that provides mental health services to women
and children;

(v) a statewide or local human rights and social justice advocacy organization;

(vi) a statewide or local organization that provides services to victims of torture,
trauma, or human trafficking;

(vii) a statewide or local organization that serves the needs of immigrants and
refugee women and children from diverse ethnic communities; and

(viii) a statewide or local organization that provides legal services to low-income
immigrants.

Subd. 3.

Officers; meetings.

(a) The task force shall annually elect a chair and
vice-chair from among its members, and may elect other officers as necessary. The task
force shall meet at least quarterly, or upon the call of its chair. The task force shall meet
sufficiently enough to accomplish the tasks identified in this section.

(b) The task force shall seek out and enlist the cooperation and assistance of
nongovernmental organizations and academic researchers, especially those specializing in
trafficking, representing diverse communities disproportionately affected by trafficking, or
focusing on child services and runaway services.

Subd. 4.

Expiration.

Notwithstanding section 15.059, the task force expires June
30, 2011, or once it has implemented and evaluated the programs and policies in sections
299A.78 to 299A.795 to the satisfaction of the commissioner, whichever occurs first.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 28.

[299A.7957] TOLL-FREE HOTLINE FOR TRAFFICKING VICTIMS.

(a) As used in this section, "trafficking victim" has the meaning given in section
299A.78, subdivision 1.

(b) The commissioner of public safety shall contract with a nonprofit organization
that provides legal services to domestic and international trafficking victims to maintain a
toll-free telephone hotline for trafficking victims.

The hotline must be in place by January 1, 2007, and must be operated 24 hours
a day, 365 days a year. The hotline must offer language interpreters for languages
commonly spoken in Minnesota, including, but not limited to, Spanish, Vietnamese,
Hmong, and Somali. At a minimum, the hotline must screen trafficking victims, both
domestic and international, and provide appropriate referrals to attorneys and victims'
services organizations.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 29.

Minnesota Statutes 2004, section 488A.03, subdivision 6, is amended to read:

Subd. 6.

Disposition of fines, fees and other money; accounts.

(a) Except as
otherwise provided herein within this subdivision and except as otherwise provided by law,
the court administrator shall pay to the Hennepin county treasurer all fines and penalties
collected by the court administrator, all fees collected by the court administrator for court
administrator's services, all sums forfeited to the court as hereinafter provided in this
subdivision, and all other money received by the court administrator. to the subdivision
of government entitled to it as follows on or before the 20th day after the last day of
the month in which the money was collected. Eighty percent of all fines and penalties
collected during the previous month shall be paid to the treasurer of the municipality or
subdivision of government where the crime was committed. The remainder of the fines
and penalties shall be credited to the general fund of the state. In all cases in which the
county attorney had charge of the prosecution, all fines and penalties shall be credited
to the state general fund.

(b) The court administrator shall provide the county treasurer with identify the name
of the municipality or other subdivision of government where the offense was committed
and the name and official position of the officer who prosecuted the offense for each fine
or penalty, and the total amount of fines or penalties collected for each such municipality
or other subdivision of government, or for the county, or for the state.

(c) At the beginning of the first day of any month the amount owing to any
municipality or county in the hands of the court administrator shall not exceed $5,000.

(d) On or before the last day of each month the county treasurer shall pay over to
the treasurer of each municipality or subdivision of government in Hennepin County all
fines or penalties collected during the previous month for offenses committed within
such municipality or subdivision of government, except that all such fines and penalties
attributable to cases in which the county attorney had charge of the prosecution shall be
retained by the county treasurer and credited to the county general revenue fund.

(e) (c) Amounts represented by checks issued by the court administrator or received
by the court administrator which have not cleared by the end of the month may be shown
on the monthly account as having been paid or received, subject to adjustment on later
monthly accounts.

(f) (d) The court administrator may receive negotiable instruments in payment
of fines, penalties, fees or other obligations as conditional payments, and is not held
accountable therefor for this until collection in cash is made and then only to the extent of
the net collection after deduction of the necessary expense of collection.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 30.

Minnesota Statutes 2004, section 488A.03, subdivision 11, is amended to read:

Subd. 11.

Fees payable to administrator.

(a) The civil fees payable to the
administrator for services are the same in amount as the fees then payable to the District
Court of Hennepin County for like services. Library and filing fees are not required of
the defendant in an eviction action. The fees payable to the administrator for all other
services of the administrator or the court shall be fixed by rules promulgated by a majority
of the judges.

(b) Fees are payable to the administrator in advance.

(c) Judgments will be entered only upon written application.

(d) The following fees shall be taxed for all charges filed in court where applicable:
(a) The state of Minnesota and any governmental subdivision within the jurisdictional area
of any district court herein established may present cases for hearing before said district
court; (b) In the event the court takes jurisdiction of a prosecution for the violation of a
statute or ordinance by the state or a governmental subdivision other than a city or town
in Hennepin County, all fines, penalties, and forfeitures collected shall be paid over to
the treasurer of the governmental subdivision which submitted charges for prosecution
under ordinance violation and to the county treasurer in all other charges except where
a different disposition is provided by law, in which case, payment shall be made to
the public official entitled thereto. The following fees shall be taxed to the county or
to the state or governmental subdivision which would be entitled to payment of the
fines, forfeiture or penalties in any case, and shall be paid to the court administrator for
disposing of the matter:

(1) For each charge where the defendant is brought into court and pleads guilty and
is sentenced, or the matter is otherwise disposed of without trial .......... $5.

(2) In arraignments where the defendant waives a preliminary examination ..........
$10.

(3) For all other charges where the defendant stands trial or has a preliminary
examination by the court .......... $15.

(e) This paragraph applies to the distribution of fines paid by defendants without a
court appearance in response to a citation. On or before the tenth day after the last day of
the month in which the money was collected, the county treasurer shall pay 80 percent
of the fines to the treasurer of the municipality or subdivision within the county where
the violation was committed. The remainder of the fines shall be credited to the general
revenue fund of the county.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 31. REPEALER.

Minnesota Statutes 2004, section 488A.03, subdivision 11b, is repealed.

EFFECTIVE DATE.

This section is effective July 1, 2006.

ARTICLE 16

STATE GOVERNMENT

Section 1. STATE GOVERNMENT APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to the
appropriations in Laws 2005, chapter 156, article 1, or other law to the agencies and for
the purposes specified in this article. The appropriations are from the general fund or
another named fund and are available for the fiscal years indicated for each purpose. The
figures "2006" and "2007" used in this article mean that the addition to the appropriation
listed under them is available for the fiscal year ending June 30, 2006, or June 30,
2007, respectively. "The first year" is fiscal year 2006. "The second year" is fiscal year
2007. "The biennium" is fiscal years 2006 and 2007. Supplementary appropriations and
reductions to appropriations for the fiscal year ending June 30, 2006, are effective the
day following final enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	4,250,000	$	5,057,000	$	9,307,000
Workers' Compensation	$	-0-	$	320,000	$	320,000
TOTAL	$	4,250,000	$	5,377,000	$	9,627,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. LEGISLATURE

Subdivision 1. Total Appropriation

$

-0-

$

37,000

The appropriations in this section are to the
Legislative Coordinating Commission for
the purposes in subdivisions 2 and 3.

Subd. 2. Legislative forums

30,000

For the cost of annual forums to improve
legislative effectiveness, as required by
Minnesota Statutes, section 3.051.

Subd. 3. International Legislators' Forum

7,000

For the International Legislators' Forum,
to allow Minnesota legislators to meet with
counterparts from South Dakota, North
Dakota, and Manitoba, Canada, to discuss
issues of mutual concern. This is a onetime
appropriation.

Sec. 3. GOVERNOR AND LIEUTENANT GOVERNOR

(700,000)

Interagency agreements

This reduction is intended to offset the value
of employees provided to the Office of the
Governor and Lieutenant Governor through
interagency agreements. This is a onetime
reduction in appropriation.

Sec. 4. FINANCE

-0-

200,000

Northwest Airlines bankruptcy counsel

For the state's share of the cost of bankruptcy
counsel representing joint interests of the
state and the city of Duluth in the Northwest
Airlines bankruptcy. The commissioner
must request the city of Duluth to pay
its proportional share of the cost of the
bankruptcy counsel. This is a onetime
appropriation.

Sec. 5. OFFICE OF ENTERPRISE TECHNOLOGY

-0-

1,900,000

For comprehensive planning,
implementation, and administration of
enterprise information technology security
according to Minnesota Statutes, sections
16E.01 and 16E.03. $1,700,000 is added
to the appropriation base for fiscal years
2008 and thereafter to provide for continuing
administration of enterprise security.

Sec. 6. OFFICE OF ADMINISTRATIVE HEARINGS

-0-

320,000

From the workers' compensation fund
for costs associated with the relocation
of offices to St. Paul. The commissioner
of administration shall take all steps as
necessary to complete the renovation of
the Stassen Building for these purposes by
June 30, 2007. Minnesota Statutes, section
16B.33, subdivision 3, does not apply if
the estimated cost of construction exceeds
$2,000,000. This is a onetime appropriation.

Beginning in fiscal year 2009 and for all
fiscal years thereafter, the appropriation base
for the workers' compensation fund for the
Office of Administrative Hearings is reduced
by $297,000 to reflect savings in rent costs
due to the relocation of offices to St. Paul.

Sec. 7. EMPLOYEE RELATIONS

Subdivision 1. Total Appropriation

4,000,000

100,000

This appropriation may be spent for the
purposes in subdivisions 2 and 3.

Subd. 2. Government shutdown reimbursement

4,000,000

To reimburse state employees, as defined
in Minnesota Statutes, section 43A.02,
subdivision 21, for hours for which they
were not compensated due to the partial
government shutdown of July 1, 2005, to
July 14, 2005.

The commissioner of employee relations
must determine the number of hours an
employee was prevented from working due
to the partial government shutdown. The
commissioner must credit an employee's
vacation bank with the number of hours
so determined. Notwithstanding any law
or policy to the contrary, an employee
credited with hours under this subdivision
may choose to be paid in cash for these
hours, rather than having the hours credited
to the employee's vacation bank. If a
memorandum of understanding or other
agreement or policy provides an employee
with partial compensation for hours not
worked due to the partial government
shutdown, compensation provided under
that agreement or policy must be subtracted
from compensation in cash or in credit to
the employee's vacation bank that otherwise
would be due under this subdivision. The
commissioner must make payments or
credits required by this subdivision within 30
days of the effective date of this section. The
commissioner must also use this general fund
appropriation to reimburse funds other than
the general fund for the cost of the payments
or credits required by this subdivision. If
the appropriation is insufficient to cover all
reimbursements, it must be prorated among
the eligible agencies and funds in proportion
to their share of the total amount reimbursed.
This is a onetime appropriation.

Subd. 3. Center for Health Care Purchasing Improvement

100,000

To establish and operate the Center for
Health Care Purchasing Improvement. This
is a onetime appropriation.

Sec. 8. VETERANS AFFAIRS

Subdivision 1. Total Appropriation

250,000

3,430,000

This appropriation may be spent for the
purposes in subdivisions 2 to 7.

Subd. 2. Soldiers' assistance fund

1,900,000

For deposit in the state soldiers' assistance
fund established in Minnesota Statutes,
section 197.03.

Subd. 3. Web site development

100,000

To create a centralized Web site to contain
information on all state, federal, local, and
private agencies and organizations that
provide goods or services to veterans or their
families.

Subd. 4. Grants to counties

200,000

For grants to counties under the terms of this
subdivision. The commissioner shall issue a
request for proposals for grants to enhance
the benefits, programs, and services provided
to veterans. The request must specify that
priority will be given to proposals that meet
the programmatic goals established by the
commissioner, including proposals that:

(1) will provide the most effective outreach
to veterans;

(2) reintegrate combat veterans into society;

(3) collaborate with other social service
agencies, educational institutions, and other
relevant community resources;

(4) reduce homelessness among veterans;
and

(5) provide measurable outcomes.

The commissioner may provide incentives to
encourage regional collaboration for service
delivery.

The grants may be for a term of up to two
years. The commissioner shall ensure that
grants are made throughout all regions of
the state and shall develop a description of
best practices for the use of these grants. A
county may not reduce its veterans service
office budget by any amount received as a
grant under this subdivision. Grants made
under this subdivision are in addition to
and not subject to the requirements for
grants made under Minnesota Statutes,
section 197.608. The Vinland Center and the
Minnesota Assistance Council for Veterans
may apply for grants under this subdivision
in fiscal year 2007. This appropriation must
be included in the appropriation base through
fiscal year 2009.

Subd. 5. Higher education veterans assistance offices

900,000

For the higher education veterans assistance
program in section 13. This appropriation
must be included in the appropriation base
through fiscal year 2009.

Subd. 6. Outreach and assistance

250,000

250,000

For an outreach and assistance initiative for
underserved veterans.

Subd. 7. Veterans organizations

80,000

For veterans' services provided by Veterans
of Foreign Wars, the Military Order of the
Purple Heart, Disabled American Veterans,
and the Vietnam Veterans of America. This
is a onetime appropriation.

Sec. 9. AMATEUR SPORTS COMMISSION

-0-

90,000

This is a onetime appropriation.

Sec. 10.

[3.051] LEGISLATIVE TRAINING FORUMS.

Subdivision 1.

Purposes.

The Legislative Coordinating Commission shall oversee
two legislative training forums each year. The commission shall:

(1) create an annual gathering of legislators to be held within the first two weeks of
January each year, and one other legislative training forum each year;

(2) select speakers, including executive or nonpartisan legislative staff, who
will provide an overview of the issues affecting Minnesota, including demographic,
environmental, sociological, and economic perspectives on Minnesota, background on key
policy issues the legislature is expected to address that year, training to improve legislative
skills in running effective meetings, and training on other issues; and

(3) invite current executive branch officials in order to provide opportunities for
legislators and invited executive branch officials to interact and work to form cooperative
solutions to Minnesota issues, problems, and challenges.

Subd. 2.

Partners.

The Legislative Coordinating Commission may select a partner
or partners from Minnesota's institutions of higher education and nonprofit communities,
and if such a choice is made, must give all interested institutions an opportunity to submit
a proposal to conduct the training, schedule activities, and create meeting agendas. The
commission may accept donations from foundations, corporations, and individuals to
defray costs of the forums, and shall publish those donations on the legislature's Web site.
A registered lobbyist or principal may not contribute for this purpose. Donations received
are appropriated to the Legislative Coordinating Commission for purposes of this section.

Sec. 11.

[16E.21] INFORMATION AND TELECOMMUNICATIONS
ACCOUNT.

Subdivision 1.

Account established; appropriation.

The information and
telecommunications technology systems and services account is created in the special
revenue fund. Receipts credited to the account are appropriated to the Office of Enterprise
Technology for the purpose of defraying the costs of personnel and technology for
activities that create government efficiencies in accordance with this chapter.

Subd. 2.

Charges.

Upon agreement of the participating agency, the Office
of Enterprise Technology may collect a charge for purchases of information and
telecommunications technology systems and services by state agencies and other
governmental entities through state contracts for purposes described in subdivision
1. Charges collected under this section must be credited to the information and
telecommunications technology systems and services account.

Sec. 12.

[43A.312] CENTER FOR HEALTH CARE PURCHASING
IMPROVEMENT.

Subdivision 1.

Establishment; administration.

The commissioner shall establish
and administer the Center for Health Care Purchasing Improvement as an administrative
unit within the Department of Employee Relations. The Center for Health Care Purchasing
Improvement shall support the state in its efforts to be a more prudent and efficient
purchaser of quality health care services. The center shall aid the state in developing and
using more common strategies and approaches for health care performance measurement
and health care purchasing. The common strategies and approaches shall promote greater
transparency of health care costs and quality, and greater accountability for health
care results and improvement. The center shall also identify barriers to more efficient,
effective, quality health care and options for overcoming the barriers.

Subd. 2.

Staffing; duties; scope.

(a) The commissioner may appoint a director, and
up to three additional senior-level staff or codirectors, and other staff as needed who are
under the direction of the commissioner. The staff of the center are in the unclassified
service.

(b) With the authorization of the commissioner of employee relations, and in
consultation or interagency agreement with the appropriate commissioners of state
agencies, the director, or codirectors, may:

(1) initiate projects to develop plan designs for state health care purchasing;

(2) require reports or surveys to evaluate the performance of current health care
purchasing strategies;

(3) calculate fiscal impacts, including net savings and return on investment, of health
care purchasing strategies and initiatives;

(4) conduct policy audits of state programs to measure conformity to state statute or
other purchasing initiatives or objectives;

(5) support the Administrative Uniformity Committee under section 62J.50 and
other relevant groups or activities to advance agreement on health care administrative
process streamlining;

(6) consult with the Health Economics Unit of the Department of Health regarding
reports and assessments of the health care marketplace;

(7) consult with the departments of Health and Commerce regarding health care
regulatory issues and legislative initiatives;

(8) work with appropriate Department of Human Services staff and the Centers for
Medicare and Medicaid Services to address federal requirements and conformity issues
for health care purchasing;

(9) assist the Minnesota Comprehensive Health Association in health care
purchasing strategies;

(10) convene medical directors of agencies engaged in health care purchasing for
advice, collaboration, and exploring possible synergies;

(11) contact and participate with other relevant health care task forces, study
activities, and similar efforts with regard to health care performance measurement and
performance-based purchasing; and

(12) assist in seeking external funding through appropriate grants or other funding
opportunities and may administer grants and externally funded projects.

Subd. 3.

Report.

The commissioner must report annually to the legislature and the
governor on the operations, activities, and impacts of the center. The report must be
posted on the Department of Employee Relations Web site and must be available to the
public. The report must include a description of the state's efforts to develop and use more
common strategies for health care performance measurement and health care purchasing.
The report must also include an assessment of the impacts of these efforts, especially in
promoting greater transparency of health care costs and quality, and greater accountability
for health care results and improvement.

Sec. 13. HIGHER EDUCATION VETERANS ASSISTANCE PROGRAM.

Subdivision 1.

Assistance provided.

The commissioner of veterans affairs shall
provide central liaison staff and campus veterans assistance officers to serve the needs
of students who are veterans at higher education institutions in Minnesota. Methods of
assistance may include, but are not limited to, work-study positions for veterans, and
providing information and assistance regarding the availability of state, federal, local,
and private resources.

Subd. 2.

Steering committee.

The commissioner of veterans affairs shall chair a
higher education veterans assistance program steering committee composed of:

(1) the adjutant general or the adjutant general's designee;

(2) a representative of Minnesota State Colleges and Universities, designated by
the chancellor;

(3) a representative of the University of Minnesota, appointed by the president of
the university;

(4) a representative of private colleges and universities in Minnesota, appointed by
the governor;

(5) a representative of the Office of Higher Education, appointed by the executive
director;

(6) a representative of county veterans service offices, appointed by the
commissioner of veterans affairs; and

(7) a representative of the Department of Employment and Economic Development,
appointed by the commissioner of that department.

The steering committee shall advise the commissioner of veterans affairs regarding the
allocation of appropriations for the purposes of this section and shall develop a long-range
plan to serve the needs of students at higher education institutions in Minnesota who are
veterans.

Subd. 3.

Office space provided.

Each campus of the University of Minnesota and
each institution within the Minnesota State Colleges and Universities system shall provide
adequate space for a veterans assistance office to be administered by the commissioner
of veterans affairs, and each private college and university in Minnesota is encouraged
to provide adequate space for a veterans assistance office to be administered by the
commissioner of veterans affairs. The veterans assistance office must provide information
and assistance to veterans who are students or family members of students at the school
regarding the availability of state, federal, local, and private resources.

Subd. 4.

Report.

Beginning January 15, 2007, and each year thereafter, the
steering committee established in subdivision 2 shall report to the chairs of the legislative
committees with jurisdiction over veterans affairs policy and finance and higher education
policy and finance regarding the implementation and effectiveness of the program
established in this section.

Subd. 5.

Expiration.

This section expires on June 30, 2009.

Sec. 14. EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 17

HUMAN SERVICES FORECAST ADJUSTMENTS

Section 1. DEPARTMENT OF HUMAN SERVICES FORECAST ADJUSTMENT.

The dollar amounts shown are added to or, if shown in parentheses, subtracted from,
the appropriations in Laws 2005, First Special Session chapter 4, and are appropriated
from the general fund, or any other fund named, to the Department of Human Services for
the purposes specified in this article, to be available for the fiscal year indicated for each
purpose. The figures "2006" and "2007" used in this article mean that the appropriation or
appropriations listed are available for the respective fiscal year ending June 30, 2006, or
June 30, 2007.

SUMMARY BY FUND
				2006		2007
General Fund			$	(58,333,000)	$	(17,589,000)
Health Care Access Fund				(44,511,000)		(62,360,000)
TANF				(13,807,000)		(3,866,000)
TOTAL			$	(116,651,000)	$	(83,815,000)

Sec. 2. COMMISSIONER OF HUMAN SERVICES

Subdivision 1. Total Appropriation

$

(116,651,000)

$

(83,815,000)

Summary by Fund
General	(58,333,000)	(17,589,000)
Health Care Access	(44,511,000)	(62,360,000)
TANF	(13,807,000)	(3,866,000)

Subd. 2. Revenue and Pass-Through

TANF

(1,446,000)

(1,177,000)

Subd. 3. Children and Economic Assistance Grants

General

(4,469,000)

1,785,000

TANF

(12,361,000)

(2,689,000)

The amount that may be spent from this
appropriation for each purpose is as follows:

(a) Minnesota Family Investment Program

General

6,048,000

(393,000)

TANF

(12,361,000)

(2,689,000)

(b) MFIP Child Care Assistance Grants

(5,090,000)

2,751,000

(c) General Assistance

2,540,000

3,947,000

(d) Minnesota Supplemental Aid

(285,000)

551,000

(e) Group Residential Housing

(7,682,000)

(5,071,000)

Subd. 4. Basic Health Care Grants

General

(19,022,000)

10,499,000

Health Care Access

(44,511,000)

(62,360,000)

The amount that may be spent from this
appropriation for each purpose is as follows:

(a) MinnesotaCare

(44,511,000)

(62,360,000)

This appropriation is from the health care
access fund.

(b) MA Basic Health Care - Families and Children

(29,882,000)

(54,401,000)

(c) MA Basic Health Care - Elderly and Disabled

(2,857,000)

33,179,000

(d) General Assistance Medical Care

13,717,000

31,721,000

Subd. 5. Continuing Care Grants

(34,842,000)

(29,873,000)

The amount that may be spent from this
appropriation for each purpose is as follows:

(a) MA Long-Term Care Waivers

(23,368,000)

(35,953,000)

(b) MA Long-Term Care Facilities

(16,251,000)

(5,202,000)

(c) Chemical Dependency Entitlement Grants

4,777,000

11,282,000

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 18

HEALTH DEPARTMENT

Section 1.

[144.366] E-HEALTH RECORD GRANTS.

Subdivision 1.

Definitions.

The following definitions are used for the purposes
of this section.

(a) "Eligible community e-health collaborative" means an existing or newly
established collaborative to support the adoption and use of interoperable electronic
health records. A collaborative must consist of at least three or more eligible health
care entities in at least two of the categories listed in paragraph (b) and have a focus on
interconnecting the members of the collaborative for secure and interoperable exchange of
health care information.

(b) "Eligible health care entity" means one of the following:

(1) community clinics, as defined under section 145.9268;

(2) hospitals eligible for rural hospital capital improvement grants, as defined
in section 144.148;

(3) physician clinics located in a community with a population of less than 50,000
according to United States Census Bureau statistics and outside the seven-county
metropolitan area;

(4) nursing facilities licensed under sections 144A.01 to 144A.27;

(5) community health boards as established under chapter 145A;

(6) nonprofit entities with a purpose to provide health information exchange
coordination governed by a representative, multistakeholder board of directors; and

(7) other providers of health or health care services approved by the commissioner
for which interoperable electronic health record capability would improve quality of
care, patient safety, or community health.

Subd. 2.

Grants authorized.

The commissioner of health shall award grants to
eligible community e-health collaborative projects to improve the implementation and
use of interoperable electronic health records including, but not limited to, the following
projects:

(1) collaborative efforts to host and support fully functional interoperable electronic
health records in multiple care settings;

(2) electronic medication history and electronic patient registration information;

(3) electronic personal health records for persons with chronic diseases and for
prevention services;

(4) rural and underserved community models for electronic prescribing; and

(5) enabling local public health systems to rapidly and electronically exchange
information needed to participate in community e-health collaboratives or for public
health emergency preparedness and response.

Grant funds may not be used for construction of health care or other buildings or
facilities.

Subd. 3.

Allocation of grants.

(a) To receive a grant under this section, an eligible
community e-health collaborative must submit an application to the commissioner of
health by the deadline established by the commissioner. A grant may be awarded upon the
signing of a grant contract. In awarding grants, the commissioner shall give preference to
projects benefiting providers located in rural and underserved areas of Minnesota which
the commissioner has determined have an unmet need for the development and funding
of electronic health records. Applicants may apply for and the commissioner may award
grants for one-year, two-year, or three-year periods.

(b) An application must be on a form and contain information as specified by the
commissioner, but at a minimum must contain:

(1) a description of the purpose or project for which grant funds will be used;

(2) a description of the problem or problems the grant funds will be used to address,
including an assessment likelihood of the project occurring absent grant funding;

(3) a description of achievable objectives; a workplan; a budget and budget
narrative; a project communications plan; a timeline for implementation and completion
of processes or projects enabled by the grant; and an assessment of privacy and security
issues, and a proposed approach to address these issues;

(4) a description of the health care entities and other groups participating in the
project, including identification of the lead entity responsible for applying for and
receiving grant funds;

(5) a plan for how patients and consumers will be involved in development of
policies and procedures related to the access to and interchange of information;

(6) evidence of consensus and commitment among the health care entities and others
who developed the proposal and are responsible for its implementation; and

(7) a plan for documenting and evaluating results of the grant.

(c) The commissioner shall review each application to determine whether the
application is complete and whether the applicant and the project are eligible for a
grant. In evaluating applications, the commissioner shall take into consideration factors
including, but not limited to, the following:

(1) the degree to which the proposal interconnects the various providers of care
in the applicant's geographic community;

(2) the degree to which the project provides for the interoperability of electronic
health records or related health information technology between the members of the
collaborative, and the presence and scope of a description of how the project intends to
interconnect with other providers not part of the project in the future;

(3) the degree to which the project addresses current unmet needs pertaining
to interoperable electronic health records in a geographic area of Minnesota and the
likelihood that the needs would not be met absent grant funds;

(4) the applicant's thoroughness and clarity in describing the project; how the project
will improve patient safety, quality of care, and consumer empowerment; and the role of
the various collaborative members;

(5) the recommendations of the Health Information and Technology Infrastructure
Advisory Committee; and

(6) other factors that the commissioner deems relevant.

(d) Grant funds shall be awarded on a three-to-one match basis. Applicants shall
be required to provide $1 in the form of cash or in-kind staff or services for each $3
provided under the grant program.

(e) Grants shall not exceed $900,000 per grant. The commissioner has discretion
over the size and number of grants awarded.

Subd. 4.

Evaluation and report.

The commissioner of health shall evaluate the
overall effectiveness of the grant program. The commissioner shall collect progress
and expenditure reports to evaluate the grant program from the eligible community
collaboratives receiving grants. Every two years, as part of the evaluation, the
commissioner shall, in coordination with the Health Information Technology and
Infrastructure Advisory Committee, report to the legislature on the needs of the community
and provide any recommendations for adding or changing eligible activities.

Sec. 2.

[144.90] STATE-LEVEL METHAMPHETAMINE COORDINATOR.

Subdivision 1.

Establishment; purpose; appointment.

A state-level,
statewide methamphetamine coordinator is created in the Department of Health. The
methamphetamine coordinator shall coordinate Minnesota's efforts to reduce the incidence
of methamphetamine addiction and related consequences by working with various state
agencies, local units of government, law enforcement, courts, the chemical dependency
treatment community, the federal government, other states, and other interested individuals
and parties in order to coordinate the state's resources to provide and oversee education,
research, and training related to methamphetamine. To the extent possible, the coordinator
must coordinate efforts with tribal governments. The coordinator shall be appointed by
the governor.

Subd. 2.

Duties.

The duties of the methamphetamine coordinator include, but
are not limited to:

(1) providing health-based information and safety training materials to law
enforcement, first responders, and others exposed to methamphetamine use and
manufacturing;

(2) promoting and tracking first responder training provided by the Minnesota Bureau
of Criminal Apprehension, the United States Drug Enforcement Agency, and others;

(3) providing train-the-trainer materials for state and local agencies and community
groups working to respond to methamphetamine problems in their communities;

(4) serving as a clearinghouse for information and materials on all aspects
of methamphetamine response, including treatment and treatment providers, law
enforcement, corrections and drug courts, education, prevention, children's issues, staff
training and safety, and K-12 curricula;

(5) tracking of grant and other funding opportunities available to Minnesota
agencies, organizations, and communities;

(6) coordinating media-based prevention opportunities, including methamphetamine
and other antidrug materials available for use by local communities;

(7) establishing a speaker's bureau of experts on methamphetamine and other
addictions;

(8) fielding methamphetamine-related calls;

(9) maintaining current knowledge and understanding of methamphetamine-related
research in the areas of remediation, children's health, health of users, best prevention
and treatment practices, and other issues;

(10) tracking trends in use, manufacturing, incidence of methamphetamine labs
and seizures, costs, incarcerations, and child involvement nationwide and for Minnesota
specifically;

(11) making recommendations to the legislature for methamphetamine policy
changes and funding;

(12) serving as coordinator or point-of-contact for a Minnesota drug endangered
children's alliance; and

(13) coordinating prevention information efforts related to methamphetamine with
the Minnesota Prevention Resource Center.

Subd. 3.

Toll-free telephone number.

The coordinator shall establish a toll-free
telephone number during business hours for providing information and counseling on
methamphetamine use and addiction.

Subd. 4.

Annual report.

The methamphetamine coordinator shall submit to the
legislature an annual report by January 15 of each year beginning January 15, 2008,
summarizing goals that have been established and met, and plans for the upcoming year.

Subd. 5.

Office space.

The commissioner of health shall provide the coordinator
with adequate office space and administrative services.

Sec. 3.

Laws 2005, First Special Session chapter 4, article 9, section 3, subdivision 2,
is amended to read:

Subd. 2. Community and Family Health Improvement

Summary by Fund
General	40,413,000	40,382,000
State Government Special Revenue	141,000	128,000
Health Care Access	3,510,000	3,516,000
Federal TANF	6,000,000	6,000,000

FAMILY PLANNING BASE
REDUCTION. Base level funding for
the family planning special projects grant
program is reduced by $1,877,000 each
year of the biennium beginning July 1,
2007, provided that this reduction shall
only take place upon full implementation of
the family planning project section of the
1115 waiver. Notwithstanding Minnesota
Statutes, section 145.925, the commissioner
shall give priority to community health care
clinics providing family planning services
that either serve a high number of women
who do not qualify for medical assistance
or are unable to participate in the medical
assistance program as a medical assistance
provider when allocating the remaining
appropriations. Notwithstanding section 15,
this paragraph shall not expire.

SHAKEN BABY VIDEO. Of the
state government special revenue fund
appropriation, $13,000 in 2006 is
appropriated to the commissioner of health
to provide a video to hospitals on shaken
baby syndrome. The commissioner of health
shall assess a fee to hospitals to cover the
cost of the approved shaken baby video and
the revenue received is to be deposited in the
state government special revenue fund.

ARTICLE 19

HEALTH CARE

Section 1.

Minnesota Statutes 2004, section 47.58, subdivision 8, is amended to read:

Subd. 8.

Counseling; requirement; penalty.

A lender, mortgage banking company,
or other mortgage lender not related to the mortgagor must keep a certificate on file
documenting that the borrower, prior to entering into the reverse mortgage loan, received
counseling as defined in this subdivision from an organization that meets the requirements
of section 462A.209 and is a housing counseling agency approved by the Department of
Housing and Urban Development. The certificate must be signed by the mortgagor and
the counselor and include the date of the counseling, the name, address, and telephone
number of both the mortgagor and the organization providing counseling. A failure by
the lender to comply with this subdivision results in a $1,000 civil penalty payable to
the mortgagor. For the purposes of this subdivision, "counseling" means the following
services are provided to the borrower:

(1) a review of the advantages and disadvantages of reverse mortgage programs;

(2) an explanation of how the reverse mortgage affects the borrower's estate and
public benefits;

(3) an explanation of the lending process;

(4) a discussion of the borrower's supplemental income needs; and

(5) an explanation of the provisions of sections 256B.0913, subdivision 17, and
462A.05, subdivision 42; and

(6) an opportunity to ask questions of the counselor.

Sec. 2.

Minnesota Statutes 2004, section 144A.071, subdivision 4c, is amended to read:

Subd. 4c.

Exceptions for replacement beds after June 30, 2003.

(a) The
commissioner of health, in coordination with the commissioner of human services, may
approve the renovation, replacement, upgrading, or relocation of a nursing home or
boarding care home, under the following conditions:

(1) to license and certify an 80-bed city-owned facility in Nicollet County to be
constructed on the site of a new city-owned hospital to replace an existing 85-bed facility
attached to a hospital that is also being replaced. The threshold allowed for this project
under section 144A.073 shall be the maximum amount available to pay the additional
medical assistance costs of the new facility;

(2) to license and certify 29 beds to be added to an existing 69-bed facility in St.
Louis County, provided that the 29 beds must be transferred from active or layaway status
at an existing facility in St. Louis County that had 235 beds on April 1, 2003.

The licensed capacity at the 235-bed facility must be reduced to 206 beds, but the payment
rate at that facility shall not be adjusted as a result of this transfer. The operating payment
rate of the facility adding beds after completion of this project shall be the same as it was
on the day prior to the day the beds are licensed and certified. This project shall not
proceed unless it is approved and financed under the provisions of section 144A.073; and

(3) to license and certify a new 60-bed facility in Austin, provided that: (i) 45 of
the new beds are transferred from a 45-bed facility in Austin under common ownership
that is closed and 15 of the new beds are transferred from a 182-bed facility in Albert Lea
under common ownership; (ii) the commissioner of human services is authorized by the
2004 legislature to negotiate budget-neutral planned nursing facility closures; and (iii)
money is available from planned closures of facilities under common ownership to make
implementation of this clause budget-neutral to the state. The bed capacity of the Albert
Lea facility shall be reduced to 167 beds following the transfer. Of the 60 beds at the
new facility, 20 beds shall be used for a special care unit for persons with Alzheimer's
disease or related dementias.; and

(4) to license and certify up to 80 beds transferred from an existing state-owned
nursing facility in Cass County to a new facility located on the grounds of the
Ah-Gwah-Ching campus. The operating cost payment rates for the new facility shall be
determined based on the interim and settle-up payment provisions of Minnesota Rules,
part 9549.0057, and the reimbursement provisions of section 256B.431. The property
payment rate for the first three years of operation shall be $25 per day. For subsequent
years, the property payment rate of $25 shall be adjusted for inflation as provided in
section 256B.434, subdivision 4, paragraph (c), as long as the facility has a contract under
section 256B.434.

(b) Projects approved under this subdivision shall be treated in a manner equivalent
to projects approved under subdivision 4a.

Sec. 3.

[144A.441] ASSISTED LIVING BILL OF RIGHTS ADDENDUM.

Assisted living clients, as defined in section 144G.01, subdivision 3, shall be
provided with the home care bill of rights required by section 144A.44, except that the
home care bill of rights provided to these clients must include the following provision in
place of the provision in section 144A.44, subdivision 1, clause (16):

"(16) the right to reasonable, advance notice of changes in services or charges,
including at least 30 days' advance notice of the termination of a service by a provider,
except in cases where:

(i) the recipient of services engages in conduct that alters the conditions of
employment as specified in the employment contract between the home care provider
and the individual providing home care services, or creates an abusive or unsafe work
environment for the individual providing home care services;

(ii) an emergency for the informal caregiver or a significant change in the recipient's
condition has resulted in service needs that exceed the current service provider agreement
and that cannot be safely met by the home care provider; or

(iii) the provider has not received payment for services, for which at least ten days'
advance notice of the termination of a service shall be provided."

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 4.

[144A.442] TERMINATION OF HOME CARE SERVICES FOR
ASSISTED LIVING CLIENTS.

If an arranged home care provider, as defined in section 144D.01, subdivision 2a,
who is not also Medicare certified terminates a service agreement or service plan with
an assisted living client, as defined in section 144G.01, subdivision 3, the home care
provider shall provide the assisted living client and the legal or designated representatives
of the client, if any, with a written notice of termination which includes the following
information:

(1) the effective date of termination;

(2) the reason for termination;

(3) without extending the termination notice period, an affirmative offer to meet with
the assisted living client or client representatives within no more than five business days of
the date of the termination notice to discuss the termination;

(4) contact information for a reasonable number of other home care providers in
the geographic area of the assisted living client, as required by Minnesota Rules, part
4668.0050;

(5) a statement that the provider will participate in a coordinated transfer of the care
of the client to another provider or caregiver, as required by section 144A.44, subdivision
1, clause (17);

(6) the name and contact information of a representative of the home care provider
with whom the client may discuss the notice of termination;

(7) a copy of the home care bill of rights; and

(8) a statement that the notice of termination of home care services by the home care
provider does not constitute notice of termination of the housing with services contract
with a housing with services establishment.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 5.

Minnesota Statutes 2004, section 144A.4605, is amended to read:

144A.4605 ASSISTED LIVING HOME CARE CLASS F PROVIDER.

Subdivision 1.

Definitions.

For purposes of this section, the term "assisted
living class F home care provider" means a home care provider who provides nursing
services, delegated nursing services, other services performed by unlicensed personnel, or
central storage of medications solely for residents of one or more housing with services
establishments registered under chapter 144D.

Subd. 2.

Assisted living Class F home care license established.

A home care
provider license category entitled assisted living class F home care provider is hereby
established. A home care provider may obtain an assisted living a class F license if the
program meets the following requirements:

(a) nursing services, delegated nursing services, other services performed by
unlicensed personnel, or central storage of medications under the assisted living class
F license are provided solely for residents of one or more housing with services
establishments registered under chapter 144D;

(b) unlicensed personnel perform home health aide and home care aide tasks
identified in Minnesota Rules, parts 4668.0100, subparts 1 and 2, and 4668.0110, subpart 1.
Qualifications to perform these tasks shall be established in accordance with subdivision 3;

(c) periodic supervision of unlicensed personnel is provided as required by rule;

(d) notwithstanding Minnesota Rules, part 4668.0160, subpart 6, item D, client
records shall include:

(1) daily records or a weekly summary of home care services provided;

(2) documentation each time medications are administered to a client; and

(3) documentation on the day of occurrence of any significant change in the client's
status or any significant incident, such as a fall or refusal to take medications.

All entries must be signed by the staff providing the services and entered into the
record no later than two weeks after the end of the service day, except as specified in
clauses (2) and (3);

(e) medication and treatment orders, if any, are included in the client record and
are renewed at least every 12 months, or more frequently when indicated by a clinical
assessment;

(f) the central storage of medications in a housing with services establishment
registered under chapter 144D is managed under a system that is established by a
registered nurse and addresses the control of medications, handling of medications,
medication containers, medication records, and disposition of medications; and

(g) in other respects meets the requirements established by rules adopted under
sections 144A.45 to 144A.47.

Subd. 3.

Training or competency evaluations required.

(a) Unlicensed personnel
must:

(1) satisfy the training or competency requirements established by rule under
sections 144A.45 to 144A.47; or

(2) be trained or determined competent by a registered nurse in each task identified
under Minnesota Rules, part 4668.0100, subparts 1 and 2, when offered to clients in a
housing with services establishment as described in paragraphs (b) to (e).

(b) Training for tasks identified under Minnesota Rules, part 4668.0100, subparts
1 and 2, shall use a curriculum which meets the requirements in Minnesota Rules, part
4668.0130.

(c) Competency evaluations for tasks identified under Minnesota Rules, part
4668.0100, subparts 1 and 2, must be completed and documented by a registered nurse.

(d) Unlicensed personnel performing tasks identified under Minnesota Rules, part
4668.0100, subparts 1 and 2, shall be trained or demonstrate competency in the following
topics:

(1) an overview of sections 144A.43 to 144A.47 and rules adopted thereunder;

(2) recognition and handling of emergencies and use of emergency services;

(3) reporting the maltreatment of vulnerable minors or adults under sections 626.556
and 626.557;

(4) home care bill of rights;

(5) handling of clients' complaints and reporting of complaints to the Office of
Health Facility Complaints;

(6) services of the ombudsman for older Minnesotans;

(7) observation, reporting, and documentation of client status and of the care or
services provided;

(8) basic infection control;

(9) maintenance of a clean, safe, and healthy environment;

(10) communication skills;

(11) basic elements of body functioning and changes in body function that must be
reported to an appropriate health care professional; and

(12) physical, emotional, and developmental needs of clients, and ways to work with
clients who have problems in these areas, including respect for the client, the client's
property, and the client's family.

(e) Unlicensed personnel who administer medications must comply with rules
relating to the administration of medications in Minnesota Rules, part 4668.0100, subpart
2, except that unlicensed personnel need not comply with the requirements of Minnesota
Rules, part 4668.0100, subpart 5.

Subd. 4.

License required.

(a) A housing with services establishment registered
under chapter 144D that is required to obtain a home care license must obtain an assisted
living a class F home care license according to this section or a class A or class E B license
according to rule. A housing with services establishment that obtains a class E B license
under this subdivision remains subject to the payment limitations in sections 256B.0913,
subdivision 5f, paragraph (b), and 256B.0915, subdivision 3d.

(b) A board and lodging establishment registered for special services as of December
31, 1996, and also registered as a housing with services establishment under chapter
144D, must deliver home care services according to sections 144A.43 to 144A.47, and
may apply for a waiver from requirements under Minnesota Rules, parts 4668.0002 to
4668.0240, to operate a licensed agency under the standards of section 157.17. Such
waivers as may be granted by the department will expire upon promulgation of home care
rules implementing section 144A.4605.

(c) An adult foster care provider licensed by the Department of Human Services and
registered under chapter 144D may continue to provide health-related services under its
foster care license until the promulgation of home care rules implementing this section.

(d) An assisted living (c) A class F home care provider licensed under this section
must comply with the disclosure provisions of section 325F.72 to the extent they are
applicable.

Subd. 5.

License fees.

The license fees for assisted living class F home care
providers shall be as follows:

(1) $125 annually for those providers serving a monthly average of 15 or fewer
clients, and for assisted living class F providers of all sizes during the first year of
operation;

(2) $200 annually for those providers serving a monthly average of 16 to 30 clients;

(3) $375 annually for those providers serving a monthly average of 31 to 50 clients;
and

(4) $625 annually for those providers serving a monthly average of 51 or more
clients.

Subd. 6.

Waiver.

Upon request of the home care provider, the commissioner may
waive the provisions of this section relating to registered nurse duties.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 6.

Minnesota Statutes 2004, section 144D.01, is amended by adding a subdivision
to read:

Subd. 2a.

Arranged home care provider.

"Arranged home care provider" means a
home care provider licensed under Minnesota Rules, chapter 4668, that provides services
to some or all of the residents of a housing with services establishment and that is either
the establishment itself or another entity with which the establishment has an arrangement.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 7.

Minnesota Statutes 2004, section 144D.015, is amended to read:

144D.015 ASSISTED LIVING FACILITY OR ASSISTED LIVING
RESIDENCE DEFINITION FOR PURPOSES OF LONG-TERM CARE
INSURANCE.

For purposes of consistency with terminology commonly used in long-term
care insurance policies and notwithstanding chapter 144G, a housing with services
establishment that is registered under section 144D.03 and that holds, or contracts makes
arrangements with an individual or entity that holds, a any type of home care license and
all other licenses, permits, registrations, or other governmental approvals legally required
for delivery of the services the establishment offers or provides to its residents, constitutes
an "assisted living facility" or "assisted living residence."

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 8.

Minnesota Statutes 2004, section 144D.02, is amended to read:

144D.02 REGISTRATION REQUIRED.

No entity may establish, operate, conduct, or maintain an elderly a housing with
services establishment in this state without registering and operating as required in
sections 144D.01 to 144D.06.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 9.

Minnesota Statutes 2004, section 144D.03, subdivision 2, is amended to read:

Subd. 2.

Registration information.

The establishment shall provide the following
information to the commissioner in order to be registered:

(1) the business name, street address, and mailing address of the establishment;

(2) the name and mailing address of the owner or owners of the establishment and, if
the owner or owners are not natural persons, identification of the type of business entity
of the owner or owners, and the names and addresses of the officers and members of the
governing body, or comparable persons for partnerships, limited liability corporations, or
other types of business organizations of the owner or owners;

(3) the name and mailing address of the managing agent, whether through
management agreement or lease agreement, of the establishment, if different from the
owner or owners, and the name of the on-site manager, if any;

(4) verification that the establishment has entered into an elderly a housing with
services contract, as required in section 144D.04, with each resident or resident's
representative;

(5) verification that the establishment is complying with the requirements of section
325F.72, if applicable;

(6) the name and address of at least one natural person who shall be responsible
for dealing with the commissioner on all matters provided for in sections 144D.01 to
144D.06, and on whom personal service of all notices and orders shall be made, and who
shall be authorized to accept service on behalf of the owner or owners and the managing
agent, if any; and

(7) the signature of the authorized representative of the owner or owners or, if
the owner or owners are not natural persons, signatures of at least two authorized
representatives of each owner, one of which shall be an officer of the owner.

Personal service on the person identified under clause (6) by the owner or owners in
the registration shall be considered service on the owner or owners, and it shall not be a
defense to any action that personal service was not made on each individual or entity. The
designation of one or more individuals under this subdivision shall not affect the legal
responsibility of the owner or owners under sections 144D.01 to 144D.06.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 10.

Minnesota Statutes 2004, section 144D.04, is amended to read:

144D.04 ELDERLY HOUSING WITH SERVICES CONTRACTS.

Subdivision 1.

Contract required.

No elderly housing with services establishment
may operate in this state unless a written elderly housing with services contract, as defined
in subdivision 2, is executed between the establishment and each resident or resident's
representative and unless the establishment operates in accordance with the terms of the
contract. The resident or the resident's representative shall be given a complete copy of
the contract and all supporting documents and attachments and any changes whenever
changes are made.

Subd. 2.

Contents of contract.

An elderly A housing with services contract, which
need not be entitled as such to comply with this section, shall include at least the following
elements in itself or through supporting documents or attachments:

(1) the name, street address, and mailing address of the establishment;

(2) the name and mailing address of the owner or owners of the establishment and, if
the owner or owners is not a natural person, identification of the type of business entity
of the owner or owners;

(3) the name and mailing address of the managing agent, through management
agreement or lease agreement, of the establishment, if different from the owner or owners;

(4) the name and address of at least one natural person who is authorized to accept
service of process on behalf of the owner or owners and managing agent;

(5) a statement describing the registration and licensure status of the establishment
and any provider providing health-related or supportive services under an arrangement
with the establishment;

(6) the term of the contract;

(7) a description of the services to be provided to the resident in the base rate to
be paid by resident;

(8) a description of any additional services, including home care services, available
for an additional fee from the establishment directly or through arrangements with the
establishment, and a schedule of fees charged for these services;

(9) fee schedules outlining the cost of any additional services;

(10) (9) a description of the process through which the contract may be modified,
amended, or terminated;

(11) (10) a description of the establishment's complaint resolution process available
to residents including the toll-free complaint line for the Office of Ombudsman for Older
Minnesotans;

(12) (11) the resident's designated representative, if any;

(13) (12) the establishment's referral procedures if the contract is terminated;

(14) criteria (13) requirements of residency used by the establishment to determine
who may reside or continue to reside in the elderly housing with services establishment;

(15) (14) billing and payment procedures and requirements;

(16) (15) a statement regarding the ability of residents to receive services from
service providers with whom the establishment does not have an arrangement; and

(17) (16) a statement regarding the availability of public funds for payment for
residence or services in the establishment; and

(17) a statement regarding the availability of and contact information for long-
term care consultation services under section 256B.0911 in the county in which the
establishment is located.

Subd. 3.

Contracts in permanent files.

Elderly Housing with services contracts
and related documents executed by each resident or resident's representative shall be
maintained by the establishment in files from the date of execution until three years after
the contract is terminated. The contracts and the written disclosures required under section
325F.72, if applicable, shall be made available for on-site inspection by the commissioner
upon request at any time.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 11.

[144D.045] INFORMATION CONCERNING ARRANGED HOME
CARE PROVIDERS.

If a housing with services establishment has one or more arranged home care
providers, the establishment shall arrange to have that arranged home care provider deliver
the following information in writing to a prospective resident, prior to the date on which
the prospective resident executes a contract with the establishment or the prospective
resident's move-in date, whichever is earlier:

(1) the name, mailing address, and telephone number of the arranged home care
provider;

(2) the name and mailing address of at least one natural person who is authorized to
accept service of process on behalf of the entity described in clause (1);

(3) a description of the process through which a home care service agreement or
service plan between a resident and the arranged home care provider, if any, may be
modified, amended, or terminated;

(4) the arranged home care provider's billing and payment procedures and
requirements; and

(5) any limits to the services available from the arranged provider.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 12.

Minnesota Statutes 2004, section 144D.05, is amended to read:

144D.05 AUTHORITY OF COMMISSIONER.

The commissioner shall, upon receipt of information which may indicate the failure
of the elderly housing with services establishment, a resident, a resident's representative,
or a service provider to comply with a legal requirement to which one or more of them
may be subject, make appropriate referrals to other governmental agencies and entities
having jurisdiction over the subject matter. The commissioner may also make referrals
to any public or private agency the commissioner considers available for appropriate
assistance to those involved.

The commissioner shall have standing to bring an action for injunctive relief
in the district court in the district in which an establishment is located to compel the
elderly housing with services establishment to meet the requirements of this chapter or
other requirements of the state or of any county or local governmental unit to which the
establishment is otherwise subject. Proceedings for securing an injunction may be brought
by the commissioner through the attorney general or through the appropriate county
attorney. The sanctions in this section do not restrict the availability of other sanctions.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 13.

Minnesota Statutes 2004, section 144D.065, is amended to read:

144D.065 ESTABLISHMENTS THAT SERVE PERSONS WITH
ALZHEIMER'S DISEASE OR RELATED DISORDERS.

(a) If a housing with services establishment registered under this chapter markets or
otherwise promotes services for persons with Alzheimer's disease or related disorders,
whether in a segregated or general unit, the facility's establishment's direct care staff and
their supervisors must be trained in dementia care.

(b) Areas of required training include:

(1) an explanation of Alzheimer's disease and related disorders;

(2) assistance with activities of daily living;

(3) problem solving with challenging behaviors; and

(4) communication skills.

(c) The establishment shall provide to consumers in written or electronic form a
description of the training program, the categories of employees trained, the frequency
of training, and the basic topics covered. This information satisfies the disclosure
requirements of section 325F.72, subdivision 2, clause (4).

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 14.

[144G.01] DEFINITIONS.

Subdivision 1.

Scope; other definitions.

For purposes of sections 144G.01 to
144G.05, the following definitions apply. In addition, the definitions provided in section
144D.01 also apply to sections 144G.01 to 144G.05.

Subd. 2.

Assisted living.

"Assisted living" means a service or package of services
advertised, marketed, or otherwise described, offered, or promoted using the phrase
"assisted living" either alone or in combination with other words, whether orally or in
writing, and which is subject to the requirements of this chapter.

Subd. 3.

Assisted living client.

"Assisted living client" or "client" means a housing
with services resident who receives assisted living that is subject to the requirements
of this chapter.

Subd. 4.

Commissioner.

"Commissioner" means the commissioner of health.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 15.

[144G.02] ASSISTED LIVING; PROTECTED TITLE; RESTRICTION
ON USE; REGULATORY FUNCTIONS.

Subdivision 1.

Protected title; restriction on use.

No person or entity may use the
phrase "assisted living," whether alone or in combination with other words and whether
orally or in writing, to advertise, market, or otherwise describe, offer, or promote itself, or
any housing, service, service package, or program that it provides within this state, unless
the person or entity is a housing with services establishment that meets the requirements of
this chapter, or is a person or entity that provides some or all components of assisted living
that meet the requirements of this chapter. A person or entity entitled to use the phrase
"assisted living" shall use the phrase only in the context of its participation in assisted
living that meets the requirements of this chapter. A housing with services establishment
offering or providing assisted living that is not made available to residents in all of its
housing units shall identify the number or location of the units in which assisted living
is available, and may not use the term "assisted living" in the name of the establishment
registered with the commissioner under chapter 144D, or in the name the establishment
uses to identify itself to residents or the public.

Subd. 2.

Authority of commissioner.

(a) The commissioner, upon receipt of
information that may indicate the failure of a housing with services establishment, the
arranged home care provider, an assisted living client, or an assisted living client's
representative to comply with a legal requirement to which one or more of the entities may
be subject, shall make appropriate referrals to other governmental agencies and entities
having jurisdiction over the subject matter. The commissioner may also make referrals
to any public or private agency the commissioner considers available for appropriate
assistance to those involved.

(b) In addition to the authority with respect to licensed home care providers under
sections 144A.45 and 144A.46 and with respect to housing with services establishments
under chapter 144D, the commissioner shall have standing to bring an action for injunctive
relief in the district court in the district in which a housing with services establishment
is located to compel the housing with services establishment or the arranged home care
provider to meet the requirements of this chapter or other requirements of the state or of
any county or local governmental unit to which the establishment or arranged home care
provider is otherwise subject. Proceedings for securing an injunction may be brought by
the commissioner through the attorney general or through the appropriate county attorney.
The sanctions in this section do not restrict the availability of other sanctions.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 16.

[144G.03] ASSISTED LIVING REQUIREMENTS.

Subdivision 1.

Verification in annual registration.

A registered housing with
services establishment using the phrase "assisted living," pursuant to section 144G.02,
subdivision 1, shall verify to the commissioner in its annual registration pursuant to chapter
144D that the establishment is complying with sections 144G.01 to 144G.05, as applicable.

Subd. 2.

Minimum requirements for assisted living.

(a) Assisted living shall
be provided or made available only to individuals residing in a registered housing with
services establishment. Except as expressly stated in this chapter, a person or entity
offering assisted living may define the available services and may offer assisted living to
all or some of the residents of a housing with services establishment. The services that
comprise assisted living may be provided or made available directly by a housing with
services establishment or by persons or entities with which the housing with services
establishment has made arrangements.

(b) A person or entity entitled to use the phrase "assisted living," according to
section 144G.02, subdivision 1, shall do so only with respect to a housing with services
establishment, or a service, service package, or program available within a housing with
services establishment that, at a minimum:

(1) provides or makes available health-related services under a class A or class F
home care license. At a minimum, health-related services must include:

(i) assistance with self-administration of medication as defined in Minnesota Rules,
part 4668.0003, subpart 2a, or medication administration as defined in Minnesota Rules,
part 4668.0003, subpart 21a; and

(ii) assistance with at least three of the following seven activities of daily living:
bathing, dressing, grooming, eating, transferring, continence care, and toileting.

All health related services shall be provided in a manner that complies with applicable
home care licensure requirements in chapter 144A and Minnesota Rules, chapter 4668,
and with sections 148.171 to 148.285;

(2) provides necessary assessments of the physical and cognitive needs of assisted
living clients by a registered nurse, as required by applicable home care licensure
requirements in chapter 144A and Minnesota Rules, chapter 4668, and by sections
148.171 to 148.285;

(3) has and maintains a system for delegation of health care activities to unlicensed
assistive health care personnel by a registered nurse, including supervision and evaluation
of the delegated activities as required by applicable home care licensure requirements in
chapter 144A and Minnesota Rules, chapter 4668, and by sections 148.171 to 148.285;

(4) provides staff access to an on-call registered nurse 24 hours per day, seven
days per week;

(5) has and maintains a system to check on each assisted living client at least daily;

(6) provides a means for assisted living clients to request assistance for health and
safety needs 24 hours per day, seven days per week, from the establishment or a person or
entity with which the establishment has made arrangements;

(7) has a person or persons available 24 hours per day, seven days per week, who
is responsible for responding to the requests of assisted living clients for assistance with
health or safety needs, who shall be:

(i) awake;

(ii) located in the same building, in an attached building, or on a contiguous campus
with the housing with services establishment in order to respond within a reasonable
amount of time;

(iii) capable of communicating with assisted living clients;

(iv) capable of recognizing the need for assistance;

(v) capable of providing either the assistance required or summoning the appropriate
assistance; and

(vi) capable of following directions;

(8) offers to provide or make available at least the following supportive services
to assisted living clients:

(i) two meals per day;

(ii) weekly housekeeping;

(iii) weekly laundry service;

(iv) upon the request of the client, reasonable assistance with arranging for
transportation to medical and social services appointments, and the name of or other
identifying information about the person or persons responsible for providing this
assistance;

(v) upon the request of the client, reasonable assistance with accessing community
resources and social services available in the community, and the name of or other
identifying information about the person or persons responsible for providing this
assistance; and

(vi) periodic opportunities for socialization; and

(9) makes available to all prospective and current assisted living clients information
consistent with the uniform format and the required components adopted by the
commissioner under section 144G.06. This information must be made available beginning
no later than six months after the commissioner makes the uniform format and required
components available to providers according to section 144G.06.

Subd. 3.

Exemption from awake-staff requirement.

(a) A housing with services
establishment that offers or provides assisted living is exempt from the requirement in
subdivision 2, paragraph (b), clause (7), item (i), that the person or persons available and
responsible for responding to requests for assistance must be awake, if the establishment
meets the following requirements:

(1) the establishment has a maximum capacity to serve 12 or fewer assisted living
clients;

(2) the person or persons available and responsible for responding to requests for
assistance are physically present within the housing with services establishment in which
the assisted living clients reside;

(3) the establishment has a system in place that is compatible with the health, safety,
and welfare of the establishment's assisted living clients;

(4) the establishment's housing with services contract, as required by section
144D.04, includes a statement disclosing the establishment's qualification for, and
intention to rely upon, this exemption;

(5) the establishment files with the commissioner, for purposes of public information
but not review or approval by the commissioner, a statement describing how the
establishment meets the conditions in clauses (1) to (5), and makes a copy of this statement
available to actual and prospective assisted living clients; and

(6) the establishment indicates on its housing with services registration, under
section 144D.02 or 144D.03, as applicable, that it qualifies for and intends to rely upon the
exemption under this subdivision.

Subd. 4.

Nursing assessment.

(a) A housing with services establishment offering or
providing assisted living shall:

(1) offer to have the arranged home care provider conduct a nursing assessment by
a registered nurse of the physical and cognitive needs of the prospective resident and
propose a service agreement or service plan prior to the date on which a prospective
resident executes a contract with a housing with services establishment or the date on
which a prospective resident moves in, whichever is earlier; and

(2) inform the prospective resident of the availability of and contact information for
long-term care consultation services under section 256B.0911, prior to the date on which a
prospective resident executes a contract with a housing with services establishment or the
date on which a prospective resident moves in, whichever is earlier.

(b) An arranged home care provider is not obligated to conduct a nursing assessment
by a registered nurse when requested by a prospective resident if either the geographic
distance between the prospective resident and the provider, or urgent or unexpected
circumstances, do not permit the assessment to be conducted prior to the date on which
the prospective resident executes a contract or moves in, whichever is earlier. When such
circumstances occur, the arranged home care provider shall offer to conduct a telephone
conference whenever reasonably possible.

(c) The arranged home care provider shall comply with applicable home care
licensure requirements in chapter 144A and Minnesota Rules, chapter 4668, and with
sections 148.171 to 148.285 with respect to the provision of a nursing assessment prior
to the delivery of nursing services and the execution of a home care service plan or
service agreement.

Subd. 5.

Assistance with arranged home care provider.

The housing with services
establishment shall provide each assisted living client with identifying information about a
person or persons reasonably available to assist the client with concerns the client may
have with respect to the services provided by the arranged home care provider. The
establishment shall keep each assisted living client reasonably informed of any changes in
the personnel referenced in this subdivision. Upon request of the assisted living client,
such personnel or designee shall provide reasonable assistance to the assisted living client
in addressing concerns regarding services provided by the arranged home care provider.

Subd. 6.

Termination of housing with services contract.

If a housing with
services establishment terminates a housing with services contract with an assisted living
client, the establishment shall provide the assisted living client, and the legal or designated
representative of the assisted living client, if any, with a written notice of termination
which includes the following information:

(1) the effective date of termination;

(2) the section of the contract that authorizes the termination;

(3) without extending the termination notice period, an affirmative offer to meet with
the assisted living client and, if applicable, client representatives, within no more than five
business days of the date of the termination notice to discuss the termination;

(4) an explanation that:

(i) the assisted living client must vacate the apartment, along with all personal
possessions, on or before the effective date of termination;

(ii) failure to vacate the apartment by the date of termination may result in the filing
of an eviction action in court by the establishment, and that the assisted living client may
present a defense, if any, to the court at that time; and

(iii) the assisted living client may seek legal counsel in connection with the notice
of termination;

(5) a statement that, with respect to the notice of termination, reasonable
accommodation is available for the disability of the assisted living client, if any; and

(6) the name and contact information of the representative of the establishment
with whom the assisted living client or client representatives may discuss the notice of
termination.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 17.

[144G.04] RESERVATION OF RIGHTS.

Subdivision 1.

Use of services.

Nothing in this chapter requires an assisted living
client to utilize any service provided or made available in assisted living.

Subd. 2.

Housing with services contracts.

Nothing in this chapter requires a
housing with services establishment to execute or refrain from terminating a housing with
services contract with a prospective or current resident who is unable or unwilling to meet
the requirements of residency, with or without assistance.

Subd. 3.

Provision of services.

Nothing in this chapter requires the arranged home
care provider to offer or continue to provide services under a service agreement or service
plan to a prospective or current resident of the establishment whose needs cannot be
met by the arranged home care provider.

Subd. 4.

Altering operations; service packages.

Nothing in this chapter requires
a housing with services establishment or arranged home care provider offering assisted
living to fundamentally alter the nature of the operations of the establishment or the
provider in order to accommodate the request or need for facilities or services by any
assisted living client, or to refrain from requiring, as a condition of residency, that an
assisted living client pay for a package of assisted living services even if the client does
not choose to utilize all or some of the services in the package.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 18.

[144G.05] REIMBURSEMENT UNDER ASSISTED LIVING SERVICE
PACKAGES.

Notwithstanding the provisions of this chapter, the requirements for the elderly
waiver program's assisted living payment rates under section 256B.0915, subdivision
3e, shall continue to be effective and providers who do not meet the requirements of
this chapter may continue to receive payment under section 256B.0915, subdivision 3e,
as long as they continue to meet the definitions and standards for assisted living and
assisted living plus set forth in the federally approved Elderly Home and Community
Based Services Waiver Program (Control Number 0025.91).

Providers of assisted living for the Community Alternatives for Disabled Individuals
(CADI) and Traumatic Brain Injury (TBI) waivers shall continue to receive payment as
long as they continue to meet the definitions and standards for assisted living and assisted
living plus set forth in the federally approved CADI and TBI waiver plans.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 19.

[144G.06] UNIFORM CONSUMER INFORMATION GUIDE.

(a) The commissioner of health shall establish an advisory committee consisting
of representatives of consumers, providers, county and state officials, and other
groups the commissioner considers appropriate. The advisory committee shall present
recommendations to the commissioner on:

(1) a format for a guide to be used by individual providers of assisted living, as
defined in section 144G.01, that includes information about services offered by that
provider, service costs, and other relevant provider-specific information, as well as a
statement of philosophy and values associated with assisted living, presented in uniform
categories that facilitate comparison with guides issued by other providers; and

(2) requirements for informing assisted living clients, as defined in section 144G.01,
of their applicable legal rights.

(b) The commissioner, after reviewing the recommendations of the advisory
committee, shall adopt a uniform format for the guide to be used by individual providers,
and the required components of materials to be used by providers to inform assisted
living clients of their legal rights, and shall make the uniform format and the required
components available to assisted living providers.

Sec. 20.

Minnesota Statutes 2004, section 256.01, is amended by adding a subdivision
to read:

Subd. 2b.

Performance payments.

The commissioner shall develop and implement
a pay-for-performance system to provide performance payments to medical groups that
demonstrate optimum care in serving individuals with chronic diseases who are enrolled
in health care programs administered by the commissioner under chapters 256B, 256D,
and 256L.

Sec. 21.

Minnesota Statutes 2004, section 256.01, is amended by adding a subdivision
to read:

Subd. 23.

Reverse mortgage information and referral.

The commissioner, in
cooperation with the commissioner of the Minnesota Housing Finance Agency, shall:

(1) establish an information and referral system to inform eligible persons regarding
the availability of reverse mortgages and state incentives available to persons who take
out certain reverse mortgages. The information and referral system shall be established
involving the Senior LinkAge Line, county and tribal agencies, community housing
agencies and organizations, reverse mortgage counselors and lenders, senior and elder
community organizations, and other relevant entities; and

(2) coordinate necessary training for Senior LinkAge Line employees, mortgage
counselors, and lenders regarding the provisions of sections 256B.0913, subdivision
17, and 462A.05, subdivision 42.

Sec. 22.

[256.9545] PRESCRIPTION DRUG DISCOUNT PROGRAM.

Subdivision 1.

Establishment; administration.

The commissioner shall establish
and administer the prescription drug discount program.

Subd. 2.

Commissioner's authority.

The commissioner shall administer a drug
rebate program for drugs purchased according to the prescription drug discount program.
The commissioner shall execute a rebate agreement from all manufacturers that choose to
participate in the program for those drugs covered under the medical assistance program.
For each drug, the amount of the rebate shall be equal to the rebate as defined for purposes
of the federal rebate program in United States Code, title 42, section 1396r-8. The
rebate program shall utilize the terms and conditions used for the federal rebate program
established according to section 1927 of title XIX of the federal Social Security Act.

Subd. 3.

Definitions.

For purposes of this section, the following terms have the
meanings given them.

(a) "Commissioner" means the commissioner of human services.

(b) "Covered prescription drug" means a prescription drug as defined in section
151.44, paragraph (d), that is covered under medical assistance as described in section
256B.0625, subdivision 13, and that is provided by a participating manufacturer that has a
fully executed rebate agreement with the commissioner under this section and complies
with that agreement.

(c) "Enrolled individual" means a person who is eligible for the program under
subdivision 4 and has enrolled in the program according to subdivision 5.

(d) "Health carrier" means an insurance company licensed under chapter 60A to
offer, sell, or issue an individual or group policy of accident and sickness insurance as
defined in section 62A.01; a nonprofit health service plan corporation operating under
chapter 62C; a health maintenance organization operating under chapter 62D; a joint
self-insurance employee health plan operating under chapter 62H; a community integrated
service network licensed under chapter 62N; a fraternal benefit society operating under
chapter 64B; a city, county, school district, or other political subdivision providing
self-insured health coverage under section 471.617 or sections 471.98 to 471.982; and a
self-funded health plan under the Employee Retirement Income Security Act of 1974, as
amended.

(e) "Participating manufacturer" means a manufacturer as defined in section 151.44,
paragraph (c), that agrees to participate in the prescription drug discount program.

(f) "Participating pharmacy" means a pharmacy as defined in section 151.01,
subdivision 2, that agrees to participate in the prescription drug discount program.

Subd. 4.

Eligibility.

(a) To be eligible for the program, an applicant must:

(1) be a permanent resident of Minnesota as defined in section 256L.09, subdivision
4;

(2) not be enrolled in medical assistance, general assistance medical care, or
MinnesotaCare;

(3) not be enrolled in and have currently available prescription drug coverage under
a health plan offered by a health carrier or employer or under a pharmacy benefit program
offered by a pharmaceutical manufacturer;

(4) not be enrolled in and have currently available prescription drug coverage under
a Medicare supplement policy, as defined in sections 62A.31 to 62A.44; and

(5) have individual or family gross income equal to or less than 300 percent of the
federal poverty guidelines. The commissioner shall adjust the income limit each July 1 by
the annual update of the federal poverty guidelines following publication by the United
States Department of Health and Human Services.

(b) Notwithstanding paragraph (a), clause (3), an individual who is enrolled in a
Medicare Part D prescription drug plan or Medicare Advantage plan is eligible for the
program but only for drugs that are not covered under the Medicare Part D plan or for
drugs that are covered under the plan, but according to the conditions of the plan, the
individual is responsible for 100 percent of the cost of the prescription drug.

Subd. 5.

Application procedure.

(a) Applications and information on the program
must be made available at county social services agencies, health care provider offices, and
agencies and organizations serving senior citizens. Individuals shall submit applications
and any information specified by the commissioner as being necessary to verify eligibility
directly to the commissioner. The commissioner shall determine an applicant's eligibility
for the program within 30 days from the date the application is received. Upon notice of
approval, the applicant must submit to the commissioner the enrollment fee specified in
subdivision 10. Eligibility begins the month after the enrollment fee is received by the
commissioner.

(b) An enrollee's eligibility must be renewed every 12 months with the 12-month
period beginning in the month after the application is approved.

(c) The commissioner shall develop an application form that does not exceed one
page in length and requires information necessary to determine eligibility for the program.

Subd. 6.

Participating pharmacy.

(a) Upon implementation of the prescription
drug discount program, and until January 1, 2008, a participating pharmacy, with a
valid prescription, must sell a covered prescription drug to an enrolled individual at the
medical assistance rate.

(b) After January 1, 2008, a participating pharmacy, with a valid prescription, must
sell a covered prescription drug to an enrolled individual at the medical assistance rate,
minus an amount that is equal to the rebate amount described in subdivision 8.

(c) Each participating pharmacy shall provide the commissioner with all information
necessary to administer the program, including, but not limited to, information on
prescription drug sales to enrolled individuals and usual and customary retail prices.

Subd. 7.

Notification of rebate amount.

The commissioner shall notify each
participating manufacturer, each calendar quarter or according to a schedule established
by the commissioner, of the amount of the rebate owed on the prescription drugs sold by
participating pharmacies to enrolled individuals.

Subd. 8.

Provision of rebate.

To the extent that a participating manufacturer's
prescription drugs are prescribed to a resident of this state, the manufacturer must provide
a rebate equal to the rebate provided under the medical assistance program for any
prescription drug distributed by the manufacturer that is purchased at a participating
pharmacy by an enrolled individual. The participating manufacturer must provide full
payment within 38 days of receipt of the state invoice for the rebate, or according to
a schedule to be established by the commissioner. The commissioner shall deposit all
rebates received into the Minnesota prescription drug dedicated fund established under
subdivision 11. The manufacturer must provide the commissioner with any information
necessary to verify the rebate determined per drug.

Subd. 9.

Payment to pharmacies.

Beginning January 1, 2008, the commissioner
shall distribute on a biweekly basis an amount that is equal to an amount collected under
subdivision 8 to each participating pharmacy based on the prescription drugs sold by that
pharmacy to enrolled individuals on or after January 1, 2008.

Subd. 10.

Enrollment fee.

Beginning July 1, 2008, the commissioner shall establish
an annual enrollment fee that covers the commissioner's expenses for enrollment,
processing claims, and distributing rebates under this program.

Subd. 11.

Dedicated fund; creation; use of fund.

(a) The Minnesota prescription
drug dedicated fund is established as an account in the state treasury. The commissioner
of finance shall credit to the dedicated fund all rebates paid under subdivision 8, any
federal funds received for the program, all enrollment fees paid by the enrollees, and
any appropriations or allocations designated for the fund. The commissioner of finance
shall ensure that fund money is invested under section 11A.25. All money earned by the
fund must be credited to the fund. The fund shall earn a proportionate share of the total
state annual investment income.

(b) Money in the fund is appropriated to the commissioner to reimburse participating
pharmacies for prescription drugs provided to enrolled individuals under subdivision 6,
paragraph (b); to reimburse the commissioner for costs related to enrollment, processing
claims, and distributing rebates and for other reasonable administrative costs related to
administration of the prescription drug discount program; and to repay the appropriation
provided by law for this section. The commissioner must administer the program so that
the costs total no more than funds appropriated plus the drug rebate proceeds.

EFFECTIVE DATE.

This section is effective July 1, 2007.

Sec. 23.

Minnesota Statutes 2004, section 256.975, subdivision 7, is amended to read:

Subd. 7.

Consumer information and assistance; Senior LinkAge.

(a) The
Minnesota Board on Aging shall operate a statewide information and assistance service
to aid older Minnesotans and their families in making informed choices about long-term
care options and health care benefits. Language services to persons with limited English
language skills may be made available. The service, known as Senior LinkAge Line, must
be available during business hours through a statewide toll-free number and must also
be available through the Internet.

(b) The service must assist older adults, caregivers, and providers in accessing
information about choices in long-term care services that are purchased through private
providers or available through public options. The service must:

(1) develop a comprehensive database that includes detailed listings in both
consumer- and provider-oriented formats;

(2) make the database accessible on the Internet and through other telecommunication
and media-related tools;

(3) link callers to interactive long-term care screening tools and make these tools
available through the Internet by integrating the tools with the database;

(4) develop community education materials with a focus on planning for long-term
care and evaluating independent living, housing, and service options;

(5) conduct an outreach campaign to assist older adults and their caregivers in
finding information on the Internet and through other means of communication;

(6) implement a messaging system for overflow callers and respond to these callers
by the next business day;

(7) link callers with county human services and other providers to receive more
in-depth assistance and consultation related to long-term care options; and

(8) provide information and assistance to inform older adults about reverse
mortgages, including the provisions of sections 47.58; 256B.0913, subdivision 17; and
462A.05, subdivision 42; and

(9) link callers with quality profiles for nursing facilities and other providers
developed by the commissioner of health.

(c) The Minnesota Board on Aging shall conduct an evaluation of the effectiveness
of the statewide information and assistance, and submit this evaluation to the legislature
by December 1, 2002. The evaluation must include an analysis of funding adequacy, gaps
in service delivery, continuity in information between the service and identified linkages,
and potential use of private funding to enhance the service.

Sec. 24.

Minnesota Statutes 2004, section 256B.0625, is amended by adding a
subdivision to read:

Subd. 13i.

Medicare Part D co-payments.

For recipients who are enrolled in a
Medicare Part D prescription drug plan or Medicare Advantage plan, medical assistance
covers the co-payments which the recipient is responsible for under the Medicare Part D
prescription drug plan or Medicare Advantage plan.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 25.

Minnesota Statutes 2005 Supplement, section 256B.075, subdivision 2,
is amended to read:

Subd. 2.

Fee-for-service.

(a) The commissioner shall develop and implement
a disease management program for medical assistance and general assistance medical
care recipients who are not enrolled in the prepaid medical assistance or prepaid general
assistance medical care programs and who are receiving services on a fee-for-service
basis. The commissioner may contract with an outside organization to provide these
services under this subdivision.

(b) The commissioner shall seek any federal approval necessary to implement this
section and to obtain federal matching funds.

(c) The commissioner shall develop and implement a pilot intensive care
management program for medical assistance children with complex and chronic medical
issues who are not able to participate in the metro-based U Special Kids program due
to geographic distance.

(d) The commissioner shall develop and implement an intensive care management
pilot program for children, adults, and families who have complex and chronic medical
conditions, or who are at high risk of developing them, and who receive their primary
care through a federally qualified health center or community clinic. For purposes of
this paragraph, "federally qualified health center" means an entity that is receiving a
grant under United States Code, title 42, section 254b, or, based on the recommendation
of the Health Resources and Services Administration within the Public Health Service,
is determined by the secretary to meet the requirements for receiving such a grant; and
"community clinic" means a clinic that is not a federally qualified health center, but is
certified by the Minnesota Department of Health as being eligible to receive a grant under
section 145.9268.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 26.

Minnesota Statutes 2005 Supplement, section 256B.0911, subdivision 1a,
is amended to read:

Subd. 1a.

Definitions.

For purposes of this section, the following definitions apply:

(a) "Long-term care consultation services" means:

(1) providing information and education to the general public regarding availability
of the services authorized under this section;

(2) an intake process that provides access to the services described in this section;

(3) assessment of the health, psychological, and social needs of referred individuals;

(4) assistance in identifying services needed to maintain an individual in the least
restrictive environment;

(5) providing recommendations on cost-effective community services that are
available to the individual;

(6) development of an individual's community support plan, which may include the
use of reverse mortgage payments to pay for services needed to maintain the individual in
the person's home;

(7) providing information regarding eligibility for Minnesota health care programs;

(8) preadmission screening to determine the need for a nursing facility level of care;

(9) preliminary determination of Minnesota health care programs eligibility for
individuals who need a nursing facility level of care, with appropriate referrals for final
determination;

(10) providing recommendations for nursing facility placement when there are no
cost-effective community services available; and

(11) assistance to transition people back to community settings after facility
admission.

(b) "Minnesota health care programs" means the medical assistance program under
chapter 256B and the alternative care program under section 256B.0913.

Sec. 27.

Minnesota Statutes 2004, section 256B.0911, subdivision 3a, is amended to
read:

Subd. 3a.

Assessment and support planning.

(a) Persons requesting assessment,
services planning, or other assistance intended to support community-based living must be
visited by a long-term care consultation team within ten working days after the date on
which an assessment was requested or recommended. Assessments must be conducted
according to paragraphs (b) to (g).

(b) The county may utilize a team of either the social worker or public health nurse,
or both, to conduct the assessment in a face-to-face interview. The consultation team
members must confer regarding the most appropriate care for each individual screened or
assessed.

(c) The long-term care consultation team must assess the health and social needs of
the person, using an assessment form provided by the commissioner.

(d) The team must conduct the assessment in a face-to-face interview with the
person being assessed and the person's legal representative, if applicable.

(e) The team must provide the person, or the person's legal representative, with
written recommendations for facility- or community-based services. The team must
document that the most cost-effective alternatives available were offered to the individual.
For purposes of this requirement, "cost-effective alternatives" means community services
and living arrangements that cost the same as or less than nursing facility care.

(f) If the person chooses to use community-based services, the team must provide
the person or the person's legal representative with a written community support plan,
regardless of whether the individual is eligible for Minnesota health care programs.
The person may request assistance in developing a community support plan without
participating in a complete assessment. If the person chooses to obtain a reverse mortgage
under section 47.58 as part of the community support plan, the plan must include a
spending plan for the reverse mortgage payments.

(g) The team must give the person receiving assessment or support planning, or
the person's legal representative, materials supplied by the commissioner containing
the following information:

(1) the purpose of preadmission screening and assessment;

(2) information about Minnesota health care programs and about reverse mortgages,
including the provisions of sections 47.58; 256B.0913, subdivision 17; and 462A.05,
subdivision 42;

(3) the person's freedom to accept or reject the recommendations of the team;

(4) the person's right to confidentiality under the Minnesota Government Data
Practices Act, chapter 13; and

(5) the person's right to appeal the decision regarding the need for nursing facility
level of care or the county's final decisions regarding public programs eligibility according
to section 256.045, subdivision 3.

Sec. 28.

Minnesota Statutes 2004, section 256B.0913, is amended by adding a
subdivision to read:

Subd. 17.

Services for persons using reverse mortgages.

(a) Alternative care
services are available to a person who satisfies the following criteria:

(1) the person qualifies for the reverse mortgage incentive program under section
462A.05, subdivision 42, and has received the final payment on a qualifying reverse
mortgage, or the person satisfies the criteria in section 462A.05, subdivision 42, paragraph
(b), clauses (1) to (5), and has otherwise obtained a reverse mortgage and payments
received from the reverse mortgage for a period of at least 24 months or in an amount of
at least $15,000 are used for services and supports, including basic shelter needs, home
maintenance, and modifications or adaptations, necessary to allow the person to remain in
the home as an alternative to a nursing facility placement; and

(2) the person satisfies the eligibility criteria under this section, other than age,
income, and assets, and verifies that reverse mortgage expenditures were made according
to the spending plan established under section 256B.0911, if one has been established.

(b) In addition to the other services provided under this section, a person who
qualifies under this subdivision shall not be assessed a monthly participation fee under
subdivision 12 nor be subject to an estate claim under section 256B.15 for services
received under this section.

(c) The commissioner shall require a certification of loan satisfaction or other
documentation that the person qualifies under this subdivision.

Sec. 29.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 1,
is amended to read:

Subdivision 1.

Program criteria.

Beginning on or after October 1, 2005, within
the limits of appropriations specifically available for this purpose, the commissioner shall
provide funding to qualified provider applicants for employee scholarships for education
in nursing and other health care fields. Employee scholarships must be for a course of
study that is expected to lead to career advancement with the provider or in the field
of long-term care, including home care or care of persons with disabilities, or nursing.
Providers that secure this funding must use it to award scholarships to employees who
work an average of at least 20 hours per week for the provider. Executive management
staff without direct care duties, registered nurses, and therapists are not eligible to receive
scholarships under this section.

Sec. 30.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 3,
is amended to read:

Subd. 3.

Provider selection criteria.

To be considered for scholarship funding,
the provider shall submit a completed application within the time frame specified by the
commissioner. In awarding funding, the commissioner shall consider the following:

(1) the size of the provider as measured in annual billing to the medical assistance
program. To be eligible, a provider must receive at least $500,000 $300,000 annually
in medical assistance payments;

(2) the percentage of employees meeting the scholarship program recipient
requirements;

(3) staff retention rates for paraprofessionals; and

(4) other criteria determined by the commissioner.

Sec. 31.

Minnesota Statutes 2005 Supplement, section 256B.0918, subdivision 4,
is amended to read:

Subd. 4.

Funding specifics.

Within the limits of appropriations specifically
available for this purpose, for the rate period beginning on or after October 1, 2005, to
September 30, 2007, the commissioner shall provide to each provider listed in subdivision
2 and awarded funds under subdivision 3 a medical assistance rate increase to fund
scholarships up to two-tenths three-tenths percent of the medical assistance reimbursement
rate. The commissioner shall require providers to repay any portion of funds awarded
under subdivision 3 that is not used to fund scholarships. If applications exceed available
funding, funding shall be targeted to providers that employ a higher percentage of
paraprofessional staff or have lower rates of turnover of paraprofessional staff. During
the subsequent years of the program, the rate adjustment may be recalculated, at the
discretion of the commissioner. In making a recalculation the commissioner may consider
the provider's success at granting scholarships based on the amount spent during the
previous year and the availability of appropriations to continue the program.

Sec. 32.

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

Subd. 9.

Recovery of alternative care and certain reverse mortgages.

The state
and a county agency shall not recover alternative care paid for a person under section
256B.0913, subdivision 17, under this section.

Sec. 33.

Minnesota Statutes 2005 Supplement, section 256B.434, subdivision 4,
is amended to read:

Subd. 4.

Alternate rates for nursing facilities.

(a) For nursing facilities which
have their payment rates determined under this section rather than section 256B.431, the
commissioner shall establish a rate under this subdivision. The nursing facility must enter
into a written contract with the commissioner.

(b) A nursing facility's case mix payment rate for the first rate year of a facility's
contract under this section is the payment rate the facility would have received under
section 256B.431.

(c) A nursing facility's case mix payment rates for the second and subsequent years
of a facility's contract under this section are the previous rate year's contract payment
rates plus an inflation adjustment and, for facilities reimbursed under this section or
section 256B.431, an adjustment to include the cost of any increase in Health Department
licensing fees for the facility taking effect on or after July 1, 2001. The index for the
inflation adjustment must be based on the change in the Consumer Price Index-All Items
(United States City average) (CPI-U) forecasted by the commissioner of finance's national
economic consultant, as forecasted in the fourth quarter of the calendar year preceding
the rate year. The inflation adjustment must be based on the 12-month period from the
midpoint of the previous rate year to the midpoint of the rate year for which the rate is
being determined. For the rate years beginning on July 1, 1999, July 1, 2000, July 1, 2001,
July 1, 2002, July 1, 2003, July 1, 2004, July 1, 2005, July 1, 2006, July 1, 2007, and July
1, 2008, this paragraph shall apply only to the property-related payment rate, except
that adjustments to include the cost of any increase in Health Department licensing fees
taking effect on or after July 1, 2001, shall be provided. Beginning in 2005, adjustment to
the property payment rate under this section and section 256B.431 shall be effective on
October 1. In determining the amount of the property-related payment rate adjustment
under this paragraph, the commissioner shall determine the proportion of the facility's
rates that are property-related based on the facility's most recent cost report. Beginning
October 1, 2006, facilities reimbursed under this section shall be allowed to receive a
property rate adjustment for building projects under section 144A.071, subdivision 2.

(d) The commissioner shall develop additional incentive-based payments of up to
five percent above a facility's operating payment rate for achieving outcomes specified
in a contract. The commissioner may solicit contract amendments and implement those
which, on a competitive basis, best meet the state's policy objectives. The commissioner
shall limit the amount of any incentive payment and the number of contract amendments
under this paragraph to operate the incentive payments within funds appropriated for this
purpose. The contract amendments may specify various levels of payment for various
levels of performance. Incentive payments to facilities under this paragraph may be in
the form of time-limited rate adjustments or supplemental payments. In establishing the
specified outcomes and related criteria, the commissioner shall consider the following
state policy objectives:

(1) successful diversion or discharge of residents to the residents' prior home or
other community-based alternatives;

(2) adoption of new technology to improve quality or efficiency;

(3) improved quality as measured in the Nursing Home Report Card;

(4) reduced acute care costs; and

(5) any additional outcomes proposed by a nursing facility that the commissioner
finds desirable.

Sec. 34.

Minnesota Statutes 2004, section 256B.437, subdivision 3, is amended to read:

Subd. 3.

Applications for planned closure of nursing facilities.

(a) By August
15, 2001, the commissioner of human services shall implement and announce a program
for closure or partial closure of nursing facilities. Names and identifying information
provided in response to the announcement shall remain private unless approved, according
to the timelines established in the plan. The announcement must specify:

(1) the criteria in subdivision 4 that will be used by the commissioner to approve or
reject applications;

(2) the information that must accompany an application; and

(3) that applications may combine planned closure rate adjustments with moratorium
exception funding, in which case a single application may serve both purposes.

Between August 1, 2001, and June 30, 2003, the commissioner may approve planned
closures of up to 5,140 nursing facility beds, less the number of beds delicensed in
facilities during the same time period without approved closure plans or that have notified
the commissioner of health of their intent to close without an approved closure plan.
Beginning July 1, 2004, the commissioner may negotiate a planned closure for nursing
facilities providing the proposal has no cost to the state.

(b) A facility or facilities reimbursed under section 256B.431 or 256B.434 with a
closure plan approved by the commissioner under subdivision 5 may assign a planned
closure rate adjustment to another facility or facilities that are not closing or in the case of
a partial closure, to the facility undertaking the partial closure. A facility may also elect to
have a planned closure rate adjustment shared equally by the five nursing facilities with
the lowest total operating payment rates in the state development region designated under
section 462.385, in which the facility that is closing is located. The planned closure
rate adjustment must be calculated under subdivision 6. Facilities that delicense beds
without a closure plan, or whose closure plan is not approved by the commissioner, are not
eligible to assign a planned closure rate adjustment under subdivision 6, unless they are
delicensing five or fewer beds, or less than six percent of their total licensed bed capacity,
whichever is greater, are located in a county in the top three quartiles of beds per 1,000
persons aged 65 or older, and have not delicensed beds in the prior three months. Facilities
meeting these criteria are eligible to assign the amount calculated under subdivision 6 to
themselves. If a facility is delicensing the greater of six or more beds, or six percent or
more of its total licensed bed capacity, and does not have an approved closure plan or is
not eligible for the adjustment under subdivision 6, the commissioner shall calculate the
amount the facility would have been eligible to assign under subdivision 6, and shall use
this amount to provide equal rate adjustments to the five nursing facilities with the lowest
total operating payment rates in the state development region designated under section
462.385, in which the facility that delicensed beds is located.

(c) To be considered for approval, an application must include:

(1) a description of the proposed closure plan, which must include identification of
the facility or facilities to receive a planned closure rate adjustment;

(2) the proposed timetable for any proposed closure, including the proposed dates
for announcement to residents, commencement of closure, and completion of closure;

(3) if available, the proposed relocation plan for current residents of any facility
designated for closure. If a relocation plan is not available, the application must include a
statement agreeing to develop a relocation plan designed to comply with section 144A.161;

(4) a description of the relationship between the nursing facility that is proposed for
closure and the nursing facility or facilities proposed to receive the planned closure rate
adjustment. If these facilities are not under common ownership, copies of any contracts,
purchase agreements, or other documents establishing a relationship or proposed
relationship must be provided;

(5) documentation, in a format approved by the commissioner, that all the nursing
facilities receiving a planned closure rate adjustment under the plan have accepted joint
and several liability for recovery of overpayments under section 256B.0641, subdivision
2, for the facilities designated for closure under the plan; and

(6) an explanation of how the application coordinates with planning efforts under
subdivision 2. If the planning group does not support a level of nursing facility closures
that the commissioner considers to be reasonable, the commissioner may approve a
planned closure proposal without its support.

(d) The application must address the criteria listed in subdivision 4.

(e) After April 1, 2006, in consideration of the authority provided in section
144A.071, subdivision 4c, paragraph (a), clause (4), the commissioner shall not approve
an application for planned closure and shall not provide a planned closure rate adjustment
under this subdivision, and shall not provide a single-bed incentive under section
256B.431, subdivision 42, for any bed closures in Cass County.

Sec. 35.

Minnesota Statutes 2004, section 256B.69, subdivision 9, is amended to read:

Subd. 9.

Reporting.

(a) Each demonstration provider shall submit information as
required by the commissioner, including data required for assessing client satisfaction,
quality of care, cost, and utilization of services for purposes of project evaluation. The
commissioner shall also develop methods of data reporting and collection from county
advocacy activities in order to provide aggregate enrollee information on encounters
and outcomes to determine access and quality assurance. Required information shall be
specified before the commissioner contracts with a demonstration provider.

(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate
spending data for major categories of service as reported to the commissioners of health
and commerce under section 62D.08, subdivision 3, and criteria for service authorization
and service use are public data that the commissioner shall make available and use
in public reports. The commissioner shall require each health plan and county-based
purchasing plan to provide:

(1) encounter data for each service provided, using standard codes and unit of
service definitions set by the commissioner, in a form that the commissioner can report by
age, eligibility groups, and health plan; and

(2) criteria, written policies, and procedures required to be disclosed under section
62M.10, subdivision 7, and Code of Federal Regulations, title 42, part 438.210(b)(1), used
for each type of service for which authorization is required.

Sec. 36.

Minnesota Statutes 2005 Supplement, section 256B.69, subdivision 23,
is amended to read:

Subd. 23.

Alternative services; elderly and disabled persons.

(a) The
commissioner may implement demonstration projects to create alternative integrated
delivery systems for acute and long-term care services to elderly persons and persons
with disabilities as defined in section 256B.77, subdivision 7a, that provide increased
coordination, improve access to quality services, and mitigate future cost increases.
The commissioner may seek federal authority to combine Medicare and Medicaid
capitation payments for the purpose of such demonstrations and may contract with
Medicare-approved special needs plans to provide Medicaid services. Medicare funds and
services shall be administered according to the terms and conditions of the federal waiver
and demonstration provisions. For the purpose of administering medical assistance funds,
demonstrations under this subdivision are subject to subdivisions 1 to 22. The provisions
of Minnesota Rules, parts 9500.1450 to 9500.1464, apply to these demonstrations, with the
exceptions of parts 9500.1452, subpart 2, item B; and 9500.1457, subpart 1, items B and
C, which do not apply to persons enrolling in demonstrations under this section. An initial
open enrollment period may be provided. Persons who disenroll from demonstrations
under this subdivision remain subject to Minnesota Rules, parts 9500.1450 to 9500.1464.
When a person is enrolled in a health plan under these demonstrations and the health
plan's participation is subsequently terminated for any reason, the person shall be provided
an opportunity to select a new health plan and shall have the right to change health plans
within the first 60 days of enrollment in the second health plan. Persons required to
participate in health plans under this section who fail to make a choice of health plan shall
not be randomly assigned to health plans under these demonstrations. Notwithstanding
section 256L.12, subdivision 5, and Minnesota Rules, part 9505.5220, subpart 1, item A,
if adopted, for the purpose of demonstrations under this subdivision, the commissioner
may contract with managed care organizations, including counties, to serve only elderly
persons eligible for medical assistance, elderly and disabled persons, or disabled persons
only. For persons with primary diagnoses of mental retardation or a related condition,
serious and persistent mental illness, or serious emotional disturbance, the commissioner
must ensure that the county authority has approved the demonstration and contracting
design. Enrollment in these projects for persons with disabilities shall be voluntary. The
commissioner shall not implement any demonstration project under this subdivision for
persons with primary diagnoses of mental retardation or a related condition, serious and
persistent mental illness, or serious emotional disturbance, without approval of the county
board of the county in which the demonstration is being implemented.

(b) Notwithstanding chapter 245B, sections 252.40 to 252.46, 256B.092, 256B.501
to 256B.5015, and Minnesota Rules, parts 9525.0004 to 9525.0036, 9525.1200 to
9525.1330, 9525.1580, and 9525.1800 to 9525.1930, the commissioner may implement
under this section projects for persons with developmental disabilities. The commissioner
may capitate payments for ICF/MR services, waivered services for mental retardation or
related conditions, including case management services, day training and habilitation and
alternative active treatment services, and other services as approved by the state and by the
federal government. Case management and active treatment must be individualized and
developed in accordance with a person-centered plan. Costs under these projects may not
exceed costs that would have been incurred under fee-for-service. Beginning July 1, 2003,
and until two years after the pilot project implementation date, subcontractor participation
in the long-term care developmental disability pilot is limited to a nonprofit long-term
care system providing ICF/MR services, home and community-based waiver services,
and in-home services to no more than 120 consumers with developmental disabilities in
Carver, Hennepin, and Scott Counties. The commissioner shall report to the legislature
prior to expansion of the developmental disability pilot project. This paragraph expires
two years after the implementation date of the pilot project.

(c) Before implementation of a demonstration project for disabled persons, the
commissioner must provide information to appropriate committees of the house of
representatives and senate and must involve representatives of affected disability groups
in the design of the demonstration projects.

(d) A nursing facility reimbursed under the alternative reimbursement methodology
in section 256B.434 may, in collaboration with a hospital, clinic, or other health care entity
provide services under paragraph (a). The commissioner shall amend the state plan and
seek any federal waivers necessary to implement this paragraph.

(e) The commissioner, in consultation with the commissioners of commerce and
health, may approve and implement programs for all-inclusive care for the elderly (PACE)
according to federal laws and regulations governing that program and state laws or rules
applicable to participating providers. The process for approval of these programs shall
begin only after the commissioner receives grant money in an amount sufficient to cover
the state share of the administrative and actuarial costs to implement the programs during
state fiscal years 2006 and 2007. Grant amounts for this purpose shall be deposited in an
account in the special revenue fund and are appropriated to the commissioner to be used
solely for the purpose of PACE administrative and actuarial costs. A PACE provider is
not required to be licensed or certified as a health plan company as defined in section
62Q.01, subdivision 4. Persons age 55 and older who have been screened by the county
and found to be eligible for services under the elderly waiver or community alternatives
for disabled individuals or who are already eligible for Medicaid but meet level of
care criteria for receipt of waiver services may choose to enroll in the PACE program.
Medicare and Medicaid services will be provided according to this subdivision and
federal Medicare and Medicaid requirements governing PACE providers and programs.
PACE enrollees will receive Medicaid home and community-based services through the
PACE provider as an alternative to services for which they would otherwise be eligible
through home and community-based waiver programs and Medicaid State Plan Services.
The commissioner shall establish Medicaid rates for PACE providers that do not exceed
costs that would have been incurred under fee-for-service or other relevant managed care
programs operated by the state.

(f) The commissioner shall seek federal approval to expand the Minnesota disability
health options (MnDHO) program established under this subdivision in stages, first to
regional population centers outside the seven-county metro area and then to all areas
of the state. Until January 1, 2008, expansion for MnDHO projects that include home
and community-based services is limited to the two projects and service areas in effect
on March 1, 2006. Enrollment in integrated MnDHO programs that include home and
community-based services shall remain voluntary. Costs for home and community-based
services included under MnDHO must not exceed costs that would have been incurred
under the fee-for-service program. In developing program specifications for expansion of
integrated programs, the commissioner shall involve and consult the state-level stakeholder
group established in subdivision 28, paragraph (d), including consultation on whether and
how to include home and community-based waiver programs. Plans for further expansion
of MnDHO projects shall be presented to the chairs of the house and senate committees
with jurisdiction over health and human services policy and finance by February 1, 2007.

(g) Notwithstanding section 256B.0261, health plans providing services under this
section are responsible for home care targeted case management and relocation targeted
case management. Services must be provided according to the terms of the waivers and
contracts approved by the federal government.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 37.

Minnesota Statutes 2004, section 256B.69, is amended by adding a
subdivision to read:

Subd. 28.

Medicare special needs plans and medical assistance basic health
care for persons with disabilities.

(a) The commissioner may contract with qualified
Medicare-approved special needs plans to provide medical assistance basic health care
services to persons with disabilities, including those with developmental disabilities.
Basic health care services include:

(1) those services covered by the medical assistance state plan except for ICF/MR
services, home and community-based waiver services, case management for persons with
developmental disabilities under section 256B.0625, subdivision 20a, and personal care
and certain home care services defined by the commissioner in consultation with the
stakeholder group established under paragraph (d); and

(2) basic health care services may also include risk for up to 100 days of nursing
facility services for persons who reside in a noninstitutional setting and home health
services related to rehabilitation as defined by the commissioner after consultation with
the stakeholder group.

The commissioner may exclude other medical assistance services from the basic
health care benefit set. Enrollees in these plans can access any excluded services on the
same basis as other medical assistance recipients who have not enrolled. Unless a person
is otherwise required to enroll in managed care, enrollment in these plans for Medicaid
services must be voluntary. For purposes of this subdivision, automatic enrollment with an
option to opt out is not voluntary enrollment.

(b) Beginning January 1, 2007, the commissioner may contract with qualified
Medicare special needs plans to provide basic health care services under medical
assistance to persons who are dually eligible for both Medicare and Medicaid and those
Social Security beneficiaries eligible for Medicaid but in the waiting period for Medicare.
The commissioner shall consult with the stakeholder group under paragraph (d) in
developing program specifications for these services. The commissioner shall report to
the chairs of the house and senate committees with jurisdiction over health and human
services policy and finance by February 1, 2007, on implementation of these programs and
the need for increased funding for the ombudsman for managed care and other consumer
assistance and protections needed due to enrollment in managed care of persons with
disabilities. Payment for Medicaid services provided under this subdivision for the months
of May and June will be made no earlier than July 1 of the same calendar year.

(c) Beginning January 1, 2008, the commissioner may expand contracting under this
subdivision to all persons with disabilities not otherwise required to enroll in managed
care.

(d) The commissioner shall establish a state-level stakeholder group to provide
advice on managed care programs for persons with disabilities, including both MnDHO
and contracts with special needs plans that provide basic health care services as described
in paragraphs (a) and (b). The stakeholder group shall provide advice on program
expansions under this subdivision and subdivision 23, including:

(1) implementation efforts;

(2) consumer protections; and

(3) program specifications such as quality assurance measures, data collection and
reporting, and evaluation of costs, quality, and results.

(e) Each plan under contract to provide medical assistance basic health care services
shall establish a local or regional stakeholder group, including representatives of the
counties covered by the plan, members, consumer advocates, and providers, for advice on
issues that arise in the local or regional area.

Sec. 38.

Minnesota Statutes 2004, section 256B.76, is amended to read:

256B.76 PHYSICIAN AND DENTAL REIMBURSEMENT.

(a) Effective for services rendered on or after October 1, 1992, the commissioner
shall make payments for physician services as follows:

(1) payment for level one Centers for Medicare and Medicaid Services' common
procedural coding system codes titled "office and other outpatient services," "preventive
medicine new and established patient," "delivery, antepartum, and postpartum care,"
"critical care," cesarean delivery and pharmacologic management provided to psychiatric
patients, and level three codes for enhanced services for prenatal high risk, shall be paid
at the lower of (i) submitted charges, or (ii) 25 percent above the rate in effect on June
30, 1992. If the rate on any procedure code within these categories is different than the
rate that would have been paid under the methodology in section 256B.74, subdivision 2,
then the larger rate shall be paid;

(2) payments for all other services shall be paid at the lower of (i) submitted charges,
or (ii) 15.4 percent above the rate in effect on June 30, 1992;

(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases
except that payment rates for home health agency services shall be the rates in effect
on September 30, 1992;

(4) effective for services rendered on or after January 1, 2000, payment rates for
physician and professional services shall be increased by three percent over the rates in
effect on December 31, 1999, except for home health agency and family planning agency
services; and

(5) the increases in clause (4) shall be implemented January 1, 2000, for managed
care.

(b) Effective for services rendered on or after October 1, 1992, the commissioner
shall make payments for dental services as follows:

(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25
percent above the rate in effect on June 30, 1992;

(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th
percentile of 1989, less the percent in aggregate necessary to equal the above increases;

(3) effective for services rendered on or after January 1, 2000, payment rates for
dental services shall be increased by three percent over the rates in effect on December
31, 1999;

(4) the commissioner shall award grants to community clinics or other nonprofit
community organizations, political subdivisions, professional associations, or other
organizations that demonstrate the ability to provide dental services effectively to public
program recipients. Grants may be used to fund the costs related to coordinating access for
recipients, developing and implementing patient care criteria, upgrading or establishing
new facilities, acquiring furnishings or equipment, recruiting new providers, or other
development costs that will improve access to dental care in a region. In awarding grants,
the commissioner shall give priority to applicants that plan to serve areas of the state in
which the number of dental providers is not currently sufficient to meet the needs of
recipients of public programs or uninsured individuals. The commissioner shall consider
the following in awarding the grants:

(i) potential to successfully increase access to an underserved population;

(ii) the ability to raise matching funds;

(iii) the long-term viability of the project to improve access beyond the period
of initial funding;

(iv) the efficiency in the use of the funding; and

(v) the experience of the proposers in providing services to the target population.

The commissioner shall monitor the grants and may terminate a grant if the grantee
does not increase dental access for public program recipients. The commissioner shall
consider grants for the following:

(i) implementation of new programs or continued expansion of current access
programs that have demonstrated success in providing dental services in underserved
areas;

(ii) a pilot program for utilizing hygienists outside of a traditional dental office to
provide dental hygiene services; and

(iii) a program that organizes a network of volunteer dentists, establishes a system to
refer eligible individuals to volunteer dentists, and through that network provides donated
dental care services to public program recipients or uninsured individuals;

(5) beginning October 1, 1999, the payment for tooth sealants and fluoride treatments
shall be the lower of (i) submitted charge, or (ii) 80 percent of median 1997 charges;

(6) the increases listed in clauses (3) and (5) shall be implemented January 1, 2000,
for managed care; and

(7) effective for services provided on or after January 1, 2002, payment for
diagnostic examinations and dental x-rays provided to children under age 21 shall be the
lower of (i) the submitted charge, or (ii) 85 percent of median 1999 charges.

(c) Effective for dental services rendered on or after January 1, 2002 July 1, 2006,
the commissioner may, within the limits of available appropriation, shall increase
reimbursements to dentists and dental clinics deemed by the commissioner to be critical
access dental providers. Reimbursement to a critical access dental provider may be
increased by not more than 50 6.88 percent above the reimbursement rate that would
otherwise be paid to the provider. Payments to health plan companies prepaid health plans
shall be adjusted to reflect increased reimbursements to critical access dental providers as
approved by the commissioner. In determining which dentists and dental clinics shall be
deemed critical access dental providers, the commissioner shall review:

(1) the utilization rate in the service area in which the dentist or dental clinic operates
for dental services to patients covered by medical assistance, general assistance medical
care, or MinnesotaCare as their primary source of coverage;

(2) the level of services provided by the dentist or dental clinic to patients covered
by medical assistance, general assistance medical care, or MinnesotaCare as their primary
source of coverage; and

(3) whether the level of services provided by the dentist or dental clinic is critical to
maintaining adequate levels of patient access within the service area.

(d) The commissioner shall award special hardship grants to nonprofit dental
providers with a high proportion of uninsured patients that equals or exceeds 15 percent
of the total number of patients served by that provider and the provider does not receive
a financial benefit comparable to other critical access dental providers under the critical
access dental provider formula described in paragraph (c). The commissioner shall award
a grant to these providers allocated in proportion to each critical access dental provider's
ratio of uninsured patients to the total number of patients served by all providers who
qualify for a grant under this paragraph.

In the absence of a critical access dental provider in a service area, the commissioner may
designate a dentist or dental clinic as a critical access dental provider if the dentist or
dental clinic is willing to provide care to patients covered by medical assistance, general
assistance medical care, or MinnesotaCare at a level which significantly increases access
to dental care in the service area.

(d) (e) An entity that operates both a Medicare certified comprehensive outpatient
rehabilitation facility and a facility which was certified prior to January 1, 1993, that is
licensed under Minnesota Rules, parts 9570.2000 to 9570.3600, and for whom at least 33
percent of the clients receiving rehabilitation services in the most recent calendar year are
medical assistance recipients, shall be reimbursed by the commissioner for rehabilitation
services at rates that are 38 percent greater than the maximum reimbursement rate
allowed under paragraph (a), clause (2), when those services are (1) provided within the
comprehensive outpatient rehabilitation facility and (2) provided to residents of nursing
facilities owned by the entity.

(e) (f) Effective for services rendered on or after January 1, 2007, the commissioner
shall make payments for physician and professional services based on the Medicare
relative value units (RVUs). This change shall be budget neutral and the cost of
implementing RVUs will be incorporated in the established conversion factor.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 39.

Minnesota Statutes 2005 Supplement, section 256D.03, subdivision 3, is
amended to read:

Subd. 3.

General assistance medical care; eligibility.

(a) General assistance
medical care may be paid for any person who is not eligible for medical assistance under
chapter 256B, including eligibility for medical assistance based on a spenddown of excess
income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in
paragraph (b), except as provided in paragraph (c), and:

(1) who is receiving assistance under section 256D.05, except for families with
children who are eligible under Minnesota family investment program (MFIP), or who is
having a payment made on the person's behalf under sections 256I.01 to 256I.06; or

(2) who is a resident of Minnesota; and

(i) who has gross countable income not in excess of 75 percent of the federal poverty
guidelines for the family size, using a six-month budget period and whose equity in assets
is not in excess of $1,000 per assistance unit. Exempt assets, the reduction of excess
assets, and the waiver of excess assets must conform to the medical assistance program in
section 256B.056, subdivision 3, with the following exception: the maximum amount of
undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by
the trustee, assuming the full exercise of the trustee's discretion under the terms of the
trust, must be applied toward the asset maximum;

(ii) who has gross countable income above 75 percent of the federal poverty
guidelines but not in excess of 175 percent of the federal poverty guidelines for the
family size, using a six-month budget period, whose equity in assets is not in excess
of the limits in section 256B.056, subdivision 3c, and who applies during an inpatient
hospitalization; or

(iii) the commissioner shall adjust the income standards under this section each July
1 by the annual update of the federal poverty guidelines following publication by the
United States Department of Health and Human Services.

(b) Effective for applications and renewals processed on or after September 1, 2006,
general assistance medical care may not be paid for applicants or recipients who are adults
with dependent children under 21 whose gross family income is equal to or less than 275
percent of the federal poverty guidelines who are not described in paragraph (e).

(c) Effective for applications and renewals processed on or after September 1, 2006,
general assistance medical care may be paid for applicants and recipients who meet all
eligibility requirements of paragraph (a), clause (2), item (i), for a temporary period
beginning the date of application. Immediately following approval of general assistance
medical care, enrollees shall be enrolled in MinnesotaCare under section 256L.04,
subdivision 7, with covered services as provided in section 256L.03 for the rest of the
six-month eligibility period, until their six-month renewal.

(d) To be eligible for general assistance medical care following enrollment in
MinnesotaCare as required by paragraph (c), an individual must complete a new
application.

(e) Applicants and recipients eligible under paragraph (a), clause (1), or; who have
applied for and are awaiting a determination of blindness or disability by the state medical
review team or a determination of eligibility for Supplemental Security Income or Social
Security Disability Insurance by the Social Security Administration, or; who fail to meet
the requirements of section 256L.09, subdivision 2,; who are classified as end-stage renal
disease beneficiaries in the Medicare program; who are enrolled in private health care
coverage as defined in section 256B.02, subdivision 9; who are eligible under paragraph
(j); or who receive treatment funded pursuant to section 254B.02 are exempt from the
MinnesotaCare enrollment requirements of this subdivision.

(f) For applications received on or after October 1, 2003, eligibility may begin no
earlier than the date of application. For individuals eligible under paragraph (a), clause
(2), item (i), a redetermination of eligibility must occur every 12 months. Individuals are
eligible under paragraph (a), clause (2), item (ii), only during inpatient hospitalization but
may reapply if there is a subsequent period of inpatient hospitalization.

(g) Beginning September 1, 2006, Minnesota health care program applications and
renewals completed by recipients and applicants who are persons described in paragraph
(c) and submitted to the county agency shall be determined for MinnesotaCare eligibility
by the county agency. If all other eligibility requirements of this subdivision are met,
eligibility for general assistance medical care shall be available in any month during which
MinnesotaCare enrollment is pending. Upon notification of eligibility for MinnesotaCare,
notice of termination for eligibility for general assistance medical care shall be sent to
an applicant or recipient. If all other eligibility requirements of this subdivision are
met, eligibility for general assistance medical care shall be available until enrollment in
MinnesotaCare subject to the provisions of paragraphs (c), (e), and (f).

(h) The date of an initial Minnesota health care program application necessary to
begin a determination of eligibility shall be the date the applicant has provided a name,
address, and Social Security number, signed and dated, to the county agency or the
Department of Human Services. If the applicant is unable to provide a name, address,
Social Security number, and signature when health care is delivered due to a medical
condition or disability, a health care provider may act on an applicant's behalf to establish
the date of an initial Minnesota health care program application by providing the county
agency or Department of Human Services with provider identification and a temporary
unique identifier for the applicant. The applicant must complete the remainder of the
application and provide necessary verification before eligibility can be determined. The
county agency must assist the applicant in obtaining verification if necessary.

(i) County agencies are authorized to use all automated databases containing
information regarding recipients' or applicants' income in order to determine eligibility
for general assistance medical care or MinnesotaCare. Such use shall be considered
sufficient in order to determine eligibility and premium payments by the county agency.

(j) General assistance medical care is not available for a person in a correctional
facility unless the person is detained by law for less than one year in a county correctional
or detention facility as a person accused or convicted of a crime, or admitted as an
inpatient to a hospital on a criminal hold order, and the person is a recipient of general
assistance medical care at the time the person is detained by law or admitted on a criminal
hold order and as long as the person continues to meet other eligibility requirements
of this subdivision.

(k) General assistance medical care is not available for applicants or recipients who
do not cooperate with the county agency to meet the requirements of medical assistance.

(l) In determining the amount of assets of an individual eligible under paragraph
(a), clause (2), item (i), there shall be included any asset or interest in an asset, including
an asset excluded under paragraph (a), that was given away, sold, or disposed of for
less than fair market value within the 60 months preceding application for general
assistance medical care or during the period of eligibility. Any transfer described in this
paragraph shall be presumed to have been for the purpose of establishing eligibility for
general assistance medical care, unless the individual furnishes convincing evidence to
establish that the transaction was exclusively for another purpose. For purposes of this
paragraph, the value of the asset or interest shall be the fair market value at the time it
was given away, sold, or disposed of, less the amount of compensation received. For any
uncompensated transfer, the number of months of ineligibility, including partial months,
shall be calculated by dividing the uncompensated transfer amount by the average monthly
per person payment made by the medical assistance program to skilled nursing facilities
for the previous calendar year. The individual shall remain ineligible until this fixed period
has expired. The period of ineligibility may exceed 30 months, and a reapplication for
benefits after 30 months from the date of the transfer shall not result in eligibility unless
and until the period of ineligibility has expired. The period of ineligibility begins in the
month the transfer was reported to the county agency, or if the transfer was not reported,
the month in which the county agency discovered the transfer, whichever comes first. For
applicants, the period of ineligibility begins on the date of the first approved application.

(m) When determining eligibility for any state benefits under this subdivision,
the income and resources of all noncitizens shall be deemed to include their sponsor's
income and resources as defined in the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, title IV, Public Law 104-193, sections 421 and 422, and
subsequently set out in federal rules.

(n) Undocumented noncitizens and nonimmigrants are ineligible for general
assistance medical care. For purposes of this subdivision, a nonimmigrant is an individual
in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and
an undocumented noncitizen is an individual who resides in the United States without the
approval or acquiescence of the Immigration and Naturalization Service.

(o) Notwithstanding any other provision of law, a noncitizen who is ineligible for
medical assistance due to the deeming of a sponsor's income and resources, is ineligible
for general assistance medical care.

(p) Effective July 1, 2003, general assistance medical care emergency services end.

EFFECTIVE DATE.

This section is effective September 1, 2006.

Sec. 40.

Minnesota Statutes 2005 Supplement, section 256L.01, subdivision 4, is
amended to read:

Subd. 4.

Gross individual or gross family income.

(a) "Gross individual or gross
family income" for nonfarm self-employed means income calculated for the six-month
period of eligibility using the net profit or loss reported on the applicant's federal income
tax form for the previous year and using the medical assistance families with children
methodology for determining allowable and nonallowable self-employment expenses and
countable income.

(b) "Gross individual or gross family income" for farm self-employed means income
calculated for the six-month period of eligibility using as the baseline the adjusted gross
income reported on the applicant's federal income tax form for the previous year and
adding back in reported depreciation amounts that apply to the business in which the
family is currently engaged.

(c) "Gross individual or gross family income" means the total income for all family
members, calculated for the six-month period of eligibility.

EFFECTIVE DATE.

This section is effective July 1, 2007, or upon federal
approval, whichever is later.

Sec. 41.

Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 1, is
amended to read:

Subdivision 1.

Covered health services.

For individuals under section 256L.04,
subdivision 7, with income no greater than 75 percent of the federal poverty guidelines
or for families with children under section 256L.04, subdivision 1, all subdivisions of
this section apply. "Covered health services" means the health services reimbursed
under chapter 256B, with the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care services other than services
covered under section 256B.0625, subdivision 9, orthodontic services, nonemergency
medical transportation services, personal care assistant and case management services,
nursing home or intermediate care facilities services, inpatient mental health services,
and chemical dependency services. Outpatient mental health services covered under the
MinnesotaCare program are limited to diagnostic assessments, psychological testing,
explanation of findings, mental health telemedicine, psychiatric consultation, medication
management by a physician, day treatment, partial hospitalization, and individual, family,
and group psychotherapy.

No public funds shall be used for coverage of abortion under MinnesotaCare
except where the life of the female would be endangered or substantial and irreversible
impairment of a major bodily function would result if the fetus were carried to term; or
where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in this section.

EFFECTIVE DATE.

This section is effective July 1, 2007.

Sec. 42.

Minnesota Statutes 2004, section 256L.03, subdivision 3, is amended to read:

Subd. 3.

Inpatient hospital services.

(a) Covered health services shall include
inpatient hospital services, including inpatient hospital mental health services and inpatient
hospital and residential chemical dependency treatment, subject to those limitations
necessary to coordinate the provision of these services with eligibility under the medical
assistance spenddown. Prior to July 1, 1997, the inpatient hospital benefit for adult
enrollees is subject to an annual benefit limit of $10,000. The inpatient hospital benefit
for adult enrollees who qualify under section 256L.04, subdivision 7, or who qualify
under section 256L.04, subdivisions 1 and 2, with family gross income that exceeds
175 percent of the federal poverty guidelines and who are not pregnant, is subject to an
annual limit of $10,000 $20,000.

(b) Admissions for inpatient hospital services paid for under section 256L.11,
subdivision 3, must be certified as medically necessary in accordance with Minnesota
Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):

(1) all admissions must be certified, except those authorized under rules established
under section 254A.03, subdivision 3, or approved under Medicare; and

(2) payment under section 256L.11, subdivision 3, shall be reduced by five percent
for admissions for which certification is requested more than 30 days after the day of
admission. The hospital may not seek payment from the enrollee for the amount of the
payment reduction under this clause.

EFFECTIVE DATE.

This section is effective July 1, 2007.

Sec. 43.

Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 5, is
amended to read:

Subd. 5.

Co-payments and coinsurance.

(a) Except as provided in paragraphs (b)
and (c), the MinnesotaCare benefit plan shall include the following co-payments and
coinsurance requirements for all enrollees:

(1) ten percent of the paid charges for inpatient hospital services for adult enrollees,
subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and
$3,000 per family;

(2) $3 per prescription for adult enrollees;

(3) $25 for eyeglasses for adult enrollees;

(4) $3 per nonpreventive visit. For purposes of this subdivision, a "visit" means an
episode of service which is required because of a recipient's symptoms, diagnosis, or
established illness, and which is delivered in an ambulatory setting by a physician or
physician ancillary, chiropractor, podiatrist, nurse midwife, advanced practice nurse,
audiologist, optician, or optometrist; and

(5) $6 for nonemergency visits to a hospital-based emergency room; and.

(6) 50 percent of the fee-for-service rate for adult dental care services other than
preventive care services for persons eligible under section 256L.04, subdivisions 1 to 7,
with income equal to or less than 175 percent of the federal poverty guidelines.

(b) Paragraph (a), clause (1), does not apply to parents and relative caretakers of
children under the age of 21 in households with family income equal to or less than 175
percent of the federal poverty guidelines. Paragraph (a), clause (1), does not apply to
parents and relative caretakers of children under the age of 21 in households with family
income greater than 175 percent of the federal poverty guidelines for inpatient hospital
admissions occurring on or after January 1, 2001.

(c) Paragraph (a), clauses (1) to (4), do not apply to pregnant women and children
under the age of 21.

(d) Adult enrollees with family gross income that exceeds 175 percent of the
federal poverty guidelines and who are not pregnant shall be financially responsible for
the coinsurance amount, if applicable, and amounts which exceed the $10,000 $20,000
inpatient hospital benefit limit.

(e) When a MinnesotaCare enrollee becomes a member of a prepaid health
plan, or changes from one prepaid health plan to another during a calendar year, any
charges submitted towards the $10,000 $20,000 annual inpatient benefit limit, and any
out-of-pocket expenses incurred by the enrollee for inpatient services, that were submitted
or incurred prior to enrollment, or prior to the change in health plans, shall be disregarded.

EFFECTIVE DATE.

This section is effective July 1, 2007.

Sec. 44.

Minnesota Statutes 2005 Supplement, section 256L.04, subdivision 1a,
is amended to read:

Subd. 1a.

Social Security number required.

(a) Individuals and families applying
for MinnesotaCare coverage must provide a Social Security number. This requirement
does not apply to an undocumented noncitizen or nonimmigrant who is eligible for
MinnesotaCare.

(b) The commissioner shall not deny eligibility to an otherwise eligible applicant
who has applied for a Social Security number and is awaiting issuance of that Social
Security number.

(c) Newborns enrolled under section 256L.05, subdivision 3, are exempt from the
requirements of this subdivision.

(d) Individuals who refuse to provide a Social Security number because of
well-established religious objections are exempt from the requirements of this subdivision.
The term "well-established religious objections" has the meaning given in Code of Federal
Regulations, title 42, section 435.910.

Sec. 45.

Minnesota Statutes 2004, section 256L.04, subdivision 7, is amended to read:

Subd. 7.

Single adults and households with no children.

The definition of eligible
persons includes all individuals and households with no children who have gross family
incomes that are equal to or less than 175 200 percent of the federal poverty guidelines.

EFFECTIVE DATE.

This section is effective July 1, 2007.

Sec. 46.

Minnesota Statutes 2004, section 256L.04, subdivision 10, is amended to read:

Subd. 10.

Citizenship requirements.

(a) Eligibility for MinnesotaCare is limited
to citizens or nationals of the United States, qualified noncitizens, and other persons
residing lawfully in the United States as described in section 256B.06, subdivision 4,
paragraphs (a) to (e) and (j). Undocumented noncitizens and nonimmigrants are ineligible
for MinnesotaCare. For purposes of this subdivision, a nonimmigrant is an individual in
one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and an
undocumented noncitizen is an individual who resides in the United States without the
approval or acquiescence of the Immigration and Naturalization Service This paragraph
does not apply to children.

(b) Families with children who are citizens or nationals of the United States must
cooperate in obtaining satisfactory documentary evidence of citizenship or nationality as
required by the federal Deficit Reduction Act of 2005, Public Law 109-171. State and
county workers must assist applicants in obtaining satisfactory documentary evidence of
citizenship or nationality.

(c) For purposes of this subdivision, a nonimmigrant is an individual in one or
more of the classes listed in United States Code, title 8, section 1101(a)(15), and an
undocumented noncitizen is an individual who resides in the United States without the
approval or acquiescence of the Immigration and Naturalization Service.

Sec. 47.

Minnesota Statutes 2004, section 256L.04, is amended by adding a subdivision
to read:

Subd. 14.

MinnesotaCare outreach.

(a) The commissioner shall award grants to
public or private organizations to provide information on the importance of maintaining
insurance coverage and on how to obtain coverage through the MinnesotaCare program in
areas of the state with high uninsured populations.

(b) In awarding the grants, the commissioner shall consider the following:

(1) geographic areas and populations with high uninsured rates;

(2) the ability to raise matching funds; and

(3) the ability to contact or serve eligible populations.

The commissioner shall monitor the grants and may terminate a grant if the outreach
effort does not increase enrollment in medical assistance, general assistance medical care,
or the MinnesotaCare program.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 48.

Minnesota Statutes 2005 Supplement, section 256L.07, subdivision 1, is
amended to read:

Subdivision 1.

General requirements.

(a) Children enrolled in the original
children's health plan as of September 30, 1992, children who enrolled in the
MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross incomes that are equal to or
less than 150 percent of the federal poverty guidelines are eligible without meeting
the requirements of subdivision 2 and the four-month requirement in subdivision 3, as
long as they maintain continuous coverage in the MinnesotaCare program or medical
assistance. Children who apply for MinnesotaCare on or after the implementation date
of the employer-subsidized health coverage program as described in Laws 1998, chapter
407, article 5, section 45, who have family gross incomes that are equal to or less than 150
percent of the federal poverty guidelines, must meet the requirements of subdivision 2 to
be eligible for MinnesotaCare.

(b) Families enrolled in MinnesotaCare under section 256L.04, subdivision 1,
whose income increases above 275 percent of the federal poverty guidelines, are no
longer eligible for the program and shall be disenrolled by the commissioner. Individuals
enrolled in MinnesotaCare under section 256L.04, subdivision 7, whose income increases
above 175 200 percent of the federal poverty guidelines are no longer eligible for the
program and shall be disenrolled by the commissioner. For persons disenrolled under
this subdivision, MinnesotaCare coverage terminates the last day of the calendar month
following the month in which the commissioner determines that the income of a family or
individual exceeds program income limits.

(c) (b) Notwithstanding paragraph (b) (a), children may remain enrolled in
MinnesotaCare if ten percent of their gross individual or gross family income as defined
in section 256L.01, subdivision 4, is less than the premium for a six-month policy with
a $500 deductible available through the Minnesota Comprehensive Health Association.
Children who are no longer eligible for MinnesotaCare under this clause shall be given a
12-month notice period from the date that ineligibility is determined before disenrollment.
The premium for children remaining eligible under this clause shall be the maximum
premium determined under section 256L.15, subdivision 2, paragraph (b).

(d) (c) Notwithstanding paragraphs (b) (a) and (c) (b), parents are not eligible for
MinnesotaCare if gross household income exceeds $25,000 for the six-month period
of eligibility.

EFFECTIVE DATE.

Amendments to paragraph (a) are effective January 1, 2009,
and amendments to paragraph (b) are effective July 1, 2007.

Sec. 49.

Minnesota Statutes 2004, section 256L.07, subdivision 2, is amended to read:

Subd. 2.

Must not have access to employer-subsidized coverage.

(a) To be
eligible, a family or individual an adult must not have access to subsidized health coverage
through an employer and must not have had access to employer-subsidized coverage
through a current employer for 18 months prior to application or reapplication. A family
or individual An adult whose employer-subsidized coverage is lost due to an employer
terminating health care coverage as an employee benefit during the previous 18 months
is not eligible.

(b) This subdivision does not apply to a family or individual an adult who was
enrolled in MinnesotaCare within six months or less of reapplication and who no longer
has employer-subsidized coverage due to the employer terminating health care coverage
as an employee benefit.

(c) For purposes of this requirement, subsidized health coverage means health
coverage for which the employer pays at least 50 percent of the cost of coverage for
the employee or dependent, or a higher percentage as specified by the commissioner.
Children are eligible for employer-subsidized coverage through either parent, including
the noncustodial parent. The commissioner must treat employer contributions to Internal
Revenue Code Section 125 plans and any other employer benefits intended to pay
health care costs as qualified employer subsidies toward the cost of health coverage for
employees for purposes of this subdivision.

(d) This subdivision does not apply to children.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 50.

Minnesota Statutes 2005 Supplement, section 256L.07, subdivision 3, is
amended to read:

Subd. 3.

Other health coverage.

(a) Families and individuals Adults enrolled in
the MinnesotaCare program must have no health coverage while enrolled or for at least
four months prior to application and renewal. Children enrolled in the original children's
health plan and children in families with income equal to or less than 150 percent of the
federal poverty guidelines, who have other health insurance, are eligible if the coverage:

(1) lacks two or more of the following:

(i) basic hospital insurance;

(ii) medical-surgical insurance;

(iii) prescription drug coverage;

(iv) dental coverage; or

(v) vision coverage;

(2) requires a deductible of $100 or more per person per year; or

(3) lacks coverage because the child has exceeded the maximum coverage for a
particular diagnosis or the policy excludes a particular diagnosis.

The commissioner may change this eligibility criterion for sliding scale premiums in
order to remain within the limits of available appropriations. The requirement of no health
coverage This paragraph does not apply to newborns children.

(b) Medical assistance, general assistance medical care, and the Civilian Health and
Medical Program of the Uniformed Service, CHAMPUS, or other coverage provided under
United States Code, title 10, subtitle A, part II, chapter 55, are not considered insurance or
health coverage for purposes of the four-month requirement described in this subdivision.

(c) For purposes of this subdivision, an applicant or enrollee who is entitled to
Medicare Part A or enrolled in Medicare Part B coverage under title XVIII of the Social
Security Act, United States Code, title 42, sections 1395c to 1395w-152, is considered to
have health coverage. An applicant or enrollee who is entitled to premium-free Medicare
Part A may not refuse to apply for or enroll in Medicare coverage to establish eligibility
for MinnesotaCare.

(d) Applicants who were recipients of medical assistance or general assistance
medical care within one month of application must meet the provisions of this subdivision
and subdivision 2.

(e) Cost-effective health insurance that was paid for by medical assistance is not
considered health coverage for purposes of the four-month requirement under this
section, except if the insurance continued after medical assistance no longer considered it
cost-effective or after medical assistance closed.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 51.

Minnesota Statutes 2004, section 256L.11, subdivision 1, is amended to read:

Subdivision 1.

Medical assistance rate to be used.

Payment to providers under
sections 256L.01 to 256L.11 shall be at the same rates and conditions established for
medical assistance, except as provided in subdivisions 2 to 6 8.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 52.

Minnesota Statutes 2004, section 256L.11, is amended by adding a subdivision
to read:

Subd. 7.

Critical access dental providers.

Effective for dental services provided
to MinnesotaCare enrollees on or after January 1, 2007, the commissioner shall increase
payment rates to dentists and dental clinics deemed by the commissioner to be critical
access providers under section 256B.76, paragraph (c), by 50 percent above the payment
rate that would otherwise be paid to the provider. The commissioner shall adjust the
rates paid on or after January 1, 2007, to prepaid health plans under contract with the
commissioner to reflect this rate increase. The prepaid health plan must pass this rate
increase to providers who have been identified by the commissioner as critical access
dental providers under section 256B.76, paragraph (c).

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 53.

Minnesota Statutes 2004, section 256L.11, is amended by adding a subdivision
to read:

Subd. 8.

Provider rate increase.

(a) Effective for services provided on or after July
1, 2006, payments to providers shall be increased by 1.85 percent over the rates in effect
on June 30, 2006. The commissioner shall adjust the rates paid on or after January 1,
2007, to prepaid health plans under contract with the commissioner to reflect this payment
increase. The prepaid health plan must pass this payment increase to providers.

(b) On September 1 of each year, beginning September 1, 2008, the commissioner of
finance shall determine the projected balance of the health care access fund as of June
30 of the following year based on the most recent February forecast adjusted for any
legislative session changes. If the commissioner of finance determines that the projected
balance in the health care access fund as of that June 30 will exceed five percent of the
projected expenditures from the fund for the fiscal year ending the following June 30, the
rate increase described in paragraph (a) shall be paid at a percentage adjusted so that the
projected balance in the fund is reduced to an amount equal to five percent of the projected
expenditures from the fund. If the commissioner of finance determines that the projected
balance in the health care access fund as of June 30 will not exceed five percent of the
projected expenditures from the fund for the fiscal year ending the following June 30, the
rate increase described in paragraph (a) shall not be paid for the following fiscal year.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 54.

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

Subdivision 1.

Premium determination.

(a) Families with children and individuals
shall pay a premium determined according to subdivision 2.

(b) Pregnant women and children under age two are exempt from the provisions
of section 256L.06, subdivision 3, paragraph (b), clause (3), requiring disenrollment
for failure to pay premiums. For pregnant women, this exemption continues until the
first day of the month following the 60th day postpartum. Women who remain enrolled
during pregnancy or the postpartum period, despite nonpayment of premiums, shall be
disenrolled on the first of the month following the 60th day postpartum for the penalty
period that otherwise applies under section 256L.06, unless they begin paying premiums.

(c) Members of the military and their families who meet the eligibility criteria for
MinnesotaCare upon eligibility approval made within 24 months following the end of
the member's tour of active duty shall have their premiums paid by the commissioner.
The effective date of coverage for an individual or family who meets the criteria of this
paragraph shall be the first day of the month following the month in which eligibility is
approved. This exemption shall apply for 12 months if the individual or family remains
eligible upon six-month renewal.

EFFECTIVE DATE.

This section is effective July 1, 2007, or upon federal
approval, whichever is later.

Sec. 55.

Minnesota Statutes 2005 Supplement, section 256L.15, subdivision 2, is
amended to read:

Subd. 2.

Sliding fee scale to determine percentage of monthly gross individual
or family income.

(a) The commissioner shall establish a sliding fee scale to determine
the percentage of monthly gross individual or family income that households at different
income levels must pay to obtain coverage through the MinnesotaCare program. The
sliding fee scale must be based on the enrollee's monthly gross individual or family
income. The sliding fee scale must contain separate tables based on enrollment of one,
two, or three or more persons. The sliding fee scale begins with a premium of 1.5 percent
of monthly gross individual or family income for individuals or families with incomes
below the limits for the medical assistance program for families and children in effect on
January 1, 1999, and proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1,
3.8, 4.8, 5.9, 7.4, and 8.8 percent. These percentages are matched to evenly spaced income
steps ranging from the medical assistance income limit for families and children in effect
on January 1, 1999, to 275 percent of the federal poverty guidelines for the applicable
family size, up to a family size of five. The sliding fee scale for a family of five must be
used for families of more than five. Effective October 1, 2003, the commissioner shall
increase each percentage by 0.5 percentage points for enrollees with income greater than
100 percent but not exceeding 200 percent of the federal poverty guidelines and shall
increase each percentage by 1.0 percentage points for families and children with incomes
greater than 200 percent of the federal poverty guidelines. The sliding fee scale and
percentages are not subject to the provisions of chapter 14. If a family or individual
reports increased income after enrollment, premiums shall be adjusted at the time the
change in income is reported.

(b) Children in families whose gross income is above 275 percent of the federal
poverty guidelines shall pay the maximum premium. The maximum premium is defined
as a base charge for one, two, or three or more enrollees so that if all MinnesotaCare
cases paid the maximum premium, the total revenue would equal the total cost of
MinnesotaCare medical coverage and administration. In this calculation, administrative
costs shall be assumed to equal ten percent of the total. The costs of medical coverage
for pregnant women and children under age two and the enrollees in these groups shall
be excluded from the total. The maximum premium for two enrollees shall be twice the
maximum premium for one, and the maximum premium for three or more enrollees shall
be three times the maximum premium for one.

(c) After calculating the percentage of premium each enrollee shall pay under
paragraph (a), eight percent shall be added to the premium.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 56.

[256L.20] MINNESOTACARE OPTION FOR SMALL EMPLOYERS.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms used
have the meanings given them.

(b) "Dependent" means an unmarried child under the age of 21.

(c) "Eligible employee" means an employee who works at least 20 hours per week
for an eligible employer. Eligible employee does not include an employee who works
on a temporary or substitute basis or who does not work more than 26 weeks annually.
Coverage of an eligible employee includes the employee's spouse.

(d) "Eligible employer" means a business that employs at least two, but not more
than 50, eligible employees, the majority of whom are employed in the state, and includes
a municipality that has 50 or fewer employees.

(e) "Maximum premium" has the meaning given under section 256L.15, subdivision
2, paragraph (b), clause (3).

(f) "Participating employer" means an eligible employer who meets the requirements
in subdivision 3 and applies to the commissioner to enroll its eligible employees and their
dependents in the MinnesotaCare program.

(g) "Program" means the MinnesotaCare program.

Subd. 2.

Option.

Eligible employees and their dependents may enroll in
MinnesotaCare if the eligible employer meets the requirements of subdivision 3. The
effective date of coverage is as defined in section 256L.05, subdivision 3.

Subd. 3.

Employer requirements.

The commissioner shall establish procedures for
an eligible employer to apply for coverage through the program. In order to participate, an
eligible employer must meet the following requirements:

(1) agree to contribute toward the cost of the premium for the employee, the
employee's spouse, and the employee's dependents according to subdivision 4;

(2) certify that at least 75 percent of its eligible employees who do not have other
creditable health coverage are enrolled in the program;

(3) offer coverage to all eligible employees, spouses, and dependents of eligible
employees; and

(4) have not provided employer-subsidized health coverage as an employee benefit
during the previous 12 months, as defined in section 256L.07, subdivision 2, paragraph (c).

Subd. 4.

Premiums.

(a) The premium for coverage provided under this section is
equal to the maximum premium regardless of the income of the eligible employee, as
defined in section 256L.15, subdivision 2, paragraph (b).

(b) For eligible employees without dependents with income equal to or less than 175
percent of the federal poverty guidelines and for eligible employees with dependents with
income equal to or less than 275 percent of the federal poverty guidelines, the participating
employer shall pay 50 percent of the premium established under paragraph (a) for the
eligible employee, the employee's spouse, and any dependents, if applicable.

(c) For eligible employees without dependents with income over 175 percent of the
federal poverty guidelines and for eligible employees with dependents with income over
275 percent of the federal poverty guidelines, the participating employer shall pay the
full cost of the premium established under paragraph (a) for the eligible employee, the
employee's spouse, and any dependents, if applicable. The participating employer may
require the employee to pay a portion of the cost of the premium so long as the employer
pays 50 percent. If the employer requires the employee to pay a portion of the premium,
the employee shall pay the portion of the cost to the employer.

(d) The commissioner shall collect premium payments from participating employers
for eligible employees, spouses, and dependents who are covered by the program as
provided under this section. All premiums collected shall be deposited in the health care
access fund.

Subd. 5.

Coverage.

The coverage offered to those enrolled in the program under
this section must include all health services described under section 256L.03 and all
co-payments and coinsurance requirements under section 256L.03, subdivision 5, apply.

Subd. 6.

Enrollment.

Upon payment of the premium, according to this section
and section 256L.06, eligible employees, spouses, and dependents shall be enrolled in
MinnesotaCare. For purposes of enrollment under this section, income eligibility limits
established under sections 256L.04 and 256L.07, subdivision 1, and asset limits established
under section 256L.17 do not apply. The barriers established under section 256L.07,
subdivision 2 or 3, do not apply to enrollees eligible under this section. The commissioner
may require eligible employees to provide income verification to determine premiums.

EFFECTIVE DATE.

This section is effective July 1, 2008.

Sec. 57.

Minnesota Statutes 2004, section 462A.05, is amended by adding a
subdivision to read:

Subd. 42.

Reverse mortgage incentive program.

(a) The agency shall, within the
limits of appropriations made available for this purpose, establish, in cooperation with
the commissioner of human services, a program to encourage eligible persons to obtain
reverse mortgages to pay for eligible costs of maintaining the person in the home as an
alternative to a nursing facility placement.

(b) The incentive program shall be made available to a person who has been
determined by the commissioner of human services or the commissioner's designated
agent to meet all of the following criteria:

(1) is age 62 or older;

(2) would be eligible for medical assistance within 365 days of admission to a
nursing home;

(3) is not a medical assistance recipient, is not eligible for medical assistance without
a spenddown or waiver obligation, is not ineligible for the medical assistance program due
to an asset transfer penalty, and does not have income greater than the maintenance needs
allowance under section 256B.0915, subdivision 1d, but equal to or less than 120 percent
of the federal poverty guidelines effective July 1 in the year for which program eligibility
is established, who would be eligible for the elderly waiver with a waiver obligation;

(4) needs services that are not funded through other state or federal funding for
which the person qualifies;

(5) obtains a reverse mortgage loan under section 47.58 on a home with an estimated
market value not to exceed $150,000. This limit shall be adjusted annually on April 1
by the percentage change for the previous calendar year in the housing component of the
United States Consumer Price Index - All Urban Consumers; and

(6) agrees to make expenditures of reverse mortgage payments in accordance with a
spending plan established under section 256B.0911, subdivision 3a, in which payments,
services, and supports meet the following standards:

(i) payments received under the loan for a period of at least 24 months or in an
amount of at least $15,000 are used for services and supports, including basic shelter
needs, home maintenance, and modifications or adaptations, necessary to allow the person
to remain in the home as an alternative to a nursing facility placement;

(ii) reimbursements for services, supplies, and equipment shall not exceed the
market rate; and

(iii) if the person's spouse qualifies under section 256B.0913, subdivisions 1 to 14,
the reverse mortgage payments may be used to pay client fees under that section.

(c) The incentives available under this program shall include:

(1) payment of the initial mortgage insurance premium for a reverse mortgage.
The maximum payment under this clause shall be limited to $1,500. This limit shall be
adjusted annually on April 1 by the percentage change for the previous calendar year in the
housing component of the United States Consumer Price Index - All Urban Consumers;

(2) with federal approval, payments to reduce service fee set-asides, through an
advance payment to the lender, an agreement to guarantee fee payments after 60 months
if the set-aside is limited to 60 months, or through other mechanisms approved by the
commissioner; and

(3) other incentives approved by the commissioner.

(d) After calculating the adjusted maximum payment limits under paragraphs (b)
and (c), the commissioner shall annually notify the Office of the Revisor of Statutes in
writing, on or before May 1, of the adjusted limits. The revisor shall annually publish in
the Minnesota Statutes the adjusted maximum payment limits under paragraph (b).

Sec. 58.

Laws 2005, First Special Session chapter 4, article 9, section 5, subdivision 8,
is amended to read:

Subd. 8. Board of Nursing

3,078,000

3,631,000

BASE ADJUSTMENT. The base for the
board of nursing is increased by $141,000
in fiscal year 2008 and by $216,000 in fiscal
year 2009.

BOARD OF NURSING
APPROPRIATIONS INCREASE. Of
this appropriation, $120,000 the first year
and $126,000 the second year are for the
increased cost of board operations, excluding
salary increases and $85,000 each year is to
hire an advanced practice registered nurse.

TRANSFERS FROM SPECIAL
REVENUE FUND. Of this appropriation,
the following transfers shall be made as
directed from the state government special
revenue fund:

(a) $392,000 in fiscal year 2006, $864,000
in fiscal year 2007, $930,000 in fiscal year
2008, and $930,000 in fiscal year 2009
shall be transferred to the general fund
and is appropriated to the Department
of Human Services to offset the state
share of the medical assistance program
costs of the long-term care and home and
community-based care employee scholarship
program and associated administrative costs.
At the end of each biennium, any funds
not expended for the scholarship program
and associated administrative costs shall
be transferred to the state government
special revenue fund carried over to the
next biennium for the same purpose.
Notwithstanding section 15, this paragraph
expires June 30, 2009 2011.

(b) $125,000 the first year and $200,000 the
second year shall be transferred to the health
professional education loan forgiveness
program account for loan forgiveness
for nurses under Minnesota Statutes,
section 144.1501. This appropriation shall
become part of base level funding for the
commissioner for the biennium beginning
July 1, 2007, but shall not be part of base
level funding for the biennium beginning
July 1, 2009. Notwithstanding section 15,
this paragraph expires on June 30, 2009.

Sec. 59. FEDERAL GOVERNMENT CHANGES.

The commissioner of human services shall seek reimbursement from the federal
government for funds expended by the state to provide drug coverage to medical
assistance recipients who are enrolled or in the process of enrolling in Medicare Part
D. The commissioner shall also continue to pursue federal changes to Medicare Part D
to address lapses in drug coverage for medical assistance recipients who are enrolled
in Medicare Part D but who are taking prescription drugs that are not included in the
formularies used by the Medicare Part D drug plans that meet the low-income premium
benchmark set for Minnesota or who are in the process of enrolling in a Medicare Part
D prescription drug plan.

Sec. 60. PHARMACY PAYMENT REFORM ADVISORY COMMITTEE.

Subdivision 1.

Definitions.

For purposes of this section, the following words, terms,
and phrases have the following meanings:

(a) "Department" means the Department of Human Services.

(b) "Commissioner" means the commissioner of human services.

(c) "Cost of dispensing" includes, but is not limited to, operational and overhead
costs; professional counseling as required under the Omnibus Budget Reconciliation Act
of 1990, excluding medication management services under Minnesota Statutes, section
256B.0625, subdivision 13h; salaries; and other associated administrative costs, as well
as a reasonable return on investment. In addition, cost of dispensing includes expenses
transferred by wholesale drug distributors to pharmacies as a result of the wholesale drug
distributor tax under Minnesota Statutes, sections 295.52 to 295.582.

(d) "Additional costs" include, but are not limited to, costs relating to coordination of
benefits, bad debt, uncollected co-pays, payment lag times, and high rate of rejected claims.

(e) "Advisory committee" means the Pharmacy Payment Reform Advisory
Committee established by this section.

Subd. 2.

Advisory committee.

The Pharmacy Payment Reform Advisory
Committee is established under the direction of the commissioner of human services.
The commissioner, after receiving recommendations from the Minnesota Pharmacists
Association, the Minnesota Retailers Association, the Minnesota Hospital Association,
and the Minnesota Wholesale Druggists Association, shall convene a pharmacy payment
reform advisory committee to advise the commissioner and make recommendations to the
legislature on implementation of pharmacy reforms contained in title VI, chapter IV, of
the Deficit Reduction Act of 2005. The committee shall be comprised of three licensed
pharmacists representing both independent and chain pharmacy entities, one of whom
must have expertise in pharmacoeconomics, two individuals representing hospitals with
outpatient pharmacies, and two individuals with expertise in wholesale drug distribution.
The committee shall be staffed by an employee of the department who shall serve as an
ex officio nonvoting member of the committee. The department's pharmacy program
manager shall also serve as an ex officio, nonvoting member of the committee. The
committee is governed by Minnesota Statutes, section 15.059, except that committee
members do not receive compensation or reimbursement for expenses. The advisory
committee expires on January 31, 2008.

Subd. 3.

Cost of dispensing study.

The commissioner shall conduct a prescription
drug cost of dispensing study to determine the average cost of dispensing Medicaid
prescriptions in Minnesota. The commissioner shall contract with an independent third
party in the state that has experience conducting business cost allocation studies, such as
an academic institution, to conduct a prescription drug cost of dispensing study. If no
independent third-party entity exists in the state, the commissioner may contract with an
out-of-state entity. The cost of dispensing study shall be completed by an independent
third party no later than October 1, 2006, and reported to the commissioner and the
advisory committee upon completion.

Subd. 4.

Content of study.

The study shall determine the cost of dispensing
the average prescription and any additional costs that might be incurred for dispensing
Medicaid prescriptions. The study shall include the current level of dispensing fees paid
to providers and an estimate of revenues required to adequately adjust reimbursement
to cover the cost to pharmacies.

Subd. 5.

Methodology of study and publishing requirement.

The independent
third-party entity performing the cost of dispensing research shall submit to the advisory
committee the entity's proposed research methodology and shall publish the collected data
to allow other independent researchers to validate the study results. The data shall be
published in a manner that does not identify the source of the data.

Subd. 6.

Recommendations.

The advisory committee shall use the information
from the cost of dispensing study and make recommendations to the commissioner on
implementation of pharmacy reforms contained in title VI, chapter IV, of the Deficit
Reduction Act of 2005. The commissioner shall report the findings of the study and the
recommendations of the advisory committee to the legislature by January 15, 2007. The
commissioner, in consultation with the advisory committee, shall make recommendations
to the legislature on how to adequately adjust reimbursement rates to pharmacies to cover
the costs of dispensing and additional costs to pharmacies. Reports shall include the
current level of dispensing fees paid to providers and an estimate of revenues required to
adequately adjust reimbursement to ensure that:

(1) reimbursement is sufficient to enlist an adequate number of participating
pharmacy providers so that pharmacy services are as available for Medicaid recipients
under the program as for the state's general population;

(2) Medicaid dispensing fees are adequate to reimburse pharmacy providers for the
costs of dispensing prescriptions under the Medicaid program;

(3) Medicaid pharmacy reimbursement for multiple-source drugs included on the
federal upper reimbursement limit is set at the level established by the federal government
under United States Code, title 42, section 1396r-8(e)(5);

(4) the combined Medicaid program reimbursement for prescription drug product
and the dispensing fee provides a return adequate to provide a reasonable profit for the
participating pharmacy; and

(5) the new payment system does not create disincentives for pharmacists to
dispense generic drugs.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 61. REPAYMENT DELAY.

A county that overspent its allowed amounts in calendar year 2004 or 2005 under
the waivered services program for persons with developmental disabilities shall not be
required to pay back the amount of overspending until May 31, 2007.

Sec. 62. STAKEHOLDER PARTICIPATION.

The commissioner of human services shall confer with one or more stakeholder
groups of interested persons, including representatives of recipients, advocacy groups,
counties, providers, and health plans to provide information and advice on the development
of any substantial proposals for changes in the medical assistance program authorized by
the federal Deficit Reduction Act of 2005, Public Law 109-171. In addition, for any
substantial Deficit Reduction Act-related medical assistance change that affects recipients
and that is proposed outside of the legislative or rulemaking process, the commissioner
shall convene a stakeholder meeting and provide a 30-day comment period before the
change becomes effective. If the time frame required to comply with a federal mandate
precludes the 30-day advance notice, notice shall be given to the stakeholder group as
soon as possible.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 63. REVISOR'S INSTRUCTION.

(a)

The revisor of statutes shall strike all references to the "Class E assisted living
home care programs license," "Class E license," and similar terms in Minnesota Rules,
chapters 4668 and 4669. In sections affected by this instruction, the revisor may make
changes necessary to correct the punctuation, grammar, or structure of the remaining text
and preserve its meaning.

(b)

The revisor of statutes shall change the term "assisted living home care provider,"
"assisted living license," and similar terms to "Class F home care provider," "Class F
license," in Minnesota Rules, chapter 4668. In sections affected by this instruction, the
revisor may make changes necessary to correct the punctuation, grammar, or structure of
the remaining text and preserve its meaning.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 64. REPEALER.

(a) Minnesota Statutes 2005 Supplement, section 256L.035, is repealed, effective
July 1, 2007.

(b) Minnesota Rules, part 4668.0215, is repealed, effective January 1, 2007.

ARTICLE 20

HEALTH CARE FEDERAL COMPLIANCE

Section 1.

Minnesota Statutes 2004, section 62A.045, is amended to read:

62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT
HEALTH PROGRAMS.

(a) As a condition of doing business in Minnesota, each health insurer shall comply
with the requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171,
including any federal regulations adopted under that act, to the extent that it imposes a
requirement that applies in this state and that is not also required by the laws of this state.
This section does not require compliance with any provision of the federal act prior to
the effective date provided for that provision in the federal act. The commissioner shall
enforce this section.

For the purpose of this section, "health insurer" includes self-insured plans; group
health plans, as defined in section 607(1) of the Employee Retirement Income Security Act
of 1974; service benefit plans; managed care organizations; pharmacy benefit managers;
or other parties that are by contract legally responsible to pay a claim for a healthcare item
or service for an individual receiving benefits under paragraph (b).

(b) No health plan issued or renewed to provide coverage to a Minnesota resident
shall contain any provision denying or reducing benefits because services are rendered to a
person who is eligible for or receiving medical benefits pursuant to title XIX of the Social
Security Act (Medicaid) in this or any other state; chapter 256; 256B; or 256D or services
pursuant to section 252.27; 256L.01 to 256L.10; 260B.331, subdivision 2; 260C.331,
subdivision 2; or 393.07, subdivision 1 or 2. No health carrier providing benefits under
plans covered by this section shall use eligibility for medical programs named in this
section as an underwriting guideline or reason for nonacceptance of the risk.

(b) (c) If payment for covered expenses has been made under state medical programs
for health care items or services provided to an individual, and a third party has a legal
liability to make payments, the rights of payment and appeal of an adverse coverage
decision for the individual, or in the case of a child their responsible relative or caretaker,
will be subrogated to the state agency. The state agency may assert its rights under this
section within three years of the date the service was rendered. For purposes of this
section, "state agency" includes prepaid health plans under contract with the commissioner
according to sections 256B.69, 256D.03, subdivision 4, paragraph (c), and 256L.12;
children's mental health collaboratives under section 245.493; demonstration projects for
persons with disabilities under section 256B.77; nursing homes under the alternative
payment demonstration project under section 256B.434; and county-based purchasing
entities under section 256B.692.

(c) (d) Notwithstanding any law to the contrary, when a person covered by a health
plan receives medical benefits according to any statute listed in this section, payment for
covered services or notice of denial for services billed by the provider must be issued
directly to the provider. If a person was receiving medical benefits through the Department
of Human Services at the time a service was provided, the provider must indicate this
benefit coverage on any claim forms submitted by the provider to the health carrier for
those services. If the commissioner of human services notifies the health carrier that
the commissioner has made payments to the provider, payment for benefits or notices
of denials issued by the health carrier must be issued directly to the commissioner.
Submission by the department to the health carrier of the claim on a Department of
Human Services claim form is proper notice and shall be considered proof of payment of
the claim to the provider and supersedes any contract requirements of the health carrier
relating to the form of submission. Liability to the insured for coverage is satisfied to the
extent that payments for those benefits are made by the health carrier to the provider or the
commissioner as required by this section.

(d) (e) When a state agency has acquired the rights of an individual eligible for
medical programs named in this section and has health benefits coverage through a
health carrier, the health carrier shall not impose requirements that are different from
requirements applicable to an agent or assignee of any other individual covered.

(e) (f) For the purpose of this section, health plan includes coverage offered by
community integrated service networks, any plan governed under the federal Employee
Retirement Income Security Act of 1974 (ERISA), United States Code, title 29, sections
1001 to 1461, and coverage offered under the exclusions listed in section 62A.011,
subdivision 3, clauses (2), (6), (9), (10), and (12).

Sec. 2.

Minnesota Statutes 2004, section 144.6501, subdivision 6, is amended to read:

Subd. 6.

Medical assistance payment.

(a) An admission contract for a facility that
is certified for participation in the medical assistance program must state that neither the
prospective resident, nor anyone on the resident's behalf, is required to pay privately any
amount for which the resident's care at the facility has been approved for payment by
medical assistance or to make any kind of donation, voluntary or otherwise. Except as
permitted under section 6015 of the Deficit Reduction Act of 2005, Public Law 109-171,
an admission contract must state that the facility does not require as a condition of
admission, either in its admission contract or by oral promise before signing the admission
contract, that residents remain in private pay status for any period of time.

(b) The admission contract must state that upon presentation of proof of eligibility,
the facility will submit a medical assistance claim for reimbursement and will return any
and all payments made by the resident, or by any person on the resident's behalf, for
services covered by medical assistance, upon receipt of medical assistance payment.

(c) A facility that participates in the medical assistance program shall not charge for
the day of the resident's discharge from the facility or subsequent days.

(d) If a facility's charges incurred by the resident are delinquent for 30 days, and
no person has agreed to apply for medical assistance for the resident, the facility may
petition the court under chapter 525 to appoint a representative for the resident in order to
apply for medical assistance for the resident.

(e) The remedy provided in this subdivision does not preclude a facility from seeking
any other remedy available under other laws of this state.

Sec. 3.

Minnesota Statutes 2004, section 256B.02, subdivision 9, is amended to read:

Subd. 9.

Private health care coverage.

"Private health care coverage" means any
plan regulated by chapter 62A, 62C or 64B. Private health care coverage also includes
any self-insurance self-insured plan providing health care benefits, pharmacy benefit
manager, service benefit plan, managed care organization, and other parties that are by
contract legally responsible for payment of a claim for a health care item or service for an
individual receiving medical benefits under chapter 256B, 256D, or 256L.

Sec. 4.

Minnesota Statutes 2004, section 256B.056, subdivision 2, is amended to read:

Subd. 2.

Homestead; exclusion and homestead equity limit for institutionalized
persons.

(a) The homestead shall be excluded for the first six calendar months of a
person's stay in a long-term care facility and shall continue to be excluded for as long as
the recipient can be reasonably expected to return to the homestead. For purposes of
this subdivision, "reasonably expected to return to the homestead" means the recipient's
attending physician has certified that the expectation is reasonable, and the recipient can
show that the cost of care upon returning home will be met through medical assistance
or other sources. The homestead shall continue to be excluded for persons residing in
a long-term care facility if it is used as a primary residence by one of the following
individuals:

(a) (1) the spouse;

(b) (2) a child under age 21;

(c) (3) a child of any age who is blind or permanently and totally disabled as defined
in the supplemental security income program;

(d) (4) a sibling who has equity interest in the home and who resided in the home for
at least one year immediately before the date of the person's admission to the facility; or

(e) (5) a child of any age, or, subject to federal approval, a grandchild of any age,
who resided in the home for at least two years immediately before the date of the person's
admission to the facility, and who provided care to the person that permitted the person to
reside at home rather than in an institution.

(b) Effective for applications filed on or after July 1, 2006, and for renewals after
July 1, 2006, for persons who first applied for payment of long-term care services on
or after January 2, 2006, the equity interest in the homestead of an individual whose
eligibility for long-term care services is determined on or after January 1, 2006, shall not
exceed $500,000, unless it is the lawful residence of the individual's spouse or child
who is under age 21, blind, or disabled. The amount specified in this paragraph shall be
increased beginning in year 2011, from year-to-year based on the percentage increase in
the Consumer Price Index for all urban consumers (all items; United States city average),
rounded to the nearest $1,000. This provision may be waived in the case of demonstrated
hardship by a process to be determined by the secretary of health and human services
pursuant to section 6014 of the Deficit Reduction Act of 2005, Public Law 109-171.

Sec. 5.

Minnesota Statutes 2004, section 256B.056, is amended by adding a
subdivision to read:

Subd. 3e.

Treatment of continuing care retirement and life care community
entrance fees.

An entrance fee paid by an individual to a continuing care retirement or
life care community shall be treated as an available asset to the extent that:

(1) the individual has the ability to use the entrance fee, or the contract provides that
the entrance fee may be used, to pay for care should other resources or income of the
individual be insufficient to pay for care;

(2) the individual is eligible for a refund of any remaining entrance fees when
the individual dies or terminates the continuing care retirement or life care community
contract and leaves the community; and

(3) the entrance fee does not confer an ownership interest in the continuing care
retirement or life care community.

Sec. 6.

Minnesota Statutes 2004, section 256B.056, is amended by adding a
subdivision to read:

Subd. 11.

Treatment of annuities.

(a) Any individual applying for or seeking
recertification of eligibility for medical assistance payment of long-term care services
shall provide a complete description of any interest either the individual or the individual's
spouse has in annuities. The individual and the individual's spouse shall furnish the
agency responsible for determining eligibility with complete current copies of their
annuities and related documents for review as part of the application process on disclosure
forms provided by the department as part of their application.

(b) The disclosure form shall include a statement that the department becomes the
remainder beneficiary under the annuity or similar financial instrument by virtue of the
receipt of medical assistance. The disclosure form shall include a notice to the issuer of
the department's right under this section as a preferred remainder beneficiary under the
annuity or similar financial instrument for medical assistance furnished to the individual
or the individual's spouse, and require the issuer to provide confirmation that a remainder
beneficiary designation has been made and to notify the county agency when there is a
change in the amount of the income or principal being withdrawn from the annuity or
other similar financial instrument at the time of the most recent disclosure required under
this section. The individual and the individual's spouse shall execute separate disclosure
forms for each annuity or similar financial instrument that they are required to disclose
under this section and in which they have an interest.

(c) An issuer of an annuity or similar financial instrument who receives notice on a
disclosure form as described in paragraph (b) shall provide confirmation to the requesting
agency that a remainder beneficiary designating the state has been made and shall notify
the county agency when there is a change in the amount of income or principal being
withdrawn from the annuity or other similar financial instrument.

Sec. 7.

Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to read:

256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.

Subdivision 1.

Definitions.

For purposes of this section, the following terms have
the meanings given them.

Subd. 2.

Home care service.

"Home care service" means care described in section
.

Subd. 3.

Long-term care insurance.

"Long-term care insurance" means a policy
described in section 62S.01.

Subd. 4.

Medical assistance.

"Medical assistance" means the program of medical
assistance established under section 256B.01.

Subd. 5.

Nursing home.

"Nursing home" means a nursing home as described
in section .

Subd. 6.

Partnership policy.

"Partnership policy" means a long-term care insurance
policy that meets the requirements under subdivision 10 or 11, regardless of when the
policy and was first issued on or after the effective date of the state plan amendment
implementing the partnership program in Minnesota.

Subd. 7.

Partnership program.

"Partnership program" means the Minnesota
partnership for long-term care program established under this section.

Subd. 7a.

Protected assets.

"Protected assets" means assets or proceeds of assets
that are protected from recovery under subdivisions 13 and 15.

Subd. 8.

Program established.

(a) The commissioner, in cooperation with the
commissioner of commerce, shall establish the Minnesota partnership for long-term care
program to provide for the financing of long-term care through a combination of private
insurance and medical assistance.

(b) An individual who meets the requirements in this paragraph is eligible to
participate in the partnership program. The individual must:

(1) be a Minnesota resident at the time coverage first became effective under the
partnership policy;

(2) purchase a partnership policy that is delivered, issued for delivery, or renewed on
or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section
5, and maintain the partnership policy in effect throughout the period of participation
in the partnership program be a beneficiary of a partnership policy that (i) is issued on
or after the effective date of the state plan amendment implementing the partnership
program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of
subdivision 8a; and

(3) exhaust the minimum have exhausted all of the benefits under the partnership
policy as described in this section. Benefits received under a long-term care insurance
policy before the effective date of Laws 2005, First Special Session chapter 4, article 7,
section 5 July 1, 2006, do not count toward the exhaustion of benefits required in this
subdivision.

Subd. 8a.

Exchange for long-term care partnership policy; addition of policy
rider.

(a) If federal law is amended or federal approval is granted with respect to the
partnership program established in this section, a long-term care insurance policy that
was issued before the effective date of the state plan amendment implementing the
partnership program in Minnesota that was exchanged after the effective date of the state
plan amendment for a long-term care partnership policy that meets the requirements
of Public Law 109-171, section 6021, qualifies as a long-term care partnership policy
under this section.

(b) If federal law is amended or federal approval is granted with respect to the
partnership program established in this section, a long-term care insurance policy that was
issued before the effective date of the state plan amendment implementing the partnership
program in Minnesota that has a rider added after the effective date of the state plan
amendment that meets the requirements of Public Law 109-171, section 6021, qualifies
as a long-term care partnership policy under this section.

Subd. 9.

Medical assistance eligibility.

(a) Upon application of for medical
assistance program payment of long-term care services by an individual who meets the
requirements described in subdivision 8, the commissioner shall determine the individual's
eligibility for medical assistance according to paragraphs (b) and (c) to (i).

(b) After disregarding financial determining assets exempted under medical
assistance eligibility requirements subject to the asset limit under section 256B.056,
subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall disregard an
additional amount of financial assets equal allow the individual to designate assets to be
protected from recovery under subdivisions 13 and 15 up to the dollar amount of coverage
the benefits utilized under the partnership policy. Designated assets shall be disregarded
for purposes of determining eligibility for payment of long-term care services.

(c) The commissioner shall consider the individual's income according to medical
assistance eligibility requirements. The individual shall identify the designated assets and
the full fair market value of those assets and designate them as assets to be protected at
the time of initial application for medical assistance. The full fair market value of real
property or interests in real property shall be based on the most recent full assessed value
for property tax purposes for the real property, unless the individual provides a complete
professional appraisal by a licensed appraiser to establish the full fair market value. The
extent of a life estate in real property shall be determined using the life estate table in the
health care program's manual. Ownership of any asset in joint tenancy shall be treated as
ownership as tenants in common for purposes of its designation as a disregarded asset.
The unprotected value of any protected asset is subject to estate recovery according to
subdivisions 13 and 15.

(d) The right to designate assets to be protected is personal to the individual and
ends when the individual dies, except as otherwise provided in subdivisions 13 and
15. It does not include the increase in the value of the protected asset and the income,
dividends, or profits from the asset. It may be exercised by the individual or by anyone
with the legal authority to do so on the individual's behalf. It shall not be sold, assigned,
transferred, or given away.

(e) If the dollar amount of the benefits utilized under a partnership policy is greater
than the full fair market value of all assets protected at the time of the application for
medical assistance long-term care services, the individual may designate additional assets
that become available during the individual's lifetime for protection under this section.
The individual must make the designation in writing to the county agency no later than
the last date on which the individual must report a change in circumstances to the county
agency, as provided for under the medical assistance program. Any excess used for this
purpose shall not be available to the individual's estate to protect assets in the estate from
recovery under section 256B.15 or 524.3-1202, or otherwise.

(f) This section applies only to estate recovery under United States Code, title 42,
section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other
provisions of federal law, including, but not limited to, recovery from trusts under United
States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from
annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of
the Deficit Reduction Act of 2005, Public Law 109-171.

(g) An individual's protected assets owned by the individual's spouse who applies
for payment of medical assistance long-term care services shall not be protected assets or
disregarded for purposes of eligibility of the individual's spouse solely because they were
protected assets of the individual.

(h) Assets designated under this subdivision shall not be subject to penalty under
section 256B.0595.

(i) The commissioner shall otherwise determine the individual's eligibility
for payment of long-term care services according to medical assistance eligibility
requirements.

Subd. 10.

Dollar-for-dollar asset protection policies Long-term care partnership
policy inflation protection.

(a) A dollar-for-dollar asset protection policy must meet all
of the requirements in paragraphs (b) to (e).

(b) The policy must satisfy the requirements of chapter 62S.

(c) The policy must offer an elimination period of not more than 180 days for an
adjusted premium.

(d) The policy must satisfy the requirements established by the commissioner of
human services under subdivision 14.

(e) Minimum daily benefits shall be $130 for nursing home care or $65 for home
care, with inflation protection provided in the policy as described in section 62S.23,
subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the
commissioner on October 1 of each year by a percentage equal to the inflation protection
feature described in section 62S.23, subdivision 1, clause (1), for purposes of setting
minimum requirements that a policy must meet in future years in order to initially qualify
as an approved policy under this subdivision. Adjusted minimum daily benefit amounts
shall be rounded to the nearest whole dollar. A long-term care partnership policy must
provide the inflation protection described in this subdivision. If the policy is sold to an
individual who:

(1) has not attained age 61 as of the date of purchase, the policy must provide
compound annual inflation protection;

(2) has attained age 61, but has not attained age 76 as of such date, the policy must
provide some level of inflation protection; and

(3) has attained age 76 as of such date, the policy may, but is not required to, provide
some level of inflation protection.

Subd. 11.

Total asset protection policies.

(a) A total asset protection policy must
meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.

(b) Minimum coverage shall be for a period of not less than three years and for a
dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate
determined and adjusted under paragraph (c).

(c) Minimum daily benefits shall be $150 for nursing home care or $75 for home
care, with inflation protection provided in the policy as described in section 62S.23,
subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted
by the commissioner on October 1 of each year by a percentage equal to the inflation
protection feature described in section 62S.23, subdivision 1, clause (1), for purposes of
setting minimum requirements that a policy must meet in future years in order to initially
qualify as an approved policy under this subdivision. Adjusted minimum daily benefit
amounts shall be rounded to the nearest whole dollar.

(d) The policy must cover all of the following services:

(1) nursing home stay;

(2) home care service; and

(3) care management.

Subd. 12.

Compliance with federal law.

An issuer of a partnership policy must
comply with any federal law authorizing partnership policies in Minnesota Public Law
109-171, section 6021, including any federal regulations, as amended, adopted under that
law. This subdivision does not require compliance with any provision of this federal
law until the date upon which the law requires compliance with the provision. The
commissioner has authority to enforce this subdivision.

Subd. 13.

Limitations on estate recovery.

(a) For an individual who exhausts the
minimum benefits of a dollar-for-dollar asset protection policy under subdivision 10, and
is determined eligible for medical assistance under subdivision 9, the state shall limit
recovery under the provisions of section 256B.15 against the estate of the individual
or individual's spouse for medical assistance benefits received by that individual to an
amount that exceeds the dollar amount of coverage utilized under the partnership policy.
Protected assets of the individual shall not be subject to recovery under section 256B.15
or 524.3-1201 for medical assistance or alternative care paid on behalf of the individual.
Protected assets of the individual in the estate of the individual's surviving spouse shall
not be liable to pay a claim for recovery of medical assistance paid for the predeceased
individual that is filed in the estate of the surviving spouse under section 256B.15.
Protected assets of the individual shall not be protected assets in the surviving spouse's
estate by reason of the preceding sentence and shall be subject to recovery under section
256B.15 or 524.3-1201 for medical assistance paid on behalf of the surviving spouse.

(b) For an individual who exhausts the minimum benefits of a total asset protection
policy under subdivision 11, and is determined eligible for medical assistance under
subdivision 9, the state shall not seek recovery under the provisions of section 256B.15
against the estate of the individual or individual's spouse for medical assistance benefits
received by that individual. The personal representative may protect the full fair market
value of an individual's unprotected assets in the individual's estate in an amount equal
to the unused amount of asset protection the individual had on the date of death. The
personal representative shall apply the asset protection so that the full fair market value of
any unprotected asset in the estate is protected. When or if the asset protection available
to the personal representative is or becomes less than the full fair market value of any
remaining unprotected asset, it shall be applied to partially protect one unprotected asset.

(c) The asset protection described in paragraph (a) terminates with respect to an asset
includable in the individual's estate under chapter 524 or section 256B.15:

(1) when the estate distributes the asset; or

(2) if the estate of the individual has not been probated within one year from the
date of death.

(d) If an individual owns a protected asset on the date of death and the estate is
opened for probate more than one year after death, the state or a county agency may file
and collect claims in the estate under section 256B.15, and no statute of limitations in
chapter 524 that would otherwise limit or bar the claim shall apply.

(e) Except as otherwise provided, nothing in this section shall limit or prevent
recovery of medical assistance.

Subd. 14.

Implementation.

(a) If federal law is amended or a federal waiver is
granted to permit implementation of this section, the commissioner, in consultation with
the commissioner of commerce, may alter the requirements of subdivisions 10 and 11,
and may establish additional requirements for approved policies in order to conform with
federal law or waiver authority. In establishing these requirements, the commissioner shall
seek to maximize purchase of qualifying policies by Minnesota residents while controlling
medical assistance costs.

(b) The commissioner is authorized to suspend implementation of this section
until the next session of the legislature if the commissioner, in consultation with the
commissioner of commerce, determines that the federal legislation or federal waiver
authorizing a partnership program in Minnesota is likely to impose substantial unforeseen
costs on the state budget.

(c) The commissioner must take action under paragraph (a) or (b) within 45 days of
final federal action authorizing a partnership policy in Minnesota.

(d) The commissioner must notify the appropriate legislative committees of
action taken under this subdivision within 50 days of final federal action authorizing a
partnership policy in Minnesota.

(e) The commissioner must publish a notice in the State Register of implementation
decisions made under this subdivision as soon as practicable.

(a) The commissioner, in cooperation with the commissioner of commerce, shall
pursue any federal law changes or waiver necessary to implement the long-term care
partnership program requirements of Public Law 109-171, section 6021.

(b) The commissioner shall submit a state plan amendment to the federal government
to implement the long-term care partnership program in accordance with this section.

Subd. 15.

Limitation on liens.

(a) An individual's interest in real property shall
not be subject to a medical assistance lien or a notice of potential claim while and to the
extent it is protected under subdivision 9.

(b) Medical assistance liens or liens arising under notices of potential claims against
an individual's interests in real property in the individual's estate that are designated as
protected under subdivision 13, paragraph (b), shall be released to the extent of the dollar
value of the protection applied to the interest.

(c) If an interest in real property is protected from a lien for recovery of medical
assistance paid on behalf of the individual under paragraph (a) or (b), no lien for recovery
of medical assistance paid on behalf of that individual shall be filed against the protected
interest in real property after it is distributed to the individual's heirs or devisees.

Subd. 16.

Burden of proof.

Any individual or the personal representative of the
individual's estate who asserts that an asset is a disregarded or protected asset under
this section in connection with any determination of eligibility for benefits under the
medical assistance program or any appeal, case, controversy, or other proceedings, shall
have the initial burden of:

(1) documenting and proving by clear and convincing evidence that the asset or
source of funds for the asset in question was designated as disregarded or protected;

(2) tracing the asset and the proceeds of the asset from that time forward; and

(3) documenting that the asset or proceeds of the asset remained disregarded or
protected at all relevant times.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 8.

[256B.0594] PAYMENT OF BENEFITS FROM AN ANNUITY.

When payment becomes due under an annuity that names the department a
remainder beneficiary as described in section 256B.056, subdivision 11, the issuer shall
pay the department an amount equal to the lesser of the amount due the department under
the annuity or the total amount of medical assistance paid on behalf of the individual
or the individual's spouse. The issuer shall request and the department shall provide a
written statement of the total amount of medical assistance paid. Any amounts remaining
after the issuer's payment to the department shall be payable according to the terms of
the annuity or similar financial instrument.

Sec. 9.

Minnesota Statutes 2004, section 256B.0595, subdivision 1, is amended to read:

Subdivision 1.

Prohibited transfers.

(a) For transfers of assets made on or before
August 10, 1993, if a person or the person's spouse has given away, sold, or disposed of,
for less than fair market value, any asset or interest therein, except assets other than the
homestead that are excluded under the supplemental security program, within 30 months
before or any time after the date of institutionalization if the person has been determined
eligible for medical assistance, or within 30 months before or any time after the date of the
first approved application for medical assistance if the person has not yet been determined
eligible for medical assistance, the person is ineligible for long-term care services for the
period of time determined under subdivision 2.

(b) Effective for transfers made after August 10, 1993, a person, a person's spouse,
or any person, court, or administrative body with legal authority to act in place of, on
behalf of, at the direction of, or upon the request of the person or person's spouse, may not
give away, sell, or dispose of, for less than fair market value, any asset or interest therein,
except assets other than the homestead that are excluded under the supplemental security
income program, for the purpose of establishing or maintaining medical assistance
eligibility. This applies to all transfers, including those made by a community spouse
after the month in which the institutionalized spouse is determined eligible for medical
assistance. For purposes of determining eligibility for long-term care services, any transfer
of such assets within 36 months before or any time after an institutionalized person applies
for medical assistance, or 36 months before or any time after a medical assistance recipient
becomes institutionalized, for less than fair market value may be considered. Any such
transfer is presumed to have been made for the purpose of establishing or maintaining
medical assistance eligibility and the person is ineligible for long-term care services for
the period of time determined under subdivision 2, unless the person furnishes convincing
evidence to establish that the transaction was exclusively for another purpose, or unless
the transfer is permitted under subdivision 3 or 4. Notwithstanding the provisions of this
paragraph, In the case of payments from a trust or portions of a trust that are considered
transfers of assets under federal law, or in the case of any other disposal of assets made on
or after February 8, 2006, any transfers made within 60 months before or any time after an
institutionalized person applies for medical assistance and within 60 months before or any
time after a medical assistance recipient becomes institutionalized, may be considered.

(c) This section applies to transfers, for less than fair market value, of income
or assets, including assets that are considered income in the month received, such as
inheritances, court settlements, and retroactive benefit payments or income to which the
person or the person's spouse is entitled but does not receive due to action by the person,
the person's spouse, or any person, court, or administrative body with legal authority
to act in place of, on behalf of, at the direction of, or upon the request of the person or
the person's spouse.

(d) This section applies to payments for care or personal services provided by a
relative, unless the compensation was stipulated in a notarized, written agreement which
was in existence when the service was performed, the care or services directly benefited
the person, and the payments made represented reasonable compensation for the care
or services provided. A notarized written agreement is not required if payment for the
services was made within 60 days after the service was provided.

(e) This section applies to the portion of any asset or interest that a person, a person's
spouse, or any person, court, or administrative body with legal authority to act in place of,
on behalf of, at the direction of, or upon the request of the person or the person's spouse,
transfers to any annuity that exceeds the value of the benefit likely to be returned to the
person or spouse while alive, based on estimated life expectancy using the life expectancy
tables employed by the supplemental security income program to determine the value
of an agreement for services for life. The commissioner may adopt rules reducing life
expectancies based on the need for long-term care. This section applies to an annuity
described in this paragraph purchased on or after March 1, 2002, that:

(1) is not purchased from an insurance company or financial institution that is
subject to licensing or regulation by the Minnesota Department of Commerce or a similar
regulatory agency of another state;

(2) does not pay out principal and interest in equal monthly installments; or

(3) does not begin payment at the earliest possible date after annuitization.

(f) Effective for transactions, including the purchase of an annuity, occurring on or
after February 8, 2006, the purchase of an annuity by or on behalf of an individual who
has applied for or is receiving long-term care services or the individual's spouse shall be
treated as the disposal of an asset for less than fair market value unless the department is
named as the remainder beneficiary in first position for an amount equal to at least the total
amount of medical assistance paid on behalf of the individual or the individual's spouse;
or the department is named as the remainder beneficiary in second position for an amount
equal to at least the total amount of medical assistance paid on behalf of the individual or
the individual's spouse after the individual's community spouse or minor or disabled child
and is named as the remainder beneficiary in the first position if the community spouse or
a representative of the minor or disabled child disposes of the remainder for less than fair
market value. Any subsequent change to the designation of the department as a remainder
beneficiary shall result in the annuity being treated as a disposal of assets for less than fair
market value. The amount of such transfer shall be the maximum amount the individual
or the individual's spouse could receive from the annuity or similar financial instrument.
Any change in the amount of the income or principal being withdrawn from the annuity
or other similar financial instrument at the time of the most recent disclosure shall be
deemed to be a transfer of assets for less than fair market value unless the individual or the
individual's spouse demonstrates that the transaction was for fair market value.

(g) Effective for transactions, including the purchase of an annuity, occurring on
or after February 8, 2006, the purchase of an annuity by or on behalf of an individual
applying for or receiving long-term care services shall be treated as a disposal of assets for
less than fair market value unless the annuity is:

(i) an annuity described in subsection (b) or (q) of section 408 of the Internal
Revenue Code of 1986; or

(ii) purchased with proceeds from:

(A) an account or trust described in subsection (a), (c), or (p) of section 408 of the
Internal Revenue Code;

(B) a simplified employee pension within the meaning of section 408(k) of the
Internal Revenue Code; or

(C) a Roth IRA described in section 408A of the Internal Revenue Code; or

(iii) an annuity that is irrevocable and nonassignable; is actuarially sound as
determined in accordance with actuarial publications of the Office of the Chief Actuary of
the Social Security Administration; and provides for payments in equal amounts during
the term of the annuity, with no deferral and no balloon payments made.

(f) (h) For purposes of this section, long-term care services include services in a
nursing facility, services that are eligible for payment according to section 256B.0625,
subdivision 2, because they are provided in a swing bed, intermediate care facility for
persons with mental retardation, and home and community-based services provided
pursuant to sections 256B.0915, 256B.092, and 256B.49. For purposes of this subdivision
and subdivisions 2, 3, and 4, "institutionalized person" includes a person who is an
inpatient in a nursing facility or in a swing bed, or intermediate care facility for persons
with mental retardation or who is receiving home and community-based services under
sections 256B.0915, 256B.092, and 256B.49.

(i) This section applies to funds used to purchase a promissory note, loan, or
mortgage unless the note, loan, or mortgage:

(1) has a repayment term that is actuarially sound;

(2) provides for payments to be made in equal amounts during the term of the loan,
with no deferral and no balloon payments made; and

(3) prohibits the cancellation of the balance upon the death of the lender.

In the case of a promissory note, loan, or mortgage that does not meet an exception
in clauses (1) to (3), the value of the note, loan, or mortgage shall be the outstanding
balance due as of the date of the individual's application for long-term care services.

(j) This section applies to the purchase of a life estate interest in another individual's
home unless the purchaser resides in the home for a period of at least one year after the
date of purchase.

Sec. 10.

Minnesota Statutes 2005 Supplement, section 256B.0595, subdivision 2,
is amended to read:

Subd. 2.

Period of ineligibility.

(a) For any uncompensated transfer occurring on or
before August 10, 1993, the number of months of ineligibility for long-term care services
shall be the lesser of 30 months, or the uncompensated transfer amount divided by the
average medical assistance rate for nursing facility services in the state in effect on the
date of application. The amount used to calculate the average medical assistance payment
rate shall be adjusted each July 1 to reflect payment rates for the previous calendar year.
The period of ineligibility begins with the month in which the assets were transferred.
If the transfer was not reported to the local agency at the time of application, and the
applicant received long-term care services during what would have been the period of
ineligibility if the transfer had been reported, a cause of action exists against the transferee
for the cost of long-term care services provided during the period of ineligibility, or for the
uncompensated amount of the transfer, whichever is less. The action may be brought by
the state or the local agency responsible for providing medical assistance under chapter
256G. The uncompensated transfer amount is the fair market value of the asset at the time
it was given away, sold, or disposed of, less the amount of compensation received.

(b) For uncompensated transfers made after August 10, 1993, the number of months
of ineligibility for long-term care services shall be the total uncompensated value of the
resources transferred divided by the average medical assistance rate for nursing facility
services in the state in effect on the date of application. The amount used to calculate the
average medical assistance payment rate shall be adjusted each July 1 to reflect payment
rates for the previous calendar year. The period of ineligibility begins with the first day
of the month after the month in which the assets were transferred except that if one or
more uncompensated transfers are made during a period of ineligibility, the total assets
transferred during the ineligibility period shall be combined and a penalty period calculated
to begin on the first day of the month after the month in which the first uncompensated
transfer was made. If the transfer was reported to the local agency after the date that
advance notice of a period of ineligibility that affects the next month could be provided to
the recipient and the recipient received medical assistance services or the transfer was not
reported to the local agency, and the applicant or recipient received medical assistance
services during what would have been the period of ineligibility if the transfer had been
reported, a cause of action exists against the transferee for the cost of medical assistance
services provided during the period of ineligibility, or for the uncompensated amount of
the transfer, whichever is less. The action may be brought by the state or the local agency
responsible for providing medical assistance under chapter 256G. The uncompensated
transfer amount is the fair market value of the asset at the time it was given away, sold, or
disposed of, less the amount of compensation received. Effective for transfers made on or
after March 1, 1996, involving persons who apply for medical assistance on or after April
13, 1996, no cause of action exists for a transfer unless:

(1) the transferee knew or should have known that the transfer was being made by a
person who was a resident of a long-term care facility or was receiving that level of care in
the community at the time of the transfer;

(2) the transferee knew or should have known that the transfer was being made to
assist the person to qualify for or retain medical assistance eligibility; or

(3) the transferee actively solicited the transfer with intent to assist the person to
qualify for or retain eligibility for medical assistance.

(c) For uncompensated transfers made on or after February 8, 2006, the period of
ineligibility begins on the first day of the month in which advance notice can be given
following the month in which assets have been transferred for less than fair market value,
or the date on which the individual is eligible for medical assistance under the Medicaid
state plan and would otherwise be receiving long-term care services based on an approved
application for such care but for the application of the penalty period, whichever is later,
and which does not occur during any other period of ineligibility.

(d) If a calculation of a penalty period results in a partial month, payments for
long-term care services shall be reduced in an amount equal to the fraction., except that in
calculating the value of uncompensated transfers, if the total value of all uncompensated
transfers made in a month not included in an existing penalty period does not exceed $200,
then such transfers shall be disregarded for each month prior to the month of application
for or during receipt of medical assistance.

(e) In the case of multiple fractional transfers of assets in more than one month for
less than fair market value on or after February 8, 2006, the period of ineligibility is
calculated by treating the total, cumulative uncompensated value of all assets transferred
during all months on or after February 8, 2006, as one transfer.

EFFECTIVE DATE.

Amendments to this section are effective for applications on
or after July 1, 2006, and for renewals and reports of transfers on or after July 1, 2006.

Sec. 11.

Minnesota Statutes 2004, section 256B.0595, subdivision 3, is amended to
read:

Subd. 3.

Homestead exception to transfer prohibition.

(a) An institutionalized
person is not ineligible for long-term care services due to a transfer of assets for less than
fair market value if the asset transferred was a homestead and:

(1) title to the homestead was transferred to the individual's:

(i) spouse;

(ii) child who is under age 21;

(iii) blind or permanently and totally disabled child as defined in the supplemental
security income program;

(iv) sibling who has equity interest in the home and who was residing in the home
for a period of at least one year immediately before the date of the individual's admission
to the facility; or

(v) son or daughter who was residing in the individual's home for a period of at least
two years immediately before the date of the individual's admission to the facility, and who
provided care to the individual that, as certified by the individual's attending physician,
permitted the individual to reside at home rather than in an institution or facility;

(2) a satisfactory showing is made that the individual intended to dispose of the
homestead at fair market value or for other valuable consideration; or

(3) the local agency grants a waiver of a penalty resulting from a transfer for less
than fair market value because denial of eligibility would cause undue hardship for the
individual, based on imminent threat to the individual's health and well-being. Whenever
an applicant or recipient is denied eligibility because of a transfer for less than fair market
value, the local agency shall notify the applicant or recipient that the applicant or recipient
may request a waiver of the penalty if the denial of eligibility will cause undue hardship.
With the written consent of the individual or the personal representative of the individual,
a long-term care facility in which an individual is residing may file an undue hardship
waiver request, on behalf of the individual who is denied eligibility for long-term care
services on or after July 1, 2006, due to a period of ineligibility resulting from a transfer on
or after February 8, 2006. In evaluating a waiver, the local agency shall take into account
whether the individual was the victim of financial exploitation, whether the individual has
made reasonable efforts to recover the transferred property or resource, and other factors
relevant to a determination of hardship. If the local agency does not approve a hardship
waiver, the local agency shall issue a written notice to the individual stating the reasons
for the denial and the process for appealing the local agency's decision.

(b) When a waiver is granted under paragraph (a), clause (3), a cause of action exists
against the person to whom the homestead was transferred for that portion of long-term
care services granted within:

(1) 30 months of a transfer made on or before August 10, 1993;

(2) 60 months if the homestead was transferred after August 10, 1993, to a trust or
portion of a trust that is considered a transfer of assets under federal law; or

(3) 36 months if transferred in any other manner after August 10, 1993, but prior
to February 8, 2006; or

(4) 60 months if the homestead was transferred on or after February 8, 2006,

or the amount of the uncompensated transfer, whichever is less, together with the
costs incurred due to the action. The action shall be brought by the state unless the
state delegates this responsibility to the local agency responsible for providing medical
assistance under chapter 256G.

Sec. 12.

Minnesota Statutes 2004, section 256B.0595, subdivision 4, is amended to
read:

Subd. 4.

Other exceptions to transfer prohibition.

An institutionalized person
who has made, or whose spouse has made a transfer prohibited by subdivision 1, is not
ineligible for long-term care services if one of the following conditions applies:

(1) the assets were transferred to the individual's spouse or to another for the sole
benefit of the spouse; or

(2) the institutionalized spouse, prior to being institutionalized, transferred assets
to a spouse, provided that the spouse to whom the assets were transferred does not then
transfer those assets to another person for less than fair market value. (At the time when
one spouse is institutionalized, assets must be allocated between the spouses as provided
under section 256B.059); or

(3) the assets were transferred to the individual's child who is blind or permanently
and totally disabled as determined in the supplemental security income program; or

(4) a satisfactory showing is made that the individual intended to dispose of the
assets either at fair market value or for other valuable consideration; or

(5) the local agency determines that denial of eligibility for long-term care services
would work an undue hardship and grants a waiver of a penalty resulting from a transfer
for less than fair market value based on an imminent threat to the individual's health
and well-being. Whenever an applicant or recipient is denied eligibility because of a
transfer for less than fair market value, the local agency shall notify the applicant or
recipient that the applicant or recipient may request a waiver of the penalty if the denial of
eligibility will cause undue hardship. With the written consent of the individual or the
personal representative of the individual, a long-term care facility in which an individual
is residing may file an undue hardship waiver request, on behalf of the individual who
is denied eligibility for long-term care services on or after July 1, 2006, due to a period
of ineligibility resulting from a transfer on or after February 8, 2006. In evaluating a
waiver, the local agency shall take into account whether the individual was the victim of
financial exploitation, whether the individual has made reasonable efforts to recover the
transferred property or resource, whether the individual has taken any action to prevent
the designation of the department as a remainder beneficiary on an annuity as described
in section 256B.056, subdivision 11, and other factors relevant to a determination of
hardship. If the local agency does not approve a hardship waiver, the local agency shall
issue a written notice to the individual stating the reasons for the denial and the process for
appealing the local agency's decision. When a waiver is granted, a cause of action exists
against the person to whom the assets were transferred for that portion of long-term care
services granted within:

(i) 30 months of a transfer made on or before August 10, 1993;

(ii) 60 months of a transfer if the assets were transferred after August 30, 1993, to a
trust or portion of a trust that is considered a transfer of assets under federal law; or

(iii) 36 months of a transfer if transferred in any other manner after August 10, 1993,
but prior to February 8, 2006; or

(iv) 60 months of any transfer made on or after February 8, 2006,

or the amount of the uncompensated transfer, whichever is less, together with the
costs incurred due to the action. The action shall be brought by the state unless the
state delegates this responsibility to the local agency responsible for providing medical
assistance under this chapter; or

(6) for transfers occurring after August 10, 1993, the assets were transferred by
the person or person's spouse: (i) into a trust established for the sole benefit of a son or
daughter of any age who is blind or disabled as defined by the Supplemental Security
Income program; or (ii) into a trust established for the sole benefit of an individual who is
under 65 years of age who is disabled as defined by the Supplemental Security Income
program.

"For the sole benefit of" has the meaning found in section 256B.059, subdivision 1.

Sec. 13.

Minnesota Statutes 2005 Supplement, section 256B.06, subdivision 4, is
amended to read:

Subd. 4.

Citizenship requirements.

(a) Eligibility for medical assistance is limited
to citizens of the United States, qualified noncitizens as defined in this subdivision, and
other persons residing lawfully in the United States. Citizens or nationals of the United
States must cooperate in obtaining satisfactory documentary evidence of citizenship or
nationality as required by the federal Deficit Reduction Act of 2005, Public Law 109-171.
State and county workers must assist applicants in obtaining satisfactory documentary
evidence of citizenship or nationality.

(b) "Qualified noncitizen" means a person who meets one of the following
immigration criteria:

(1) admitted for lawful permanent residence according to United States Code, title 8;

(2) admitted to the United States as a refugee according to United States Code,
title 8, section 1157;

(3) granted asylum according to United States Code, title 8, section 1158;

(4) granted withholding of deportation according to United States Code, title 8,
section 1253(h);

(5) paroled for a period of at least one year according to United States Code, title 8,
section 1182(d)(5);

(6) granted conditional entrant status according to United States Code, title 8,
section 1153(a)(7);

(7) determined to be a battered noncitizen by the United States Attorney General
according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996,
title V of the Omnibus Consolidated Appropriations Bill, Public Law 104-200;

(8) is a child of a noncitizen determined to be a battered noncitizen by the United
States Attorney General according to the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996, title V, of the Omnibus Consolidated Appropriations Bill,
Public Law 104-200; or

(9) determined to be a Cuban or Haitian entrant as defined in section 501(e) of Public
Law 96-422, the Refugee Education Assistance Act of 1980.

(c) All qualified noncitizens who were residing in the United States before August
22, 1996, who otherwise meet the eligibility requirements of this chapter, are eligible for
medical assistance with federal financial participation.

(d) All qualified noncitizens who entered the United States on or after August 22,
1996, and who otherwise meet the eligibility requirements of this chapter, are eligible for
medical assistance with federal financial participation through November 30, 1996.

Beginning December 1, 1996, qualified noncitizens who entered the United States
on or after August 22, 1996, and who otherwise meet the eligibility requirements of this
chapter are eligible for medical assistance with federal participation for five years if they
meet one of the following criteria:

(i) refugees admitted to the United States according to United States Code, title 8,
section 1157;

(ii) persons granted asylum according to United States Code, title 8, section 1158;

(iii) persons granted withholding of deportation according to United States Code,
title 8, section 1253(h);

(iv) veterans of the United States armed forces with an honorable discharge for
a reason other than noncitizen status, their spouses and unmarried minor dependent
children; or

(v) persons on active duty in the United States armed forces, other than for training,
their spouses and unmarried minor dependent children.

Beginning December 1, 1996, qualified noncitizens who do not meet one of the
criteria in items (i) to (v) are eligible for medical assistance without federal financial
participation as described in paragraph (j).

(e) Noncitizens who are not qualified noncitizens as defined in paragraph (b),
who are lawfully residing in the United States and who otherwise meet the eligibility
requirements of this chapter, are eligible for medical assistance under clauses (1) to (3).
These individuals must cooperate with the Immigration and Naturalization Service to
pursue any applicable immigration status, including citizenship, that would qualify them
for medical assistance with federal financial participation.

(1) Persons who were medical assistance recipients on August 22, 1996, are eligible
for medical assistance with federal financial participation through December 31, 1996.

(2) Beginning January 1, 1997, persons described in clause (1) are eligible for
medical assistance without federal financial participation as described in paragraph (j).

(3) Beginning December 1, 1996, persons residing in the United States prior to
August 22, 1996, who were not receiving medical assistance and persons who arrived on
or after August 22, 1996, are eligible for medical assistance without federal financial
participation as described in paragraph (j).

(f) Nonimmigrants who otherwise meet the eligibility requirements of this chapter
are eligible for the benefits as provided in paragraphs (g) to (i). For purposes of this
subdivision, a "nonimmigrant" is a person in one of the classes listed in United States
Code, title 8, section 1101(a)(15).

(g) Payment shall also be made for care and services that are furnished to noncitizens,
regardless of immigration status, who otherwise meet the eligibility requirements of
this chapter, if such care and services are necessary for the treatment of an emergency
medical condition, except for organ transplants and related care and services and routine
prenatal care.

(h) For purposes of this subdivision, the term "emergency medical condition" means
a medical condition that meets the requirements of United States Code, title 42, section
1396b(v).

(i) Pregnant noncitizens who are undocumented, nonimmigrants, or eligible for
medical assistance as described in paragraph (j), and who are not covered by a group
health plan or health insurance coverage according to Code of Federal Regulations, title
42, section 457.310, and who otherwise meet the eligibility requirements of this chapter,
are eligible for medical assistance through the period of pregnancy, including labor and
delivery, to the extent federal funds are available under title XXI of the Social Security
Act, and the state children's health insurance program, followed by 60 days postpartum
without federal financial participation.

(j) Qualified noncitizens as described in paragraph (d), and all other noncitizens
lawfully residing in the United States as described in paragraph (e), who are ineligible
for medical assistance with federal financial participation and who otherwise meet the
eligibility requirements of chapter 256B and of this paragraph, are eligible for medical
assistance without federal financial participation. Qualified noncitizens as described
in paragraph (d) are only eligible for medical assistance without federal financial
participation for five years from their date of entry into the United States.

(k) Beginning October 1, 2003, persons who are receiving care and rehabilitation
services from a nonprofit center established to serve victims of torture and are otherwise
ineligible for medical assistance under this chapter are eligible for medical assistance
without federal financial participation. These individuals are eligible only for the period
during which they are receiving services from the center. Individuals eligible under this
paragraph shall not be required to participate in prepaid medical assistance.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 14.

Minnesota Statutes 2005 Supplement, section 256B.0625, subdivision 1a,
is amended to read:

Subd. 1a.

Services provided in a hospital emergency room.

Medical assistance
does not cover visits to a hospital emergency room that are not for emergency and
emergency poststabilization care or urgent care, and does not pay for any services provided
in a hospital emergency room that are not for emergency and emergency poststabilization
care or urgent care payment of a nonemergency emergency room facility component shall
be reduced to the payment level of the appropriate outpatient clinic facility component.

Sec. 15. REPEALER.

Minnesota Statutes 2005 Supplement, section 256B.0571, subdivisions 2, 5, and
11, are repealed.

ARTICLE 21

QUALIFIED LONG-TERM CARE INSURANCE REGULATORY CHANGES

Section 1.

Minnesota Statutes 2004, section 62S.05, is amended by adding a
subdivision to read:

Subd. 4.

Extension of limitation periods.

The commissioner may extend the
limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in
specific policy forms upon finding that the extension is in the best interest of the public.

Sec. 2.

Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:

Subd. 3.

Mandatory format.

The following standard format outline of coverage
must be used, unless otherwise specifically indicated:

COMPANY NAME

ADDRESS - CITY AND STATE

TELEPHONE NUMBER

LONG-TERM CARE INSURANCE

OUTLINE OF COVERAGE

Policy Number or Group Master Policy and Certificate Number

(Except for policies or certificates which are guaranteed issue, the following caution
statement, or language substantially similar, must appear as follows in the outline of
coverage.)

CAUTION: The issuance of this long-term care insurance (policy) (certificate)
is based upon your responses to the questions on your application. A copy of your
(application) (enrollment form) (is enclosed) (was retained by you when you applied).
If your answers are incorrect or untrue, the company has the right to deny benefits or
rescind your policy. The best time to clear up any questions is now, before a claim
arises. If, for any reason, any of your answers are incorrect, contact the company at this
address: (insert address).

(1) This policy is (an individual policy of insurance) (a group policy) which was
issued in the (indicate jurisdiction in which group policy was issued).

(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides
a very brief description of the important features of the policy. You should compare
this outline of coverage to outlines of coverage for other policies available to you. This
is not an insurance contract, but only a summary of coverage. Only the individual or
group policy contains governing contractual provisions. This means that the policy or
group policy sets forth in detail the rights and obligations of both you and the insurance
company. Therefore, if you purchase this coverage, or any other coverage, it is important
that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.

(3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE
INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE
INTERNAL REVENUE CODE OF 1986.

(4) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE
CONTINUED IN FORCE OR DISCONTINUED.

(a) (For long-term care health insurance policies or certificates describe one of the
following permissible policy renewability provisions:

(1) Policies and certificates that are guaranteed renewable shall contain the following
statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS GUARANTEED
RENEWABLE. This means you have the right, subject to the terms of your policy,
(certificate) to continue this policy as long as you pay your premiums on time. (Company
name) cannot change any of the terms of your policy on its own, except that, in the future,
IT MAY INCREASE THE PREMIUM YOU PAY.

(2) (Policies and certificates that are noncancelable shall contain the following
statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE.
This means that you have the right, subject to the terms of your policy, to continue this
policy as long as you pay your premiums on time. (Company name) cannot change any
of the terms of your policy on its own and cannot change the premium you currently
pay. However, if your policy contains an inflation protection feature where you choose
to increase your benefits, (company name) may increase your premium at that time for
those additional benefits.

(b) (For group coverage, specifically describe continuation/conversion provisions
applicable to the certificate and group policy.)

(c) (Describe waiver of premium provisions or state that there are not such
provisions.)

(5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.

(In bold type larger than the maximum type required to be used for the other
provisions of the outline of coverage, state whether or not the company has a right to
change the premium and, if a right exists, describe clearly and concisely each circumstance
under which the premium may change.)

(6) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE
RETURNED AND PREMIUM REFUNDED.

(a) (Provide a brief description of the right to return -- "free look" provision of
the policy.)

(b) (Include a statement that the policy either does or does not contain provisions
providing for a refund or partial refund of premium upon the death of an insured or
surrender of the policy or certificate. If the policy contains such provisions, include a
description of them.)

(5) (7) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are
eligible for Medicare, review the Medicare Supplement Buyer's Guide available from
the insurance company.

(a) (For agents) neither (insert company name) nor its agents represent Medicare, the
federal government, or any state government.

(b) (For direct response) (insert company name) is not representing Medicare, the
federal government, or any state government.

(6) (8) LONG-TERM CARE COVERAGE. Policies of this category are designed to
provide coverage for one or more necessary or medically necessary diagnostic, preventive,
therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting
other than an acute care unit of a hospital, such as in a nursing home, in the community,
or in the home.

This policy provides coverage in the form of a fixed dollar indemnity benefit for
covered long-term care expenses, subject to policy (limitations), (waiting periods), and
(coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity
policy.)

(7) (9) BENEFITS PROVIDED BY THIS POLICY.

(a) (Covered services, related deductible(s), waiting periods, elimination periods,
and benefit maximums.)

(b) (Institutional benefits, by skill level.)

(c) (Noninstitutional benefits, by skill level.)

(d) (Eligibility for payment of benefits.)

(Activities of daily living and cognitive impairment shall be used to measure an
insured's need for long-term care and must be defined and described as part of the outline
of coverage.)

(Any benefit screens must be explained in this section. If these screens differ for
different benefits, explanation of the screen should accompany each benefit description. If
an attending physician or other specified person must certify a certain level of functional
dependency in order to be eligible for benefits, this too must be specified. If activities of
daily living (ADLs) are used to measure an insured's need for long-term care, then these
qualifying criteria or screens must be explained.)

(8) (10) LIMITATIONS AND EXCLUSIONS:

Describe:

(a) preexisting conditions;

(b) noneligible facilities/provider;

(c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided
by a family member, etc.);

(d) exclusions/exceptions; and

(e) limitations.

(This section should provide a brief specific description of any policy provisions
which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify
payment of the benefits described in paragraph (6) (8).)

THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH
YOUR LONG-TERM CARE NEEDS.

(9) (11) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs
of long-term care services will likely increase over time, you should consider whether and
how the benefits of this plan may be adjusted. As applicable, indicate the following:

(a) that the benefit level will not increase over time;

(b) any automatic benefit adjustment provisions;

(c) whether the insured will be guaranteed the option to buy additional benefits and
the basis upon which benefits will be increased over time if not by a specified amount
or percentage;

(d) if there is such a guarantee, include whether additional underwriting or health
screening will be required, the frequency and amounts of the upgrade options, and any
significant restrictions or limitations; and

(e) whether there will be any additional premium charge imposed and how that
is to be calculated.

(10) (12) ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN
DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as
having Alzheimer's disease or related degenerative and dementing illnesses. Specifically,
describe each benefit screen or other policy provision which provides preconditions to the
availability of policy benefits for such an insured.)

(11) (13) PREMIUM.

(a) State the total annual premium for the policy.

(b) If the premium varies with an applicant's choice among benefit options, indicate
the portion of annual premium which corresponds to each benefit option.

(12) (14) ADDITIONAL FEATURES.

(a) Indicate if medical underwriting is used.

(b) Describe other important features.

(15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR
LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM
CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE
SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE
POLICY OR CERTIFICATE.

Sec. 3.

Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:

Subd. 4.

Forms.

An insurer shall use the forms in Appendices B (Personal
Worksheet) and F (Potential Rate Increase Disclosure Form) of the Long-term Care
Insurance Model Regulation adopted by the National Association of Insurance
Commissioners to comply with the requirements of subdivisions 1 and 2.

Sec. 4.

Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:

Subd. 2.

Contents.

The summary must include the following information:

(1) an explanation of how the long-term care benefit interacts with other components
of the policy, including deductions from death benefits;

(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed
lifetime benefits, if any, for each covered person; and

(3) any exclusions, reductions, and limitations on benefits of long-term care; and

(4) a statement that any long-term care inflation protection option required by section
62S.23 is not available under this policy.

Sec. 5.

Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision
to read:

Subd. 6.

Death of insured.

In the event of the death of the insured, this section shall
not apply to the remaining death benefit of a life insurance policy that accelerates benefits
for long-term care. In this situation, the remaining death benefits under these policies shall
be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this
section shall apply to life insurance policies that accelerate benefits for long-term care.

Sec. 6.

Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:

Subd. 2.

Terms.

The terms "guaranteed renewable" and "noncancelable" may not
be used in an individual long-term care insurance policy without further explanatory
language that complies with the disclosure requirements of section 62S.20. The term
"level premium" may only be used when the insurer does not have the right to change
the premium.

Sec. 7.

Minnesota Statutes 2004, section 62S.15, is amended to read:

62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.

No policy may be delivered or issued for delivery in this state as long-term care
insurance if the policy limits or excludes coverage by type of illness, treatment, medical
condition, or accident, except as follows:

(1) preexisting conditions or diseases;

(2) mental or nervous disorders; except that the exclusion or limitation of benefits on
the basis of Alzheimer's disease is prohibited;

(3) alcoholism and drug addiction;

(4) illness, treatment, or medical condition arising out of war or act of war;
participation in a felony, riot, or insurrection; service in the armed forces or auxiliary
units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying
aviation; and

(5) treatment provided in a government facility unless otherwise required by
law, services for which benefits are available under Medicare or other government
program except Medicaid, state or federal workers' compensation, employer's liability
or occupational disease law, motor vehicle no-fault law; services provided by a member
of the covered person's immediate family; and services for which no charge is normally
made in the absence of insurance; and

(6) expenses for services or items available or paid under another long-term care
insurance or health insurance policy.

This subdivision does not prohibit exclusions and limitations by type of provider or
territorial limitations.

Sec. 8.

Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:

Subdivision 1.

Renewability.

(a) Individual long-term care insurance policies
must contain a renewability provision that is appropriately captioned, appears on the first
page of the policy, and clearly states the duration, where limited, of renewability and the
duration of the term of coverage for which the policy is issued and for which it may be
renewed that the coverage is guaranteed renewable or noncancelable. This subdivision
does not apply to policies which are part of or combined with life insurance policies
which do not contain a renewability provision and under which the right to nonrenew is
reserved solely to the policyholder.

(b) A long-term care insurance policy or certificate, other than one where the insurer
does not have the right to change the premium, shall include a statement that premium
rates may change.

Sec. 9.

Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:

Subdivision 1.

Required questions.

An application form must include the following
questions designed to elicit information as to whether, as of the date of the application, the
applicant has another long-term care insurance policy or certificate in force or whether a
long-term care policy or certificate is intended to replace any other accident and sickness
or long-term care policy or certificate presently in force. A supplementary application
or other form to be signed by the applicant and agent, except where the coverage is sold
without an agent, containing the following questions may be used. If a replacement policy
is issued to a group as defined under section 62S.01, subdivision 15, clause (1), the
following questions may be modified only to the extent necessary to elicit information
about long-term care insurance policies other than the group policy being replaced;
provided, however, that the certificate holder has been notified of the replacement:

(1) do you have another long-term care insurance policy or certificate in force
(including health care service contract or health maintenance organization contract)?;

(2) did you have another long-term care insurance policy or certificate in force
during the last 12 months?;

(i) if so, with which company?; and

(ii) if that policy lapsed, when did it lapse?; and

(3) are you covered by Medicaid?; and

(4) do you intend to replace any of your medical or health insurance coverage with
this policy (certificate)?

Sec. 10.

Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision
to read:

Subd. 1a.

Other health insurance policies sold by agent.

Agents shall list all other
health insurance policies they have sold to the applicant that are still in force or were sold
in the past five years and are no longer in force.

Sec. 11.

Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:

Subd. 3.

Solicitations other than direct response.

After determining that a
sale will involve replacement, an insurer, other than an insurer using direct response
solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of
the individual long-term care insurance policy, a notice regarding replacement of accident
and sickness or long-term care coverage. One copy of the notice must be retained by the
applicant and an additional copy signed by the applicant must be retained by the insurer.
The required notice must be provided in the following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF

INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM
CARE INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to
lapse or otherwise terminate existing accident and sickness or long-term care insurance
and replace it with an individual long-term care insurance policy to be issued by (company
name) insurance company. Your new policy provides 30 days within which you may
decide, without cost, whether you desire to keep the policy. For your own information and
protection, you should be aware of and seriously consider certain factors which may affect
the insurance protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all accident
and sickness or long-term care insurance coverage you now have, and terminate your
present policy only if, after due consideration, you find that purchase of this long-term
care coverage is a wise decision.

STATEMENT TO APPLICANT BY AGENT

(BROKER OR OTHER REPRESENTATIVE):

(Use additional sheets, as necessary.)

I have reviewed your current medical health insurance coverage. I believe the
replacement of insurance involved in this transaction materially improves your position.
My conclusion has taken into account the following considerations, which I call to your
attention:

(a) Health conditions which you presently have (preexisting conditions) may not
be immediately or fully covered under the new policy. This could result in denial or
delay in payment of benefits under the new policy, whereas a similar claim might have
been payable under your present policy.

(b) State law provides that your replacement policy or certificate may not contain
new preexisting conditions or probationary periods. The insurer will waive any time
periods applicable to preexisting conditions or probationary periods in the new policy (or
coverage) for similar benefits to the extent such time was spent (depleted) under the
original policy.

(c) If you are replacing existing long-term care insurance coverage, you may wish to
secure the advice of your present insurer or its agent regarding the proposed replacement of
your present policy. This is not only your right, but it is also in your best interest to make
sure you understand all the relevant factors involved in replacing your present coverage.

(d) If, after due consideration, you still wish to terminate your present policy and
replace it with new coverage, be certain to truthfully and completely answer all questions
on the application concerning your medical health history. Failure to include all material
medical information on an application may provide a basis for the company to deny any
future claims and to refund your premium as though your policy had never been in force.
After the application has been completed and before you sign it, reread it carefully to be
certain that all information has been properly recorded.

.

(Signature of Agent, Broker, or Other Representative)

(Typed Name and Address of Agency or Broker)

The above "Notice to Applicant" was delivered to me on:

	.
	(Date)
	.
	(Applicant's Signature)

Sec. 12.

Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:

Subd. 4.

Direct response solicitations.

Insurers using direct response solicitation
methods shall deliver a notice regarding replacement of long-term care coverage to
the applicant upon issuance of the policy. The required notice must be provided in the
following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT

AND SICKNESS OR LONG-TERM CARE INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE

IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to
lapse or otherwise terminate existing accident and sickness or long-term care insurance
and replace it with the long-term care insurance policy delivered herewith issued by
(company name) insurance company.

Your new policy provides 30 days within which you may decide, without cost,
whether you desire to keep the policy. For your own information and protection, you
should be aware of and seriously consider certain factors which may affect the insurance
protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all long-term care
insurance coverage you now have, and terminate your present policy only if, after due
consideration, you find that purchase of this long-term care coverage is a wise decision.

(a) Health conditions which you presently have (preexisting conditions) may not
be immediately or fully covered under the new policy. This could result in denial or
delay in payment of benefits under the new policy, whereas a similar claim might have
been payable under your present policy.

(b) State law provides that your replacement policy or certificate may not contain
new preexisting conditions or probationary periods. Your insurer will waive any time
periods applicable to preexisting conditions or probationary periods in the new policy (or
coverage) for similar benefits to the extent such time was spent (depleted) under the
original policy.

(c) If you are replacing existing long-term care insurance coverage, you may wish to
secure the advice of your present insurer or its agent regarding the proposed replacement of
your present policy. This is not only your right, but it is also in your best interest to make
sure you understand all the relevant factors involved in replacing your present coverage.

(d) (To be included only if the application is attached to the policy.)

If, after due consideration, you still wish to terminate your present policy and replace
it with new coverage, read the copy of the application attached to your new policy and be
sure that all questions are answered fully and correctly. Omissions or misstatements in
the application could cause an otherwise valid claim to be denied. Carefully check the
application and write to (company name and address) within 30 days if any information is
not correct and complete, or if any past medical history has been left out of the application.

	.
	(Company Name)

Sec. 13.

Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision
to read:

Subd. 7.

Life insurance policies.

Life insurance policies that accelerate benefits for
long-term care shall comply with this section if the policy being replaced is a long-term
care insurance policy. If the policy being replaced is a life insurance policy, the insurer
shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a
life insurance policy that accelerates benefits for long-term care is replaced by another
such policy, the replacing insurer shall comply with both the long-term care and the life
insurance replacement requirements.

Sec. 14.

Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:

Subd. 6.

Claims denied.

Each insurer shall report annually by June 30 the number
of claims denied for any reason during the reporting period for each class of business,
expressed as a percentage of claims denied, other than claims denied for failure to meet
the waiting period or because of any applicable preexisting condition. For purposes of
this subdivision, "claim" means a request for payment of benefits under an in-force policy
regardless of whether the benefit claimed is covered under the policy or any terms or
conditions of the policy have been met.

Sec. 15.

Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision
to read:

Subd. 7.

Reports.

Reports under this section shall be done on a statewide basis and
filed with the commissioner. They shall include, at a minimum, the information in the
format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G
(Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation
adopted by the National Association of Insurance Commissioners.

Sec. 16.

Minnesota Statutes 2004, section 62S.26, is amended to read:

62S.26 LOSS RATIO.

Subdivision 1.

Minimum loss ratio.

(a) The minimum loss ratio must be at least 60
percent, calculated in a manner which provides for adequate reserving of the long-term
care insurance risk. In evaluating the expected loss ratio, the commissioner shall give
consideration to all relevant factors, including:

(1) statistical credibility of incurred claims experience and earned premiums;

(2) the period for which rates are computed to provide coverage;

(3) experienced and projected trends;

(4) concentration of experience within early policy duration;

(5) expected claim fluctuation;

(6) experience refunds, adjustments, or dividends;

(7) renewability features;

(8) all appropriate expense factors;

(9) interest;

(10) experimental nature of the coverage;

(11) policy reserves;

(12) mix of business by risk classification; and

(13) product features such as long elimination periods, high deductibles, and high
maximum limits.

Subd. 2.

Life insurance policies.

Subdivision 1 shall not apply to life insurance
policies that accelerate benefits for long-term care. A life insurance policy that funds
long-term care benefits entirely by accelerating the death benefit is considered to provide
reasonable benefits in relation to premiums paid, if the policy complies with all of the
following provisions:

(1) the interest credited internally to determine cash value accumulations, including
long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest
rate for cash value accumulations without long-term care set forth in the policy;

(2) the portion of the policy that provides life insurance benefits meets the
nonforfeiture requirements of section 61A.24;

(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and
62S.11; and

(4) an actuarial memorandum is filed with the commissioner that includes:

(i) a description of the basis on which the long-term care rates were determined;

(ii) a description of the basis for the reserves;

(iii) a summary of the type of policy, benefits, renewability, general marketing
method, and limits on ages of issuance;

(iv) a description and a table of each actuarial assumption used. For expenses,
an insurer must include percentage of premium dollars per policy and dollars per unit
of benefits, if any;

(v) a description and a table of the anticipated policy reserves and additional reserves
to be held in each future year for active lives;

(vi) the estimated average annual premium per policy and the average issue age;

(vii) a statement as to whether underwriting is performed at the time of application.
The statement shall indicate whether underwriting is used and, if used, the statement
shall include a description of the type or types of underwriting used, such as medical
underwriting or functional assessment underwriting. Concerning a group policy, the
statement shall indicate whether the enrollee or any dependent will be underwritten and
when underwriting occurs; and

(viii) a description of the effect of the long-term care policy provision on the required
premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both
for active lives and those in long-term care claim status.

Subd. 3.

Nonapplication.

(b) This section does not apply to policies or certificates
that are subject to sections 62S.021, 62S.081, and 62S.265, and that comply with those
sections.

Sec. 17.

Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:

Subd. 2.

Requirement.

(a) An insurer must offer each prospective policyholder a
nonforfeiture benefit in compliance with the following requirements:

(1) a policy or certificate offered with nonforfeiture benefits must have coverage
elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be
issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must
be the benefit described in subdivision 5; and

(2) the offer must be in writing if the nonforfeiture benefit is not otherwise described
in the outline of coverage or other materials given to the prospective policyholder.

(b) When a group long-term care insurance policy is issued, the offer required in
paragraph (a) shall be made to the group policy holder. However, if the policy is issued as
group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4),
other than to a continuing care retirement community or other similar entity, the offering
shall be made to each proposed certificate holder.

Sec. 18.

Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:

Subdivision 1.

Requirements.

An insurer or other entity marketing long-term care
insurance coverage in this state, directly or through its producers, shall:

(1) establish marketing procedures and agent training requirements to assure that a
any marketing activities, including any comparison of policies by its agents or other
producers, are fair and accurate;

(2) establish marketing procedures to assure excessive insurance is not sold or issued;

(3) display prominently by type, stamp, or other appropriate means, on the first page
of the outline of coverage and policy, the following:

"Notice to buyer: This policy may not cover all of the costs associated with
long-term care incurred by the buyer during the period of coverage. The buyer is advised
to review carefully all policy limitations.";

(4) provide copies of the disclosure forms required in section 62S.081, subdivision
4, to the applicant;

(5) inquire and otherwise make every reasonable effort to identify whether a
prospective applicant or enrollee for long-term care insurance already has long-term care
insurance and the types and amounts of the insurance;

(5) (6) establish auditable procedures for verifying compliance with this subdivision;
and

(6) (7) if applicable, provide written notice to the prospective policyholder and
certificate holder, at solicitation, that a senior insurance counseling program approved
by the commissioner is available and the name, address, and telephone number of the
program;

(8) use the terms "noncancelable" or "level premium" only when the policy or
certificate conforms to section 62S.14; and

(9) provide an explanation of contingent benefit upon lapse provided for in section
62S.266.

Sec. 19.

Minnesota Statutes 2004, section 62S.30, is amended to read:

62S.30 APPROPRIATENESS OF RECOMMENDED PURCHASE
SUITABILITY.

In recommending the purchase or replacement of a long-term care insurance policy
or certificate, an agent shall comply with section 60K.46, subdivision 4.

Subdivision 1.

Standards.

Every insurer or other entity marketing long-term care
insurance shall:

(1) develop and use suitability standards to determine whether the purchase or
replacement of long-term care insurance is appropriate for the needs of the applicant;

(2) train its agents in the use of its suitability standards; and

(3) maintain a copy of its suitability standards and make them available for
inspection upon request by the commissioner.

Subd. 2.

Procedures.

(a) To determine whether the applicant meets the standards
developed by the insurer or other entity marketing long-term care insurance, the agent
and insurer or other entity marketing long-term care insurance shall develop procedures
that take the following into consideration:

(1) the ability to pay for the proposed coverage and other pertinent financial
information related to the purchase of the coverage;

(2) the applicant's goals or needs with respect to long-term care and the advantages
and disadvantages of insurance to meet those goals or needs; and

(3) the values, benefits, and costs of the applicant's existing insurance, if any, when
compared to the values, benefits, and costs of the recommended purchase or replacement.

(b) The insurer or other entity marketing long-term care insurance, and the agent,
where an agent is involved, shall make reasonable efforts to obtain the information set
forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior
to application, of the "Long-Term Care Insurance Personal Worksheet." The personal
worksheet used by the insurer or other entity marketing long-term care insurance shall
contain, at a minimum, the information in the format contained in Appendix B of the
Long-Term Care Model Regulation adopted by the National Association of Insurance
Commissioners in not less than 12-point type. The insurer or other entity marketing
long-term care insurance may request the applicant to provide additional information to
comply with its suitability standards. The insurer or other entity marketing long-term care
insurance shall file a copy of its personal worksheet with the commissioner.

(c) A completed personal worksheet shall be returned to the insurer or other entity
marketing long-term care insurance prior to consideration of the applicant for coverage,
except the personal worksheet need not be returned for sales of employer group long-term
care insurance to employees and their spouses. The sale or dissemination by the insurer
or other entity marketing long-term care insurance, or the agent, of information obtained
through the personal worksheet is prohibited.

(d) The insurer or other entity marketing long-term care insurance shall use the
suitability standards it has developed under this section in determining whether issuing
long-term care insurance coverage to an applicant is appropriate. Agents shall use the
suitability standards developed by the insurer or other entity marketing long-term care
insurance in marketing long-term care insurance.

(e) At the same time as the personal worksheet is provided to the applicant, the
disclosure form entitled "Things You Should Know Before You Buy Long-Term Care
Insurance" shall be provided. The form shall be in the format contained in Appendix C of
the Long-Term Care Insurance Model Regulation adopted by the National Association of
Insurance Commissioners in not less than 12-point type.

(f) If the insurer or other entity marketing long-term care insurance determines
that the applicant does not meet its financial suitability standards, or if the applicant has
declined to provide the information, the insurer or other entity marketing long-term
care insurance may reject the application. In the alternative, the insurer or other entity
marketing long-term care insurance shall send the applicant a letter similar to Appendix D
of the Long-Term Care Insurance Model Regulation adopted by the National Association
of Insurance Commissioners. However, if the applicant has declined to provide financial
information, the insurer or other entity marketing long-term care insurance may use some
other method to verify the applicant's intent. The applicant's returned letter or a record of
the alternative method of verification shall be made part of the applicant's file.

Subd. 3.

Reports.

The insurer or other entity marketing long-term care insurance
shall report annually to the commissioner the total number of applications received from
residents of this state, the number of those who declined to provide information on the
personal worksheet, the number of applicants who did not meet the suitability standards,
and the number of those who chose to confirm after receiving a suitability letter.

Subd. 4.

Application.

This section shall not apply to life insurance policies that
accelerate benefits for long-term care.

Sec. 20.

[62S.315] PRODUCER TRAINING.

The commissioner shall approve insurer and producer training requirements
according to the NAIC Long-Term Care Insurance Model Act provisions. The
commissioner of human services shall provide technical assistance and information to the
commissioner according to Public Law 109-171, section 6021.

ARTICLE 22

CHILDREN AND FAMILIES PROGRAMS AND SERVICES

Section 1.

Minnesota Statutes 2004, section 119B.011, is amended by adding a
subdivision to read:

Subd. 23.

Work participation rate enhancement program.

"Work participation
rate enhancement program" means the program established under section 256J.575.

Sec. 2.

Minnesota Statutes 2004, section 119B.05, subdivision 1, is amended to read:

Subdivision 1.

Eligible participants.

Families eligible for child care assistance
under the MFIP child care program are:

(1) MFIP participants who are employed or in job search and meet the requirements
of section 119B.10;

(2) persons who are members of transition year families under section 119B.011,
subdivision 20, and meet the requirements of section 119B.10;

(3) families who are participating in employment orientation or job search, or
other employment or training activities that are included in an approved employability
development plan under section 256J.95;

(4) MFIP families who are participating in work job search, job support,
employment, or training activities as required in their employment plan, or in appeals,
hearings, assessments, or orientations according to chapter 256J;

(5) MFIP families who are participating in social services activities under chapter
256J as required in their employment plan approved according to chapter 256J;

(6) families who are participating in services or activities that are included in an
approved family stabilization plan under section 256J.575;

(7) families who are participating in programs as required in tribal contracts under
section 119B.02, subdivision 2, or 256.01, subdivision 2; and

(7) (8) families who are participating in the transition year extension under section
119B.011, subdivision 20a.

Sec. 3.

Minnesota Statutes 2005 Supplement, section 119B.13, subdivision 1, is
amended to read:

Subdivision 1.

Subsidy restrictions.

(a)(i) Effective July 1, 2005, the commissioner
of human services shall modify the rate tables for child care centers published in
Department of Human Services Bulletin No. 03-68-07 so that in counties with regional or
statewide cells, the higher of the 100th percentile of the 2002 market rate survey data or
the rate currently identified in the bulletin will be the maximum rate. The rates established
in this clause will be considered as the previous year's rates for purposes of the increase in
item (iii), and shall be compared to the 100th percentile of current market rates.

(ii) For the period between July 1, 2005, and through the full implementation of the
new rates under item (iii), the rates published in Department of Human Services Bulletin
No. 03-68-07 as adjusted by item (i) shall remain in effect.

(iii) (a) Beginning January July 1, 2006, the maximum rate paid for child care
assistance in any county or multicounty region under the child care fund shall be the
lesser of the

75th percentile rate for like-care arrangements in the county or multicounty region
as surveyed by the commissioner or the previous year's rate for like-care arrangements in
the county increased by 1.75 percent except that in counties where the maximum rate is
set at the 100th percentile on January 1, 2006, as published in Policy Bulletin 05-68-15,
the maximum rate shall continue to be set at the 100th percentile.

(iv) (b) Rate changes shall be implemented for services provided in March
September 2006 unless a participant eligibility redetermination or a new provider
agreement is completed between January July 1, 2006, and February 28 August 31, 2006.

As necessary, appropriate notice of adverse action must be made according to
Minnesota Rules, part 3400.0185, subparts 3 and 4.

New cases approved on or after January July 1, 2006, shall have the maximum rates
under item (iii) paragraph (a) implemented immediately.

(b) (c) Not less than once every two years, the commissioner shall survey rates
charged by child care providers in Minnesota to determine the 75th percentile for
like-care arrangements in counties. When the commissioner determines that, using the
commissioner's established protocol, the number of providers responding to the survey is
too small to determine the 75th percentile rate for like-care arrangements in a county or
multicounty region, the commissioner may establish the 75th percentile maximum rate
based on like-care arrangements in a county, region, or category that the commissioner
deems to be similar.

(c) (d) A rate which includes a special needs rate paid under subdivision 3 may be in
excess of the maximum rate allowed under this subdivision.

(d) (e) The department shall monitor the effect of this paragraph on provider rates.
The county shall pay the provider's full charges for every child in care up to the maximum
established. The commissioner shall determine the maximum rate for each type of care on
an hourly, full-day, and weekly basis, including special needs and handicapped care. The
commissioner shall also determine the maximum rate for school age care on a half-day
basis.

(e) (f) When the provider charge is greater than the maximum provider rate allowed,
the parent is responsible for payment of the difference in the rates in addition to any
family co-payment fee.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 4.

Minnesota Statutes 2004, section 119B.13, is amended by adding a subdivision
to read:

Subd. 3a.

Provider rate differential for accreditation.

A family child care
provider or child care center shall be paid a 15 percent differential above the maximum rate
established in subdivision 1, up to the actual provider rate, if the provider or center holds a
current early childhood development credential or is accredited. For a family child care
provider, early childhood development credential and accreditation includes an individual
who has earned a child development associate degree, a diploma in child development from
a Minnesota state technical college, or a bachelor's degree in early childhood education
from an accredited college or university, or who is accredited by the National Association
for Family Child Care or the Competency Based Training and Assessment Program. For a
child care center, accreditation includes accreditation by the National Association for the
Education of Young Children, the Council on Accreditation, the National Early Childhood
Program Accreditation, the National School-Age Care Association, or the National Head
Start Association Program of Excellence. For Montessori programs, accreditation includes
the American Montessori Society, Association of Montessori International-USA, or the
National Center for Montessori Education.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 5.

[256.029] DOMESTIC VIOLENCE INFORMATIONAL BROCHURE.

(a) The commissioner shall provide a domestic violence informational brochure
that provides information about the existence of domestic violence waivers for eligible
public assistance applicants to all general assistance, general assistance medical care,
MFIP, medical assistance, and MinnesotaCare. The brochure must explain that eligible
applicants may be temporarily waived from certain program requirements due to domestic
violence. The brochure must provide information about services and other programs to
help victims of domestic violence.

(b) The brochure must be funded with TANF funds.

EFFECTIVE DATE.

This section is effective upon federal approval.

Sec. 6.

[256D.0515] ASSET LIMITATIONS FOR FOOD STAMP HOUSEHOLDS.

All food stamp households must be determined eligible for the benefit discussed
under section 256.029. Food stamp households must demonstrate that:

(1) their gross income meets the federal food stamp requirements under United
States Code, title 7, section 2014(c); and

(2) they have financial resources, excluding vehicles, of less than $7,000.

EFFECTIVE DATE.

This section is effective upon federal approval.

Sec. 7.

Minnesota Statutes 2004, section 256J.01, is amended by adding a subdivision
to read:

Subd. 6.

Legislative approval to move programs or activities.

The commissioner
shall not move programs or activities funded with MFIP or TANF maintenance of effort
funds to other funding sources unless specifically approved by law.

Sec. 8.

Minnesota Statutes 2004, section 256J.02, subdivision 1, is amended to read:

Subdivision 1.

Commissioner's authority to administer block grant funds.

The
commissioner of human services is authorized to receive, and administer, and expend
funds available under the TANF block grant authorized under title I of Public Law
104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
Notwithstanding section 4.07, the commissioner shall not spend TANF funds, except
pursuant to a direct appropriation enacted by the legislature.

Sec. 9.

Minnesota Statutes 2004, section 256J.021, is amended to read:

256J.021 SEPARATE STATE PROGRAM FOR USE OF STATE MONEY
PROGRAMS.

(a) Beginning Until October 1, 2001 2006, and each year thereafter, the
commissioner of human services must treat MFIP expenditures made to or on behalf of
any minor child under section 256J.02, subdivision 2, clause (1), who is a resident of
this state under section 256J.12, and who is part of a two-parent eligible household as
expenditures under a separately funded state program and report those expenditures to the
federal Department of Health and Human Services as separate state program expenditures
under Code of Federal Regulations, title 45, section 263.5.

(b) Beginning October 1, 2006, the commissioner of human services must treat
MFIP expenditures made to or on behalf of any minor child under section 256J.02,
subdivision 2, clause (1), who is a resident of this state under section 256J.12, and who is
part of a two-parent eligible household as expenditures under a separately funded state
program. These expenditures shall not count toward the state's maintenance of effort
(MOE) requirements under the federal TANF program except if counting certain families
would allow the commissioner to avoid a federal penalty. Families receiving assistance
under this section must comply with all applicable requirements in chapter 256J.

(c) Beginning October 1, 2006, and each year thereafter, the commissioner of
human services must treat MFIP expenditures made to or on behalf of any minor child
under section 256J.02, subdivision 2, clause (1), who is a resident of this state under
section 256J.12, and who is part of a household participating in the work participation rate
enhancement program under section 256J.575, as expenditures under a program funded
with state nonmaintenance of effort funds. These expenditures shall not count toward the
state's MOE requirements under the federal TANF program, except if counting certain
families would allow the commissioner to avoid a federal penalty. Families receiving
assistance under this section must comply with all applicable requirements in chapter 256J.

Sec. 10.

Minnesota Statutes 2004, section 256J.08, subdivision 65, is amended to read:

Subd. 65.

Participant.

"Participant" means a person who is currently receiving cash
assistance or the food portion available through MFIP. A person who fails to withdraw
or access electronically any portion of the person's cash and food assistance payment by
the end of the payment month, who makes a written request for closure before the first
of a payment month and repays cash and food assistance electronically issued for that
payment month within that payment month, or who returns any uncashed assistance
check and food coupons and withdraws from the program is not a participant. A person
who withdraws a cash or food assistance payment by electronic transfer or receives and
cashes an MFIP assistance check or food coupons and is subsequently determined to be
ineligible for assistance for that period of time is a participant, regardless whether that
assistance is repaid. The term "participant" includes the caregiver relative and the minor
child whose needs are included in the assistance payment. A person in an assistance unit
who does not receive a cash and food assistance payment because the case has been
suspended from MFIP is a participant. A person who receives cash payments under the
diversionary work program under section 256J.95 is a participant. A person who receives
cash payments under the work participation rate enhancement program under section
256J.575 is a participant.

Sec. 11.

Minnesota Statutes 2004, section 256J.37, subdivision 3a, is amended to read:

Subd. 3a.

Rental subsidies; unearned income.

(a) Effective July 1, 2003, the
county agency shall count $50 of the value of public and assisted rental subsidies provided
through the Department of Housing and Urban Development (HUD) as unearned income
to the cash portion of the MFIP grant. The full amount of the subsidy must be counted as
unearned income when the subsidy is less than $50. The income from this subsidy shall
be budgeted according to section 256J.34.

(b) The provisions of this subdivision shall not apply to an MFIP assistance unit
which includes a participant who is:

(1) age 60 or older;

(2) a caregiver who is suffering from an illness, injury, or incapacity that has been
certified by a qualified professional when the illness, injury, or incapacity is expected
to continue for more than 30 days and prevents the person from obtaining or retaining
employment; or

(3) a caregiver whose presence in the home is required due to the illness or
incapacity of another member in the assistance unit, a relative in the household, or a foster
child in the household when the illness or incapacity and the need for the participant's
presence in the home has been certified by a qualified professional and is expected to
continue for more than 30 days.

(c) The provisions of this subdivision shall not apply to an MFIP assistance unit
where the parental caregiver is an SSI recipient.

(d) Prior to implementing this provision, the commissioner must identify the MFIP
participants subject to this provision and provide written notice to these participants at
least 30 days before the first grant reduction. The notice must inform the participant of the
basis for the potential grant reduction, the exceptions to the provision, if any, and inform
the participant of the steps necessary to claim an exception. A person who is found not to
meet one of the exceptions to the provision must be notified and informed of the right to a
fair hearing under section 256J.40. The notice must also inform the participant that the
participant may be eligible for a rent reduction resulting from a reduction in the MFIP
grant and encourage the participant to contact the local housing authority.

(e) This subdivision is suspended from July 1, 2006, through June 30, 2007.

Sec. 12.

Minnesota Statutes 2004, section 256J.521, subdivision 1, is amended to read:

Subdivision 1.

Assessments.

(a) For purposes of MFIP employment services,
assessment is a continuing process of gathering information related to employability for
the purpose of identifying both participant's strengths and strategies for coping with
issues that interfere with employment. The job counselor must use information from the
assessment process to develop and update the employment plan under subdivision 2 or 3,
as appropriate, and to determine whether the participant qualifies for a family violence
waiver including an employment plan under subdivision 3, and to determine whether
the participant should be referred to the work participation rate enhancement program
under section 256J.575.

(b) The scope of assessment must cover at least the following areas:

(1) basic information about the participant's ability to obtain and retain employment,
including: a review of the participant's education level; interests, skills, and abilities; prior
employment or work experience; transferable work skills; child care and transportation
needs;

(2) identification of personal and family circumstances that impact the participant's
ability to obtain and retain employment, including: any special needs of the children, the
level of English proficiency, family violence issues, and any involvement with social
services or the legal system;

(3) the results of a mental and chemical health screening tool designed by the
commissioner and results of the brief screening tool for special learning needs. Screening
tools for mental and chemical health and special learning needs must be approved by the
commissioner and may only be administered by job counselors or county staff trained in
using such screening tools. The commissioner shall work with county agencies to develop
protocols for referrals and follow-up actions after screens are administered to participants,
including guidance on how employment plans may be modified based upon outcomes
of certain screens. Participants must be told of the purpose of the screens and how the
information will be used to assist the participant in identifying and overcoming barriers to
employment. Screening for mental and chemical health and special learning needs must
be completed by participants who are unable to find suitable employment after six weeks
of job search under subdivision 2, paragraph (b), and participants who are determined to
have barriers to employment under subdivision 2, paragraph (d). Failure to complete the
screens will result in sanction under section 256J.46; and

(4) a comprehensive review of participation and progress for participants who have
received MFIP assistance and have not worked in unsubsidized employment during
the past 12 months. The purpose of the review is to determine the need for additional
services and supports, including placement in subsidized employment or unpaid work
experience under section 256J.49, subdivision 13, or referral to the work participation rate
enhancement program under section 256J.575.

(c) Information gathered during a caregiver's participation in the diversionary work
program under section 256J.95 must be incorporated into the assessment process.

(d) The job counselor may require the participant to complete a professional chemical
use assessment to be performed according to the rules adopted under section 254A.03,
subdivision 3, including provisions in the administrative rules which recognize the cultural
background of the participant, or a professional psychological assessment as a component
of the assessment process, when the job counselor has a reasonable belief, based on
objective evidence, that a participant's ability to obtain and retain suitable employment
is impaired by a medical condition. The job counselor may assist the participant with
arranging services, including child care assistance and transportation, necessary to meet
needs identified by the assessment. Data gathered as part of a professional assessment
must be classified and disclosed according to the provisions in section 13.46.

Sec. 13.

Minnesota Statutes 2004, section 256J.521, subdivision 2, is amended to read:

Subd. 2.

Employment plan; contents.

(a) Based on the assessment under
subdivision 1, the job counselor and the participant must develop an employment plan
that includes participation in activities and hours that meet the requirements of section
256J.55, subdivision 1. The purpose of the employment plan is to identify for each
participant the most direct path to unsubsidized employment and any subsequent steps that
support long-term economic stability. The employment plan should be developed using
the highest level of activity appropriate for the participant. Activities must be chosen from
clauses (1) to (6), which are listed in order of preference. Notwithstanding this order of
preference for activities, priority must be given for activities related to a family violence
waiver when developing the employment plan. The employment plan must also list the
specific steps the participant will take to obtain employment, including steps necessary
for the participant to progress from one level of activity to another, and a timetable for
completion of each step. Levels of activity include:

(1) unsubsidized employment;

(2) job search;

(3) subsidized employment or unpaid work experience;

(4) unsubsidized employment and job readiness education or job skills training;

(5) unsubsidized employment or unpaid work experience and activities related to
a family violence waiver or preemployment needs; and

(6) activities related to a family violence waiver or preemployment needs.

(b) Participants who are determined to possess sufficient skills such that the
participant is likely to succeed in obtaining unsubsidized employment must job search at
least 30 hours per week for up to six weeks and accept any offer of suitable employment.
The remaining hours necessary to meet the requirements of section 256J.55, subdivision
1, may be met through participation in other work activities under section 256J.49,
subdivision 13. The participant's employment plan must specify, at a minimum: (1)
whether the job search is supervised or unsupervised; (2) support services that will
be provided; and (3) how frequently the participant must report to the job counselor.
Participants who are unable to find suitable employment after six weeks must meet
with the job counselor to determine whether other activities in paragraph (a) should be
incorporated into the employment plan. Job search activities which are continued after six
weeks must be structured and supervised.

(c) Beginning July 1, 2004, activities and hourly requirements in the employment
plan may be adjusted as necessary to accommodate the personal and family circumstances
of participants identified under section 256J.561, subdivision 2, paragraph (d). Participants
who no longer meet the provisions of section 256J.561, subdivision 2, paragraph (d),
must meet with the job counselor within ten days of the determination to revise the
employment plan.

(d) Participants who are determined to have barriers to obtaining or retaining
employment that will not be overcome during six weeks of job search under paragraph (b)
must work with the job counselor to develop an employment plan that addresses those
barriers by incorporating appropriate activities from paragraph (a), clauses (1) to (6). The
employment plan must include enough hours to meet the participation requirements in
section 256J.55, subdivision 1, unless a compelling reason to require fewer hours is noted
in the participant's file.

(e) The job counselor and the participant must sign the employment plan to indicate
agreement on the contents. Failure to develop or comply with activities in the plan, or
voluntarily quitting suitable employment without good cause, will result in the imposition
of a sanction under section 256J.46.

(f) Employment plans must be reviewed at least every three months to determine
whether activities and hourly requirements should be revised. The job counselor is
encouraged to allow participants who are participating in at least 20 hours of work
activities to also participate in employment and training activities in order to meet the
federal hourly participation rates.

Sec. 14.

Minnesota Statutes 2004, section 256J.53, subdivision 2, is amended to read:

Subd. 2.

Approval of postsecondary education or training.

(a) In order for a
postsecondary education or training program to be an approved activity in an employment
plan, the participant must be working in unsubsidized employment at least 20 hours per
week.

(b) (a) Participants seeking approval of a postsecondary education or training plan
must provide documentation that:

(1) the employment goal can only be met with the additional education or training;

(2) there are suitable employment opportunities that require the specific education or
training in the area in which the participant resides or is willing to reside;

(3) the education or training will result in significantly higher wages for the
participant than the participant could earn without the education or training;

(4) the participant can meet the requirements for admission into the program; and

(5) there is a reasonable expectation that the participant will complete the training
program based on such factors as the participant's MFIP assessment, previous education,
training, and work history; current motivation; and changes in previous circumstances.

(c) (b) The hourly unsubsidized employment requirement does not apply for
intensive education or training programs lasting 12 weeks or less when full-time
attendance is required.

(d) (c) Participants with an approved employment plan in place on July 1, 2003,
which includes more than 12 months of postsecondary education or training shall be
allowed to complete that plan provided that hourly requirements in section 256J.55,
subdivision 1, and conditions specified in paragraph (b) (a), and subdivisions 3 and 5 are
met. A participant whose case is subsequently closed for three months or less for reasons
other than noncompliance with program requirements and who returns to MFIP shall
be allowed to complete that plan provided that hourly requirements in section 256J.55,
subdivision 1, and conditions specified in paragraph (b) (a) and subdivisions 3 and 5 are
met.

Sec. 15.

Minnesota Statutes 2004, section 256J.53, is amended by adding a subdivision
to read:

Subd. 2a.

Employment while attending postsecondary education.

For the first
12 months of education, the participant may work, but there is no work requirement.
For the subsequent 12 months of education, the participant must work in unsubsidized
employment at least 20 hours per week.

Sec. 16.

[256J.575] WORK PARTICIPATION RATE ENHANCEMENT
PROGRAM.

Subdivision 1.

Purpose.

(a) The work participation rate enhancement program
(WORK PREP) is Minnesota's cash assistance program to serve families who are not
making significant progress within MFIP due to a variety of barriers to employment.

(b) The goal of this program is to stabilize and improve the lives of families at risk
of long-term welfare dependency or family instability due to employment barriers such as
physical disability, mental disability, age, and caring for a disabled household member.
WORK PREP provides services to promote and support families to achieve the greatest
possible degree of self-sufficiency.

Subd. 2.

Definitions.

The terms used in this section have the meanings given them
in paragraphs (a) to (d).

(a) The "work participation rate enhancement program" means the WORK PREP
program established under this section.

(b) "Case management" means the services provided by or through the county agency
to participating families, including assessment, information, referrals, and assistance in the
preparation and implementation of a family stabilization plan under subdivision 5.

(c) "Family stabilization plan" means a plan developed by a case manager and
the participant, which identifies the participant's most appropriate path to unsubsidized
employment, family stability, and barrier reduction, taking into account the family's
circumstances.

(d) "Family stabilization services" means programs, activities, and services in this
section that provide participants and their family members with assistance regarding,
but not limited to:

(1) obtaining and retaining unsubsidized employment;

(2) family stability;

(3) economic stability; and

(4) barrier reduction.

The goal of the program is to achieve the greatest degree of economic self-sufficiency
and family well-being possible for the family under the circumstances.

Subd. 3.

Eligibility.

(a) The following MFIP or diversionary work program (DWP)
participants are eligible for the program under this section:

(1) a participant identified under section 256J.561, subdivision 2, paragraph (d), who
has or is eligible for an employment plan developed under section 256J.521, subdivision
2, paragraph (c);

(2) a participant identified under section 256J.95, subdivision 12, paragraph (b), as
unlikely to benefit from the diversionary work program;

(3) a participant who meets the requirements for or has been granted a hardship
extension under section 256J.425, subdivision 2 or 3; and

(4) a participant who is applying for supplemental security income or Social Security
disability insurance.

(b) Families must meet all other eligibility requirements for MFIP established in
this chapter. Families are eligible for financial assistance to the same extent as if they
were participating in MFIP.

Subd. 4.

Universal participation.

All caregivers must participate in family
stabilization services as defined in subdivision 2.

Subd. 5.

Case management; family stabilization plans; coordinated services.

(a)
The county agency shall provide family stabilization services to families through a case
management model. A case manager shall be assigned to each participating family within
30 days after the family begins to receive financial assistance as a participant of the work
participation rate enhancement program. The case manager, with the full involvement
of the family, shall recommend, and the county agency shall establish and modify as
necessary, a family stabilization plan for each participating family.

(b) The family stabilization plan shall include:

(1) each participant's plan for long-term self-sufficiency, including an employment
goal where applicable;

(2) an assessment of each participant's strengths and barriers, and any special
circumstances of the participant's family that impact, or are likely to impact, the
participant's progress towards the goals in the plan; and

(3) an identification of the services, supports, education, training, and
accommodations needed to overcome any barriers to enable the family to achieve
self-sufficiency and to fulfill each caregiver's personal and family responsibilities.

(c) The case manager and the participant must meet within 30 days of the family's
referral to the case manager. The initial family stabilization plan shall be completed within
30 days of the first meeting with the case manager. The case manager shall establish a
schedule for periodic review of the family stabilization plan that includes personal contact
with the participant at least once per month. In addition, the case manager shall review
and modify if necessary the plan under the following circumstances:

(1) there is a lack of satisfactory progress in achieving the goals of the plan;

(2) the participant has lost unsubsidized or subsidized employment;

(3) a family member has failed to comply with a family stabilization plan
requirement;

(4) services required by the plan are unavailable; or

(5) changes to the plan are needed to promote the well-being of the children.

(d) Family stabilization plans under this section shall be written for a period of
time not to exceed six months.

Subd. 6.

Cooperation with program requirements.

(a) To be eligible, a participant
must comply with paragraphs (b) to (f).

(b) Participants shall engage in family stabilization plan services for the appropriate
number of hours per week based on the participant's plan, but not fewer than ten hours per
week, provided the activities are scheduled and available, unless good cause exists for
not doing so, as defined in section 256J.57, subdivision 1.

(c) The case manager shall review the participant's progress toward the goals in the
family stabilization plan every six months to determine whether conditions have changed,
including whether revisions to the plan are needed.

(d) When the participant has increased participation in work-related activities
sufficient to meet the federal participation requirements of TANF, the county agency shall
refer the participant to the MFIP program and assign the participant to a job counselor.
The participant and the job counselor must meet within 15 days of referral to MFIP to
develop an employment plan under section 256J.521. No reapplication is necessary and
financial assistance shall continue without interruption.

(e) Participants who have not increased their participation in work activities
sufficient to meet the federal participation requirements of TANF may request a referral to
the MFIP program and assignment to a job counselor after 12 months in the program.

(f) A participant's requirement to comply with any or all family stabilization plan
requirements under this subdivision shall be excused when the case management services,
training and educational services, and family support services identified in the participant's
family stabilization plan are unavailable for reasons beyond the control of the participant,
including when money appropriated is not sufficient to provide the services.

Subd. 7.

Sanctions.

(a) The financial assistance grant of a participating family shall
be reduced, according to section 256J.46, if a participating adult fails without good cause
to comply or continue to comply with the family stabilization plan requirements in this
subdivision, unless compliance has been excused under subdivision 6, paragraph (f).

(b) Given the purpose of the work participation rate enhancement program in this
section and the nature of the underlying family circumstances that act as barriers to both
employment and full compliance with program requirements, sanctions are appropriate
only when it is clear that there is both the ability to comply and willful noncompliance by
the participant, as confirmed by a behavioral health or medical professional.

(c) Prior to the imposition of a sanction, the county agency must review the
participant's case to determine if the family stabilization plan is still appropriate and meet
with the participant face-to-face. The participant may bring an advocate to the face-to-face
meeting. If a face-to-face meeting is not conducted, the county agency must send the
participant a written notice that includes the following face-to-face meeting requirements:

(1) during the face-to-face meeting, the county agency must:

(i) determine whether the continued noncompliance can be explained and mitigated
by providing a needed family stabilization service, as defined in subdivision 2, paragraph
(d);

(ii) determine whether the participant qualifies for a good cause exception under
section 256J.57, or if the sanction is for noncooperation with child support requirements,
determine if the participant qualifies for a good cause exemption under section 256.741,
subdivision 10;

(iii) determine whether activities in the family stabilization plan are appropriate
based on the family's circumstances;

(iv) explain the consequences of continuing noncompliance;

(v) identify other resources that may be available to the participant to meet the
needs of the family; and

(vi) inform the participant of the right to appeal under section 256J.40; and

(2) if the lack of an identified activity or service can explain the noncompliance, the
county must work with the participant to provide the identified activity.

(d) After the requirements of paragraph (c) are met and prior to imposition of a
sanction, the county agency shall provide a notice of intent to sanction under section
256J.57, subdivision 2, and, when applicable, a notice of adverse action as provided
in section 256J.31.

(e) Section 256J.57 applies to this section except to the extent that it is modified
by this subdivision.

Sec. 17.

[256J.621] WORK PARTICIPATION BONUS.

Upon exiting the diversionary work program (DWP) or upon terminating MFIP cash
assistance with earnings, a participant who is employed and working 24 hours a week may
be eligible for transitional assistance of $50 per month to assist in meeting the family's
basic needs as the participant continues to move toward self-sufficiency.

To be eligible for a transitional assistance payment, the participant must not receive
MFIP cash assistance or DWP assistance during the month and must be employed an
average of at least 24 hours a week. Transitional assistance shall be available for a
maximum of 12 months from the date the participant exited the DWP or terminated MFIP
cash assistance.

The commissioner shall establish minimal policies and develop forms to verify
eligibility for transitional assistance. The commissioner is authorized to change or
modify the provisions of this section in order to comply with federal rules or regulations
promulgated as a result of the federal Deficit Reduction Act (DEFRA) of 2005.

Expenditures on the transitional assistance program shall be maintenance of effort
state funds. Months in which a participant receives transitional assistance under this
section shall not count toward the participant's MFIP 60-month time limit.

Sec. 18.

Minnesota Statutes 2004, section 256J.626, subdivision 1, is amended to read:

Subdivision 1.

Consolidated fund.

The consolidated fund is established to support
counties and tribes in meeting their duties under this chapter. Counties and tribes must
use funds from the consolidated fund to develop programs and services that are designed
to improve participant outcomes as measured in section 256J.751, subdivision 2, and
to provide case management services to participants of the work participation rate
enhancement program. Counties may use the funds for any allowable expenditures under
subdivision 2. Tribes may use the funds for any allowable expenditures under subdivision
2, except those in clauses (1) and (6).

Sec. 19.

Minnesota Statutes 2004, section 256J.626, subdivision 2, is amended to read:

Subd. 2.

Allowable expenditures.

(a) The commissioner must restrict expenditures
under the consolidated fund to benefits and services allowed under title IV-A of the federal
Social Security Act. Allowable expenditures under the consolidated fund may include, but
are not limited to:

(1) short-term, nonrecurring shelter and utility needs that are excluded from the
definition of assistance under Code of Federal Regulations, title 45, section 260.31, for
families who meet the residency requirement in section 256J.12, subdivisions 1 and 1a.
Payments under this subdivision are not considered TANF cash assistance and are not
counted towards the 60-month time limit;

(2) transportation needed to obtain or retain employment or to participate in other
approved work activities or activities under a family stabilization plan;

(3) direct and administrative costs of staff to deliver employment services for MFIP
or the diversionary work program, the DWP, or the work participation rate enhancement
program; to administer financial assistance,; and to provide specialized services intended
to assist hard-to-employ participants to transition to work or transition from the work
participation rate enhancement program to MFIP;

(4) costs of education and training including functional work literacy and English as
a second language;

(5) cost of work supports including tools, clothing, boots, and other work-related
expenses;

(6) county administrative expenses as defined in Code of Federal Regulations, title
45, section 260(b);

(7) services to parenting and pregnant teens;

(8) supported work;

(9) wage subsidies;

(10) child care needed for MFIP or diversionary work program, the DWP, or the
work participation rate enhancement program participants to participate in social services;

(11) child care to ensure that families leaving MFIP or diversionary work program
will continue to receive child care assistance from the time the family no longer qualifies
for transition year child care until an opening occurs under the basic sliding fee child
care program; and

(12) services to help noncustodial parents who live in Minnesota and have minor
children receiving MFIP or DWP assistance, but do not live in the same household as the
child, obtain or retain employment; and

(13) services to help families participating in the work participation rate
enhancement program achieve the greatest possible degree of self-sufficiency.

(b) Administrative costs that are not matched with county funds as provided in
subdivision 8 may not exceed 7.5 percent of a county's or 15 percent of a tribe's allocation
under this section. The commissioner shall define administrative costs for purposes of
this subdivision.

(c) The commissioner may waive the cap on administrative costs for a county or tribe
that elects to provide an approved supported employment, unpaid work, or community
work experience program for a major segment of the county's or tribe's MFIP population.
The county or tribe must apply for the waiver on forms provided by the commissioner. In
no case shall total administrative costs exceed the TANF limits.

Sec. 20.

Minnesota Statutes 2004, section 256J.626, subdivision 3, is amended to read:

Subd. 3.

Eligibility for services.

Families with a minor child, a pregnant woman,
or a noncustodial parent of a minor child receiving assistance, with incomes below 200
percent of the federal poverty guideline for a family of the applicable size, are eligible
for services funded under the consolidated fund. Counties and tribes must give priority
to families currently receiving MFIP or, the diversionary work program, or the work
participation rate enhancement program, and families at risk of receiving MFIP or
diversionary work program.

Sec. 21.

Minnesota Statutes 2004, section 256J.626, subdivision 4, is amended to read:

Subd. 4.

County and tribal biennial service agreements.

(a) Effective January 1,
2004, and each two-year period thereafter, each county and tribe must have in place an
approved biennial service agreement related to the services and programs in this chapter.
In counties with a city of the first class with a population over 300,000, the county must
consider a service agreement that includes a jointly developed plan for the delivery of
employment services with the city. Counties may collaborate to develop multicounty,
multitribal, or regional service agreements.

(b) The service agreements will be completed in a form prescribed by the
commissioner. The agreement must include:

(1) a statement of the needs of the service population and strengths and resources
in the community;

(2) numerical goals for participant outcomes measures to be accomplished during
the biennial period. The commissioner may identify outcomes from section 256J.751,
subdivision 2, as core outcomes for all counties and tribes;

(3) strategies the county or tribe will pursue to achieve the outcome targets.
Strategies must include specification of how funds under this section will be used and may
include community partnerships that will be established or strengthened; and

(4) strategies the county or tribe will pursue under the work participation rate
enhancement program; and

(5) other items prescribed by the commissioner in consultation with counties and
tribes.

(c) The commissioner shall provide each county and tribe with information needed
to complete an agreement, including: (1) information on MFIP cases in the county or
tribe; (2) comparisons with the rest of the state; (3) baseline performance on outcome
measures; and (4) promising program practices.

(d) The service agreement must be submitted to the commissioner by October 15,
2003, and October 15 of each second year thereafter. The county or tribe must allow
a period of not less than 30 days prior to the submission of the agreement to solicit
comments from the public on the contents of the agreement.

(e) The commissioner must, within 60 days of receiving each county or tribal service
agreement, inform the county or tribe if the service agreement is approved. If the service
agreement is not approved, the commissioner must inform the county or tribe of any
revisions needed prior to approval.

(f) The service agreement in this subdivision supersedes the plan requirements
of section 116L.88.

Sec. 22.

Minnesota Statutes 2004, section 256J.626, subdivision 5, is amended to read:

Subd. 5.

Innovation projects.

Beginning January 1, 2005, no more than $3,000,000
of the funds annually appropriated to the commissioner for use in the consolidated
fund shall be available to the commissioner for projects testing innovative approaches
to improving outcomes for MFIP participants, and persons at risk of receiving MFIP
as detailed in subdivision 3, and for providing incentives to counties and tribes that
exceed performance. Projects shall be targeted to geographic areas with poor outcomes
as specified in section 256J.751, subdivision 5, or to subgroups within the MFIP case
load who are experiencing poor outcomes. For purposes of an incentive, a county or
tribe exceeds performance if the county or tribe is above the top of the county or tribe's
annualized range of expected performance on the three-year self-support index under
section 256J.751, subdivision 2, clause (6), and achieves a 50 percent MFIP participation
rate under section 256J.751, subdivision 2, clause (7), as averaged across the four quarterly
measurements for the most recent year for which the measurements are available.

Sec. 23.

Minnesota Statutes 2005 Supplement, section 256J.626, subdivision 6,
is amended to read:

Subd. 6.

Base allocation to counties and tribes; definitions.

(a) For purposes of
this section, the following terms have the meanings given.

(1) "2002 historic spending base" means the commissioner's determination of
the sum of the reimbursement related to fiscal year 2002 of county or tribal agency
expenditures for the base programs listed in clause (6), items (i) through (iv), and earnings
related to calendar year 2002 in the base program listed in clause (6), item (v), and the
amount of spending in fiscal year 2002 in the base program listed in clause (6), item (vi),
issued to or on behalf of persons residing in the county or tribal service delivery area.

(2) "Adjusted caseload factor" means a factor weighted:

(i) 47 percent on the MFIP cases in each county at four points in time in the most
recent 12-month period for which data is available multiplied by the county's caseload
difficulty factor; and

(ii) 53 percent on the count of adults on MFIP in each county and tribe at four points
in time in the most recent 12-month period for which data is available multiplied by the
county or tribe's caseload difficulty factor.

(3) "Caseload difficulty factor" means a factor determined by the commissioner for
each county and tribe based upon the self-support index described in section 256J.751,
subdivision 2, clause (7).

(4) "Initial allocation" means the amount potentially available to each county or tribe
based on the formula in paragraphs (b) through (h).

(5) "Final allocation" means the amount available to each county or tribe based on
the formula in paragraphs (b) through (h), after adjustment by subdivision 7.

(6) "Base programs" means the:

(i) MFIP employment and training services under Minnesota Statutes 2002, section
256J.62, subdivision 1, in effect June 30, 2002;

(ii) bilingual employment and training services to refugees under Minnesota Statutes
2002, section 256J.62, subdivision 6, in effect June 30, 2002;

(iii) work literacy language programs under Minnesota Statutes 2002, section
256J.62, subdivision 7, in effect June 30, 2002;

(iv) supported work program authorized in Laws 2001, First Special Session chapter
9, article 17, section 2, in effect June 30, 2002;

(v) administrative aid program under section 256J.76 in effect December 31, 2002;
and

(vi) emergency assistance program under Minnesota Statutes 2002, section 256J.48,
in effect June 30, 2002.

(b) The commissioner shall:

(1) beginning July 1, 2003, determine the initial allocation of funds available under
this section according to clause (2);

(2) allocate all of the funds available for the period beginning July 1, 2003, and
ending December 31, 2004, to each county or tribe in proportion to the county's or tribe's
share of the statewide 2002 historic spending base;

(3) determine for calendar year 2005 the initial allocation of funds to be made
available under this section in proportion to the county or tribe's initial allocation for the
period of July 1, 2003, to December 31, 2004;

(4) determine for calendar year 2006 the initial allocation of funds to be made
available under this section based 90 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and ten percent on the proportion of
the county or tribe's share of the adjusted caseload factor;

(5) determine for calendar year 2007 the initial allocation of funds to be made
available under this section based 70 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and 30 percent on the proportion of the
county or tribe's share of the adjusted caseload factor; and

(6) determine for calendar year 2008 and subsequent years the initial allocation of
funds to be made available under this section based 50 percent on the proportion of the
county or tribe's share of the statewide 2002 historic spending base and 50 percent on the
proportion of the county or tribe's share of the adjusted caseload factor.

(c) With the commencement of a new or expanded tribal TANF program or an
agreement under section 256.01, subdivision 2, paragraph (g), in which some or all of
the responsibilities of particular counties under this section are transferred to a tribe,
the commissioner shall:

(1) in the case where all responsibilities under this section are transferred to a tribal
program, determine the percentage of the county's current caseload that is transferring to a
tribal program and adjust the affected county's allocation accordingly; and

(2) in the case where a portion of the responsibilities under this section are
transferred to a tribal program, the commissioner shall consult with the affected county or
counties to determine an appropriate adjustment to the allocation.

(d) Effective January 1, 2005, counties and tribes will have their final allocations
adjusted based on the performance provisions of subdivision 7.

Sec. 24.

[259.86] POSTADOPTION SEARCH SERVICES.

(a) The commissioner of human services shall develop a specialized curriculum
to train department, county agency, and social service agency staff in performing and
complying with the postadoption search services developed in the best practices guidelines
reported to the legislature in 2006.

(b) All department and county social service agency staff providing postadoption
search services, shall complete six hours of postadoption search services training as a
specialized curriculum of the child welfare training.

(c) All private agency staff providing postadoption search services shall complete at
least six hours of postadoption search services training.

Sec. 25.

Minnesota Statutes 2004, section 259.87, is amended to read:

259.87 RULES.

The commissioner of human services shall make rules as necessary to administer
sections 259.79 and, 259.83, and 259.86.

Sec. 26.

Minnesota Statutes 2004, section 518.551, subdivision 7, is amended to read:

Subd. 7.

Fees and cost recovery fees for IV-D services.

(a) When a recipient of
IV-D services is no longer receiving assistance under the state's title IV-A, IV-E foster
care, medical assistance, or MinnesotaCare programs, the public authority responsible
for child support enforcement must notify the recipient, within five working days of the
notification of ineligibility, that IV-D services will be continued unless the public authority
is notified to the contrary by the recipient. The notice must include the implications
of continuing to receive IV-D services, including the available services and fees, cost
recovery fees, and distribution policies relating to fees.

(b) An application fee of $25 shall be paid by the person who applies for child
support and maintenance collection services, except persons who are receiving public
assistance as defined in section 256.741 and, if enacted, the diversionary work program
under section 256J.95, persons who transfer from public assistance to nonpublic assistance
status, and minor parents and parents enrolled in a public secondary school, area learning
center, or alternative learning program approved by the commissioner of education.

(c) In the case of an individual who has never received assistance under a state
program funded under Title IV-A of the Social Security Act and for whom the public
authority has collected at least $500 of support, the public authority must impose an
annual federal collections fee of $25 for each case in which services are furnished. This
fee must be retained by the public authority from support collected on behalf of the
individual, but not from the first $500 collected.

(d) When the public authority provides full IV-D services to an obligee who has
applied for those services, upon written notice to the obligee, the public authority must
charge a cost recovery fee of one percent of the amount collected. This fee must be
deducted from the amount of the child support and maintenance collected and not assigned
under section 256.741 before disbursement to the obligee. This fee does not apply to an
obligee who:

(1) is currently receiving assistance under the state's title IV-A, IV-E foster care,
medical assistance, or MinnesotaCare programs; or

(2) has received assistance under the state's title IV-A or IV-E foster care programs,
until the person has not received this assistance for 24 consecutive months.

(d) (e) When the public authority provides full IV-D services to an obligor who has
applied for such services, upon written notice to the obligor, the public authority must
charge a cost recovery fee of one percent of the monthly court-ordered child support and
maintenance obligation. The fee may be collected through income withholding, as well
as by any other enforcement remedy available to the public authority responsible for
child support enforcement.

(e) (f) Fees assessed by state and federal tax agencies for collection of overdue
support owed to or on behalf of a person not receiving public assistance must be imposed
on the person for whom these services are provided. The public authority upon written
notice to the obligee shall assess a fee of $25 to the person not receiving public assistance
for each successful federal tax interception. The fee must be withheld prior to the release
of the funds received from each interception and deposited in the general fund.

(f) (g) Federal collections fees collected under paragraph (c) and cost recovery fees
collected under paragraphs (c) and (d) and (e) shall be considered child support program
income according to Code of Federal Regulations, title 45, section 304.50, and shall
be deposited in the cost recovery fee special revenue fund account established under
paragraph (h) (i). The commissioner of human services must elect to recover costs based
on either actual or standardized costs.

(g) (h) The limitations of this subdivision on the assessment of fees shall not apply
to the extent inconsistent with the requirements of federal law for receiving funds for the
programs under Title IV-A and Title IV-D of the Social Security Act, United States Code,
title 42, sections 601 to 613 and United States Code, title 42, sections 651 to 662.

(h) (i) The commissioner of human services is authorized to establish a special
revenue fund account to receive child support the federal collections fees collected under
paragraph (c) and cost recovery fees collected under paragraphs (d) and (e). A portion of
the nonfederal share of these fees may be retained for expenditures necessary to administer
the fee fees and must be transferred to the child support system special revenue account.
The remaining nonfederal share of the federal collections fees and cost recovery fee fees
must be retained by the commissioner and dedicated to the child support general fund
county performance-based grant account authorized under sections 256.979 and 256.9791.

EFFECTIVE DATE.

This section is effective October 1, 2006, or later if the
commissioner determines that a later implementation will not result in federal fiscal
penalties.

Sec. 27. PARENT FEE SCHEDULE.

Notwithstanding Minnesota Rules, part 3400.0100, subpart 4, the parent fee
schedule for the child care assistance program is as follows:

Income Range (as a percent of the federal poverty guidelines)	Co-payment (as a percentage of adjusted gross income)
0-74.99%	$0/month
75.00-99.99%	$5/month
100.00-104.99%	2.61%
105.00-109.99%	2.61%
110.00-114.99%	2.61%
115.00-119.99%	2.61%
120.00-124.99%	2.91%
125.00-129.99%	2.91%
130.00-134.99%	2.91%
135.00-139.99%	2.91%
140.00-144.99%	3.21%
145.00-149.99%	3.21%
150.00-154.99%	3.21%
155.00-159.99%	3.84%
160.00-164.99%	3.84%
165.00-169.99%	4.46%
170.00-174.99%	4.76%
175.00-179.99%	5.05%
180.00-184.99%	5.65%
185.00-189.99%	5.95%
190.00-194.99%	6.24%
195.00-199.99%	6.84%
200.00-204.99%	7.58%
205.00-209.99%	8.33%
210.00-214.99%	9.20%
215.00-219.99%	10.07%
220.00-224.99%	10.94%
225.00-229.99%	11.55%
230.00-234.99%	12.16%
235.00-239.99%	12.77%
240.00-244.99%	13.38%
245.00-249.99%	14.00%
250%	ineligible

A family's monthly co-payment fee is the fixed percentage established for the
income range multiplied by the highest possible income within that income range.

EFFECTIVE DATE.

This section is effective July 1, 2006.

Sec. 28. REPEALER.

(a) Minnesota Statutes 2004, section 256J.626, subdivision 9, and Minnesota
Statutes 2005 Supplement, sections 119B.13, subdivision 7; and 256J.626, subdivision
7, are repealed.

(b) Laws 2003, First Special Session chapter 14, article 9, section 36, is repealed.

ARTICLE 23

MENTAL HEALTH AND CHEMICAL HEALTH

Section 1.

Minnesota Statutes 2004, section 245.465, is amended by adding a
subdivision to read:

Subd. 3.

Responsibility not duplicated.

For individuals who have health care
coverage, the county board is not responsible for providing mental health services which
are covered by the entity that administers the health care coverage.

Sec. 2.

[245.4682] MENTAL HEALTH SERVICE DELIVERY AND FINANCE
REFORM.

Subdivision 1.

Policy.

The commissioner of human services shall undertake a series
of reforms to improve the underlying structural, financing, and organizational problems
in Minnesota's mental health system with the goal of improving the availability, quality,
and accountability of mental health care within the state.

Subd. 2.

General provisions.

In the design and implementation of reforms to the
mental health system, the commissioner shall:

(1) consult with consumers, families, counties, tribes, advocates, providers, and
other stakeholders;

(2) bring to the legislature, and the state Mental Health Advisory Council by January
15, 2007, recommendations for legislation to update the role of counties and to clarify the
case management roles and functions of health plans and counties;

(3) ensure continuity of care for persons affected by these reforms including:

(i) ensuring client choice of provider by requiring broad provider networks;

(ii) allowing clients options to maintain previously established therapeutic
relationships; and

(iii) developing mechanisms to facilitate a smooth transition of service
responsibilities;

(4) provide accountability for the efficient and effective use of public and private
resources in achieving positive outcomes for consumers;

(5) ensure client access to applicable protections and appeals; and

(6) make budget transfers that do not increase the state and county costs to
effectively implement improvements to the mental health system and efficiently allocate
state funds. When making transfers necessary to implement movement of responsibility
for clients and services between counties and health care programs, the commissioner,
in consultation with counties, shall ensure that any transfer of state grants to health
care programs, including the value of case management transfer grants under section
256B.0625, subdivision 20, does not exceed the value of the services being transferred
for the latest 12-month period for which data is available. The commissioner may make
quarterly adjustments based on the availability of additional data during the first four
quarters after the transfers first occur.

Subd. 3.

Regional projects for coordination of care.

(a) Consistent with section
256B.69 and chapters 256D and 256L, the commissioner is authorized to solicit, approve,
and implement regional projects to demonstrate the integration of physical and mental
health services within prepaid health plans and their coordination with social services. The
commissioner, in consultation with consumers, families, and their representatives, shall:

(1) determine criteria for approving the regional projects and use those criteria to
solicit regional proposals for integrated service networks;

(2) require that each project be based on locally defined partnerships that include
at least one health maintenance organization, community integrated service network, or
accountable provider network authorized and operating under chapter 62D, 62N, or 62T,
or county-based purchasing entity under section 256B.692 that is eligible to contract with
the commissioner as a prepaid health plan, and the county or counties within the region;

(3) allow potential bidders at least 90 days to respond to the request for proposals;

(4) waive any administrative rule not consistent with the implementation of the
regional projects; and

(5) begin implementation of the regional projects no earlier than January 1, 2008,
with not more than 20 percent of the statewide population described in paragraph (b)
included during calendar year 2008 and additional individuals included in subsequent
years.

(b) Notwithstanding any statute or administrative rule to the contrary, the
commissioner shall enroll all medical assistance eligible persons with serious and
persistent mental illness or severe emotional disturbance in the prepaid plan of their choice
within the project region unless:

(1) an individual has another basis for exclusion from the prepaid plan under section
256B.69, subdivision 4;

(2) an individual has a previously established therapeutic relationship with a
provider who is not included in the available prepaid plans; or

(3) the service the individual wishes to use is not included in the available prepaid
plans.

(c) If the person with serious and persistent mental illness or severe emotional
disturbance declines to choose a plan, the commissioner may preferentially assign
that person to the prepaid plan participating in the integrated service network. The
commissioner shall implement the enrollment changes within a regional project on the
timeline specified in that region's approved application.

(d) The commissioner, in consultation with consumers, families, and their
representatives, shall evaluate the regional projects begun in 2008, and shall refine the
design of the regional service integration projects before expanding beyond the 20
percent of the statewide population and expanding the number of regions engaged in the
demonstration projects as additional qualified applicant partnerships present themselves.

(e) The commissioner shall apply for any federal waivers necessary to implement
these changes.

Sec. 3.

[245.4835] COUNTY MAINTENANCE OF EFFORT.

Subdivision 1.

Required expenditures.

Counties must maintain a level of
expenditures for mental health services under sections 245.461 to 245.484 and 245.487 to
245.4887 so that each year's county expenditures are at least equal to that county's average
expenditures for those services for calendar years 2004 and 2005. The commissioner will
adjust each county's base level for minimum expenditures in each year by the amount of
any increase or decrease in that county's state grants or other noncounty revenues for
mental health services under sections 245.461 to 245.484 and 245.487 to 245.4887.

Subd. 2.

Failure to maintain expenditures.

If a county does not comply with
subdivision 1, the commissioner shall require the county to develop a corrective action plan
according to a format and timeline established by the commissioner. If the commissioner
determines that a county has not developed an acceptable corrective action plan within
the required timeline, or that the county is not in compliance with an approved corrective
action plan, the protections provided to that county under section 245.485 do not apply.

Sec. 4.

Minnesota Statutes 2005 Supplement, section 245.4874, is amended to read:

245.4874 DUTIES OF COUNTY BOARD.

Subdivision 1.

Duties of the county board.

(a) The county board must:

(1) develop a system of affordable and locally available children's mental health
services according to sections 245.487 to 245.4887;

(2) establish a mechanism providing for interagency coordination as specified in
section 245.4875, subdivision 6;

(3) consider the assessment of unmet needs in the county as reported by the local
children's mental health advisory council under section 245.4875, subdivision 5, paragraph
(b), clause (3). The county shall provide, upon request of the local children's mental health
advisory council, readily available data to assist in the determination of unmet needs;

(4) assure that parents and providers in the county receive information about how to
gain access to services provided according to sections 245.487 to 245.4887;

(5) coordinate the delivery of children's mental health services with services
provided by social services, education, corrections, health, and vocational agencies to
improve the availability of mental health services to children and the cost-effectiveness of
their delivery;

(6) assure that mental health services delivered according to sections 245.487
to 245.4887 are delivered expeditiously and are appropriate to the child's diagnostic
assessment and individual treatment plan;

(7) provide the community with information about predictors and symptoms of
emotional disturbances and how to access children's mental health services according to
sections 245.4877 and 245.4878;

(8) provide for case management services to each child with severe emotional
disturbance according to sections 245.486; 245.4871, subdivisions 3 and 4; and 245.4881,
subdivisions 1, 3, and 5;

(9) provide for screening of each child under section 245.4885 upon admission
to a residential treatment facility, acute care hospital inpatient treatment, or informal
admission to a regional treatment center;

(10) prudently administer grants and purchase-of-service contracts that the county
board determines are necessary to fulfill its responsibilities under sections 245.487 to
245.4887;

(11) assure that mental health professionals, mental health practitioners, and case
managers employed by or under contract to the county to provide mental health services
are qualified under section 245.4871;

(12) assure that children's mental health services are coordinated with adult mental
health services specified in sections 245.461 to 245.486 so that a continuum of mental
health services is available to serve persons with mental illness, regardless of the person's
age;

(13) assure that culturally informed mental health consultants are used as necessary
to assist the county board in assessing and providing appropriate treatment for children of
cultural or racial minority heritage; and

(14) consistent with section 245.486, arrange for or provide a children's mental
health screening to a child receiving child protective services or a child in out-of-home
placement, a child for whom parental rights have been terminated, a child found to be
delinquent, and a child found to have committed a juvenile petty offense for the third or
subsequent time, unless a screening has been performed within the previous 180 days, or
the child is currently under the care of a mental health professional. The court or county
agency must notify a parent or guardian whose parental rights have not been terminated of
the potential mental health screening and the option to prevent the screening by notifying
the court or county agency in writing. The screening shall be conducted with a screening
instrument approved by the commissioner of human services according to criteria that
are updated and issued annually to ensure that approved screening instruments are valid
and useful for child welfare and juvenile justice populations, and shall be conducted
by a mental health practitioner as defined in section 245.4871, subdivision 26, or a
probation officer or local social services agency staff person who is trained in the use of
the screening instrument. Training in the use of the instrument shall include training in the
administration of the instrument, the interpretation of its validity given the child's current
circumstances, the state and federal data practices laws and confidentiality standards, the
parental consent requirement, and providing respect for families and cultural values.
If the screen indicates a need for assessment, the child's family, or if the family lacks
mental health insurance, the local social services agency, in consultation with the child's
family, shall have conducted a diagnostic assessment, including a functional assessment,
as defined in section 245.4871. The administration of the screening shall safeguard the
privacy of children receiving the screening and their families and shall comply with the
Minnesota Government Data Practices Act, chapter 13, and the federal Health Insurance
Portability and Accountability Act of 1996, Public Law 104-191. Screening results shall be
considered private data and the commissioner shall not collect individual screening results.

(b) When the county board refers clients to providers of children's therapeutic
services and supports under section 256B.0943, the county board must clearly identify
the desired services components not covered under section 256B.0943 and identify the
reimbursement source for those requested services, the method of payment, and the
payment rate to the provider.

Subd. 2.

Responsibility not duplicated.

For individuals that have health care
coverage, the county board is not responsible for providing mental health services which
are covered by the entity which administers the health care coverage.

Sec. 5.

[245.4889] CHILDREN'S MENTAL HEALTH GRANTS.

Subdivision 1.

Establishment and authority.

The commissioner is authorized to
make grants from available appropriations to assist counties, Indian tribes, children's
collaboratives under section 124D.23 or 245.493, or mental health service providers for
providing services to children with emotional disturbances as defined in section 245.4871,
subdivision 15, and their families; and to young adults meeting the criteria for transition
services in section 245.4875, subdivision 8, and their families. Services must be designed
to help each child to function and remain with the child's family in the community and
delivered consistent with the child's treatment plan. Transition services to eligible young
adults must be designed to foster independent living in the community.

Subd. 2.

Grant application and reporting requirements.

To apply for a grant
an applicant organization shall submit an application and budget for the use of the
money in the form specified by the commissioner. The commissioner shall make grants
only to entities whose applications and budgets are approved by the commissioner. In
awarding grants, the commissioner shall give priority to applications that indicate plans
to collaborate in the development, funding, and delivery of services with other agencies
in the local system of care. The commissioner shall specify requirements for reports,
including quarterly fiscal reports, according to section 256.01, subdivision 2, paragraph
(q). The commissioner shall require collection of data and periodic reports that the
commissioner deems necessary to demonstrate the effectiveness of each service.

Sec. 6.

Minnesota Statutes 2004, section 246.54, subdivision 1, is amended to read:

Subdivision 1.

County portion for cost of care.

Except for chemical dependency
services provided under sections 254B.01 to 254B.09, the client's county shall pay to the
state of Minnesota a portion of the cost of care provided in a regional treatment center
or a state nursing facility to a client legally settled in that county. A county's payment
shall be made from the county's own sources of revenue and payments shall be paid as
follows: payments to the state from the county shall equal 20 percent of the cost of care, as
determined by the commissioner, for each day of the first 60 days, or the portion thereof,
that the client spends at a regional treatment center or a state nursing facility. After the
first 60 days, the county share is 50 percent. This increase in the county share of payment
shall not apply if the continued placement of the client in the regional treatment center or
state nursing facility is the result of one of the following:

(1) the individual has been admitted for assessment and treatment under a court
order issued under the Rules of Criminal Procedure, parts 20.01 and 20.02; or

(2) there has been medical certification by the head of the center or facility that the
client is in need of continued treatment at a hospital level of care.

If payments received by the state under sections 246.50 to 246.53 exceed 80 percent
of the cost of care for the first 60 days or 50 percent of any additional days, the county
shall be responsible for paying the state only the remaining amount. The county shall
not be entitled to reimbursement from the client, the client's estate, or from the client's
relatives, except as provided in section 246.53. No such payments shall be made for any
client who was last committed prior to July 1, 1947.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 7.

Minnesota Statutes 2004, section 246.54, is amended by adding a subdivision
to read:

Subd. 3.

Additional exception for community behavioral health hospitals.

Subdivision 1 does not apply to services provided at state-operated community behavioral
health hospitals. For services at these facilities, a county's payment shall be made from
the county's own sources of revenue and payments shall be paid as follows: payments
to the state from the county shall equal 50 percent of the cost of care, as determined
by the commissioner, for each day, or the portion thereof, that the client spends at
the hospital. After the first 60 days, the county share of payment shall not apply if the
continued placement of the client in the community behavioral health hospital is the result
of one of the following:

(1) the individual has been admitted for assessment and treatment under a court
order issued under the Rules of Criminal Procedure, parts 20.01 and 20.02; or

(2) there has been medical certification by the head of the hospital that the client is
in need of continued treatment at a hospital level of care.

If payments received by the state under sections 246.50 to 246.53 exceed 50 percent
of the cost of care, the county shall be responsible for paying the state only the remaining
amount. The county shall not be entitled to reimbursement from the client, the client's
estate, or from the client's relatives, except as provided in section 246.53.

EFFECTIVE DATE.

This section is effective January 1, 2007.

Sec. 8.

Minnesota Statutes 2004, section 253B.02, subdivision 2, is amended to read:

Subd. 2.

Chemically dependent person.

"Chemically dependent person" means
any person (a) determined as being incapable of self-management or management of
personal affairs by reason of the habitual and excessive use of alcohol, drugs, or other
mind-altering substances; and (b) whose recent conduct as a result of habitual and
excessive use of alcohol, drugs, or other mind-altering substances poses a substantial
likelihood of physical harm to self or others as demonstrated by (i) a recent attempt or
threat to physically harm self or others, (ii) evidence of recent serious physical problems,
or (iii) a failure to obtain necessary food, clothing, shelter, or medical care. "Chemically
dependent person" also means a pregnant woman who has engaged during the pregnancy
in habitual or excessive use, for a nonmedical purpose, of any of the following controlled
substances or their derivatives: opium, cocaine, heroin, phencyclidine, methamphetamine,
or amphetamine.

Sec. 9.

[254A.20] CHEMICAL USE ASSESSMENTS.

Subdivision 1.

Persons arrested outside of home county.

When a chemical use
assessment is required under Minnesota Rules, parts 9530.6600 to 9530.6655, for a person
who is arrested and taken into custody by a peace officer outside of the person's county
of residence, the assessment must be completed by the person's county of residence no
later than three weeks after the assessment is initially requested. If the assessment is
not performed within this time limit, the county where the person is to be sentenced
shall perform the assessment. The county of financial responsibility must be determined
under chapter 256G.

Subd. 2.

Probation officer as contact.

When a chemical use assessment is required
under Minnesota Rules, parts 9530.6600 to 9530.6655, for a person who is on probation
or under other correctional supervision, the assessor, either orally or in writing, shall
contact the person's probation officer to verify or supplement the information provided
by the person.

Subd. 3.

Financial conflicts of interest.

(a) Except as provided in paragraph (b), an
assessor conducting a chemical use assessment under Minnesota Rules, parts 9530.6600
to 9530.6655, may not have any direct or shared financial interest or referral relationship
resulting in shared financial gain with a treatment provider.

(b) A county may contract with an assessor having a conflict described in paragraph
(a) if the county documents that:

(1) the assessor is employed by a culturally specific service provider or a service
provider with a program designed to treat individuals of a specific age, sex, or sexual
preference; or

(2) the county does not employ a sufficient number of qualified assessors and the
only qualified assessors available in the county have a direct or shared financial interest or
a referral relationship resulting in shared financial gain with a treatment provider.

An assessor under this paragraph may not place clients in treatment. The assessor
shall gather required information and provide it to the county along with any required
documentation. The county shall make all placement decisions for clients assessed by
assessors under this paragraph.

EFFECTIVE DATE.

This section is effective July 1, 2006, except for subdivision
3, which is effective July 1, 2008.

Sec. 10.

[254A.25] DUTIES OF COMMISSIONER RELATED TO CHEMICAL
HEALTH.

The commissioner shall:

(1) develop a directory that identifies key characteristics of each licensed chemical
dependency treatment program; and

(2) post copies of state licensing reviews at an online location where they may be
reviewed by agencies that make client placements.

Sec. 11.

Minnesota Statutes 2004, section 256B.0625, subdivision 20, is amended to
read:

Subd. 20.

Mental health case management.

(a) To the extent authorized by rule
of the state agency, medical assistance covers case management services to persons with
serious and persistent mental illness and children with severe emotional disturbance.
Services provided under this section must meet the relevant standards in sections 245.461
to 245.4887, the Comprehensive Adult and Children's Mental Health Acts, Minnesota
Rules, parts 9520.0900 to 9520.0926, and 9505.0322, excluding subpart 10.

(b) Entities meeting program standards set out in rules governing family community
support services as defined in section 245.4871, subdivision 17, are eligible for medical
assistance reimbursement for case management services for children with severe
emotional disturbance when these services meet the program standards in Minnesota
Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subparts 6 and 10.

(c) Medical assistance and MinnesotaCare payment for mental health case
management shall be made on a monthly basis. In order to receive payment for an eligible
child, the provider must document at least a face-to-face contact with the child, the child's
parents, or the child's legal representative. To receive payment for an eligible adult, the
provider must document:

(1) at least a face-to-face contact with the adult or the adult's legal representative; or

(2) at least a telephone contact with the adult or the adult's legal representative and
document a face-to-face contact with the adult or the adult's legal representative within
the preceding two months.

(d) Payment for mental health case management provided by county or state staff
shall be based on the monthly rate methodology under section 256B.094, subdivision 6,
paragraph (b), with separate rates calculated for child welfare and mental health, and
within mental health, separate rates for children and adults.

(e) Payment for mental health case management provided by Indian health services
or by agencies operated by Indian tribes may be made according to this section or other
relevant federally approved rate setting methodology.

(f) Payment for mental health case management provided by vendors who contract
with a county or Indian tribe shall be based on a monthly rate negotiated by the host county
or tribe. The negotiated rate must not exceed the rate charged by the vendor for the same
service to other payers. If the service is provided by a team of contracted vendors, the
county or tribe may negotiate a team rate with a vendor who is a member of the team. The
team shall determine how to distribute the rate among its members. No reimbursement
received by contracted vendors shall be returned to the county or tribe, except to reimburse
the county or tribe for advance funding provided by the county or tribe to the vendor.

(g) If the service is provided by a team which includes contracted vendors, tribal
staff, and county or state staff, the costs for county or state staff participation in the team
shall be included in the rate for county-provided services. In this case, the contracted
vendor, the tribal agency, and the county may each receive separate payment for services
provided by each entity in the same month. In order to prevent duplication of services,
each entity must document, in the recipient's file, the need for team case management and
a description of the roles of the team members.

(h) The commissioner shall calculate the nonfederal share of actual medical
assistance and general assistance medical care payments for each county, based on the
higher of calendar year 1995 or 1996, by service date, project that amount forward to 1999,
and transfer one-half of the result from medical assistance and general assistance medical
care to each county's mental health grants under section 256E.12 for calendar year 1999.
The annualized minimum amount added to each county's mental health grant shall be
$3,000 per year for children and $5,000 per year for adults. The commissioner may reduce
the statewide growth factor in order to fund these minimums. The annualized total amount
transferred shall become part of the base for future mental health grants for each county.

(i) Any net increase in revenue to the county or tribe as a result of the change in this
section must be used to provide expanded mental health services as defined in sections
245.461 to 245.4887, the Comprehensive Adult and Children's Mental Health Acts,
excluding inpatient and residential treatment. For adults, increased revenue may also be
used for services and consumer supports which are part of adult mental health projects
approved under Laws 1997, chapter 203, article 7, section 25. For children, increased
revenue may also be used for respite care and nonresidential individualized rehabilitation
services as defined in section 245.492, subdivisions 17 and 23. "Increased revenue" has
the meaning given in Minnesota Rules, part 9520.0903, subpart 3.

(j) (h) Notwithstanding section 256B.19, subdivision 1, the nonfederal share of
costs for mental health case management shall be provided by the recipient's county of
responsibility, as defined in sections 256G.01 to 256G.12, from sources other than federal
funds or funds used to match other federal funds. If the service is provided by a tribal
agency, the nonfederal share, if any, shall be provided by the recipient's tribe. When this
service is paid by the state without a federal share through fee-for-service, 50 percent of
the cost shall be provided by the recipient's county of responsibility.

(i) Notwithstanding Minnesota Rules to the contrary, prepaid medical assistance,
general assistance medical care, and MinnesotaCare include mental health case
management. When the service is provided through prepaid capitation, the nonfederal
share is paid by the state and there is no county share.

(k) (j) The commissioner may suspend, reduce, or terminate the reimbursement to a
provider that does not meet the reporting or other requirements of this section. The county
of responsibility, as defined in sections 256G.01 to 256G.12, or, if applicable, the tribal
agency, is responsible for any federal disallowances. The county or tribe may share this
responsibility with its contracted vendors.

(l) (k) The commissioner shall set aside a portion of the federal funds earned for
county expenditures under this section to repay the special revenue maximization account
under section 256.01, subdivision 2, clause (15). The repayment is limited to:

(1) the costs of developing and implementing this section; and

(2) programming the information systems.

(m) (l) Payments to counties and tribal agencies for case management expenditures
under this section shall only be made from federal earnings from services provided
under this section. When this service is paid by the state without a federal share through
fee-for-service, 50 percent of the cost shall be provided by the state. Payments to
county-contracted vendors shall include both the federal earnings, the state share, and the
county share.

(n) Notwithstanding section 256B.041, county payments for the cost of mental
health case management services provided by county or state staff shall not be made
to the commissioner of finance. For the purposes of mental health case management
services provided by county or state staff under this section, the centralized disbursement
of payments to counties under section 256B.041 consists only of federal earnings from
services provided under this section.

(o) (m) Case management services under this subdivision do not include therapy,
treatment, legal, or outreach services.

(p) (n) If the recipient is a resident of a nursing facility, intermediate care facility,
or hospital, and the recipient's institutional care is paid by medical assistance, payment
for case management services under this subdivision is limited to the last 180 days of
the recipient's residency in that facility and may not exceed more than six months in a
calendar year.

(q) (o) Payment for case management services under this subdivision shall not
duplicate payments made under other program authorities for the same purpose.

(r) By July 1, 2000, the commissioner shall evaluate the effectiveness of the changes
required by this section, including changes in number of persons receiving mental health
case management, changes in hours of service per person, and changes in caseload size.

(s) For each calendar year beginning with the calendar year 2001, the annualized
amount of state funds for each county determined under paragraph (h) shall be adjusted by
the county's percentage change in the average number of clients per month who received
case management under this section during the fiscal year that ended six months prior to
the calendar year in question, in comparison to the prior fiscal year.

(t) For counties receiving the minimum allocation of $3,000 or $5,000 described
in paragraph (h), the adjustment in paragraph (s) shall be determined so that the county
receives the higher of the following amounts:

(1) a continuation of the minimum allocation in paragraph (h); or

(2) an amount based on that county's average number of clients per month who
received case management under this section during the fiscal year that ended six months
prior to the calendar year in question, times the average statewide grant per person per
month for counties not receiving the minimum allocation.

(u) The adjustments in paragraphs (s) and (t) shall be calculated separately for
children and adults.

EFFECTIVE DATE.

This section is effective January 1, 2008.

Sec. 12.

Minnesota Statutes 2004, section 256B.0625, subdivision 28, is amended to
read:

Subd. 28.

Certified nurse practitioner services.

Medical assistance covers
services performed by a certified pediatric nurse practitioner, a certified family nurse
practitioner, a certified adult nurse practitioner, a certified obstetric/gynecological
nurse practitioner, a certified neonatal nurse practitioner, or a certified geriatric nurse
practitioner, a clinical nurse specialist in mental health, or a certified psychiatric nurse
practitioner in independent practice, if:

(1) the service provided on an inpatient basis is not included as part of the cost for
inpatient services included in the operating payment rate;

(2) the service is otherwise covered under this chapter as a physician service; and

(3) the service is within the scope of practice of the nurse practitioner's license as a
registered nurse, as defined in section 148.171.

Sec. 13.

Minnesota Statutes 2004, section 256B.0945, subdivision 1, is amended to
read:

Subdivision 1.

Provider qualifications.

Counties must arrange to provide
residential services for children with severe emotional disturbance according to sections
245.4882, 245.4885, and this section. Services must be provided by a facility that is
licensed according to section 245.4882 and administrative rules promulgated thereunder,
and under contract with the county. Facilities providing services under subdivision 2,
paragraph (a), must be accredited as a psychiatric facility by the Joint Commission
on Accreditation of Healthcare Organizations, the Commission on Accreditation of
Rehabilitation Facilities, or the Council on Accreditation. Accreditation is not required for
facilities providing services under subdivision 2, paragraph (b).

Sec. 14.

Minnesota Statutes 2004, section 256B.0945, subdivision 4, is amended to
read:

Subd. 4.

Payment rates.

(a) Notwithstanding sections 256B.19 and 256B.041,
payments to counties for residential services provided by a residential facility shall only
be made of federal earnings for services provided under this section, and the nonfederal
share of costs for services provided under this section shall be paid by the county from
sources other than federal funds or funds used to match other federal funds. Payment to
counties for services provided according to this section shall be a proportion of the per
day contract rate that relates to rehabilitative mental health services and shall not include
payment for costs or services that are billed to the IV-E program as room and board.

(b) Per diem rates paid to providers under this section by prepaid plans shall be the
proportion of the per day contract rate that relates to rehabilitative mental health services
and shall not include payment for costs or services that are billed to the IV-E program
as room and board.

(c) The commissioner shall set aside a portion not to exceed five percent of the
federal funds earned for county expenditures under this section to cover the state costs of
administering this section. Any unexpended funds from the set-aside shall be distributed
to the counties in proportion to their earnings under this section.

EFFECTIVE DATE.

This section is effective January 1, 2008.

Sec. 15.

Minnesota Statutes 2005 Supplement, section 256B.0946, subdivision 1,
is amended to read:

Subdivision 1.

Covered service.

(a) Effective July 1, 2006, and subject to federal
approval, medical assistance covers medically necessary services described under
paragraph (b) that are provided by a provider entity eligible under subdivision 3 to a client
eligible under subdivision 2 who is placed in a treatment foster home licensed under
Minnesota Rules, parts 2960.3000 to 2960.3340.

(b) Services to children with severe emotional disturbance residing in treatment
foster care settings must meet the relevant standards for mental health services under
sections 245.487 to 245.4887. In addition, specific service components reimbursed by
medical assistance must meet the following standards:

(1) case management service component must meet the standards in Minnesota
Rules, parts 9520.0900 to 9520.0926 and 9505.0322, excluding subparts 6 and 10;

(2) psychotherapy, crisis assistance, and skills training components must meet the
standards for children's therapeutic services and supports in section 256B.0943; and

(3) family psychoeducation services under supervision of a mental health
professional.

Sec. 16.

Minnesota Statutes 2004, section 256B.69, subdivision 5g, is amended to read:

Subd. 5g.

Payment for covered services.

For services rendered on or after January
1, 2003, the total payment made to managed care plans for providing covered services
under the medical assistance and general assistance medical care programs is reduced by
.5 percent from their current statutory rates. This provision excludes payments for nursing
home services, home and community-based waivers, and payments to demonstration
projects for persons with disabilities, and mental health services added as covered benefits
after December 31, 2006.

Sec. 17.

Minnesota Statutes 2004, section 256B.69, subdivision 5h, is amended to read:

Subd. 5h.

Payment reduction.

In addition to the reduction in subdivision 5g,
the total payment made to managed care plans under the medical assistance program is
reduced 1.0 percent for services provided on or after October 1, 2003, and an additional
1.0 percent for services provided on or after January 1, 2004. This provision excludes
payments for nursing home services, home and community-based waivers, and payments
to demonstration projects for persons with disabilities, and mental health services added as
covered benefits after December 31, 2006.

Sec. 18.

[256B.763] CRITICAL ACCESS MENTAL HEALTH RATE INCREASE.

(a) For services defined in paragraph (b) and rendered on or after July 1, 2007,
payment rates shall be increased by 23.7 percent over the rates in effect on January 1,
2006, for:

(1) psychiatrists and advanced practice registered nurses with a psychiatric specialty;

(2) community mental health centers under section 256B.0625, subdivision 5; and

(3) mental health clinics and centers certified under Minnesota Rules, parts
9520.0750 to 9520.0870, or hospital outpatient psychiatric departments that are designated
as essential community providers under section 62Q.19.

(b) This increase applies to group skills training when provided as a component of
children's therapeutic services and support, psychotherapy, medication management,
evaluation and management, diagnostic assessment, explanation of findings, psychological
testing, neuropsychological services, direction of behavioral aides, and inpatient
consultation.

(c) This increase does not apply to rates that are governed by section 256B.0625,
subdivision 30, or 256B.761, paragraph (b), other cost-based rates, rates that are
negotiated with the county, rates that are established by the federal government, or rates
that increased between January 1, 2004, and January 1, 2005.

(d) The commissioner shall adjust rates paid to prepaid health plans under contract
with the commissioner to reflect the rate increases provided in paragraph (a). The prepaid
health plan must pass this rate increase to the providers identified in paragraph (a).

Sec. 19.

Minnesota Statutes 2005 Supplement, section 256D.03, subdivision 4, is
amended to read:

Subd. 4.

General assistance medical care; services.

(a) (i) For a person who is
eligible under subdivision 3, paragraph (a), clause (2), item (i), general assistance medical
care covers, except as provided in paragraph (c):

(1) inpatient hospital services;

(2) outpatient hospital services;

(3) services provided by Medicare certified rehabilitation agencies;

(4) prescription drugs and other products recommended through the process
established in section 256B.0625, subdivision 13;

(5) equipment necessary to administer insulin and diagnostic supplies and equipment
for diabetics to monitor blood sugar level;

(6) eyeglasses and eye examinations provided by a physician or optometrist;

(7) hearing aids;

(8) prosthetic devices;

(9) laboratory and X-ray services;

(10) physician's services;

(11) medical transportation except special transportation;

(12) chiropractic services as covered under the medical assistance program;

(13) podiatric services;

(14) dental services as covered under the medical assistance program;

(15) outpatient services provided by a mental health center or clinic that is under
contract with the county board and is established under section 245.62 mental health
services covered under chapter 256B;

(16) day treatment services for mental illness provided under contract with the
county board;

(17) (16) prescribed medications for persons who have been diagnosed as mentally
ill as necessary to prevent more restrictive institutionalization;

(18) psychological services, (17) medical supplies and equipment, and Medicare
premiums, coinsurance and deductible payments;

(19) (18) medical equipment not specifically listed in this paragraph when the use
of the equipment will prevent the need for costlier services that are reimbursable under
this subdivision;

(20) (19) services performed by a certified pediatric nurse practitioner, a
certified family nurse practitioner, a certified adult nurse practitioner, a certified
obstetric/gynecological nurse practitioner, a certified neonatal nurse practitioner, or a
certified geriatric nurse practitioner in independent practice, if (1) the service is otherwise
covered under this chapter as a physician service, (2) the service provided on an inpatient
basis is not included as part of the cost for inpatient services included in the operating
payment rate, and (3) the service is within the scope of practice of the nurse practitioner's
license as a registered nurse, as defined in section 148.171;

(21) (20) services of a certified public health nurse or a registered nurse practicing
in a public health nursing clinic that is a department of, or that operates under the direct
authority of, a unit of government, if the service is within the scope of practice of the
public health nurse's license as a registered nurse, as defined in section 148.171; and

(22) (21) telemedicine consultations, to the extent they are covered under section
256B.0625, subdivision 3b; and.

(23) mental health telemedicine and psychiatric consultation as covered under
section 256B.0625, subdivisions 46 and 48.

(ii) Effective October 1, 2003, for a person who is eligible under subdivision 3,
paragraph (a), clause (2), item (ii), general assistance medical care coverage is limited
to inpatient hospital services, including physician services provided during the inpatient
hospital stay. A $1,000 deductible is required for each inpatient hospitalization.

(b) Effective August 1, 2005, sex reassignment surgery is not covered under this
subdivision.

(c) In order to contain costs, the commissioner of human services shall select
vendors of medical care who can provide the most economical care consistent with high
medical standards and shall where possible contract with organizations on a prepaid
capitation basis to provide these services. The commissioner shall consider proposals by
counties and vendors for prepaid health plans, competitive bidding programs, block grants,
or other vendor payment mechanisms designed to provide services in an economical
manner or to control utilization, with safeguards to ensure that necessary services are
provided. Before implementing prepaid programs in counties with a county operated or
affiliated public teaching hospital or a hospital or clinic operated by the University of
Minnesota, the commissioner shall consider the risks the prepaid program creates for the
hospital and allow the county or hospital the opportunity to participate in the program in a
manner that reflects the risk of adverse selection and the nature of the patients served by
the hospital, provided the terms of participation in the program are competitive with the
terms of other participants considering the nature of the population served. Payment for
services provided pursuant to this subdivision shall be as provided to medical assistance
vendors of these services under sections 256B.02, subdivision 8, and 256B.0625. For
payments made during fiscal year 1990 and later years, the commissioner shall consult
with an independent actuary in establishing prepayment rates, but shall retain final control
over the rate methodology.

(d) Recipients eligible under subdivision 3, paragraph (a), shall pay the following
co-payments for services provided on or after October 1, 2003:

(1) $25 for eyeglasses;

(2) $25 for nonemergency visits to a hospital-based emergency room;

(3) $3 per brand-name drug prescription and $1 per generic drug prescription,
subject to a $12 per month maximum for prescription drug co-payments. No co-payments
shall apply to antipsychotic drugs when used for the treatment of mental illness; and

(4) 50 percent coinsurance on restorative dental services.

(e) Co-payments shall be limited to one per day per provider for nonpreventive visits,
eyeglasses, and nonemergency visits to a hospital-based emergency room. Recipients of
general assistance medical care are responsible for all co-payments in this subdivision.
The general assistance medical care reimbursement to the provider shall be reduced by
the amount of the co-payment, except that reimbursement for prescription drugs shall not
be reduced once a recipient has reached the $12 per month maximum for prescription
drug co-payments. The provider collects the co-payment from the recipient. Providers
may not deny services to recipients who are unable to pay the co-payment, except as
provided in paragraph (f).

(f) If it is the routine business practice of a provider to refuse service to an individual
with uncollected debt, the provider may include uncollected co-payments under this
section. A provider must give advance notice to a recipient with uncollected debt before
services can be denied.

(g) Any county may, from its own resources, provide medical payments for which
state payments are not made.

(h) Chemical dependency services that are reimbursed under chapter 254B must not
be reimbursed under general assistance medical care.

(i) The maximum payment for new vendors enrolled in the general assistance
medical care program after the base year shall be determined from the average usual and
customary charge of the same vendor type enrolled in the base year.

(j) The conditions of payment for services under this subdivision are the same as the
conditions specified in rules adopted under chapter 256B governing the medical assistance
program, unless otherwise provided by statute or rule.

(k) Inpatient and outpatient payments shall be reduced by five percent, effective July
1, 2003. This reduction is in addition to the five percent reduction effective July 1, 2003,
and incorporated by reference in paragraph (i).

(l) Payments for all other health services except inpatient, outpatient, and pharmacy
services shall be reduced by five percent, effective July 1, 2003.

(m) Payments to managed care plans shall be reduced by five percent for services
provided on or after October 1, 2003.

(n) A hospital receiving a reduced payment as a result of this section may apply the
unpaid balance toward satisfaction of the hospital's bad debts.

(o) Fee-for-service payments for nonpreventive visits shall be reduced by $3
for services provided on or after January 1, 2006. For purposes of this subdivision, a
visit means an episode of service which is required because of a recipient's symptoms,
diagnosis, or established illness, and which is delivered in an ambulatory setting by
a physician or physician ancillary, chiropractor, podiatrist, advance practice nurse,
audiologist, optician, or optometrist.

(p) Payments to managed care plans shall not be increased as a result of the removal
of the $3 nonpreventive visit co-payment effective January 1, 2006.

(q) Payments for mental health services added as covered benefits after December
31, 2006, are not subject to the reductions in paragraphs (i), (k), (l), and (m).

EFFECTIVE DATE.

This section is effective January 1, 2007, except mental
health case management under paragraph (a)(i)(15) is effective January 1, 2008.

Sec. 20.

Minnesota Statutes 2005 Supplement, section 256L.03, subdivision 1, is
amended to read:

Subdivision 1.

Covered health services.

For individuals under section 256L.04,
subdivision 7, with income no greater than 75 percent of the federal poverty guidelines
or for families with children under section 256L.04, subdivision 1, all subdivisions of
this section apply. "Covered health services" means the health services reimbursed
under chapter 256B, with the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care services other than services
covered under section 256B.0625, subdivision 9, orthodontic services, nonemergency
medical transportation services, personal care assistant and case management services,
nursing home or intermediate care facilities services, inpatient mental health services,
and chemical dependency services. Outpatient mental health services covered under the
MinnesotaCare program are limited to diagnostic assessments, psychological testing,
explanation of findings, mental health telemedicine, psychiatric consultation, medication
management by a physician, day treatment, partial hospitalization, and individual, family,
and group psychotherapy.

No public funds shall be used for coverage of abortion under MinnesotaCare
except where the life of the female would be endangered or substantial and irreversible
impairment of a major bodily function would result if the fetus were carried to term; or
where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in this section.

EFFECTIVE DATE.

This section is effective January 1, 2007, except mental
health case management under subdivision 1 is effective January 1, 2008.

Sec. 21.

Minnesota Statutes 2005 Supplement, section 256L.035, is amended to read:

256L.035 LIMITED BENEFITS COVERAGE FOR CERTAIN SINGLE
ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.

(a) "Covered health services" for individuals under section 256L.04, subdivision
7, with income above 75 percent, but not exceeding 175 percent, of the federal poverty
guideline means:

(1) inpatient hospitalization benefits with a ten percent co-payment up to $1,000 and
subject to an annual limitation of $10,000;

(2) physician services provided during an inpatient stay; and

(3) physician services not provided during an inpatient stay; outpatient hospital
services; freestanding ambulatory surgical center services; chiropractic services; lab and
diagnostic services; diabetic supplies and equipment; mental health services as covered
under chapter 256B; and prescription drugs; subject to the following co-payments:

(i) $50 co-pay per emergency room visit;

(ii) $3 co-pay per prescription drug; and

(iii) $5 co-pay per nonpreventive visit.

The services covered under this section may be provided by a physician, physician
ancillary, chiropractor, psychologist, or licensed independent clinical social worker, or
other mental health providers covered under chapter 256B if the services are within the
scope of practice of that health care professional.

For purposes of this section, "a visit" means an episode of service which is required
because of a recipient's symptoms, diagnosis, or established illness, and which is delivered
in an ambulatory setting by any health care provider identified in this paragraph.

Enrollees are responsible for all co-payments in this section.

(b) Reimbursement to the providers shall be reduced by the amount of the
co-payment, except that reimbursement for prescription drugs shall not be reduced once a
recipient has reached the $20 per month maximum for prescription drug co-payments.
The provider collects the co-payment from the recipient. Providers may not deny services
to recipients who are unable to pay the co-payment, except as provided in paragraph (c).

(c) If it is the routine business practice of a provider to refuse service to an individual
with uncollected debt, the provider may include uncollected co-payments under this
section. A provider must give advance notice to a recipient with uncollected debt before
services can be denied.

EFFECTIVE DATE.

This section is effective January 1, 2007, except mental
health case management under paragraph (a), clause (3), is effective January 1, 2008.

Sec. 22.

Minnesota Statutes 2004, section 256L.12, subdivision 9a, is amended to read:

Subd. 9a.

Rate setting; ratable reduction.

For services rendered on or after
October 1, 2003, the total payment made to managed care plans under the MinnesotaCare
program is reduced 1.0 percent. This provision excludes payments for mental health
services added as covered benefits after December 31, 2006.

Sec. 23. MENTAL HEALTH PILOT PROGRAM FOR UNSHELTERED
INDIVIDUALS.

Subdivision 1.

Pilot project program components.

The commissioner of human
services shall establish two pilot projects, one in Ramsey County and one in Hennepin
County, which shall:

(1) operate two ten-bed facilities in separate locations;

(2) provide community support to individuals who have been living homeless for at
least one year;

(3) provide 24-hour supervision; and

(4) provide on-site mental health services which focus on the mental health needs of
individuals who have lived unsheltered.

Subd. 2.

Group residential housing.

Notwithstanding Minnesota Statutes, section
256I.05, subdivisions 1a and 1c, a county agency shall negotiate a supplementary rate in
addition to the rate specified in Minnesota Statutes, section 256I.05, subdivision 1, not to
exceed $700 per month, including any legislatively authorized inflationary adjustments for
a group residential program that meets the components under subdivision 1, and for the
independent living component of the program under subdivision 3.

Subd. 3.

Independent living.

An individual who has lived in one of the facilities
under subdivision 1, and who is being transitioned to independent living as part of the
program plan, continues to be eligible for group residential housing and the supplementary
service rate negotiated with the county under subdivision 2.

Subd. 4.

Effective date.

This section is effective July 1, 2006, through June 30,
2008.

Sec. 24. RECOMMENDATIONS ON CHANGING THE CONSOLIDATED
CHEMICAL DEPENDENCY TREATMENT FUND.

The commissioner shall report to the legislature by January 15, 2007, on
recommendations which analyze the merits of changing the statutory maintenance of
effort provisions in the chemical dependency treatment fund.

Sec. 25. PLAN FOR IMPROVING COMMUNITY-BASED SUBSTANCE
ABUSE TREATMENT AND OTHER ISSUES RELATED TO IMPROVING
CHEMICAL HEALTH.

(a) The commissioner of human services shall present a plan to the senate and
house of representatives committees having jurisdiction over substance abuse treatment
issues by January 15, 2007, for improving the availability of community-based substance
abuse treatment.

(b) The commissioner of human services shall also report back to the senate and
house of representatives committees having jurisdiction over substance abuse treatment
issues by January 15, 2007, on the merits, feasibility, and cost of:

(1) posting treatment program peer reviews at an online location where they can be
viewed by agencies that make client placements;

(2) annually distributing information to chemical health assessors on best practices
in assessments, including model instruments for adults and adolescents;

(3) monitoring the compliance of local agencies with assessment and referral rules;

(4) working with the commissioner of health to develop guidelines and training
materials for health care organizations on the use of brief interventions for alcohol abuse;

(5) providing local agencies with examples of best practices for addressing needs of
persons being considered for repeat placements into publicly funded treatment;

(6) identifying best practices to help local agencies monitor the progress of clients
placed in treatment; and

(7) periodically providing local agencies with statewide information on treatment
outcomes.

Sec. 26. REVISOR'S INSTRUCTION.

In the next edition of Minnesota Statutes, the revisor of statutes shall change the
reference to sections 245.487 to 245.4887, the Children's Mental Health Act, wherever it
appears in statutes or rules to sections 245.487 to 245.4889.

Sec. 27. REPEALER.

Minnesota Statutes 2004, sections 245.465, subdivision 2; 256B.0945, subdivisions
5, 6, 7, 8, and 9; and 256B.83, are repealed.

ARTICLE 24

HEALTH AND HUMAN SERVICES APPROPRIATIONS

Section 1. HEALTH AND HUMAN SERVICES APPROPRIATIONS.

The sums shown in the columns marked "APPROPRIATIONS" are added to or, if
shown in parentheses, subtracted from the appropriations in Laws 2005, First Special
Session chapter 4, article 9, or other law to the agencies and for the purposes specified
in this article. The appropriations are from the general fund or another named fund and
are available for the fiscal years indicated for each purpose. The figures "2006" and
"2007" used in this article mean that the addition to or subtraction from the appropriation
listed under them is available for the fiscal year ending June 30, 2006, or June 30,
2007, respectively. "The first year" is fiscal year 2006. "The second year" is fiscal year
2007. "The biennium" is fiscal years 2006 and 2007. Supplementary appropriations and
reductions to appropriations for the fiscal year ending June 30, 2006, are effective the
day following final enactment.

SUMMARY BY FUND
		2006		2007		TOTAL
General	$	26,673,000	$	66,463,000	$	93,136,000
Health Care Access		-0-		38,881,000		38,881,000
Special Revenue		514,000		762,000		1,276,000
Federal TANF		7,484,000		11,748,000		19,232,000
TOTAL	$	34,671,000	$	117,854,000	$	152,525,000

			APPROPRIATIONS
			Available for the Year
			Ending June 30
				2006		2007

Sec. 2. COMMISSIONER OF HUMAN SERVICES

Subdivision 1. Total Appropriation

$

31,709,000

$

100,608,000

Summary by Fund
General	24,225,000	59,393,000
Health Care Access	-0-	29,467,000
TANF	7,484,000	11,748,000

SPECIAL REVENUE FUND
TRANSFER. Notwithstanding any law to
the contrary, excluding accounts authorized
under Minnesota Statutes, section 16A.1286,
and Minnesota Statutes, chapter 245B, the
commissioner shall transfer $900,000 in
fiscal year 2007 of uncommitted special
revenue fund balances to the general fund.
The actual transfers shall be identified within
the standard information provided to the
chairs of the legislative committees with
jurisdiction over health and human services
issues in December 2006.

TANF MAINTENANCE OF EFFORT.
Notwithstanding Laws 2005, First Special
Session chapter 4, article 9, section 2,
subdivision 1, the commissioner shall ensure
that for fiscal year 2007, the maintenance of
effort used by the commissioner of finance
for the February and November forecasts
required under Minnesota Statutes, section
16A.103, contains expenditures under the
TANF/MOE rider, paragraph (a), clause (1),
in Laws 2005, First Special Session chapter
4, article 9, section 2, subdivision 1, equal to
at least 21 percent of the total required under
Code of Federal Regulations, title 45, section
263.1.

INCREASED WORKING FAMILY
CREDIT EXPENDITURES TO BE
CLAIMED FOR TANF MAINTENANCE
OF EFFORT. In addition to the amounts
provided in Laws 2005, First Special
Session chapter 4, article 9, section 2,
subdivision 1, the commissioner may count
the following amounts of working family
credit expenditure as TANF maintenance of
effort:

(1) fiscal year 2006, $9,858,000;

(2) fiscal year 2007, $10,936,000;

(3) fiscal year 2008, $42,495,000; and

(4) fiscal year 2009, $42,502,000.

Notwithstanding any contrary provision in
this article, this paragraph shall expire on
June 30, 2009.

CHILD CARE AND DEVELOPMENT
FUND; FEDERAL DEFICIT
REDUCTION ACT OF 2005. Increased
child care funds from the federal Deficit
Reduction Act of 2005 may be allocated by
the commissioner for the basic sliding fee
child care program.

Subd. 2. Children and Economic Assistance Grants

Summary by Fund
General Fund	(7,854,000)	9,433,000
Federal TANF	7,484,000	11,456,000

(a) MFIP/DWP Grants

General	(7,484,000)	7,484,000
Federal TANF	7,484,000	(4,803,000)

(b) MFIP Child Care Grants

TANF

-0-

16,119,000

(c) Children's Services Grants

-0-

2,223,000

PROVIDER RATE FREEZE
ELIMINATION. Of the TANF fund
appropriation, $15,888,000 in fiscal year
2007 is to eliminate the provider rate freeze
in Minnesota Statutes, section 119B.13,
subdivision 1; provide an accreditation
incentive under Minnesota Statutes,
section 119B.13, subdivision 3a; repeal the
limitations on payments for absent days
in Minnesota Statutes, section 119B.13,
subdivision 7; and reduce co-payments.
Effective July 1, 2007, these costs shall be
paid from the general fund. Notwithstanding
any section in this article to the contrary, this
paragraph shall not expire.

SUBSIDIZED HOUSING PENALTY
REPORT. By February 15, 2007, the
commissioner shall report to the legislature
on the results of suspending the $50
MFIP subsidized housing penalty and with
recommendations on funding sources to
continue this suspension after June 30, 2007.

CHILDREN'S SERVICES GRANTS
BASE LEVEL ADJUSTMENT. The
general fund base for children's services
grants shall be increased by $7,964,000 in
fiscal year 2008 and $7,964,000 in fiscal year
2009.

CHILDREN'S AND COMMUNITY
SERVICES GRANTS. Notwithstanding
Minnesota Statutes, section 256M.50,
supplemental social service block grant funds
of $153,936 appropriated under the federal
2005 Department of Defense Appropriations
Act, Public Law 109-148, shall be allocated
proportionately to those counties that served
hurricane evacuees and reported those
services on the Social Service Information
System.

CHILDREN'S AND COMMUNITY
SERVICES GRANTS BASE LEVEL
ADJUSTMENT. The general fund base for
children's and community services grants
shall be decreased by $2,849,000 in fiscal
year 2009.

BASIC SLIDING FEE ALLOCATIONS;
CONVERSION TO AUTOMATED
PAYMENT SYSTEM. As determined by
the commissioner, counties may use up to six
percent of either calendar year 2008 or 2009
allocations under Minnesota Statutes, section
119B.03, to fund accelerated payments that
may occur during the preceding calendar
year during conversion to the automated
child care assistance program system. If
conversion occurs over two calendar years,
counties may use up to three percent of the
combined calendar year allocations to fund
accelerated payments. Funding advanced
under this paragraph shall be considered part
of the allocation from which it was originally
advanced for purposes of setting future
allocations under Minnesota Statutes, section
119B.03, subdivisions 6, 6a, 6b, and 8, and
shall include funding for administrative costs
under Minnesota Statutes, section 119B.15.
Notwithstanding any contrary provisions in
this article, this paragraph shall sunset on
December 31, 2009.

(d) Other Children's and Economic Assistance Grants

General	(370,000)	(452,000)
Federal TANF	-0-	140,000

OTHER CHILDREN'S AND
ECONOMIC ASSISTANCE GRANTS
BASE LEVEL ADJUSTMENT. The
general fund base for other children's and
economic assistance grants shall be increased
by $20,000 in fiscal year 2008 and by
$20,000 in fiscal year 2009.

NEW CHANCE PROGRAM
APPROPRIATION. Of the general fund
appropriation, $140,000 for fiscal year
2007 is for a grant to the new chance
program. The new chance program shall
provide comprehensive services through a
private, nonprofit agency to young parents in
Hennepin County who have dropped out of
school and are receiving public assistance.
The program administrator shall report
annually to the commissioner of human
services on skills development, education,
job training, and job placement outcomes
for program participants. This appropriation
shall become part of base level funding for
the biennium beginning July 1, 2007.

FOOD PROGRAM SURPLUS
REDUCTION. The general fund base
for the Minnesota food assistance program is
reduced by $370,000 in fiscal year 2006 and
by $452,000 in fiscal year 2007.

(e) Group Residential Housing Grants

-0-

168,000

Subd. 3. Children and Economic Assistance Management

Summary by Fund
General	9,000	26,000
Federal TANF	-0-	292,000

(a) Children and Economic Assistance Administration

General	-0-	7,000
Federal TANF	-0-	51,000

(b) Children and Economic Assistance Operations

General	9,000	19,000
Federal TANF	-0-	241,000

CHILDREN AND ECONOMIC
ASSISTANCE OPERATIONS BASE
LEVEL ADJUSTMENT. The general fund
base for children and economic assistance
operations shall be decreased by $19,000 in
fiscal year 2008 and by $19,000 in fiscal year
2009.

CHILDREN AND ECONOMIC
ASSISTANCE OPERATIONS TANF
BASE LEVEL ADJUSTMENT. The TANF
base for children and economic assistance
operations shall be decreased by $241,000
in fiscal year 2008 and by $241,000 in fiscal
year 2009.

Subd. 4. Health Care Grants

Summary by Fund
General	-0-	4,439,000
Health Care Access	-0-	25,806,000

(a) MinnesotaCare Grants

Health Care Access

-0-

8,304,000

TRANSFER TO MINNESOTA
PHARMACY ACCESS ACCOUNT.
Notwithstanding Minnesota Statutes,
section 295.581, the commissioner of
finance shall transfer $1,925,000 from the
health care access fund to the Minnesota
pharmacy access account in fiscal year
2008 and $916,000 in fiscal year 2009.
Notwithstanding any provision in this article
to the contrary, this paragraph shall expire
on June 30, 2009.

PAY FOR PERFORMANCE.
The commissioner shall provide
recommendations to the legislature by
January 15, 2007, to make payments for
the optimum care of persons with diabetes
consistent with the percentage enrollment of
persons with diabetes in Minnesota health
care programs, beginning on July 1, 2007.

(b) Medical Assistance Basic Health Care - Families and Children

General	-0-	75,000
Health Care Access	-0-	3,532,000

(c) Medical Assistance Basic Health Care - Elderly and Disabled

General	-0-	(472,000)
Health Care Access	-0-	11,420,000

ENHANCED RATES FOR MENTAL
HEALTH SERVICES. The reimbursement
rate increases effective July 1, 2007, under
Minnesota Statutes, section 256B.763,
for outpatient mental health services that
currently have long waiting lists and other
access problems shall be equalized for mental
health providers in all Minnesota health care
programs.

(d) General Assistance Medical Care

-0-

4,836,000

(e) Other Health Care Grants

Health Care Access

-0-

2,550,000

DENTAL GRANTS. Of the health care
access fund appropriation, $300,000 in fiscal
year 2007 is for grants to nonprofit dental
providers under Minnesota Statutes, section
256B.76, paragraph (d). This appropriation
shall become part of base level funding for
the biennium beginning July 1, 2007.

CRITICAL ACCESS DENTAL
PROVIDERS. (a) Of the health care access
fund appropriation, $3,532,000 in fiscal
year 2007 only is for critical access dental
provider rates and $78,000 is for related
administrative costs.

(b) Notwithstanding Minnesota Statutes,
section 256B.76, paragraph (c), effective for
dental services provided between October 1,
2006, and June 30, 2007, the commissioner
shall increase reimbursement rates for
dentists and dental clinics deemed to be
critical access dental providers by 38 percent
above the reimbursement rate that would
otherwise be paid to the provider. Payments
to prepaid health plans made on or after
January 1, 2007, shall be adjusted to reflect
these increases.

(c) By February 15, 2007, the commissioner
shall report to the legislature on the results
of higher payments to critical access dental
providers and with recommendations on
funding sources to continue these higher
payments in effect after June 30, 2007.

INTENSIVE CARE MANAGEMENT. (a)
Of the health care access fund appropriation,
$1,505,000 for fiscal year 2007 is for the
intensive care management pilot program
established under Minnesota Statutes, section
256B.075, subdivision 2, paragraph (d), of
which $5,000 is for systems costs and the
remainder is to be distributed as follows:

(1) $300,000 is to be paid under a contract
with the neighborhood health care network
for the community care network project that
consists of a network of safety net clinics and
health centers working in cooperation with
a safety net hospital, a health plan, and the
Department of Human Services to improve
care coordination services;

(2) of the balance remaining after the
payment made under clause (1), 60 percent
shall be paid in grants to federally qualified
health centers, as defined in Minnesota
Statutes, section 256B.075, subdivision 2,
paragraph (d), in proportion to each center's
amount of discounts granted to patients
during calendar year 2005 as reported on
the federal Uniform Data Systems report in
conformance with the Bureau of Primary
Health Care Program Expectations Policy
Information Notice 98-23, except that each
eligible federally qualified health center shall
receive at least $10,000 but no more than
20 percent of the total amount of money
available under this clause;

(3) the balance remaining after the payments
made under clauses (1) and (2) shall be paid
in grants to community clinics, as defined
in Minnesota Statutes, section 256B.075,
subdivision 2, paragraph (d), to be distributed
based on each clinic's proportionate amount
of contribution to patients as determined in
accordance with the clinic's formal policy for
sliding fee discounts approved by the clinic's
board of directors, as reported by each clinic,
except that each eligible community clinic
shall receive at least $10,000 but no more
than 20 percent of the total amount of money
available under this clause; and

(4) the commissioner shall pay the amounts
at the beginning of the fiscal year, even if
federal approval has not yet been granted.

(b) Base level funding for this activity shall
be $1,500,000 each year for the biennium
beginning July 1, 2007.

MINNESOTACARE OUTREACH. Of
the health care access fund appropriation,
$750,000 in fiscal year 2007 is for the
MinnesotaCare outreach grants under
Minnesota Statutes, section 256L.04,
subdivision 4.

MINNESOTACARE OUTREACH
REIMBURSEMENT. Federal
administrative reimbursement resulting from
MinnesotaCare outreach is appropriated to
the commissioner for this activity.

Subd. 5. Health Care Management

Summary by Fund
General	-0-	1,508,000
Health Care Access	-0-	3,661,000

(a) Health Care Administration

General	-0-	1,428,000
Health Care Access	-0-	843,000

HEALTH CARE ADMINISTRATION
HEALTH CARE ACCESS BASE LEVEL
ADJUSTMENT. The health care access
fund base for health care administration shall
be increased by $420,000 in fiscal year 2008
and shall be decreased by $7,000 in fiscal
year 2009.

HEALTH CARE ADMINISTRATION
BASE LEVEL ADJUSTMENT.
The general fund base for health care
administration shall be increased by
$195,000 in fiscal year 2008 and shall be
decreased by $382,000 in fiscal year 2009.

(b) Health Care Operations

General	-0-	80,000
Health Care Access	-0-	2,818,000

HEALTHMATCH DELAY. The
commissioner shall delay implementation of
the HealthMatch program by two months.
Of the health care access fund appropriation,
$929,000 in fiscal year 2007 is for the
administrative costs of the two-month delay.

HEALTH CARE OPERATIONS BASE
LEVEL ADJUSTMENT. The general fund
base for health care operations shall be
decreased by $38,000 in fiscal year 2008 and
increased by $32,000 in fiscal year 2009.

HEALTH CARE OPERATIONS
HEALTH CARE ACCESS FUND BASE
LEVEL ADJUSTMENT. The health care
access fund base for health care operations
shall be increased by $482,000 in fiscal year
2008 and $496,000 in fiscal year 2009.

Subd. 6. Continuing Care Grants

General

1,500,000

(1,522,000)

(a) Aging and Adult Grants

General

-0-

25,000

MEDICARE PART D INFORMATION
AND ASSISTANCE REIMBURSEMENT.
Federal administrative reimbursement
obtained from information and assistance
services provided by the Senior LinkAge or
Disability Linkage lines to people who are
identified as eligible for medical assistance
shall be appropriated to the commissioner
for this activity.

AGING AND ADULT GRANTS BASE
LEVEL ADJUSTMENT. Base level
funding for aging and adult grants shall be
reduced in fiscal year 2008 by $25,000 and
by $25,000 in fiscal year 2009.

(b) Alternative Care Grants

-0-

3,337,000

ALTERNATIVE CARE BASE LEVEL
ADJUSTMENT. Base level funding for
alternative care grants shall be reduced by
$1,737,000 in fiscal year 2008 and reduced
by $2,504,000 in fiscal year 2009.

(c) Medical Assistance Long-Term Care Facilities

-0-

(1,874,000)

TEMPORARY RATE INCREASE. Of the
general fund appropriation, $29,000 in fiscal
year 2007 is for a temporary rate increase
equivalent to six percent of the operating rate
in effect on July 1, 2006, for a day training
and habilitation provider in Meeker County
providing services to up to 110 individuals.
This rate increase shall be in effect only until
June 30, 2007.

(d) Medical Assistance Long-Term Care Waivers

-0-

(415,000)

ADDITIONAL WAIVER
ALLOCATIONS. Notwithstanding
the waiver growth limits in Laws 2005,
First Special Session chapter 4, article 9,
section 2, paragraph (d), the commissioner
may allocate an additional waiver allocation
under Minnesota Statutes, section 256B.49,
for a recipient of personal care assistant
services who is eligible for and chooses
waivered services and received personal care
assistant services from a provider who was
billing for a service delivery model for that
recipient other than individual or shared care
on March 1, 2006.

(e) Mental Health Grants

-0-

(2,595,000)

MENTAL HEALTH GRANTS BASE
LEVEL ADJUSTMENT. The general
fund base for mental health grants shall be
decreased by $2,893,000 in fiscal year 2008
and $8,043,000 in fiscal year 2009.

(f) Chemical Dependency Nonentitlement Grants

-0-

-0-

METHAMPHETAMINE
COORDINATOR. The following
amounts shall be transferred from the federal
chemical health block grant fund to the
commissioner of health for the fiscal years
indicated for the purposes of Minnesota
Statutes, section 144.90: $82,000 in fiscal
year 2007; $205,000 in fiscal year 2008; and
$205,000 in fiscal year 2009.

Subd. 7. Continuing Care Management

Summary by Fund
General	-0-	881,000
Health Care Access	-0-	-0-

CONTINUING CARE MANAGEMENT
BASE LEVEL ADJUSTMENT. The
general fund base for continuing care
management shall be decreased by $200,000
in fiscal year 2008 and decreased by
$386,000 in fiscal year 2009.

Subd. 8. State-operated Services

30,570,000

44,628,000

STATE-OPERATED SERVICES BASE
LEVEL ADJUSTMENT. The general fund
base for state-operated services shall be
increased by $758,000 in fiscal year 2008 and
decreased by $3,694,000 in fiscal year 2009.

MINNESOTA SECURITY HOSPITAL.
For the purposes of enhancing the safety
of the public, improving supervision, and
enhancing community-based mental health
treatment, state-operated services may
establish additional community capacity
for providing treatment and supervision
of clients who have been ordered into a
less restrictive alternative of care from the
state-operated services transition services
program consistent with Minnesota Statutes,
section 246.014.

MINNESOTA SECURITY HOSPITAL
DISCHARGE PLANNING. The
commissioner shall study the feasibility of
requiring the Minnesota Security Hospital
to take full responsibility for the provisional
discharge planning for patients moving from
the St. Peter Campus into the community
under the process outlined by Minnesota
Statutes, section 253B.18, subdivision 8. The
commissioner shall report the results of the
study to the legislature by January 15, 2007.

STATE-OPERATED SERVICES
SALARY DEFICIT. The state-operated
services salary deficit of $6,833,000 in fiscal
year 2006 and $10,274,000 in fiscal year
2007 shall be absorbed by the Department of
Human Services, excluding state-operated
services.

Sec. 3. COMMISSIONER OF HEALTH

Subdivision 1. Total Appropriation

-0-

12,064,000

Summary by Fund
General	-0-	2,510,000
Health Care Access Fund	-0-	9,414,000
State Government Special Revenue	-0-	140,000

The appropriations in this section are added
to appropriations in Laws 2005, First Special
Session chapter 4, article 9, section 3.

Subd. 2. Health Protection

Summary by Fund
General	-0-	2,510,000
State Government Special Revenue Fund	-0-	140,000

HEALTH PROTECTION BASE LEVEL
ADJUSTMENT. The general fund base
for health protection shall be decreased
by $2,510,000 in fiscal year 2008 and
$2,510,000 in fiscal year 2009.

HEALTH PROTECTION STATE
GOVERNMENT SPECIAL REVENUE
BASE LEVEL ADJUSTMENT. The state
government special revenue fund base for
health protection shall be increased by
$140,000 in fiscal year 2008 and $140,000 in
fiscal year 2009.

PANDEMIC INFLUENZA
PREPAREDNESS. (a) Of the
general fund appropriation, $2,510,000 in
fiscal year 2007 only is for preparation,
planning, and response to an outbreak of
influenza. Of this amount, $2,410,000 is
to purchase antivirals and supplies and
$100,000 is for mass clinic development and
planning, including training and technical
assistance for local public health.

(b) By February 15, 2007, the commissioner
shall report to the legislature on the results
of funding for this initiative and with
recommendations on funding sources to
continue these activities after June 30, 2007.

HIV/AIDS PREVENTION. (a) The
commissioner shall allocate $135,000 of the
federal HIV prevention grant to establish a
toll-free telephone line to provide information
and counseling on HIV/AIDS, contingent on
the approval of the Community Cooperative
Council on HIV/AIDS prevention.

(b) The commissioner shall not cap HIV
prevention grants. Notwithstanding any
provision in this article to the contrary, this
paragraph shall not expire.

Subd. 3. Policy Compliance and Quality

Summary by Fund
Health Care Access Fund	-0-	9,414,000

POLICY QUALITY AND
COMPLIANCE GENERAL
FUND BASE LEVEL ADJUSTMENT.
The policy quality and compliance general
fund base shall be increased by $1,887,000
in fiscal year 2008 and $1,887,000 in fiscal
year 2009.

POLICY QUALITY AND
COMPLIANCE HEALTH CARE
ACCESS FUND BASE LEVEL
ADJUSTMENT. The health care access
fund base for policy quality and compliance
shall be decreased by $9,121,000 in fiscal
year 2008 and $9,121,000 in fiscal year 2009.

Sec. 4. VETERANS NURSING HOMES BOARD

2,448,000

4,560,000

This appropriation is added to appropriations
in Laws 2005, First Special Session
chapter 4, article 9, section 4. Of this
appropriation, $1,868,000 in fiscal year 2006
and $2,159,000 in fiscal year 2007 is to
supplement nursing staff at the Minneapolis
facility. The board shall negotiate with
state bargaining units to address wages,
benefits, and the staffing skill mix in order
to appropriately serve the acuity level of
residents.

BASE LEVEL ADJUSTMENT. The
general fund base for the board shall be
increased by $3,981,000 in fiscal year 2008
and $3,981,000 in fiscal year 2009.

Sec. 5. HEALTH-RELATED BOARDS

Subdivision 1. State Government Special Revenue

514,000

622,000

BASE LEVEL ADJUSTMENT. The state
government special revenue fund base for the
health-related boards shall be decreased by
$505,000 in fiscal year 2008 and $505,000 in
fiscal year 2009.

Subd. 2. Board of Chiropractic Examiners

5,000

5,000

BOARD OF CHIROPRACTIC
EXAMINERS APPROPRIATION
INCREASE. (a) This appropriation is
added to appropriations in Laws 2005,
First Special Session chapter 4, article 9,
section 5, subdivision 3. This is a onetime
appropriation.

(b) This increase is to correct programming
difficulties incurred during implementation
of payment processing changes.

Subd. 3. Board of Dentistry

-0-

67,000

BOARD OF DENTISTRY
APPROPRIATION INCREASE.
(a) This appropriation is added to
appropriations in Laws 2005, First Special
Session chapter 4, article 9, section 5,
subdivision 4.

(b) This increase is to retain a legal analyst
as part of the board staff.

Subd. 4. Board of Medical Practice

500,000

500,000

BOARD OF MEDICAL PRACTICE
INCREASE. (a) This appropriation is
added to appropriations in Laws 2005,
First Special Session chapter 4, article 9,
section 5, subdivision 7. This is a onetime
appropriation.

(b) This increase is to cover higher than
expected costs of investigation and legal
action.

Subd. 5. Board of Physical Therapy

9,000

-0-

BOARD OF PHYSICAL THERAPY
APPROPRIATION INCREASE. (a) This
appropriation is added to appropriations in
Laws 2005, First Special Session chapter 4,
article 9, section 5, subdivision 12. This is a
onetime appropriation.

(b) This increase is to correct programming
difficulties incurred during implementation
of payment processing changes.

Subd. 6. Emergency Medical Services Board

-0-

50,000

EMERGENCY MEDICAL SERVICES
BOARD APPROPRIATION INCREASE.
(a) This appropriation is added to
appropriations in Laws 2005, First Special
Session chapter 4, article 9, section 5,
subdivision 12.

(b) This increase is to be spent by the health
professional service program from the state
government special revenue fund.

Sec. 6. ENDOWMENT FUND TRANSFERS

On June 30, 2006, the commissioner of
finance shall transfer the balances in the
tobacco use prevention and local public
health endowment fund and the medical
education endowment fund to the general
fund. These balances result from investment
income credited to the funds after the transfer
of balances on July 1, 2003. The amount
transferred under this section is estimated to
be $2,933,000.

Sec. 7.

Minnesota Statutes 2004, section 245.771, is amended by adding a subdivision
to read:

Subd. 4.

Food stamp bonus awards.

In the event that Minnesota qualifies for
the United States Department of Agriculture Food and Nutrition Services Food Stamp
Program performance bonus awards, the funding is appropriated to the commissioner. The
commissioner shall retain 25 percent of the funding, with the other 75 percent divided
among the counties according to a formula that takes into account each county's impact
on state performance in the applicable bonus categories.

Sec. 8.

Minnesota Statutes 2004, section 256.01, is amended by adding a subdivision
to read:

Subd. 24.

Funding from other than state funds.

Notwithstanding sections
16A.013 to 16A.016, the commissioner may accept, on behalf of the state, additional
funding from sources other than state funds for the purpose of financing the cost of
assistance program grants or nongrant administration. All additional funding under this
subdivision is appropriated to the commissioner for use as designated by the grantor of
funding.

Sec. 9. SUNSET OF UNCODIFIED LANGUAGE.

All uncodified language contained in this article expires on June 30, 2007, unless a
different expiration date is explicit.

Sec. 10. REPEALER.

Minnesota Statutes 2004, section 62J.694, subdivision 5, is repealed.