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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 403-H.F.No. 243 
           An act relating to the organization and operation of 
          state government; appropriating money for human 
          services, corrections, health, economic security, and 
          other purposes with certain conditions; amending 
          Minnesota Statutes 1986, sections 15A.081, subdivision 
          1; 86.33, subdivisions 2 and 3; 136C.06; 144.122; 
          144.123, subdivision 2; 144.219; 144.55, subdivision 
          6; 144.68; 144.69; 144A.05; 144A.071, subdivision 3; 
          144A.27; 144A.33, subdivisions 3 and 4;  171.29, 
          subdivision 2; 245.713, subdivision 2; 245.782, 
          subdivision 5;  246.18, subdivision 1, and by adding a 
          subdivision; 246.50, subdivisions 3, 4a, 5, 7, and by 
          adding a subdivision; 246.51; 246.511; 246.57, by 
          adding a subdivision; 251.011, subdivision 6; 252.21; 
          252.22; 252.23; 252.24, subdivisions 1 and 4; 252.25; 
          252.275, subdivisions 1, 2, 4, and 7; 256.01, 
          subdivisions 2 and 4; 256.045, subdivision 3; 256.73, 
          by adding a subdivision; 256.736, subdivisions 3, 4, 
          6, 7, 8, and by adding subdivisions; 256.737, 
          subdivision 1; 256.74, subdivision 1; 256.969, 
          subdivisions 2 and 3; 256.98; 256B.02, subdivision 8, 
          and by adding a subdivision; 256B.03, subdivision 1; 
          256B.04, subdivisions 14 and 15; 256B.06, subdivision 
          1, and by adding a subdivision; 256B.064, subdivision 
          1a; 256B.15; 256B.17, subdivisions 4 and 5; 256B.19, 
          subdivision 1; 256B.35, subdivisions 1 and 2; 256B.37, 
          by adding a subdivision; 256B.421, subdivision 1; 
          256B.431, subdivisions 2b, 2e, 3a, 4, and by adding 
          subdivisions; 256B.433; 256B.47, subdivision 1, and by 
          adding subdivisions; 256B.48, subdivision 1; 256B.50, 
          subdivision 2; 256B.501, subdivisions 1, 2, and 8; 
          256B.69, subdivisions 6, 11, and by adding 
          subdivisions; 256C.26; 256D.01, subdivision 1a; 
          256D.02, subdivisions 5 and 8; 256D.03, subdivisions 
          2, 3, 4, and by adding a subdivision; 256D.05, 
          subdivision 1, and by adding a subdivision; 256D.051 
          subdivisions 1, 2, 6, 8, and by adding a subdivision; 
          256D.06, subdivisions 1, 1b, and 2; 256D.08, 
          subdivision 1; 256D.101; 256D.15; 256D.22; 256D.37, 
          subdivision 1; 256E.09, subdivision 3; 256E.12, 
          subdivision 3; 257.33; 257.34, subdivision 1; 257.35; 
          257.351, subdivision 15, and by adding subdivisions; 
          257.354, subdivision 4, and by adding a subdivision; 
          257.57, subdivision 2; 257.60; 257.62, by adding a 
          subdivision; 257.63, subdivision 2; 268.0111, 
          subdivision 8; 268.0122, subdivisions 2 and 3; 268.36; 
          268.37, subdivision 3; 268.53, subdivision 1; 268.673, 
          subdivision 5, and by adding a subdivision; 268.6751; 
          268.676; 268.677, subdivision 1; 268.678, subdivisions 
          1 and 4; 268.681, subdivisions 2 and 3; 268.85, 
          subdivision 2; 268.86, subdivisions 1, 2, and 4; 
          268.871, subdivisions 1, 2, and by adding a 
          subdivision; 268.88; 268.89, subdivision 2; 268.91, 
          subdivisions 1, 2, 3, 4, 5, 6, 11, and by adding 
          subdivisions; 268.911, subdivision 1; 287.05, 
          subdivision 1; 287.12; 287.21, subdivision 1; 393.07, 
          subdivision 10; 510.07; 518.131, subdivision 7; 
          518.171, subdivision 1; 518.24; 518.551, subdivision 
          1, and by adding a subdivision; 518.57, subdivision 1; 
          518.611, subdivisions 1, 2, 3, 4, 6, 8, and by adding 
          a subdivision; 518.64, subdivision 2; 524.3-1201; 
          525.56, subdivision 3; and Laws 1986, chapter 394, 
          section 24; proposing coding for new law in Minnesota 
          Statutes, chapters 62D; 144; 144A; 245; 246; 252; 256; 
          256B; 256D; 257; and 518; repealing Minnesota Statutes 
          1986, sections 116J.035, subdivision 3; 116L.04, 
          subdivision 3; 136.63, subdivision 1b; 144.66; 144.67; 
          178.03, subdivision 5; 245.69, subdivision 1a; 
          245.713, subdivisions 1 and 3; 245.74; 245.76; 
          256.966, subdivision 2; 256B.05, subdivision 4; 
          256B.07; 256B.501, subdivisions 5, 6, 7, and 9; 
          256D.051, subdivisions 4, 5, 11, and 12; 256E.06, 
          subdivision 2a; 257.34, subdivision 2; 267.01; 267.02; 
          267.03; 267.04; 267.05; 267.06; 268.0111, subdivision 
          3; and 268.86, subdivisions 1, 3, 4, and 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                             APPROPRIATIONS 
    Section 1.  [HUMAN SERVICES, CORRECTIONS, HEALTH; 
APPROPRIATIONS.] 
    The sums shown in the columns marked "APPROPRIATIONS" are 
appropriated from the general fund, or any other fund named, to 
the agencies and for the purposes specified in the following 
sections of this act, to be available for the fiscal years 
indicated for each purpose.  The figures "1987," "1988," and 
"1989," where used in this act, mean that the appropriation or 
appropriations listed under them are available for the year 
ending June 30, 1987, June 30, 1988, or June 30, 1989, 
respectively.  

                            SUMMARY BY FUND 
           1987          1988           1989           TOTAL 
General  
       $1,919,400  $1,083,715,000  $1,132,831,800  $2,218,466,200
Special Revenue
                   $    3,642,100  $     3,661,100 $    7,303,200
Public Health Fund
                   $    7,403,000  $     7,344,200 $   14,747,200
Metropolitan
  Landfill
                   $      140,100  $       140,100 $      280,200
Trunk Highway
                   $      536,000  $       535,400 $    1,071,400
Total
       $1,919,400  $1,095,436,200  $1,144,512,600  $2,241,868,200
                                           APPROPRIATIONS
                                       Available for the Year
                                          Ending June 30,
                                          1988        1989
     Sec. 2.  COMMISSIONER OF HUMAN 
SERVICES 
    Subdivision 1.  Appropriation by Fund 
General Fund                            918,949,700  969,235,400
Public Health Fund                        3,982,600    3,924,900
 The amounts that may be spent from this 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
 Federal money received in excess of the 
estimates shown in the 1987 department 
of human services budget document 
reduces the state appropriation by the 
amount of the excess receipts, unless 
otherwise directed by the governor, 
after consulting with the legislative 
advisory commission.  
 Positions and administrative money may 
be transferred within the department of 
human services as the commissioner 
considers necessary, with the advance 
approval of the commissioner of finance.
 Estimates of federal money that will be 
earned by the various accounts of the 
department of human services and 
deposited in the general fund are 
detailed on the worksheets of the 
conferees of the senate and house of 
representatives, a true copy of which 
is on file in the office of the 
commissioner of finance. If federal 
money anticipated is less than that 
shown on the official worksheets, the 
commissioner of finance shall reduce 
the amount available from the direct 
appropriation a corresponding amount. 
The reductions must be noted in the 
budget document submitted to the 76th 
legislature in addition to an estimate 
of similar federal money anticipated 
for the 1989-1991 biennium. 
 The commissioner may use up to $180,000 
from the account authorized by 
Minnesota Statutes, section 256.01, 
subdivision 2, clause (15), to maximize 
collections of federal Title IV-E money 
through automation of the 
administrative functions associated 
with the licensing of foster care and 
family day care homes.  
 The information system project 
appropriations must be deposited in the 
special systems account according to 
Minnesota Statutes, section 256.014, 
and, except for development costs under 
the child support enforcement project, 
are not available until September 1, 
1987. Money appropriated for computer 
projects may be transferred from one 
project to another as the commissioner 
considers necessary. The commissioner 
shall report quarterly to the chair of 
the senate finance committee and the 
chair of the house of representatives 
appropriations committee detailing the 
progress made, the nature and amount of 
expenditures made, and future 
development plans.  On January 1 of 
each year the commissioner must also 
report to the legislature under 
Minnesota Statutes, section 256.014, 
subdivision 3, on the steps taken to 
integrate these projects with the 
information systems architecture of the 
state. Any unexpended balance in the 
appropriation for these projects 
remaining in the first year does not 
cancel but is available in the second 
year. 
     Subd. 2.  Human Services 
Management                               7,594,300    7,604,400 
The first year appropriation for 
equalization aid must be allocated to 
the same counties and in the same 
proportion as the distribution of 
equalization aid for fiscal year 1986. 
     Subd. 3.  Policy and Program 
Support Services                         4,113,000    4,263,000 
     Subd. 4.  Community Social  
Services                                77,563,600   79,906,100 
 The commissioner may use money from 
available social service appropriations 
to pay appropriate administrative and 
training costs associated with child 
foster care programs to maximize 
federal reimbursement under title IV-E 
of the social security act, United 
State Code, title 42, sections 670 to 
676.  State money may be used for this 
purpose only if the money is replaced 
by other federal or state money so that 
there is no reduction or delay in 
payments for any of the programs 
involved.  Notwithstanding any other 
law, transfers must be disregarded when 
applying the formula for allocation of 
state social service money and must not 
cause a reduction in the total amount 
of money available to grantees. 
 Of this appropriation, $48,799,000 the 
first year and $50,599,000 the second 
year are for community social services 
subsidies. 
For purposes of the 1989-1991 biennial 
budget, the base level for community 
social services is $49,699,000. 
 $447,400 each year of the county 
allocation for Title XX community 
social services is for migrant day care.
 $82,637 of the second year 
appropriation in Laws 1985, chapter 9, 
article 1, section 2, subdivision 4, 
for Title XX community social services 
is transferred from the county 
allocation to the migrant day care 
allocation. 
 Of the amount appropriated to the day 
care sliding fee program, $121,700 is 
allocated each year of the biennium to 
the migrant day care program. 
 $125,000 each year of the appropriation 
for child care must be used for grants 
for new or expanding child care 
resource and referral programs under 
Minnesota Statutes, section 268.911, 
subdivision 3.  No more than 20 percent 
of the money may be expended for 
programs in the seven-county 
metropolitan area. 
 $125,000 each year of the appropriation 
for child care must be used for grants 
for the development of child care 
services under Minnesota Statutes, 
section 245.84, subdivision 1. 
Any unexpended balance remaining in the 
first year appropriation for the 
subsidized adoption program does not 
cancel but is available for the second 
year.  
 By January 15, 1988, the commissioner 
of human services shall report to the 
chairs of the health and human services 
committee in the senate and the house 
of representatives on information 
systems needed to support improved 
accountability from the general fund 
and monitoring for county social 
service expenditures.  The report must 
include at least the following:  the 
identification of minimum data elements 
required for federal compliance 
purposes; an inventory and description 
of current social services data 
collection activities; an assessment of 
specific data elements needed to 
monitor major state social services 
policy goals; an analysis of any 
difficulties imposed by data collection 
by target population; and opportunities 
for improving the reliability and 
accuracy of data submitted by 
counties.  The commissioner shall also 
recommend future technical improvements 
and identify any needed strategies for 
transition from current reporting 
mechanisms to systems with better 
reliability, timeliness, and county 
participation. 
 Notwithstanding the criteria in 
Minnesota Rules, part 9525.0960, 
subpart 3, for the biennium ending June 
30, 1989, the commissioner shall use 
semi-independent living services 
funding for new persons first to reduce 
the number of inappropriate nursing 
home placements and then to provide 
alternative community services to those 
recipients in intermediate care 
facilities for the mentally retarded or 
waivered services who are no longer 
eligible for those services.  This 
provision supersedes any inconsistent 
provision of Minnesota Statutes, 
section 252.275, or any other law. 
The commissioner shall review social 
services programs offered and proposed 
to be offered to senior citizens 
including but not limited to the foster 
grandparent, retired senior volunteer, 
and senior companion programs.  The 
commissioner shall prepare a report as 
follows:  (1) outlining the purposes, 
funding, target populations, and 
counties served by each program; (2) 
identifying areas of overlap among the 
programs; and (3) examining 
alternatives that would allow 
flexibility in design and delivery of 
programs for senior citizens.  The 
commissioner shall present the report 
to the legislature by January 1, 1988. 
     Subd. 5.  Mental Health           17,892,500   17,783,500 
 The $50,000 appropriated for the study 
of Alzheimer's disease in Laws 1985, 
First Special Session chapter 9, 
article 1, section 2, subdivision 6c is 
available until expended.  St. Paul 
Ramsey Medical Center is responsible 
for reimbursing Minnesota physicians 
and pathologists for their services and 
other expenses related to the removal, 
transportation, and storage of 
decedents' brains. 
 $25,000 of the appropriation for mental 
health program administration must be 
used to fund the study and report to 
the legislature on issues related to 
involuntary outpatient commitment. 
     Subd. 6.  Income Maintenance 
General Fund                            596,364,300  652,852,700 
Public Health Fund                        3,982,600    3,924,900 
 Money appropriated for income 
maintenance programs must not be 
transferred for other purposes except 
as allowed in this subdivision, 
subdivision 1, section 14, or as 
otherwise authorized by law. 
 $2,500,000 is available for each year 
of the biennium for case management 
services to caretakers in priority 
groups receiving aid to families with 
dependent children.  The unencumbered 
balance remaining at the end of the 
first year does not cancel but is 
available for the second year of the 
biennium. 
 The public health fund appropriation is 
for the Children's Health Plan and is 
available until expended.  The staff 
complement of the department of human 
services reflects an increase of 7 
positions to administer the program. 
 Of this amount, $25,000 is for training 
welfare fraud prosecutors, $25,000 is 
for training welfare fraud 
investigators, and $80,000 is for staff 
and equipment for the fraud training 
and control function. 
 The staff complement of the department 
of human services reflects an increase 
of one position to carry out duties 
formerly assigned to the coordinator of 
full productivity and opportunity. 
 The amounts that may be spent from this 
appropriation for each activity are as 
follows:  
(a) Aid to Families with Dependent 
Children, General Assistance, Work 
Readiness, Minnesota Supplemental 
Aid 
  $135,268,400  $142,897,400 
 $1,900,000 is appropriated for fiscal 
year 1987 to fund the deficiency in the 
work readiness account.  
 Money appropriated in the first year 
for employment and training services 
for AFDC recipients does not cancel but 
is available for the second year of the 
biennium. 
 If the appropriation for AFDC, general 
assistance, work readiness, and 
Minnesota supplemental aid is 
insufficient for either year, the 
appropriation for the other year is 
available by direction of the governor 
after consulting with the legislative 
advisory commission.  
 During the biennium ending June 30, 
1989, the commissioner of human 
services shall provide supplementary 
grants not to exceed $816,800 a year 
for aid to families with dependent 
children and include the following 
costs in determining the amount of the 
supplementary grants:  major home 
repairs; repair of major home 
appliances; utility recaps; 
supplementary dietary needs not covered 
by medical assistance; replacement of 
essential household furnishings and 
essential major appliances; and 
employment-related transportation and 
educational expenses.  Of this amount, 
$616,800 is for employment-related 
transportation and educational expenses.
 When federal money is available to 
match state money, any part of the 
appropriation for day care sliding fee 
services provided to persons or 
families who are receiving AFDC may be 
transferred to the special needs 
account of the AFDC program.  Federal 
money received during the biennium for 
child care services under this rider is 
appropriated to the commissioner of 
human services for day care sliding fee 
services, except as provided in 
Minnesota Statutes, section 268.91, 
subdivision 2. 
If a county's mortgage and deed tax 
receipts under Minnesota Statutes 1986, 
section 287.12, exceed the state share 
of AFDC grants for the county, the 
excess amount must be offset against 
state payments to the county for the 
state share of the income maintenance 
programs.  Any excess remaining after 
offsetting all state payments for 
income maintenance programs must be 
paid to the commissioner of human 
services and credited to the AFDC 
account. 
The commissioner of human services 
shall set the standard of assistance 
for general assistance and work 
readiness assistance units consisting 
of an adult recipient who is childless 
and unmarried or living apart from his 
or her parents or a legal guardian at 
$203. 
 For the AFDC entrepreneurship program 
appropriation, any unencumbered balance 
remaining in the first year does not 
cancel and is available for the second 
year. 
(b) Medical Assistance and General 
Assistance Medical Care      
   $417,678,400  $464,670,700 
 If the appropriation for medical 
assistance and general assistance 
medical care is insufficient for either 
year, the appropriation for the other 
year is available by direction of the 
governor after consulting with the 
legislative advisory commission.  
 Federal money received during the 
biennium for administration of the home 
and community-based services waiver for 
persons with mental retardation is 
appropriated to the commissioner of 
human services for administration of 
the home and community-based services 
program and must be deposited in that 
activity's account. 
 For medical assistance services 
rendered on or after July 1, 1987, 
payments to medical assistance vendors 
for physician services, dental care, 
vision care, podiatric services, 
chiropractic care, physical therapy, 
occupational therapy, speech 
pathologists, audiologists, mental 
health centers, psychologists, public 
health clinics, and independent 
laboratory and X-ray services shall be 
based on payments in effect on June 30, 
1987, reduced by five percent.  This 
percentage reduction does not apply to 
prenatal care and delivery services. 
 The medical assistance appropropriation 
includes $300,000 the second year for 
the increased costs of exceptions to 
the moratorium on licensure and 
certification of long-term care beds.  
The commissioner of health may license 
or certify beds through the exception 
review process, provided the projected 
total annual increased state medical 
assistance costs of all licenses or 
certifications granted during the 
biennium under any exception to the 
moratorium do not exceed $300,000. 
 The commissioner of human services 
shall contract for a study that 
includes quality assurance evaluations 
and medical record audits of prepaid 
health plans under contract to the 
commissioner to provide medical 
assistance services.  Federal money 
received during the biennium to fund 
this project is appropriated to the 
commissioner.  Any unencumbered balance 
remaining in the first year does not 
cancel but is available for the second 
year of the biennium. 
 $6,100,000 of the amount remaining in 
the medical assistance and general 
assistance medical care account at the 
end of fiscal year 1987 does not cancel 
but is available for fiscal year 1988. 
 $7,100,000 of the appropriation in Laws 
1985, First Special Session chapter 9, 
article 1, section 2, subdivision 5, 
does not cancel and is available during 
the first year to pay medical 
assistance costs of acute care hospital 
outlier charges incurred prior to July 
1, 1987. 
 The maximum pharmacy dispensing fee 
under medical assistance and general 
assistance medical care is $4. 
The commissioner shall study and 
develop recommendations regarding 
implementing an alternative payment 
mechanism for reimbursing hospitals for 
inpatient mental health services. 
 Notwithstanding the allocation 
provisions of Minnesota Statutes, 
section 254B.02, and until such time as 
the federal waiver required to be 
applied for by Minnesota Statutes, 
section 254B.08 is obtained, the 
department shall withhold sufficient 
funds from the consolidated chemical 
dependency treatment fund, established 
under Minnesota Statutes, chapter 254B, 
to pay the state share of chemical 
dependency treatment services provided 
after January 1, 1988, through the 
medical assistance program. 
(c) Preadmission Screening and 
Alternative Care Grants
  $11,914,000   $17,580,000 
Up to $3,500,000 of any balance 
remaining at the end of fiscal year 
1987 in the appropriation for 
preadmission screening and alternative 
care grants does not cancel but is 
available for fiscal year 1988. 
(d) Other Income Maintenance Activities 
  $31,503,500   $27,704,600 
 This appropriation includes $100,000 
each year to contract for the provision 
of training and technical assistance to 
counties to: (1) facilitate the 
transfer of general assistance 
recipients to federal disability 
programs by identifying recipients who 
are potentially eligible for benefits 
and helping them with the application 
and appeals process; and (2) facilitate 
the transfer of general assistance 
medical care recipients to the medical 
assistance program by identifying 
recipients who are potentially eligible 
for medical assistance benefits and 
helping them establish eligibility. 
     Subd. 7.  Long-Term Care 
Management                              4,735,000    4,847,600
     Subd. 8.  Chemical Dependency, 
Hearing Impaired, and Protection 
Services                                6,256,500    6,411,300 
 $100,000 of the money appropriated each 
year for services to deaf persons is 
for grants for specialized mental 
health services for deaf and 
multiple-handicapped deaf persons at St.
Paul-Ramsey Medical Center. 
The commissioner of finance shall 
transfer money as necessary to 
implement the chemical dependency 
consolidated fund program. 
 The entire sum of the money made 
available to the state as a result of 
Public Law Number 99-570, title 4, 
subtitle A, section 4002, of the 
federal Alcohol and Drug Abuse 
Amendments of 1986, must be deposited 
in the chemical dependency fund. 
 The commissioner shall prepare a report 
to the chairs of the human services 
division of house appropriations and 
the health and human services 
subcommittee of senate finance 
containing details concerning the 
provision of chemical dependency 
services by regional treatment centers, 
including utilization rates, staffing 
levels, costs incurred, and rates 
charged.  The commissioner shall 
deliver the report before February 1, 
1988. 
     Subd. 9.  Reimbursement and 
Facilities Administration                204,430,500  195,566,800
 The amounts that may be spent from this 
appropriation for each activity are as 
follows: 
(a) Regional Treatment Centers 
     Approved Complement 
      June 30, 1988     June 30, 1989 
             5,049             4,895
(1) Salaries
  $158,702,600  $155,621,000
(2) Current Expense 
  $ 15,273,000  $ 15,269,000
(3) Repairs and Betterments
  $  2,875,000  $  1,875,000
(4) Special Equipment
  $  1,114,000  
 The commissioner of human services 
shall consolidate both program and 
support functions at each of the 
regional centers and state nursing 
homes to ensure efficient and effective 
space utilization which is consistent 
with applicable licensing and 
certification standards.  The 
commissioner may transfer residents and 
positions among the regional center and 
state nursing home system as necessary 
to promote the most efficient use of 
available state buildings.  Surplus 
buildings shall be reported to the 
commissioner of administration for 
appropriate disposition in accordance 
with Minnesota Statutes, section 16B.24.
 Provided there is no conflict with any 
collective bargaining agreement, any 
state hospital or state nursing home 
reduction in the human services 
technician classifications and other 
nonprofessional, nonsupervisory direct 
care positions must only be 
accomplished through attrition, 
transfers, and retirement and must not 
be accomplished through layoff, unless 
the position reduction is due to the 
relocation of residents to a different 
state facility and the employee 
declines to accept a transfer to a 
comparable position in another state 
facility. 
 This appropriation includes $3,000,000 
to be retained in a separate 
interest-bearing account established in 
accordance with Minnesota Statutes, 
section 246.18, subdivision 3, for use 
by the commissioner of human services 
in contingency situations related to 
chemical dependency programs operated 
by the regional centers or state 
nursing homes.  Up to $250,000 must be 
provided to each regional treatment 
center in advance, at the request of 
the chief executive officer, for 
remodeling or other expenses identified 
by the chief executive officer as 
necessary to allow the facility to 
compete with other chemical dependency 
providers.  The remaining money must be 
used to enable state institutions to 
continue to provide at least the 
current level of chemical dependency 
services for the biennium. 
 Effective January 1, 1988, 329 staff 
positions related to the provision of 
chemical dependency services in the 
regional treatment centers and funded 
by general fund appropriations are 
transferred to each regional treatment 
center's chemical dependency account 
established under Minnesota Statutes, 
section 246.18, subdivision 3. 
 The commissioner may continue to 
operate and may expand the 
state-operated, community-based program 
pilot projects established under Laws 
1985, chapter 9, article 1, subdivision 
6(a)(1), within the limits of available 
appropriations.  State-operated, 
community-based service positions must 
not be counted for position reduction 
purposes.  These positions remain part 
of the authorized complement. 
 Any unexpended balance remaining in the 
regional treatment center fuel and 
utilities appropriations for fiscal 
year 1987 is reappropriated for the 
biennium ending June 30, 1989, to be 
used as follows:  $175,000 to repair a 
boiler at Oak Terrace Nursing Home; up 
to $400,000 to the regional treatment 
centers for furniture replacement; 
$180,000 for the purpose of conducting 
reimbursement projects to increase 
collections and better manage client 
programs in the regional treatment 
centers; and up to $450,000 for 
department computer charges incurred in 
fiscal year 1987. 
 Any state hospital employee position 
identified as being vacant by the state 
hospital and the commissioner of human 
services may only be declared so after 
review of the chair of the house human 
services division of appropriations and 
the chair of the senate health and 
human services subcommittee of finance. 
 Four of the mental health enrichment 
positions are for the dual disabilities 
program at St. Peter regional treatment 
center. 
 Any unencumbered balances in special 
equipment and repairs and betterments 
remaining in the first year do not 
cancel but are available for the second 
year of the biennium.  
(b) Nursing Homes
     Approved Complement - 616.5   605.5
(1) Salaries
  $17,501,100   $17,144,700
This appropriation includes $300,000 
the first year of the biennium for the 
program for chronically chemically 
dependent people at Ah Gwah Ching state 
nursing home.  The commissioner of 
human services shall augment the 
program with federal money and any 
additional money provided through 
shared service agreements under 
Minnesota Statutes, section 246.57, 
after the amount of the state 
appropriation has been recovered and 
deposited in the medical assistance 
account. 
(2) Current Expense 
  $ 2,250,000   $ 2,267,000
(3) Repairs and Betterments
  $   382,000   $   232,000 
 For the biennium ending June 30, 1989, 
the commissioner may reallocate repair 
and betterment funds among projects as 
the commissioner determines necessary. 
 Wages for project labor may be paid 
from repair and replacement money if 
the employee is to be engaged in a 
construction or repair project of a 
short-term and nonrecurring nature. 
(4) Special Equipment
  $    74,000 
(c) Other Reimbursement and Facilities
 Administration Activities
  $ 6,258,800   $ 3,158,100 
 For the child support enforcement 
activity, during the biennium ending 
June 30, 1989, money received from the 
counties for providing data processing 
services must be deposited in that 
activity's account.  The money is 
appropriated to the commissioner of 
human services for the purposes of the 
child support enforcement activity. 
Any balance remaining in the 
appropriation for the administrative 
process pilot program at the end of the 
first year does not cancel but is 
available for the second year. 
     Sec. 3.  OFFICE OF FULL PRODUCTIVITY 
AND OPPORTUNITY                            153,200            0
     Sec. 4.  COMMISSIONER OF JOBS AND 
TRAINING 
     Subdivision 1.  Total 
Appropriation                           34,899,000   33,128,000
 The amounts that may be spent from this 
appropriation for each program are more 
specifically described in the following 
subdivisions. 
     Subd. 2.  Employment and 
Training 
  $12,697,000   $11,213,000
 Of this appropriation, $9,000,000 each 
year is for Minnesota employment and 
economic development wage subsidies.  
Any unencumbered balance remaining in 
the first year does not cancel but is 
available for the second year of the 
biennium.  To the extent permissible 
under federal and state law, the 
commissioner shall use money available 
from the federal government and the 
private sector to fund the program. 
 Notwithstanding Minnesota Statutes, 
section 268.677, subdivision 2, the 
commissioner may spend up to one 
percent of the appropriation for wage 
subsidy for each fiscal year for the 
department's administrative costs and 
may allocate five percent of the 
appropriation for wage subsidy for each 
fiscal year to local service units for 
administrative costs. 
 Of the money appropriated for the 
summer youth employment program for 
fiscal year 1988, $750,000 is 
immediately available.  If that amount 
is insufficient for the costs incurred, 
an additional amount may be transferred 
with the advance approval of the 
commissioner of finance.  Any 
unexpended balance of the immediately 
available money is available for the 
year in which it is appropriated.  
Contracts for the calendar year 1987 
program must be written for the entire 
period of the calendar year 1987 
program.  
 The commissioner of jobs and training 
shall develop, in consultation with the 
commissioners of education, human 
services, and natural resources, a 
coordinated plan for enhanced youth 
education, employment, and service 
opportunities.  This plan shall 
consider the current programming of the 
Minnesota conservation corps, the 
Minnesota youth program, the summer 
youth employment and training program, 
community and secondary vocational 
education, and other appropriate 
programs in designing a coordinated 
cost-effective model which would 
enlarge opportunities for youth.  The 
plan should also recommend a model for 
coordinated funding.  The commissioners 
shall report to the appropriate 
committees of the legislature by 
January 1, 1988. 
 The commissioner may spend up to one 
percent of the appropriation for 
employment programs for each fiscal 
year for the department's 
administrative costs and for program 
operators' administrative costs. 
 In the event the federal work incentive 
program is ended before June 30, 1989, 
any remaining funds appropriated from 
the general fund to the department of 
human services to operate the work 
incentive program shall transfer to a 
federal program enacted to replace the 
work incentive program.  If no 
replacement program is enacted, any 
remaining funds shall transfer to the 
Minnesota employment and economic 
development wage subsidy program in the 
department of jobs and training.  This 
transfer is in addition to funds 
appropriated to the wage subsidy 
program for the biennium. 
 The staff complement of the department 
of jobs and training reflects an 
increase of two positions to carry out 
duties formerly assigned to the 
coordinator of full productivity and 
opportunity. 
     Subd. 3.  Rehabilitation Services 
  $20,281,000   $20,395,000
 Any unexpended balance remaining in the 
first year does not cancel and is 
available for the second year. 
     Subd. 4.  Community Services 
  $ 1,921,000   $ 1,520,000 
 Of this appropriation, $200,000 the 
first year and $200,000 the second year 
are to provide for the local storage, 
transportation, processing, and 
distribution of United States 
Department of Agriculture surplus 
commodities.  The department of jobs 
and training shall report on the 
surplus commodities program to the 
state legislature by January 15 of each 
year. 
 Notwithstanding any law to the 
contrary, for the biennium ending June 
30, 1989, the commissioner of jobs and 
training shall transfer to the 
community services block grant program 
ten percent of the money received under 
the low-income home energy assistance 
block grant in each year of the 
biennium and shall expend all of the 
transferred money during the year of 
the transfer or the year following the 
transfer.  None of the transferred 
money may be used by the commissioner 
of jobs and training for administrative 
costs, except that up to two percent of 
the funds used to supplement the 
federal funding for Project Head Start 
may be used for administrative costs.  
 Twenty-five percent of the money 
transferred by the commissioner of jobs 
and training from the low-income home 
energy assistance block grant to the 
community services block grant shall be 
used to supplement the federal funding 
of Project Head Start for children from 
low-income families.  Notwithstanding 
any law to the contrary, these 
transferred funds shall be allocated 
through the existing Project Head Start 
formula to existing Project Head Start 
grantees for the purpose of expanding 
services to additional low-income 
families.  The transferred funds shall 
be expended according to the federal 
regulations governing Project Head 
Start, including Code of Federal 
Regulations, title 45, sections 1302 
through 1305.  Each local Project Head 
Start shall expend the supplemental 
funds during the year of their receipt 
or the year following their receipt.  
 The commissioner of jobs and training 
shall prepare an annual report to the 
legislature describing the uses and 
impacts of the Project Head Start 
supplemental funding.  The first annual 
report shall be delivered to the 
appropriate committees of the 
legislature on January 1 following the 
first full school year for which 
supplemental funding is available. 
 For the biennium ending June 30, 1989, 
the commissioner of jobs and training 
shall shift to the low-income home 
weatherization program at least five 
percent of money received under the 
low-income home energy assistance block 
grant in each year of the biennium and 
shall expend all of the transferred 
funds during the year of the transfer 
or the year following the transfer.  
None of the transferred money may be 
used by the commissioner of jobs and 
training for administrative costs.  
 To the extent allowed by federal 
regulations, the commissioner of jobs 
and training shall ensure that the same 
income eligibility criteria apply to 
both the weatherization program and the 
energy assistance program. 
 For the biennium ending June 30, 1989, 
no more than 1.11 percent of funds 
received under the total low-income 
home energy assistance program may be 
used by the commissioner for 
departmental administrative costs.  
 Discretionary money from the community 
services block grant (regular) must be 
used to supplement the appropriation 
for local storage, transportation, 
processing, and distribution of United 
States Department of Agriculture 
surplus commodities to the extent 
supplementary funding is required.  Any 
remaining funds shall be allocated to 
state-designated and state-recognized 
community action agencies, Indian 
reservations, and the Minnesota migrant 
council. 
 In the event that the federal office of 
community services does not recognize 
the Olmsted and Freeborn county 
community action agencies as eligible 
entities for full funding, the 
commissioner shall provide full funding 
for those agencies from discretionary 
funds resulting from block grant 
transfers to the community services 
block grant.  The balance of these 
funds may be used by the commissioner 
for discretionary purposes consistent 
with federal community services block 
grant guidelines stated in Public Law 
Number 97-35.  The commissioner shall 
by January 1, 1988, report to the 
legislature on the use of these funds. 
 The commissioner shall by January 1, 
1988, provide to the chairs of the 
health and human services divisions of 
the house appropriations committee and 
the senate finance committee a written 
plan describing how the department's 
division of community services will 
issue one contract for human service 
programs, with the community action 
agencies, the Indian reservations, and 
the Minnesota migrant council, 
including but not limited to, the 
community services block grant program, 
the low-income home weatherization 
program, the low-income energy 
assistance program, the USDA Surplus 
Commodities Program, and all other 
programs for which the division has 
contractual responsibility. 
     Sec. 5.  COMMISSIONER OF 
CORRECTIONS 
     Subdivision 1.  Appropriation by Fund
General Fund                            97,655,600   98,730,400 
Special Revenue Fund                       126,500      126,500
 The amounts that may be spent from the 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
 Positions and administrative money may 
be transferred within the department of 
corrections as the commissioner 
considers necessary, upon the advance 
approval of the commissioner of finance.
 For the biennium ending June 30, 1989, 
the commissioner of corrections may, 
with the approval of the commissioner 
of finance and upon notification of the 
chairs of the health and human services 
divisions of the house appropriations 
committee and the senate finance 
committee, transfer funds to or from 
salaries. 
 Any unencumbered balances within this 
section remaining in the first year 
shall not cancel but are available for 
the second year of the biennium. 
     Subd. 2.  Management Services       3,714,900    3,928,000 
     Subd. 3.  Community Services       23,383,700   24,633,400 
 Of this appropriation, $13,329,000 the 
first year and $14,829,000 the second 
year are for community corrections act 
subsidies. 
 $50,000 from the general fund is to 
provide a state match for county funds 
used by the Hennepin county department 
of community services to establish a 
juvenile residential facility as 
defined in Minnesota Rules, part 
2935.0100, subpart 13, in Hennepin 
county.  The facility shall be used 
exclusively as a residential placement 
for American Indian juveniles who are 
referred for placement by the juvenile 
court or the commissioner of 
corrections.  Money appropriated under 
this section may be used to acquire a 
facility, provide equipment and 
furnishings for the facility, employ 
staff, and make modifications necessary 
to meet the licensing standards of the 
commissioner under Minnesota Rules, 
chapter 2935. 
 Notwithstanding any other law to the 
contrary, the commissioner of finance 
shall deposit in the special revenue 
account receipts from the provision of 
juvenile probation services to Lincoln, 
Lyon, and Faribault counties.  These 
receipts are appropriated to fund 
battered women grants for the biennium 
ending June 30, 1989. 
 There is appropriated for fiscal year 
1987, $19,400 from the general fund for 
probation and supervised release. 
 This appropriation includes $76,000 for 
a grant under Minnesota Statutes, 
section 241.022, to the West Central 
Juvenile Center in Moorhead. 
 Any unencumbered balance remaining in 
the county probation reimbursement 
account at the end of the first year 
does not cancel but is available for 
the second year of the biennium.  Any 
surplus remaining in the account at the 
end of the biennium cancels to the 
general fund. 
     Subd. 4.  Correctional
Institutions                            70,557,000   70,169,000 
(a) Salaries 
  $52,610,400   $52,438,400 
(b) Current Expense 
  $12,252,000   $12,254,000 
(c) Repairs and Betterments 
  $ 1,368,000   $ 1,164,000 
 For the biennium ending June 30, 1989, 
the commissioner may reallocate repair 
and betterment funds among projects as 
the commissioner determines necessary. 
(d) Special Equipment
  $   342,000   $   334,000 
(e) Institution Support 
  $ 3,984,600    $3,978,600 
 The commissioner may enter into 
agreements with the appropriate Alaskan 
officials, or officials of any state, 
political subdivision, or the United 
States, for housing prisoners in 
Minnesota correctional facilities.  
Money received under the agreements is 
appropriated to the commissioner for 
correctional purposes. 
 Any unencumbered balances in special 
equipment, repairs and replacement, 
food provisions, and central office 
health care, remaining in the first 
year do not cancel and are available 
for the second year. 
 Wages for project labor may be paid 
from repair and replacement money if 
the employee is to be engaged in a 
construction or repair project of a 
short-term and nonrecurring nature. 
 Notwithstanding Minnesota Statutes, 
sections 94.09 to 94.16, the 
commissioner may sell surplus property 
at Lino Lakes Correctional Facility to 
Anoka county and the proceeds from a 
sale are appropriated to the 
commissioner to expand living quarters 
at the facility after review by the 
chair of the house human services 
division of appropriations and the 
chair of the senate health and human 
services subommittee of finance. 
     Sec. 6.  SENTENCING GUIDELINES 
COMMISSION                                 198,000      201,100
     Sec. 7.  CORRECTIONS OMBUDSMAN        331,000      331,000
     Sec. 8.  COMMISSIONER OF HEALTH 
     Subdivision 1.  Appropriation by Fund 
General Fund                            31,528,500   31,205,900
Public Health Fund                       3,420,400    3,419,300
Trunk Highway Fund                         536,000      535,400
Metropolitan Landfill Contingency Fund     140,100      140,100
 The amounts that may be spent from this 
appropriation for each program and 
activity are more specifically 
described in the following subdivisions.
 Positions and administrative money may 
be transferred within the department of 
health as the commissioner considers 
necessary, with the advance approval of 
the commissioner of finance. 
     Subd. 2.  Preventive and Protective 
Health Services                          
General Fund                             8,032,000    7,494,000
Public Health Fund                       1,727,200    1,726,800
Metropolitan Landfill Contingency Fund     140,100      140,100
 Of this general fund appropriation 
$50,000 in 1988 is to pay the St. Paul 
Ramsey Medical Center for autopsies for 
the purposes of Laws 1985, First 
Special Session chapter 9, article 2, 
sections 14, 15, and 91, except that 
payments may be made to physicians and 
pathologists statewide for their 
services and expenses related to the 
removal, transportation and storage of 
decedents' brains.  The number of 
autopsies that may be performed is 
limited only by the amount of the 
appropriation.  The appropriation is 
available until expended.  
 Of this appropriation, $140,100 each 
year is appropriated from the 
metropolitan landfill contingency fund 
for monitoring well water supplies in 
the metropolitan area. 
 The appropriation for preventive and 
protective health services reflects an 
increase of $54,000 the first year and 
$53,000 the second year for swimming 
pool surveillance and monitoring.  The 
increase is not available until the 
department has established a fee system 
that will allow the increased costs to 
be fully recovered. 
     Subd. 3.  Health Delivery 
Systems                               
General Fund                             20,437,000   20,591,400
Public Health Fund                        1,693,200    1,692,500
Trunk Highway Fund                          536,000      535,400
 Of this appropriation, $11,828,000 from 
the general fund each year is for the 
community health services subsidy. 
 For the purposes of the community 
health services subsidy, the 
commissioner of finance may authorize 
the transfer of money to the community 
health services activity from the other 
programs in this section.  
 The state appropriation to supplement 
the federal Women, Infants and Children 
(WIC) program in each year is to be 
spent consistent with federal 
requirements.  Any balance remaining in 
the first year does not cancel but is 
available for the second year. 
 Of this appropriation, $536,000 the 
first year and $535,400 the second year 
are appropriated from the trunk highway 
fund for emergency medical services 
activities. 
 If the appropriation for community 
health services or services to children 
with handicaps is insufficient for 
either year, the appropriation for the 
other year is available by direction of 
the governor after consulting with the 
legislative advisory commission.  
 Notwithstanding any law to the 
contrary, appropriations from the 
general fund for services to children 
with handicaps for fiscal years 1987, 
1988, and 1989 are available until 
expended and may be used in the 
maternal and child health activity for 
grants, staff and supplies consistent 
with section 8, page 37 of the 
governor's 1987-1989 biennial budget 
document.  All receipts generated by 
the services to children with handicaps 
program are to be deposited as 
dedicated receipts and appropriated to 
the commissioner of health for use in 
the maternal and child health program. 
     Subd. 4.  Health Support Services 
General Fund                             3,059,500    3,120,500
     Sec. 9.  HAZARDOUS SUBSTANCE 
INJURY COMPENSATION BOARD         
The $2,000,000 appropriated to the 
Hazardous Substance Injury Compensation 
Board in Laws 1985, First Special 
Session, chapter 8, section 18 is 
available until expended. 
     Sec. 10.  HEALTH-RELATED BOARDS  
     Subdivision 1.  Total for this 
section                                  3,515,600    3,534,600
 The appropriations in this section are 
from the special revenue fund. 
     Subd. 2.  Board of Chiropractic
Examiners                                  174,200      162,200
     Subd. 3.  Board of Dentistry          317,100      317,400
     Subd. 4.  Board of Medical
Examiners                                1,323,100    1,353,000
 The board of medical examiners shall 
establish fees for individuals licensed 
or registered by it at a level which 
nearly equals the board's 
appropriation, general support costs, 
indirect costs, and attorney general 
costs.  The fees must be set in 
accordance with the procedure 
established by Minnesota Statutes, 
section 16A.128, subdivision 2a, in 
effect on August 1, 1984. 
     Subd. 5.  Board of Nursing            867,100      867,700
 The board of nursing may supplement its 
appropriation by receipts from the 
board of podiatry for services provided 
to the board of podiatry. 
     Subd. 6.  Board of Examiners for
Nursing Home Administrators                131,900      132,000
     Subd. 7.  Board of Optometry           46,900       47,000
     Subd. 8.  Board of Pharmacy           405,300      405,500
     Subd. 9.  Board of Podiatry             9,600        9,600
     Subd. 10.  Board of Psychology        160,300      160,100
     Subd. 11.  Board of Veterinary
Medicine                                    80,100       80,100
     Subd. 12.  Revenue 
 The commissioner of finance shall not 
permit the allotment, encumbrance, or 
expenditure of money appropriated in 
this section in excess of the 
anticipated biennial revenues from fees 
collected by the boards.  Neither this 
provision nor Minnesota Statutes, 
section 214.06, applies to transfers 
from the general contingent account, if 
the amount transferred does not exceed 
the amount of surplus revenue 
accumulated by the transferee during 
the previous five years. 
     Subd. 13.  Attorney General Services 
 Notwithstanding any law to the 
contrary, in the event the office of 
the attorney general does not provide 
legal and investigative services to the 
health-related licensing boards in 
either fiscal year 1988 or fiscal year 
1989 in an amount at least equal to the 
services provided in fiscal year 1986, 
the boards are authorized to contract 
with the office of the attorney general 
for such services in amounts not to 
exceed fee revenues for the year 
affected. 
     Sec. 11.  BUDGET BOOK FORMAT 
 Notwithstanding Minnesota Statutes, 
section 16A.11, the commissioner of 
finance shall consult with and seek the 
recommendations of the chair of the 
house appropriations committee and the 
chair of the senate finance committee 
and their respective division chairs 
prior to adopting a format for the 
1989-1991 biennial budget document.  
The commissioner of finance shall not 
adopt a format for the 1989-1991 
biennial budget document until the 
commissioner has received the positive 
recommendations of the chair of the 
house appropriations committee and the 
chair of the senate finance committee. 
     Sec. 12.  FEDERAL RECEIPTS 
 For the biennium ending June 30, 1989, 
federal receipts as shown in the 
biennial budget document or in working 
papers of the two appropriations 
committees to be used for financing 
activities, programs, and projects 
under the supervision and jurisdiction 
of the commissioner of human services 
must be accredited to and become a part 
of the appropriations provided for in 
section 2. 
     Sec. 13.  PROVISIONS 
 For the biennium ending June 30, 1989, 
money appropriated to the commissioner 
of corrections and the commissioner of 
human services in this act for the 
purchase of provisions within the item 
"current expense" must be used solely 
for that purpose.  Money provided and 
not used for purchase of provisions 
must be canceled into the fund from 
which appropriated, except that money 
provided and not used for the purchase 
of provisions because of population 
decreases may be transferred and used 
for the purchase of medical and 
hospital supplies with the approval of 
the governor after consulting with the 
legislative advisory commission.  
 The allowance for food may be adjusted 
annually according to the United States 
department of labor, bureau of labor 
statistics publication, producer price 
index, with the approval of the 
commissioner of finance.  Adjustments 
for fiscal year 1988 and fiscal year 
1989 must be based on the June 1987, 
and June 1988, producer price index 
respectively, but the adjustment must 
be prorated if the wholesale food price 
index adjustment would require money in 
excess of this appropriation. 
     Sec. 14.  TRANSFERS OF MONEY 
     Subdivision 1.  Governor's Approval 
Required 
 For the biennium ending June 30, 1989, 
the commissioners of human services, 
corrections, jobs and training, and 
health shall not transfer money to or 
from the object of expenditure 
"personal services" to or from the 
object of expenditure "claims and 
grants," as shown on the official 
worksheets of the conferees of the 
senate and house of representatives, a 
true copy of which is on file in the 
office of the commissioner of finance, 
except for services for the blind, 
basic client rehabilitation services, 
and rehabilitation services for 
workers' compensation recipients, and 
for those transfers that have the 
written approval of the governor after 
consulting with the legislative 
advisory commission.  
    Subd. 2.  Transfers of Unencumbered 
Appropriations
 For the biennium ending June 30, 1989, 
the commissioners of human services, 
corrections, and health by direction of 
the governor after consulting with the 
legislative advisory commission may 
transfer unencumbered appropriation 
balances and positions among all 
programs.  
     Sec. 15.  APPROVED COMPLEMENT 
 For the biennium ending June 30, 1989, 
the approved complements indicated in 
this act are full-time equivalent 
positions and apply only to positions 
paid for with money appropriated by 
this act.  
 Additional employees over the approved 
complement may be employed on the basis 
of public necessity or emergency with 
the written approval of the governor, 
but the governor shall not approve the 
consulting with the legislative 
advisory commission.  
    Subd. 2.  Transfers of Unencumbered 
Appropriations
 For the biennium ending June 30, 1989, 
the commissioners of human services, 
corrections, and health by direction of 
the governor after consulting with the 
legislative advisory commission may 
transfer unencumbered appropriation 
balances and positions among all 
programs.  
     Sec. 16.  APPROVED COMPLEMENT 
 For the biennium ending June 30, 1989, 
the approved complements indicated in 
this act are full-time equivalent 
positions and apply only to positions 
paid for with money appropriated by 
this act.  
 Additional employees over the approved 
complement may be employed on the basis 
of public necessity or emergency with 
the written approval of the governor, 
but the governor shall not approve the 
additional personnel until he has 
consulted with the legislative advisory 
commission.  Requests for increases in 
the approved complement must be 
forwarded to the house committee on 
appropriations and Senate committee on 
finance at least 30 days before the 
legislative advisory commission meeting.
     Sec. 17.  MASTER LEASE 
 If an amount is appropriated in this 
act to purchase equipment, and the 
equipment is instead acquired using a 
master lease, the commissioner of 
finance shall reduce the allotment for 
equipment by the amount of the savings 
after written consultation with the 
chairs of the house appropriations 
committee and the senate finance 
committee.  Any unencumbered balance 
allotted for this equipment remaining 
in the first year does not cancel and 
is available for the second year. 

                                ARTICLE 2
    Section 1.  Minnesota Statutes 1986, section 15A.081, 
subdivision 1, is amended to read: 
    Subdivision 1.  The governor shall set the salary rate 
within the ranges listed below for positions specified in this 
subdivision, upon approval of the legislative commission on 
employee relations and the legislature as provided by section 
43A.18, subdivisions 2 and 5: 
                                                Salary Range 
                                                  Effective 
                                                July 1, 1983 
Commissioner of education;                   $57,500-$70,000 
Commissioner of finance; 
Commissioner of transportation; 
Commissioner of human services; 
Executive director, state board of 
  investment; 
Commissioner of administration;              $50,000-$60,000 
Commissioner of agriculture; 
Commissioner of commerce;
Commissioner of corrections;  
Commissioner of jobs and training;  
Commissioner of employee relations;  
Commissioner of energy and economic 
  development;  
Commissioner of health;  
Commissioner of labor and industry;  
Commissioner of natural resources;  
Commissioner of revenue;
Commissioner of public safety;  
Chair, waste management board; 
Chief administrative law judge; office of
  administrative hearings;
Director, pollution control agency;
Director, state planning agency;
Executive director, housing finance 
  agency;  
Executive director, public employees
  retirement association; 
Executive director, teacher's 
  retirement association;  
Executive director, state retirement  
  system;
Chair, metropolitan council; 
Chair, regional transit board; 
Coordinator of full productivity and 
opportunity; 
Commissioner of human rights;                $40,000-$52,500
Director, department of public service; 
Commissioner of veterans' affairs; 
Director, bureau of mediation services; 
Commissioner, public utilities commission; 
Member, transportation regulation board. 
    Sec. 2.  [62D.211] [RENEWAL FEE.] 
    Each health maintenance organization subject to sections 
62D.01 to 62D.29 shall submit to the commissioner of health each 
year before April 1 a certificate of authority renewal fee in 
the amount of $10,000 each plus 20 cents per person enrolled in 
the health maintenance organization on December 31 of the 
preceding year.  The commissioner may adjust the renewal fee in 
rule under the provisions of chapter 14. 
    Sec. 3.  [REPORT.] 
    The commissioner shall report to the legislature before 
January 15, 1988, assessing the effect of the renewal fee 
structure upon health maintenance organizations and making any 
necessary recommendations for changes in this method of 
computing certificate of authority renewal fees. 
    Sec. 4.  Minnesota Statutes 1986, section 86.33, 
subdivision 2, is amended to read: 
    Subd. 2.  [PROJECT COORDINATION.] The commissioner of 
natural resources shall consult with the full productivity and 
opportunity coordinator and develop a plan that establishes:  a 
priority for unemployed youths who are economically, socially, 
physically, or educationally disadvantaged; the ways in which 
participants will be assisted in gaining ongoing employment or 
training upon completing the projects; the ways in which 
exclusive bargaining representatives are to be consulted in 
regard to the positions and job duties of persons employed in 
projects; and how the projects are coordinated with other 
publicly authorized or subsidized programs. 
    The commissioner shall submit the plan to the full 
productivity and opportunity coordinator in each even-numbered 
year, according to standards established by the coordinator for 
use in developing a biennial statewide employment and training 
plan. 
    Sec. 5.  Minnesota Statutes 1986, section 86.33, 
subdivision 3, is amended to read: 
    Subd. 3.  [REPORTING; CORPS MEMBER STATUS; FEES.] The 
commissioner of natural resources shall cooperate with the full 
productivity and opportunity coordinator in developing and 
implementing any evaluation and reporting systems for employment 
and training programs.  All camp staff except camp directors in 
the young adult program are corps members.  Corps members are 
not eligible for unemployment compensation or other benefits 
except workers' compensation, and they are not employees of the 
state of Minnesota within the meaning of section 43A.02, 
subdivision 21.  The commissioner may charge a fee for any 
service performed by the corps. 
    Sec. 6.  Minnesota Statutes 1986, section 136C.06, is 
amended to read: 
    136C.06 [SOLE STATE AGENCY.] 
    The state board of vocational technical education is the 
sole state agency to receive and disburse federal funds 
authorized by the Vocational Education Act of 1963, as amended 
in the education amendments of 1976, Public Law Number 94-482, 
and Code of Federal Regulations, title 34, part 400.  The state 
board shall develop and submit the state plan for vocational 
technical education.  The state board shall develop the state 
plan according to terms of agreement with the state board of 
education.  Before developing and submitting the state plan, the 
state board shall consult with the full productivity and 
opportunity coordinator.  The state board shall submit the state 
plan to the full productivity and opportunity coordinator for 
use in developing a biennial statewide employment and training 
plan. 
    Sec. 7.  Minnesota Statutes 1986, section 144.122, is 
amended to read:  
    144.122 [LICENSE AND PERMIT FEES.] 
    (a) The state commissioner of health, by rule, may 
prescribe reasonable procedures and fees for filing with the 
commissioner as prescribed by statute and for the issuance of 
original and renewal permits, licenses, registrations and 
certifications issued under authority of the commissioner. The 
expiration dates of the various licenses, permits, registrations 
and certifications as prescribed by the rules shall be plainly 
marked thereon.  Fees may include application and examination 
fees and a penalty fee for renewal applications submitted after 
the expiration date of the previously issued permit, license, 
registration, and certification.  The commissioner may also 
prescribe, by rule, reduced fees for permits, licenses, 
registrations, and certifications when the application therefor 
is submitted during the last three months of the permit, 
license, registration, or certification period.  Fees proposed 
to be prescribed in the rules shall be first approved by the 
department of finance.  All fees proposed to be prescribed in 
rules shall be reasonable.  The fees shall be in an amount so 
that the total fees collected by the commissioner will, where 
practical, approximate the cost to the commissioner in 
administering the program.  All fees collected shall be 
deposited in the state treasury and credited to the general fund 
unless otherwise specifically appropriated by law for specific 
purposes. 
    (b) The commissioner may charge a fee for voluntary 
certification of medical laboratories and environmental 
laboratories, and for environmental and medical laboratory 
services provided by the department, without complying with 
subdivision 1 or chapter 14.  Fees charged for environment and 
medical laboratory services provided by the department must be 
approximately equal to the costs of providing the services.  
    Sec. 8.  Minnesota Statutes 1986, section 144.123, 
subdivision 2, is amended to read:  
    Subd. 2.  The commissioner of health shall promulgate 
rules, in accordance with chapter 14, which shall specify the 
amount of the handling fee prescribed in subdivision 1.  The fee 
shall approximate the costs to the department of handling 
specimens including reporting, postage, specimen kit 
preparation, and overhead costs.  The fee prescribed in 
subdivision 1 shall be $1.50 $5 per specimen until the 
commissioner promulgates rules pursuant to this subdivision. 
    Sec. 9.  [144.671] [CANCER SURVEILLANCE SYSTEM; PURPOSE.] 
    The commissioner of health shall establish a statewide 
population-based cancer surveillance system.  The purpose of 
this system is to: 
    (1) monitor incidence trends of cancer to detect potential 
public health problems, predict risks, and assist in 
investigating cancer clusters; 
    (2) more accurately target intervention resources for 
communities and patients and their families; 
    (3) inform health professionals and citizens about risks, 
early detection, and treatment of cancers known to be elevated 
in their communities; and 
    (4) promote high quality research to provide better 
information for cancer control and to address public concerns 
and questions about cancer. 
    Sec. 10.  [144.672] [DUTIES OF COMMISSIONER; RULES.] 
    Subdivision 1.  [RULE AUTHORITY.] The commissioner of 
health shall collect cancer incidence information, analyze the 
information, and conduct special studies designed to determine 
the potential public health significance of an increase in 
cancer incidence. 
    The commissioner shall adopt rules to administer the 
system, collect information, and distribute data.  The rules 
must include, but not be limited to, the following: 
    (1) the type of data to be reported; 
    (2) standards for reporting specific types of data; 
    (3) payments allowed to hospitals, pathologists, and 
registry systems to defray their costs in providing information 
to the system; 
    (4) criteria relating to contracts made with outside 
entities to conduct studies using data collected by the system.  
The criteria may include requirements for a written protocol 
outlining the purpose and public benefit of the study, the 
description, methods, and projected results of the study, peer 
review by other scientists, the methods and facilities to 
protect the privacy of the data, and the qualifications of the 
researcher proposing to undertake the study; 
    (5) specification of fees to be charged under section 
13.03, subdivision 3, for all out-of-pocket expenses for data 
summaries or specific analyses of data requested by public and 
private agencies, organizations, and individuals, and which are 
not otherwise included in the commissioner's annual summary 
reports.  Fees collected are appropriated to the commissioner to 
offset the cost of providing the data; and 
    (6) establishment of a committee to assist the commissioner 
in the review of system activities. 
    Subd. 2.  [BIENNIAL REPORT REQUIRED.] The commissioner of 
health shall prepare and transmit to the governor and to members 
of the legislature a biennial report on the incidence of cancer 
in Minnesota and a compilation of summaries and reports from 
special studies and investigations performed to determine the 
potential public health significance of an increase in cancer 
incidence, together with any findings and recommendations.  The 
first report shall be delivered by February 1989, with 
subsequent reports due in February of each of the following 
odd-numbered years. 
    Sec. 11.  Minnesota Statutes 1986, section 144.68, is 
amended to read:  
    144.68 [RECORDS AND REPORTS REQUIRED.] 
    Subdivision 1.  [PERSON PRACTICING HEALING ARTS.] Every 
person licensed to practice the healing arts in any form, upon 
request of the state commissioner of health, shall prepare and 
forward to the commissioner, in the manner and at such times as 
the commissioner designates, a detailed record of each case of 
malignant disease cancer treated or seen by the person 
professionally. 
    Subd. 2.  [HOSPITALS AND SIMILAR INSTITUTIONS.] Every 
hospital, sanatorium, nursing home medical clinic, medical 
laboratory, or other institution for the hospitalization, 
clinical or laboratory diagnosis, or care of human beings, upon 
request of the state commissioner of health, shall prepare and 
forward to the commissioner, in the manner and at the times 
designated by the commissioner, a detailed record of each case 
of malignant disease having been therein cancer. 
    Subd. 3.  [INFORMATION REPORTING WITHOUT LIABILITY.] The 
furnishing of the information required under subdivisions 1 and 
2 shall not subject the person, hospital, sanatorium, nursing 
home medical clinic, medical laboratory, or other place 
institution furnishing the information, to any action for 
damages or other relief. 
    Sec. 12.  Minnesota Statutes 1986, section 144.69, is 
amended to read:  
    144.69 [INFORMATION NOT AVAILABLE TO THE PUBLIC 
CLASSIFICATION OF DATA ON INDIVIDUALS.] 
    No such report, or part thereof, nor any copy of the same 
or part thereof, shall be open to the public, nor shall any of 
the contents thereof be disclosed, in any manner, by any 
official or clerk or other employee or person having access 
thereto, but all such information Notwithstanding any law to the 
contrary, including section 13.05, subdivision 9, data collected 
on individuals by the cancer surveillance system, including the 
names and personal identifiers of persons required in section 
144.68 to report, shall be confidential private and may only be 
used for the purposes set forth in sections 144.66 to 144.671, 
144.672, 144.68, and 144.69.  And any such disclosure other than 
is provided for in sections 144.66 to 144.671, 144.672, 144.68, 
and 144.69, is hereby declared to be a misdemeanor and 
punishable as such.  No Except as provided by rule, and as part 
of an epidemiologic investigation, an officer or employee of the 
board shall commissioner of health may interview any patient 
patients named in any such report, nor a relative or relatives 
of any such patient, unless only after the consent of the 
attending physician and or surgeon is first obtained.  
    Sec. 13.  Minnesota Statutes 1986, section 144A.33, 
subdivision 3, is amended to read: 
    Subd. 3.  [FUNDING OF ADVISORY COUNCIL EDUCATION.] A 
license application or renewal fee for nursing homes and 
boarding care homes under section 144.53 or 144A.07 must be 
increased by $1.73 $2.75 per bed to fund the development and 
education of resident and family advisory councils. 
    Sec. 14.  Minnesota Statutes 1986, section 144A.33, 
subdivision 4, is amended to read:  
    Subd. 4.  [SPECIAL ACCOUNT.] All money collected by the 
commissioner of health under subdivision 3 must be deposited in 
the state treasury and credited to a special account called the 
nursing home advisory council fund.  Money credited to the fund 
is appropriated to the Minnesota board on aging for the purposes 
of this section. 
    Sec. 15.  Minnesota Statutes 1986, section 171.29, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) A person whose drivers license has been 
revoked as provided in subdivision 1, except under section 
169.121 or 169.123, shall pay a $30 fee before the person's 
drivers license is reinstated. 
    (b) A person whose drivers license has been revoked as 
provided in subdivision 1 under section 169.121 or 169.123 shall 
pay a $150 $200 fee before the person's drivers license is 
reinstated to be credited as follows: 
    (1) 50 25 percent shall be credited to the trunk highway 
fund; 
    (2) 25 50 percent shall be credited to a separate account 
to be known as the county probation reimbursement account.  
Money in this account is appropriated to the commissioner of 
corrections for the costs that counties assume under Laws 1959, 
chapter 698, of providing probation and parole services to wards 
of the commissioner of corrections.  This money is provided in 
addition to any money which the counties currently receive under 
section 260.311, subdivision 5; and 
    (3) 25 percent shall be credited to a separate account to 
be known as the alcohol impaired driver education account.  
Money in the account is appropriated to the commissioner of 
education for grants to develop alcohol impaired driver 
education programs in elementary, secondary, and post-secondary 
schools.  The state board of education shall establish 
guidelines for the distribution of the grants.  The commissioner 
of education shall report to the legislature by January 15, 
1988, on the expenditure of grant funds under this clause. 
     Sec. 16.  [245.461] [POLICY AND CITATION.] 
     Subdivision 1.  [CITATION.] Sections 245.461 to 245.486 may 
be cited as the "Minnesota comprehensive mental health act." 
     Subd. 2.  [MISSION STATEMENT.] The commissioner shall 
create and ensure a unified, accountable, comprehensive mental 
health service system that: 
     (1) recognizes the right of people with mental illness to 
control their own lives as fully as possible; 
     (2) promotes the independence and safety of people with 
mental illness; 
     (3) reduces chronicity of mental illness; 
     (4) reduces abuse of people with mental illness; 
     (5) provides services designed to: 
     (i) increase the level of functioning of people with mental 
illness or restore them to a previously held higher level of 
functioning; 
     (ii) stabilize individuals with mental illness; 
     (iii) prevent the development and deepening of mental 
illness; 
     (iv) support and assist individuals in resolving emotional 
problems that impede their functioning; 
     (v) promote higher and more satisfying levels of emotional 
functioning; and 
     (vi) promote sound mental health; and 
     (6) provides a quality of service that is effective 
efficient, appropriate, and consistent with contemporary 
professional standards in the field of mental health. 
    Subd. 3.  [REPORT.] By February 15, 1988, and annually 
after that until February 15, 1990, the commissioner shall 
report to the legislature on all steps taken and recommendations 
for full implementation of sections 245.461 to 245.486 and on 
additional resources needed to further implement those sections. 
    Sec. 17.  [245.462] [DEFINITIONS.] 
    Subdivision 1.  [DEFINITIONS.] The definitions in this 
section apply to sections 245.461 to 245.486. 
    Subd. 2.  [ACUTE CARE HOSPITAL INPATIENT TREATMENT.] "Acute 
care hospital inpatient treatment" means short-term medical, 
nursing, and psychosocial services provided in an acute care 
hospital licensed under chapter 144.  
    Subd. 3.  [CASE MANAGEMENT ACTIVITIES.] "Case management 
activities" means activities that are part of the community 
support services program as defined in subdivision 6 and are 
designed to help people with serious and persistent mental 
illness in gaining access to needed medical, social, 
educational, vocational, and other necessary services as they 
relate to the client's mental health needs.  Case management 
activities include obtaining a diagnostic assessment, developing 
an individual community support plan, referring the person to 
needed mental health and other services, coordinating services, 
and monitoring the delivery of services. 
    Subd. 4.  [CASE MANAGER.] "Case manager" means an 
individual authorized by the county board to provide case 
management activities as part of a community support services 
program.  A case manager must be qualified at the mental health 
practitioner level, skilled in the process of identifying and 
assessing a wide range of client needs, and knowledgeable about 
local community resources and how to use those resources for the 
benefit of the client. 
    Subd. 5.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services.  
    Subd. 6.  [COMMUNITY SUPPORT SERVICES PROGRAM] "Community 
support services program" means services, other than inpatient 
or residential treatment services, provided or coordinated by an 
identified program and staff under the clinical supervision of a 
mental health professional designed to help people with serious 
and persistent mental illness to function and remain in the 
community.  A community support services program includes case 
management activities provided to persons with serious and 
persistent mental illness, client outreach, medication 
management, assistance in independent living skills, development 
of employability and supportive work opportunities, crisis 
assistance, psychosocial rehabilitation, help in applying for 
government benefits, and the development, identification, and 
monitoring of living arrangements.  
    Subd. 7.  [COUNTY BOARD.] "County board" means the county 
board of commissioners or board established pursuant to the 
joint powers act, section 471.59, or the human services board 
act, sections 402.01 to 402.10.  
    Subd. 8.  [DAY TREATMENT SERVICES.] "Day treatment services"
means a structured program of intensive therapeutic and 
rehabilitative services at least one day a week for a minimum 
three-hour time block that is provided within a group setting by 
a multidisciplinary staff under the clinical supervision of a 
mental health professional.  Day treatment services are not a 
part of inpatient or residential treatment services, but may be 
part of a community support services program. 
    Subd. 9.  [DIAGNOSTIC ASSESSMENT.] "Diagnostic assessment" 
means a written summary of the history, diagnosis, strengths, 
vulnerabilities, and general service needs of a person with 
mental illness using diagnostic, interview, and other relevant 
mental health techniques provided by a mental health 
professional used in developing an individual treatment plan or 
individual community support plan.  
    Subd. 10.  [EDUCATION AND PREVENTION SERVICES.] "Education 
and prevention services" means services designed to educate the 
general public or special high-risk target populations about 
mental illness, to increase the understanding and acceptance of 
problems associated with mental illness, to increase people's 
awareness of the availability of resources and services, and to 
improve people's skills in dealing with high-risk situations 
known to affect people's mental health and functioning.  
    Subd. 11.  [EMERGENCY SERVICES.] "Emergency services" means 
an immediate response service available on a 24-hour, 
seven-day-a-week basis for persons having a psychiatric crisis 
or emergency.  
    Subd. 12.  [INDIVIDUAL COMMUNITY SUPPORT PLAN.] "Individual 
community support plan" means a written plan developed by a case 
manager on the basis of a diagnostic assessment.  The plan 
identifies specific services needed by a person with serious and 
persistent mental illness to develop independence or improved 
functioning in daily living, health and medication management, 
social functioning, interpersonal relationships, financial 
management, housing, transportation, and employment.  
    Subd. 13.  [INDIVIDUAL PLACEMENT AGREEMENT.] "Individual 
placement agreement" means a written agreement or supplement to 
a service contract entered into between the county board and a 
service provider on behalf of an individual client to provide 
residential treatment services.  
    Subd. 14.  [INDIVIDUAL TREATMENT PLAN.] "Individual 
treatment plan" means a written plan of intervention, treatment, 
and services for a person with mental illness that is developed 
by a service provider under the clinical supervision of a mental 
health professional on the basis of a diagnostic assessment.  
The plan identifies goals and objectives of treatment, treatment 
strategy, a schedule for accomplishing treatment goals and 
objectives, and the individual responsible for providing 
treatment to the person with mental illness. 
    Subd. 15.  [LOCAL MENTAL HEALTH PROPOSAL.] "Local mental 
health proposal" means the proposal developed by the county 
board, reviewed by the commissioner, and described in section 18.
    Subd. 16.  [MENTAL HEALTH FUNDS.] "Mental health funds" are 
funds expended under sections 245.73 and 256E.12, federal mental 
health block grant funds, and funds expended under sections 
256D.06 and 256D.37 to facilities licensed under Minnesota 
Rules, parts 9520.0500 to 9520.0690. 
    Subd. 17.  [MENTAL HEALTH PRACTITIONER.] "Mental health 
practitioner" means a person providing services to persons with 
mental illness who is qualified in at least one of the following 
ways:  
    (1) holds a bachelor's degree in one of the behavioral 
sciences or related fields from an accredited college or 
university, and has 2,000 hours of supervised experience in the 
delivery of services to persons with mental illness; 
    (2) has 6,000 hours of supervised experience in the 
delivery of services to persons with mental illness; 
    (3) is a graduate student in one of the behavioral sciences 
or related fields formally assigned to an agency or facility for 
clinical training by an accredited college or university; or 
    (4) holds a master's or other graduate degree in one of the 
behavioral sciences or related fields from an accredited college 
or university with less than 4,000 hours post-master's 
experience in the treatment of mental illness. 
    Subd. 18.  [MENTAL HEALTH PROFESSIONAL.] "Mental health 
professional" means a person providing clinical services in the 
treatment of mental illness who is qualified in at least one of 
the following ways:  
    (1) in psychiatric nursing:  a registered nurse with a 
master's degree in one of the behavioral sciences or related 
fields from an accredited college or university or its 
equivalent, who is licensed under sections 148.171 to 148.285, 
with at least 4,000 hours of post-master's supervised experience 
in the delivery of clinical services in the treatment of mental 
illness;  
    (2) in clinical social work:  a person with a master's 
degree in social work from an accredited college or university, 
with at least 4,000 hours of post-master's supervised experience 
in the delivery of clinical services in the treatment of mental 
illness;  
    (3) in psychology:  a psychologist licensed under sections 
148.88 to 148.98 who has stated to the board of psychology 
competencies in the diagnosis and treatment of mental illness;  
    (4) in psychiatry:  a physician licensed under chapter 147 
and certified by the American board of psychiatry and neurology 
or eligible for board certification in psychiatry; or 
    (5) in allied fields:  a person with a master's degree from 
an accredited college or university in one of the behavioral 
sciences or related fields, with at least 4,000 hours of 
post-master's supervised experience in the delivery of clinical 
services in the treatment of mental illness.  
    Subd. 19.  [MENTAL HEALTH SERVICES.] "Mental health 
services" means all of the treatment services and management 
activities that are provided to persons with mental illness and 
are described in sections 245.468 to 245.476. 
    Subd. 20.  [MENTAL ILLNESS.] (a) "Mental illness" means an 
organic disorder of the brain or a clinically significant 
disorder of thought, mood, perception, orientation, memory, or 
behavior that is listed in the clinical manual of the 
International Classification of Diseases (ICD-9-CM), current 
edition, code range 290.0 to 302.99 or 306.0 to 316.0 or the 
corresponding code in the American Psychiatric Association's 
Diagnostic and Statistical Manual of Mental Disorders (DSM-MD), 
current edition, Axes I, II, or III, and that seriously limits a 
person's capacity to function in primary aspects of daily living 
such as personal relations, living arrangements, work, and 
recreation.  
    (b) A "person with acute mental illness" means a person who 
has a mental illness that is serious enough to require prompt 
intervention.  
    (c) For purposes of sections 245.461 to 245.486, a "person 
with serious and persistent mental illness" means a person who 
has a mental illness and meets at least one of the following 
criteria: 
    (1) The person has undergone two or more episodes of 
inpatient care for a mental illness within the preceding 24 
months.  
    (2) The person has experienced a continuous psychiatric 
hospitalization or residential treatment exceeding six months' 
duration within the preceding 12 months. 
    (3) The person has had a history of recurring inpatient or 
residential treatment episodes of a frequency described in 
clause (1) or (2), but not within the preceding 24 months.  
There must also be a written opinion of a mental health 
professional stating that the person is reasonably likely to 
have future episodes requiring inpatient or residential 
treatment unless an ongoing community support services program 
is provided.  
    Subd. 21.  [OUTPATIENT SERVICES.] "Outpatient services" 
means mental health services, excluding day treatment and 
community support services programs, provided by or under the 
clinical supervision of a mental health professional to persons 
with a mental illness who live outside a hospital or residential 
treatment setting.  Outpatient services include clinical 
activities such as individual, group, and family therapy; 
individual treatment planning; diagnostic assessments; 
medication management; and psychological testing.  
    Subd. 22.  [REGIONAL TREATMENT CENTER INPATIENT 
SERVICES.] "Regional treatment center inpatient services" means 
the medical, nursing, or psychosocial services provided in a 
regional treatment center operated by the state.  
    Subd. 23.  [RESIDENTIAL TREATMENT.] "Residential treatment" 
means a 24-hour-a-day residential program under the clinical 
supervision of a mental health professional, other than an acute 
care hospital or regional treatment center, which must be 
licensed as a residential treatment facility for mentally ill 
persons under Minnesota Rules, parts 9520.0500 to 9520.0690 for 
adults, 9545.0900 to 9545.1090 for children, or other rule 
adopted by the commissioner. 
    Subd. 24.  [SERVICE PROVIDER.] "Service provider" means 
either a county board or an individual or agency including a 
regional treatment center under contract with the county board 
that provides mental health services funded by sections 245.461 
to 245.486. 
    Subd. 25.  [CLINICAL SUPERVISION.] "Clinical supervision," 
when referring to the responsibilities of a mental health 
professional, means the oversight responsibility of a mental 
health professional for individual treatment plans, service 
delivery, and program activities.  Clinical supervision may be 
accomplished by full or part-time employment of or contracts 
with mental health professionals.  Clinical supervision must be 
documented by the mental health professional cosigning 
individual treatment plans and evidence of input into service 
delivery and program development.  
    Sec. 18.  [245.463] [PLANNING FOR A MENTAL HEALTH SYSTEM.] 
    Subdivision 1.  [PLANNING EFFORT.] Starting on the 
effective date of sections 245.461 to 245.486 and ending June 
30, 1988, the commissioner and the county agencies shall plan 
for the development of a unified, accountable, and comprehensive 
statewide mental health system.  The system must be planned and 
developed by stages until it is operating at full capacity.  
    Subd. 2.  [TECHNICAL ASSISTANCE.] The commissioner shall 
provide ongoing technical assistance to county boards to develop 
local mental health proposals as specified in section 245.479, 
to improve system capacity and quality.  The commissioner and 
county boards shall exchange information as needed about the 
numbers of persons with mental illness residing in the county 
and extent of existing treatment components locally available to 
serve the needs of those persons.  County boards shall cooperate 
with the commissioner in obtaining necessary planning 
information upon request.  
    Sec. 19.  [245.464] [COORDINATION OF MENTAL HEALTH SYSTEM.] 
    Subdivision 1.  [SUPERVISION.] The commissioner shall 
supervise the development and coordination of locally available 
mental health services by the county boards in a manner 
consistent with sections 245.461 to 245.486.  The commissioner 
shall coordinate locally available services with those services 
available from the regional treatment center serving the area.  
The commissioner shall review local mental health service 
proposals developed by county boards as specified in section 18 
and provide technical assistance to county boards in developing 
and maintaining locally available mental health services.  The 
commissioner shall monitor the county board's progress in 
developing its full system capacity and quality through ongoing 
review of the county board's mental health proposals, quarterly 
reports, and other information as required by sections 245.461 
to 245.486.  
    Subd. 2.  [PRIORITIES.] By January 1, 1990, the 
commissioner shall require that each of the treatment services 
and management activities described in sections 245.469 to 
245.477 are developed for persons with mental illness within 
available resources based on the following ranked priorities:  
    (1) the provision of locally available emergency services;  
    (2) the provision of locally available services to all 
persons with serious and persistent mental illness and all 
persons with acute mental illness;  
    (3) the provision of specialized services regionally 
available to meet the special needs of all persons with serious 
and persistent mental illness and all persons with acute mental 
illness;  
    (4) the provision of locally available services to persons 
with other mental illness; and 
    (5) the provision of education and preventive mental health 
services targeted at high-risk populations. 
    Sec. 20.  [245.465] [DUTIES OF COUNTY BOARD.] 
    The county board in each county shall use its share of 
mental health and community social service act funds allocated 
by the commissioner according to a biennial local mental health 
service proposal approved by the commissioner.  The county board 
must: 
    (1) develop and coordinate a system of affordable and 
locally available mental health services in accordance with 
sections 245.466 to 245.474; 
    (2) provide for case management services to persons with 
serious and persistent mental illness in accordance with section 
245.475; 
    (3) provide for screening of persons specified in section 
245.476 upon admission to a residential treatment facility or 
acute care hospital inpatient, or informal admission to a 
regional treatment center; and 
    (4) prudently administer grants and purchase-of-service 
contracts that the county board determines are necessary to 
fulfill its responsibilities under sections 245.461 to 245.486. 
    Sec. 21.  [245.466] [LOCAL SERVICE DELIVERY SYSTEM.] 
    Subdivision 1.  [DEVELOPMENT OF SERVICES.] The county board 
in each county is responsible for using all available resources 
to develop and coordinate a system of locally available and 
affordable mental health services.  The county board may provide 
some or all of the mental health services and activities 
specified in subdivision 2 directly through a county agency or 
under contracts with other individuals or agencies.  A county or 
counties may enter into an agreement with a regional treatment 
center to enable the county or counties to provide the treatment 
services in subdivision 2.  Services provided through an 
agreement between a county and a regional treatment center must 
meet the same requirements as services from other service 
providers.  County boards shall demonstrate their continuous 
progress toward full implementation of sections 245.461 to 
245.486 during the period July 1, 1987 to January 1, 1990.  
County boards must develop fully each of the treatment services 
and management activities prescribed by sections 245.461 to 
245.486 by January 1, 1990, according to the priorities 
established in section 245.464 and local mental health services 
proposal approved by the commissioner under section 245.478. 
    Subd. 2.  [MENTAL HEALTH SERVICES.] The mental health 
service system developed by each county board must include the 
following treatment services:  
    (1) education and prevention services in accordance with 
section 245.468;  
    (2) emergency services in accordance with section 245.469;  
    (3) outpatient services in accordance with section 245.470; 
    (4) community support program services in accordance with 
sections 245.471 and 245.475;  
    (5) residential treatment services in accordance with 
section 245.472;  
    (6) acute care hospital inpatient treatment services in 
accordance with section 245.473;  
    (7) regional treatment center inpatient services in 
accordance with section 245.474; and 
    (8) screening in accordance with section 245.476.  
    Subd. 3.  [LOCAL CONTRACTS.] Effective January 1, 1988, the 
county board shall review all proposed county agreements, 
grants, or other contracts related to mental health services for 
funding from any local, state, or federal governmental sources.  
Contracts with service providers must: 
    (1) name the commissioner as a third party beneficiary;  
    (2) identify monitoring and evaluation procedures not in 
violation of the Minnesota government data practices act, 
chapter 13, which are necessary to ensure effective delivery of 
quality services;  
    (3) include a provision that makes payments conditional on 
compliance by the contractor and all subcontractors with 
sections 245.461 to 245.486 and all other applicable laws, 
rules, and standards; and 
    (4) require financial controls and auditing procedures.  
    Subd. 4.  [JOINT COUNTY MENTAL HEALTH AGREEMENTS.] In order 
to provide efficiently the services required by sections 245.461 
to 245.486, counties are encouraged to join with one or more 
county boards to establish a multicounty local mental health 
authority pursuant to the joint powers act, section 471.59, the 
human service board act, sections 402.01 to 402.10, community 
mental health center provisions, section 245.62, or enter into 
multicounty mental health agreements.  Participating county 
boards shall establish acceptable ways of apportioning the cost 
of the services. 
    Subd. 5.  [LOCAL ADVISORY COUNCIL.] The county board, 
individually or in conjunction with other county boards, shall 
establish a local mental health advisory council or mental 
health subcommittee of an existing advisory council.  The 
council's members must reflect a broad range of community 
interests.  They must include at least one consumer, one family 
member of a person with mental illness, one mental health 
professional, and one community support services program 
representative.  The local mental health advisory council or 
mental health subcommittee of an existing advisory council shall 
meet at least quarterly to review, evaluate, and make 
recommendations regarding the local mental health system.  
Annually, the local advisory council or mental health 
subcommittee of an existing advisory council shall arrange for 
input from the regional treatment center review board regarding 
coordination of care between the regional treatment center and 
community-based services.  The county board shall consider the 
advice of its local mental health advisory council or mental 
health subcommittee of an existing advisory council in carrying 
out its authorities and responsibilities.  
    Subd. 6.  [OTHER LOCAL AUTHORITY.] The county board may 
establish procedures and policies that are not contrary to those 
of the commissioner or sections 245.461 to 245.486 regarding 
local mental health services and facilities.  The county board 
shall perform other acts necessary to carry out sections 245.461 
to 245.486.  
    Sec. 22.  [245.467] [QUALITY OF SERVICES.] 
    Subdivision 1.  [CRITERIA.] Mental health services required 
by this chapter must be:  
    (1) based, when feasible, on research findings;  
    (2) based on individual clinical needs, cultural and ethnic 
needs, and other special needs of individuals being served;  
    (3) provided in the most appropriate, least restrictive 
setting available to the county board;  
    (4) accessible to all age groups;  
    (5) delivered in a manner that provides accountability;  
    (6) provided by qualified individuals as required in this 
chapter; 
    (7) coordinated with mental health services offered by 
other providers; and 
    (8) provided under conditions which protect the rights and 
dignity of the individuals being served.  
    Subd. 2.  [DIAGNOSTIC ASSESSMENT.] All providers of 
residential, acute care hospital inpatient and regional 
treatment centers must complete a diagnostic assessment for each 
of their clients within five days of admission.  Providers of 
outpatient and day treatment services must complete a diagnostic 
assessment within ten days of admission.  In cases where a 
diagnostic assessment is available and has been completed within 
90 days preceding admission, only updating is necessary. 
     Subd. 3.  [INDIVIDUAL TREATMENT PLANS.] All providers of 
outpatient, residential treatment, acute care hospital inpatient 
treatment, and all regional treatment centers must develop an 
individual treatment plan for each of their clients.  The 
individual treatment plan must be based on a diagnostic 
assessment.  To the extent possible, the client shall be 
involved in all phases of developing and implementing the 
individual treatment plan.  The individual treatment plan must 
be developed within ten days of client intake and reviewed every 
90 days thereafter.  
    Sec. 23.  [245.468] [EDUCATION AND PREVENTION SERVICES.] 
    By July 1, 1988, county boards must provide or contract for 
education and prevention services to persons residing in the 
county.  Education and prevention services must be designed to: 
    (1) convey information regarding mental illness and 
treatment resources to the general public or special high-risk 
target groups;  
    (2) increase understanding and acceptance of problems 
associated with mental illness;  
    (3) improve people's skills in dealing with high-risk 
situations known to have an impact on people's mental health 
functioning; and 
    (4) prevent development or deepening of mental illness.  
    Sec. 24.  [245.469] [EMERGENCY SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF EMERGENCY SERVICES.] By 
July 1, 1988, county boards must provide or contract for enough 
emergency services within the county to meet the needs of 
persons in the county who are experiencing an emotional crisis 
or mental illness.  Clients may be required to pay a fee based 
on their ability to pay.  Emergency services must include 
assessment, intervention, and appropriate case disposition.  
Emergency services must:  
    (1) promote the safety and emotional stability of people 
with mental illness or emotional crises;  
    (2) minimize further deterioration of people with mental 
illness or emotional crises;  
    (3) help people with mental illness or emotional crises to 
obtain ongoing care and treatment; and 
    (4) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client needs.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that all service providers of emergency services provide 
immediate direct access to mental health professionals during 
regular business hours.  For evenings, weekends, and holidays, 
the service may be by direct toll free telephone access to a 
mental health professional, a mental health practitioner, or a 
designated person with training in human services who is under 
the supervision of a mental health professional.  Whenever 
emergency service during nonbusiness hours is provided by anyone 
other than a mental health professional, a mental health 
professional must be available for consultation within 30 
minutes.  
    Sec. 25.  [245.470] [OUTPATIENT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF OUTPATIENT SERVICES.] (a) 
By July 1, 1988, county boards must provide or contract for 
enough outpatient services within the county to meet the needs 
of persons with mental illness residing in the county.  Clients 
may be required to pay a fee based on their ability to pay.  
Outpatient services include:  
    (1) conducting diagnostic assessments;  
    (2) conducting psychological testing;  
    (3) developing or modifying individual treatment plans;  
    (4) making referrals and recommending placements as 
appropriate;  
    (5) treating a person's mental health needs through therapy;
    (6) prescribing and managing medication; and 
    (7) preventing placement in settings that are more 
intensive, costly, or restrictive than necessary and appropriate 
to meet client needs.  
     (b) County boards may request a waiver allowing outpatient 
services to be provided in a nearby trade area if it is 
determined that the client can best be served outside the county.
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that all service providers of outpatient services:  
    (1) meet the professional qualifications contained in 
sections 245.461 to 245.486;  
    (2) use a multidisciplinary mental health professional 
staff including at a minimum, arrangements for psychiatric 
consultation, licensed consulting psychologist consultation, and 
other necessary multidisciplinary mental health professionals;  
    (3) develop individual treatment plans;  
    (4) provide initial appointments within three weeks, except 
in emergencies where there must be immediate access as described 
in section 245.469; and 
    (5) establish fee schedules approved by the county board 
that are based on a client's ability to pay. 
    Sec. 26.  [245.471] [COMMUNITY SUPPORT SERVICES PROGRAM.] 
    Subdivision 1.  [AVAILABILITY OF COMMUNITY SUPPORT SERVICES 
PROGRAM.] By July 1, 1988, county boards must provide or 
contract for sufficient community support services within the 
county to meet the needs of persons with serious and persistent 
mental illness residing in the county.  Clients may be required 
to pay a fee.  The county board shall require that all service 
providers of community support services set fee schedules 
approved by the county board which are based on the client's 
ability to pay.  The community support services program must be 
designed to improve the ability of persons with serious and 
persistent mental illness to:  
    (1) work in a regular or supported work environment;  
    (2) handle basic activities of daily living;  
    (3) participate in leisure time activities;  
    (4) set goals and plans;  
    (5) obtain and maintain appropriate living arrangements; 
and 
    (6) reduce the use of more intensive, costly, or 
restrictive placements both in number of admissions and lengths 
of stay as determined by client need. 
    Subd. 2.  [CASE MANAGEMENT ACTIVITIES.] (a) By January 1, 
1989, case management activities must be developed as part of 
the community support program available to all persons with 
serious and persistent mental illness residing in the county.  
Staffing ratios must be sufficient to serve the needs of the 
clients.  The case manager must at a minimum qualify as a mental 
health practitioner.  
    (b) All providers of case management activities must 
develop an individual community support plan.  The individual 
community support plan must state for each of their clients:  
    (1) the goals of each service;  
    (2) the activities for accomplishing each goal;  
    (3) a schedule for each activity; and 
    (4) the frequency of face-to-face client contacts, as 
appropriate to client need and the implementation of the 
community support plan.  
    The individual community support plan must incorporate the 
individual treatment plan.  The individual treatment plan may 
not be a substitute for the development of an individual 
community support plan.  The individual community support plan 
must be developed within 30 days of client intake and reviewed 
every 90 days after it is developed.  The case manager is 
responsible for developing the individual community support plan 
based on a diagnostic assessment and for implementing and 
monitoring the delivery of services according to the individual 
community support plan.  To the extent possible, the person with 
serious and persistent mental illness, the person's family, 
advocates, service providers, and significant others must be 
involved in all phases of development and implementation of the 
individual community support plan.  
    Subd. 3.  [DAY TREATMENT ACTIVITIES PROVIDED.] (a) By July 
1, 1989, day treatment activities must be developed as a part of 
the community support program available to persons with serious 
and persistent mental illness residing in the county.  Day 
treatment services must be available to persons with serious and 
persistent mental illness residing in the county as part of the 
community support program of each county.  Clients may be 
required to pay a fee.  Day treatment services must be designed 
to:  
    (1) provide a structured environment for treatment;  
    (2) provide family and community support;  
    (3) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client need; and 
     (4) establish fee schedules approved by the county board 
that are based on a client's ability to pay. 
    (b) County boards may request a waiver from including day 
treatment services if they can document that:  
    (1) an alternative plan of care exists through the county's 
community support program for clients who would otherwise need 
day treatment services;  
    (2) that day treatment, if included, would be duplicative 
of other components of the community support program; and 
    (3) that county demographics and geography make the 
provision of day treatment services cost ineffective and 
unfeasible.  
    Subd. 4.  [BENEFITS ASSISTANCE.] By July 1, 1988, help in 
applying for federal benefits, including supplemental security 
income, medical assistance, and Medicare, must be offered as a 
part of the community support program available to individuals 
with serious and persistent mental illness for whom the county 
is financially responsible and who may qualify for these 
benefits.  The county board must offer help in applying for 
federal benefits to all persons with serious and persistent 
mental illness.  
    Sec. 27.  [245.472] [RESIDENTIAL TREATMENT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF RESIDENTIAL TREATMENT 
SERVICES.] By July 1, 1988, county boards must provide or 
contract for enough residential treatment services to meet the 
needs of all persons with mental illness residing in the 
county.  Residential treatment services include both intensive 
and structured residential treatment with length of stay based 
on client residential treatment need.  Services must be as close 
to the county as possible.  Residential treatment must be 
designed to:  
    (1) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client needs; 
    (2) help clients achieve the highest level of independent 
living;  
    (3) help clients gain the necessary skills to be referred 
to a community support services program or outpatient services; 
and 
    (4) stabilize crisis admissions.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] Providers of residential 
services must be licensed under applicable rules adopted by the 
commissioner and must be clinically supervised by a mental 
health professional. 
    Sec. 28.  [245.473] [ACUTE CARE HOSPITAL INPATIENT 
SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF ACUTE CARE INPATIENT 
SERVICES.] By July 1, 1988, county boards must make available 
through contract or direct provision enough acute care hospital 
inpatient treatment services as close to the county as possible 
to meet the needs of persons with mental illness residing in the 
county.  Acute care hospital inpatient treatment services must 
be designed to:  
    (1) stabilize the medical condition of people with acute or 
serious and persistent mental illness;  
    (2) improve functioning; and 
    (3) facilitate appropriate referrals, follow-up, and 
placements.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] Providers of acute care 
hospital inpatient services must meet applicable standards 
established by the commissioners of health and human services.  
    Sec. 29.  [245.474] [REGIONAL TREATMENT CENTER INPATIENT 
SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF REGIONAL TREATMENT CENTER 
INPATIENT SERVICES.] By July 1, 1987, the commissioner shall 
make sufficient regional treatment center inpatient services 
available to people with mental illness throughout the state.  
Regional treatment centers are responsible to:  
    (1) stabilize the medical condition of the person with 
mental illness;  
    (2) improve functioning;  
    (3) strengthen family and community support; and 
    (4) facilitate appropriate discharge, aftercare, and 
follow-up placements in the community.  
    Subd. 2.  [QUALITY OF SERVICE.] The commissioner shall 
biennially determine the needs of all mentally ill patients 
served by regional treatment centers by administering a 
client-based evaluation system.  The client-based evaluation 
system must include at least the following independent 
measurements:  behavioral development assessment; habilitation 
program assessment; medical needs assessment; maladaptive 
behavioral assessment; and vocational behavior assessment.  The 
commissioner shall propose staff ratios to the legislature for 
the mental health and support units in regional treatment 
centers as indicated by the results of the client-based 
evaluation system.  The proposed staffing ratios shall include 
professional, nursing, direct care, medical, clerical, and 
support staff based on the client-based evaluation system.  The 
commissioner shall recompute staffing ratios and recommendations 
on a biennial basis.  
    Sec. 30.  [245.475] [COUNTY RESPONSIBILITY TO PROVIDE 
COMMUNITY SUPPORT SERVICES.] 
    Subdivision 1.  [CLIENT ELIGIBILITY.] The county board 
shall provide case management and other appropriate community 
support services to all persons with serious and persistent 
mental illness.  Case management services provided to people 
with serious and persistent mental illness eligible for medical 
assistance must be billed to the medical assistance program 
under section 256B.02, subdivision 8. 
    Subd. 2.  [DESIGNATION OF CASE MANAGER.] The county board 
shall designate a case manager within five working days after 
receiving an application for community support services or 
immediately after authorizing payment for residential, acute 
care hospital inpatient, or regional treatment center services 
under section 245.476. 
    The county board shall send a written notice to the 
applicant and the applicant's representative, if any, that 
identifies the designated case manager. 
    Subd. 3.  [DIAGNOSTIC ASSESSMENT.] The case manager shall 
promptly arrange for a diagnostic assessment of the applicant 
when one is not available as described in section 245.467, 
subdivision 2, to determine the applicant's eligibility as a 
person with serious and persistent mental illness for community 
support services.  The county board shall notify in writing the 
applicant and the applicant's representative, if any, if the 
applicant is determined ineligible for community support 
services. 
    Subd. 4.  [COMMUNITY SUPPORT SERVICES.] Upon a 
determination of eligibility for community support services, the 
case manager shall develop an individual community support plan 
as specified in section 245.471, subdivision 2, paragraph (b), 
arrange and authorize payment for appropriate community support 
services, review the client's progress, and monitor the 
provision of services.  If services are to be provided in a host 
county that is not the county of financial responsibility, the 
case manager shall consult with the host county and obtain a 
letter demonstrating the concurrence of the host county 
regarding the provision of services. 
    Sec. 31.  [245.476] [SCREENING FOR INPATIENT AND 
RESIDENTIAL TREATMENT.] 
    Subdivision 1.  [SCREENING REQUIRED.] By January 1, 1989, 
the county board shall screen all persons before they may be 
admitted for treatment of mental illness to a residential 
treatment facility, an acute care hospital, or informally 
admitted to a regional treatment center if public funds are used 
to pay for the services.  Screening prior to admission must 
occur within ten days.  If a person is admitted for treatment of 
mental illness on an emergency basis to a residential facility 
or acute care hospital or held for emergency care by a regional 
treatment center under section 253B.05, subdivision 1, screening 
must occur within five days of the admission.  Persons must be 
screened within ten days before or within five days after 
admission to ensure that:  (1) an admission is necessary, (2) 
the length of stay is as short as possible consistent with 
individual client need, and (3) a case manager is immediately 
assigned to individuals with serious and persistent mental 
illness and an individual community support plan is developed.  
The screening process and placement decision must be documented. 
    Subd. 2.  [QUALIFICATIONS.] Screening for residential and 
inpatient services must be conducted by a mental health 
professional.  Mental health professionals providing screening 
for inpatient and residential services must not be financially 
affiliated with any acute care inpatient hospital, residential 
treatment facility, or regional treatment center.  The 
commissioner may waive this requirement in sparsley populated 
areas. 
    Subd. 3.  [INDIVIDUAL PLACEMENT AGREEMENT.] The county 
board shall enter into an individual placement agreement with a 
provider of residential services to a person eligible for 
services under this section.  The agreement must specify the 
payment rate and terms and conditions of county payment for the 
placement. 
    Sec. 32.  [245.477] [APPEALS.] 
    Any person who applies for mental health services under 
sections 245.461 to 245.486 must be advised of services 
available and the right to appeal at the time of application and 
each time the community service plan is reviewed.  Any person 
whose application for mental health services under sections 
245.468 to 245.476 is denied, not acted upon with reasonable 
promptness, or whose services are suspended, reduced, or 
terminated may contest that action before the state agency as 
specified in section 256.045.  The commissioner shall monitor 
the nature and frequency of administrative appeals under this 
section. 
    Sec. 33.  [245.478] [LOCAL MENTAL HEALTH PROPOSAL.] 
    Subdivision 1.  [TIME PERIOD.] The first local mental 
health proposal period is from July 1, 1988, to December 31, 
1989.  The county board shall submit its first proposal to the 
commissioner by January 1, 1988.  Subsequent proposals must be 
on the same two-year cycle as community social service plans 
required by section 256E.09.  The proposal must be made 
available upon request to all residents of the county at the 
same time it is submitted to the commissioner. 
    Subd. 2.  [PROPOSAL CONTENT.] The local mental health 
proposal must include: 
    (1) the local mental health advisory council's or mental 
health subcommittee of an existing advisory council's report on 
unmet needs and any other needs assessment used by the county 
board in preparing the local mental health proposal; 
    (2) a description of the local mental health advisory 
council's or the mental health subcommittee of an existing 
advisory council's involvement in preparing the local mental 
health proposal and methods used by the county board to obtain 
participation of citizens, mental health professionals, and 
providers in development of the local mental health proposal; 
    (3) information for the preceding year, including the 
actual number of clients who received each of the mental health 
services listed in sections 245.468 to 245.476, and actual 
expenditures and revenues for each mental health service; 
    (4) for the first proposal period only, information for the 
year during which the proposal is being prepared: 
    (i) a description of the current mental health system 
identifying each mental health service listed in sections 
245.468 to 245.476; 
    (ii) a description of each service provider, including a 
listing of the professional qualifications of the staff involved 
in service delivery, that is either the sole provider of one of 
the treatment services or management activities described in 
sections 8 to 16 or that provides over $10,000 of mental health 
services per year; 
    (iii) a description of how the mental health services in 
the county are unified and coordinated; 
    (iv) the estimated number of clients receiving each mental 
health service;  
    (v) estimated expenditures and revenues for each mental 
health service; and 
    (5) the following information describing how the county 
board intends to meet the requirements of sections 245.461 to 
245.486 during the proposal period: 
    (i) specific objectives and outcome goals for each mental 
health service listed in sections 245.468 to 245.476; 
    (ii) a description of each service provider, including 
county agencies, contractors, and subcontractors, that is 
expected to either be the sole provider of one of the treatment 
services or management activities described in sections 8 to 16 
or to provide over $10,000 of mental health services per year, 
including a listing of the professional qualifications of the 
staff involved in service delivery; 
    (iii) a description of how the mental health services in 
the county will be unified and coordinated; 
    (iv) the estimated number of clients who will receive each 
mental health service; and 
    (v) estimated expenditures and revenues for each mental 
health service.  
    Subd. 3.  [PROPOSAL FORMAT.] The local mental health 
proposal must be made in a format prescribed by the commissioner.
    Subd. 4.  [PROVIDER APPROVAL.] The commissioner's review of 
the local mental health proposal must include a review of the 
qualifications of each service provider required to be 
identified in the local mental health proposal under subdivision 
2.  The commissioner may reject a county board's proposal for a 
particular provider if: 
    (1) the provider does not meet the professional 
qualifications contained in sections 245.461 to 245.486; 
    (2) the provider does not possess adequate fiscal stability 
or controls to provide the proposed services as determined by 
the commissioner; or 
    (3) the provider is not in compliance with other applicable 
state laws or rules. 
    Subd. 5.  [SERVICE APPROVAL.] The commissioner's review of 
the local mental health proposal must include a review of the 
appropriateness of the amounts and types of mental health 
services in the local mental health proposal.  The commissioner 
may reject the county board's proposal if the commissioner 
determines that the amount and types of services proposed are 
not cost effective, do not meet client needs, or do not comply 
with sections 245.461 to 245.486. 
    Subd. 6.  [PROPOSAL APPROVAL.] The commissioner shall 
review each local mental health proposal within 90 days and work 
with the county board to make any necessary modifications to 
comply with sections 245.461 to 245.486.  After the commissioner 
has approved the proposal, the county board is eligible to 
receive an allocation of mental health and community social 
service act funds. 
    Subd. 7.  [PARTIAL OR CONDITIONAL APPROVAL.] If the local 
mental health proposal is in substantial, but not in full 
compliance with sections 245.461 to 245.486 and necessary 
modifications cannot be made before the proposal period begins, 
the commissioner may grant partial or conditional approval and 
withhold a proportional share of the county board's mental 
health and community social service act funds until full 
compliance is achieved. 
    Subd. 8.  [AWARD NOTICE.] Upon approval of the county board 
proposal, the commissioner shall send a notice of approval for 
funding.  The notice must specify any conditions of funding and 
is binding on the county board.  Failure of the county board to 
comply with the approved proposal and funding conditions may 
result in withholding or repayment of funds as specified in 
section 21. 
    Subd. 9.  [PLAN AMENDMENT.] If the county board finds it 
necessary to make significant changes in the approved local 
proposal, it must present the proposed changes to the 
commissioner for approval at least 60 days before the changes 
take effect.  "Significant changes" means: 
    (1) the county board proposes to provide a mental health 
service through a provider other than the provider listed for 
that service in the approved local proposal; 
    (2) the county board expects the total annual expenditures 
for any single mental health service to vary more than ten 
percent from the amount in the approved local proposal; 
    (3) the county board expects a combination of changes in 
expenditures per mental health service to exceed more than ten 
percent of the total mental health services expenditures; or 
    (4) the county board proposes a major change in the 
specific objectives and outcome goals listed in the approved 
local proposal. 
    Sec. 34.  [MAINTENANCE OF EFFORT.] Counties must continue 
to spend for mental health services an amount equal to the total 
expenditures shown in the county's approved 1987 Community 
Social Services Act plan under "State CSSA, Title XX and County 
Tax" for services to persons with mental illness plus the total 
for Rule 5 facilities under target populations other than mental 
illness in the approved 1987 CSSA plan. 
    Sec. 35.  [245.79] [COUNTY OF FINANCIAL RESPONSIBILITY.] For 
purposes of section 245.476, the county of financial 
responsibility is the same as that for community social services 
under section 256E.08, subdivision 7.  Disputes between counties 
regarding financial responsibility must be resolved by the 
commissioner in accordance with section 256D.18, subdivision 4. 
    Sec. 36.  [245.482] [REPORTING AND EVALUATION.] 
    Subdivision 1.  [FISCAL REPORTS.] The commissioner shall 
develop a unified format for quarterly fiscal reports that will 
include information that the commissioner determines necessary 
to carry out sections 245.461 to 245.486 and section 256E.08.  
The county board shall submit a completed fiscal report in the 
required format no later than 15 days after the end of each 
quarter. 
    Subd. 2.  [PROGRAM REPORTS.] The commissioner shall develop 
a unified format for a semiannual program report that will 
include information that the commissioner determines necessary 
to carry out sections 245.461 to 245.486 and section 256E.10.  
The county board shall submit a completed program report in the 
required format no later than 75 days after each six-month 
period. 
    Subd. 3.  [PROVIDER REPORTS.] The commissioner may develop 
a format and procedures for direct reporting from providers to 
the commissioner to include information that the commissioner 
determines necessary to carry out sections 245.461 to 245.486.  
In particular, the provider reports must include aggregate 
information by county of residence about mental health services 
paid for by funding sources other than counties. 
    Subd. 4.  [INACCURATE OR INCOMPLETE REPORTS.] The 
commissioner shall promptly notify a county or provider if a 
required report is clearly inaccurate or incomplete.  The 
commissioner may delay all or part of a mental health fund 
payment if an appropriately completed report is not received as 
required by this section. 
    Subd. 5.  [STATEWIDE EVALUATION.] The commissioner shall 
use the county and provider reports required by this section to 
complete the statewide report required in section 245.461. 
    Sec. 37.  [245.483] [TERMINATION OR RETURN OF AN 
ALLOCATION.] 
    Subdivision 1.  [FUNDS NOT PROPERLY USED.] If the 
commissioner determines that a county is not meeting the 
requirements of sections 245.461 to 245.486 or that funds are 
not being used according to the approved local proposal, all or 
part of the mental health and community social service act funds 
may be terminated upon 30 days notice to the county board.  The 
commissioner may require repayment of any funds not used 
according to the approved local proposal.  If the commissioner 
receives a written appeal from the county board within the 
30-day period, opportunity for a hearing under the Minnesota 
administrative procedure act, chapter 14, must be provided 
before the allocation is terminated or is required to be 
repaid.  The 30-day period begins when the county board receives 
the commissioner's notice by certified mail. 
    Subd. 2.  [USE OF RETURNED FUNDS.] The commissioner may 
reallocate the funds returned. 
    Subd. 3.  [DELAYED PAYMENTS.] If the commissioner finds 
that a county board or its contractors are not in compliance 
with the approved local proposal or sections 245.461 to 245.486, 
the commissioner may delay payment of all or part of the 
quarterly mental health and community social service act funds 
until the county board and its contractors meet the 
requirements.  The commissioner shall not delay a payment longer 
than three months without first issuing a notice under 
subdivision 2 that all or part of the allocation will be 
terminated or required to be repaid.  After this notice is 
issued, the commissioner may continue to delay the payment until 
completion of the hearing in subdivision 2. 
    Subd. 4.  [STATE ASSUMPTION OF RESPONSIBILITY.] If the 
commissioner determines that services required by sections 
245.461 to 245.486 will not be provided by the county board in 
the manner or to the extent required by sections 245.461 to 
245.486, the commissioner shall contract directly with providers 
to ensure that clients receive appropriate services.  In this 
case, the commissioner shall use the county's community social 
service act and mental health funds to the extent necessary to 
carry out the county's responsibilities under sections 245.461 
to 245.486.  The commissioner shall work with the county board 
to allow for a return of authority and responsibility to the 
county board as soon as compliance with sections 245.461 to 
245.486 can be assured. 
    Sec. 38.  [245.484] [RULES.] 
    The commissioner shall adopt permanent rules as necessary 
to carry out this act. 
    Sec. 39.  [245.485] [NO RIGHT OF ACTION.] 
    Sections 245.461 to 245.484 do not independently establish 
a right of action on behalf of recipients of services or service 
providers against a county board or the commissioner.  A claim 
for monetary damages must be brought under section 3.736 or 
3.751. 
    Sec. 40.  [245.486] [LIMITED APPROPRIATIONS.] 
    Nothing in sections 245.461 to 245.485 shall be construed 
to require the commissioner or county boards to fund services 
beyond the limits of legislative appropriations. 
    Sec. 41.  Minnesota Statutes 1986, section 245.713, 
subdivision 2, is amended to read:  
    Subd. 2.  [TOTAL FUNDS AVAILABLE; REDUCTIONS 
ALLOCATION.] The amount of funds available for allocation to 
counties for use by qualified community mental health centers 
shall be the total amount of Funds granted to the state by the 
federal government under United States Code, title 42, sections 
300X to 300X-9 each federal fiscal year for mental health 
services reduced by the sum of the following must be allocated 
as follows:  
    (a) Any amount set aside by the commissioner of human 
services for American Indian tribal organizations within the 
state, which funds shall not duplicate any direct federal 
funding of American Indian tribal organizations and which funds 
shall not exceed 12 be at least 25 percent of the total block 
grant federal allocation to the state for mental health 
services; provided that sufficient applications for funding are 
received by the commissioner which meet the specifications 
contained in requests for proposals and,.  Money from this 
source may be used for special committees to advise the 
commissioner on mental health programs and services for American 
Indians and other minorities or underserved groups; and,.  For 
purposes of this subdivision, "American Indian organization" 
means an American Indian tribe or band or an organization 
providing mental health services that is legally incorporated as 
a nonprofit organization registered with the secretary of state 
and governed by a board of directors having at least a majority 
of American Indian directors. 
    (b) Any amount calculated into the base of the block grant 
that is made available by the commissioner for qualified 
community mental health centers that were receiving grants for 
operations or other continuing grant obligations defined in 
United States Code, title 42, sections 300X to 300X-9 
immediately prior to its enactment.  
    (c) An amount not to exceed ten percent of the total 
federal block grant allocation for mental health services to be 
retained by the commissioner for administration.  
    (d) (c) Any amount permitted under federal law which the 
commissioner approves for demonstration or research projects for 
severely disturbed children and adolescents, the underserved, 
special populations or multiply disabled mentally ill persons. 
The groups to be served, the extent and nature of services to be 
provided, the amount and duration of any grant awards are to be 
based on criteria set forth in the Alcohol, Drug Abuse and 
Mental Health Block Grant Law, United States Code, title 42, 
sections 300X to 300X-9, and on state policies and procedures 
determined necessary by the commissioner.  Grant recipients must 
comply with applicable state and federal requirements and 
demonstrate fiscal and program management capabilities that will 
result in provision of quality, cost-effective services.  
    (e) (d) The amount required under federal law, for 
federally mandated expenditures. 
    (e) An amount not to exceed ten percent of the federal 
block grant allocation for mental health services to be retained 
by the commissioner for planning and evaluation. 
    Sec. 42.  [245.721] [MENTAL ILLNESS INFORMATION MANAGEMENT 
SYSTEM.] 
    By January 1, 1990, the commissioner of human services 
shall establish an information management system for collecting 
data about individuals who suffer from severe and persistent 
mental illness and who receive publicly funded services for 
mental illness. 
    Sec. 43.  [245.775] [EQUALIZATION AID.] 
    Subdivision 1.  [TERMS DEFINED.] As used in subdivisions 1 
to 6, the terms defined in this section have the meanings given 
them. 
    (a) [RECIPIENT RATE.] "Recipient rate" means the number of 
individual income maintenance program recipients per 10,000 
people in a county during the calendar year ending immediately 
before the fiscal year for which equalization aid is paid. 
    (b) [PER CAPITA INCOME.] "Per capita income" means the 
estimate of income per person in a county most recently 
published by the United States Bureau of the Census on October 1 
of the fiscal year for which equalization aid is paid. 
    (c)  [PER CAPITA TAXABLE VALUE.] "Per capita taxable value" 
means the adjusted assessed value of taxable property within a 
county reported by the department of revenue for the calendar 
year ending immediately before the fiscal year, divided by the 
population of the county.  The adjusted assessed value of 
taxable property in counties receiving taconite production tax 
revenue shall be increased by an amount equal to the taconite 
regular production tax revenue divided by the county's mill rate.
    (d)  [COUNTY INCOME MAINTENANCE EXPENDITURES.] "County 
income maintenance expenditures" means the income maintenance 
program expenditures, including administrative costs, of a 
county for income maintenance programs, minus federal, state, 
and other revenue received for income maintenance programs 
during the calendar year ending immediately before the fiscal 
year for which equalization aid is paid. 
    (e)  [PER CAPITA COUNTY INCOME MAINTENANCE 
EXPENDITURES.] "Per capita county income maintenance 
expenditures" means county income maintenance expenditures 
divided by the population of the county. 
    (f)  [INCOME MAINTENANCE PROGRAMS.] "Income maintenance 
programs" include, for equalization aid purposes, aid to 
families with dependent children, general assistance, general 
assistance medical care, work readiness, and medical assistance. 
    (g)  [POPULATION.] "Population" means the estimate of 
population in a county most recently issued by the state 
demographer's office on October 1 of the fiscal year for which 
equalization aid is paid. 
     Subd. 2.  [COUNTY ELIGIBILITY.] The commissioner of human 
services shall establish a county's eligibility for equalization 
aid using the following formula: 
     (a) A statewide standard deviation from the mean shall be 
calculated for each of the following factors:  recipient rate, 
per capita income, per capita taxable value, and per capita 
income maintenance expenditures. 
     (b) A standard score shall be calculated for each factor; 
the standard score is the factor minus the state mean for that 
factor divided by the statewide standard deviation from the mean 
for that factor. 
    (c) The standard score for per capita income and per capita 
taxable value shall be multiplied by negative one. 
    (d) The county's average score of the standard scores of 
the four factors shall be computed. 
Every county with an average score equal to one or higher shall 
be eligible for equalization aid. 
    Subd. 3.  [AMOUNT OF EQUALIZATION AID.] The commissioner 
shall establish a distress indicator for each county eligible 
for equalization aid by multiplying the county's average 
standard score by its population.  Equalization aid shall be 
allocated to all eligible counties in proportion to each 
eligible county's distress indicator. 
    Subd. 4.  [PHASE-IN.] Notwithstanding the provisions of 
subdivisions 2 and 3, the commissioner of human services shall 
make minimum equalization aid payments to counties during fiscal 
years 1989 and 1990 as follows: 
    (a) A base amount equal to the average amount of 
equalization aid received for fiscal years 1981 to 1987 shall be 
calculated for every county. 
    (b) If the appropriation for equalization aid during fiscal 
year 1989 or 1990 is less than the average of all equalization 
aid appropriations for fiscal years 1981 to 1987, the base 
amount for each county shall be reduced by that proportion for 
that fiscal year. 
    (c) In fiscal year 1989, each county shall receive 100 
percent of its base amount within the limit of available 
appropriations.  In fiscal year 1990, each county shall receive 
90 percent of its base amount within the limit of available 
appropriations. 
    Subd. 5.  [LIMIT.] No county shall receive equalization aid 
for any fiscal year amounting to more than 75 percent of county 
income maintenance expenditures. 
    Subd. 6.  [PAYMENT.] The commissioner of human services 
shall make preliminary payments for equalization aid for a 
fiscal year by December 15th of the fiscal year.  The 
commissioner shall adjust each county's equalization aid in 
accordance with the allocation formula established in 
subdivision 3 and make final payments by June 30 of the fiscal 
year. 
    Sec. 44.  Minnesota Statutes 1986, section 246.18, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivision subdivisions 2 and 4, every officer and employee of 
the several institutions under the jurisdiction of the 
commissioner of human services who has money belonging to an 
institution shall pay the money to the accounting officer 
thereof.  Every accounting officer, at the close of each month 
or oftener, shall forward to the commissioner of human services 
a statement of the amount and sources of all money received.  On 
receipt of such statement, the commissioner shall transmit the 
same to the commissioner of finance, who shall deliver to the 
state treasurer a draft upon the accounting officer for the same 
specifying the funds to which it is to be credited.  Upon 
payment of such draft, the amount shall be so credited.  
    Sec. 45.  Minnesota Statutes 1986, section 246.18, is 
amended by adding a subdivision to read: 
    Subd. 4.  [COLLECTIONS DEPOSITED IN MEDICAL ASSISTANCE 
ACCOUNT.] Except as provided in subdivision 2, all receipts from 
collection efforts for the regional treatment centers and state 
nursing homes must be deposited in the medical assistance 
account and are appropriated for that purpose.  The commissioner 
shall ensure that the departmental financial reporting systems 
and internal accounting procedures comply with federal standards 
for reimbursement for program and administrative expenditures 
and fulfill the purpose of this paragraph. 
    Sec. 46.  Minnesota Statutes 1986, section 246.50, 
subdivision 3, is amended to read:  
    Subd. 3.  [REGIONAL TREATMENT CENTER.] "State 
hospital" "Regional treatment center" means a state facility for 
treating persons with mental illness, mental retardation, or 
chemical dependency now existing or hereafter established.  
    Sec. 47.  Minnesota Statutes 1986, section 246.50, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [STATE NURSING HOME.] "State nursing home" means 
Ah-Gwah-Ching and Oak Terrace facilities. 
    Sec. 48.  Minnesota Statutes 1986, section 246.50, 
subdivision 4a, is amended to read:  
    Subd. 4a.  [RESIDENT.] "Resident" means any mentally 
retarded person receiving care or treatment at a state hospital 
regional treatment center, whether the person entered such 
hospital voluntarily or under commitment, and any person 
residing at or receiving care in a state nursing home.  
    Sec. 49.  Minnesota Statutes 1986, section 246.50, 
subdivision 5, is amended to read:  
    Subd. 5.  [COST OF CARE.] "Cost of care" means the 
commissioner's determination of the anticipated average per 
capita cost of all maintenance, treatment and expense, including 
depreciation of buildings and equipment, interest paid on bonds 
issued for capital improvements to state hospitals facilities, 
and indirect costs related to the operation other than that paid 
from the Minnesota state building fund, at all of the 
state hospitals facilities during the current year for which 
billing is being made.  The commissioner shall determine the 
anticipated average per capita cost.  The commissioner may 
establish one all inclusive rate or separate rates for each 
patient or resident disability group, and may establish separate 
charges for each hospital facility.  "Cost of care" for 
outpatient or day-care patients or residents shall be on a cost 
for service basis under a schedule the commissioner shall 
establish. 
    For purposes of this subdivision "resident patient" means a 
person who occupies a bed while housed in a hospital state 
facility for observation, care, diagnosis, or treatment. 
    For purposes of this subdivision "outpatient" or "day-care" 
patient or resident means a person who makes use of diagnostic, 
therapeutic, counseling, or other service in a state hospital 
facility or through state hospital personnel but does not occupy 
a hospital bed overnight. 
    For the purposes of collecting from the federal government 
for the care of those patients eligible for medical care under 
the Social Security Act "cost of care" shall be determined as 
set forth in the rules and regulations of the Department of 
Health and Human Services or its successor agency.  
    Sec. 50.  Minnesota Statutes 1986, section 246.50, 
subdivision 7, is amended to read:  
    Subd. 7.  [PATIENT'S OR RESIDENT'S COUNTY.] "Patient's or 
resident's county" means the county of the patient's or 
resident's legal settlement for poor relief purposes at the time 
of commitment or voluntary admission to a state hospital 
facility, or if the patient or resident has no such legal 
settlement in this state, it means the county of commitment, 
except that where a patient or resident with no such legal 
settlement is committed while serving a sentence at a penal 
institution, it means the county from which the patient or 
resident was sentenced.  
    Sec. 51.  Minnesota Statutes 1986, section 246.51, is 
amended to read:  
    246.51 [PAYMENT FOR CARE AND TREATMENT; DETERMINATION.] 
    Subdivision 1.  [PROCEDURES.] The commissioner shall make 
investigation as necessary to determine, and as circumstances 
require redetermine, what part of the cost of care, if any, the 
patient or resident is able to pay.  If the patient or resident 
is unable to pay the full cost of care the commissioner shall 
make a determination as to the ability of the relatives to pay.  
The patient or, resident, and relatives or both shall provide 
the commissioner documents and proofs necessary to determine 
their ability to pay.  Failure to provide the commissioner with 
sufficient information to determine ability to pay may make the 
patient, resident, or relatives, both, liable for the full cost 
of care until the time when sufficient information is provided.  
No parent shall be liable for the cost of care given a patient 
at a regional treatment center after the patient has reached the 
age of 18 years.  The commissioner's determination shall be 
conclusive in any action to enforce payment of the cost of care 
unless appealed from as provided in section 246.55.  All money 
received, except for chemical dependency receipts, shall be paid 
to the state treasurer and placed in the general fund of the 
state and a separate account kept of it.  Responsibility under 
this section shall not apply to those relatives having gross 
earnings of less than $11,000 per year.  
    Subd. 2.  [RULES.] The commissioner shall adopt, pursuant 
to the administrative procedure act, rules establishing uniform 
standards for determination of patient liability and relative, 
guardian or conservator responsibility for care provided at 
state hospitals facilities.  These rules shall have the force 
and effect of law.  
    Sec. 52.  Minnesota Statutes 1986, section 246.511, is 
amended to read:  
    246.511 [RELATIVE RESPONSIBILITY.] 
    In no case, shall a patient's or resident's relatives, 
pursuant to the commissioner's authority under section 246.51, 
be ordered to pay more than ten percent of the cost of care, 
unless they reside outside the state.  Parents of children in 
state hospitals facilities shall have their responsibility to 
pay determined according to section 252.27, subdivision 2.  The 
commissioner may accept voluntary payments in excess of ten 
percent.  The commissioner may require full payment of the full 
per capita cost of care in state hospitals facilities for 
patients or residents whose parent, parents, spouse, guardian, 
or conservator do not reside in Minnesota. 
    Sec. 53.  [246.531] [SUBROGATION OF INSURANCE SETTLEMENTS.] 
    Subdivision 1.  [SUBROGATION TO PATIENT'S RIGHTS.] The 
department of human services shall be subrogated, to the extent 
of the cost of care for services given, to the rights a patient 
or resident who receives treatment or care at a state facility 
may have under private health care coverage.  The right of 
subrogation does not attach to benefits paid or provided under 
private health care coverage before the carrier issuing the 
health care coverage receives written notice of the exercise of 
subrogation rights. 
    Subd. 2.  [CIVIL ACTION.] To recover under this section, 
the department of human services, with counsel of the attorney 
general, may institute or join in a civil action against the 
carrier issuing the private health care coverage. 
    Sec. 54.  Minnesota Statutes 1986, section 246.57, is 
amended by adding a subdivision to read: 
    Subd. 5. [LAUNDRY EQUIPMENT.] The commissioner of human 
services may provide for the replacement of laundry equipment by 
including a charge for depreciation as part of the service costs 
charged by a regional treatment center operating a laundry 
service.  Receipts for laundry services attributable to 
depreciation of laundry equipment must be deposited in a laundry 
equipment depreciation account within the general fund.  All 
money deposited in the account is appropriated to the 
commissioner of human services for the replacement of laundry 
equipment.  Any balance remaining in the account at the end of a 
fiscal year does not cancel and is available until expended. 
    Sec. 55.  Minnesota Statutes 1986, section 251.011, 
subdivision 6, is amended to read:  
    Subd. 6.  [RULES.] The commissioner of human services may 
promulgate rules for the operation of, and for the admission of 
residents in, and to establish charges for care in the state 
nursing homes at Ah-Gwah-Ching and Oak Terrace.  Charges for 
care in the state nursing homes shall be established under 
sections 246.50 to 246.55.  For the purposes of collecting from 
the federal government for the care of those residents in the 
state nursing homes eligible for medical care under the Social 
Security Act, "cost of care" shall be determined as set forth in 
the rules and regulations of the department of health and human 
services or its successor agency. 
    Sec. 56.  Minnesota Statutes 1986, section 252.275, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PROGRAM.] The commissioner of human 
services shall establish a statewide program to assist counties 
in reducing the utilization of intermediate care services in 
state hospitals and in community residential facilities, 
including nursing homes, for persons with mental retardation or 
related conditions.  The commissioner shall make grants to 
county boards to establish, operate, or contract for the 
provision of semi-independent living services licensed by the 
commissioner pursuant to sections 245.781 to 245.812 and 252.28. 
    Sec. 57.  Minnesota Statutes 1986, section 252.275, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION; CRITERIA.] To apply for a grant, a 
county board shall submit an application and budget for use of 
grant money in the form specified by the commissioner.  The 
commissioner shall make grants only to counties whose 
applications and budgets or portions thereof are approved by the 
commissioner.  
    Sec. 58.  Minnesota Statutes 1986, section 252.275, 
subdivision 4, is amended to read: 
    Subd. 4.  [FORMULA.] From the appropriations made available 
for this program, the commissioner shall allocate grants under 
this section to finance up to 95 percent, but not less than 80 
percent, of each county's cost approved budget for 
semi-independent living services for mentally retarded persons 
with mental retardation or related conditions.  The commissioner 
shall not approve budgeted costs for services for any person 
which exceed the state share of the average medical assistance 
costs for services provided by intermediate care facilities for 
a person with mental retardation or a related condition for the 
same fiscal year.  Nothing in this subdivision prevents a county 
from using other funds to pay for additional costs of 
semi-independent living services. 
    As of July 1, 1987, the commissioner shall allocate funds 
and reimburse county costs for persons approved for funding.  
The commissioner shall proportionally allocate funds to counties 
based on the approved budgeted costs for persons approved for 
funding.  The commissioner shall adjust county grants based on 
actual approved expenditures and shall reallocate funds to the 
extent necessary.  The commissioner may set aside up to two 
percent of the appropriations to fund county demonstration 
projects that improve the efficiency and effectiveness of 
semi-independent living services. 
    Sec. 59.  Minnesota Statutes 1986, section 252.275, 
subdivision 7, is amended to read: 
    Subd. 7.  [REPORTS.] The commissioner shall require 
collection of data and periodic reports necessary to demonstrate 
the effectiveness of semi-independent living services in helping 
persons with mental retardation or related conditions achieve 
self-sufficiency and independence.  The commissioner shall 
report to the legislature no later than January 15, 1984, on the 
effectiveness of the program, its effect on reducing the number 
of persons with mental retardation or related conditions in 
state hospitals and in intermediate care facilities, and the 
commissioner's recommendations regarding making this program an 
integral part of the social services programs administered by 
the counties. 
    Sec. 60.  Minnesota Statutes 1986, section 256.01, 
subdivision 4, is amended to read: 
    Subd. 4.  [DUTIES AS STATE AGENCY.] The state agency shall: 
    (1) supervise the administration of assistance to dependent 
children under Laws 1937, chapter 438, by the county agencies in 
an integrated program with other service for dependent children 
maintained under the direction of the state agency; 
    (2) may subpoena witnesses and administer oaths, make 
rules, and take such action as may be necessary, or desirable 
for carrying out the provisions of Laws 1937, chapter 438.  All 
rules made by the state agency shall be binding on the counties 
and shall be complied with by the respective county agencies; 
    (3) establish adequate standards for personnel employed by 
the counties and the state agency in the administration of Laws 
1937, chapter 438, and make the necessary rules to maintain such 
standards; 
    (4) prescribe the form of and print and supply to the 
county agencies blanks for applications, reports, affidavits, 
and such other forms as it may deem necessary and advisable; 
    (5) cooperate with the federal government and its public 
welfare agencies in any reasonable manner as may be necessary to 
qualify for federal aid for aid to dependent children and in 
conformity with the provisions of Laws 1937, chapter 438, 
including the making of such reports and such forms and 
containing such information as the Federal Social Security Board 
may from time to time require, and comply with such provisions 
as such board may from time to time find necessary to assure the 
correctness and verification of such reports; and 
    (6) may cooperate with other state agencies in establishing 
reciprocal agreements in instances where a child receiving aid 
to dependent children moves or contemplates moving into or out 
of the state, in order that such child may continue to receive 
supervised aid from the state moved from until the child shall 
have resided for one year in the state moved to; and 
    (7) on or before October 1 in each even-numbered year make 
a biennial report to the governor concerning the activities of 
the agency; 
    (8) prepare a plan and submit it to the full productivity 
and opportunity coordinator in each even-numbered year, 
according to standards established by the coordinator, for use 
in developing a biennial statewide employment and training plan 
design, develop, and administer an intake, referral, and 
inventory system that provides localized, single-point intake 
with a direct access to a statewide data base to match client 
needs with employment opportunities and public and private 
services.  The system must include information on all available 
public and private programs for employment and training services 
and income maintenance and support services as defined in 
section 268.0111.  The state agency shall cooperate with the 
department of jobs and training, counties and other local 
service units, service providers, and clients in the development 
and operation of the system.  The system is not subject to 
sections 16B.40 to 16B.45; and 
    (9) enter into agreements with other departments of the 
state as necessary to meet all requirements of the federal 
government. 
    Sec. 61.  Minnesota Statutes 1986, section 256.045, 
subdivision 3, is amended to read:  
    Subd. 3.  [STATE AGENCY HEARINGS.] In counties in which the 
commissioner of human services has not appointed a local welfare 
referee, (a) Any person applying for, receiving or having 
received any of the forms of public assistance described in 
subdivision 2 public assistance or a program of social services 
granted by a local agency under sections 256.72 to 256.879, 
chapters 256B, 256D, 256E, 261, or the federal Food Stamp Act 
whose application for assistance is denied, not acted upon with 
reasonable promptness, or whose assistance is suspended, 
reduced, terminated, or claimed to have been incorrectly paid, 
or any patient or relative aggrieved by an order of the 
commissioner under section 252.27, or a party aggrieved by a 
ruling of a prepaid health plan, may contest that action or 
decision before the state agency by submitting a written request 
for a hearing to the state agency within 30 days after receiving 
written notice of the action or decision, or within 90 days of 
such written notice if the applicant, recipient, patient or 
relative shows good cause why the request was not submitted 
within the 30 day time limit. 
    (b) All prepaid health plans under contract to the 
commissioner pursuant to chapter 256B or 256D must provide for a 
complaint system according to section 62D.11.  The prepaid 
health plan must notify the ombudsman within three working days 
of any formal complaint made under section 62D.11 by persons 
enrolled in a prepaid health plan under chapter 256B or 256D.  
At the time a complaint is made, the prepaid health plan must 
notify the recipient of the name and telephone number of the 
ombudsman.  Recipients may request the assistance of the 
ombudsman in the complaint system process.  The prepaid health 
plan shall issue a written resolution within 30 days of filing 
with the prepaid health plan.  The ombudsman may waive the 
requirement that the complaint system procedures be exhausted 
prior to an appeal if the ombudsman determines that the 
complaint must be resolved expeditiously in order to provide 
care in an urgent situation. 
    (c) A local agency or party aggrieved by a ruling of a 
local welfare referee may appeal the ruling to the state agency 
by filing a notice of appeal with the state agency within 30 
days after receiving the ruling of the local welfare referee.  A 
state welfare human services referee shall conduct a hearing on 
the matter and shall recommend an order to the commissioner of 
human services.  In appeals from rulings of local welfare 
referees, the hearing may be limited, upon stipulation of the 
parties, to a review of the record of the local welfare 
referee.  The commissioner need not grant a hearing if the sole 
issue raised by an appellant is the commissioner's authority to 
require mandatory enrollment in a prepaid health plan in a 
county where prepaid health plans are under contract with the 
commissioner. 
    (d) In a notice of appeal from a ruling of a prepaid health 
plan, a recipient may request an expedited hearing.  The 
ombudsman, after discussing with the recipient his or her 
condition and in consultation with a health practitioner who 
practices in the specialty area of the recipient's primary 
diagnosis, shall investigate and determine whether an expedited 
appeal is warranted.  In making the determination, the ombudsman 
shall evaluate whether the medical condition of the recipient, 
if not expeditiously diagnosed and treated, could cause physical 
or mental disability, substantial deterioration of physical or 
mental health, continuation of severe pain, or death.  The 
ombudsman may order a second medical opinion from the prepaid 
health plan or order a second medical opinion from a nonprepaid 
health plan provider at prepaid health plan expense.  If the 
ombudsman determines that an expedited appeal is warranted, the 
state welfare referee shall hear the appeal and render a 
decision within a time commensurate with the level of urgency 
involved, based on the individual circumstances of the case.  In 
urgent or emergency situations in which a prepaid health plan 
provider has prescribed treatment, and the prepaid health plan 
has denied authorization for that treatment, the referee may 
order the health plan to authorize treatment pending the outcome 
of the appeal. 
    Sec. 62.  Minnesota Statutes 1986, section 256.737, 
subdivision 1, is amended to read:  
    Subdivision 1.  [PILOT PROGRAMS.] In order that persons 
receiving aid under this chapter may be assisted in achieving 
self-sufficiency by enhancing their employability through 
meaningful work experience and training and the development of 
job search skills, the commissioner of human services may 
continue the pilot community work experience demonstration 
programs that were approved by January 1, 1984.  No new pilot 
community work experience demonstration programs may be 
established under this subdivision.  The commissioner shall:  
(a) assist counties in the design, implementation, and 
evaluation of these demonstration programs; (b) promulgate, in 
accordance with chapter 14, emergency rules necessary for the 
implementation of this section, except that the time 
restrictions of section 14.35 shall not apply and the rules may 
be in effect until the termination of the demonstration 
programs; and (c) seek any federal waivers necessary for proper 
implementation of this section in accordance with federal law.  
The commissioner shall prohibit use of participants in the 
programs to do work that was part or all of the duties or 
responsibilities of an authorized public employee position 
established as of January 1, 1985.  The exclusive bargaining 
representative shall be notified no less than 14 days in advance 
of any placement by the community work experience program.  
Concurrence with respect to job duties of persons placed under 
the community work experience program shall be obtained from the 
appropriate exclusive bargaining representative.  The 
appropriate oversight committee shall be given monthly lists of 
all job placements under a community work experience program. 
    Projects end As the commissioner phases in case management 
and other employment and training services under section 
256.736, and no later than June 30, 1987 1989, and a report 
the commissioner may phase out projects under this section. 
shall be made to the legislature by February 15, 1987, on the 
feasibility of permanent implementation and on the cost 
effectiveness of each of the demonstration programs.  
    Sec. 63.  [256.936] [CHILDREN'S HEALTH PLAN.] 
    Subdivision 1.  [DEFINITIONS.] For purposes of this section 
the following terms shall have the meanings given them: 
    (a) "Eligible persons" means pregnant women and children 
under six years old who have gross family incomes that are equal 
to or less than 185 percent of the federal poverty guidelines 
and who are not eligible for medical assistance under chapter 
256B or general assistance medical care under chapter 256D and 
who are not otherwise insured for the covered services. 
Eligibility for pregnant women shall continue for 60 days 
post-partum to allow for follow-up visits. 
    (b) "Covered services" means prenatal care services and 
children's health services. 
    (c) "Prenatal care services" means the outpatient services 
provided to pregnant women which are medically necessary for the 
pregnancy.  Physician or certified nurse-midwife services for 
delivery are included but inpatient hospital services are not 
included. 
    (d) "Children's health services" means the health services 
reimbursed under chapter 256B, with the exception of inpatient 
hospital services, nursing home or intermediate care facilities 
services, and mental health and chemical dependency services.  
    (e) "Eligible providers" means those health care providers 
who provide prenatal care services and children's health 
services to medical assistance clients under rules established 
by the commissioner for that program.  Reimbursement under this 
section shall be at the same rates and conditions established 
for medical assistance.  A provider of prenatal care services 
shall assess whether the pregnant woman is at risk of delivering 
a low birth weight baby or has a health condition which may 
increase the probability of a problem birth. 
    (f) "Commissioner" means the commissioner of human services.
    Subd. 2.  [FUND ADMINISTRATION.] The children's health plan 
is established to promote access to appropriate health care for 
pregnant women and to assure healthy babies and healthy 
children.  The commissioner shall establish an office for the 
state administration of this plan.  The plan shall be used to 
provide prenatal care and children's health services for 
eligible persons.  Payment for these services shall be made to 
all eligible providers.  The commissioner shall establish 
marketing efforts to encourage potentially eligible persons to 
receive information about the program.  A toll-free telephone 
number must be used to provide information about the plan and to 
promote access to the covered services.  The commissioner must 
make a quarterly assessment of the expected expenditures for the 
covered services and the appropriation.  Based on this 
assessment the commissioner may limit enrollments and target 
former aid to families with dependent children recipients.  If 
sufficient money is not available to cover all costs incurred in 
one quarter, the commissioner may seek an additional 
authorization for funding from the legislative advisory 
committee. 
    Subd. 3.  [APPLICATION PROCEDURES.] Applications and other 
information must be available in provider offices, local human 
services agencies, community health offices, and Women, Infants 
and Children (WIC) program sites.  These sites may accept 
applications, collect the enrollment fee, and forward the forms 
and fees to the commissioner.  Otherwise, applicants may apply 
directly to the commissioner.  The commissioner may use 
individuals' social security numbers as identifiers for purposes 
of administering the plan and conduct data matches to verify 
income.  Applicants shall submit evidence of family income, 
earned and unearned, that will be used to verify income 
eligibility.  Notwithstanding any other law to the contrary, 
benefits under this section are secondary to any plan of 
insurance or benefit program under which an eligible person may 
have coverage.  The commissioner shall identify eligible persons 
who may have coverage or benefits under other plans of insurance 
or who become eligible for medical assistance. 
    Subd. 4.  [ENROLLMENT FEE.] An enrollment fee of $35 is 
required from eligible persons for prenatal care services and an 
annual enrollment fee of $25 is required from eligible persons 
for children's health services.  The fees may be paid together 
at the time of enrollment or as two payment installments.  The 
commissioner shall make an annual redetermination of continued 
eligibility and identify people who may become eligible for 
medical assistance.  
    Sec. 64.  Minnesota Statutes 1986, section 256.969, 
subdivision 2, is amended to read:  
    Subd. 2.  [RATES FOR INPATIENT HOSPITALS.] Rates paid to 
inpatient hospitals shall be based on a rate per admission until 
the commissioner can begin to reimburse hospitals for services 
under the medical assistance and general assistance medical care 
programs based upon a diagnostic classification system 
appropriate to the service populations.  On July 1, 1984, the 
commissioner shall begin to utilize to the extent possible 
existing classification systems, including medicare.  The 
commissioner may incorporate the grouping of hospitals with 
similar characteristics for uniform rates upon the development 
and implementation of the diagnostic classification system.  
Prior to implementation of the diagnostic classification system, 
the commissioner shall report the proposed grouping of hospitals 
to the senate health and human services committee and the house 
health and welfare committee.  Effective August 1, 1985, The 
computation of the base year cost per admission and the 
computation of the relative values of the diagnostic categories 
must include identified outlier cases and their weighted costs 
up to the point that they become outlier cases, but must exclude 
costs and days beyond that point.  Claims paid for care provided 
on or after August 1, 1985, shall be adjusted to reflect a 
recomputation of rates, unless disapproved by the federal Health 
Care Financing Administration.  The state shall pay the state 
share of the adjustment for care provided on or after August 1, 
1985, up to and including June 30, 1987, whether or not the 
adjustment is approved by the federal Health Care Financing 
Administration.  The commissioner may reconstitute the 
diagnostic categories to reflect actual hospital practices, the 
specific character of specialty hospitals, or to reduce 
variances within the diagnostic categories after notice in the 
State Register and a 30-day comment period.  After May 1, 1986, 
acute care hospital billings under the medical assistance and 
general assistance medical care programs must not be submitted 
until the recipient is discharged.  However, the commissioner 
shall establish monthly interim payments with inpatient 
hospitals that have individual patient lengths of stay in excess 
of 30 days regardless of diagnosis-related group.  For purposes 
of establishing interim rates, the commissioner is exempt from 
the requirements of chapter 14.  Medical assistance and general 
assistance medical care reimbursement for treatment of mental 
illness shall be reimbursed based upon diagnosis 
classifications.  The commissioner may selectively contract with 
hospitals for services within the diagnostic classifications 
relating to mental illness and chemical dependency under 
competitive bidding when reasonable geographic access by 
recipients can be assured.  No physician shall be denied the 
privilege of treating a recipient required to utilize a hospital 
under contract with the commissioner, as long as the physician 
meets credentialing standards of the individual 
hospital.  Effective July 1, 1988, the commissioner shall limit 
the annual increase in pass-through cost payments for 
depreciation, rents and leases, and interest expense to the 
annual growth in the consumer price index for all urban 
consumers (CPI-U).  When computing budgeted pass-through cost 
payments, the commissioner shall use the annual increase in the 
CPI-U forecasted by Data Resources, Inc. consistent with the 
quarter of the hospital's fiscal year end.  In final settlement 
of pass-through cost payments, the commissioner shall use the 
CPI-U for the month in which the hospital's fiscal year ends 
compared to the same month one year earlier. 
    Sec. 65.  Minnesota Statutes 1986, section 256.969, 
subdivision 3, is amended to read:  
    Subd. 3.  [SPECIAL CONSIDERATIONS.] (a) In determining the 
rate the commissioner of human services will take into 
consideration whether the following circumstances exist:  
    (a) (1) minimal medical assistance and general assistance 
medical care utilization;  
    (b) (2) unusual length of stay experience; and 
    (c) (3) disproportionate numbers of low income patients 
served. 
    (b) To the extent of available appropriations, the 
commissioner shall provide supplemental grants directly to a 
hospital described in section 87, paragraph (a), that receives 
medical assistance payments through a county-managed health plan 
that serves only residents of the county.  The payments must be 
designed to compensate for actuarially demonstrated higher 
health care costs within the county, for the population served 
by the plan, that are not reflected in the plan's rates under 
section 87, subdivision 4. 
    Sec. 66.  [256.974] [OFFICE OF OMBUDSMAN FOR OLDER 
MINNESOTANS; LOCAL PROGRAMS.] 
    The ombudsman for older Minnesotans serves in the 
classified service under section 256.01, subdivision 7, in an 
office within the Minnesota board on aging that incorporates the 
long-term care ombudsman program required by the Older Americans 
Act, Public Law 98-456, United States Code, title 42, section 
3027(a)(12), and established within the Minnesota board on 
aging.  The Minnesota board on aging may make grants to local 
programs or area agencies on aging for the provision of 
ombudsman services to clients in county or multicounty areas.  
Individuals providing local ombudsman services must be qualified 
to perform the duties required by section 256.9742. 
    Sec. 67.  [256.9741] [DEFINITIONS.] 
    Subdivision 1.  "Long-term care facility" means a nursing 
home licensed under sections 144A.02 to 144A.10 or boarding care 
home licensed under sections 144.50 to 144.56.  
    Subd. 2.  "Acute care facility" means a facility licensed 
as a hospital under sections 144.50 to 144.56. 
    Subd. 3.  "Client" means an individual who requests, or on 
whose behalf a request is made for, ombudsman services and is (a)
a resident of a long-term care facility or (b) a patient in an 
acute care facility who is eligible for Medicare and requests 
assistance relating to admission or discharge from an acute care 
facility.  
    Subd. 4.  "Area agency on aging" means an agency 
responsible for coordinating a comprehensive aging services 
system within a planning and service area that has been 
designated an area agency on aging by the Minnesota board on 
aging.  
    Subd. 5.  "Office" means the office of ombudsman 
established within the Minnesota board on aging or local 
ombudsman programs.  
    Sec. 68.  [256.9742] [DUTIES AND POWERS OF THE OFFICE.] 
    Subdivision 1.  [DUTIES.] The ombudsman shall: 
    (1) gather information and evaluate any act, practice, 
policy, procedure, or administrative action of a long-term care 
facility, acute care facility, or government agency that may 
adversely affect the health, safety, welfare, or rights of any 
client; 
    (2) mediate or advocate on behalf of clients; 
    (3) monitor the development and implementation of federal, 
state, or local laws, regulations, and policies affecting the 
rights and benefits of clients; 
    (4) comment on and recommend to the legislature and public 
and private agencies regarding laws, regulations, and policies 
affecting clients; 
    (5) inform public agencies about the problems of clients; 
    (6) provide for training of volunteers and promote the 
development of citizen participation in the work of the office; 
    (7) conduct public forums to obtain information about and 
publicize issues affecting clients; 
    (8) provide public education regarding the health, safety, 
welfare, and rights of clients; and 
    (9) collect and analyze data relating to complaints and 
conditions in long-term care facilities. 
    Subd. 2.  [IMMUNITY FROM LIABILITY.] A person designated as 
an ombudsman under this section is immune from civil liability 
that otherwise might result from the person's actions or 
omissions if the person's actions are in good faith, are within 
the scope of the person's responsibilities as an ombudsman, and 
do not constitute willful or reckless misconduct.  
    Subd. 3.  [POSTING.] Every long-term care facility and 
acute care facility shall post in a conspicuous place the 
address and telephone number of the office.  The posting is 
subject to approval by the ombudsman.  
    Subd. 4.  [ACCESS TO LONG-TERM CARE AND ACUTE CARE 
FACILITIES AND CLIENTS.] The ombudsman may: 
    (1) enter any long-term care facility without notice at any 
time; 
    (2) enter any acute care facility without notice during 
normal business hours; 
    (3) communicate privately and without restriction with any 
client in accordance with section 144.651; and 
    (4) inspect records of a long-term care facility or acute 
care facility that pertain to the care of the client according 
to sections 144.335 and 144.651. 
    Subd. 5.  [ACCESS TO STATE RECORDS.] The ombudsman has 
access to data of a state agency necessary for the discharge of 
the ombudsman's duties, including records classified 
confidential or private under chapter 13, or any other law.  The 
data requested must be related to a specific case and is subject 
to section 13.03, subdivision 4.  If the data concerns an 
individual, the ombudsman shall first obtain the individual's 
consent. 
    Each state agency responsible for licensing, regulating, 
and enforcing state and federal laws and regulations concerning 
long-term care and acute care facilities shall forward to the 
ombudsman on a quarterly basis, copies of all correction orders, 
penalty assessments, and complaint investigation reports, for 
all long-term care facilities and acute care facilities. 
    Sec. 69.  [256.9743] [REPORTING.] 
    By February 1, 1989, the board on aging shall recommend 
methods for expanding and funding local ombudsman programs to 
serve clients receiving in-home services or care in acute care 
facilities.  
    Sec. 70.  [256.9744] [OFFICE DATA.] 
    Subdivision 1.  [CLASSIFICATION.] Except as provided in 
this section, data maintained by the office under sections 
256.974 to 256.9744 are private data on individuals or nonpublic 
data as defined in section 13.02, subdivision 9 or 12, and must 
be maintained in accordance with the requirements of Public Law 
98-459, United States Code, title 42, section 3027(a)(12)(D). 
    Subd. 2.  [RELEASE.] Data maintained by the office that 
does not relate to the identity of a complainant or a resident 
of a long-term facility may be released at the discretion of the 
ombudsman responsible for maintaining the data.  Data relating 
to the identity of a complainant or a resident of a long-term 
facility may be released only with the consent of the 
complainant or resident or by court order. 
    Sec. 71.  [256.9745] [IN-HOME SERVICES ADVISORY TASK 
FORCE.] 
    The Minnesota board on aging shall appoint an advisory task 
force to make recommendations for expanding ombudsman services 
to recipients of in-home services.  The task force shall include 
clients or representatives of clients, providers of in-home 
services, representatives of the Minnesota department of health, 
department of human services, counties, area agencies on aging, 
and members of the public at large.  Compensation, terms, and 
removal of members shall be as provided in section 15.059.  The 
Minnesota board on aging shall issue a report of the 
recommendations of the task force by February 1, 1989. 
    Sec. 72.  Minnesota Statutes 1986, section 256.98, is 
amended to read:  
    256.98 [WRONGFULLY OBTAINING ASSISTANCE; THEFT.] 
    Subdivision 1.  [WRONGFULLY OBTAINING ASSISTANCE.] A person 
who obtains, or attempts to obtain, or aids or abets any person 
to obtain by means of a willfully false statement or 
representation, by intentional concealment of a material fact, 
or by impersonation or other fraudulent device, assistance to 
which the person is not entitled or assistance greater than that 
to which the person is entitled, or who knowingly aids or abets 
in buying or in any way disposing of the property of a recipient 
or applicant of assistance without the consent of the local 
agency with intent to defeat the purposes of sections 256.12, 
256.72 to 256.872 256.871, and chapter 256B, or all of these 
sections is guilty of theft and shall be sentenced pursuant to 
section 609.52, subdivision 3, clauses (1), (2) and (5). 
    Subd. 2.  [JOINT TRIALS.] When two or more defendants are 
jointly charged with the same offense under subdivision 1, or 
are jointly charged with different offenses under subdivision 1 
arising from the same course of conduct, they shall be tried 
jointly; however, if it appears to the court that a defendant or 
the state is substantially prejudiced by the joinder for trial, 
the court may order an election or separate trial of counts, 
grant a severance of defendants, or provide other relief. 
    Subd. 3.  [AMOUNT OF ASSISTANCE INCORRECTLY PAID.] The 
amount of the assistance incorrectly paid shall be under this 
section is the difference between the amount of assistance 
actually received on the basis of misrepresented or concealed 
facts and the amount to which the recipient would have been 
entitled under state and federal law had the welfare agency been 
informed of all material facts specific concealment or 
misrepresentation not occurred.  Unless required by law, rule, 
or regulation, earned income disregards shall not be applied to 
earnings not reported by the recipient. 
    Subd. 4.  [RECOVERY OF ASSISTANCE.] The amount of any 
assistance determined to have been incorrectly paid shall be is 
recoverable from the recipient or the recipient's estate by the 
county or the state as a debt due the county or the state or 
both in proportion to the contribution of each.  Any amounts 
recovered shall be paid to the appropriate units of government 
in the same manner as provided in section 256.863. 
    Subd. 5.  [CRIMINAL OR CIVIL ACTION.] To prosecute or to 
recover assistance wrongfully obtained under this section, the 
attorney general or the appropriate county attorney, acting 
independently or at the direction of the attorney general, may 
institute a criminal or civil action or both.  
    Subd. 6.  [RULE SUPERSEDED.] Rule 17.03, subdivision 2, of 
the Minnesota Rules of Criminal Procedures that relates to joint 
trials is superseded by this section to the extent that it 
conflicts with this section. 
     Subd. 7.  [DIVISION OF RECOVERED AMOUNTS.] If the state is 
responsible for the recovery, the amounts recovered shall be 
paid to the appropriate units of government as provided under 
section 256.863.  If the recovery is directly attributable to a 
county, the county may retain one-half of the nonfederal share 
of any recovery from a recipient or the recipient's estate.  
This subdivision does not apply to recoveries from medical 
providers or to recoveries involving the department of human 
services, surveillance and utilization review division, state 
hospital collections unit, and the benefit recoveries division. 
    Sec. 73.  Minnesota Statutes 1986, section 256B.02, 
subdivision 8, is amended to read:  
    Subd. 8.  [MEDICAL ASSISTANCE; MEDICAL CARE.] "Medical 
assistance" or "medical care" means payment of part or all of 
the cost of the following care and services for eligible 
individuals whose income and resources are insufficient to meet 
all of this cost: 
    (1) Inpatient hospital services.  A second medical opinion 
is required prior to reimbursement for elective 
surgeries requiring a second opinion.  The commissioner shall 
publish in the State Register a proposed list of elective 
surgeries that require a second medical opinion prior to 
reimbursement, and the criteria and standards for deciding 
whether an elective surgery should require a second medical 
opinion.  The list is and the criteria and standards are not 
subject to the requirements of sections 14.01 to 14.70 14.69.  
The commissioner's decision whether a second medical opinion is 
required, made in accordance with rules governing that decision, 
is not subject to administrative appeal; 
    (2) Skilled nursing home services and services of 
intermediate care facilities, including training and 
habilitation services, as defined in section 256B.50, 
subdivision 1, for persons with mental retardation or related 
conditions who are residing in intermediate care facilities for 
persons with mental retardation or related conditions.  Medical 
assistance must not be used to pay the costs of nursing care 
provided to a patient in a swing bed as defined in section 
144.562; 
    (3) Physicians' services; 
    (4) Outpatient hospital or nonprofit community health 
clinic services or physician-directed clinic services.  The 
physician-directed clinic staff shall include at least two 
physicians, one of whom is on the premises whenever the clinic 
is open, and all services shall be provided under the direct 
supervision of the physician who is on the premises.  Hospital 
outpatient departments are subject to the same limitations and 
reimbursements as other enrolled vendors for all services, 
except initial triage, emergency services, and services not 
provided or immediately available in clinics, physicians' 
offices, or by other enrolled providers.  A second medical 
opinion is required before reimbursement for elective surgeries 
requiring a second opinion.  The commissioner shall publish in 
the State Register a list of elective surgeries that require a 
second medical opinion before reimbursement and the criteria and 
standards for deciding whether an elective surgery should 
require a second surgical opinion.  The list and the criteria 
and standards are not subject to the requirements of sections 
14.01 to 14.69.  The commissioner's decision whether a second 
medical opinion is required, made in accordance with rules 
governing that decision, is not subject to administrative 
appeal.  "Emergency services" means those medical services means 
those medical services required for the immediate diagnosis and 
treatment of medical conditions that, if not immediately 
diagnosed and treated, could lead to serious physical or mental 
disability or death or are necessary to alleviate severe pain.  
Neither the hospital, its employees, nor any physician or 
dentist, shall be liable in any action arising out of a 
determination not to render emergency services or care if 
reasonable care is exercised in determining the condition of the 
person, or in determining the appropriateness of the facilities, 
or the qualifications and availability of personnel to render 
these services consistent with this section; 
    (5) Community mental health center services, as defined in 
rules adopted by the commissioner pursuant to section 256B.04, 
subdivision 2, and provided by a community mental health center 
as defined in section 245.62, subdivision 2; 
    (6) Home health care services; 
    (7) Private duty nursing services; 
    (8) Physical therapy and related services; 
    (9) Dental services, excluding cast metal restorations; 
    (10) Laboratory and X-ray services; 
    (11) The following if prescribed by a licensed practitioner:
drugs, eyeglasses, dentures, and prosthetic devices.  The 
commissioner shall designate a formulary committee which shall 
advise the commissioner on the names of drugs for which payment 
shall be made, recommend a system for reimbursing providers on a 
set fee or charge basis rather than the present system, and 
develop methods encouraging use of generic drugs when they are 
less expensive and equally effective as trademark drugs.  The 
commissioner shall appoint the formulary committee members no 
later than 30 days following July 1, 1981.  The formulary 
committee shall consist of nine members, four of whom shall be 
physicians who are not employed by the department of human 
services, and a majority of whose practice is for persons paying 
privately or through health insurance, three of whom shall be 
pharmacists who are not employed by the department of human 
services, and a majority of whose practice is for persons paying 
privately or through health insurance, a consumer 
representative, and a nursing home representative.  Committee 
members shall serve two-year terms and shall serve without 
compensation.  The commissioner may establish a drug formulary.  
Its establishment and publication shall not be subject to the 
requirements of the administrative procedure act, but the 
formulary committee shall review and comment on the formulary 
contents.  Prior authorization may be required by the 
commissioner, with the consent of the drug formulary committee, 
before certain formulary drugs are eligible for payment.  The 
formulary shall not include:  drugs or products for which there 
is no federal funding; over-the-counter drugs, except for 
antacids, acetaminophen, family planning products, aspirin, 
insulin, prenatal vitamins, and vitamins for children under the 
age of seven; or any other over-the-counter drug identified by 
the commissioner, in consultation with the appropriate 
professional consultants under contract with or employed by the 
state agency, as necessary, appropriate and cost effective for 
the treatment of certain specified chronic diseases, conditions 
or disorders, and this determination shall not be subject to the 
requirements of chapter 14, the administrative procedure act; 
nutritional products, except for those products needed for 
treatment of phenylketonuria, hyperlysinemia, maple syrup urine 
disease, a combined allergy to human milk, cow milk, and soy 
formula, or any other childhood or adult diseases, conditions, 
or disorders identified by the commissioner as requiring a 
similarly necessary nutritional product; anorectics; and drugs 
for which medical value has not been established.  Separate 
payment shall not be made for nutritional products for residents 
of long-term care facilities; payment for dietary requirements 
is a component of the per diem rate paid to these facilities.  
Payment to drug vendors shall not be modified before the 
formulary is established except that the commissioner shall not 
permit payment for any drugs which may not by law be included in 
the formulary, and the commissioner's determination shall not be 
subject to chapter 14, the administrative procedure act.  The 
commissioner shall publish conditions for prohibiting payment 
for specific drugs after considering the formulary committee's 
recommendations.  
    The basis for determining the amount of payment shall be 
the lower of the actual acquisition costs of the drugs plus a 
fixed dispensing fee established by the commissioner, the 
maximum allowable cost set by the federal government or by the 
commissioner plus the fixed dispensing fee or the usual and 
customary price charged to the public.  Actual acquisition cost 
includes quantity and other special discounts except time and 
cash discounts.  The actual acquisition cost of a drug may be 
estimated by the commissioner.  The maximum allowable cost of a 
multi-source drug may be set by the commissioner and it shall be 
comparable to, but no higher than, the maximum amount paid by 
other third party payors in this state who have maximum 
allowable cost programs.  Establishment of this fee the amount 
of payment for drugs shall not be subject to the requirements of 
the administrative procedure act.  An additional dispensing fee 
of $.30 may be added to the dispensing fee paid to pharmacists 
for prescriptions dispensed to residents of long-term care 
facilities when a unit dose blister card system, approved by the 
department, is used.  Under this type of dispensing system, the 
pharmacist must dispense a 30-day supply of drug.  The National 
Drug Code (NDC) from the drug container used to fill the blister 
card must be identified on the claim to the department.  The 
unit dose blister card containing the drug must meet the 
packaging standards set forth in Minnesota Rules, part 
6800.2700, that govern the return of unused drugs to the 
pharmacy for reuse.  The pharmacy provider will be required to 
credit the department for the actual acquisition cost of all 
unused drugs that are eligible for reuse.  Whenever a 
generically equivalent product is available, payment shall be on 
the basis of the actual acquisition cost of the generic drug, 
unless the prescriber specifically indicates "dispense as 
written" on the prescription as required by section 151.21, 
subdivision 2.  
    Notwithstanding the above provisions, implementation of any 
change in the fixed dispensing fee which has not been subject to 
the administrative procedure act shall be limited to not more 
than 180 days, unless, during that time, the commissioner shall 
have initiated rulemaking through the administrative procedure 
act; 
    (12) Diagnostic, screening, and preventive services.  
"Preventive services" include services related to pregnancy, 
including services for those conditions which may complicate a 
pregnancy and which may be available to a pregnant woman 
determined to be at risk of poor pregnancy outcome.  Preventive 
services available to a woman at risk of poor pregnancy outcome 
may differ in an amount, duration, or scope from those available 
to other individuals eligible for medical assistance; 
    (13) Health care prepayment plan premiums and insurance 
premiums if paid directly to a vendor and supplementary medical 
insurance benefits under Title XVIII of the Social Security 
Act.  For purposes of obtaining Medicare part B, expenditures 
may be made even if federal funding is not available; 
    (14) Abortion services, but only if one of the following 
conditions is met: 
    (a) The abortion is a medical necessity.  "Medical 
necessity" means (1) the signed written statement of two 
physicians indicating the abortion is medically necessary to 
prevent the death of the mother, and (2) the patient has given 
her consent to the abortion in writing unless the patient is 
physically or legally incapable of providing informed consent to 
the procedure, in which case consent will be given as otherwise 
provided by law; 
    (b) The pregnancy is the result of criminal sexual conduct 
as defined in section 609.342, clauses (c), (d), (e)(i), and 
(f), and the incident is reported within 48 hours after the 
incident occurs to a valid law enforcement agency for 
investigation, unless the victim is physically unable to report 
the criminal sexual conduct, in which case the report shall be 
made within 48 hours after the victim becomes physically able to 
report the criminal sexual conduct; or 
    (c) The pregnancy is the result of incest, but only if the 
incident and relative are reported to a valid law enforcement 
agency for investigation prior to the abortion; 
    (15) Transportation costs incurred solely for obtaining 
emergency medical care or transportation costs incurred by 
nonambulatory persons in obtaining emergency or nonemergency 
medical care when paid directly to an ambulance company, common 
carrier, or other recognized providers of transportation 
services.  For the purpose of this clause, a person who is 
incapable of transport by taxicab or bus shall be considered to 
be nonambulatory; 
    (16) To the extent authorized by rule of the state agency, 
costs of bus or taxicab transportation incurred by any 
ambulatory eligible person for obtaining nonemergency medical 
care; 
    (17) Personal care attendant assistant services provided by 
an individual, not a relative, who is qualified to provide the 
services, where the services are prescribed by a physician in 
accordance with a plan of treatment and are supervised by a 
registered nurse.  Payments to personal care attendants 
assistants shall be adjusted annually to reflect changes in the 
cost of living or of providing services by the average annual 
adjustment granted to vendors such as nursing homes and home 
health agencies; and 
    (18) To the extent authorized by rule of the state agency, 
case management services to persons with serious and persistent 
mental illness; 
    (19) To the extent authorized by rule of the state agency, 
case management services to persons with brain injuries; and 
    (20) Any other medical or remedial care licensed and 
recognized under state law unless otherwise prohibited by law, 
except licensed chemical dependency treatment programs or 
primary treatment or extended care treatment units in hospitals 
that are covered under Laws 1986, chapter 394, sections 8 to 
20.  The commissioner shall include chemical dependency services 
in the state medical assistance plan for federal reporting 
purposes, but payment must be made under Laws 1986, chapter 394, 
sections 8 to 20.  The commissioner shall publish in the State 
Register a list of elective surgeries that require a second 
medical opinion before medical assistance reimbursement, and the 
criteria and standards for deciding whether an elective surgery 
should require a second medical opinion.  The list and criteria 
and standards are not subject to the requirements of sections 
14.01 to 14.69.  The commissioner shall publish in the State 
Register a list of health services that require prior 
authorization, as well as the criteria and standards used to 
select health services on the list.  The list and the criteria 
and standards used to formulate it are not subject to the 
requirements of sections 14.01 to 14.69.  The commissioner's 
decision whether prior authorization is required for a health 
service or a second medical opinion is required for an elective 
surgery is not subject to administrative appeal. 
    Sec. 74.  Minnesota Statutes 1986, section 256B.02, is 
amended by adding a subdivision to read: 
    Subd. 13.  [PREPAID HEALTH PLAN.] "Prepaid health plan" 
means a vendor who receives a capitation payment and assumes 
financial risk for the provision of medical assistance services 
under a contract with the commissioner. 
    Sec. 75.  Minnesota Statutes 1986, section 256B.03, 
subdivision 1, is amended to read:  
    Subdivision 1.  [GENERAL LIMIT.] All payments for medical 
assistance hereunder must be made to the vendor.  The maximum 
payment for new vendors enrolled in the medical assistance 
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. 
    Sec. 76.  [256B.031] [PREPAID HEALTH PLANS.] 
    Subdivision 1.  [CONTRACTS.] The commissioner may contract 
with health insurers licensed and operating under chapters 60A 
and 62A, nonprofit health service plans licensed and operating 
under chapter 62C, health maintenance organizations licensed and 
operating under chapter 62D, and vendors of medical care and 
organizations participating in prepaid programs under section 
256D.03, subdivision 4, clause (b), to provide medical services 
to medical assistance recipients.  Notwithstanding any other 
law, health insurers may enter into contracts with the 
commissioner under this section.  As a condition of the 
contract, health insurers and health service plan corporations 
must agree to comply with the requirements of section 62D.04, 
subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 
a complaint procedure that satisfies the requirements of section 
62D.11.  Nothing in this section permits health insurers not 
licensed as health maintenance organizations under chapter 62D 
to offer a prepaid health plan as defined in section 256B.02, 
subdivision 12, to persons other than those receiving medical 
assistance or general assistance medical care under this 
section.  Contracts between the commissioner and a prepaid 
health plan are exempt from the set-aside and preference 
provisions of section 16B.19, subdivisions 5 and 6.  Contracts 
must specify the services that are included in the per capita 
rate.  Contracts must specify those services that are to be 
eligible for risk sharing between the prepaid health plan and 
the state.  Contracts must also state that payment must be made 
within 60 days after the month of coverage. 
    Subd. 2.  [SERVICES.] State contracts for these services 
must assure recipients of at least the comprehensive health 
services defined in section 256B.02, subdivision 8, except 
services defined in section 256B.02, subdivision 8, paragraphs 
(2), (5), (16), and (17), and except services defined as 
chemical dependency services and mental health services. 
    Contracts under this section must include provision for 
assessing pregnant women to determine their risk of poor 
pregnancy outcome.  Contracts must also include provision for 
treatment of women found to be at risk of poor pregnancy outcome.
    Subd. 3.  [INFORMATION REQUIRED.] Prepaid health plans 
under contract must provide information to the commissioner 
according to the contract specifications.  The information must 
include, at a minimum, the number of people receiving services, 
the number of encounters, the types of services received, 
evidence of an operating quality assurance program, and 
information about the use of and actual recoveries of available 
third-party resources.  A plan under contract to provide 
services in a county must provide the county agency with the 
most current listing of the health care providers whose services 
are covered by the plan. 
    Subd. 4.  [PREPAID HEALTH PLAN RATES.] For payments made 
during calendar year 1988, the monthly maximum allowable rate 
established by the commissioner of human services for payment to 
prepaid health plans must not exceed 90 percent of the projected 
average monthly per capita fee-for-service medical assistance 
costs for state fiscal year 1988 for recipients of aid to 
families with dependent children.  The base year for projecting 
the average monthly per capita fee-for-service medical 
assistance costs is state fiscal year 1986.  A maximum allowable 
per capita rate must be established collectively for Anoka, 
Carver, Dakota, Hennepin, Ramsey, St. Louis, Scott, and 
Washington counties.  A separate maximum allowable per capita 
rate must be established collectively for all other counties.  
The maximum allowable per capita rate may be adjusted to reflect 
utilization differences among eligible classes of recipients.  
For payments made during calendar year 1989, the maximum 
allowable rate must be calculated in the same way as 1988 rates, 
except the base year is state fiscal year 1987.  For payments 
made during calendar year 1990 and later years, the commissioner 
shall contract with an independent actuary to establish 
prepayment rates.  Rates established for prepaid health plans 
must be based on the services that the prepaid health plan 
provides under contract with the commissioner.  
    Subd. 5.  [FREE CHOICE LIMITED.] (a) The commissioner may 
require recipients of aid to families with dependent children, 
except those recipients who are refugees and whose health 
services are reimbursed 100 percent by the federal government 
for the first 31 months after entry into the United States, to 
enroll in a prepaid health plan and receive services from or 
through the prepaid health plan.  Enrollment in a prepaid health 
plan is mandatory only when recipients have a choice of at least 
two prepaid health plans.  
    (b) Recipients who become eligible on or after December 1, 
1987, must choose a health plan within 30 days of the date 
eligibility is determined.  At the time of application, the 
local agency shall ask the recipient whether the recipient has a 
primary health care provider.  If the recipient has not chosen a 
health plan within 30 days but has provided the local agency 
with the name of a a primary health care provider, the local 
agency shall determine whether the provider participates in a 
prepaid health plan available to the recipient and, if so, the 
local agency shall select that plan on the recipient's behalf.  
If the recipient has not provided the name of a primary health 
care provider who participates in an available prepaid health 
plan, commissioner shall randomly assign the recipient to a 
health plan.  
    (c) Recipients who are eligible on November 30, 1987, must 
choose a prepaid health plan by January 15, 1988.  If possible, 
the local agency shall ask whether the recipient has a primary 
health care provider and the procedures under paragraph (b) 
shall apply.  If a recipient does not choose a prepaid health 
plan by this date, the commissioner shall randomly assign the 
recipient to a health plan.  
    (d) Each recipient must be enrolled in the health plan for 
a minimum of six months following the effective date of 
enrollment, except that the recipient may change health plans 
once within the first 60 days after initial enrollment.  The 
commissioner shall request a waiver from the federal Health Care 
Financing Administration to extend the minimum period to 12 
months. 
    (e) Women who are receiving medical assistance due to 
pregnancy and later become eligible for aid to families with 
dependent children are not required to choose a prepaid health 
plan until 60 days postpartum.  An infant born as a result of 
that pregnancy must be enrolled in a prepaid health plan at the 
same time as the mother. 
    (f) If third-party coverage is available to a recipient 
through enrollment in a prepaid health plan through employment, 
through coverage by the former spouse, or if a duty of support 
has been imposed by law, order, decree, or judgment of a court 
under section 518.551, the obligee or recipient shall 
participate in the prepaid health plan in which the obligee has 
enrolled provided that the commissioner has contracted with the 
plan. 
    Subd. 6.  [OMBUDSMAN.] The commissioner shall designate an 
ombudsman to advocate for persons required to enroll in prepaid 
health plans under this section.  The ombudsman shall advocate 
for recipients enrolled in prepaid health plans through 
complaint and appeal procedures and ensure that necessary 
medical services are provided either by the prepaid health plan 
directly or by referral to appropriate social services.  At the 
time of enrollment in a prepaid health plan, the local agency 
shall inform recipients about the ombudsman program and their 
right to a resolution of a complaint by the prepaid health plan 
if they experience a problem with the plan or its providers. 
    Subd. 7.  [SERVICES PENDING APPEAL.] If the recipient 
appeals in writing to the state agency on or before the tenth 
day after the decision of the prepaid health plan to reduce, 
suspend or terminate services which the recipient had been 
receiving, and the treating physician or another plan physician 
orders the services to be continued at the previous level, the 
prepaid health plan must continue to provide services at a level 
equal to the level ordered by the plan's physician until the 
state agency renders its decision. 
    Subd. 8.  [CASE MANAGEMENT.] The commissioner shall prepare 
a report to the legislature by January 1988, that describes the 
issues involved in successfully implementing a case management 
system in counties where the commissioner has fewer than two 
prepaid health plans under contract to provide health care 
services to eligible classes of recipients.  In the report the 
commissioner shall address which health care providers could be 
case managers, the responsibilities of the case manager, the 
assumption of risk by the case manager, the services to be 
provided either directly or by referral, reimbursement concerns, 
federal waivers that may be required, and other issues that may 
affect the quality and cost of care under such a system. 
    Subd. 9.  [PREPAYMENT COORDINATOR.] The local agency shall 
designate a prepayment coordinator to assist the state agency in 
implementing this section, section 256B.69, and section 256D.03, 
subdivision 4.  Assistance must include educating recipients 
about available health care options, enrolling recipients under 
subdivision 5, providing necessary eligibility and enrollment 
information to health plans and the state agency, and 
coordinating complaints and appeals with the ombudsman 
established in subdivision 6. 
    Subd. 10.  [IMPACT ON PUBLIC OR TEACHING HOSPITALS AND 
COMMUNITY CLINICS.] (a) 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, provided 
the terms of participation in the program are competitive with 
the terms of other participants. 
    (b) Prepaid health plans serving counties with a nonprofit 
community clinic or community health services agency must 
contract with the clinic or agency to provide services to 
clients who choose to receive services from the clinic or 
agency, if the clinic or agency agrees to payment rates that are 
competitive with rates paid to other health plan providers for 
the same or similar services. 
    Sec. 77.  Minnesota Statutes 1986, section 256B.04, 
subdivision 14, is amended to read:  
    Subd. 14.  [COMPETITIVE BIDDING.] The commissioner shall 
utilize volume purchase through competitive bidding under the 
provisions of chapter 16, to provide the following items:  
    (1) eyeglasses; 
    (2) oxygen.  The commissioner shall provide for oxygen 
needed in an emergency situation on a short-term basis, until 
the vendor can obtain the necessary supply from the contract 
dealer; 
    (3) hearing aids and supplies; and 
    (4) durable medical equipment, including but not limited to:
    (a) hospital beds; 
    (b) commodes; 
    (c) glide-about chairs; 
    (d) patient lift apparatus; 
    (e) wheelchairs and accessories; 
    (f) oxygen administration equipment; 
    (g) respiratory therapy equipment; 
    (h) electronic diagnostic, therapeutic and life support 
systems; and 
    (5) wheelchair transportation services; and 
    (6) drugs. 
    Sec. 78.  Minnesota Statutes 1986, section 256B.04, 
subdivision 15, is amended to read:  
    Subd. 15.  [UTILIZATION REVIEW.] (1) Establish on a 
statewide basis a new program to safeguard against unnecessary 
or inappropriate use of medical assistance services, against 
excess payments, against unnecessary or inappropriate hospital 
admissions or lengths of stay, and against underutilization of 
services in prepaid health plans, long-term care facilities or 
any health care delivery system subject to fixed rate 
reimbursement.  In implementing the program, the state agency 
shall utilize both prepayment and postpayment review systems to 
determine if utilization is reasonable and necessary.  The 
determination of whether services are reasonable and necessary 
shall be made by the commissioner in consultation with a 
professional services advisory group appointed by the 
commissioner.  An aggrieved party may appeal the commissioner's 
determination pursuant to the contested case procedures of 
chapter 14.  
    (2) Contracts entered into for purposes of meeting the 
requirements of this subdivision shall not be subject to the 
set-aside provisions of chapter 16B. 
    (3) A recipient aggrieved by the commissioner's termination 
of services or denial of future services may appeal pursuant to 
section 256.045.  A vendor aggrieved by the commissioner's 
determination that services provided were not reasonable or 
necessary may appeal pursuant to the contested case procedures 
of chapter 14.  To appeal, the vendor shall notify the 
commissioner in writing within 30 days of receiving the 
commissioner's notice.  The appeal request shall specify each 
disputed item, the reason for the dispute, an estimate of the 
dollar amount involved for each disputed item, the computation 
that the vendor believes is correct, the authority in statute or 
rule upon which the vendor relies for each disputed item, the 
name and address of the person or firm with whom contacts may be 
made regarding the appeal, and other information required by the 
commissioner. 
    Sec. 79.  Minnesota Statutes 1986, section 256B.06, 
subdivision 1, is amended to read:  
    Subdivision 1.  Medical assistance may be paid for any 
person: 
    (1) who is a child eligible for or receiving adoption 
assistance payments under Title IV-E of the Social Security Act, 
United States Code, title 42, sections 670 to 676 under 
Minnesota Statutes, section 259.40 or 259.431; or 
    (2) who is a child eligible for or receiving foster care 
maintenance payments under Title IV-E of the Social Security 
Act, United States Code, title 42, sections 670 to 676; or 
    (3) who is eligible for or receiving public assistance 
under the aid to families with dependent children program, the 
Minnesota supplemental aid program, except for those persons 
eligible for Minnesota supplemental aid because the local agency 
waived excess assets under section 256D.37, subdivision 2; or 
    (4) who is a pregnant woman, as certified in writing by a 
physician or nurse midwife, and who (a) meets the other 
eligibility criteria of this section, and (b) would be 
categorically eligible for assistance under the aid to families 
with dependent children program if the child had been born and 
was living with the woman.  For purposes of this section, a 
woman is considered pregnant for 60 days postpartum; or 
    (5) who is a pregnant woman, as certified in writing by a 
physician or nurse midwife, who meets the other eligibility 
criteria of this section and whose unborn child would be 
eligible as a needy child under clause (9) (8) if born and 
living with the woman.  For purposes of this section, a woman is 
considered pregnant for 60 days postpartum; or 
    (6) who meets the categorical eligibility requirements of 
the supplemental security income program and the other 
eligibility requirements of this section; or 
    (7) who, except for the amount of income or resources 
assets, would qualify for supplemental security income for the 
aged, blind and disabled, or aid to families with dependent 
children, and who meets the other eligibility requirements of 
this section.  However, in the case of families and children who 
meet the categorical eligibility requirements for aid to 
families with dependent children, the methodology for 
calculating assets shall be as specified in section 256.73, 
subdivision 2, and the methodology for calculating deductions 
from earnings for child care and work expenses shall be as 
specified in section 256.74, subdivision 1; or 
    (8) who is under 21 years of age and in need of medical 
care that neither the person nor the person's relatives 
responsible under sections 256B.01 to 256B.26 are financially 
able to provide; or 
    (9) who is an infant less than one year of age born on or 
after October 1, 1984, whose mother was eligible at the time of 
birth and who remains in the mother's household.  Eligibility 
under this clause is concurrent with the mother's and does not 
depend on the father's income except as the income affects the 
mother's eligibility; or 
    (10) who is residing in a hospital for treatment of mental 
disease or tuberculosis and is 65 years of age or older and 
without means sufficient to pay the per capita hospital charge; 
and 
    (11) who resides in Minnesota, or, if absent from the 
state, is deemed to be a resident of Minnesota in accordance 
with the rules of the state agency; and 
    (12) who alone, or together with the person's spouse, does 
not own real property other than the homestead.  For the 
purposes of this section, "homestead" means the house owned and 
occupied by the applicant or recipient as a primary place of 
residence, together with the contiguous land upon which it is 
situated.  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 the spouse, minor child, or disabled child 
of any age; or the applicant/recipient is expected to return to 
the home as a principal residence within six calendar months of 
entry to the long-term care facility.  Certification of expected 
return to the homestead shall be documented in writing by the 
attending physician.  The homestead is also excluded for the 
first six calendar months of the person's stay in the long-term 
care facility.  The homestead must be reduced to an amount 
within limits or excluded on another basis if the person remains 
in the long-term care facility for a period longer than six 
months.  Real estate not used as a home may not be retained 
unless it produces net income applicable to the family's needs 
or the family is making a continuing effort to sell it at a fair 
and reasonable price or unless the commissioner determines that 
sale of the real estate would cause undue hardship or unless the 
equity in the real estate when combined with the equity in the 
homestead totals $15,000 or less the property is not salable, 
the equity is $6,000 or less and the income produced by the 
property is at least six percent of the equity, or the excess 
real property is exempted for a period of nine months if there 
is a good faith effort to sell the property and a legally 
binding agreement is signed to repay the amount of assistance 
issued during that nine months; and 
    (13) who individually does not own more than $3,000 in cash 
or liquid assets, or if a member of a household with two family 
members (husband and wife, or parent and child), does not own 
more than $6,000 in cash or liquid assets, plus $200 for each 
additional legal dependent.  In addition to these maximum 
amounts, an eligible individual or family may accrue interest on 
these amounts, but they must be reduced to the maximum at the 
time of an eligibility redetermination.  For residents of 
long-term care facilities, the accumulation of the clothing and 
personal needs allowance pursuant to section 256B.35 must also 
be reduced to the maximum at the time of the eligibility 
redetermination.  Cash and liquid assets may include a prepaid 
funeral contract and insurance policies with cash surrender 
value.  The value of the following shall not be included: 
    (a) the homestead, and (b) household goods and furniture in 
use in the home, (c) wearing apparel, (d) personal property used 
as a regular abode by the applicant or recipient, (e) a lot in a 
burial plot for each member of the household, (f) personal 
jewelry acquired more than 24 months immediately prior to the 
period of medical assistance eligibility and personal jewelry 
acquired within 24 months immediately prior to the period of 
medical assistance eligibility and not purchased with assets of 
the applicant or recipient, (g) capital and operating assets of 
a trade or business that the local agency determines are 
necessary to the person's ability to earn an income, (h) for a 
period of six months, insurance settlements to repair or replace 
damaged, destroyed, or stolen property, (i) one motor vehicle 
that is licensed pursuant to chapter 168 and defined as:  (1) 
passenger automobile, (2) station wagon, (3) motorcycle, (4)  
motorized bicycle or (5) truck of the weight found in categories 
A to E, of section 168.013, subdivision 1e, and that is used 
primarily for the person's benefit, and (j) other items which 
may be required by federal law or statute.  To be excluded, the 
vehicle must have a market value of less than $4,500; be 
necessary to obtain medically necessary health services; be 
necessary for employment; be modified for operation by or 
transportation of a handicapped person; or be necessary to 
perform essential daily tasks because of climate, terrain, 
distance, or similar factors.  The equity value of other motor 
vehicles is counted against the cash or liquid asset limit; and 
    (14) who has or anticipates receiving an annual a 
semiannual income not in excess of 115 percent of the income 
standards by family size used in the aid to families with 
dependent children program, or who has income in excess of these 
maxima and in the month of application, or during the three 
months prior to the month of application, incurs expenses for 
medical care that total more than one-half of the annual excess 
income in accordance with the rules of the state agency except 
that families and children may have an income up to 133-1/3 
percent of the AFDC income standard.  Notwithstanding any laws 
or rules to the contrary, in computing income to determine 
eligibility of persons who are not residents of long-term care 
facilities, the commissioner shall disregard increases in income 
as required by Public Law Number 94-566, section 503.  In excess 
income cases, eligibility shall be limited to a period of six 
months beginning with the first of the month in which these 
medical obligations are first incurred, Public Law Number 99-272 
and Public Law Number 99-509; and 
    (15) who has continuing monthly expenses for medical care 
that are more than the amount of the person's excess income, 
computed on a monthly basis, in which case eligibility may be 
established before the total income obligation referred to in 
the preceding paragraph is incurred, and medical assistance 
payments may be made to cover the monthly unmet medical need.  
In licensed nursing home and state hospital cases, income over 
and above that required for justified needs, determined pursuant 
to a schedule of contributions established by the commissioner 
of human services, is to be applied to the cost of institutional 
care or who is a pregnant woman who meets the requirements of 
clauses (1) to (8) except that her anticipated income is in 
excess of the income standards by family size used in the aid to 
families with dependent children program, but is equal to or 
less than 133-1/3 percent of that income standard.  Eligibility 
for a pregnant woman with respect to this clause shall be 
without regard to the asset standards specified in clauses (12) 
and (13).  For persons who reside in licensed nursing homes, 
regional treatment centers, or medical institutions, the income 
over and above that required in section 256B.35 for personal 
needs allowance is to be applied to the cost of institutional 
care.  In addition, income may be retained by an 
institutionalized person (a) to support dependents in the amount 
that, together with the income of the spouse and child under age 
18, would provide net income equal to the medical assistance 
standard for the family size of the dependents excluding the 
person residing in the facility; or (b) for a period of up to 
three calendar months, in an amount equal to the medical 
assistance standard for a family size of one if the person was 
not living together with a spouse or child under age 21 at the 
time the person entered a long-term care facility, if the person 
has expenses of maintaining a residence in the community, and if 
a physician certifies that the person is expected to reside in 
the long-term care facility on a short-term basis.  For purposes 
of this section, persons are determined to be residing in 
licensed nursing homes, regional treatment centers, or medical 
institutions if the persons are expected to remain for a period 
expected to last longer than three months.  The commissioner of 
human services may establish a schedule of contributions to be 
made by the spouse of a nursing home resident to the cost of 
care; and 
    (16) who has applied or agrees to apply all proceeds 
received or receivable by the person or the person's spouse from 
automobile accident coverage and private health care coverage to 
any third person liable for the costs of medical care for the 
person, the spouse, and children.  The state agency may shall 
require from any applicant or recipient of medical assistance 
the assignment of any rights accruing under private health care 
coverage to medical support and third party payments.  Persons 
must cooperate with the state in establishing paternity and 
obtaining third party payments.  By signing an application for 
medical assistance, a person assigns to the department of human 
services all rights the person may have to medical support or 
payments for medical expenses from any other person or entity on 
their own or their dependent's behalf and agrees to cooperate 
with the state in establishing paternity and obtaining third 
party payments.  Any rights or amounts so assigned shall be 
applied against the cost of medical care paid for under this 
chapter.  Any assignment takes effect upon the determination 
that the applicant is eligible for medical assistance and up to 
three months prior to the date of application if the applicant 
is determined eligible for and receives medical assistance 
benefits.  The application must contain a statement explaining 
this assignment.  Any assignment shall not be effective as to 
benefits paid or provided under automobile accident coverage and 
private health care coverage prior to receipt notification of 
the assignment by the person or organization providing the 
benefits; and 
    (17) eligibility is available for the month of application 
and for three months prior to application if the person was 
eligible in those prior months.  A redetermination of 
eligibility must occur every 12 months. 
    Sec. 80.  Minnesota Statutes 1986, section 256B.06, is 
amended by adding a subdivision to read: 
    Subd. 4.  [CITIZENSHIP REQUIREMENTS.] Eligibility for 
medical assistance is limited to citizens of the United States 
and aliens lawfully admitted for permanent residence or 
otherwise permanently residing in the United States under the 
color of law.  Payment shall also be made for care and services 
that are furnished to an alien who otherwise meets the 
eligibility requirements of this section if such care and 
services are necessary for the treatment of an emergency medical 
condition.  For purposes of this subdivision, the term 
"emergency medical condition" means a medical condition, 
including labor and delivery, that if not immediately treated 
could cause a person physical or mental disability, continuation 
of severe pain, or death. 
    Sec. 81.  Minnesota Statutes 1986, section 256B.064, 
subdivision 1a, is amended to read:  
    Subd. 1a.  [GROUNDS FOR MONETARY RECOVERY AND SANCTIONS 
AGAINST VENDORS.] The commissioner may seek monetary recovery 
and impose sanctions against vendors of medical care for any of 
the following:  fraud, theft, or abuse in connection with the 
provision of medical care to recipients of public assistance; a 
pattern of presentment of false or duplicate claims or claims 
for services not medically necessary; a pattern of making false 
statements of material facts for the purpose of obtaining 
greater compensation than that to which the vendor is legally 
entitled; suspension or termination as a Medicare vendor; and 
refusal to grant the state agency access during regular business 
hours to examine all records necessary to disclose the extent of 
services provided to program recipients.  No sanction may be 
imposed or monetary recovery obtained against any vendor of 
nursing home or convalescent care for providing services not 
medically necessary when the services provided were ordered by a 
licensed health professional not an employee of the vendor.  The 
determination of services not medically necessary shall be made 
by the commissioner in consultation with a provider peer 
advisory committee appointed by the commissioner on the 
recommendation of appropriate professional organizations. 
    Sec. 82.  Minnesota Statutes 1986, section 256B.15, is 
amended to read:  
    If a person receives any medical assistance hereunder, on 
the person's death, if single, or on the death of the person and 
the surviving spouse, if married survivor of a married couple, 
either or both of whom received medical assistance, and only 
when there is no surviving child who is under 21 or is blind or 
totally disabled, the total amount paid for medical assistance 
rendered for the person and spouse, after age 65, without 
interest, shall be filed as a claim against the estate of the 
person or the estate of the surviving spouse in the court having 
jurisdiction to probate the estate.  A claim against the estate 
of a surviving spouse who did not receive medical assistance, 
for medical assistance rendered for the predeceased spouse, is 
limited to the value of the assets of the estate that were 
marital property or jointly-owned property at any time during 
the marriage.  The claim shall be considered an expense of the 
last illness of the decedent for the purpose of section 
524.3-805.  Any statute of limitations that purports to limit 
any county agency or the state agency, or both, to recover for 
medical assistance granted hereunder shall not apply to any 
claim made hereunder for reimbursement for any medical 
assistance granted hereunder.  Counties may retain one-half of 
the nonfederal share of medical assistance collections from 
estates that are directly attributable to county effort.  
    Sec. 83.  Minnesota Statutes 1986, section 256B.17, 
subdivision 4, is amended to read:  
    Subd. 4.  [PERIOD OF INELIGIBILITY.] For any uncompensated 
transfer, the period number of months of ineligibility shall be 
calculated by dividing the uncompensated transferred amount by 
the statewide average monthly skilled nursing facility per 
diem per person payment made by the medical assistance program 
to skilled nursing facilities for the previous calendar year to 
determine the number of months of ineligibility.  The individual 
shall remain ineligible until this fixed ineligibility period 
has expired.  The period of ineligibility may exceed 24 months, 
and a reapplication for benefits after 24 months from the date 
of the transfer shall not result in eligibility unless and until 
the period of ineligibility has expired.  
    Sec. 84.  Minnesota Statutes 1986, section 256B.17, 
subdivision 5, is amended to read: 
    Subd. 5.  [EXCLUDED RESOURCES.] Except for the limitations 
contained in subdivision 6, a resource which is transferred 
while otherwise excluded under sections section 256B.06 and 
256B.07 shall not be considered an available resource for 
purposes of medical assistance eligibility.  This exception 
shall not apply to applicants for or recipients of general 
assistance medical care benefits under chapter 256D.  
    Sec. 85.  Minnesota Statutes 1986, section 256B.19, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DIVISION OF COST.] The cost of medical 
assistance paid by each county of financial responsibility shall 
be borne as follows:  Payments shall be made by the state to the 
county for that portion of medical assistance paid by the 
federal government and the state on or before the 20th day of 
each month for the succeeding month upon requisition from the 
county showing the amount required for the succeeding month.  
Ninety percent of the expense of assistance not paid by federal 
funds available for that purpose shall be paid by the state and 
ten percent shall be paid by the county of financial 
responsibility.  
    For counties that participate in a medicaid demonstration 
project under sections 256B.69 and 256B.71, the division of the 
nonfederal share of medical assistance expenses for payments 
made to prepaid health plans or for payments made to health 
maintenance organizations in the form of prepaid capitation 
payments, this division of medical assistance expenses shall be 
95 percent by the state and five percent by the county of 
financial responsibility.  
    State contracts with health maintenance organizations shall 
assure medical assistance recipients of at least the 
comprehensive health maintenance services defined in section 
62D.02, subdivision 7.  The contracts shall require health 
maintenance organizations to provide information to the 
commissioner concerning the number of people receiving services, 
the number of encounters, the type of services received, 
evidence of an operational quality assurance program pursuant to 
section 62D.04 and information about utilization. 
    In counties where prepaid health plans are under contract 
to the commissioner to provide services to medical assistance 
recipients, the cost of court ordered treatment ordered without 
consulting the prepaid health plan that does not include 
diagnostic evaluation, recommendation, or and referral for 
treatment by the prepaid health plan is the responsibility of 
the county of financial responsibility.  
    Sec. 86.  Minnesota Statutes 1986, section 256B.35, 
subdivision 1, is amended to read:  
    Subdivision 1.  Notwithstanding any law to the contrary, 
welfare allowances for clothing and personal needs for 
individuals receiving medical assistance while residing in any 
skilled nursing home or, intermediate care facility, or medical 
institution including recipients of supplemental security 
income, in this state shall not be less than $40 per month from 
all sources.  
    Provided that this personal needs allowance may be paid as 
part of the Minnesota supplemental aid program, notwithstanding 
the provisions of section 256D.37, subdivision 2, and payments 
to the recipients from Minnesota supplemental aid funds may be 
made once each three months beginning in October, 1977 covering 
liabilities that accrued during the preceding three months. 
     Sec. 87.  Minnesota Statutes 1986, section 256B.35, 
subdivision 2, is amended to read:  
    Subd. 2.  Neither the skilled nursing home, the 
intermediate care facility, the medical institution, nor the 
department of human services shall withhold or deduct any amount 
of this allowance for any purpose contrary to this section. 
    Sec. 88.  Minnesota Statutes 1986, section 256B.421, 
subdivision 1, is amended to read:  
    Subdivision 1.  [SCOPE.] For the purposes of this section 
and sections 256B.41, 256B.411, 256B.431, 256B.433, 256B.47, 
256B.48, 256B.50, and 256B.502, the following terms and phrases 
shall have the meaning given to them. 
    Sec. 89.  Minnesota Statutes 1986, section 256B.431, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For 
rate years beginning on or after July 1, 1985, the commissioner 
shall establish procedures for determining per diem 
reimbursement for operating costs.  
    (b) The commissioner shall contract with an econometric 
firm with recognized expertise in and access to national 
economic change indices that can be applied to the appropriate 
cost categories when determining the operating cost payment rate.
    (c) The commissioner shall analyze and evaluate each 
nursing home's cost report of allowable operating costs incurred 
by the nursing home during the reporting year immediately 
preceding the rate year for which the payment rate becomes 
effective.  
    (d) The commissioner shall establish limits on actual 
allowable historical operating cost per diems based on cost 
reports of allowable operating costs for the reporting year that 
begins October 1, 1983, taking into consideration relevant 
factors including resident needs, geographic location, size of 
the nursing home, and the costs that must be incurred for the 
care of residents in an efficiently and economically operated 
nursing home.  In developing the geographic groups for purposes 
of reimbursement under this section, the commissioner shall 
ensure that nursing homes in any county contiguous to the 
Minneapolis-St. Paul seven-county metropolitan area are included 
in the same geographic group.  The limits established by the 
commissioner shall not be less, in the aggregate, than the 60th 
percentile of total actual allowable historical operating cost 
per diems for each group of nursing homes established under 
subdivision 1 based on cost reports of allowable operating costs 
in the previous reporting year.  For rate years beginning on or 
after July 1, 1987, or until the new base period is established, 
facilities located in geographic group I as described in 
Minnesota Rules, part 9549.0052 (Emergency), on January 1, 1987, 
may choose to have the commissioner apply either the care 
related limits or the other operating cost limits calculated for 
facilities located in geographic group II, or both, if either of 
the limits calculated for the group II facilities is higher.  
The efficiency incentive for geographic group I nursing homes 
must be calculated based on geographic group I limits.  The 
phase-in must be established utilizing the chosen limits.  For 
purposes of these exceptions to the geographic grouping 
requirements, the definitions in Minnesota Rules, parts 
9549.0050 to 9549.0059 (Emergency), and 9549.0010 to 9549.0080, 
apply.  The limits established under this paragraph remain in 
effect until the commissioner establishes a new base period.  
Until the new base period is established, the commissioner shall 
adjust the limits annually using the appropriate economic change 
indices established in paragraph (e).  In determining allowable 
historical operating cost per diems for purposes of setting 
limits and nursing home payment rates, the commissioner shall 
divide the allowable historical operating costs by the actual 
number of resident days, except that where a nursing home is 
occupied at less than 90 percent of licensed capacity days, the 
commissioner may establish procedures to adjust the computation 
of the per diem to an imputed occupancy level at or below 90 
percent.  The commissioner shall establish efficiency incentives 
as appropriate.  The commissioner may establish efficiency 
incentives for different operating cost categories.  The 
commissioner shall consider establishing efficiency incentives 
in care related cost categories.  The commissioner may combine 
one or more operating cost categories and may use different 
methods for calculating payment rates for each operating cost 
category or combination of operating cost categories.  For the 
rate year beginning on July 1, 1985, the commissioner shall: 
     (1) allow nursing homes that have an average length of stay 
of 180 days or less in their skilled nursing level of care, 125 
percent of the care related limit and 105 percent of the other 
operating cost limit established by rule; and 
     (2) exempt nursing homes licensed on July 1, 1983, by the 
commissioner to provide residential services for the physically 
handicapped under Minnesota Rules, parts 9570.2000 to 9570.3600, 
from the care related limits and allow 105 percent of the other 
operating cost limit established by rule. 
     For the purpose of calculating the other operating cost 
efficiency incentive for nursing homes referred to in clause (1) 
or (2), the commissioner shall use the other operating cost 
limit established by rule before application of the 105 percent. 
     (e) The commissioner shall establish a composite index or 
indices by determining the appropriate economic change 
indicators to be applied to specific operating cost categories 
or combination of operating cost categories.  
     (f) Each nursing home shall receive an operating cost 
payment rate equal to the sum of the nursing home's operating 
cost payment rates for each operating cost category.  The 
operating cost payment rate for an operating cost category shall 
be the lesser of the nursing home's historical operating cost in 
the category increased by the appropriate index established in 
paragraph (e) for the operating cost category plus an efficiency 
incentive established pursuant to paragraph (d) or the limit for 
the operating cost category increased by the same index.  If a 
nursing home's actual historic operating costs are greater than 
the prospective payment rate for that rate year, there shall be 
no retroactive cost settle-up.  In establishing payment rates 
for one or more operating cost categories, the commissioner may 
establish separate rates for different classes of residents 
based on their relative care needs.  
     (g) The commissioner shall include the reported actual real 
estate tax liability of each proprietary nursing home as an 
operating cost of that nursing home.  The commissioner shall 
include a reported actual special assessment, and reported 
actual license fees required by the Minnesota department of 
health, for each nursing home as an operating cost of that 
nursing home.  Total real estate tax liability, actual special 
assessments paid, and license fees paid as required by the 
Minnesota department of health, for each nursing home (1) shall 
be divided by actual resident days in order to compute the 
operating cost payment rate for this operating cost category, 
(2) shall not be used to compute the 60th percentile or other 
operating cost limits established by the commissioner, and (3) 
shall not be increased by the composite index or indices 
established pursuant to paragraph (e). 
    Sec. 90.  Minnesota Statutes 1986, section 256B.433, is 
amended to read:  
    256B.433 [ANCILLARY SERVICES.] 
    Subdivision 1.  [SETTING PAYMENT; MONITORING USE OF THERAPY 
SERVICES.] The commissioner shall promulgate rules pursuant to 
the administrative procedure act to set the amount and method of 
payment for ancillary materials and services provided to 
recipients residing in long-term care facilities nursing homes.  
Payment for materials and services may be made to either the 
nursing home in the operating cost per diem, to the vendor of 
ancillary services pursuant to Minnesota Rules, parts 9500.0750 
to 9500.1080 or to a nursing home pursuant to Minnesota Rules, 
parts 9500.0750 to 9500.1080.  Payment for the same or similar 
service to a recipient shall not be made to both the nursing 
home and the vendor.  The commissioner shall ensure the 
avoidance of double payments through audits and adjustments to 
the nursing home's annual cost report as required by section 
256B.47, and that charges and arrangements for ancillary 
materials and services are cost effective and as would be 
incurred by a prudent and cost conscious buyer.  Therapy 
services provided to a recipient must be medically necessary and 
appropriate to the medical condition of the recipient.  If the 
vendor, nursing home, or ordering physician cannot provide 
adequate medical necessity justification, as determined by the 
commissioner, in consultation with an advisory committee that 
meets the requirements of section 256B.064, subdivision 1a, the 
commissioner may recover or disallow the payment for the 
services and may require prior authorization for therapy 
services as a condition of payment or may impose administrative 
sanctions to limit the vendor, nursing home, or ordering 
physician's participation in the medical assistance program.  
    Subd. 2.  [CERTIFICATION THAT TREATMENT IS 
APPROPRIATE.] The physical therapist, occupational therapist, 
speech therapist, or audiologist who provides or supervises the 
provision of therapy services, other than an initial evaluation, 
to a medical assistance recipient must certify in writing that 
the therapy's nature, scope, duration, and intensity are 
appropriate to the medical condition of the recipient every 30 
days.  The therapist's statement of certification must be 
maintained in the recipient's medical record together with the 
specific orders by the physician and the treatment plan.  If the 
recipient's medical record does not include these documents, the 
commissioner may recover or disallow the payment for such 
services.  If the therapist determines that the therapy's 
nature, scope, duration, or intensity is not appropriate to the 
medical condition of the recipient, the therapist must provide a 
statement to that effect in writing to the nursing home for 
inclusion in the recipient's medical record.  The commissioner 
shall utilize a peer review program that meets the requirements 
of section 256B.064, subdivision 1a, to make recommendations 
regarding the medical necessity of services provided.  
    Subd. 3.  [SEPARATE BILLINGS FOR THERAPY SERVICES.] Until 
new procedures are developed under subdivision 4, payment for 
therapy services provided to nursing home residents that are 
billed separate from nursing home's payment rate or according to 
Minnesota Rules, parts 9500.0750 to 9500.1080, shall be subject 
to the following requirements:  
    (a) The practitioner invoice must include, in a format 
specified by the commissioner, the provider number of the 
nursing home where the medical assistance recipient resides 
regardless of the service setting.  
    (b) Nursing homes that are related by ownership, control, 
affiliation, or employment status to the vendor of therapy 
services shall report, in a format specified by the 
commissioner, the revenues received during the reporting year 
for therapy services provided to residents of the nursing home.  
For rate years beginning on or after July 1, 1988, the 
commissioner shall offset the revenues received during the 
reporting year for therapy services provided to residents of the 
nursing home to the total payment rate of the nursing home by 
dividing the amount of offset by the nursing home's actual 
resident days.  Except as specified in paragraphs (d) and (f), 
the amount of offset shall be the revenue in excess of 108 
percent of the cost removed from the cost report resulting from 
the requirement of the commissioner to ensure the avoidance of 
double payments as determined by section 256B.47.  In 
establishing a new base period for the purpose of setting 
operating cost payment rate limits and rates, the commissioner 
shall not include the revenues offset in accordance with this 
section.  
    (c) For rate years beginning on or after July 1, 1987, 
nursing homes shall limit charges in total to vendors of therapy 
services for renting space, equipment, or obtaining other 
services during the rate year to 108 percent of the annualized 
cost removed from the reporting year cost report resulting from 
the requirement of the commissioner to ensure the avoidance of 
double payments as determined by section 256B.47.  If the 
arrangement for therapy services is changed so that a nursing 
home is subject to this paragraph instead of paragraph (b), the 
cost that is used to determine rent must be adjusted to exclude 
the annualized costs for therapy services that are not provided 
in the rate year.  The maximum charges to the vendors shall be 
based on the commissioner's determination of annualized cost and 
may be subsequently adjusted upon resolution of appeals. 
    (d) The commissioner shall require reporting of all 
revenues relating to the provision of therapy services and shall 
establish a therapy cost, as determined by section 256B.47, to 
revenue ratio for the reporting year ending in 1986.  For 
subsequent reporting years, the ratio may increase five 
percentage points in total until a new base year is established 
under paragraph (e).  Increases in excess of five percentage 
points may be allowed if adequate justification is provided to 
and accepted by the commissioner.  Unless an exception is 
allowed by the commissioner, the amount of offset in paragraph 
(b) is the greater of the amount determined in paragraph (b) or 
the amount of offset that is imputed based on one minus the 
lesser of (1) the actual reporting year ratio or (2) the base 
reporting year ratio increased by five percentage points, 
multiplied by the revenues. 
    (e) The commissioner may establish a new reporting year 
base for determining the cost to revenue ratio. 
    (f) If the arrangement for therapy services is changed so 
that a nursing home is subject to the provisions of paragraph 
(b) instead of paragraph (c), an average cost to revenue ratio 
based on the ratios of nursing homes that are subject to the 
provisions of paragraph (b) shall be imputed for paragraph (d). 
    (g) This section does not allow unrelated nursing homes to 
reorganize related organization therapy services and provide 
services among themselves to avoid offsetting revenues.  Nursing 
homes that are found to be in violation of this provision shall 
be subject to the penalty requirements of section 256B.48, 
subdivision 1, paragraph (f).  
    Subd. 4.  [ADVISORY COMMITTEE.] The commissioner shall 
convene an advisory committee consisting of nursing home 
consumers, therapists from each discipline, and representatives 
of the nursing home industry.  The commissioner, in consultation 
with the advisory committee, shall study alternative methods of 
payment for therapy services provided to nursing home residents 
and report to the legislature by February 1, 1989. 
    Sec. 91.  Minnesota Statutes 1986, section 256B.47, 
subdivision 1, is amended to read:  
    Subdivision 1.  [NONALLOWABLE COSTS.] The following costs 
shall not be recognized as allowable:  (1) political 
contributions; (2) salaries or expenses of a lobbyist, as 
defined in section 10A.01, subdivision 11, for lobbying 
activities; (3) advertising designed to encourage potential 
residents to select a particular nursing home; (4) assessments 
levied by the commissioner of health for uncorrected violations; 
(5) legal and related expenses for unsuccessful challenges to 
decisions by governmental agencies; (6) memberships in sports, 
health or similar social clubs or organizations; and (7) costs 
incurred for activities directly related to influencing 
employees with respect to unionization; and (8) direct and 
indirect costs of providing services which are billed separately 
from the nursing home's payment rate or pursuant to Minnesota 
Rules, parts 9500.0750 to 9500.1080.  The commissioner shall by 
rule exclude the costs of any other items not directly related 
to the provision of resident care. 
    Sec. 92.  Minnesota Statutes 1986, section 256B.47, is 
amended by adding a subdivision to read:  
    Subd. 3.  [ALLOCATION OF COSTS.] To ensure the avoidance of 
double payments as required by section 256B.433, the direct and 
indirect reporting year costs of providing residents of nursing 
homes that are not hospital attached with therapy services that 
are billed separately from the nursing home payment rate or 
according to Minnesota Rules, parts 9500.0750 to 9500.1080, must 
be determined and deducted from the appropriate cost categories 
of the annual cost report as follows: 
    (a) The costs of wages and salaries for employees providing 
or participating in providing and consultants providing services 
shall be allocated to the therapy service based on direct 
identification.  
    (b) The costs of fringe benefits and payroll taxes relating 
to the costs in paragraph (a) must be allocated to the therapy 
service based on direct identification or the ratio of total 
costs in paragraph (a) to the sum of total allowable salaries 
and the costs in paragraph (a).  
    (c) The costs of housekeeping, plant operations and 
maintenance, real estate taxes, special assessments, property 
and insurance, other than the amounts classified as a fringe 
benefit, must be allocated to the therapy service based on the 
ratio of service area square footage to total facility square 
footage.  
    (d) The costs of bookkeeping and medical records must be 
allocated to the therapy service either by the method in 
paragraph (e) or based on direct identification.  Direct 
identification may be used if adequate documentation is provided 
to, and accepted by, the commissioner.  
    (e) The costs of administrators, bookkeeping, and medical 
records salaries, except as provided in paragraph (d), must be 
allocated to the therapy service based on the ratio of the total 
costs in paragraphs (a) to (d) to the sum of total allowable 
nursing home costs and the costs in paragraphs (a) to (d).  
    Sec. 93.  Minnesota Statutes 1986, section 256B.47, is 
amended by adding a subdivision to read:  
    Subd. 4.  [ALLOCATION OF COSTS; HOSPITAL-ATTACHED 
FACILITIES.] To ensure the avoidance of double payments as 
required by section 256B.433, the direct and indirect reporting 
year costs of providing therapy services to residents of a 
hospital-attached nursing home, when the services are billed 
separately from the nursing home's payment rate or according to 
Minnesota Rules, parts 9500.0750 to 9500.1080, must be 
determined and deducted from the appropriate cost categories of 
the annual cost report based on the Medicare step-down as 
prepared in accordance with instructions provided by the 
commissioner.  
    Sec. 94.  Minnesota Statutes 1986, section 256B.48, 
subdivision 1, is amended to read:  
    Subdivision 1.  [PROHIBITED PRACTICES.] A nursing home is 
not eligible to receive medical assistance payments unless it 
refrains from all of the following: 
    (a) Charging private paying residents rates for similar 
services which exceed those which are approved by the state 
agency for medical assistance recipients as determined by the 
prospective desk audit rate, except under the following 
circumstances:  the nursing home may (1) charge private paying 
residents a higher rate for a private room, and (2) charge for 
special services which are not included in the daily rate if 
medical assistance residents are charged separately at the same 
rate for the same services in addition to the daily rate paid by 
the commissioner.  Services covered by the payment rate must be 
the same regardless of payment source.  Special services, if 
offered, must be offered to all residents and charged separately 
at the same rate.  Residents are free to select or decline 
special services.  Special services must not include services 
which must be provided by the nursing home in order to comply 
with licensure or certification standards and that if not 
provided would result in a deficiency or violation by the 
nursing home.  Services beyond those required to comply with 
licensure or certification standards must not be charged 
separately as a special service if they were included in the 
payment rate for the previous reporting year.  A nursing home 
that charges a private paying resident a rate in violation of 
this clause is subject to an action by the state of Minnesota or 
any of its subdivisions or agencies for civil damages.  A 
private paying resident or the resident's legal representative 
has a cause of action for civil damages against a nursing home 
that charges the resident rates in violation of this clause.  
The damages awarded shall include three times the payments that 
result from the violation, together with costs and 
disbursements, including reasonable attorneys' fees or their 
equivalent.  A private paying resident or the resident's legal 
representative, the state, subdivision or agency, or a nursing 
home may request a hearing to determine the allowed rate or 
rates at issue in the cause of action.  Within 15 calendar days 
after receiving a request for such a hearing, the commissioner 
shall request assignment of an administrative law judge under 
sections 14.48 to 14.56 to conduct the hearing as soon as 
possible or according to agreement by the parties.  The 
administrative law judge shall issue a report within 15 calendar 
days following the close of the hearing.  The prohibition set 
forth in this clause shall not apply to facilities licensed as 
boarding care facilities which are not certified as skilled or 
intermediate care facilities level I or II for reimbursement 
through medical assistance;. 
    (b) Requiring an applicant for admission to the home, or 
the guardian or conservator of the applicant, as a condition of 
admission, to pay any fee or deposit in excess of $100, loan any 
money to the nursing home, or promise to leave all or part of 
the applicant's estate to the home;.  
    (c) Requiring any resident of the nursing home to utilize a 
vendor of health care services who is a licensed physician or 
pharmacist chosen by the nursing home;.  
    (d) Providing differential treatment on the basis of status 
with regard to public assistance;.  
    (e) Discriminating in admissions, services offered, or room 
assignment on the basis of status with regard to public 
assistance.  Admissions discrimination shall include, but is not 
limited to:  
    (1) basing admissions decisions upon assurance by the 
applicant to the nursing home, or the applicant's guardian or 
conservator, that the applicant is neither eligible for nor will 
seek public assistance for payment of nursing home care costs;  
and 
    (2) engaging in preferential selection from waiting lists 
based on an applicant's ability to pay privately. 
    The collection and use by a nursing home of financial 
information of any applicant pursuant to the preadmission 
screening program established by section 256B.091 shall not 
raise an inference that the nursing home is utilizing that 
information for any purpose prohibited by this paragraph;.  
    (f) Requiring any vendor of medical care as defined by 
section 256B.02, subdivision 7, who is reimbursed by medical 
assistance under a separate fee schedule, to pay any amount 
based on utilization or service levels or any portion of the 
vendor's fee to the nursing home except as payment for renting 
or leasing space or equipment of the nursing home or purchasing 
support services, if those from the nursing home as limited by 
section 256B.433.  All agreements are must be disclosed to the 
commissioner; and upon request of the commissioner.  Nursing 
homes and vendors of ancillary services that are found to be in 
violation of this provision shall each be subject to an action 
by the state of Minnesota or any of its subdivisions or agencies 
for treble civil damages on the portion of the fee in excess of 
that allowed by this provision and section 256B.433.  Damages 
awarded must include three times the excess payments together 
with costs and disbursements including reasonable attorney's 
fees or their equivalent.  
    (g) Refusing, for more than 24 hours, to accept a resident 
returning to the same bed or a bed certified for the same level 
of care, in accordance with a physician's order authorizing 
transfer, after receiving inpatient hospital services. 
    The prohibitions set forth in clause (b) shall not apply to 
a retirement home with more than 325 beds including at least 150 
licensed nursing home beds and which: 
    (1) is owned and operated by an organization tax-exempt 
under section 290.05, subdivision 1, clause (i); and 
    (2) accounts for all of the applicant's assets which are 
required to be assigned to the home so that only expenses for 
the cost of care of the applicant may be charged against the 
account; and 
    (3) agrees in writing at the time of admission to the home 
to permit the applicant, or the applicant's guardian, or 
conservator, to examine the records relating to the applicant's 
account upon request, and to receive an audited statement of the 
expenditures charged against the applicant's individual account 
upon request; and 
    (4) agrees in writing at the time of admission to the home 
to permit the applicant to withdraw from the home at any time 
and to receive, upon withdrawal, the balance of the applicant's 
individual account. 
    For a period not to exceed 180 days, the commissioner may 
continue to make medical assistance payments to a nursing home 
or boarding care home which is in violation of this section if 
extreme hardship to the residents would result.  In these cases 
the commissioner shall issue an order requiring the nursing home 
to correct the violation.  The nursing home shall have 20 days 
from its receipt of the order to correct the violation.  If the 
violation is not corrected within the 20-day period the 
commissioner may reduce the payment rate to the nursing home by 
up to 20 percent.  The amount of the payment rate reduction 
shall be related to the severity of the violation, and shall 
remain in effect until the violation is corrected.  The nursing 
home or boarding care home may appeal the commissioner's action 
pursuant to the provisions of chapter 14 pertaining to contested 
cases.  An appeal shall be considered timely if written notice 
of appeal is received by the commissioner within 20 days of 
notice of the commissioner's proposed action.  
    In the event that the commissioner determines that a 
nursing home is not eligible for reimbursement for a resident 
who is eligible for medical assistance, the commissioner may 
authorize the nursing home to receive reimbursement on a 
temporary basis until the resident can be relocated to a 
participating nursing home. 
    Certified beds in facilities which do not allow medical 
assistance intake on July 1, 1984, or after shall be deemed to 
be decertified for purposes of section 144A.071 only.  
    Sec. 95.  Minnesota Statutes 1986, section 256B.69, 
subdivision 6, is amended to read:  
    Subd. 6.  [SERVICE DELIVERY.] (a) Each demonstration 
provider shall be responsible for the health care coordination 
for eligible individuals.  Demonstration providers:  
    (a) (1) shall authorize and arrange for the provision of 
all needed health services including but not limited to the full 
range of services listed in section 256B.02, subdivision 8, in 
order to ensure appropriate health care is delivered to 
enrollees; 
    (b) (2) shall accept the prospective, per capita payment 
from the commissioner in return for the provision of 
comprehensive and coordinated health care services for eligible 
individuals enrolled in the program; 
    (c) (3) may contract with other health care and social 
service practitioners to provide services to enrollees; and 
    (d) (4) shall institute recipient grievance procedures 
according to the method established by the project, utilizing 
applicable requirements of chapter 62D.  Disputes not resolved 
through this process shall be appealable to the commissioner as 
provided in subdivision 11.  
    (b) Demonstration providers must comply with the standards 
for claims settlement under section 72A.20, subdivision 12a, 
paragraphs (d), (e), (g), and (h), when contracting with other 
health care and social service practitioners to provide services 
to enrollees.  A demonstration provider must pay a clean claim, 
as defined in Code of Federal Regulations, title 42, section 
447.45(d), within 30 business days of the date of acceptance of 
the claim. 
    Sec. 96.  Minnesota Statutes 1986, section 256B.69, 
subdivision 11, is amended to read:  
    Subd. 11.  [APPEALS.] A recipient may appeal to the 
commissioner a demonstration provider's delay or refusal to 
provide services.  The commissioner shall appoint a panel of 
health practitioners, including social service practitioners, as 
necessary to determine the necessity of services provided or 
refused to a recipient.  The deliberations and decisions of the 
panel replace the administrative review process otherwise 
available under this chapter 256.  The panel shall follow the 
time requirements and other provisions of the Code of Federal 
Regulations, title 42, sections 431.200 to 431.246.  The time 
requirements shall be expedited based on request by the 
individual who is appealing for emergency services.  If a 
service is determined to be necessary and is included among the 
benefits for which a recipient is enrolled, the service must be 
provided by the demonstration provider as specified in 
subdivision 5.  The panel's decision is a final agency 
action that may be appealed under the contested case provisions 
of chapter 14.  
    Sec. 97.  Minnesota Statutes 1986, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 12.  [JUDICIAL REVIEW.] A party aggrieved by an order 
of the panel may appeal the order to the district court of the 
county responsible for furnishing assistance by serving a 
written copy of a notice of appeal upon the commissioner and any 
adverse party of record within 30 days after the date the panel 
issued the order and by filing the original notice and proof of 
service with the court administrator of the district court.  
Service may be made personally or by mail.  Service by mail is 
complete upon mailing.  No filing fee shall be required by the 
court administrator in appeals taken under this subdivision.  
The commissioner may elect to become a party to the proceedings 
in the district court.  Any party may demand that the 
commissioner furnish all parties to the proceedings with a copy 
of the decision, and a transcript of any testimony, evidence, or 
other supporting papers from the hearing held before the panel, 
by serving a written demand on the commissioner within 30 days 
after service of the notice of appeal. 
    Sec. 98.  Minnesota Statutes 1986, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 13.  [HEARING.] A party may obtain a hearing at a 
special term of the district court by serving a written notice 
of the time and place of the hearing at least ten days before 
the date of the hearing.  The court may consider the matter in 
or out of chambers and shall take no new or additional evidence 
unless it determines that the evidence is necessary for a more 
equitable disposition of the appeal. 
    Sec. 99.  Minnesota Statutes 1986, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 14.  [APPEAL.] A party aggrieved by the order of the 
district court may appeal the order as in other civil cases.  No 
costs or disbursements shall be taxed against a party nor shall 
any filing fee or bond be required of a party. 
    Sec. 100.  Minnesota Statutes 1986, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 15.  [PAYMENTS PENDING APPEAL.] If the panel or 
district court orders services paid or provided in any 
proceeding under this section, it must be paid or provided 
pending appeal to the district court, court of appeals, or 
supreme court. 
    Sec. 101.  Minnesota Statutes 1986, section 256B.69, is 
amended by adding a subdivision to read: 
    Subd. 16.  [PROJECT EXTENSION.] Minnesota Rules, parts 
9550.1450; 9500.1451; 9500.1452; 9500.1453; 9500.1454; 
9500.1455; 9500.1456; 9500.1457; 9500.1458; 9500.1459; 
9500.1460; 9500.1461; 9500.1462; 9500.1463; and 9500.1464 are 
extended until December 31, 1990.  
     Sec. 102.  Minnesota Statutes 1986, section 256C.26, is 
amended to read: 
    256C.26 [EMPLOYMENT SERVICES.] 
    The commissioner of jobs and training shall include in the 
biennial plan submitted to the full productivity and opportunity 
coordinator a method develop a plan to deal with the 
underemployment of hearing impaired persons.  The plan shall 
provide for training regarding the nature of hearing handicaps 
for department staff who consult with prospective employers or 
who provide job placement services. 
    Sec. 103.  Minnesota Statutes 1986, section 256D.03, 
subdivision 3, is amended to read: 
    Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
Persons eligible for benefits under sections 256D.01 to 256D.21 
and persons not eligible for federal health care benefits whose 
nonexempt property, as determined according to medical 
assistance standards, has an equity value no greater than $1,000 
and whose income is not in excess of the medical assistance 
standards shall be eligible for general assistance medical 
care.  Persons with excess income and resources may qualify for 
benefits under this subdivision by spending down.  Treatment of 
income and resources in calculation of the spenddown shall be 
the same as in the medical assistance program pursuant to 
chapter 256B.  General assistance medical care may be paid for 
any person: 
    (1) who is eligible for assistance under section 256D.05 or 
256D.051 and is not eligible for medical assistance under 
chapter 256B; or 
    (2) who is a resident of Minnesota; whose income as 
calculated under chapter 256B is not in excess of the medical 
assistance standards or whose excess income is spent down 
pursuant to chapter 256B; and whose equity in resources is not 
in excess of $1,000 per assistance unit.  Exempt real and liquid 
assets, the reduction of excess assets, and the waiver of excess 
assets must conform to the medical assistance program in chapter 
256B.  
    Eligibility is available for the month of application and 
for three months prior to application if the person was eligible 
in those prior months.  A redetermination of eligibility must 
occur every 12 months. 
    Sec. 104.  Minnesota Statutes 1986, section 256D.03, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [CLAIMS; ASSIGNMENT OF BENEFITS.] Claims must be 
filed pursuant to section 256D.16.  General assistance medical 
care applicants and recipients must apply or agree to apply 
third party health and accident benefits to the costs of medical 
care.  They must cooperate with the state in establishing 
paternity and obtaining third party payments.  By signing an 
application for general assistance, a person assigns to the 
department of human services all rights to medical support or 
payments for medical expenses from another person or entity on 
their own or their dependent's behalf and agrees to cooperate 
with the state in establishing paternity and obtaining third 
party payments.  The application shall contain a statement 
explaining the assignment.  Any rights or amounts assigned shall 
be applied against the cost of medical care paid for under this 
chapter.  An assignment is effective on the date general 
assistance medical care eligibility takes effect.  The 
assignment shall not affect benefits paid or provided under 
automobile accident coverage and private health care coverage 
until the person or organization providing the benefits has 
received notice of the assignment.  
    Sec. 105.  Minnesota Statutes 1986, section 256D.03, 
subdivision 4, is amended to read:  
    Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] (a) 
Reimbursement under the general assistance medical care program 
shall be limited to the following categories of service: 
inpatient hospital care, outpatient hospital care, services 
provided by medicare certified rehabilitation agencies, 
prescription drugs, equipment necessary to administer insulin 
and diagnostic supplies and equipment for diabetics to monitor 
blood sugar level, eyeglasses and eye examinations provided by a 
physician or optometrist, hearing aids, prosthetic devices, 
laboratory and X-ray services, physician's services, medical 
transportation, chiropractic services as covered under the 
medical assistance program, podiatric services, and dental 
care.  In addition, payments of state aid shall be made for day 
treatment services provided by a mental health center 
established under sections 245.61 to 245.69, subdivision 1, and 
funded through chapter 256E and for: 
    (1) outpatient services provided by a mental health center 
or clinic that is under contract with the county board and is 
certified under Minnesota Rules, parts 9520.0750 to 9520.0870; 
    (2) day treatment services provided under contract with the 
county board; and 
    (3) prescribed medications for persons who have been 
diagnosed as mentally ill as necessary to prevent more 
restrictive institutionalization. 
    (b) 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 section 256B.02, 
subdivision 8.  The rates payable under this section must be 
calculated according to section 256.966, subdivision 2 256B.031, 
subdivision 4. 
      (c) The commissioner of human services may reduce payments 
provided under sections 256D.01 to 256D.21 and 261.23 in order 
to remain within the amount appropriated for general assistance 
medical care, within the following restrictions. 
       For the period July 1, 1985, to December 31, 1985, 
reductions below the cost per service unit allowable under 
section 256.966, are permitted only as follows:  payments for 
inpatient and outpatient hospital care provided in response to a 
primary diagnosis of chemical dependency or mental illness may 
be reduced no more than 30 percent; payments for all other 
inpatient hospital care may be reduced no more than 20 percent.  
Reductions below the payments allowable under general assistance 
medical care for the remaining general assistance medical care 
services allowable under this subdivision may be reduced no more 
than ten percent. 
       For the period January 1, 1986 to December 31, 1986, 
reductions below the cost per service unit allowable under 
section 256.966 are permitted only as follows:  payments for 
inpatient and outpatient hospital care provided in response to a 
primary diagnosis of chemical dependency or mental illness may 
be reduced no more than 20 percent; payments for all other 
inpatient hospital care may be reduced no more than 15 percent.  
Reductions below the payments allowable under general assistance 
medical care for the remaining general assistance medical care 
services allowable under this subdivision may be reduced no more 
than five percent. 
      For the period January 1, 1987 to June 30, 1987, reductions 
below the cost per service unit allowable under section 256.966 
are permitted only as follows:  payments for inpatient and 
outpatient hospital care provided in response to a primary 
diagnosis of chemical dependency or mental illness may be 
reduced no more than 15 percent; payments for all other 
inpatient hospital care may be reduced no more than ten 
percent.  Reductions below the payments allowable under medical 
assistance for the remaining general assistance medical care 
services allowable under this subdivision may be reduced no more 
than five percent.  
    For the period July 1, 1987, to June 30, 1988, reductions 
below the cost per service unit allowable under section 256.966 
are permitted only as follows:  payments for inpatient and 
outpatient hospital care provided in response to a primary 
diagnosis of chemical dependency or mental illness may be 
reduced no more than 15 percent; payments for all other 
inpatient hospital care may be reduced no more than five percent.
Reductions below the payments allowable under medical assistance 
for the remaining general assistance medical care services 
allowable under this subdivision may be reduced no more than 
five percent. 
    For the period July 1, 1988, to June 30, 1989, reductions 
below the cost per service unit allowable under section 256.966 
are permitted only as follows:  payments for inpatient and 
outpatient hospital care provided in response to a primary 
diagnosis of chemical dependency or mental illness may be 
reduced no more than 15 percent; payments for all other 
inpatient hospital care may not be reduced.  Reductions below 
the payments allowable under medical assistance for the 
remaining general assistance medical care services allowable 
under this subdivision may be reduced no more than five percent. 
    There shall be no copayment required of any recipient of 
benefits for any services provided under this subdivision.  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. 
    (d) Any county may, from its own resources, provide medical 
5 payments for which state payments are not made. 
    (e) Chemical dependency services that are reimbursed under 
Laws 1986, chapter 394, sections 8 to 20, must not be reimbursed 
under general assistance medical care. 
    (f) 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. 
    Sec. 106.  Minnesota Statutes 1986, section 256D.05, is 
amended by adding a subdivision to read: 
    Subd. 5.  [TRANSFERS OF PROPERTY.] The equity value of real 
and personal property transferred without reasonable 
compensation within 12 months preceding the date of application 
for general assistance must be included in determining the 
resources of an assistance unit in the same manner as in the aid 
to families with dependent children program under chapter 256. 
    Sec. 107.  Minnesota Statutes 1986, section 256D.22, is 
amended to read:  
    256D.22 [REIMBURSEMENT OF COUNTIES BY STATE RELATING TO 
PUBLIC ASSISTANCE.] 
    To the extent of appropriations available therefor, the 
department of human services shall reimburse 
counties Subdivision 1.  [DISTRIBUTION FORMULA.] Beginning July 
1, 1988, and to the extent of appropriations available, the 
commissioner of human services shall reimburse counties' 
administrative costs in the following manner: 
    (a) 50 percent of the available appropriation shall be 
distributed to counties as reimbursement for up to 50 percent of 
all salary expenses, approved by the commissioner, incurred and 
paid by the counties, for which no payment or reimbursement is 
made by the United States or any subdivision thereof, in 
administering, and salary administrative costs in providing 
services in connection with, all public assistance programs.  
    (b) 25 percent of the available appropriation shall be 
distributed to counties based on each county's proportionate 
share of the state's aid to families with dependent children and 
medical assistance caseloads; provided, however, that each 
county's share shall be reduced by a direct percentage equal to 
the sum of that county's percentage of overdue aid to families 
with dependent children eligibility reviews added to that 
county's percentage of overdue quarterly asset reviews for 
medical assistance eligibility, as calculated for the quarter 
immediately preceding each quarter in which this payment is 
made.  Any money accruing as a result of these reductions shall 
be rolled over and distributed as provided for in this paragraph 
during the next quarterly payment. 
     (c) 25 percent of the available appropriation shall be 
distributed to counties based on each county's proportionate 
share of the state's total number of children served under the 
community social services act as calculated for the quarter 
immediately preceding each quarter in which this payment is 
made; provided, however, that a county's share shall be reduced 
by a direct percentage equal to the county's percentage increase 
in child out-of-home placement days above the number of child 
out-of-home placement days for the quarter immediately preceding 
the quarter in which this payment is calculated.  Any money 
accruing as a result of reductions in county shares shall be 
rolled over and distributed as provided in this paragraph during 
the next quarterly payment. 
     Subd. 2.  [EXCEPTIONS.] No aid under this section shall be 
paid for salary costs of (a) single-county welfare directors; or 
(b) fiscal support personnel to the extent involved in the 
processing of public assistance claims and payments, or their 
supporting clerical staff; or (c) persons who are not regularly 
assigned employees of local agencies.  
     Subd. 3.  [CLAIMS.] Claims for reimbursement for 
expenditures made by the county shall be presented to the 
department by the respective counties at least four times per 
year in such manner as the commissioner shall prescribe.  
     Subd. 4.  [DEFINITIONS.] For the purposes of this 
section, (a) the term "salary" shall include regular 
compensation not in excess of that paid similarly situated state 
employees, the employer's cost of health benefits and 
contributions to the appropriate retirement system, but shall 
not include travel or other reimbursable expenses.  The 
commissioner shall, pursuant to the administrative procedure 
act, prior to making any payments, promulgate rules to implement 
this section; (b) the term "child out-of-home placement days" 
includes those days when a child is a resident in a regular 
treatment center, residential treatment facility, juvenile group 
home, foster home, or temporary emergency shelter home; and (c) 
the term "child" means a person under 21 years of age. 
    Sec. 108.  Minnesota Statutes 1986, section 256D.37, 
subdivision 1, is amended to read:  
    Subdivision 1.  (a) For all individuals who apply to the 
appropriate local agency for supplemental aid, the local agency 
shall determine whether the individual meets the eligibility 
criteria prescribed in subdivision 2.  For each individual who 
meets the relevant eligibility criteria prescribed in 
subdivision 2, the local agency shall certify to the 
commissioner the amount of supplemental aid to which the 
individual is entitled in accordance with all of the standards 
in effect December 31, 1973, for the appropriate categorical aid 
program.  
    (b) When a recipient is an adult with mental illness in a 
facility licensed under Minnesota Rules, parts 9520.0500 to 
9520.0690, a resident of a state hospital or a dwelling with a 
negotiated rate, the recipient is not eligible for a shelter 
standard, a basic needs standard, or for special needs 
payments.  The state standard of assistance for those recipients 
is the clothing and personal needs allowance for medical 
assistance recipients under section 256B.35.  Minnesota 
supplemental aid may be paid to negotiated rate facilities at 
the rates in effect on March 1, 1985, for services provided 
under the supplemental aid program to residents of the facility, 
up to the maximum negotiated rate specified in this section.  
The rate for room and board for a licensed facility must not 
exceed $800.  The maximum negotiated rate does not apply to a 
facility that, on August 1, 1984, was licensed by the 
commissioner of health only as a boarding care home, certified 
by the commissioner of health as an intermediate care facility, 
and Minnesota supplemental aid may not be used to pay a 
negotiated rate for adults with mental illness in a facility 
licensed by the commissioner of human services under Minnesota 
Rules, parts 9520.0500 to 9520.0690 or a facility that, on 
August 1, 1984, was licensed by the commissioner of human 
services under Minnesota Rules, parts 9525.0520 to 9525.0660, 
but funded as a supplemental aid negotiated rate facility under 
this chapter.  The following facilities are exempt from the 
limit on negotiated rates and must be reimbursed for documented 
actual costs, until June 30, 1987 an alternative reimbursement 
system covering services excluding room and board maintenance 
services is developed by the commissioner:  
    (1) a facility that only provides services to persons with 
mental retardation; and 
    (2) a facility not certified to participate in the medical 
assistance program that is licensed as a boarding care facility 
as of March 1, 1985, and only provides care to persons aged 65 
or older does not receive supplemental program funding under 
Minnesota Rules, parts 9535.2000 to 9535.3000 or parts 9553.0010 
to 9553.0080.  Beginning July 1, 1987, these the facilities 
under clause (1) are subject to applicable supplemental aid 
limits, and mental retardation facilities must meet all 
applicable licensing and reimbursement requirements for programs 
for persons with mental retardation.  The negotiated rates may 
be paid for persons who are placed by the local agency or who 
elect to reside in a room and board facility or a licensed 
facility for the purpose of receiving physical, mental health, 
or rehabilitative care, provided the local agency agrees that 
this care is needed by the person.  When Minnesota supplemental 
aid is used to pay a negotiated rate, the rate payable to the 
facility must not exceed the rate paid by an individual not 
receiving Minnesota supplemental aid.  To receive payment for a 
negotiated rate, the dwelling must comply with applicable laws 
and rules establishing standards necessary for health, safety, 
and licensure.  The negotiated rate must be adjusted by the 
annual percentage change in the urban consumer price 
index (CPI-U) for Minneapolis-St. Paul (CPI-U U.S. city 
average), as published by the Bureau of Labor Statistics between 
the previous two Octobers Septembers, new series index 
(1967-100) or 2.5 percent, whichever is less.  In computing the 
amount of supplemental aid under this section, the local agency 
shall deduct from the gross amount of the individual's 
determined needs all income, subject to the criteria for income 
disregards in effect December 31, 1973, for the appropriate 
categorical aid program, except that the earned income disregard 
for disabled persons who are not residents of long-term care 
facilities shall must be the same as the earned income disregard 
available to disabled persons in the supplemental security 
income program and all actual work expenses shall must be 
deducted when determining the amount of income for the 
individual.  From and after the first of the month in which an 
effective application is filed, the state and the county shall 
share responsibility for the payment of the supplemental aid to 
which the individual is entitled under this section as provided 
in section 256D.36. 
    Sec. 109.  Minnesota Statutes 1986, section 256E.12, 
subdivision 3, is amended to read:  
    Subd. 3.  The commissioner shall allocate grants under this 
section to finance up to 90 percent of each county's costs for 
services for chronically mentally ill persons.  The commissioner 
shall promulgate emergency and permanent rules to govern grant 
applications, approval of applications, allocation of grants, 
and maintenance of financial statements by grant recipients.  
The commissioner shall require collection of data and periodic 
reports as the commissioner deems necessary to demonstrate the 
effectiveness of the services in helping chronically mentally 
ill persons remain and function in their own communities.  The 
commissioner shall report to the legislature no later than 
January 15, 1983 on the effectiveness of the experimental 
program and shall make recommendations regarding making this 
program an integral part of the social development programs 
administered by counties.  The experimental program shall expire 
no later than June 30, 1987 1989. 
    Sec. 110.  Minnesota Statutes 1986, section 257.35, is 
amended to read:  
    257.35 [CITATION.] 
    Sections 257.35 to 257.357 and sections 257.3571 to 
257.3579 may be cited as the "Minnesota Indian family 
preservation act." 
    Sec. 111.  Minnesota Statutes 1986, section 257.351, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [COMMISSIONER.] "Commissioner" means the 
commissioner of human services. 
    Sec. 112.  Minnesota Statutes 1986, section 257.351, is 
amended by adding a subdivision to read: 
    Subd. 4a.  [FAMILY-BASED SERVICES.] "Family-based services" 
means intensive family-centered services to families primarily 
in their own home and for a limited time. 
    Sec. 113.  Minnesota Statutes 1986, section 257.351, is 
amended by adding a subdivision to read: 
    Subd. 8a.  [INDIAN ORGANIZATION.] "Indian organization" 
means an organization providing child welfare services that is 
legally incorporated as a nonprofit organization, is registered 
with the secretary of state, and is governed by a board of 
directors having at least a majority of Indian directors.  
    Sec. 114.  Minnesota Statutes 1986, section 257.351, is 
amended by adding a subdivision to read: 
    Subd. 11a.  [PERMANENCY PLANNING.] "Permanency planning" 
means the systematic process of carrying out, within a short 
time, a set of goal-oriented activities designed to help 
children live in families that offer continuity of relationships 
with nurturing parents or caretakers, and the opportunity to 
establish lifetime relationships. 
    Sec. 115.  Minnesota Statutes 1986, section 257.351, is 
amended by adding a subdivision to read: 
    Subd. 11b.  [PLACEMENT PREVENTION AND FAMILY REUNIFICATION 
SERVICES.] "Placement prevention and family reunification 
services" means services designed to help children remain with 
their families or to reunite children with their parents. 
    Sec. 116.  Minnesota Statutes 1986, section 257.351, 
subdivision 15, is amended to read:  
    Subd. 15.  [TRIBAL COURT.] "Tribal court" means a court 
with federally recognized jurisdiction over child custody 
proceedings which is either a court of Indian offenses, or a 
court established and operated under the code or custom of an 
Indian tribe, or the administrative body of a tribe which is 
vested with authority over child custody proceedings.  Except as 
provided in section 257.354, subdivision 5, nothing in this 
chapter shall be construed as conferring jurisdiction on an 
Indian tribe. 
    Sec. 117.  Minnesota Statutes 1986, section 257.354, 
subdivision 4, is amended to read:  
    Subd. 4.  [EFFECT OF TRIBAL COURT PLACEMENT ORDERS.] To the 
extent that any child subject to sections 257.35 to 257.357 is 
otherwise eligible for social services, orders of a tribal court 
concerning placement of such child shall have the same force and 
effect as orders of a court of this state.  In any case where 
the tribal court orders placement through a local social service 
agency, the court shall provide to the local agency notice and 
an opportunity to be heard regarding the 
placement.  Determination of county of financial responsibility 
for the placement shall be determined by the local social 
service agency and shall be subject to review by the 
commissioner in accordance with sections 14.01 to 14.69 section 
256E.08.  Disputes concerning the county of financial 
responsibility shall be settled in the manner prescribed in 
section 256D.18, subdivision 4. 
    Sec. 118.  Minnesota Statutes 1986, section 257.354, is 
amended by adding a subdivision to read: 
    Subd. 5.  The commissioner is hereby authorized to enter 
into agreements with Indian tribes pursuant to United States 
Code, title 25, section 1919, respecting care and custody of 
Indian children and jurisdiction over child custody proceedings, 
including agreements which may provide for orderly transfer of 
jurisdiction on a case-by-case basis and agreements which 
provide for concurrent jurisdiction between the state and an 
Indian tribe.  
    Sec. 119.  [257.3571] [INDIAN CHILD WELFARE GRANTS.] 
    Subdivision 1.  [PRIMARY SUPPORT GRANTS.] The commissioner 
shall establish direct grants to Indian tribes and Indian 
organizations to provide primary support for Indian child 
welfare programs to implement the Indian family preservation act.
    Subd. 2.  [SPECIAL FOCUS GRANTS.] The commissioner shall 
establish direct grants to local social service agencies, 
tribes, Indian organizations, and other organizations for 
placement prevention and family reunification services for 
Indian children.  
    Subd. 3.  [REQUEST FOR PROPOSALS.] The commissioner shall 
request proposals for primary support for Indian child welfare 
programs and special focus programs under subdivisions 1 and 2, 
and specify the information and criteria required.  
    Sec. 120.  [257.3572] [GRANT APPLICATIONS.] 
    A tribe or Indian organization may apply for primary 
support grants under section 108, subdivision 1.  A local social 
service agency, tribe, Indian organization, or other social 
service organization may apply for special focus grants under 
section 257.3571, subdivision 2.  Application may be made alone 
or in combination with other tribes or Indian organizations.  
    Sec. 121.  [257.3573] [ELIGIBLE SERVICES.] 
    Subdivision 1.  [TYPES OF SERVICES.] (a) Eligible Indian 
child welfare services provided under primary support grants 
include: 
    (1) placement prevention and reunification services; 
    (2) family-based services; 
    (3) individual and family counseling; 
    (4) access to professional individual, group, and family 
counseling; 
    (5) crisis intervention and crisis counseling; 
    (6) development of foster and adoptive placement resources, 
including recruitment, licensing, and support; 
    (7) court advocacy; 
    (8) training and consultation to county and private social 
service agencies regarding the Indian child welfare act and the 
Minnesota Indian family preservation act; 
    (9) advocacy in working with the county and private social 
service agencies, and activities to help provide access to 
agency services, including but not limited to 24-hour caretaker 
and homemaker services, day care, emergency shelter care up to 
30 days in 12 months, access to emergency financial assistance, 
and arrangements to provide temporary respite care to a family 
for up to 72 hours consecutively or 30 days in 12 months. 
    (10) transportation services to the child and parents to 
prevent placement or reunite the family; and 
    (11) other activities and services approved by the 
commissioner that further the goals of the Indian child welfare 
act and the Indian family preservation act, including but not 
limited to recruitment of Indian staff for local social service 
agencies and licensed child placing agencies.  The commissioner 
may specify the priority of an activity and service based on its 
success in furthering these goals. 
    (b) Eligible services provided under special focus grants 
include; 
    (1) permanency planning activities that meet the special 
needs of Indian families; 
    (2) teenage pregnancy; 
    (3) independent living skills; 
    (4) family and community involvement strategies to combat 
child abuse and chronic neglect of children; 
    (5) coordinated child welfare and mental health services to 
Indian families; 
    (6) innovative approaches to assist Indian youth to 
establish better self-image, decrease isolation, and decrease 
the suicide rate; 
    (7) expanding or improving services by packaging and 
disseminating information on successful approaches or by 
implementing models in Indian communities relating to the 
development or enhancement of social structures that increase 
family self-reliance and links with existing community resources;
    (8) family retrieval services to help adopted individuals 
reestablish legal affiliation with the Indian tribe; and 
    (9) other activities and services approved by the 
commissioner that further the goals of the Indian child welfare 
act and the Indian family preservation act.  The commissioner 
may specify the priority of an activity and service based on its 
success in furthering these goals. 
    (c) The commissioner shall give preference to programs that 
use Indian staff, contract with Indian organizations or tribes, 
or whose application is a joint effort between the Indian and 
non-Indian community to achieve the goals of the Indian child 
welfare act and the Minnesota Indian family preservation act.  
Programs must have input and support from the Indian community. 
    Subd. 2.  [INAPPROPRIATE EXPENDITURES.] Indian child 
welfare grant money must not be used for: 
    (1) child day care necessary solely because of employment 
or training for employment of a parent or other relative with 
whom the child is living; 
    (2) foster care maintenance or difficulty of care payments; 
    (3) residential facility payments; 
    (4) adoption assistance payments; 
    (5) public assistance payments for aid to families with 
dependent children, supplemental aid, medical assistance, 
general assistance, general assistance medical care, or 
community health services authorized by sections 145.911 to 
145.922; or 
    (6) administrative costs for income maintenance staff.  
    Sec. 122.  [257.3574] [CONTINUED LEGAL RESPONSIBILITY OF 
LOCAL SOCIAL SERVICE AGENCIES.] 
    The legal responsibility of local social service agencies 
to provide Indian child welfare services continues, and existing 
services must not be reduced because of the availability of 
these funds.  
     Sec. 123.  [257.3575] [PAYMENTS; REQUIRED REPORTS.] 
    Subdivision 1.  [PAYMENTS.] The commissioner shall make 
grant payments to each approved program in four quarterly 
installments a year.  The commissioner may certify an advance 
payment for the first quarter of the state fiscal year.  Later 
payments must be made upon receipt by the state of a quarterly 
report on finances and program activities. 
    Subd. 2.  [QUARTERLY REPORT.] Each quarter, an approved 
program receiving an Indian child welfare grant shall submit a 
report to the commissioner that includes: 
    (1) a detailed accounting of grant money expended during 
the preceding quarter, specifying expenditures by line item and 
year to date; and 
    (2) a description of Indian child welfare activities 
conducted during the preceding quarter, including the number of 
clients served and the type of services provided.  
    The quarterly reports must be submitted no later than 15 
days after the end of each quarter of the state fiscal year. 
    Subd. 3.  [FINAL REPORT.] A final evaluation report must be 
submitted by each approved program.  It must include client 
outcomes, cost and effectiveness in meeting the goals of the 
Indian family preservation act and permanency planning goals. 
    Sec. 124.  [257.3576] [MONITORING AND EVALUATION.] 
    The commissioner shall design and implement methods for 
monitoring the delivery and evaluating the effectiveness of 
Indian child welfare services funded through these grants. 
    Sec. 125.  [257.3577] [GRANT FORMULA.] 
    Subdivision 1.  [PRIMARY SUPPORT GRANTS.] (a) The amount 
available for grants established under section 108, subdivision 
1, to tribes and Indian organization grants is four-fifths of 
the total annual appropriation for Indian child welfare grants.  
    (b) The commissioner shall award tribes at least 70 percent 
of the amount set in paragraph (a) for primary support grants.  
Each tribe shall be awarded a base amount of five percent of the 
total amount set in this paragraph.  In addition, each tribe 
shall be allocated a proportion of the balance of the amount set 
in this paragraph, less the total base amounts for all 
reservations.  This proportion must equal the ratio of the 
tribe's on-reservation population to the state's total 
on-reservation population.  Population data must be based on the 
most recent federal census data according to the state 
demographer's office. 
    (c) The commissioner shall award Indian organizations up to 
30 percent of the amount set in paragraph (a) for primary 
support grants.  A maximum of four multiservice Indian 
organizations may be awarded grants under this paragraph.  
"Multiservice Indian organizations" means Indian organizations 
recognized by the Indian community as providing a broad 
continuum of social, educational, or cultural services, 
including Indian child welfare services designed to meet the 
unique needs of the Indian communities in Minneapolis, St. Paul, 
and Duluth.  Grants may be awarded to programs that submit 
acceptable proposals, comply with the goals and the application 
process of the program, and have budgets that reflect 
appropriate and efficient use of funds. 
    Subd. 2.  [SPECIAL FOCUS GRANTS.] The amount available for 
grants established under section 257.3571, subdivision 2 for 
local social service agencies, tribes, Indian organizations, and 
other social services organizations is one-fifth of the total 
annual appropriation for Indian child welfare grants.  The 
maximum award under this subdivision is $100,000 a year for 
programs approved by the commissioner. 
    Sec. 126.  [257.3578] [UNDISTRIBUTED FUNDS.] 
    Undistributed funds must be reallocated by the department 
of human services to any other grant categories established 
under section 257.3571, subdivision 1 or 2 for the goals of this 
grant process.  Undistributed funds are available until expended.
    Sec. 127.  [257.3579] [AMERICAN INDIAN ADVISORY TASK 
FORCE.] 
    Subdivision 1.  [CREATION OF TASK FORCE.] The commissioner 
shall appoint an American Indian advisory task force to help 
formulate policies and procedures relating to Indian child 
welfare services and to make recommendations regarding approval 
of grants provided under section 257.3571, subdivisions 1 and 
2.  The task force shall consist of 17 members appointed by the 
commissioner and must include representatives of each of the 11 
Minnesota reservations who are authorized by tribal resolution, 
one representative from the Duluth Urban Indian Community, three 
representatives from the Minneapolis Urban Indian Community, and 
two representatives from the St. Paul Urban Indian Community.  
Representatives from the urban Indian communities must be 
selected through an open appointments process under section 
15.0597.  The task force shall expire on June 30, 1991.  The 
terms, compensation, and removal of American Indian advisory 
task force members shall be as provided in section 15.059. 
    Sec. 128.  Minnesota Statutes 1986, section 268.0111, 
subdivision 8, is amended to read: 
    Subd. 8.  [SERVICE PROVIDER.] "Service provider" means a 
public, private, or nonprofit agency that is capable of 
providing or administrating one or more of the employment and 
training services or income maintenance and support services or 
administering one or more of the programs for which the full 
productivity and opportunity coordinator has responsibility 
under this section. 
    Sec. 129.  Minnesota Statutes 1986, section 268.0122, 
subdivision 2, is amended to read: 
    Subd. 2.  [SPECIFIC POWERS.] The commissioner of jobs and 
training shall: 
    (1) administer and supervise all forms of unemployment 
insurance provided for under federal and state laws that are 
vested in the commissioner; 
    (2) administer and supervise all employment and training 
services assigned to the department of jobs and training under 
federal or state law; 
    (3) review and comment on local service unit plans and 
community investment program plans and, with the concurrence of 
the coordinator, approve or disapprove the plans; 
    (4) establish and maintain administrative units necessary 
to perform administrative functions common to all divisions of 
the department; 
    (5) supervise the county boards of commissioners, local 
service units, and any other units of government designated in 
federal or state law as responsible for employment and training 
programs; 
    (6) establish administrative standards and payment 
conditions for providers of employment and training services; 
    (7) act as the agent of, and cooperate with, the federal 
government in matters of mutual concern, including the 
administration of any federal funds granted to the state to aid 
in the performance of functions of the commissioner; and 
    (8) obtain reports from local service units and service 
providers for the purpose of evaluating the performance of 
employment and training services. 
     Sec. 130.  Minnesota Statutes 1986, section 268.0122, 
subdivision 3, is amended to read: 
    Subd. 3.  [DUTIES AS A STATE AGENCY.] The commissioner 
shall: 
    (1) administer the unemployment insurance laws and related 
programs; 
    (2) administer the aspects of aid to families with 
dependent children, general assistance, work readiness, and food 
stamps that relate to employment and training services, subject 
to the limitations of federal regulations; 
    (3) administer wage subsidies and recommend to the 
coordinator the use of the discretionary portion of wage subsidy 
appropriations; 
    (4) administer a national system of public employment 
offices as prescribed by United States Code, title 29, chapter 
4B, the Wagner-Peyser Act, and other federal employment and 
training programs; 
    (5) cooperate with the federal government and its 
employment and training agencies in any reasonable manner as 
necessary to qualify for federal aid for employment and training 
services and money; 
    (6) enter into agreements with other departments of the 
state and local units of government as necessary; 
    (7) certify competent service providers and, with the 
concurrence of the coordinator, decertify service providers that 
fail to comply with performance criteria according to standards 
established by the coordinator commissioner; 
    (8) provide consistent, integrated employment and training 
services across the state; 
    (9) establish the standards for all employment and training 
services administered under this chapter; 
    (10) develop standards for the contents and structure of 
the county plans; 
    (11) provide current state and substate labor market 
information and forecasts, in cooperation with other agencies; 
    (12) prepare a plan and submit it to the coordinator in 
each even-numbered year, according to standards established by 
the coordinator, for use in developing a statewide employment 
and training plan; 
    (13) (12) identify underserved populations, unmet service 
needs, and funding requirements; 
    (14) (13) consult with the council for the blind on matters 
pertaining to programs and services for the blind and visually 
impaired; and 
    (15) (14) submit to the governor, the coordinator, the 
commissioners of human services and finance, and the chairs of 
the senate finance and house appropriations committees a 
semiannual report that: 
    (a) reports, by client classification, an unduplicated 
count of the kinds and number of services furnished through each 
program administered or supervised by the department or 
coordinated with it; 
    (b) reports on the number of job openings listed, 
developed, available, and obtained by clients; 
    (c) identifies the number of cooperative agreements in 
place, the number of individuals being served, and the kinds of 
service provided them; 
    (d) evaluates the performance of services, such as wage 
subsidies, community investments, work readiness, and grant 
diversions; and 
    (e) explains the effects of current employment levels, 
unemployment rates, and program performance on the unemployment 
insurance fund and general assistance, work readiness, and aid 
to families with dependent children caseloads and program 
expenditures. 
     Sec. 131.  Minnesota Statutes 1986, section 268.36, is 
amended to read: 
    268.36 [REPORT TO THE COORDINATOR AND THE LEGISLATURE.] 
    The commissioner, after consultation with the local service 
units and providers of employment and training services, shall 
evaluate the effectiveness of youth employment programs, taking 
into account the extent of all programs which are providing 
summer employment opportunities for youth, and shall report to 
the coordinator and the legislature no later than January 15 of 
each even-numbered year with an evaluation of this and other 
programs and any recommendations for improvements. 
    Sec. 132.  Minnesota Statutes 1986, section 268.37, 
subdivision 3, is amended to read: 
    Subd. 3.  The commissioner shall promulgate emergency rules 
as necessary to administer the grants program and shall 
promulgate permanent rules by July 1, 1980.  The rules shall 
describe:  (a) procedures for the administration of grants, (b) 
data to be reported by grant recipients, and (c) other matters 
the commissioner finds necessary for the proper administration 
of the grant program including compliance with relevant federal 
regulations.  Weatherization assistance shall be given to 
households where the total income does not exceed 125 percent of 
the poverty level as updated by the federal office of management 
and budget poverty guidelines.  The commissioner must require 
that a rental unit weatherized under this section be rented to a 
household meeting the income limits of the program for 24 of the 
36 months after weatherization is complete.  In applying this 
restriction to multiunit buildings weatherized under this 
section, the commissioner shall require that occupancy continue 
to reflect the proportion of eligible households in the building 
at the time of weatherization.  The commissioner shall report by 
February 1, 1988, to the chair of the health and human services 
divisions of the house appropriations and senate finance 
committees all steps taken to implement the requirement 
restricting rental of weatherized units to eligible households. 
    Sec. 133.  Minnesota Statutes 1986, section 268.53, 
subdivision 1, is amended to read:  
    Subdivision 1.  [IN GENERAL.] A community action agency is 
a political subdivision of the state, a combination of political 
subdivisions, a public agency, or a private nonprofit agency 
which has the authority under its applicable charter or laws to 
receive funds under section 268.52 to support community action 
programs as described in section 268.54 and which was designated 
as an eligible entity under the Community Services Block Grant 
Act, Public Law Number 97-35, section 673(1), 95 Stat. 357, 512 
(1981), as amended by, Act of October 30, 1984, Public Law 
Number 98-558, section 202, 98 Stat. 2878, 2884 (1984).  For 
purposes of this subdivision, "eligible entity" also means any 
community action agency which qualified under all federal and 
state regulations applicable during the period from 1981 to 
September 30, 1984.  
    Sec. 134.  Minnesota Statutes 1986, section 268.673, is 
amended by adding a subdivision to read: 
    Subd. 4a.  [CONTRACTS WITH SERVICE PROVIDERS.] The 
commissioner shall contract directly with a certified local 
service provider to deliver wage subsidies if (1) each county 
served by the provider agrees to the contract and knows the 
amount of wage subsidy money allocated to the county under 
section 268.6751, and (2) the provider agrees to meet regularly 
with each county being served. 
    Sec. 135.  Minnesota Statutes 1986, section 268.673, 
subdivision 5, is amended to read:  
    Subd. 5.  [REPORT.] Each eligible local service unit entity 
delivering wage subsidies shall report to the commissioner and 
the coordinator on a quarterly basis:  
    (1) the number of persons employed placed in private sector 
jobs, in temporary public sector jobs, or in other services; 
    (2) the outcome for each participant placed in a private 
sector job, in a temporary public sector job, or in another 
service; 
    (3) the number and type of employers employing persons 
under the program; 
    (3) (4) the amount of money spent in each eligible local 
service unit for wages for each type of employment and each type 
of other expense; 
    (4) (5) the number age, educational experience, family 
status, gender, priority group status, race, and work experience 
of persons who have completed participation each person in the 
program and their current employment, educational, or training 
status; 
    (6) the amount of wages received by persons while in the 
program and 60 days after completing the program; 
    (7) for each classification of persons described in clause 
(5), the outcome of the wage subsidy placement, including length 
of time employed; nature of employment, whether private sector, 
temporary public sector, or other service; and the hourly wages; 
and 
    (5) (8) any other information requested by the commissioner 
or the coordinator.  Each report must include cumulative 
information, as well as information for each quarter. 
    Data collected on individuals under this subdivision are 
private data on individuals as defined in section 13.02, 
subdivision 12, except that summary data may be provided under 
section 13.05, subdivision 7. 
    Sec. 136.  Minnesota Statutes 1986, section 268.6751 is 
amended to read:  
    Subdivision 1.  [WAGE SUBSIDIES.] Wage subsidy money must 
be allocated to eligible local service units in the following 
manner: 
    (a) The commissioner shall allocate 70 87.5 percent of the 
funds available for allocation to eligible local service units 
for wage subsidy programs as follows:  the proportion of the 
wage subsidy money available to each eligible local service unit 
must be based on the number of unemployed persons in the 
eligible local service unit for the most recent six-month period 
and the number of work readiness assistance cases and aid to 
families with dependent children cases in the eligible local 
service unit for the most recent six-month period. 
    (b) Thirty Five percent of the money available for wage 
subsidy programs must be allocated at the direction and 
discretion of the coordinator commissioner. 
     (c) Seven and one-half percent of the money available for 
wage subsidy programs must be allocated at the discretion of the 
commissioner to provide jobs for residents of federally 
recognized Indian reservations.  The commissioner shall 
distribute the discretionary portion of wage subsidy 
appropriations at the request of the coordinator.  For the 
biennium ending June 30, 1987, up to 25 percent of the 
discretionary portion of the wage subsidy appropriation may be 
used to support the office of full productivity and opportunity 
and the development of an intake, referral, and inventory 
system.  In allocating the remaining discretionary portion of 
the wage subsidy appropriation, the coordinator shall give 
priority to eligible local service units that have: 
    (1) high numbers of farmers who can demonstrate severe 
household financial need; 
    (2) demonstrated success in placing public assistance 
applicants in private sector jobs; 
    (3) demonstrated need beyond the allocation distributed 
under paragraph (a); 
    (4) maximized use of money through coordination with other 
programs and state, local, and federal agencies, and through the 
use of matching money from private and nonprofit sources; 
    (5) demonstrated need to provide special assistance in 
order to serve unemployed persons who incur unusual costs such 
as necessary relocation expenses; or 
    (6) areas with high unemployment rates.  
    (d) By December 31 of each fiscal year, providers and local 
service units receiving wage subsidy money shall report to the 
commissioner on the use of allocated funds.  The commissioner 
shall reallocate uncommitted funds for each fiscal year 
according to the formula in paragraph (a). 
    Subd. 2.  [EMERGENCY WAGE SUBSIDIES.] (a) The 
coordinator commissioner shall monitor local and statewide 
unemployment rates.  Upon determining that an economic emergency 
exists in one or more local service units, the coordinator 
commissioner may implement an emergency wage subsidy program and 
recommend to the governor to pursue ways to increase the wage 
subsidy money available to local service units in the affected 
area or areas from sources other than the appropriation 
allocated under subdivision 1.  
    (b) When the unemployment rate for the state of Minnesota 
equals or exceeds nine percent, the coordinator commissioner 
shall implement a statewide emergency wage subsidy program and 
shall recommend to the governor to pursue ways to increase money 
available for wage subsidies. 
    Sec. 137.  Minnesota Statutes 1986, section 268.676, is 
amended to read:  
    268.676 [ALLOCATION WITHIN ELIGIBLE LOCAL SERVICE UNITS; 
PRIORITIES AMONG APPLICANTS; EMPLOYERS.] 
    Subdivision 1.  [AMONG JOB APPLICANTS.] Allocation At least 
80 percent of funds allocated among eligible job 
applicants within an eligible local service unit shall give 
priority statewide must be allocated to: 
    (1) applicants living in households with no other income 
source; 
    (2) applicants whose incomes and resources are less than 
the standards for eligibility for general assistance or work 
readiness; 
    (3) applicants who are eligible for aid to families with 
dependent children; and 
    (4) applicants who live in a farm household who demonstrate 
severe household financial need. 
    Subd. 2.  [AMONG EMPLOYERS.] Allocation of funds among 
eligible employers within an eligible local service unit shall 
give priority to funding private sector jobs to the extent that 
eligible businesses apply for funds.  If possible, no more than 
25 percent of the statewide funds available for wages may be 
allocated for temporary jobs with eligible government and 
nonprofit agencies, or for temporary community investment 
program jobs with eligible government agencies during the 
biennium.  This subdivision does not apply to jobs for residents 
of federally recognized Indian reservations. 
    Sec. 138.  Minnesota Statutes 1986, section 268.677, 
subdivision 1, is amended to read:  
    Subdivision 1.  To the extent allowable under federal and 
state law, wage subsidy money must be pooled and used in 
combination with money from other employment and training 
services or income maintenance and support services.  At least 
75 percent of the money appropriated for wage subsidies must be 
used to pay wages for eligible job applicants.  For each 
eligible job applicant employed, the maximum state contribution 
from any combination of public assistance grant diversion and 
employment and training services governed under this chapter, 
including wage subsidies, is $4 per hour for wages and $1 per 
hour for fringe benefits.  In addition, The use of wage 
subsidies are is limited as follows:  
    (a) For each eligible job applicant placed in private or 
nonprofit employment, the state may subsidize wages for a 
maximum of 1,040 hours over a period of 26 weeks.  Employers are 
encouraged to use money from other sources to provide increased 
wages to applicants they employ.  
    (b) For each eligible job applicant participating in a job 
training program and placed in private sector employment, the 
state may subsidize wages for a maximum of 1,040 hours over a 
period of 52 weeks.  
    (c) For each eligible job applicant placed in a community 
investment program job, the state may provide wage subsidies for 
a maximum of 780 hours over a maximum of 26 weeks.  For an 
individual placed in a community investment program job, the 
county share of the wage subsidy shall be 25 percent.  Counties 
may use money from sources other than public assistance and wage 
subsidies, including private grants, contributions from 
nonprofit corporations and other units of government, and other 
state money, to increase the wages or hours of persons employed 
in community investment programs.  
    (d) Notwithstanding the limitations of paragraphs (a) and 
(b), money may be used to provide a state contribution for wages 
and fringe benefits in private sector jobs for eligible 
applicants who had previously held temporary jobs with eligible 
government and nonprofit agencies or who had previously held 
community investment program jobs for which a state contribution 
had been made, and who are among the priority groups established 
in section 268.676, subdivision 1.  The use of money under this 
paragraph shall be for a maximum of 1,040 hours over a maximum 
period of 26 weeks per job applicant. 
    Sec. 139.  Minnesota Statutes, section 268.678, subdivision 
1, is amended to read:  
    Subdivision 1.  [GENERAL POWERS.] Eligible local service 
units have the powers and duties given in this section and any 
additional duties given by the coordinator or the commissioner.  
    Sec. 140.  Minnesota Statutes 1986, section 268.678, 
subdivision 4, is amended to read:  
    Subd. 4.  [CONTRACTS.] Each eligible local service unit 
that has not agreed to a contract under section 122, may enter 
into contracts with certified service providers to deliver wage 
subsidies. 
    Sec. 141.  Minnesota Statutes 1986, section 268.681, 
subdivision 2, is amended to read:  
    Subd. 2.  [PRIORITIES.] (a) In allocating funds among 
eligible businesses, the eligible local service unit or its 
contractor shall give priority to: 
    (1) businesses engaged in manufacturing; 
    (2) nonretail businesses that are small businesses as 
defined in section 645.445; and 
    (3) businesses that export products outside the state. 
    (b) In addition to paragraph (a), an eligible local service 
unit must give priority to businesses which best satisfy the 
following criteria that: 
    (a) (1) have a high potential for growth and long-term job 
creation;  
    (b) (2) are labor intensive;  
    (c) meet the definition of a small business as defined in 
section 645.445;  
    (d) (3) make high use of local and Minnesota resources;  
    (e) (4) are under ownership of women and minorities;  
    (f) (5) make high use of new technology;  
    (g) (6) produce energy conserving materials or services or 
are involved in development of renewable sources of energy; and 
    (h) (7) have their primary place of business in Minnesota.  
    Sec. 142.  Minnesota Statutes 1986, section 268.681, 
subdivision 3, is amended to read:  
    Subd. 3.  [PAYBACK.] A business receiving wage subsidies 
shall repay 70 percent of the amount initially received for each 
eligible job applicant employed, if the employee does not 
continue in the employment of the business beyond the six-month 
subsidized period.  If the employee continues in the employment 
of the business for one year or longer after the six-month 
subsidized period, the business need not repay any of the funds 
received for that employee's wages.  If the employee continues 
in the employment of the business for a period of less than one 
year after the expiration of the six-month subsidized period, 
the business shall receive a proportional reduction in the 
amount it must repay.  If an employer dismisses an employee for 
good cause and works in good faith with the eligible local 
service unit or its contractor to employ and train another 
person referred by the eligible local service unit or its 
contractor, the payback formula shall apply as if the original 
person had continued in employment.  
    A repayment schedule shall be negotiated and agreed to by 
the eligible local service unit and the business prior to the 
disbursement of the funds and is subject to renegotiation.  The 
eligible local service unit shall forward 25 percent of the 
payments received under this subdivision to the commissioner on 
a monthly basis and shall retain the remaining 75 percent for 
local program expenditures.  Notwithstanding section 268.677, 
subdivision 2, the local service unit may use up to 20 percent 
of its share of the funds returned under this subdivision for 
any administrative costs associated with the collection of the 
funds under this subdivision.  At least 80 percent of the local 
service unit's share of the funds returned under this 
subdivision must be used as provided in section 268.677.  The 
commissioner shall deposit these payments forwarded to the 
commissioner under this subdivision in the Minnesota wage 
subsidy account created by subdivision 4.  
    Sec. 143.  Minnesota Statutes 1986, section 268.871, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RESPONSIBILITY AND CERTIFICATION.] Unless 
prohibited by federal law or otherwise determined by state 
law or the coordinator, a local service unit is responsible for 
the delivery of employment and training services.  After 
February 1, 1986, employment and training services must be 
delivered by public, nonprofit, or private service providers 
that are certified to provide the services.  
    Sec. 144.  Minnesota Statutes 1986, section 268.88, is 
amended to read: 
     268.88 [LOCAL SERVICE UNIT PLANS.] 
     (a) Local service units shall prepare and submit to the 
commissioner by October 15 of each year an annual plan for the 
subsequent calendar year.  The commissioner shall notify each 
local service unit by December 1 of each year if its plan has 
been approved or disapproved.  The plan must include: 
     (1) a statement of objectives for the employment and 
training services the local service unit administers; 
     (2) the establishment of public assistance caseload 
reduction goals and the strategies that will be used to achieve 
these goals; 
     (3) a statement of whether the goals from the preceding 
year were met and an explanation if the local service unit 
failed to meet the goals; 
     (4) the amount proposed to be allocated to each employment 
and training service; 
     (5) the proposed types of employment and training services 
the local service unit plans to utilize; 
     (6) a report on the use of wage subsidies, grant 
diversions, community investment programs, sliding fee day care, 
and other services administered under this chapter; 
     (7) an annual update of the community investment program 
plan according to standards established by the commissioner; and 
     (8) a performance review of service providers delivering 
employment and training services. 
    (b) In counties with a city of the first class, the county 
and the city shall develop and submit a joint plan.  The plan 
may not be submitted until agreed to by both the city and the 
county.  The plan must provide for the direct allocation of 
employment and training money to the city and the county unless 
waived by either.  If the county and the city cannot concur on a 
plan, the coordinator commissioner shall resolve their dispute. 
    (c) The commissioner may withhold the distribution of 
employment and training money from a local service unit that 
does not submit a plan to the commissioner by the date set by 
this section, and shall withhold the distribution of employment 
and training money from a local service unit whose plan has been 
disapproved by the coordinator commissioner until an acceptable 
amended plan has been submitted.  
    (d) For 1985, local service unit plans must be submitted by 
November 1, 1985 and must include:  
    (1) a statement of objectives for the employment and 
training services the local service unit administers; 
    (2) the establishment of public assistance caseload 
reduction goals and the strategies that will be used to achieve 
these goals; 
    (3) the amount proposed to be allocated to each employment 
and training service; 
    (4) the proposed employment and training services and 
service providers the local service unit plans to utilize; and 
    (5) a statement of intent regarding the establishment of 
either a community investment program or an employment 
experience program.  
    If the local service unit provides a statement of intent 
for the establishment of a community investment program under 
clause (5), the local service unit must submit a preliminary 
community investment program plan by February 1, 1986.  
     Sec. 145.  Minnesota Statutes 1986, section 268.89, 
subdivision 2, is amended to read: 
    Subd. 2.  [BIENNIAL PLAN.] The commissioner shall recommend 
to the governor the priorities, performance standards, and 
special projects that are consistent with the coordinator's 
biennial plan. 
     Sec. 146.  Minnesota Statutes 1986, section 268.91, 
subdivision 2, is amended to read: 
    Subd. 2.  [DUTIES OF COMMISSIONER.] The commissioner shall 
develop standards for county boards to provide child care 
services to enable eligible families to participate in 
employment or training programs.  The commissioner shall 
distribute money to counties to reduce the costs of child care 
for eligible families.  The commissioner shall adopt rules to 
govern the program in accordance with this section.  The rules 
must establish a sliding schedule of fees for parents receiving 
child care services.  The commissioner shall require counties to 
collect and report data that the commissioner deems necessary to 
evaluate the effectiveness of the program in preventing and 
reducing participants' dependence on public assistance and in 
providing other benefits, including improvement in the care 
provided to children.  The commissioner shall report to the full 
productivity and opportunity coordinator in each even-numbered 
year on the effectiveness of the program.  
    Sec. 147.  Minnesota Statutes 1986, section 287.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  A tax of 15 23 cents is imposed upon each 
$100, or fraction thereof, of the principal debt or obligation 
which is or may be secured by any mortgage of real property 
situated within the state executed, delivered, and recorded or 
registered; provided, however, that the tax shall be imposed but 
once upon any mortgage and extension thereof.  If the mortgage 
describes real estate situated outside of this state, the tax 
shall be imposed upon that proportion of the whole debt secured 
thereby as the value of the real estate therein described 
situated in this state bears to the value of the whole of the 
real estate described therein.  The tax imposed by this section 
shall not apply to a contract for the conveyance of real estate 
or any interest in real estate recorded or registered on or 
after January 1, 1984.  
    Sec. 148.  Minnesota Statutes 1986, section 287.12, is 
amended to read: 
    287.12 [TAXES, HOW APPORTIONED.] 
    All taxes paid to the county treasurer under the provisions 
of sections 287.01 to 287.12 shall be credited to the county 
revenue fund. 
    On or before the tenth day of each month the county 
treasurer shall determine the receipts from the mortgage 
registration tax during the preceding month.  The treasurer 
shall report to the county welfare agency on or before the tenth 
day of each month 95 97 percent of the receipts attributable to 
the statutory rate in section 287.05.  That amount, in addition 
to 97 percent of the amount determined under section 287.29, 
must be shown as a deduction from the report filed with the 
department of human services as required by section 256.82.  The 
net receipts from the preceding month must be credited to the 
county welfare fund by the tenth day of each month. 
    Sec. 149.  Minnesota Statutes 1986, section 287.21, 
subdivision 1, is amended to read: 
    Subdivision 1.  There is hereby imposed on each deed, 
instrument, or writing by which any lands, tenements, or other 
realty in this state shall be granted, assigned, transferred or 
otherwise conveyed, a tax determined in the following manner.  
When transfers are made by instruments pursuant to mergers, 
consolidations, sales or transfers of substantially all of the 
assets of corporations pursuant to plans of reorganization or 
there is no consideration or when the consideration, exclusive 
of the value of any lien or encumbrance remaining thereon at the 
time of sale, is $1,000 $500 or less, the tax shall 
be $2.20 $1.65.  When the consideration, exclusive of the value 
of any lien or encumbrance remaining thereon at the time of 
sale, exceeds $1,000 $500, the tax shall be $2.20 $1.65 plus 
$1.10 $1.65 for each additional $500 or fractional part of $500 
in excess of $1,000 fraction of that amount. 
     The tax applies against the total consideration, including 
the fair market value of any personal property transferred as 
part of the total consideration. 
    Sec. 150.  Minnesota Statutes 1986, section 393.07, 
subdivision 10, is amended to read:  
    Subd. 10.  [FEDERAL FOOD STAMP PROGRAM.] (a) The county 
welfare board shall establish and administer the food stamp 
program pursuant to rules of the commissioner of human services 
and all federal laws and regulations.  The commissioner of human 
services shall monitor food stamp program delivery on an ongoing 
basis to ensure that each county complies with federal laws and 
regulations.  Program requirements to be monitored include, but 
are not limited to, number of applications, number of approvals, 
number of cases pending, length of time required to process each 
application and deliver benefits, number of applicants eligible 
for expedited issuance, length of time required to process and 
deliver expedited issuance, number of terminations and reasons 
for terminations, client profiles by age, household composition 
and income level and sources, and the use of phone certification 
and home visits.  The commissioner shall determine the 
county-by-county and statewide participation rate.  The 
commissioner shall report on the monitoring activities on a 
county-by-county basis in a report presented to the legislature 
by July 1 each year.  This monitoring activity shall be separate 
from the management evaluation survey sample required under 
federal regulations.  
    (b) On July 1 of each year, the commissioner of human 
services shall determine a statewide and county-by-county food 
stamp program participation rate.  The commissioner may 
designate a different agency to administer the food stamp 
program in a county if the agency administering the program 
fails to increase the food stamp program participation rate 
among families or eligible individuals, or comply with all 
federal laws and regulations governing the food stamp program.  
The commissioner shall review agency performance annually to 
determine compliance with this paragraph. 
    (c) The county welfare board shall participate in a food 
stamp quality control system subject to the supervision of the 
commissioner of human services and pursuant to federal 
regulations.  
    Any A person who commits any of the following acts is 
guilty of theft and shall be sentenced pursuant to section 
609.52, subdivision 3, clauses (1), (2), and (5) has violated 
section 256.98 and is subject to both the criminal and civil 
penalties provided under that section: 
    (1) Obtains or attempts to obtain, or aids or abets any 
person to obtain by means of a willfully false statement or 
representation, or intentional concealment of a material fact, 
food stamps to which the person is not entitled or in an amount 
greater than that to which that person is entitled; or 
    (2) Presents or causes to be presented, coupons for payment 
or redemption knowing them to have been received, transferred or 
used in a manner contrary to existing state or federal law; or 
    (3) Willfully uses or transfers food stamp coupons or 
authorization to purchase cards in any manner contrary to 
existing state or federal law. 
    The amount of food stamps incorrectly issued shall be the 
difference between the amount of food stamps actually received 
and the amount to which the recipient would have been entitled 
under state and federal law had the welfare agency been informed 
of all material facts.  The amount of any food stamps determined 
to have been incorrectly issued, used, transferred or presented 
shall, unless otherwise determined by the county welfare board 
in order to prevent undue hardship, be recoverable from the 
recipient, or user, or the recipient's or user's estate by the 
county as a debt due the county. 
    Sec. 151.  Minnesota Statutes 1986, section 524.3-1201, is 
amended to read:  
    524.3-1201 [COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT.] 
    (a) Thirty days after the death of a decedent, any person 
indebted to the decedent or having possession of tangible 
personal property or an instrument evidencing a debt, 
obligation, stock or chose in action belonging to the decedent 
shall make payment of the indebtedness or deliver the tangible 
personal property or an instrument evidencing a debt, 
obligation, stock or chose in action to a person claiming to be 
the successor of the decedent, or a county agency with a claim 
authorized by section 256B.15, upon being presented a certified 
death certificate of the decedent and an affidavit, in 
duplicate, made by or on behalf of the successor stating that: 
    (1) the value of the entire probate estate, wherever 
located, less liens and encumbrances, does not exceed $5,000; 
    (2) 30 days have elapsed since the death of the decedent; 
    (3) no application or petition for the appointment of a 
personal representative is pending or has been granted in any 
jurisdiction; and 
    (4) the claiming successor is entitled to payment or 
delivery of the property. 
    (b) A transfer agent of any security shall change the 
registered ownership on the books of a corporation from the 
decedent to the successor or successors upon the presentation of 
an affidavit as provided in subsection (a). 
    (c) The claiming successor or county agency shall disburse 
the proceeds collected under this section to any person with a 
superior claim under section 524.3-805. 
    Sec. 152.  Minnesota Statutes 1986, section 525.56, 
subdivision 3, is amended to read:  
    Subd. 3.  The court may appoint a guardian of the person if 
it determines that all the powers and duties listed in this 
subdivision are needed to provide for the needs of the 
incapacitated person.  The court may appoint a conservator of 
the person if it determines that a conservator is needed to 
provide for the needs of the incapacitated person through the 
exercise of some, but not all, of the powers and duties listed 
in this subdivision.  The duties and powers of a guardian or 
those which the court may grant to a conservator of the person 
include, but are not limited to: 
    (1) The power to have custody of the ward or conservatee 
and the power to establish a place of abode within or without 
the state, except as otherwise provided in this clause.  The 
ward or conservatee or any person interested in the ward's or 
conservatee's welfare may petition the court to prevent or to 
initiate a change in abode.  A ward or conservatee may not be 
admitted to any state institution by the guardian or conservator 
except (1) after a hearing pursuant to section 253A.07; (2) for 
outpatient services; or (3) for the purpose of receiving 
temporary care for a specific period of time not to exceed 90 
days in any calendar year. 
    (2) The duty to provide for the ward's or conservatee's 
care, comfort and maintenance needs, including food, clothing, 
shelter, health care, social and recreational requirements, and, 
whenever appropriate, training, education and rehabilitation.  
The guardian or conservator has no duty to pay for these 
requirements out of personal funds.  Whenever possible and 
appropriate, the guardian or conservator should meet these 
requirements through governmental benefits or services to which 
the ward or conservatee is entitled, rather than from the ward's 
or conservatee's estate.  Failure to satisfy the needs and 
requirements of this clause shall be grounds for removal, but 
the guardian or conservator shall have no personal or monetary 
liability.  
    (3) The duty to take reasonable care of the ward's or 
conservatee's clothing, furniture, vehicles and other personal 
effects, and, if other property requires protection, the power 
to seek appointment of a guardian or conservator of the estate.  
The guardian or conservator must give notice in the manner 
required and to those persons specified in section 525.55 prior 
to the disposition of the ward's or conservatee's clothing, 
furniture, vehicles or other personal effects.  The notice must 
inform the person of the right to object to the disposition of 
the property within ten days and to petition the court for a 
review of the guardian's or conservator's proposed actions.  
Notice of the objection must be served by mail or personal 
service on the guardian or conservator and the ward or 
conservatee unless the ward or conservatee be the objector.  The 
guardian or conservator served with notice of an objection to 
the disposition of the property may not dispose of the property 
unless the court approves the disposition after a hearing. 
    (4) (a) The power to give any necessary consent to enable 
the ward or conservatee to receive necessary medical or other 
professional care, counsel, treatment or service, except that no 
guardian or conservator may give consent for psychosurgery, 
electroshock, sterilization or experimental treatment of any 
kind unless the procedure is first approved by order of the 
court as provided in this clause.  The guardian or conservator 
shall not consent to any medical care for the ward or 
conservatee which violates the known conscientious, religious, 
or moral belief of the ward or conservatee. 
    (b) A guardian or conservator who believes a procedure 
described in clause (4)(a) requiring prior court approval to be 
necessary for the proper care of the ward or conservatee shall 
petition the court for an order.  The court shall fix the time 
and place for the hearing and shall give notice to the ward or 
conservatee and to the other persons specified in section 
525.55, subdivision 1.  The notice shall comply with the 
requirements of, and be served in the manner provided in section 
525.55, subdivision 2.  The court shall appoint an attorney to 
represent the ward or conservatee who is not represented by 
counsel.  In every case the court shall determine if the 
procedure is in the best interests of the ward or conservatee.  
In making its determination the court shall consider a written 
medical report which specifically considers the medical risks of 
the procedure and whether alternative, less restrictive methods 
of treatment could be used to protect the best interests of the 
ward or conservatee. 
    (c) In the case of a petition for sterilization of a 
mentally retarded ward or conservatee, the court shall appoint a 
licensed physician, a psychologist who is qualified in the 
diagnosis and treatment of mental retardation, and a social 
worker who is familiar with the ward's or conservatee's social 
history and adjustment to examine or evaluate the ward or 
conservatee and to provide written reports to the court.  The 
reports shall indicate whether sterilization is necessary and 
whether it is in the best interests of the ward or conservatee.  
The medical report shall specifically consider the medical risks 
of sterilization and whether alternative methods of 
contraception could be used to protect the best interests of the 
ward or conservatee. 
    (5) The power to approve or withhold approval of any 
contract, except for necessities, which the ward or conservatee 
may make or wish to make. 
    (6) The duty and power to exercise supervisory authority 
over the ward or conservatee in a manner which limits civil 
rights and restricts personal freedom only to the extent 
necessary to provide needed care and services. 
    Sec. 153.  Laws 1986, chapter 394, section 24, is amended 
to read: 
    Sec. 24.  [EFFECTIVE DATE.] Section 10, subdivision 6, and 
section 15 are effective the day following final enactment.  
Sections 1 to 9; 10, subdivisions 1 to 5, 7, and 8; 11 to 14; 
and 16 to 23 are effective July January 1, 1987 1988. 
    Sec. 154.  [256.981] [TRAINING OF WELFARE FRAUD PROSECUTORS.] 
    The commissioner of human services shall, to the extent an 
appropriation is provided for this purpose, contract with the 
county attorney's council or other public or private entity 
experienced in providing training for prosecutors to conduct 
quarterly workshops and seminars focusing on current aid to 
families with dependent children program issues, other income 
maintenance program changes, recovery issues, alternative 
sentencing methods, use of technical aids for interviews and 
interrogations, and other matters affecting prosecution of 
welfare fraud cases. 
    Sec. 155.  [256.982] [TRAINING OF WELFARE FRAUD INVESTIGATORS.] 
    The commissioner of human services shall, to the extent an 
appropriation is provided for this purpose, establish a pilot 
project for further education and training of welfare fraud 
investigators.  The commissioner may enter into contractual 
agreements with other state, federal, or county agencies as part 
of cooperative projects employing experienced investigators to 
provide on-the-job training to county investigators. 
    Sec. 156.  [STAFFING.] 
    A position is established in the assistance payments 
division, department of human services, to undertake the 
training initiatives required of the department.  This position 
may also be utilized to assist in fraud control initiatives 
which the department may undertake. 
    Sec. 157.  [OIL OVERCHARGE FUNDS.]* 
    Subdivision 1.  [ALLOCATION OF FUNDS.] All money received 
by the governor, the commissioner of finance or any other state 
agency, before or after the effective date of this section, as a 
result of the settlement of the parties and order of the United 
States District Court for the District of Kansas in the case of 
In Re Department of Energy Stripper Well Exemption Litigation, 
578 F.Supp. 586 (D. Kan. 1983) and all other money received 
after the effective date of this section by any of those 
entities or agencies, resulting from overcharges by oil 
companies in violation of federal law, is allocated in the 
following manner: 
    (1) Not less than one-half of the oil overcharge funds made 
available to the state must be used to fund the low-income 
energy conservation programs administered by the commissioner of 
jobs and training; and 
    (2) The remaining oil overcharge money received by the 
state may be used for any purpose authorized by law or court 
order pursuant to the plans prepared by the advisory task force 
and the legislative advisory commission under subdivision 2. 
    Subd. 2.  [PLAN DEVELOPMENT; RECOMMENDATIONS.] An advisory 
task force shall be established and shall consist of 15 
members.  The task force shall include representatives of 
government, schools and hospitals, non-profit organizations, 
community groups and individuals interested in low-income 
weatherization and energy conservation programs and individuals 
who work with energy-related research.  Five members of the task 
force shall be appointed by the governor, five members shall be 
appointed by the senate committee on rules and administration, 
and five members shall be appointed by the speaker of the house 
of representatives. 
    The task force shall prepare and recommend to the 
legislative advisory commission an energy conservation plan that 
allocates the funds as described in subdivision 1, paragraph 
(2).  The plan must be delivered to the commission within 60 
days after all members of the task force have been appointed.  
The plan must take into consideration programs and activities 
that will reduce the consumption of fossil fuels within the 
state, including energy conservation related research. 
    Within 30 days of receipt of the task force's plan, the 
commission shall submit a final plan to the governor for the 
allocation of the funds in subdivision 1, paragraph (2).  The 
commission may amend the task force's plan.  The governor shall 
submit the plan to the United States Department of Energy for 
its approval.  If the plan or any part of it is rejected by the 
Department of Energy, the plan or rejected part of it must be 
revised and resubmitted as provided in this section for 
preparation and submission of the original plan.  Funds under 
subdivision 1, paragraph (2), may be expended only in accordance 
with a plan or part of it approved by the Department of Energy. 
    Subd. 3.  [AUTHORITY.] Money received by the state as a 
result of litigation or settlements of the alleged violations of 
federal petroleum pricing regulations may not be spent unless 
specifically appropriated by law. 
     (* This section was vetoed by the governor.) 
    Sec. 158.  [LOW-LEVEL IONIZING RADIATION REPORTS.] 
    The commissioner of health shall transmit to the governor 
and the legislature no later than December 31, 1987, a summary 
of the major reports on human health effects of low-level 
ionizing radiation.  The reports shall include: 
    (1) data and risk coefficients relating to ionizing 
radiation effects of occupational exposure, on human fetuses, 
and on the general public; and 
    (2) information on the worldwide effects to the public 
health of the radioactive emissions resulting from the Chernobyl 
accident in April 1986. 
    Sec. 159.  [MENTAL HEALTH STUDY.] 
    The commissioner of human services shall study the 
following issues related to the care and treatment of people 
with mental illness: 
    (1) the role of involuntary outpatient treatment in 
providing a continuum of services to people with mental illness, 
including the following: 
    (a) people for whom and conditions under which involuntary 
outpatient treatment may be appropriate, and 
    (b) scope of services and payment mechanisms available for 
involuntary outpatient treatment; 
    (2) the relationship among procedures and purposes of 
inpatient commitment, outpatient commitment, and private 
guardianship; 
    (3) the appropriate use of involuntary medication in the 
treatment of mental illness; 
    (4) the role of family members and other interested persons 
in formulating and monitoring treatment decisions; and 
    (5) the appropriate role for commitment and other treatment 
options in protecting the safety and liberty interests of family 
members and other members of society. 
    By January 1, 1988, the commissioner shall develop and 
present to the legislature recommendations regarding involuntary 
outpatient treatment. 
    Sec. 160.  [VETERAN'S NURSING CARE STUDY.] 
    The commissioner of human services, with the assistance of 
the commissioner of veterans affairs, shall study the 
possibility of using the resources of the regional treatment 
centers system to provide care for veterans.  The commissioner 
shall develop recommendations based on the study and report the 
recommendations to the legislature by January 1, 1988.  
    The study must include an assessment of need for the care, 
the costs of the care, and the impact of providing the care on 
treatment center residents.  If the commissioner recommends 
conversion of a specific site, the study must analyze the impact 
of conversion on residents, employees, and communities affected 
by the recommendation. 
    Sec. 161.  [INPATIENT HOSPITAL RATES STUDY.] 
    The commissioner shall study and develop recommendations 
regarding alternative payment mechanisms for reimbursing 
hospitals for inpatient psychiatric care.  
    Sec. 162.  [NEGOTIATED RATE FACILITY STUDY.] 
    The commissioner of human services in cooperation with the 
director of the state planning agency shall study and evaluate 
the existing system for paying negotiated rate facilities for 
services provided to residents through the supplemental aid 
program and report to the legislature by February 1, 1988, on 
the results of the study and evaluation, including any 
recommendations for legislative changes in the rate setting 
system. 
    Sec. 163.  [STUDY OF ELDERLY PERSONS WITH MENTAL 
RETARDATION OR RELATED CONDITIONS.] 
    Subdivision 1.  [STUDY; REPORT.] The commissioner of the 
department of human services shall study the needs of elderly 
citizens with mental retardation or related conditions.  The 
study shall include existing programs providing services to this 
population, including funding and location of services, and the 
extent to which the services meet the needs of this population. 
    The study shall be completed in one year.  The commissioner 
shall report to the legislature in 1988 on findings and 
recommendations, including methods of resolving problems through 
interagency cooperation. 
    Subd. 2.  [ADVICE TO THE COMMISSIONER.] In performing the 
duties of subdivision 1, the commissioner shall seek the advice 
of the advisory task force established under section 252.31. 
    Sec. 164.  [REPEALER.] 
    Subdivision 1.  Minnesota Statutes 1986, sections 116J.035, 
subdivision 3; 116L.04, subdivision 3; 136.63, subdivision 1b; 
144.66; 144.67; 178.03, subdivision 5; 245.69, subdivision 1a; 
245.76; 256.966, subdivision 2; 256B.05, subdivision 4; 256B.07; 
256D.051, subdivisions 11 and 12; 267.01; 267.02; 267.03; 
267.04; 267.05; 267.06; and 268.0111, subdivision 3, are 
repealed.  The provision in Laws 1985, First Special Session 
chapter 9, article 1, section 2, subdivision 5, paragraph (b), 
relating to a phase out of the ratable reductions in the general 
assistance medical care program is repealed effective the day 
following final enactment.  Minnesota Statutes 1986, 256D.051, 
subdivisions 4 and 5, are repealed effective January 1, 1988.  
Minnesota Statutes 1986, sections 245.713, subdivisions 1 and 3; 
and 245.74, are repealed effective July 1, 1988. 
    Sec. 165.  [EFFECTIVE DATE.] 
    Sections 9 to 12, 61, 62, 81, 88, 90 to 94, are effective 
the day following final enactment.  Sections 30, 31, and 42, are 
effective July 1, 1988. 

                                ARTICLE 3
    Section 1.  Minnesota Statutes 1986, section 144.219, is 
amended to read:  
    144.219 [AMENDMENT OF VITAL RECORDS.] 
    Upon the order of a court of this state, upon the request 
of a court of another state, or upon the filing of an 
acknowledgment of paternity a declaration of parentage under 
section 257.34 with the state registrar or the appropriate court 
which is not disputed by the mother named on the original birth 
certificate within a reasonable time after being informed of the 
filing, a new birth certificate shall be registered consistent 
with the findings of the court or with the acknowledgment of 
paternity declaration of parentage. 
    Sec. 2.  Minnesota Statutes 1986, section 256.01, 
subdivision 2, is amended to read:  
    Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
section 241.021, subdivision 2, the commissioner of human 
services shall: 
    (1) Administer and supervise all forms of public assistance 
provided for by state law and other welfare activities or 
services as are vested in the commissioner. 
    (2) Administer and supervise all child welfare activities; 
promote the enforcement of laws protecting handicapped, 
dependent, neglected and delinquent children, and children born 
to mothers who were not married to the children's fathers at the 
times of the conception nor at the births of the children; 
license and supervise child-caring and child-placing agencies 
and institutions; supervise the care of children in boarding and 
foster homes or in private institutions; and generally perform 
all functions relating to the field of child welfare now vested 
in the state board of control. 
    (3) Administer and supervise all noninstitutional service 
to handicapped persons, including those who are visually 
impaired, hearing impaired, or physically impaired or otherwise 
handicapped.  The commissioner may provide and contract for the 
care and treatment of qualified indigent children in facilities 
other than those located and available at state hospitals when 
it is not feasible to provide the service in state hospitals. 
    (4) Assist and actively cooperate with other departments, 
agencies and institutions, local, state, and federal, by 
performing services in conformity with the purposes of Laws 
1939, chapter 431. 
    (5) Act as the agent of and cooperate with the federal 
government in matters of mutual concern relative to and in 
conformity with the provisions of Laws 1939, chapter 431, 
including the administration of any federal funds granted to the 
state to aid in the performance of any functions of the 
commissioner as specified in Laws 1939, chapter 431, and 
including the promulgation of rules making uniformly available 
medical care benefits to all recipients of public assistance, at 
such times as the federal government increases its participation 
in assistance expenditures for medical care to recipients of 
public assistance, the cost thereof to be borne in the same 
proportion as are grants of aid to said recipients. 
    (6) Establish and maintain any administrative units 
reasonably necessary for the performance of administrative 
functions common to all divisions of the department. 
    (7) Administer and supervise any additional welfare 
activities and services as are vested by law in the department. 
    (8) The commissioner is designated as guardian of both the 
estate and the person of all the wards of the state of 
Minnesota, whether by operation of law or by an order of court, 
without any further act or proceeding whatever, except as to 
persons committed as mentally retarded.  
    (9) Act as coordinating referral and informational center 
on requests for service for newly arrived immigrants coming to 
Minnesota. 
    (10) The specific enumeration of powers and duties as 
hereinabove set forth shall in no way be construed to be a 
limitation upon the general transfer of powers herein contained. 
    (11) Establish county, regional, or statewide schedules of 
maximum fees and charges which may be paid by local agencies for 
medical, dental, surgical, hospital, nursing and nursing home 
care and medicine and medical supplies under all programs of 
medical care provided by the state and for congregate living 
care under the income maintenance programs. 
    (12) Have the authority to conduct and administer 
experimental projects to test methods and procedures of 
administering assistance and services to recipients or potential 
recipients of public welfare.  To carry out such experimental 
projects, it is further provided that the commissioner of human 
services is authorized to waive the enforcement of existing 
specific statutory program requirements, rules, and standards in 
one or more counties.  The order establishing the waiver shall 
provide alternative methods and procedures of administration, 
shall not be in conflict with the basic purposes, coverage, or 
benefits provided by law, and in no event shall the duration of 
a project exceed two four years.  It is further provided that no 
order establishing an experimental project as authorized by the 
provisions of this section shall become effective until the 
following conditions have been met: 
    (a) The proposed comprehensive plan including estimated 
project costs and the proposed order establishing the waiver 
shall be filed with the secretary of the senate and chief clerk 
of the house of representatives at least 60 days prior to its 
effective date. 
    (b) The secretary of health, education, and welfare of the 
United States has agreed, for the same project, to waive state 
plan requirements relative to statewide uniformity. 
    (c) A comprehensive plan, including estimated project 
costs, shall be approved by the legislative advisory commission 
and filed with the commissioner of administration.  
    (13) In accordance with federal requirements establish 
procedures to be followed by local welfare boards in creating 
citizen advisory committees, including procedures for selection 
of committee members. 
    (14) Allocate federal fiscal disallowances or sanctions 
which are based on quality control error rates for the aid to 
families with dependent children, medical assistance, or food 
stamp program in the following manner:  
    (a) One-half of the total amount of the disallowance shall 
be borne by the county boards responsible for administering the 
programs and shall be shared by each county board in the same 
proportion as that county's expenditures for the sanctioned 
program are to the total of all counties' expenditures for that 
program.  Each county shall pay its share of the disallowance to 
the state of Minnesota.  When a county fails to pay the amount 
due hereunder, the commissioner may deduct the amount from 
reimbursement otherwise due the county, or the attorney general, 
upon the request of the commissioner, may institute civil action 
to recover the amount due. 
    (b) Notwithstanding the provisions of paragraph (a), if the 
disallowance results from knowing noncompliance by one or more 
counties with a specific program instruction, and that knowing 
noncompliance is a matter of official county board record, the 
commissioner may require payment or recover from the county or 
counties, in the manner prescribed in paragraph (a), an amount 
equal to the portion of the total disallowance which resulted 
from the noncompliance, and may distribute the balance of the 
disallowance according to paragraph (a).  
    (15) Develop and implement special projects that maximize 
reimbursements and result in the recovery of money to the 
state.  For the purpose of recovering state money, the 
commissioner may enter into contracts with third parties.  Any 
recoveries that result from projects or contracts entered into 
under this paragraph shall be deposited in the state treasury 
and credited to a special account until the balance in the 
account reaches $400,000.  When the balance in the account 
exceeds $400,000, the excess shall be transferred and credited 
to the general fund.  All money in the account is appropriated 
to the commissioner for the purposes of this paragraph.  
    Sec. 3.  Minnesota Statutes 1986, section 256.73, is 
amended by adding a subdivision to read: 
    Subd. 7.  [VERIFICATION PROCEDURES.] The commissioner shall 
form an advisory committee of local agency representatives, 
state officials, and recipients to recommend and implement ways 
to reduce verification procedures at the local level.  The goal 
of this effort is to treat clients with dignity and expect 
client honesty.  Verification procedures should be reduced to a 
minimum at the time of application and increased only as needed. 
    Sec. 4.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [DEFINITIONS.] As used in this section and 
section 22, the following words have the meanings given them: 
    (a) "AFDC" means aid to families with dependent children. 
    (b) "AFDC-UP" means that group of AFDC clients who are 
eligible for assistance by reason of unemployment as defined by 
the commissioner under section 256.12, subdivision 14. 
    (c) "Caretaker" means a parent or eligible adult who is 
part of the assistance unit that has applied for or is receiving 
AFDC. 
    (d) "Employment and training services" means programs, 
activities, and services related to job training and job 
placement, including job service programs, job training 
partnership act programs, wage subsidies, remedial and secondary 
education programs, post-secondary education programs excluding 
education leading to a post-baccalaureate degree, vocational 
education programs, work incentive programs, work readiness 
programs, employment search, community work experience programs, 
displaced homemaker programs, self-employment programs, grant 
diversion, employment experience programs, youth employment 
programs, community investment programs, supported work 
programs, refugee employment and training programs, and 
counseling and support activities necessary to stabilize the 
caretaker or the family. 
    (e) "Employment and training service provider" means an 
administrative entity certified by the commissioner of jobs and 
training to deliver employment and training services under 
section 268.0122, subdivision 3. 
     (f) "Minor parent" means a caretaker relative who is the 
parent of the dependent child or children in the assistance unit 
and who is under the age of 18. 
    (g) "Priority groups" or "priority caretakers" means 
recipients of AFDC or AFDC-UP designated as priorities for 
employment and training services under subdivision 2a. 
    (h) "Support services" means programs, activities, and 
services intended to stabilize families and individuals or 
provide assistance for family needs related to employment or 
participation in employment and training services, including 
child care, transportation, housing assistance, personal and 
family counseling, crisis intervention services, peer support 
groups, chemical dependency counseling and treatment, money 
management assistance, and parenting skill courses. 
    Sec. 5.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 1b.  [WORK INCENTIVE SUBSIDIZED HOUSING 
PROGRAM.] Within the limit of available appropriations, employed 
recipients of aid to families with dependent children who meet 
eligibility requirements established by the commissioner of 
human services are eligible for a state housing subsidy as an 
incentive to seek and retain employment.  The commissioner of 
human services shall adopt rules for the work incentive 
subsidized housing program using eligibility criteria, subsidy 
amounts, and an administrative system developed jointly by the 
commissioner of human services and the commissioner of jobs and 
training.  The rules must: 
    (1) target recipients who are or are likely to become 
long-term recipients or who experience substantial barriers to 
employment; 
    (2) establish a fixed or sliding scale subsidy amount that 
will create a significant work incentive yet enable the program 
to serve the greatest possible number of recipients; 
    (3) limit the subsidy to persons who become employed while 
receiving assistance; and 
    (4) provide for continued subsidy payments for up to one 
year after termination of assistance to ease the transition from 
assistance to self-sufficiency.  
    The program must be coordinated with existing work and 
training programs and must be designed to maximize savings in 
the aid to families with dependent children program.  The 
subsidy must be provided as in-kind assistance, and it is not 
available if it would be considered countable income under state 
and federal requirements. 
    Sec. 6.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [PRIORITY GROUPS.] (a) Priority for 
participation in employment and training services under this 
section must be given to caretakers who: 
    (1) are under the age of 21; 
    (2) have not received a high school diploma or general 
equivalency diploma; or 
    (3) have received 24 months or more of AFDC over the last 
36 months. 
    (b) Highest priority for participation in employment and 
training services under this section must be given to caretakers 
with two or more of the characteristics listed in paragraph (a). 
    Sec. 7.  Minnesota Statutes 1986, section 256.736, 
subdivision 3, is amended to read:  
    Subd. 3.  [OPERATION OF PROGRAMS REGISTRATION.] To 
determine who shall be designated as an appropriate individual 
for certification for employment and training services, the 
commissioner of jobs and training shall provide, by rule, 
standards for county boards consistent with the standards 
promulgated by the secretary of health and human services.  
County boards shall certify appropriate individuals for 
employment and training services, shall notify the commissioner 
of human services, and shall require that every individual 
certified, as a condition of receiving aid to families with 
dependent children, register for employment services, training, 
and employment, unless such individual is: (a) To the extent 
permissible under federal law, every caretaker or child is 
required to register for employment and training services, as a 
condition of receiving AFDC, unless the caretaker or child is: 
    (1) a child who is under age 16, a child age 16 or 17 who 
is attending elementary or secondary school or a secondary level 
vocational or technical school full time, or a full-time student 
age 18 who is attending a secondary school or a secondary level 
vocational or technical program and who is expected to complete 
the school or program before reaching age 19; 
    (2) a person caretaker who is ill, incapacitated or of 
advanced age age 55 or older; 
    (3) a person so remote from caretaker for whom 
participation in an employment and training service and where 
transportation is not reasonably available that effective 
participation is precluded would require a round trip commuting 
time by available transportation of more than two hours; 
    (4) a person caretaker whose presence in the home is 
required because of illness or incapacity of another member of 
the household; 
    (5) a parent caretaker or other caretaker relative of a 
child under the age of six who personally provides full-time 
care for the child;  
    (6) a parent or other caretaker if another adult relative 
in the assistance unit is registered and has not, without good 
cause, failed or refused to participate or accept employment;  
    (7) a pregnant woman in the last trimester of pregnancy; or 
    (8) a parent who is not the principal earner if the parent 
who is the principal earner is not exempt under clauses (1) to 
(7). 
    Any individual referred to in clauses (3) and (5) to (8) 
must be advised of the option to register for any available 
employment services, and training services, and employment if 
the individual so desires, and must be informed of the any 
available child care and other support services available if the 
individual decides to register. 
    (b) If, after planning with a recipient a decision is made 
that the recipient must register for employment services, 
training, and employment, the county board shall notify the 
recipientin writing of the need to register for participation in 
an employment and training service and that the recipient To the 
extent permissible by federal law, applicants for benefits under 
the AFDC program are registered for employment and training 
services by signing the application form.  Applicants must be 
informed that they are registering for employment and training 
services by signing the form.  Persons receiving benefits on the 
effective date of this section shall register for employment and 
training services to the extent permissible by federal law.  The 
caretaker has a right to a fair hearing under section 256.045 
with respect to the appropriateness of the registration. 
    Sec. 8.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [PARTICIPATION.] Caretakers in priority groups 
must participate in employment and training services under this 
section to the extent permissible under federal law.  However, 
no assistance unit may be sanctioned for a caretaker's failure 
to participate in employment and training services under this 
section if failure results from inadequate funding for 
employment and training services. 
    Sec. 9.  Minnesota Statutes 1986, section 256.736, 
subdivision 4, is amended to read:  
    Subd. 4.  [CONDITIONS OF CERTIFICATION.] The commissioner 
of human services shall: 
    (1) Arrange for or provide any relative caretaker or child 
required to register for participate in employment and training 
services pursuant to this section with child-care services, 
transportation, and other necessary family services; 
    (2) Pay ten percent of the cost of the work incentive 
program and any other costs that are required of that agency by 
federal regulation for employment and training services for 
recipients of aid to families with dependent children; 
    (3) Provide that in determining a recipient's needs any 
monthly incentive training payment made to the recipient by the 
department of jobs and training is disregarded and the 
additional expenses attributable to participation in a program 
are taken into account in grant determination to the extent 
permitted by federal regulations; and 
    (4) Provide that when it has been certified by 
the commissioner of jobs and training, certification to be 
binding upon the commissioner of human services county board, 
that a relative or child certified under caretaker or child 
required to participate in an employment and training program to 
the commissioner of jobs and training has been found by the 
commissioner, after a hearing conducted in the manner prescribed 
by section 268.10, subdivision 3, with the right of review in 
accordance with the provisions of section 268.10, subdivision 8, 
employment and training service provider to have refused without 
good cause to participate in appropriate employment and training 
services or to have refused without good cause to accept a bona 
fide offer of public or other employment, the county board shall 
provide that: 
    (a) If the relative caretaker makes the refusal, the 
relative's caretaker's needs shall not be taken into account in 
making the grant determination, and aid for any dependent child 
in the family will be made in the form of protective or vendor 
payments, except that when protective payments are made, the 
local agency may continue payments to the relative caretaker if 
a protective payee cannot reasonably be found. 
    (b) Aid with respect to a dependent child will be denied if 
a child who makes the refusal is the only child receiving aid in 
the family. 
    (c) If there is more than one child receiving aid in the 
family, aid for the child who makes the refusal will be denied 
and the child's needs will not be taken into account in making 
the grant determination. 
    (d) If the assistance unit's eligibility is based on the 
nonexempt principal earner's unemployment and this principal 
earner fails or refuses without good cause to participate or to 
accept employment, the entire assistance unit is ineligible for 
benefits under sections 256.72 to 256.87, if the family is 
subject to requirements of the work incentive program. 
    Sec. 10.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 4a.  [NOTICE AND RIGHT OF APPEAL.] If the employment 
and training service provider determines that the caretaker has 
failed or refused, without good cause, to cooperate or accept 
employment, the employment and training service provider shall 
issue to the caretaker a written notice of its determination of 
non-cooperation or refusal to accept employment.  The notice 
must include a detailed explanation of the reason for the 
determination and must specify the consequences for failure or 
refusal to cooperate or accept employment, the actions which the 
employment and training service provider believes are necessary 
for the caretaker to comply with the employment and training 
program, and the right to request, within ten days of receipt of 
the notice, a conciliation conference.  If the dispute between 
the employment and training service provider and the caretaker 
is not resolved in the conciliation conference or a request for 
a conciliation conference is not made within the required time, 
then the employment and training service provider shall notify 
the county board of a caretaker's failure without good cause to 
cooperate or accept employment.  Any determination, action, or 
inaction on the part of the county board relating to a 
caretaker's participation under section 256.736 is subject to 
the notice and hearing procedures in section 256.045, and Code 
of Federal Regulations, title 45, section 205.10. 
    Sec. 11.  Minnesota Statutes 1986, section 256.736, 
subdivision 6, is amended to read:  
    Subd. 6.  [PROTECTION FROM GARNISHMENT.] Earnings of a 
recipient caretaker while participating in full or part-time 
employment or training shall be protected from garnishment.  
This protection shall extend for a period of six months from the 
date of termination of a recipient's caretaker's grant of 
assistance. 
    Sec. 12.  Minnesota Statutes 1986, section 256.736, 
subdivision 7, is amended to read: 
    Subd. 7.  [RULEMAKING.] The commissioner of human services, 
in cooperation with the commissioner of jobs and training, 
may make adopt permanent and emergency rules necessary to 
qualify for any federal funds available under this section and 
to carry out this section. 
    Sec. 13.  Minnesota Statutes 1986, section 256.736, 
subdivision 8, is amended to read:  
    Subd. 8.  [SPECIAL NEEDS.] The commissioner of human 
services shall amend the state plan for aid to families with 
dependent children to provide, as special needs payments, money 
for the costs of child care, transportation, tuition, and items 
associated with education or seeking employment to the extent 
allowed under federal regulations and state appropriations.  The 
commissioner of human services, with the assistance of the 
commissioner of education, shall establish a procedure whereby a 
governmental entity that pays for child care may contract with a 
county agency authorized to administer AFDC under sections 
393.01, subdivision 7, and 393.07, subdivision 2, to make the 
child care payments on their behalf to AFDC recipients who are 
eligible for employment special needs funds.  The governmental 
entity shall reimburse the county agency for the nonfederal 
share of the payments and administrative costs necessary to 
carry out the contract.  The commissioners of human services and 
education shall provide information and technical assistance to 
governmental entities about the availability of special needs 
payments for child care.  Governmental entities that receive 
state aid for child care through the community social services 
act, the sliding fee child care program, or other programs, 
shall request special needs payments for child care provided to 
AFDC recipients who are potentially eligible for special needs 
assistance under criteria established by the commissioner of 
human services. 
    Sec. 14.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 10.  [COUNTY DUTIES.] To the extent of available 
state appropriations, county boards shall:  
    (1) refer all priority caretakers required to register 
under subdivision 3 to an employment and training service 
provider for participation in employment and training services; 
    (2) identify to the employment and training service 
provider caretakers who fall into the priority groups; 
    (3) provide all caretakers with an orientation which (a) 
gives information on available employment and training services 
and support services, and (b) encourages clients to view AFDC as 
a temporary program providing grants and services to clients who 
set goals and develop strategies for supporting their families 
without AFDC assistance; 
    (4) work with the employment and training service provider 
to encourage voluntary participation by caretakers in the 
priority groups; 
    (5) work with the employment and training service provider 
to collect data as required by the commissioner; 
    (6) to the extent permissible under federal law, require 
all caretakers coming into the AFDC program to attend 
orientation;  
    (7) encourage nonpriority caretakers to develop a plan to 
obtain self-sufficiency; 
    (8) notify the commissioner of the caretakers required to 
participate in employment and training services; 
    (9) inform appropriate caretakers of opportunities 
available through the head start program and encourage 
caretakers to have their children screened for enrollment in the 
program where appropriate; 
    (10) provide transportation assistance using the employment 
special needs fund to caretakers who participate in employment 
and training programs, with priority for services to caretakers 
in priority groups; 
    (11) ensure that orientation, employment search, and case 
management services are made available to appropriate caretakers 
under this section, except that payment for case management 
services is governed by subdivision 13; and 
    (12) explain in its local service unit plan under Minnesota 
Statutes, section 268.88 how it will ensure that priority 
caretakers determined to be in need of social services are 
provided with such social services.  The plan must specify how 
the case manager and the county social service workers will 
ensure delivery of needed services. 
A county board may provide other employment and training 
services that it considers necessary to help caretakers obtain 
self-sufficiency. 
    Sec. 15.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 11.  [CASE MANAGEMENT SERVICES.] (a) For clients 
described in subdivision 2a, the case manager shall: 
    (1) Assess the education, skills, and ability of the 
caretaker to secure and retain a job which, when added to child 
support, will support the caretaker's family.  The case manager 
must work with the caretaker in completing this task; 
    (2) Set goals and develop a timetable for completing 
education and employment goals.  The case manager must work with 
the caretaker in completing this task.  For caretakers who are 
not literate or who have not completed high school, the first 
goal for the caretaker must be to complete literacy training or 
a general education diploma.  Caretakers who are literate and 
have completed high school shall be counseled to set realistic 
attainable goals, taking into account the long-term needs of 
both the caretaker and the caretaker's family; 
    (3) Coordinate services such as child care, transportation, 
and education assistance necessary to enable the caretaker to 
work toward the goals developed in clause (2).  When a client 
needs child care services in order to attend a Minnesota public 
or nonprofit college, university or technical institute, the 
case manager shall contact the appropriate agency to reserve 
child care funds for the client.  A caretaker who needs child 
care services in order to complete high school or a general 
education diploma is eligible for child care under section 
268.91; 
    (4) Develop, execute, and monitor a contract between the 
local agency and the caretaker.  The contract must include:  (a) 
specific goals of the caretaker including stated measurements of 
progress toward each goal; (b) specific services provided by the 
county agency; and (c) conditions under which the county will 
withdraw the services provided. 
    The contract may include other terms as desired or needed 
by either party.  In all cases, however, the case manager must 
ensure that the caretaker has set forth in the contract 
realistic goals consistent with the ultimate goal of 
self-sufficiency for the caretaker's family; and 
    (5) Develop and refer caretakers to counseling or peer 
group networks for emotional support while participating in 
work, education, or training. 
     (b) In addition to the duties in paragraph (a), for minor 
parents, the case manager shall: 
     (1) Ensure that the contract developed under paragraph 
(a)(4) considers all factors set forth in section 257.33, 
subdivision 2; and 
    (2) Assess the housing and support systems needed by the 
caretaker in order to provide the dependent children with 
adequate parenting.  The case manager shall encourage minor 
parents who are not living with friends or relatives to live in 
a group home or foster care setting.  If minor parents are 
unwilling to live in a group home or foster care setting or if 
no group home or foster care setting is available, the case 
manager shall assess the minor parent's need for training in 
parenting and independent living skills and shall refer 
appropriate minor parents to available counseling programs 
designed to teach needed skills; 
    (c) A caretaker may request a conciliation conference to 
attempt to resolve disputes regarding the contents of a contract 
developed under this section or a housing and support systems 
assessment conducted under this section.  The caretaker may 
request a hearing pursuant to section 256.045 to dispute the 
contents of a contract or assessment developed under this 
section.  The caretaker need not request a conciliation 
conference in order to request a hearing pursuant to section 
256.045. 
    Sec. 16.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 12.  [CASE MANAGERS.] (a) Counties may directly 
employ case managers if certified as an employment and training 
service provider under section 268.0122, or may contract for 
case management services with a certified employment and 
training service provider.  Uncertified counties and contracting 
agencies may provide case management services only if they 
demonstrate the ability to coordinate employment, training, 
education, and support services.  The commissioner of jobs and 
training shall determine whether or not an uncertified county or 
agency has demonstrated such ability. 
    (b) Counties that employ case managers must ensure that the 
case managers have the skills and knowledge necessary to perform 
the variety of tasks described in subdivision 11.  Counties that 
contract with another agency for case management services must 
specify in the contract the skills and knowledge needed by the 
case managers.  At a minimum, case managers must: 
    (1) have a thorough knowledge of training, education, and 
employment opportunities; 
    (2) have training or experience in understanding the needs 
of AFDC clients and their families; and 
    (3) be able to formulate creative individualized contracts. 
    Sec. 17.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 13.  [STATE SHARE.] (a) The state must pay 75 percent 
of costs incurred by counties under subdivision 11, except that 
after July 1, 1988, the commissioner shall adjust the state 
share to reflect county performance.  Factors which the 
commissioner may consider in adjusting the state share must 
include, but are not limited to, the following: 
    (1) percentage of priority caretakers leaving the AFDC 
program after one year, two years, and three years; 
    (2) percentage of minor parents who finish high school; and 
    (3) percentage of priority caretakers who are in training 
or education and are successfully working toward their 
contracted goals. 
    The commissioner may raise or lower the state share of 
costs by a maximum of ten percent. 
    (b) If the state appropriation is not sufficient to fund 
the cost of case management services for all caretakers 
identified in subdivision 2a, the commissioner must define a 
statewide subgroup of caretakers which includes all caretakers 
in subdivision 2a, clause (1) and as many caretakers as possible 
from subdivision 2a, clauses (2) and (3). 
    Sec. 18.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 14.  [EMPLOYMENT SEARCH.] (a) The commissioner of 
human services shall establish an employment search program 
under United States Code, title 42, section 602(a)(35).  The 
principal wage earner in an AFDC-UP assistance unit must 
participate in the employment search program within four months 
of being determined eligible for AFDC-UP unless: 
    (1) the caretaker is already participating in another 
approved employment and training service; 
    (2) the caretaker's employability plan specifies other 
activities; or 
    (3) the caretaker is unable to secure employment due to 
inability to communicate in the English language. 
    The employment and training service provider shall refer 
caretakers unable to communicate in the English language to 
English as a second language courses. 
    (b) The employment search program must provide the 
following services: 
    (1) an initial period of up to four weeks of job search 
activities for not more than 32 hours per week.  The employment 
and training service provider shall specify for each 
participating caretaker the number of weeks and hours of job 
search to be conducted and shall report to the county board if 
the caretaker fails to cooperate with the employment search 
requirement; and 
    (2) an additional period of job search following the first 
period at the discretion of the employment and training service 
provider.  The total of these two periods of job search may not 
exceed eight weeks. 
    (c) The employment search program may provide services to 
non-AFDC-UP caretakers. 
    Sec. 19.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 15.  [REPORTING.] The commissioner of human services, 
in cooperation with the commissioner of jobs and training shall 
develop reporting requirements for local agencies and employment 
and training service providers.  Reporting requirements must, to 
the extent possible, use existing client tracking systems and 
must be within the limits of funds available.  The requirements 
must include summary information necessary for state agencies 
and the legislature to evaluate the effectiveness of the 
services.  
     Sec. 20.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 16.  [ALLOCATION AND USE OF MONEY.] (a) State money 
appropriated for employment and training services under this 
section must be allocated to counties as follows: 
    (1) Forty percent of the state money must be allocated 
based on the average monthly number of caretakers receiving AFDC 
in the county who are under age 22 and the average monthly 
number of AFDC cases open in the county for 24 or more 
consecutive months and residing in the county for the 12-month 
period ending March 31 of the previous fiscal year. 
    (2) Twenty percent of the state money must be allocated 
based on the average monthly number of nonpriority caretakers 
receiving AFDC in the county for the period ending March 31 of 
the previous fiscal year.  Funds may be used to develop 
employability plans for nonpriority caretakers if resources 
allow.  
    (3) Twenty-five percent of the state money must be 
allocated based on the average monthly number of assistance 
units in the county receiving AFDC-UP for the period ending 
March 31 of the previous fiscal year. 
    (4) Fifteen percent of the state money must be allocated at 
the discretion of the commissioner based on participation levels 
for priority group members in each county. 
    (b) No more than 15 percent of the money allocated under 
paragraph (a) may be used for administrative activities. 
    (c) Except as provided in paragraph (d), at least 70 
percent of the money allocated to counties must be used for case 
management services and employment and training services for 
caretakers in the priority groups.  Up to 30 percent of the 
money may be used for employment search activities and 
employment and training services for nonpriority caretakers.  
    (d) A county whose proportion of the statewide average 
monthly AFDC-UP caseload exceeds its proportion of the statewide 
AFDC caseload may, with the approval of the commissioner of 
human services, use up to 40 percent of the money allocated 
under this section for employment search activities and 
employment and training services for nonpriority caretakers. 
    (e) Counties and the department of jobs and training shall 
bill the commissioner of human services for any expenditures 
incurred by the county, the county's employment and training 
service provider, or the department of jobs and training that 
may be reimbursed by federal money.  The commissioner of human 
services shall bill the United States Department of Health and 
Human Services for the reimbursement and appropriate the 
reimbursed money to the county or employment and training 
service provider that submitted the original bill.  The 
reimbursed money must be used to expand employment and training 
services. 
    Sec. 21.  Minnesota Statutes 1986, section 256.736, is 
amended by adding a subdivision to read: 
    Subd. 17.  [PHASE-IN.] The commissioner shall implement 
this section on a statewide basis as quickly as possible.  The 
commissioner may phase in changes under the section in any 
reasonable manner that ensures a unified, statewide coordinated 
program by no later than December 31, 1988. 
    Sec. 22.  [256.7365] [SPECIAL PROJECTS TO ADDRESS 
DEPENDENCE ON AFDC.] 
    Subdivision 1.  [ESTABLISHMENT AND PURPOSE.] The 
commissioner shall establish a grant program for projects to 
serve AFDC caretakers who have received AFDC for at least 36 
months, AFDC caretakers with substantial barriers to employment, 
or individuals at risk of long-term dependency on AFDC.  The 
projects shall assist individuals to escape or avoid long-term 
dependency on AFDC.  
    Subd. 2.  [DEFINITIONS.] For the purpose of this section, 
the following terms have the meanings given them.  
    (a) "Substantial barriers to employment" means 
disabilities, chemical dependency, having children with 
disabilities, lack of a high school degree, lack of a marketable 
occupational skill, three or more children, or lack of regular 
work experience in the previous five years.  
     (b) "Case management" means case management as defined in 
subdivision 11. 
     Subd. 3.  [APPLICATION.] Counties, employment and training 
service providers, cities, local and state agencies, federally 
recognized Indian reservations, educational institutions, job 
training agencies, community-based organizations, displaced 
homemaker programs, supported work programs, and other nonprofit 
agencies may apply for grants under this section.  
    Subd. 4.  [SELECTION.] A committee consisting of the 
commissioner of human services, the commissioner of jobs and 
training, and the director of the state board of vocational 
technical education, or their designees, shall review the 
project proposals and select projects to receive grants under 
this section.  The first set of projects must be selected by 
March 1, 1988.  At least two projects must be selected that are 
operated by or in cooperation with tribes or organizations 
representing ethnic minorities, except that the committee may 
reject any project proposal that does not meet the design 
requirements established in subdivision 5. 
     Subd. 5.  [PROJECT DESIGN.] Projects selected under this 
section must: 
     (1) use existing resources whenever possible; 
     (2) serve one of the three groups listed in subdivision 1; 
     (3) meet financial and administrative standards established 
by the commissioner; 
     (4) participate in reporting and evaluation requirements as 
specified by the commissioner; and 
     (5) provide matching funds, including in-kind matches, but 
not including income maintenance grants, medical assistance, 
food stamps, or state job training funds.  Preference shall be 
given to projects which include multi-agency participation or 
coordination. 
     Subd. 6.  [ALLOWABLE EXPENDITURES.] (a) Projects may use 
money received under this section for education, employment, 
social services, child care, transportation, support services, 
rehabilitation services, relocation assistance, job development, 
work experience, on-the-job training, case management, medical 
services, and other appropriate services. 
    (b) Projects may use up to 15 percent of the money received 
under this section for administrative expenses.  Administrative 
expenses do not include expenses for activities in paragraph (a).
    (c) The commissioner may establish limits on the use of 
money for particular purposes or services. 
    Subd. 7.  [DEMONSTRATION AND EVALUATION.] For the biennium 
ending June 30, 1989, projects are demonstration projects to 
test the effectiveness of differing approaches to serving 
populations with acute needs.  The commissioner of human 
services shall submit to the governor and the legislature a 
progress report by February 1, 1989, and shall submit subsequent 
program evaluation reports as part of the biennial plan. 
    Subd. 8.  [CONTINUED FUNDING.] Projects that received 
grants for the biennium ending June 30, 1989, and achieve 
effective results must be given priority for grants in 
succeeding cycles. 
    Subd. 9.  [CARRYOVER AUTHORITY.] Money appropriated in one 
fiscal year may be carried forward into the next year to ensure 
continuity of services and funding for follow-up services. 
    Sec. 23.  Minnesota Statutes 1986, section 256.74, 
subdivision 1, is amended to read:  
    Subdivision 1.  [AMOUNT.] The amount of assistance which 
shall be granted to or on behalf of any dependent child and 
mother or other needy eligible relative caring for the dependent 
child shall be determined by the county agency in accordance 
with rules promulgated by the commissioner and shall be 
sufficient, when added to all other income and support available 
to the child, to provide the child with a reasonable subsistence 
compatible with decency and health.  The amount shall be based 
on the method of budgeting required in Public Law Number 97-35, 
section 2315, United States Code, title 42, section 602, as 
amended and federal regulations at Code of Federal Regulations, 
title 45, section 233.  Nonrecurring lump sum income received by 
an assistance unit must be budgeted in the normal retrospective 
cycle.  The number of months of ineligibility is determined by 
dividing the amount of the lump sum income and all other income, 
after application of the applicable disregards, by the standard 
of need for the assistance unit.  An amount remaining after this 
calculation is income in the first month of eligibility.  If the 
total monthly income including the lump sum income is larger 
than the standard of need for a single month the first month of 
ineligibility is the payment month that corresponds with the 
budget month in which the lump sum income was received.  In 
making its determination the county agency shall disregard the 
following from family income: 
    (1) all of the earned income of each dependent child 
receiving aid to families with dependent children who is a 
full-time student or part-time student, and not a full-time 
employee, attending a school, college, or university, or a 
course of vocational or technical training designed to fit 
students for gainful employment as well as all the earned income 
derived from the job training and partnership act (JTPA) for a 
dependent child for six calendar months per year, together with 
unearned income derived from the job training and partnership 
act; 
    (2) all educational grants and loans awarded pursuant to a 
federal law when public assistance was considered in making the 
award and the award was made on the basis of financial need; and 
that part of any other educational grant or loan which is used 
for educational purposes, such as tuition, fees, equipment, 
transportation and child care expenses necessary for school 
attendance;  
    (3) the first $75 of each individual's earned income.  For 
self-employed persons, the expenses directly related to 
producing goods and services and without which the goods and 
services could not be produced shall be disregarded pursuant to 
rules promulgated by the commissioner;  
    (4) an amount equal to the actual expenditures but not to 
exceed $160 for the care of each dependent child or 
incapacitated individual living in the same home and receiving 
aid.  In the case of a person not engaged in full-time 
employment or not employed throughout the month, the 
commissioner shall prescribe by rule a lesser amount to be 
disregarded;  
    (5) thirty dollars plus one-third of the remainder of each 
individual's earned income not already disregarded for 
individuals found otherwise eligible to receive aid or who have 
received aid in one of the four months before the month of 
application.  With respect to any month, the county welfare 
agency shall not disregard under this clause any earned income 
of any person who has: 
    (a) reduced earned income without good cause within 30 days 
preceding any month in which an assistance payment is made; or 
    (b) refused without good cause to accept an offer of 
suitable employment; or 
    (c) left employment or reduced earnings without good cause 
and applied for assistance so as to be able later to return to 
employment with the advantage of the income disregard; or 
    (d) failed without good cause to make a timely report of 
earned income in accordance with rules promulgated by the 
commissioner of human services.  
    Persons who are already employed and who apply for 
assistance shall have their needs computed with full account 
taken of their earned and other income.  If earned and other 
income of the family is less than need, as determined on the 
basis of public assistance standards, the county agency shall 
determine the amount of the grant by applying the disregard of 
income provisions.  The county agency shall not disregard earned 
income for persons in a family if the total monthly earned and 
other income exceeds their needs, unless for any one of the four 
preceding months their needs were met in whole or in part by a 
grant payment.  
    The disregard of $30 and one-third of the remainder of 
earned income described in clause (5) shall be applied to the 
individual's income for a period not to exceed four consecutive 
months.  Any month in which the individual loses this disregard 
because of the provisions of clauses (5)(a) to (5)(d) shall be 
considered as one of the four months.  An additional $30 work 
incentive must be available for an eight-month period beginning 
in the month following the last month of the combined $30 and 
one-third work incentive.  This period must be in effect whether 
or not the person has earned income or is eligible for AFDC.  To 
again qualify for the earned income disregards under clause (d), 
the individual must not be a recipient of aid for a period of 12 
consecutive months.  When an assistance unit becomes ineligible 
for aid due to the fact that these disregards are no longer 
applied to income, the assistance unit shall be eligible for 
medical assistance benefits for a 12-month period beginning with 
the first month of AFDC ineligibility;  
    (6) the first $50 per assistance unit of the monthly 
support obligation collected by the support and recovery (IV-D) 
unit; and 
    (7) that portion of an insurance settlements settlement 
earmarked and used to pay medical bills, to compensate a member 
of an assistance unit for partial or permanent loss of function 
or a body part expenses, funeral and burial costs, or to repair 
or replace insured property. 
    The first $50 of periodic support payments collected by the 
public authority responsible for child support enforcement from 
a person with a legal obligation to pay support for a member of 
the assistance unit shall be paid to the assistance unit within 
15 days of after the end of the month in which the collection of 
such periodic support payments occurred and shall be disregarded 
in determining the amount of assistance. 
    Sec. 24.  [256.745] [SERVICE DELIVERY IMPROVEMENT PILOT 
PROJECT.] 
    Subdivision 1.  [STEP.] "STEP" means the strive toward 
excellence program administered by the department of 
administration. 
    Subd. 2.  [PILOT PROJECT ESTABLISHED; GOALS.] The service 
delivery improvement project, consisting of six pilot projects 
selected under subdivision 4, is established to use STEP 
productivity improvement technology to achieve the following 
goals:  redesign of employment and training and income 
maintenance delivery systems as required under Laws 1985, First 
Special Session chapter 14, article 9; and improvement of the 
quality and cost effectiveness of employment and training and 
income maintenance services provided to clients. 
    Subd. 3.  [COMMITTEE.] The commissioner shall establish and 
select a committee to administer the service delivery 
improvement project.  The committee consists of the 
commissioner, the commissioner of jobs and training, the 
commissioner of human services, one member of the senate, one 
member of the house of representatives, one public member 
representing the private sector, and other public members 
considered necessary by the commissioner.  The commissioner may 
reimburse the public members for actual expenses in the same 
manner and amount as authorized by the commissioner's plan under 
section 43A.18, subdivision 2. 
    Subd. 4.  [DUTIES.] The committee shall solicit from local 
service units or consortia of local service units proposals to 
conduct innovative pilot projects to redesign the employment and 
training and income maintenance delivery system.  By December 1, 
1987, the committee shall evaluate the proposals and select six 
pilot projects to receive training and technical assistance as 
provided in subdivision 6. 
    Subd. 5.  [EVALUATION.] The committee shall evaluate each 
proposal based upon the extent to which the proposed pilot 
project uses STEP productivity improvement technology, addresses 
the goals set forth under subdivision 2, and involves members of 
the private sector in joint financing of delivery system 
innovations. 
    Subd. 6.  [TRAINING AND TECHNICAL ASSISTANCE.] The 
commissioner shall contract with the department of 
administration to provide staff training, technical assistance, 
and detailed periodic reports of the day-to-day operation of a 
pilot project to affected local service units. 
    Subd. 7.  [COOPERATION OF AGENCIES.] The commissioner of 
human services and the commissioner of jobs and training shall 
cooperate fully with local service units undertaking pilot 
projects under this section.  If requested by a local service 
unit which has had a pilot project selected under subdivision 4, 
the commissioner shall reduce, to the extent possible, reporting 
and other requirements which may be applicable under state law 
to that pilot project.  
    Sec. 25.  [256.979] [CHILD SUPPORT INCENTIVES.] 
    Subdivision 1.  [INCENTIVE AWARD ACCOUNT.] The state share 
of AFDC child support collections received by the commissioner 
of human services during fiscal year 1988 in excess of a 
threshold of $14,273,000 and during fiscal year 1989 in excess 
of a threshold of $15,628,000 must be deposited in an incentive 
award account for nonpublic assistance collections.  Money in 
the incentive award account is appropriated to the commissioner 
of human services for distribution to counties under this 
section.  This subdivision does not apply to an increase in 
child support collections that may result from changes in 
federal law pertaining to the treatment of the first $50 of 
periodic support payments collected by the child support 
enforcement office. 
    Subd. 2.  [RATIO DETERMINATION.] Using information reported 
to the commissioner of human services under Title IV-D of the 
Social Security Act by county agencies responsible for child 
support enforcement, the commissioner shall determine the 
cost-benefit ratio for each county on a quarterly basis.  The 
commissioner shall determine the ratio by dividing each county's 
nonpublic assistance collections by the county child support 
agency costs.  For purposes of this section, collections made on 
behalf of another county agency in Minnesota shall be identified 
and counted only by the county agency making the collection. 
    Subd. 3.  [PERCENTAGE DETERMINATION.] The commissioner 
shall use the following table to determine the percentage for 
each county that corresponds to the ratio determined in 
subdivision 2.  The commissioner shall multiply each county 
agency's quarterly nonpublic assistance collections by the 
applicable percentage to determine the county agency's nonpublic 
assistance dollar amount for purposes of this subdivision. 
              Ratio*                   Percent 
                .1 or less               3.0
                .2                       3.5 
                .4                       4.0 
                .6                       4.5 
                .8                       5.0 
               1.0                       5.5 
               1.2                       6.0 
               1.4                       6.5 
               1.6                       7.0 
               1.8                       7.5 
               2.0                       8.0 
               2.2                       8.5 
               2.4                       9.0 
               2.6                       9.5 
               2.8 or more              10.0 
    *A county ratio that falls between two listed ratios must 
be rounded up to the next listed ratio. 
    Subd. 4.  [DISTRIBUTION FORMULA.] (a) The commissioner 
shall determine each county child support enforcement agency's 
share of the state's quarterly incentive award for nonpublic 
assistance collections according to the formula in paragraph 
(b).  County agencies that do not submit the required report to 
the commissioner within 30 days after the end of the quarter 
shall not receive an incentive award under this section and are 
excluded for purposes of the formula in this subdivision.  
Within 45 days after the end of the quarter, the commissioner 
shall inform each county agency of the determinations and pay 
the determined amount to the county agency.  Incentive payments 
under this section must begin with the quarter ending September 
30, 1988. 
    (b) To determine the county agency's quarterly incentive 
award, the commissioner shall: 
    (1) add all county agency quarterly nonpublic assistance 
dollar amounts as determined in subdivision 3; 
    (2) divide the state's quarterly nonpublic assistance 
incentive award by the total obtained in clause (1); and 
    (3) multiply the quotient obtained in clause (2) by each 
county agency's quarterly nonpublic assistance dollar amount as 
determined under subdivision 3. 
    Sec. 26.  Minnesota Statutes 1986, section 256B.37, is 
amended by adding a subdivision to read: 
    Subd. 7.  [PRIVATE BENEFITS TO BE USED FIRST.] Private 
accident and health care coverage for medical services is 
primary coverage and must be exhausted before medical assistance 
is paid.  When a person who is otherwise eligible for medical 
assistance has private accident or health care coverage, 
including a prepaid health plan, the private health care 
benefits available to the person must be used first and to the 
fullest extent.  Supplemental payment may be made by medical 
assistance, but the combined total amount paid must not exceed 
the amount payable under medical assistance in the absence of 
other coverage.  Medical assistance must not make supplemental 
payment for covered services rendered by a vendor who 
participates or contracts with a health coverage plan if the 
plan requires the vendor to accept the plan's payment as payment 
in full. 
    Sec. 27.  Minnesota Statutes 1986, section 256D.01, 
subdivision 1a, is amended to read:  
    Subd. 1a.  [STANDARDS.] (1) A principal objective in 
providing general assistance is to provide for persons 
ineligible for federal programs who are unable to provide for 
themselves.  To achieve these aims, the commissioner shall 
establish minimum standards of assistance for general 
assistance.  The minimum standard of assistance determines the 
total amount of the general assistance grant without separate 
standards for shelter, utilities, or other needs. 
    For a recipient who is a member of a one-person assistance 
unit, the standard shall not be less than the combined total of 
the minimum standards of assistance for shelter and basic needs 
in effect on February 1, 1983.  The standards of assistance 
shall not be lower for a recipient sharing a residence with 
another person unless that person is a responsible relative.  
The standards of assistance for recipients who are members of an 
assistance unit composed of more than one person must be equal 
to the aid to families with dependent children standard of 
assistance for a family of similar size and composition. 
    The standards shall be lowered for recipients who share a 
residence with a person who is a responsible relative of one or 
more members of the assistance unit if the responsible relative 
also receives general assistance or aid to families with 
dependent children.  The standards must also be lowered for 
recipients who share a residence with a responsible relative if 
the relative is not receiving general assistance or aid to 
families with dependent children because the relative has been 
sanctioned or disqualified.  If the responsible relative is 
receiving general assistance or aid to families with dependent 
children, or would be receiving them but for sanction or 
disqualification, then the standard applicable to the general 
assistance recipient's assistance unit must equal the amount 
that would be attributable to the members of the assistance unit 
if the members were included as additional recipients in the 
responsible relative's general assistance or aid to families 
with dependent children grant.  When determining the amount 
attributable to members of an assistance unit that must receive 
a reduced standard, the amount attributed to adults must be the 
amount attributed to another child added to the responsible 
relative's assistance unit.  When an assistance unit is subject 
to a reduced standard, the reduced standard must not exceed the 
standard that applies to an assistance unit that does not share 
a residence with a responsible relative.  
    For recipients, except recipients who are eligible under 
section 256D.05, subdivision 1, paragraph (a), clauses (1), (7), 
(8), (9), and (14), who share a residence with a responsible 
relative who is not receiving general assistance or aid to 
families with dependent children but who receives other income, 
the standards shall be lowered, subject to these limitations:  
    (a) The general assistance grant to the one-person 
assistance unit shall be in an amount such that total household 
income is equal to the aid to families with dependent children 
standard for a household of like size and composition, except 
that the grant shall not exceed that paid to a general 
assistance recipient living independently. 
    (b) Benefits received by a responsible relative under the 
supplemental security income program, the social security 
retirement program if the relative was receiving benefits under 
the social security disability program at the time of becoming 
eligible for the social security retirement program or if the 
relative is a person described in section 256D.05, subdivision 
1, paragraph (a), clause (1), (7), or (9), the social security 
disability program, a workers' compensation program, the 
Minnesota supplemental aid program, or on the basis of the 
relative's disability, must not be included in the household 
income calculation. 
    (2) The commissioner shall set the standard of assistance 
for an assistance unit consisting of an adult recipient who is 
childless and unmarried or living apart from his or her children 
and spouse and who does not live with his or her parent or 
parents or a legal custodian.  When the other standards 
specified in this subdivision increase, this standard shall also 
be increased by the same percentage. 
    (3) For an assistance unit consisting of an adult who is 
childless and unmarried or living apart from his or her children 
and spouse, but who lives with his or her parent or parents, the 
general assistance standard of assistance shall be equal to the 
amount that the aid to families with dependent children standard 
of assistance would increase if the recipient were added as an 
additional minor child to an assistance unit consisting of the 
recipient's parent and all of that parent's family members, 
provided that the standard shall not exceed the standard for a 
general assistance recipient living alone.  Benefits received by 
a responsible relative of the assistance unit under the 
supplemental security income program, a workers' compensation 
program, the Minnesota supplemental aid program, or any other 
program based on the responsible relative's disability, and any 
benefits received by a responsible relative of the assistance 
unit under the social security retirement program, shall not be 
counted in the determination of eligibility or benefit level for 
the assistance unit.  An adult child shall be ineligible for 
general assistance if the available resources or the countable 
income of the adult child and the parent or parents with whom he 
or she lives are such that a family consisting of the adult 
child's parent or parents, the parent or parents' other family 
members and the adult child as the only or additional minor 
child would be financially ineligible for general assistance. 
    (4) For an assistance unit consisting of a married couple 
who are childless or who live apart from any child or children 
of whom either of the married couple is a parent or legal 
custodian, the standards of assistance shall be equal to the 
first and second adult standards of the aid to families with 
dependent children program.  If one member of the couple is not 
included in the general assistance grant, then the standard of 
assistance for the other shall be equal to the second adult 
standard of the aid to families with dependent children program, 
except that, when one member of the couple is not included in 
the general assistance grant because he or she is not 
categorically eligible for general assistance under section 
256D.05, subdivision 1, and has exhausted work readiness 
eligibility under section 256D.051, subdivision 4 or 5, for the 
period of time covered by the general assistance grant, then the 
standard of assistance for the remaining member of the couple 
shall be equal to the first adult standard of the aid to 
families with dependent children program. 
    (5) For an assistance unit consisting of all members of a 
family, the standards of assistance shall be the same as the 
standards of assistance applicable to a family under the aid to 
families with dependent children program if that family had the 
same number of parents and children as the assistance unit under 
general assistance and if all members of that family were 
eligible for the aid to families with dependent children 
program.  If one or more members of the family are not included 
in the assistance unit for general assistance, the standards of 
assistance for the remaining members shall be equal to the 
standards of assistance applicable to an assistance unit 
composed of the entire family, less the standards of assistance 
applicable to a family of the same number of parents and 
children as those members of the family who are not in the 
assistance unit for general assistance.  Notwithstanding the 
foregoing, if an assistance unit consists solely of the minor 
children because their parent or parents have been sanctioned 
from receiving benefits from the aid to families with dependent 
children program, the standard for the assistance unit shall be 
equal to the special child standard of the aid to families with 
dependent children program.  A child shall not be excluded from 
the assistance unit unless income intended for its benefit is 
received from a federally aided categorical assistance program; 
supplemental security income; retirement, survivors, and 
disability income; other assistance programs; or child support 
and maintenance payments.  The income of a child who is excluded 
from the assistance unit shall not be counted in the 
determination of eligibility or benefit level for the assistance 
unit. 
    Sec. 28.  Minnesota Statutes 1986, section 256D.02, 
subdivision 5, is amended to read:  
    Subd. 5.  "Family" means two or more individuals who are 
related by blood, marriage or adoption, who are living in a 
place or residence maintained by one or more of them as a home, 
and at least one of whom is a child who is not married to 
another of such individuals and is in the care of or dependent 
upon another of such individuals the following persons who live 
together:  a minor child or a group of minor children related to 
each other as siblings, half siblings, or stepsiblings, together 
with their natural or adoptive parents, their stepparents, or 
their legal custodians, and any other minor children of whom an 
adult member of the family is a legal custodian. 
    Sec. 29.  Minnesota Statutes 1986, section 256D.02, 
subdivision 8, is amended to read:  
    Subd. 8.  "Income" means any form of income, including 
remuneration for services performed as an employee and net 
earnings from self-employment, reduced by the amount 
attributable to employment expenses as defined by the 
commissioner.  The amount attributable to employment expenses 
shall include amounts paid or withheld for federal and state 
personal income taxes and federal social security taxes.  
    "Income" includes any payments received as an annuity, 
retirement, or disability benefit, including veteran's or 
workers' compensation; old age, survivors, and disability 
insurance; railroad retirement benefits; unemployment benefits; 
and benefits under any federally aided categorical assistance 
program, supplementary security income, or other assistance 
program; rents, dividends, interest and royalties; and support 
and maintenance payments.  Such payments may not be considered 
as available to meet the needs of any person other than the 
person for whose benefit they are received, unless that person 
is under a legal duty to support another a family member or a 
spouse and the income is not excluded under section 256D.01, 
subdivision 1a.  Goods and services provided in lieu of cash 
payment shall be excluded from the definition of income, except 
that payments made for room, board, tuition or fees by a parent, 
on behalf of a child enrolled as a full-time student in a 
post-secondary institution, must be included as income. 
     Sec. 30.  Minnesota Statutes 1986, section 256D.03, 
subdivision 2, is amended to read:  
    Subd. 2.  After December 31, 1980, state aid shall be paid 
to local agencies for 75 percent of all general assistance 
grants up to the standards of section 256D.01, subdivision 1a, 
and according to procedures established by the commissioner, 
except that, after December 31, 1987, state aid is reduced to 65 
percent of all general assistance grants if the local agency 
does not make occupational or vocational literacy training 
available and accessible to recipients who are eligible for 
assistance under section 256D.05, subdivision 1, paragraph (a), 
clause (15).  
    After December 31, 1986, state aid must be paid to local 
agencies for 65 percent of work readiness assistance paid under 
section 256D.051 if the county does not have an approved and 
operating community investment program.  
    Any local agency may, from its own resources, make payments 
of general assistance:  (a) at a standard higher than that 
established by the commissioner without reference to the 
standards of section 256D.01, subdivision 1; or, (b) to persons 
not meeting the eligibility standards set forth in section 
256D.05, subdivision 1, but for whom the aid would further the 
purposes established in the general assistance program in 
accordance with rules promulgated by the commissioner pursuant 
to the administrative procedure act. 
     Sec. 31.  Minnesota Statutes 1986, section 256D.05, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ELIGIBILITY.] (a) Each person or family 
whose income and resources are less than the standard of 
assistance established by the commissioner shall be eligible for 
and entitled to general assistance if the person or family is: 
    (1) a person who is suffering from a permanent or temporary 
illness, injury, or incapacity which is medically certified and 
which prevents the person from obtaining or retaining employment;
    (2) a person whose presence in the home on a substantially 
continuous basis is required because of the certified illness, 
injury, incapacity, or the age of another member of the 
household; 
    (3) a person who has been placed in a licensed or certified 
facility for purposes of physical or mental health or 
rehabilitation, or in an approved chemical dependency 
domiciliary facility, if the placement is based on illness or 
incapacity and is pursuant to a plan developed or approved by 
the local agency through its director or designated 
representative; 
    (4) a person who resides in a shelter facility described in 
subdivision 3; 
    (5) a person who is or may be eligible for displaced 
homemaker services, programs, or assistance under section 
268.96, but only if that person is enrolled as a full-time 
student; 
    (6) a person who is unable to secure suitable employment 
due to inability to communicate in the English language, 
provided that the person is not an illegal alien, and who, if 
assigned to a language skills program by the local agency, is 
participating in that program; 
    (7) a person not described in clause (1) or (3) who is 
diagnosed by a licensed physician or licensed consulting 
psychologist as mentally retarded or mentally ill, and that 
condition prevents the person from obtaining or retaining 
employment; 
    (8) a person who has an application pending for the social 
security disability program or the program of supplemental 
security income for the aged, blind, and disabled, or who has 
been terminated from either program and has an appeal from that 
termination pending; 
    (9) a person who is unable to obtain or retain employment 
because advanced age significantly affects the person's ability 
to seek or engage in substantial work; 
    (10) a person completing a secondary education program; 
    (11) a family with one or more minor children; provided 
that, if all the children are six years of age or older, all the 
adult members of the family register for and cooperate in the 
work readiness program under section 256D.051; and provided 
further that, if one or more of the children are under the age 
of six and if the family contains more than one adult member, 
all the adult members except one adult member register for and 
cooperate in the work readiness program under section 256D.051.  
The adult members required to register for and cooperate with 
the work readiness program are not eligible for financial 
assistance under section 256D.051, except as provided in section 
256D.051, subdivision 6, and shall be included in the general 
assistance grant.  If an adult member fails to cooperate with 
requirements of section 256D.051, the local agency shall not 
take that member's needs into account in making the grant 
determination.  The time limits of section 256D.051, 
subdivisions 4 and 5, do not apply to people eligible under this 
clause.; 
    (12) a person who has substantial barriers to employment, 
including but not limited to factors relating to work or 
training history, as determined by the local agency in 
accordance with permanent or emergency rules adopted by the 
commissioner after consultation with the commissioner of jobs 
and training; 
    (13) a person who is certified by the commissioner of jobs 
and training before August 1, 1985, as lacking work skills or 
training or as being unable to obtain work skills or training 
necessary to secure employment, as defined in a permanent or 
emergency rule adopted by the commissioner of jobs and training 
in consultation with the commissioner; or 
    (14) a person who is determined by the local agency, in 
accordance with emergency and permanent rules adopted by the 
commissioner, to be functionally illiterate or learning disabled;
    (15) a person who is determined by the local agency, in 
accordance with emergency and permanent rules adopted by the 
commissioner, to be functionally illiterate, provided that the 
person complies with literacy training requirements set by the 
local agency under section 32.  A person who is terminated for 
failure to comply with literacy training requirements may not 
reapply for assistance under this clause for 60 days.  The local 
agency must provide an oral explanation to the person of the 
person's responsibilities under this clause, the penalties for 
failure to comply, the agency's duties under section 256D.0505, 
subdivision 2, and the person's right to appeal (1) at the time 
an application is approved based on this clause, and (2) at the 
time the person is referred to literacy training; or 
    (16) a child under the age of 18 who is not living with a 
parent, stepparent, or legal custodian, but only if:  the child 
is legally emancipated or living with an adult with the consent 
of an agency acting as a legal custodian; the child is at least 
16 years of age and the general assistance grant is approved by 
the director of the local agency or a designated representative 
as a component of a social services case plan for the child; or 
the child is living with an adult with the consent of the 
child's legal custodian and the local agency. 
    (b) The following persons or families with income and 
resources that are less than the standard of assistance 
established by the commissioner are eligible for and entitled to 
a maximum of six months of general assistance during any 
consecutive 12-month period, after registering with and 
completing six months in a work readiness program under section 
256D.051: 
    (1) a person who has borderline mental retardation; and 
    (2) a person who exhibits perceptible symptoms of mental 
illness as certified by a qualified professional but who is not 
eligible for general assistance under paragraph (a), because the 
mental illness interferes with the medical certification 
process; provided that the person cooperates with social 
services, treatment, or other plans developed by the local 
agency to address the illness. 
    In order to retain eligibility under this paragraph, a 
recipient must continue to cooperate with work and training 
requirements as determined by the local agency. 
    Sec. 32.  [256D.052] [LITERACY TRAINING FOR RECIPIENTS.] 
     Subdivision 1.  [OCCUPATIONAL AND VOCATIONAL PROGRAMS.] The 
local agency must work with local educational institutions and 
job training programs in the identification, development, and 
utilization of occupational and vocational literacy programs for 
general assistance recipients.  Occupational and vocational 
literacy programs are programs which provide literacy training 
to adults who lack formal education or job skills.  The programs 
emphasize particular language and reading skills needed for 
successful job performance. 
     Subd. 2.  [ASSESSMENT AND ASSIGNMENT.] The local agency 
must: 
    (1) assess existing reading level, learning disabilities, 
reading potential, and vocational or occupational interests of 
people eligible under section 256D.05, subdivision 1, paragraph 
(a), clause (15); 
    (2) assign suitable recipients to openings in occupational 
and vocational literacy programs; 
    (3) if no openings are available in accessible occupational 
or vocational literacy programs, assign suitable recipients to 
openings in other accessible literacy training programs; and 
    (4) reassign to another accessible literacy program any 
recipient who does not complete an assigned program and who 
wishes to try another program. 
    Subd. 3.  [SERVICES PROVIDED.] The local agency must 
provide child care and transportation to enable people to 
participate in literacy training under this section. 
    Subd. 4.  [PAYMENT OF GENERAL ASSISTANCE.] The local agency 
must provide assistance under section 256D.05, subdivision 1, 
paragraph (a), clause (15) to people who: 
    (1) participate in a literacy program assigned under 
subdivision 2.  To "participate" means to attend regular 
classes, complete assignments, and make progress toward literacy 
goals; 
    (2) despite participation for a period of six months or 
more, fail to progress in assigned literacy programs; 
    (3) are not assigned to literacy training because there is 
no program available or accessible to them; or 
    (4) have failed for good cause to complete an assigned 
literacy program. 
    Subd. 5.  [REASSESSMENT AND LITERACY REFERRAL.] (a) When a 
person is no longer functionally illiterate under rules adopted 
by the commissioner or is terminated for failure to comply with 
literacy training requirements, the local agency must assess the 
person's eligibility for general assistance under the remaining 
provisions of section 256D.05, subdivision 1, paragraph (a).  
The local agency must refer to the work readiness program under 
section 256D.051 all people not eligible for general assistance. 
    (b) The local agency may also refer for voluntary work 
readiness services all recipients who reach a level of literacy 
that may allow successful participation in job training, 
provided that the job training does not interfere with a 
recipient's participation in literacy training.  However, 
referral under this clause does not affect general assistance 
eligibility. 
    Subd. 6.  [RIGHT TO NOTICE AND HEARING.] The local agency 
shall provide notice and opportunity for hearings for adverse 
actions under this section according to sections 256D.10 and 
256D.101. 
     Subd. 7.  [COSTS.] The state shall reimburse local agencies 
for the costs of providing transportation under this section.  
Counties must make every effort to ensure that child care is 
available as needed by recipients who are pursuing literacy 
training.  A recipient who is unable to obtain affordable child 
care is not required to participate in literacy training. 
    Counties must identify literacy programs and services 
available through educational institutions and are required to 
provide additional services within the limits of available 
appropriations. 
    Sec. 33.  Minnesota Statutes 1986, section 256D.051, 
subdivision 1, is amended to read:  
    Subdivision 1.  [WORK REGISTRATION.] A person or, family, 
or married couple whose income and resources are less than the 
standard of assistance established by the commissioner, but who 
are not eligible to receive general assistance under section 
256D.05, subdivision 1, are eligible for a work readiness 
program.  Upon registration, a registrant is eligible to receive 
assistance in an amount equal to general assistance under 
section 256D.05, subdivision 1, for a maximum of six months 
during any consecutive 12-month period, subject to subdivisions 
subdivision 3, 4, and 5.  The local agency shall pay work 
readiness assistance in monthly payments beginning at the time 
of registration.  
    Sec. 34.  Minnesota Statutes 1986, section 256D.051, 
subdivision 2, is amended to read: 
    Subd. 2.  [LOCAL AGENCY DUTIES.] (a) The local agency shall 
provide to registrants under subdivision 1 a work readiness 
program.  The work readiness program must include: 
    (1) an employability assessment and development plan in 
which the local agency estimates the length of time it will take 
the registrant to obtain employment; 
    (2) referral to available employment assistance programs 
including the Minnesota employment and economic development 
program; 
    (3) a job search program; and 
    (4) other activities designed by the local agency to 
prepare the registrant for permanent employment. 
    In order to allow time for job search, the local agency 
shall not require an individual to participate in the work 
readiness program for more than 32 hours a week.  The local 
agency shall require an individual to spend at least eight hours 
a week in job search or other work readiness program activities. 
    (b) The local agency may provide a work readiness program 
to recipients under section 256D.05, subdivision 1, paragraph 
(b) and shall provide a work readiness program to recipients 
referred under section 32, subdivision 5, paragraph (b). 
    Sec. 35.  Minnesota Statutes 1986, section 256D.051, 
subdivision 6, is amended to read: 
    Subd. 6.  [LOCAL AGENCY OPTIONS.] The local agency may, at 
its option, provide up to $100 per $200 for each registrant who 
has completed an employment development plan for direct expenses 
incurred by the registrant for transportation, clothes, and 
tools necessary for employment.  The local agency may provide an 
additional $100 for direct expenses of registrants remaining in 
the work readiness program for more than two months.  After 
paying direct expenses as needed by individual registrants, the 
local agency may use any remaining money to provide additional 
services as needed by any registrant including education, 
orientation, placement, other work experience, on-the-job 
training, and other appropriate activities. 
    Sec. 36.  Minnesota Statutes 1986, section 256D.051, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [COUNTY MATCH AND USE OF FUNDS.] Each county 
shall provide a 25 percent match for direct participation 
expenses and administrative costs of providing work readiness 
services.  Funds may be used for the following direct 
participation expenses:  transportation, clothes, tools, and 
other necessary work-related expenses.  Funds may be used for 
administrative costs incurred providing the following services:  
employability assessments and employability development plans, 
employment search assistance, education, orientation, placement, 
on-the-job training, and other appropriate activities. 
    Sec. 37.  Minnesota Statutes 1986, section 256D.051, 
subdivision 8, is amended to read: 
    Subd. 8.  [INELIGIBILITY VOLUNTARY QUIT.] A person who is 
otherwise eligible to receive work readiness assistance under 
subdivision 1 must be terminated from work readiness assistance 
on quitting work without good cause, being fired for misconduct, 
or refusing to accept an offer of suitable employment. A person 
is not eligible for work readiness payments or services if, 
without good cause, the person refuses a legitimate offer of 
suitable employment within 60 days before the date of 
application.  A person who, without good cause, voluntarily 
quits suitable employment or refuses a legitimate offer of 
suitable employment while receiving work readiness payments or 
services shall be disqualified for two months according to rules 
adopted by the commissioner. 
    Sec. 38.  Minnesota Statutes 1986, section 256D.06, 
subdivision 1, is amended to read:  
    Subdivision 1.  General assistance shall be granted in such 
an amount that when added to the nonexempt income actually 
available to the individual, married couple, or family, the 
total amount equals the applicable standard of 
assistance established by the commissioner for general 
assistance.  In determining eligibility for and the amount of 
assistance the local agency shall disregard the first $50 of 
earned income per month.  
    Sec. 39.  Minnesota Statutes 1986, section 256D.06, 
subdivision 1b, is amended to read: 
    Subd. 1b.  [EARNED INCOME SAVINGS ACCOUNT.] In addition to 
the $50 disregard required under subdivision 1, the local agency 
shall disregard an additional earned income up to a maximum of 
$150 per month for persons residing in facilities licensed under 
Minnesota Rules, parts 9520.0500 to 9520.0690 and 9530.2500 to 
9530.4000, and for whom discharge and work are part of a 
treatment plan.  The additional amount disregarded must be 
placed in a separate savings account by the eligible individual, 
to be used upon discharge from the residential facility into the 
community.  A maximum of $1,000, including interest, of the 
money in the savings account must be excluded from the resource 
limits established by section 256D.08, subdivision 1, clause (1).
Amounts in that account in excess of $1,000 must be applied to 
the resident's cost of care. If excluded money is removed from 
the savings account by the eligible individual at any time 
before the individual is discharged from the facility into the 
community, the money is income to the individual in the month of 
receipt and a resource in subsequent months.  If an eligible 
individual moves from a community facility to an inpatient 
hospital setting, the separate savings account is an excluded 
asset for up to 18 months.  During that time, amounts that 
accumulate in excess of the $1,000 savings limit must be applied 
to the patient's cost of care.  If the patient continues to be 
hospitalized at the conclusion of the 18-month period, the 
entire account must be applied to the patient's cost of care. 
    Sec. 40.  Minnesota Statutes 1986, section 256D.06, 
subdivision 2, is amended to read:  
    Subd. 2.  Notwithstanding the provisions of subdivision 1, 
a grant of general assistance shall be made to an eligible 
individual, married couple, or family for an emergency need, as 
defined in rules promulgated by the commissioner, where the 
recipient requests temporary assistance not exceeding 30 days if 
an emergency situation appears to exist and the individual is 
ineligible for the program of emergency assistance under aid to 
families with dependent children and is not a recipient of aid 
to families with dependent children at the time of application 
hereunder.  If a recipient relates facts to the local agency 
which may be sufficient to constitute an emergency situation, 
the local agency shall advise the recipient of the procedure for 
applying for assistance pursuant to this subdivision.  
    Sec. 41.  Minnesota Statutes 1986, section 256D.08, 
subdivision 1, is amended to read:  
    Subdivision 1.  In determining eligibility of a family, 
married couple, or individual there shall be excluded the 
following resources: 
    (1) Real or personal property or liquid assets which do not 
exceed those permitted under the federally aided assistance 
program known as aid to families with dependent children; and 
    (2) Other property which has been determined, in accordance 
with and subject to limitations contained in rules promulgated 
by the commissioner, to be essential to the family or individual 
as a means of self-support or self-care or which is producing 
income that is being used for the support of the individual or 
family.  The commissioner shall further provide by rule the 
conditions for those situations in which property not excluded 
under this subdivision may be retained by the family or 
individual where there is a reasonable probability that in the 
foreseeable future the property will be used for the 
self-support of the individual or family; and 
    (3) Payments, made pursuant to litigation and subsequent 
appropriation by the United States Congress, of funds to 
compensate members of Indian tribes for the taking of tribal 
land by the federal government. 
    Sec. 42.  Minnesota Statutes 1986, section 256D.101, is 
amended to read:  
    256D.101 [FAILURE TO COMPLY WITH WORK REQUIREMENTS; 
NOTICE.] 
    Subdivision 1.  [DISQUALIFICATION.] If the local agency 
determines that a registrant has failed to comply with the 
requirements of section 256D.051, the local agency shall notify 
the registrant of the determination.  The notification shall be 
in writing; and shall state the facts that support the local 
agency's determination;.  For the first two times in a six-month 
period that the registrant has failed without good cause to 
comply with program requirements, the notification shall specify 
the particular actions that must be taken by the registrant to 
achieve compliance; shall state that the recipient must take the 
specified actions by a date certain, which must be at least 15 
ten days following the date the notification is mailed or 
delivered to the registrant; shall explain the ramifications of 
the registrant's failure to take the required actions by the 
specified date; and shall advise the registrant that the 
registrant may request and have a conference with the local 
agency to discuss the notification.  A registrant who fails 
without good cause to comply with requirements of the program 
more than two times in a six-month period must be notified of 
termination.  
    Subd. 2.  [NOTICE OF GRANT REDUCTION, SUSPENSION, OR 
TERMINATION.] No The notice of grant reduction, suspension, or 
termination on the ground that a registrant has failed to comply 
with section 256D.051 shall be given mailed or hand delivered by 
the local agency until the notification required by subdivision 
1 has been given, the time for compliance stated in the 
notification has lapsed, and the local agency has, 
subsequent concurrently with the notification required by 
subdivision 1.  Prior to giving the notification, assessed the 
local agency must assess the registrant's eligibility for 
general assistance under section 256D.05 to the extent possible 
using information contained in the case file, and determined 
determine that the registrant is not eligible under that 
section.  The determination that the registrant is not eligible 
shall be stated in the notice of grant reduction, suspension, or 
termination. 
    Subd. 3.  [BENEFITS AFTER NOTIFICATION.] Assistance 
payments otherwise due to the registrant under section 256D.051 
shall not be paid after the notification required in subdivision 
1 has been provided to the registrant unless, before the date 
stated in the notification, the registrant takes the specified 
action necessary to achieve compliance or, within five days 
after the effective date stated in the notice, files an appeal 
of the grant reduction, suspension, or termination.  If, by the 
required date, the registrant does take the specified action 
necessary to achieve compliance, both the notification required 
by subdivision 1 and the notice required by subdivision 2 shall 
be canceled and all benefits due to the registrant shall be paid 
promptly.  If, by the required date, the registrant files an 
appeal of the grant reduction, suspension, or termination, 
benefits otherwise due to the registrant shall be continued 
pending the outcome of the appeal. 
    Sec. 43.  Minnesota Statutes 1986, section 256D.15, is 
amended to read:  
    256D.15 [RELATIVE'S RESPONSIBILITY.] 
    The financial responsibility of a relative for an applicant 
for or recipient of general assistance or work readiness shall 
not extend beyond the relationship of a spouse or a parent of an 
adult child who resides with the parent, or the parent of a 
minor child regardless of where the minor child resides, or a 
family member who resides with the applicant or recipient.  
    Sec. 44.  Minnesota Statutes 1986, section 257.33, is 
amended to read:  
    257.33 [DUTIES OF COMMISSIONER OF HUMAN SERVICES.] 
    Subdivision 1.  [SERVICES TO PREGNANT WOMEN.] It shall be 
the duty of the commissioner of human services to offer 
appropriate social services to any pregnant woman who is in need 
of social services under criteria prescribed by rule of the 
commissioner.  The commissioner shall also offer appropriate 
social services to the woman and her child after the birth of 
the child.  
    Subd. 2.  [MINOR PARENTS AND THEIR CHILDREN.] (a) Every 
birth to a minor shall be reported by the hospital where the 
birth occurs, within three working days after the birth.  The 
hospital shall make the report to the commissioner on a form 
provided by the department of human services county social 
services agency in the county in which the minor mother resides 
and shall notify the minor that the report has been made.  The 
county social services agency shall contact any minor mother who 
does not have a case manager who resides in the county and 
determine whether she has a plan for herself and her child.  The 
plan must consider: 
    (1) the age of the minor parent; 
    (2) the involvement of the minor's parents or of other 
adults who provide active, ongoing guidance, support, and 
supervision; 
    (3) the involvement of the father of the minor's child, 
including steps being taken to establish paternity, if 
appropriate; 
    (4) a decision of the minor to keep and raise her child or 
place the child for adoption; 
    (5) completion of high school or GED; 
    (6) current economic support of the minor parent and child 
and plans for economic self-sufficiency; 
    (7) parenting skills of the minor parent; 
    (8) living arrangement of the minor parent and child; 
    (9) child care and transportation needed for education, 
training, or employment; 
    (10) ongoing health care; and 
    (11) other services as needed to address personal or family 
problems or to facilitate the personal growth and development 
and economic self-sufficiency of the minor parent and child. 
    (b) If the minor parent does not have a plan for herself 
and child, the county social services agency shall work with her 
to develop a plan and shall provide case management services as 
needed to assure the resources and services are available to 
meet the plan requirements. 
     (c) If the minor parent refuses to plan for herself and her 
child or fails, without good cause, to follow through on an 
agreed upon plan, the county social services agency may file a 
petition under section 260.131 seeking an order for protective 
supervision under section 260.191, subdivision 1, clause (a), on 
the grounds that the minor parent's child is dependent due to 
the state of immaturity of the minor parent.  A contract with a 
minor parent under section 256.736, subdivision 11(a)(4) is an 
"agreed upon plan" for purposes of this section. 
    Sec. 45.  Minnesota Statutes 1986, section 257.34, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ACKNOWLEDGMENT BY PARENTS.] The mother and 
father of a child born to a mother who was not married to the 
child's father when the child was conceived nor when the child 
was born may, in a writing signed by both of them before a 
notary public, declare and acknowledge under oath that they are 
the biological parents of the child.  The declaration may 
provide that any such child born to the mother at any time 
before or up to ten months after the date of execution of the 
declaration is the biological child of the signatories.  
Execution of the declaration shall: 
    (a) have the same consequences as an acknowledgment by the 
signatories of parentage of the child for the purposes of 
sections 62A.041 and 62C.14, subdivision 5a; 
    (b) be conclusive evidence that the signatories are parents 
of the child for the purposes of sections 176.111 and 197.09 to 
197.11 197.75 and 197.752; 
    (c) have create a presumption that the same consequences as 
an acknowledgment by signatory is the biological father of 
paternity of the child for the purposes of sections 257.57 and 
257.66 257.51 to 257.74; 
    (d) when timely filed with the division of vital statistics 
of the Minnesota department of health as provided in section 
259.261, qualify as an affidavit stating the intention of the 
signatories to retain parental rights as provided in section 
259.261 if it contains the information required by section 
259.261 or rules promulgated thereunder; 
    (e) have the same consequences as a writing declaring 
paternity of the child for the purposes of section 524.2-109; 
and 
    (f) be conclusive evidence that the signatories are parents 
of the child for the purposes of chapter 573. 
    Sec. 46.  Minnesota Statutes 1986, section 257.57, 
subdivision 2, is amended to read:  
    Subd. 2.  An action to determine the existence or 
nonexistence of the father and child relationship presumed under 
section 257.55, subdivision 1, clause (d) or (e) may be brought 
at any time by The child, the mother or personal representative 
of the child, the public authority chargeable by law with the 
support of the child, the personal representative or a parent of 
the mother if the mother has died or is a minor, a man alleged 
or alleging himself to be the father, or the personal 
representative or a parent of the alleged father if the alleged 
father has died or is a minor may bring an action: 
    (1) at any time for the purpose of declaring the existence 
of the father and child relationship presumed under section 
257.55, subdivision 1, clause (d) or (e), or the nonexistence of 
the father and child relationship presumed under clause (d) of 
that subdivision; or 
    (2) for the purpose of declaring the nonexistence of the 
father and child relationship presumed under section 257.55, 
subdivision 1, clause (e) only if the action is brought within 
three years after the date of the execution of the declaration.  
    Sec. 47.  Minnesota Statutes 1986, section 257.60, is 
amended to read:  
    257.60 [PARTIES.] 
    The child may be made a party to the action.  If the child 
is a minor and is made a party, a general guardian or a guardian 
ad litem shall be appointed by the court to represent the 
child.  The child's mother or father may not represent the child 
as guardian or otherwise.  If the child is a minor and the case 
involves a compromise under section 257.64, subdivision 1 or a 
lump sum payment under section 257.66, subdivision 4, the child 
and the commissioner of human services shall each be made a 
party before the court approves a compromise or orders a lump 
sum payment.  The natural biological mother, each man presumed 
to be the father under section 257.55, and each man alleged to 
be the natural biological father, shall be made parties or, if 
not subject to the jurisdiction of the court, shall be given 
notice of the action in a manner prescribed by the court and 
shall be given an opportunity to be heard.  The public agency 
responsible for support enforcement is joined as a party in each 
case in which rights are assigned under section 256.74, 
subdivision 5.  A person who may bring an action under section 
257.57 may be made a party to the action.  The court may align 
the parties.  The child shall be made a party whenever: 
    (1) the child is a minor and the case involves a compromise 
under section 257.64, subdivision 1, or a lump sum payment under 
section 257.66, subdivision 4, in which case the commissioner of 
human services shall also be made a party; or 
    (2) the child is a minor and the action is to declare the 
nonexistence of the father and child relationship; or 
    (3) an action to declare the existence of the father and 
child relationship is brought by a man presumed to be the father 
under section 257.55, or a man who alleges to be the father, and 
the mother of the child denies the existence of the father and 
child relationship. 
    Sec. 48.  Minnesota Statutes 1986, section 257.62, is 
amended by adding a subdivision to read: 
    Subd. 6.  [TESTS, EVIDENCE ADMISSIBLE.] In any hearing 
brought under subdivision 5, a certified report of the facts and 
results of a laboratory analysis or examination of blood or 
genetic tests, that is performed in a laboratory accredited to 
meet the Standards for Parentage Testing of the American 
Association of Blood Banks and is prepared and attested by a 
qualified expert appointed by the court, shall be admissible in 
evidence without proof of the seal, signature, or official 
character of the person whose name is signed to it, unless a 
demand is made by a party in a motion or responsive motion made 
within the time limit for making and filing a responsive motion 
that the matter be heard on oral testimony before the court. 
    Sec. 49.  Minnesota Statutes 1986, section 257.63, 
subdivision 2, is amended to read:  
    Subd. 2.  Upon refusal of a witness, including a party, to 
testify under oath or produce evidence, the court may order the 
party to testify under oath and produce evidence concerning all 
relevant facts.  If the refusal is upon the grounds that the No 
testimony or evidence might tend to incriminate the party, the 
court may grant the party immunity from all criminal liability 
on account of the testimony or evidence the party is required to 
produce.  An other information compelled under the 
order granting immunity bars prosecution of, or any information 
directly or indirectly derived from such testimony or other 
information, may be used against the witness for any offense 
shown, in whole or in part, by testimony or evidence which the 
party is required to produce any criminal case, except for 
perjury committed in the testimony.  The refusal of a witness, 
who has been granted immunity, to obey an order to testify or 
produce evidence is subject to the sanctions within the 
jurisdiction of the court.  
    Sec. 50.  Minnesota Statutes 1986, section 268.0122, 
subdivision 3, is amended to read:  
    Subd. 3.  [DUTIES AS A STATE AGENCY.] The commissioner 
shall: 
    (1) administer the unemployment insurance laws and related 
programs; 
    (2) administer the aspects of aid to families with 
dependent children, general assistance, work readiness, and food 
stamps that relate to employment and training services, subject 
to the limitations of federal regulations contract under section 
268.86, subdivision 2; 
    (3) administer wage subsidies and recommend to the 
coordinator the use of the discretionary portion of wage subsidy 
appropriations the discretionary employment and training fund; 
    (4) administer a national system of public employment 
offices as prescribed by United States Code, title 29, chapter 
4B, the Wagner-Peyser Act, and other federal employment and 
training programs; 
    (5) cooperate with the federal government and its 
employment and training agencies in any reasonable manner as 
necessary to qualify for federal aid for employment and training 
services and money; 
    (6) enter into agreements with other departments of the 
state and local units of government as necessary; 
    (7) certify competent employment and training service 
providers, with the concurrence of the coordinator, and 
decertify service providers that fail to comply with performance 
criteria according to standards established by the coordinator 
commissioner; 
    (8) provide consistent, integrated employment and training 
services across the state; 
    (9) establish the standards for all employment and training 
services administered under this chapter; 
    (10) develop standards for the contents and structure of 
the county local service unit plans;  
    (11) provide current state and substate labor market 
information and forecasts, in cooperation with other agencies; 
    (12) prepare a plan and submit it to the coordinator in 
each even-numbered year, according to standards established by 
the coordinator, for use in developing a statewide employment 
and training plan; 
    (13) (12) identify underserved populations, unmet service 
needs, and funding requirements; 
    (14) (13) consult with the council for the blind on matters 
pertaining to programs and services for the blind and visually 
impaired; and 
    (15) (14) submit to the governor, the coordinator, the 
commissioners of human services and finance, and the chairs of 
the senate finance and house appropriations committees a 
semiannual report that: 
    (a) reports, by client classification, an unduplicated 
count of the kinds and number of services furnished through each 
program administered or supervised by the department or 
coordinated with it; 
    (b) reports on the number of job openings listed, 
developed, available, and obtained by clients; 
    (c) identifies the number of cooperative agreements in 
place, the number of individuals being served, and the kinds of 
service provided them; 
    (d) evaluates the performance of services, such as wage 
subsidies, community investments, work readiness, and grant 
diversions; and 
    (e) explains the effects of current employment levels, 
unemployment rates, and program performance on the unemployment 
insurance fund and general assistance, work readiness, and aid 
to families with dependent children caseloads and program 
expenditures. 
    Sec. 51.  Minnesota Statutes 1986, section 268.85, 
subdivision 2, is amended to read: 
    Subd. 2.  [ORDER OF PRIORITY.] (a) The priority for 
services to be provided is: 
    (1) permanent, unsubsidized, full-time private or nonprofit 
sector employment and, where possible, in conjunction with 
targeted jobs tax credits as defined at United States Code, 
title 26, section 44B, as amended by Public Law Number 98-369, 
with highest priority to employment with paid medical benefits; 
    (2) permanent, subsidized, full-time private sector 
employment; 
    (3) permanent, subsidized, full-time nonprofit sector 
employment; 
    (4) training; 
    (5) relocation, except that relocation is considered only 
when a client can find affordable housing near the new location; 
and 
    (6) part-time, subsidized, nonprofit, or public employment 
with continued employment assistance. 
    (b) Individuals receiving any of the priority services in 
paragraph (a) must be provided with child care, transportation, 
or other support services as necessary and in relation to their 
eligibility and the availability of funds. 
    (c) In delivering employment and training services, local 
service units shall distribute their available resources in a 
manner that provides greater incentives to clients in permanent 
private or nonprofit sector employment than in public sector 
jobs. 
    Sec. 52.  Minnesota Statutes 1986, section 268.86, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEVELOPMENT DISCRETIONARY PROGRAMS.] The 
commissioner shall may develop and administer discretionary 
employment and training services programs to assist appropriate 
recipients of public assistance and unemployed and underemployed 
persons eligible to receive wage subsidies to become 
economically independent.  The services must have as their 
objective the improvement of clients' opportunities for economic 
independence through permanent employment.  The services must 
provide sufficient employment and training options to allow 
local service units to effectively meet the support services, 
educational, and training needs of their public assistance and 
wage subsidy clients programs may include on-the-job training, 
wage subsidies, classroom training, relocation expenses, 
temporary cash assistance for persons in training, and support 
services. 
    Sec. 53.  Minnesota Statutes 1986, section 268.86, 
subdivision 2, is amended to read:  
    Subd. 2.  [ADMINISTRATION INTERAGENCY AGREEMENTS.] Under 
agreements necessary to comply with federal regulations, By 
October 1, 1987, the commissioner, on behalf of and the 
commissioner of human services, shall administer enter into a 
written contract for the design, delivery, and administration of 
employment and training services for applicants for or 
recipients of food stamps or aid to families with dependent 
children and food stamps.  The commissioner shall administer 
employment and training services for general assistance and work 
readiness recipients in consultation with the commissioner of 
human services, including AFDC employment and training programs, 
grant diversion, and supported work.  The contract must be 
approved by the coordinator and must address: 
    (1) specific roles and responsibilities of each department; 
    (2) assignment and supervision of staff for interagency 
activities including any necessary interagency employee mobility 
agreements under the administrative procedures of the department 
of employee relations; 
    (3) mechanisms for determining the conditions under which 
individuals participate in services, their rights and 
responsibilities while participating, and the standards by which 
the services must be administered; 
    (4) procedures for providing technical assistance to local 
service units and employment and training service providers; 
    (5) access to appropriate staff for ongoing development and 
interpretation of policy, rules, and program standards; 
    (6) procedures for reimbursing appropriate agencies for 
administrative expenses; and 
    (7) procedures for accessing available federal funds. 
    Sec. 54.  Minnesota Statutes 1986, section 268.86, 
subdivision 4, is amended to read: 
    Subd. 4.  [EMPLOYABILITY PLANS.] The commissioner shall 
require that a public assistance recipient's employment status 
is appraised within 30 days and that a written employability 
plan is prepared for appropriate public assistance recipients in 
consultation with the recipients.  The plan must take into 
account the level of skill and education of the recipient, as 
measured against the existing market, the length of time the 
recipient has been absent from the work force, and the 
recipient's financial responsibility to a family, if any.  The 
plan must be designed to help the recipient obtain suitable 
employment, or training and work skills necessary to secure 
suitable employment, and may include an arrangement with another 
service provider or agency for specialized employment, 
education, training, or support services.  A copy of the plan 
must be given to the recipient at the time it is prepared; an 
additional copy must be given to the local agency for its files. 
    Sec. 55.  Minnesota Statutes 1986, section 268.871, 
subdivision 1, is amended to read:  
    Subdivision 1.  [RESPONSIBILITY AND CERTIFICATION.] Unless 
prohibited by federal law or otherwise determined by state law 
or the coordinator, a local service unit is responsible for the 
delivery of employment and training services.  After February 1, 
1986 1988, employment and training services must be delivered by 
public, nonprofit, or private service providers that are 
certified to provide the services employment and training 
service providers.  
    Sec. 56.  Minnesota Statutes 1986, section 268.871, 
subdivision 2, is amended to read:  
    Subd. 2.  [CONTRACTING PREFERENCE.] In contracting, a local 
service unit must give preference, whenever possible, 
to existing certified employment and training service providers 
including the job service, opportunities industrialization 
centers, displaced homemaker providers, work incentive 
providers, Minnesota employment and economic development act 
providers, post-secondary educational institutions, and job 
training partnership act programs that can effectively 
coordinate federal, state, and local employment and training 
services; that can maximize use of available federal and other 
nonstate funds; and that have demonstrated the ability to serve 
public assistance clients as well as other unemployed people.  
    Sec. 57.  Minnesota Statutes 1986, section 268.871, is 
amended by adding a subdivision to read: 
    Subd. 5.  [REPORTS.] Each employment and training service 
provider under contract with a local service unit to deliver 
employment and training services must submit an annual report by 
March 1 to the local service unit.  The report must specify: 
    (1) the types of services provided; 
    (2) the number of priority and nonpriority AFDC recipients 
served, the number of work readiness assistance recipients 
served, and the number of other clients served; 
    (3) how resources will be prioritized to serve priority and 
nonpriority public assistance recipients and other clients; and 
    (4) the manner in which state employment and training funds 
and programs are being coordinated with federal and local 
employment and training funds and programs.  
    Sec. 58.  Minnesota Statutes 1986, section 268.88, is 
amended to read: 
    268.88 [LOCAL SERVICE UNIT PLANS.] 
    (a) Local service units shall prepare and submit to the 
commissioner by October April 15 of each year an annual plan for 
the subsequent calendar year.  The commissioner shall notify 
each local service unit by December May 1 of each year if its 
plan has been approved or disapproved.  The plan must include: 
    (1) a statement of objectives for the employment and 
training services the local service unit administers; 
    (2) the establishment of public assistance caseload 
reduction goals and the strategies and programs that will be 
used to achieve these goals; 
    (3) a statement of whether the goals from the preceding 
year were met and an explanation if the local service unit 
failed to meet the goals; 
    (4) the amount proposed to be allocated to each employment 
and training service; 
    (5) the proposed types of employment and training services 
the local service unit plans to utilize; 
    (6) a description of how the local service unit will use 
funds provided under section 256.736 to meet the requirements of 
that section.  The description must include what services will 
be provided, number of clients served, per service expenditures, 
and projected outcomes; 
    (6) (7) a report on the use of wage subsidies, grant 
diversions, community investment programs, sliding fee day care, 
and other services administered under this chapter; 
    (7) (8) an annual update of the community investment 
program plan according to standards established by the 
commissioner; and 
    (8) (9) a performance review of the employment and training 
service providers delivering employment and training 
services for the local service unit; and 
    (10) a copy of any contract between the local service unit 
and an employment and training service provider including 
expected outcomes and service levels for public assistance 
clients. 
    (b) In counties with a city of the first class, the county 
and the city shall develop and submit a joint plan.  The plan 
may not be submitted until agreed to by both the city and the 
county.  The plan must provide for the direct allocation of 
employment and training money to the city and the county unless 
waived by either.  If the county and the city cannot concur on a 
plan, the coordinator shall resolve their dispute. 
    (c) The commissioner may withhold the distribution of 
employment and training money from a local service unit that 
does not submit a plan to the commissioner by the date set by 
this section, and shall withhold the distribution of employment 
and training money from a local service unit whose plan has been 
disapproved by the coordinator until an acceptable amended plan 
has been submitted.  
    (d) For 1985 1987, local service unit plans must be 
submitted by November 1, 1985 and must include:  October 1, 
1987.  The plan must include the implementation plan for aid to 
families with dependent children employment and training 
services as required under section 90. 
    (1) a statement of objectives for the employment and 
training services the local service unit administers;  
    (2) the establishment of public assistance caseload 
reduction goals and the strategies that will be used to achieve 
these goals;  
    (3) the amount proposed to be allocated to each employment 
and training service;  
    (4) the proposed employment and training services and 
service providers the local service unit plans to utilize; and 
    (5) a statement of intent regarding the establishment of 
either a community investment program or an employment 
experience program.  
    If the local service unit provides a statement of intent 
for the establishment of a community investment program under 
clause (5), the local service unit must submit a preliminary 
community investment program plan by February 1, 1986.  
    Sec. 59.  Minnesota Statutes 1986, section 268.91, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] For the purposes of this 
section the following terms have the meanings given. 
    (a) "Child care services" means child care provided in 
family day care homes, group day care homes, nursery schools, 
day nurseries, child day care centers, play groups, head 
start, and parent cooperatives, and in-home child care as 
defined in the Minnesota plan for social services to families 
and children or in the child's home. 
    (b) "Child" means a person 14 12 years old or younger, or a 
person age 13 or 14 who is handicapped, as defined in section 
120.03. 
    (c) "Commissioner" means the commissioner of jobs and 
training human services. 
    (d) "Child care" means the care of a child by someone other 
than a parent or legal guardian in or outside the child's own 
home for gain or otherwise, on a regular basis, for any part of 
a 24-hour day. 
    (e) "County board" means the board of county commissioners 
in each county. 
    (f) "Education program" means remedial or basic education 
or English as a second language instruction, high school 
education, a program leading to a general equivalency diploma, 
and post-secondary education excluding post-baccalaureate 
programs. 
    (g) "Employment program" means employment of recipients 
financially eligible for the child care sliding fee program, 
vocational assessment, and job readiness and job search 
activities. 
    (h) "Human services board" means a board established under 
section 402.02, Laws 1974, chapter 293, or Laws 1976, chapter 
340. 
    (i) "Provider" means the child care license holder or the 
legal nonlicensed caregiver who operates a family day care home, 
a group family day care home, a day care center, a nursery 
school, or a day nursery, or who functions in the child's home.  
    (j) "Post-secondary educational systems" means the 
University of Minnesota board of regents, the state university 
board, the state board for community colleges, and the state 
board of vocational technical education.  
    (k) "AFDC priority groups" means the recipients defined in 
section 256.736, subdivision 2a. 
     (l) "AFDC" means aid to families with dependent children. 
    Sec. 60.  Minnesota Statutes 1986, section 268.91, 
subdivision 2, is amended to read:  
    Subd. 2.  [DUTIES OF COMMISSIONER.] The commissioner shall 
develop standards for county and human services boards, and 
post-secondary educational systems, to provide child care 
services to enable eligible families to participate in 
employment or, training, or education programs.  The 
commissioner shall distribute money to counties to reduce the 
costs of child care for eligible families.  The commissioner 
shall adopt rules to govern the program in accordance with this 
section.  The rules must establish a sliding schedule of fees 
for parents receiving child care services.  The commissioner 
shall require counties to collect and report data that the 
commissioner deems necessary to evaluate the effectiveness of 
the program in preventing and reducing participants' dependence 
on public assistance and in providing other benefits, including 
improvement in the care provided to children.  The commissioner 
shall report to the full productivity and opportunity 
coordinator in each even-numbered year on the effectiveness of 
the program.  The commissioner shall maximize the use of federal 
money under the AFDC employment special needs program in section 
256.736, subdivision 8, for recipients of aid to families with 
dependent children who are in education, training, job search, 
or other activities allowed under that program.  Money 
appropriated under this section must be coordinated with the 
AFDC employment special needs program to accomplish this 
purpose.  Federal reimbursement obtained must be allocated to 
the county that spent money for child care that is federally 
reimbursable under the AFDC employment special needs program.  
The counties shall use the federal money to expand services to 
AFDC recipients under this section. 
    Sec. 61.  Minnesota Statutes 1986, section 268.91, 
subdivision 3, is amended to read:  
    Subd. 3.  [ALLOCATION.] (a) By June 1 of each odd-numbered 
year, the commissioner shall notify all county and human 
services boards and post-secondary educational systems of the 
their allocation and the procedures used for the sliding fee 
program.  Allocations must be made by July 1 of each 
odd-numbered year.  If the appropriation is insufficient to meet 
the needs in all counties, the amount must be prorated among the 
counties. 
    (b) For the purposes of this section Except for set-aside 
money allocated under subdivisions 3a, 3b, 3c, and 3d, the 
commissioner shall allocate money appropriated between the 
metropolitan area, comprising the counties of Anoka, Carver, 
Dakota, Hennepin, Ramsey, Scott, and Washington, and the area 
outside the metropolitan area so that no more than 55 percent of 
the total appropriation goes to either area after excluding 
allocations for statewide administrative costs.  The 
commissioner shall allocate 50 percent of the money among 
counties on the basis of the number of families below the 
poverty level, as determined from the most recent special 
census, and 50 percent on the basis of caseloads of aid to 
families with dependent children for the preceding fiscal year, 
as determined by the commissioner of human services. 
    (c) Once each quarter, the commissioner shall review the 
use of child care fund allocations by county.  In accordance 
with the formula found in paragraph (b), the commissioner may 
reallocate unexpended or unencumbered money among those counties 
who have expended their full portion.  Any unexpended money from 
the first year of the biennium may be carried forward to the 
second year of the biennium.  
    Sec. 62.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [SET-ASIDE MONEY.] (a) State money must be set 
aside by the commissioner for child care services for: 
    (1) AFDC priority groups; 
    (2) recipients of AFDC attending post-secondary education 
programs, excluding post-baccalaureate programs; and 
    (3) students attending post-secondary education programs, 
excluding post-baccalaureate programs, who meet sliding fee 
program eligibility standards.  
    (b) The set-aside amount must be determined by the 
commissioner and must not exceed 52 percent of the total funds 
appropriated.  Of the set-aside amount, 44 percent must be 
allocated for persons described in paragraph (a), clause (1); 40 
percent must be allocated for persons described in paragraph 
(a), clause (2); and 16 percent must be allocated for persons 
described in paragraph (a), clause (3). 
    Sec. 63.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [SET-ASIDE MONEY FOR AFDC PRIORITY GROUPS.] (a) 
Set-aside money for AFDC priority groups must be allocated among 
the counties based on the average monthly number of caretakers 
receiving AFDC under the age of 22 and the average monthly 
number of AFDC cases open 24 or more consecutive months.  For 
each fiscal year the average monthly caseload shall be based on 
the 12-month period ending March 31 of the previous fiscal year. 
The commissioner may reallocate quarterly unexpended or 
unencumbered set-aside money to counties that expend their full 
allocation.  The county shall use the set-aside money for AFDC 
priority groups. 
    (b) The county shall develop cooperative agreements with 
the employment and training service provider for coordination of 
child care funding with employment, training, and education 
programs for aid to families with dependent children priority 
groups.  The cooperative agreement shall specify that 
individuals receiving employment, training, and education 
services under an employability plan from the employment and 
training service provider shall, as resources permit, be 
guaranteed set-aside money for child care assistance from the 
county of their residence.  
    (c) Counties may contract for administration of the program 
or may arrange for or contract for child care funds to be used 
by other appropriate programs, in accordance with this section 
and as permitted by federal law and regulations.  
    (d) If the commissioner finds, on or after January 1 of a 
fiscal year, that set-aside money for AFDC priority groups is 
not being fully utilized, the commissioner may permit counties 
to use set-aside money for other eligible applicants, as long as 
priority for use of the money will continue to be given to the 
AFDC priority groups.  
    (e) A county may claim federal reimbursement under the AFDC 
special needs program for money spent for persons listed in 
subdivision 3a, clause (1).  The commissioner shall allocate any 
federal earnings to the county.  The county shall use the money 
to expand services to AFDC recipients under the child care 
sliding fee program. 
    Sec. 64.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [SET-ASIDE MONEY FOR AFDC POST-SECONDARY 
STUDENTS.] (a) For the fiscal year ending June 30, 1988, 
set-aside money for persons listed in subdivision 3a, clause 
(2), shall be allocated to the counties based on caseloads of 
aid to families with dependent children for the preceding fiscal 
year, as determined by the commissioner.  For succeeding fiscal 
years, the commissioner shall, in cooperation with the director 
of the higher education coordinating board, develop a formula 
for allocation of the funds to counties based on the number of 
AFDC caretakers in each county who are enrolled at 
post-secondary institutions. 
    (b) Money allocated in paragraph (a) must be used for child 
care expenses of AFDC recipients attending post-secondary 
educational programs, excluding post-baccalaureate programs, and 
making satisfactory progress towards completion of the program. 
    (c) Once each quarter the commissioner shall review the use 
of child care fund allocations under this subdivision by 
county.  The commissioner may reallocate unexpended or 
unencumbered money among those counties that have expended their 
full portion for the purposes of this subdivision. 
    (d) A county may claim federal reimbursement under the AFDC 
special needs program for money spent for persons listed in 
subdivision 3a, clause (2).  The commissioner shall allocate any 
federal earnings to the county.  The county shall use the money 
to expand services to AFDC recipients under the child care 
sliding fee program. 
    (e) Recipients of AFDC who have completed their 
post-secondary education and had received child care funds 
during that education shall be assured, to the extent of 
available resources, of sliding fee money for employment 
programs after graduation if they meet sliding fee program 
eligibility standards. 
    Sec. 65.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3d.  [SET-ASIDE MONEY FOR POST-SECONDARY 
STUDENTS.] (a) Each post-secondary educational system shall be 
allocated a portion of the set-aside money for persons listed in 
subdivision 3a, clause (3), based on the number of students with 
dependent children enrolled in each system in the preceding 
fiscal year.  The post-secondary educational systems shall 
allocate their money among institutions under their authority 
based on the number of students with dependent children enrolled 
in each institution in the last fiscal year.  For the purposes 
of this subdivision, "students with dependent children" means 
the sum of all Minnesota residents enrolled in public 
post-secondary institutions who report dependents on their 
applications to the state scholarship and grant program.  The 
commissioner shall transfer the allocation for each 
post-secondary institution to the county board of the county in 
which the institution is located, to be held in an account for 
students found eligible for child care sliding fee assistance 
and attending the institution.  
    (b) Post-secondary educational institutions shall take 
applications for the child care sliding fee program from 
students and determine eligibility based on this section and 
rules promulgated by the commissioner.  If a person is eligible 
for the child care sliding fee program, the post-secondary 
institution shall notify the county.  The county shall process 
the person's application and make vendor payments to the 
person's child care provider from the institution's account.  
Set-aside money must be used to subsidize child care expenses 
for eligible students making satisfactory progress toward 
completion of a program.  The post-secondary institution must 
provide the county with quarterly reports on students' 
progress.  The post-secondary educational institution shall not 
approve applications for sliding fee assistance in excess of the 
set-aside money allocated to it under paragraph (a). 
    (c) The post-secondary educational systems may reallocate 
unexpended or unencumbered money among institutions under their 
authority.  If by May 15 of any year set-aside money is 
unexpended or unencumbered, the commissioner may reallocate the 
money among post-secondary educational systems, or reallocate it 
to the counties.  Any unexpended money from the first year of 
the biennium may be carried forward to the second year of the 
biennium. 
    (d) Ten percent of the amount allocated for persons 
described in subdivision 3a, paragraph (a), clause (3), shall be 
held by the commissioner for students attending a Minnesota 
nonprofit post-secondary education program.  A nonprofit 
education program may take applications for the child care 
sliding fee program and determine eligibility based on this 
section and rules promulgated by the commissioner. If a person 
is eligible for the child care sliding fee program, the 
post-secondary institution shall notify the county in which the 
institution is located.  The county shall process the person's 
application and, upon approval of the commissioner, make vendor 
payments to the person's child care provider.  The commissioner 
shall reimburse counties out of the money held by the 
commissioner under this paragraph. 
    Sec. 66.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3e.  [USE OF MONEY.] Money for persons listed in 
subdivision 3a, clauses (2) and (3), shall be used to reduce the 
costs of child care for students, including the costs of child 
care for students while employed if enrolled in an eligible 
education program at the same time and making satisfactory 
progress towards completion of the program.  The county may plan 
for and provided child care assistance to persons listed in 
subdivision 3a, clauses (2) and (3), from the regular sliding 
fee fund to supplement the set-aside funds.  Students provided 
child care assistance for one academic year shall be provided 
child care assistance in the following academic year, providing 
they remain financially eligible. 
    Sec. 67.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 3f.  [REPORTING AND PAYMENTS.] (a) Counties and 
post-secondary educational systems shall submit on forms 
prescribed by the commissioner a quarterly financial and program 
activity report which is due 20 calendar days after the end of 
each quarter.  The financial and program activity report must 
include: 
    (1) a detailed accounting of the expenditures and revenues 
for the program during the preceding quarter by funding source 
and by eligibility group; 
    (2) a description of activities and concomitant 
expenditures that are federally reimbursable under the AFDC 
employment special needs program; 
    (3) a description of activities and concomitant 
expenditures of set-aside money; 
    (4) information on money encumbered at the quarter's end 
but not yet reimbursable, for use in adjusting allocations as 
provided in subdivision 3b, paragraph (d); subdivision 3c, 
paragraph (c); and subdivision 3d, paragraph (c); and 
    (5) other data the commissioner considers necessary to 
account for the program or to evaluate its effectiveness in 
preventing and reducing participants' dependence on public 
assistance and in providing other benefits, including 
improvement in the care provided to children.  
    (b) The commissioner shall make payments to each county in 
quarterly installments.  The commissioner may certify an advance 
for the first quarter of the fiscal year.  Later payments must 
be based on actual expenditures as reported in the quarterly 
financial and program activity report.  
    (c) The commissioner may withhold, reduce, or terminate the 
allocation of any county or post-secondary educational system 
that does not meet the reporting or other requirements of this 
program.  The commissioner shall reallocate to other counties or 
post-secondary educational systems money so reduced or 
terminated.  
    Sec. 68.  Minnesota Statutes 1986, section 268.91, 
subdivision 4, is amended to read:  
    Subd. 4.  [FINANCIAL ELIGIBILITY.] (a) Child care services 
must be available to families who need child care to find or 
keep employment or to obtain the training or education necessary 
to find employment and who: 
    (1) receive aid to families with dependent children; 
    (2) have household income below the eligibility levels for 
aid to families with dependent children; or 
    (3) have household income within a range established by the 
commissioner. 
    (b) Child care services for the families receiving aid to 
families with dependent children must be made available as 
in-kind services, to cover any difference between the actual 
cost and the amount disregarded under the aid to families with 
dependent children program.  Child care services to families 
whose incomes are below the threshold of eligibility for aid to 
families with dependent children, but that are not receiving aid 
to families with dependent children, must be made available 
without cost to the families. 
    (c) Child care services to families with incomes in the 
commissioner's established range must be made available on a 
sliding fee basis.  The lower limit of the sliding fee range 
must be the eligibility limit for aid to families with dependent 
children.  The upper limit of the range must be neither less 
than 70 percent nor more than 90 percent of the state median 
income for a family of four, adjusted for family size.  
    (d) If a disproportionate amount of the available money is 
provided to any one of the groups described in subdivision 4, 
paragraph (a), the county board shall document to the 
commissioner the reason the group received a disproportionate 
share.  If a county projects that its child care allocation is 
insufficient to meet the needs of all eligible groups, it may 
prioritize among the groups to be served.  Counties shall assure 
that a person receiving child care assistance from the sliding 
fee program prior to July 1, 1987, continues to receive 
assistance, providing the person meets all other eligibility 
criteria.  Set-aside money must be prioritized by the state, and 
counties do not have discretion over the use of this money. 
    Sec. 69.  Minnesota Statutes 1986, section 268.91, 
subdivision 5, is amended to read:  
    Subd. 5.  [EMPLOYMENT OR TRAINING ELIGIBILITY.] (a) Persons 
who are seeking employment and who are eligible for assistance 
under this section are eligible to receive the equivalent of one 
month of child care.  Employed persons who work at least ten 
hours a week and receive at least a minimum wage for all hours 
worked are eligible for child care assistance. 
    (b) Persons eligible under this section for child care 
assistance for education or training must receive assistance for 
the length of the program or 24 months, whichever is shorter.  
An education or training program with demonstrated effectiveness 
may be approved by the commissioner of education and accredited 
by the appropriate agency as an eligible program including high 
school or an equivalent program, an English competency program, 
technical or vocational training, or a four-year or associate 
degree program participating in employment programs, training 
programs, or education programs are eligible for assistance from 
the child care sliding fee program, if they are financially 
eligible under the sliding fee scale set by the commissioner in 
subdivision 7.  Counties shall assure that a person receiving 
child care assistance from the sliding fee program while 
attending a post-secondary institution prior to July 1, 1987, 
continues to receive assistance from the regular sliding fee 
program, or the set-asides in subdivisions 3c or 3d, providing 
the person meets all other eligibility criteria. 
    Sec. 70.  Minnesota Statutes 1986, section 268.91, 
subdivision 6, is amended to read:  
    Subd. 6.  [COUNTY CONTRIBUTION.] (a) In addition to 
payments from parents, the program must be funded by county 
contributions.  Except for set-aside money, counties shall 
contribute five from county tax sources a minimum of 15 percent 
of the cost of the program in the program's first year and 15 
percent in the second and subsequent years.  The commissioner 
may require by rule that a county pay the commissioner the 
portion of sliding fee allocations paid by the state for which 
the county is responsible.  The county shall advance its portion 
of sliding fee costs, based upon allocations made by the 
commissioner for that county for expenditures in the succeeding 
month.  A The commissioner shall recover from the county as 
necessary to bring county expenditures into compliance with this 
subdivision. 
    (b) The commissioner shall recover from counties any state 
or federal money found to be ineligible.  If a federal audit 
exception is taken based on a percentage of federal earnings, 
all counties shall pay a share proportional to their respective 
federal earnings during the period in question.  
    (c) To receive money through this program, each county 
shall certify to the commissioner that the county has not 
reduced allocations from other federal, state, and county 
sources, which, in the absence of child care sliding fee or wage 
subsidy money, would have been available for child care services.
    Sec. 71.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [POST-SECONDARY RESPONSIBILITY.] To receive 
money through this program, each post-secondary educational 
system shall certify to the commissioner that the system has not 
reduced allocations from other federal and state sources, which, 
in the absence of child care sliding fee money, would have been 
available for child care services. 
    Sec. 72.  Minnesota Statutes 1986, section 268.91, 
subdivision 11, is amended to read:  
    Subd. 11.  [ADMINISTRATIVE EXPENSES.] A county must not use 
more than seven percent of its allocation for its administrative 
expenses under this section, except a county may not use any of 
its allocation of the set-aside funds under subdivisions 3b and 
3c for administrative expenses.  A county may use up to four 
percent of the funds transferred to it under subdivision 3d for 
administrative expenses.  
    Sec. 73.  Minnesota Statutes 1986, section 268.91, is 
amended by adding a subdivision to read: 
    Subd. 12.  [FAIR HEARING PROCESS.] (a) Applicants and 
recipients have the option to request the county to conduct a 
conciliation conference to attempt to resolve complaints arising 
from any of the following actions:  
    (1) a determination of ineligibility for child care 
assistance; 
    (2) unauthorized termination of child care assistance; 
    (3) determination of the factors considered in setting the 
family fee; and 
    (4) income redetermination resulting in change of a family 
fee.  
    (b) The county shall notify the applicant or the recipient, 
in writing, of any adverse action.  The determination described 
in paragraph (a), clauses (1) and (3), must include written 
notice of the applicant's or recipient's right to the election 
described in paragraph (c), where and how to request the 
election, the time limit within which to make the request, and 
the reasons for the determination.  Notice of the proposed 
actions described in paragraph (a), clauses (2) and (4), must be 
mailed to the applicant or recipient at least 15 calendar days 
before the effective date of the action.  The notice must 
clearly state what action the county proposes to take, the 
effective date of the proposed action, the reasons for the 
proposed action, the necessary corrective measures, the option 
to request either a conciliation conference or an administrative 
hearing, where and how to make the request, the time limits 
within which a request must be made, and the consequence of the 
action.  
    (c) An applicant or recipient who receives a determination 
or notice of proposed action under paragraph (b) must mail or 
deliver either a written notice of request for a conciliation 
conference to the administering agency or a written notice of 
request for the hearing specified under paragraph (e) to the 
administering agency on or before the effective date of the 
proposed action or the date specified in the notice, or the 
action will be final.  
    (d) The county shall provide a conciliation conference 
within 30 days of receipt of a written request.  
    The county shall give the applicant or recipient ten 
calendar days' notice of the conference date.  The applicant or 
recipient and the county's representative have the right to 
appear, to bring witnesses, and to submit documentation.  The 
written request and the resolution, if any, of the conference 
shall be maintained as part of the official record.  The 
county's representative shall issue a written resolution only if 
mutual agreement is reached between the county's representative 
and the applicant or recipient.  The resolution must be signed 
by both parties and issued the same day as the conciliation 
conference is held.  Participating in a conciliation conference 
or signing a resolution does not constitute a waiver of the 
right to an administrative hearing.  
    An applicant or recipient may, within 15 calendar days of 
the conference, mail or deliver a written request to the 
administering agency for an administrative hearing.  Unless an 
appeal is requested, a determination, proposed action, or 
resolution of a conciliation conference will be final after the 
15-day period has passed.  
    (e) A fair hearing shall be conducted in the manner 
prescribed by section 268.10, subdivision 3.  A right to review 
will be provided in accordance with section 268.10, subdivision 
5.  The proposed action will not take effect until the appeal is 
decided by the administrative hearing process. 
    Sec. 74.  Minnesota Statutes 1986, section 268.911, 
subdivision 1, is amended to read:  
    Subdivision 1.  [AUTHORITY.] The commissioner of human 
services may make grants to public or private nonprofit agencies 
for the planning, establishment, expansion, improvement, or 
operation of child care resource and referral programs and child 
care services according to the provisions of this section and 
may make grants to county boards to carry out the purposes of 
section 245.84. 
    Sec. 75.  Minnesota Statutes 1986, section 510.07, is 
amended to read:  
    510.07 [SALE OR REMOVAL PERMITTED; NOTICE.] 
    The owner may sell and convey the homestead without 
subjecting it, or the proceeds of such sale for the period of 
one year after sale, to any judgment or debt from which it was 
exempt in the owner's hands, except that the proceeds of the 
sale are not exempt from a judgment or debt for a court ordered 
child support or maintenance obligation in arrears.  The owner 
may remove therefrom without affecting such exemption, if the 
owner does not thereby abandon the same as the place of abode.  
If the owner shall cease to occupy such homestead for more than 
six consecutive months the owner shall be deemed to have 
abandoned the same unless, within such period, the owner shall 
file with the county recorder of the county in which it is 
situated a notice, executed, witnessed, and acknowledged as in 
the case of a deed, describing the premises and claiming the 
same as the owner's homestead.  In no case shall the exemption 
continue more than five years after such filing, unless during 
some part of the term the premises shall have been occupied as 
the actual dwelling place of the debtor or the debtor's family. 
    Sec. 76.  Minnesota Statutes 1986, section 518.131, 
subdivision 7, is amended to read:  
    Subd. 7.  The court shall be guided by the factors set 
forth in sections 518.17 518.551 (concerning child support), 
518.552 (concerning maintenance) and 518.17 to 518.175 
(concerning custody and visitation) in making temporary orders 
and restraining orders. 
    Sec. 77.  Minnesota Statutes 1986, section 518.171, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ORDER.] Unless the obligee has comparable 
or better group dependent health insurance coverage available at 
a more reasonable cost, the court shall order the obligor to 
name the minor child as beneficiary on any health and dental 
insurance plan that is available to the obligor on a group basis 
or through an employer or union. 
    If the court finds that dependent health or dental 
insurance is not available to the obligor on a group basis or 
through an employer or union, or that the group insurer is not 
accessible to the obligee, the court may require the obligor to 
obtain dependent health or dental insurance, or to be liable for 
reasonable and necessary medical or dental expenses of the child.
    If the court finds that the dependent health or dental 
insurance required to be obtained by the obligor does not pay 
all the reasonable and necessary medical or dental expenses of 
the child, or that the dependent health or dental insurance 
available to the obligee does not pay all the reasonable and 
necessary medical or dental expenses of the child, and the court 
finds that the obligor has the financial ability to contribute 
to the payment of these medical or dental expenses, the court 
shall require the obligor to be liable for all or a portion of 
the medical or dental expenses of the child not covered by the 
required health or dental plan. 
    Sec. 78.  Minnesota Statutes 1986, section 518.24, is 
amended to read:  
    518.24 [SECURITY; SEQUESTRATION; CONTEMPT.] 
    In all cases when maintenance or support payments are 
ordered, the court may require sufficient security to be given 
for the payment of them according to the terms of the order.  
Upon neglect or refusal to give security, or upon failure to pay 
the maintenance or support, the court may sequester the 
obligor's personal estate and the rents and profits of real 
estate of the obligor, and appoint a receiver of them.  The 
court may cause the personal estate and the rents and profits of 
the real estate to be applied according to the terms of the 
order.  If The obligor has is presumed to have an income from a 
source sufficient to pay the maintenance or support and the 
obligor fails to pay the same, the court shall order the obligor 
to pay it.  A person or party who If the obligor disobeys the 
order may be punished by the court as for, it is prima facie 
evidence of contempt. 
    Sec. 79.  Minnesota Statutes 1986, section 518.551, 
subdivision 1, is amended to read:  
    Subdivision 1.  [PAYMENT TO PUBLIC AGENCY.] 
    The court shall direct that all payments ordered for 
maintenance and support be made to the public agency responsible 
for child support enforcement so long as the obligee is 
receiving or has applied for public assistance, or has applied 
for child support and maintenance collection services.  Amounts 
received by the public agency responsible for child support 
enforcement greater than the amount granted to the obligee shall 
be remitted to the obligee.  
    Sec. 80.  Minnesota Statutes 1986, section 518.551, is 
amended by adding a subdivision to read: 
    Subd. 10.  [ADMINISTRATIVE PROCESS CHILD SUPPORT PILOT 
PROJECT.] A pilot project is established to obtain, modify, and 
enforce child and medical support orders and maintenance through 
administrative process, to evaluate the efficiency of the 
administrative process.  The pilot project shall begin when the 
procedures have been established and end on June 30, 1989.  
    During the pilot project, all proceedings for obtaining, 
modifying, or enforcing child and medical support orders and 
maintenance required to be conducted in Dakota county in which 
Dakota county human services is a party or represents a party to 
the action must be conducted by an administrative law judge from 
the office of administrative hearings, except for the following 
proceedings: 
    (1) adjudication of paternity; 
    (2) motions to set aside a paternity adjudication or 
declaration of parentage; 
    (3) evidentiary hearing on contempt motions; and 
    (4) motions to sentence or to revoke the stay of a jail 
sentence in contempt proceedings. 
    An administrative law judge may hear a stipulation reached 
on a contempt motion, but any stipulation that involves a 
finding of contempt and a jail sentence, whether stayed or 
imposed, shall require the review and signature of a county or 
district judge. 
    For the purpose of this pilot project, all powers, duties, 
and responsibilities conferred on judges of the county or 
district court to obtain and enforce child and medical support 
obligations, subject to the limitation set forth herein, are 
conferred on the administrative law judge conducting the 
proceedings, including the power to issue orders to show cause 
and to issue bench warrants for failure to appear.  
    During fiscal year 1988, the chief administrative law 
judge, the commissioner of human services, the director of 
Dakota county human services, the Dakota county attorney, and 
the clerk of the Dakota county court shall jointly establish 
procedures for the implementation of this pilot project.  
    Nonattorney employees of Dakota county human services, 
acting at the direction of the county attorney, may prepare, 
sign, serve, and file motions for obtaining, modifying, or 
enforcing child and medical support orders and maintenance and 
related documents, appear at prehearing conferences, and 
participate in proceedings before an administrative law judge.  
This activity shall not be considered to be the unauthorized 
practice of law. 
    For the purpose of this pilot project, the hearings shall 
be conducted under the conference contested case rules adopted 
by the chief administrative law judge.  Any discovery required 
in a proceeding shall be conducted under the rules of family 
court and the rules of civil procedure.  Orders issued by an 
administrative law judge shall be enforceable by the contempt 
powers of the county or district courts. 
    The administrative law judge shall make a report to the 
chief administrative law judge or the chief administrative law 
judge's designee, stating findings of fact and conclusions and 
recommendations concerning the proposed action, in accordance 
with sections 14.48 to 14.56.  The chief administrative law 
judge or a designee shall render the final decision and order in 
accordance with sections 14.61 and 14.62.  The decision and 
order of the chief administrative law judge or a designee shall 
be a final agency decision for purposes of sections 14.63 to 
14.69. 
    Sec. 81.  Minnesota Statutes 1986, section 518.57, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ORDER.] Upon a decree of dissolution, 
legal separation or annulment, the court may make a further 
order which is just and proper concerning the maintenance of the 
minor children as provided by section 518.17 518.551, and for 
the maintenance of any child of the parties as defined in 
section 518.54, as support money, and may make the same a lien 
or charge upon the property of the parties to the proceeding, or 
either of them, either at the time of the entry of the judgment 
or by subsequent order upon proper application. 
    Sec. 82.  Minnesota Statutes 1986, section 518.611, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ORDER.] Whenever an obligation for support 
of a dependent child or maintenance of a spouse, or both, is 
determined and ordered by a court of this state, that court 
shall order the withholding of the amount of child support or 
maintenance as determined by court order, must be withheld from 
the income, regardless of source, of the person obligated to pay 
the support or maintenance.  When an order for withholding has 
not previously been secured, the obligee may or the public 
agency responsible for child support enforcement shall move the 
court, and the court shall grant the order Every order for 
maintenance or support must include the obligor's social 
security number and the name and address of the obligor's 
employer or other payor of funds.  
    Sec. 83.  Minnesota Statutes 1986, section 518.611, 
subdivision 2, is amended to read: 
    Subd. 2.  [NOTICE CONDITIONS OF INCOME WITHHOLDING.] Each 
order for withholding shall provide for a conspicuous notice to 
the obligor that:  
    (a) Withholding shall result if whenever the obligor fails 
to make the maintenance or support payments, and that no 
withholding shall be made until the following conditions are met:
    (1) The obligee or the public authority determines that the 
obligor is at least 30 days in arrears;  
    (2) The obligee or the public authority serves written 
notice of its determination of income withholding, showing 
arrearage, on the obligor at least 15 days before service of the 
notice of income withholding and a copy of the court's order for 
withholding on the payor of funds;  
    (3) Within the 15-day period, the obligor fails to move the 
court to deny withholding on the grounds that an arrearage of at 
least 30 days does not exist as of the date of the notice of 
income withholding, or on other grounds limited to mistakes of 
fact, and, ex parte, to stay service on the payor of funds until 
the motion to deny withholding is heard.  Within 45 days from 
the date of the notice of income withholding, the court shall 
hold the hearing on the motion to deny withholding and notify 
the parties of its decision; and 
    (4) The obligee or the public authority serves a copy of 
the notice of income withholding and, a copy of the court's 
withholding order, and the provisions of this section on the 
payor of funds; and 
    (5) The obligee serves on the public authority a copy of 
the notice of income withholding, a copy of the court's 
withholding order, an application and the fee to use the public 
authority's collection services.  
    (b) To pay the arrearage specified in the notice of income 
withholding, the employer or payor of funds shall withhold from 
the obligor's income an additional amount equal to 20 percent of 
the monthly child support or maintenance obligation until the 
arrearage is paid.  
    (c) The obligor may, at any time, waive the written notice 
required by this subdivision.  
    (d) The obligor may move the court, under section 518.64, 
to modify the order respecting the amount of maintenance or 
support. 
    (e) Every order for support or maintenance shall provide 
for a conspicuous notice of the provisions of this subdivision. 
    Sec. 84.  Minnesota Statutes 1986, section 518.611, 
subdivision 3, is amended to read:  
    Subd. 3.  [WITHHOLDING HEARING.] Within 45 days from the 
date of the notice given under subdivision 2, the court shall 
hold the hearing on the motion under subdivision 2 and notify 
the parties of its decision.  At the hearing to deny 
withholding, if the court finds that there was no mistake of 
fact, the court shall order income withholding to begin no later 
than the first pay period that occurs after 14 days following 
the date of the hearing.  If the court finds that an arrearage 
of at least 30 days existed as of the date of the notice of 
income withholding, but finds a mistake in the amount of 
arrearage, the court shall order income withholding, but it 
shall correct the amount of arrearage to be withheld under 
subdivision 2, paragraph (b). 
    Sec. 85.  Minnesota Statutes 1986, section 518.611, 
subdivision 4, is amended to read: 
    Subd. 4.  [EFFECT OF ORDER.] Notwithstanding any law to the 
contrary, the order is binding on the employer, trustee, or 
other payor of the funds when service under subdivision 2 has 
been made.  Withholding must begin no later than the first pay 
period that occurs after 14 days following the date of the 
notice.  An employer or other payor of funds in this state is 
required to withhold income according to court orders for 
withholding issued by other states or territories.  The payor 
shall withhold from the income payable to the obligor the amount 
specified in the order and amounts required under subdivision 2, 
paragraph (b) and section 518.613 and shall remit, within ten 
days of the date the obligor is paid the remainder of the 
income, the amounts withheld to the public authority.  Employers 
may combine all amounts withheld from one pay period into one 
payment to each public authority, but shall separately identify 
each obligor making payment.  Amounts received by the public 
authority which are in excess of public assistance expended for 
the party or for a child shall be remitted to the party.  An 
employer shall not discharge, or refuse to hire, or otherwise 
discipline an employee as a result of a wage or salary 
withholding authorized by this section.  The employer or other 
payor of funds shall be liable to the obligee for any amounts 
required to be withheld. 
    Sec. 86.  Minnesota Statutes 1986, section 518.611, 
subdivision 6, is amended to read:  
    Subd. 6.  [PRIORITY.] An order for withholding under this 
section or execution or garnishment upon a judgment for child 
support arrearages or preadjudicated expenses shall have 
priority over an attachment, execution, garnishment, or wage 
assignment and shall not be subject to the statutory limitations 
on amounts levied against the income of the obligor.  Amounts 
withheld from an employee's income must not exceed the maximum 
permitted under the Consumer Credit Protection Act, United 
States Code, title 15, section 1673(b)(2).  If there is more 
than one withholding order on a single employee, the employer 
shall put them into effect, giving priority first to amounts 
currently due and not in arrears and then to other amounts, in 
the sequence in which the withholding orders were received up to 
the maximum allowed in the Consumer Credit Protection 
Act.  Notwithstanding any law to the contrary, funds from income 
sources included in section 518.54, subdivision 6, whether 
periodic or lump sum, are not exempt from attachment or 
execution upon a judgment for child support arrearages. 
    Sec. 87.  Minnesota Statutes 1986, section 518.611, 
subdivision 8, is amended to read:  
    Subd. 8.  [EMPLOYER OR PAYOR AND OBLIGOR NOTICE.] When an 
individual is hired for employment, the employer shall request 
that the individual disclose whether or not the individual has 
court-ordered child support obligations that are required by law 
to be withheld from income and the terms of the court order, if 
any.  The individual shall disclose this information at the time 
of hiring.  When an individual discloses that the individual 
owes child support that is required to be withheld, the employer 
shall begin withholding according to the terms of the order and 
under this section.  When a withholding order is in effect and 
the obligor's employment is terminated or the periodic payment 
terminates, the obligor and the obligor's employer or the payor 
of funds shall notify the public agency responsible for child 
support enforcement of the termination within 30 ten days of the 
termination date.  The notice shall include the obligor's home 
address and the name and address of the obligor's new employer 
or payor of funds, if known.  Information disclosed under this 
section shall not be divulged except to the extent necessary for 
the administration of the child support enforcement program or 
when otherwise authorized by law.  
    Sec. 88.  Minnesota Statutes 1986, section 518.611, is 
amended by adding a subdivision to read: 
    Subd. 11.  [CONTRACT FOR SERVICE.] To carry out the 
provisions of this section, the public authority responsible for 
child support enforcement may contract for services, including 
the use of electronic funds transfer. 
    Sec. 89.  [518.613] [AUTOMATIC WITHHOLDING.] 
    Subdivision 1.  [GENERAL.] Notwithstanding any provision of 
section 518.611, subdivision 2 or 3, to the contrary, whenever 
an obligation for child support or maintenance is initially 
determined and ordered or modified by the court in a county in 
which this section applies, the amount of child support or 
maintenance ordered by the court must be withheld from the 
income, regardless of source, of the person obligated to pay the 
support.  For purposes of this section, "modified" does not mean 
a cost-of-living adjustment without any other modification of 
the support order. 
    Subd. 2.  [ORDER; COLLECTION SERVICES.] Every order for 
child support must include the obligor's social security number 
and the name and address of the obligor's employer or other 
payor of funds.  Upon entry of the order for support or 
maintenance, the court shall mail a copy of the court's order 
and the provisions of section 518.611 and this section to the 
obligor's employer or other payor of funds and to the public 
agency responsible for child support enforcement.  An obligee 
who is not a recipient of public assistance shall apply for the 
collection services of the public authority when an order for 
support is entered. 
    Subd. 3.  [WITHHOLDING.] The employer or other payor shall 
withhold and forward the child support or maintenance ordered in 
the manner and within the time limits provided in section 
518.611.  Amounts received from employers or other payors under 
this section by the public agency responsible for child support 
enforcement that are in excess of public assistance received by 
the obligee must be remitted to the obligee.  The public agency 
must remit payments to the obligee at least once monthly on a 
standard payment date set by the agency.  A county in which this 
section applies may contract for services to carry out the 
provisions of this section. 
    Subd. 4.  [APPLICATION.] On and after August 1, 1987, and 
prior to August 1, 1989, this section applies in a county 
selected under section 93 and in a county that chooses to have 
this section apply by resolution of a majority vote of its 
county board. 
    Sec. 90.  Minnesota Statutes 1986, section 518.64, 
subdivision 2, is amended to read: 
    Subd. 2.  [MODIFICATION.] The terms of a decree respecting 
maintenance or support may be modified upon a showing of one or 
more of the following:  (1) substantially increased or decreased 
earnings of a party; (2) substantially increased or decreased 
need of a party; (3) receipt of assistance under sections 256.72 
to 256.87; or (4) a change in the cost-of-living for either 
party as measured by the federal bureau of statistics, any of 
which makes the terms unreasonable and unfair.  On a motion for 
modification of maintenance, the court shall apply, in addition 
to all other relevant factors, the factors for an award of 
maintenance under section 518.552 that exist at the time of the 
motion.  On a motion for modification of support, the court 
shall take into consideration the needs of the children and 
shall not consider the financial circumstances of each party's 
spouse, if any.  A modification which decreases support or 
maintenance may be made retroactive only upon a showing that any 
failure to pay in accord with the terms of the original order 
was not willful with respect to any period during which the 
support obligor has pending a motion for modification but only 
from the date that notice of the motion has been given to the 
obligee and to the court or other entity which issued each 
support order.  A modification which increases support or 
maintenance shall not be made retroactive if the obligor has 
substantially complied with the previous order.  Except for an 
award of the right of occupancy of the homestead, provided in 
section 518.63, all divisions of real and personal property 
provided by section 518.58 shall be final, and may be revoked or 
modified only where the court finds the existence of conditions 
that justify reopening a judgment under the laws of this state.  
The court may impose a lien or charge on the divided property at 
any time while the property, or subsequently acquired property, 
is owned by the parties or either of them, for the payment of 
maintenance or support money, or may sequester the property as 
is provided by section 518.24. 
    Sec. 91.  [1987 COUNTY IMPLEMENTATION PLANS.] 
    By October 1, 1987, each county shall prepare an 
implementation plan for AFDC employment and training services 
and submit it to the commissioner of jobs and training as part 
of its local service unit plan under section 268.88.  The 
implementation plan must include a timetable for phasing in AFDC 
employment and training services, any barriers to implementing 
AFDC employment and training services, and a proposed design for 
the AFDC employment and training delivery system. 
    Sec. 92.  [FEDERAL AUTHORITY.] 
    Subdivision 1.  [LEGISLATIVE WAIVERS.] The commissioner of 
human services shall seek from the Congress of the United States 
or the United States Department of Health and Human Services a 
change in or waiver of existing requirements of the aid to 
families with dependent children (AFDC) program to the extent 
necessary to allow the commissioner to: 
    (1) require that minor parents of children six weeks of age 
and older who have not completed a high school education either 
attend high school or work toward a general education diploma as 
long as necessary child care and transportation services are 
available to them;  
    (2) require that minor parents not living with relatives 
live in a group or foster home or, when the case manager 
determines the need for such services, participate in a program 
that teaches skills in parenting and independent living, 
provided that the described living or counseling opportunities 
are available to the minor parent; 
    (3) require that all caretakers coming onto the program 
attend orientation and develop a plan to obtain 
self-sufficiency, to the extent that programs and services are 
available. 
    (4) require that, as a condition of receiving AFDC, 
priority caretakers of children younger than six months 
participate for not more than four hours a week in activities 
related to personal and family development, including parenting 
education, personal and vocational counseling, chemical 
dependency treatment, domestic abuse counseling, or remedial 
education, and then only if child care assistance is provided or 
if the activity includes the child as a participant, and if 
transportation needs are met; 
    (5) require that, as a condition of receiving AFDC, 
caretakers of children aged three and over register for and 
participate in employment and training services and seek 
employment as long as necessary child care and transportation 
are available to them;  
    (6) replace the sanctions under section 256.736, 
subdivision 4, clause (4), paragraphs (a) and (d), with the 
following graduated sanctions: 
    (a) upon first caretaker refusal, 50 percent of the grant 
provided to the family shall be made in the form of protective 
or vendor payments; 
    (b) upon second caretaker refusal, the entire grant 
provided to the family shall be made in the form of protective 
or vendor payments; and 
    (c) upon third caretaker refusal, the caretaker's needs 
shall not be taken into account in making the grant 
determination, and aid for any dependent child in the family 
will be made in the form of protective or vendor payments; 
    (7) exclude all expenses related to education when 
determining income for food stamp purposes; 
    (8) disregard more earned income of a recipient than 
allowed under United States Code, title 42, section 
602(a)(8)(B)(ii), to provide an incentive to work and prevent 
recipients from experiencing a sudden loss of income after four 
months of employment; 
    (9) exclude from consideration in computing the income of 
an AFDC caretaker parent under the age of 18 any income of the 
parents of the caretaker parent, without regard to the residence 
of the caretaker parent, to make it possible for a minor parent 
to receive financial assistance while remaining in a supportive 
home environment; 
    (10) determine the maximum value of an automobile which can 
be excluded as an asset under United States Code, title 42, 
section 602(a)(7)(B)(i), because of the need of AFDC recipients 
for reliable transportation in order to participate in work and 
training and become self-sufficient; 
    (11) disregard in computing income the cost of child care 
beyond that currently allowed under United States Code, title 
42, section 602(a)(8)(A)(iii), because of the need of AFDC 
recipients for quality reliable child care in order to 
participate in work and training and become self-sufficient; 
    (12) permit a principal earner in a family receiving 
AFDC-UP to work more than 100 hours per month without being 
disqualified from the program, in order to recognize the 
financial reality of AFDC-UP families and to help the families 
achieve financial security before leaving the program; 
    (13) simplify eligibility determination processes, 
budgeting procedures, and excessive paperwork requirements 
without becoming subject to federal sanctions, in order to 
enhance self-esteem among clients and free workers to help 
families achieve self-sufficiency; and 
    (14) disregard quality control review requirements that are 
not directly related to actual grant miscalculation or client 
right violations, in order to move the AFDC program away from a 
system driven by audits, error rates, and sanctions. 
    In constructing and negotiating modifications under this 
section, the commissioner shall not agree to terms or conditions 
that infringe on recipients' entitlement to benefits or impede 
federal financial participation under United States Code, title 
42, subchapter IV, part A.  The commissioner shall not accept a 
block grant or lump sum amount of federal money for AFDC in 
Minnesota unless the sum is adjusted to protect the state 
against an increase in the number of recipients during a period 
of recession.  
    Subd. 2.  [IMPLEMENTATION.] The commissioner shall not 
implement any program changes authorized by this section unless 
sufficient appropriations are available to cover any increased 
costs to the state.  The commissioner shall promulgate emergency 
rules as necessary to implement any waiver.  Rules promulgated 
under authority of this section supersede any conflicting laws 
or rules until July 1, 1988. 
    Sec. 93.  [DEMONSTRATION.] 
    On or before July 1, 1987, the commissioner of human 
services shall designate five counties in which child support or 
maintenance shall be withheld from the obligor's income pursuant 
to section 518.613.  The total population of the counties 
designated must equal at least 25 percent of the population of 
the state.  The designated counties must include at least one 
county in which is located a city of the first class, and at 
least two counties that are not metropolitan counties, as 
defined in section 473.121, subdivision 4.  The group of 
counties designated must be representative of urban, suburban, 
and rural demographic areas. 
    Sec. 94.  [REPORT TO THE LEGISLATURE.] 
    The commissioner of human services shall collect data on 
costs and collections and report to the chairs of the health and 
human services committees in the house of representatives and 
the senate on or before January 2, 1989, on the progress and 
experience of the county agencies in implementing the automatic 
income withholding provisions of this act, including a 
recommendation on whether the program should be discontinued or 
implemented statewide. 
    Sec. 95.  [DEMONSTRATION PROJECT; PERSONS WITHOUT A 
VERIFIED RESIDENCE ADDRESS.] 
    (a) The commissioner shall establish a one-county 
demonstration project to determine the effectiveness of 
establishing special procedures for providing assistance to 
applicants or recipients of general assistance, work readiness, 
or emergency general assistance, who do not have a verified 
residence address.  For purposes of the demonstration project, 
the requirements in this section supersede section 256D.09, 
subdivision 4, and other conflicting laws and rules. 
    (b) For applicants or recipients of general assistance, 
emergency general assistance, and work readiness assistance who 
do not have a verified residence address, the local agency may 
provide assistance using one or more of the following methods:  
    (1) The local agency may provide assistance in the form of 
vouchers or vendor payments and provide separate vouchers or 
vendor payments for food, shelter, and other needs. 
    (2) The local agency may divide the monthly assistance 
standard into weekly payments, whether in cash or by voucher or 
vendor payment; or, if actual need is greater than the standards 
of assistance established pursuant to section 256D.01, 
subdivision 1a, issue assistance based on actual need.  Nothing 
in this clause prevents the local agency from issuing voucher or 
vendor payments for emergency general assistance in an amount 
less than the standards of assistance. 
    (3) The local agency may determine eligibility and provide 
assistance on a weekly basis.  Weekly assistance can be issued 
in cash or by voucher or vendor payment and can be determined 
either on the basis of actual need or by prorating the monthly 
assistance standard. 
    (c) An individual may verify a residence address by 
providing a driver's license; a state identification card; 
postmarked mail addressed to and received by the individual at 
the address; a statement by the landlord, apartment manager, or 
homeowner verifying that the individual is residing at the 
address; or other written documentation approved by the 
commissioner. 
    (d) If the local agency elects to provide assistance on a 
weekly basis, the agency shall not provide assistance for a 
period during which no need is claimed by the individual.  The 
individual must be notified, each time weekly assistance is 
provided, that subsequent weekly assistance will not be issued 
unless the individual claims need.  The ten-day advance notice 
required under sections 256D.051, subdivision 13, and 256D.10 
does not apply to weekly assistance issued under this paragraph. 
    Sec. 96.  [INSTRUCTION TO REVISOR.] 
    In the next edition of Minnesota Statutes, the revisor of 
statutes shall substitute in chapter 257 the term "biological" 
when referring to a parent, mother, or father for the term 
"natural." 
    Sec. 97.  [APPLICATION.] 
    Section 83 is effective August 1, 1987, and applies to 
child support orders entered before, on, or after that date. 
    Sec. 98.  [REPEALER.] 
    Minnesota Statutes 1986, sections 257.34, subdivision 2; 
and section 268.86, subdivisions 1, 3, 4, and 5, are repealed.  
Section 95 is repealed effective June 30, 1989. 
    Sec. 99.  [EFFECTIVE DATE; APPLICATION.] 
    Sections 13 and 90 are effective the day following final 
enactment. 

                               ARTICLE 4 
    Section 1.  Minnesota Statutes 1986, section 144.55, 
subdivision 6, is amended to read:  
    Subd. 6.  [SUSPENSION, REVOCATION, AND REFUSAL TO RENEW.] 
(a) The commissioner may refuse to grant or renew, or may 
suspend or revoke, a license on any of the following grounds: 
    (1) Violation of any of the provisions of sections 144.50 
to 144.56 or the rules or standards issued pursuant thereto; 
    (2) Permitting, aiding, or abetting the commission of any 
illegal act in the institution; 
    (3) Conduct or practices detrimental to the welfare of the 
patient; or 
    (4) Obtaining or attempting to obtain a license by fraud or 
misrepresentation. 
    (b) The commissioner shall not renew a license for a 
boarding care bed in a resident room with more than four beds. 
    Sec. 2.  Minnesota Statutes 1986, section 144A.05, is 
amended to read:  
    144A.05 [LICENSE RENEWAL.] 
    Unless the license expires in accordance with section 
144A.06 or is suspended or revoked in accordance with section 
144A.11, a nursing home license shall remain effective for a 
period of one year from the date of its issuance.  The 
commissioner of health by rule shall establish forms and 
procedures for the processing of license renewals.  The 
commissioner of health shall approve a license renewal 
application if the facility continues to satisfy the 
requirements, standards and conditions prescribed by sections 
144A.01 to 144A.17 and the rules promulgated thereunder.  The 
commissioner shall not approve the renewal of a license for a 
nursing home bed in a resident room with more than four beds.  
Except as provided in section 144A.08, a facility shall not be 
required to submit with each application for a license renewal 
additional copies of the architectural and engineering plans and 
specifications of the facility.  Before approving a license 
renewal, the commissioner of health shall determine that the 
facility's most recent balance sheet and its most recent 
statement of revenues and expenses, as audited by the state 
auditor, by a certified public accountant licensed by this state 
or by a public accountant as defined in section 412.222, have 
been received by the department of human services. 
    Sec. 3.  Minnesota Statutes 1986, section 144A.071, 
subdivision 3, is amended to read:  
    Subd. 3.  [EXCEPTIONS.] The commissioner of health, in 
coordination with the commissioner of human services, may 
approve the addition of a new certified bed or the addition of a 
new licensed nursing home bed, under the following conditions:  
    (a) to replace a bed decertified after May 23, 1983 or to 
address an extreme hardship situation, in a particular county 
that, together with all contiguous Minnesota counties, has fewer 
nursing home beds per 1,000 elderly than the number that is ten 
percent higher than the national average of nursing home beds 
per 1,000 elderly individuals.  For the purposes of this 
section, the national average of nursing home beds shall be the 
most recent figure that can be supplied by the federal health 
care financing administration and the number of elderly in the 
county or the nation shall be determined by the most recent 
federal census or the most recent estimate of the state 
demographer as of July 1, of each year of persons age 65 and 
older, whichever is the most recent at the time of the request 
for replacement.  In allowing replacement of a decertified bed, 
the commissioners shall ensure that the number of added or 
recertified beds does not exceed the total number of decertified 
beds in the state in that level of care.  An extreme hardship 
situation can only be found after the county documents the 
existence of unmet medical needs that cannot be addressed by any 
other alternatives; 
    (b) to certify a new bed in a facility that commenced 
construction before May 23, 1983.  For the purposes of this 
section, "commenced construction" means that all of the 
following conditions were met:  the final working drawings and 
specifications were approved by the commissioner of health; the 
construction contracts were let; a timely construction schedule 
was developed, stipulating dates for beginning, achieving 
various stages, and completing construction; and all zoning and 
building permits were secured; 
    (c) to certify beds in a new nursing home that is needed in 
order to meet the special dietary needs of its residents, if: 
the nursing home proves to the commissioner's satisfaction that 
the needs of its residents cannot otherwise be met; elements of 
the special diet are not available through most food 
distributors; and proper preparation of the special diet 
requires incurring various operating expenses, including extra 
food preparation or serving items, not incurred to a similar 
extent by most nursing homes; 
    (d) to license a new nursing home bed in a facility that 
meets one of the exceptions contained in clauses (a) to (c); 
    (e) to license nursing home beds in a facility that has 
submitted either a completed licensure application or a written 
request for licensure to the commissioner before March 1, 1985, 
and has either commenced any required construction as defined in 
clause (b) before May 1, 1985, or has, before May 1, 1985, 
received from the commissioner approval of plans for phased-in 
construction and written authorization to begin construction on 
a phased-in basis.  For the purpose of this clause, 
"construction" means any erection, building, alteration, 
reconstruction, modernization, or improvement necessary to 
comply with the nursing home licensure rules; or 
    (f) to certify or license new beds in a new facility that 
is to be operated by the commissioner of veterans' affairs or 
when the costs of constructing and operating the new beds are to 
be reimbursed by the commissioner of veterans' affairs or the 
United States Veterans Administration.; 
    (g) to license or certify beds in a new facility 
constructed to replace a facility that was destroyed after June 
30, 1987, by fire, lightning, or other hazard provided:  
    (1) destruction was not caused by the intentional act of or 
at the direction of a controlling person of the facility; 
    (2) at the time the facility was destroyed the controlling 
persons of the facility maintained insurance coverage for the 
type of hazard that occurred in an amount that a reasonable 
person would conclude was adequate; 
    (3) the net proceeds from an insurance settlement for the 
damages caused by the hazard are applied to the cost of the new 
facility; 
    (4) the new facility is constructed on the same site as the 
destroyed facility or on another site subject to the 
restrictions in section 4, subdivision 5; and 
    (5) the number of licensed and certified beds in the new 
facility does not exceed the number of licensed and certified 
beds in the destroyed facility; 
    (h) to license or certify beds that are moved from one 
location to another within a nursing home facility, provided the 
total costs of remodeling performed in conjunction with the 
relocation of beds does not exceed ten percent of the appraised 
value of the facility or $200,000, whichever is less, or to 
license or certify beds in a facility for which the total costs 
of remodeling or renovation exceed ten percent of the appraised 
value of the facility or $200,000, whichever is less, if the 
facility makes a written commitment to the commissioner of human 
services that it will not seek to receive an increase in its 
property-related payment rate by reason of the remodeling or 
renovation; 
    (i) to license or certify beds in a facility that has been 
involuntarily delicensed or decertified for participation in the 
medical assistance program, provided that an application for 
relicensure or recertification is submitted to the commissioner 
within 120 days after delicensure or decertification; 
    (j) to license or certify beds in a project recommended for 
approval by the interagency board for quality assurance under 
section 4; 
    (k) to license nursing home beds in a hospital facility 
that are relocated from a different hospital facility under 
common ownership or affiliation, provided: (1) the hospital in 
which the nursing home beds were originally located ceases to 
function as an acute care facility, or necessary support 
services for nursing homes as required for licensure under 
sections 144A.02 to 144A.10, such as dietary service, physical 
plant, housekeeping, physical therapy, occupational therapy, and 
administration, are no longer available from the original 
hospital site; and (2) the nursing home beds are not certified 
for participation in the medical assistance program; 
    (1) to license or certify beds that are moved from one 
location to another within an existing identifiable complex of 
hospital buildings, from a hospital-attached nursing home to the 
hospital building, or from a separate nursing home under common 
ownership with or control of a hospital to the hospital when a 
hospital-attached nursing home is moved simultaneously to the 
hospital.  As a condition of receiving a license or 
certification under this clause, the facility must make a 
written commitment to the commissioner of human services that it 
will not seek to receive an increase in its property-related 
payment rate as a result of the relocation.  At the time of the 
licensure and certification of the nursing home beds, the 
commissioner of health shall delicense the same number of acute 
care beds within the existing complex of hospital buildings or 
building.  When a separate nursing home and a hospital-attached 
nursing home under common ownership or control are 
simultaneously relocated to a hospital building, a combined cost 
report must be submitted for the cost reporting year ending 
September 30, 1987, and the freestanding nursing home limits 
apply.  Relocation of nursing home beds under this clause is 
subject to the limitations in section 4, subdivision 5; 
    (m) to license or certify beds that are moved from an 
existing state nursing home to a different state facility, 
provided there is no net increase in the number of state nursing 
home beds; or 
    (n) to license new nursing home beds in a continuing care 
retirement community affiliated with a national referral center 
engaged in substantial programs of patient care, medical 
research, and medical education meeting state and national needs 
that receives more than 40 percent of its residents from outside 
the state for the purpose of meeting contractual obligations to 
residents of the retirement community, provided the facility 
makes a written commitment to the commissioner of human services 
that it will not seek medical assistance certification for the 
new beds. 
    Sec. 4.  [144A.073] [REVIEW OF PROPOSALS REQUIRING 
EXCEPTIONS TO THE MORATORIUM.] 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given them: 
    (a) "Conversion" means the relocation of a nursing home bed 
from a nursing home to an attached hospital. 
    (b) "Renovation" means extensive remodeling of, or 
construction of an addition to, a facility on an existing site 
with a total cost exceeding ten percent of the appraised value 
of the facility or $200,000, whichever is less. 
    (c) "Replacement" means the demolition and reconstruction 
of all or part of an existing facility. 
    (d) "Upgrading" means a change in the level of licensure of 
a bed from a boarding care bed to a nursing home bed, in a 
certified boarding care facility that is attached to a nursing 
home or a boarding care bed in a freestanding boarding care 
facility that currently meets all health department standards 
for a nursing home. 
    Subd. 2.  [REQUEST FOR PROPOSALS.] At the intervals 
specified in rules, the interagency board shall publish in the 
State Register a request for proposals for nursing home projects 
to be licensed or certified under section 3, clause (j).  The 
notice must describe the information that must accompany a 
request and state that proposals must be submitted to the 
interagency board within 90 days of the date of publication.  
The notice must include the amount of the legislative 
appropriation available for the additional costs to the medical 
assistance program of projects approved under this section.  If 
no money is appropriated for a year, the notice for that year 
must state that proposals will not be requested because no 
appropriations were made.  To be considered for approval, a 
proposal must include the following information: 
    (1) whether the request is for renovation, replacement, 
upgrading, or conversion; 
    (2) a description of the problem the project is designed to 
address; 
    (3) a description of the proposed project; 
    (4) an analysis of projected costs, including initial 
construction and remodeling costs, site preparation costs, 
financing costs, and estimated operating costs during the first 
two years after completion of the project; 
    (5) for proposals involving replacement of all or part of a 
facility, the proposed location of the replacement facility and 
an estimate of the cost of addressing the problem through 
renovation; 
    (6) for proposals involving renovation, an estimate of the 
cost of addressing the problem through replacement; 
    (7) the proposed timetable for commencing construction and 
completing the project; and 
    (8) other information required by rule of the commissioner 
of health. 
    Subd. 3.  [REVIEW AND APPROVAL OF PROPOSALS.] Within the 
limits of money specifically appropriated to the medical 
assistance program for this purpose, the interagency board for 
quality assurance may recommend that the commissioner of health 
grant exceptions to the nursing home licensure or certification 
moratorium for proposals that satisfy the requirements of this 
section.  The interagency board shall appoint an advisory review 
panel composed of representatives of consumers and providers to 
review proposals and provide comments and recommendations to the 
board.  The commissioners of human services and health shall 
provide staff and technical assistance to the board for the 
review and analysis of proposals.  The interagency board shall 
hold a public hearing before submitting recommendations to the 
commissioner of health on project requests.  The board shall 
submit recommendations within 150 days of the date of the 
publication of the notice, based on a comparison and ranking of 
proposals using the criteria in subdivision 4.  The commissioner 
of health shall approve or disapprove a project within 30 days 
after receiving the board's recommendations.  The cost to the 
medical assistance program of the proposals approved must be 
within the limits of the appropriations specifically made for 
this purpose.  Approval of a proposal expires 12 months after 
approval by the commissioner of health unless the facility has 
commenced construction as defined in section 144A.071, 
subdivision 3, paragraph (b).  The board's report to the 
legislature, as required under section 144A.31, must include the 
projects approved, the criteria used to recommend proposals for 
approval, and the estimated costs of the projects, including the 
costs of initial construction and remodeling, and the estimated 
operating costs during the first two years after the project is 
completed. 
    Subd. 4.  [CRITERIA FOR REVIEW.] (a) The following criteria 
must be used to compare and evaluate all proposals submitted: 
    (1) the extent to which the average occupancy rate of the 
facility supports the need for the proposed project; 
    (2) the extent to which the average occupancy rate of all 
facilities in the county in which the applicant is located, 
together with all contiguous Minnesota counties, supports the 
need for the proposed project; 
    (3) the extent to which the proposal furthers state 
long-term care goals, including the goal of enhancing the 
availability and use of alternative care services and the goal 
of reducing the number of long-term care resident rooms with 
more than two beds; 
    (4) the cost effectiveness of the proposal, including the 
proposal's long-term effects on the costs of the medical 
assistance program, as determined by the commissioner of human 
services; and 
      (5) other factors developed in rule by the commissioner of 
health that evaluate and assess how the proposed project will 
further promote or protect the health, safety, comfort, 
treatment, or well-being of the facility's residents. 
    (b) In addition to the criteria in paragraph (a), the 
following criteria must be used to evaluate, compare, and rank 
proposals involving renovation or replacement: 
    (1) the extent to which the project improves conditions 
that affect the health or safety of residents, such as narrow 
corridors, narrow door frames, unenclosed fire exits, and wood 
frame construction, and similar provisions contained in fire and 
life safety codes and licensure and certification rules; 
    (2) the extent to which the project improves conditions 
that affect the comfort or quality of life of residents in a 
facility or the ability of the facility to provide efficient 
care, such as a relatively high number of residents in a room; 
inadequate lighting or ventilation; poor access to bathing or 
toilet facilities; a lack of available ancillary space for 
dining rooms, day rooms, or rooms used for other activities; 
problems relating to heating, cooling, or energy efficiency; 
inefficient location of nursing stations; narrow corridors; or 
other provisions contained in the licensure and certification 
rules. 
     Subd. 5.  [REPLACEMENT RESTRICTIONS.] (a) Proposals 
submitted or approved under this section involving replacement 
must provide for replacement of the facility on the existing 
site except as allowed in this subdivision.  
    (b) Facilities located in a metropolitan statistical area 
other than the Minneapolis-St. Paul seven-county metropolitan 
area may relocate to a site within the same census tract or a 
contiguous census tract.  
    (c) Facilities located in the Minneapolis-St. Paul 
seven-county metropolitan area may relocate to a site within the 
same or contiguous health planning area as adopted in March 1982 
by the metropolitan council.  
    (d) Facilities located outside a metropolitan statistical 
area may relocate to a site within the same city or township, or 
within a contiguous township.  
    (e) A facility relocated to a different site under 
paragraphs (b), (c), or (d) must not be relocated to a site more 
than six miles from the existing site. 
    Subd. 6.  [CONVERSION RESTRICTIONS.] Proposals submitted or 
approved under this section involving conversion must satisfy 
the following conditions: 
    (a) Conversion is limited to a total of five beds. 
    (b) An equivalent number of hospital beds must be 
delicensed. 
    (c) The average occupancy rate in the existing nursing home 
beds must be greater than 96 percent according to the most 
recent annual statistical report of the department of health. 
    (d) The cost of remodeling the hospital rooms to meet 
current nursing home construction standards must not exceed ten 
percent of the appraised value of the nursing home or $200,000, 
whichever is less. 
    (e) The conversion must not result in an increase in 
operating costs. 
    Subd. 7.  [UPGRADING RESTRICTIONS.] Proposals submitted or 
approved under this section involving upgrading must satisfy the 
following conditions: 
     (a) No proposal for upgrading may be approved after June 
30, 1989. 
     (b) No more than one proposal for upgrading may be approved 
for a facility. 
    (c) Upgrading is limited to a total of ten beds. 
    (d) The facility must meet minimum nursing home care 
standards. 
    (e) Upgrading must not result in an increase in per diem 
operating costs, except for the upgrading of those freestanding 
boarding care facilities which currently meet existing nursing 
home building and space standards. 
    (f) If beds are upgraded to nursing home beds, the number 
of boarding care beds in a facility must not increase in the 
future. 
    (g) The average occupancy rate in the existing nursing home 
beds must be greater than 96 percent according to the most 
recent annual statistical report of the department of health. 
    (h) The cost of remodeling the facility to meet current 
nursing home construction standards must not exceed ten percent 
of the appraised value of the facility or $200,000, whichever is 
less. 
    Subd. 8.  [RULEMAKING.] The commissioner of health shall 
adopt emergency or permanent rules to implement this section. 
    Sec. 5.  Minnesota Statutes 1986, section 144A.27, is 
amended to read:  
    144A.27 [ACTING ADMINISTRATORS.] 
    If a licensed nursing home administrator is removed from 
the position by death or other unexpected cause, the controlling 
persons of the nursing home suffering the removal may designate 
an acting nursing home administrator who may serve without a 
license for no more than 90 days, unless an extension is granted 
by the board of examiners shall secure an acting administrator's 
license within 30 days of appointment as the acting 
administrator. 
    Sec. 6.  Minnesota Statutes 1986, section 256B.431, 
subdivision 2b, is amended to read:  
    Subd. 2b.  [OPERATING COSTS, AFTER JULY 1, 1985.] (a) For 
rate years beginning on or after July 1, 1985, the commissioner 
shall establish procedures for determining per diem 
reimbursement for operating costs.  
    (b) The commissioner shall contract with an econometric 
firm with recognized expertise in and access to national 
economic change indices that can be applied to the appropriate 
cost categories when determining the operating cost payment rate.
    (c) The commissioner shall analyze and evaluate each 
nursing home's cost report of allowable operating costs incurred 
by the nursing home during the reporting year immediately 
preceding the rate year for which the payment rate becomes 
effective.  
    (d) The commissioner shall establish limits on actual 
allowable historical operating cost per diems based on cost 
reports of allowable operating costs for the reporting year that 
begins October 1, 1983, taking into consideration relevant 
factors including resident needs, geographic location, size of 
the nursing home, and the costs that must be incurred for the 
care of residents in an efficiently and economically operated 
nursing home.  In developing the geographic groups for purposes 
of reimbursement under this section, the commissioner shall 
ensure that nursing homes in any county contiguous to the 
Minneapolis-St. Paul seven-county metropolitan area are included 
in the same geographic group.  The limits established by the 
commissioner shall not be less, in the aggregate, than the 60th 
percentile of total actual allowable historical operating cost 
per diems for each group of nursing homes established under 
subdivision 1 based on cost reports of allowable operating costs 
in the previous reporting year.  The limits established under 
this paragraph remain in effect until the commissioner 
establishes a new base period.  Until the new base period is 
established, the commissioner shall adjust the limits annually 
using the appropriate economic change indices established in 
paragraph (e).  In determining allowable historical operating 
cost per diems for purposes of setting limits and nursing home 
payment rates, the commissioner shall divide the allowable 
historical operating costs by the actual number of resident 
days, except that where a nursing home is occupied at less than 
90 percent of licensed capacity days, the commissioner may 
establish procedures to adjust the computation of the per diem 
to an imputed occupancy level at or below 90 percent.  The 
commissioner shall establish efficiency incentives as 
appropriate.  The commissioner may establish efficiency 
incentives for different operating cost categories.  The 
commissioner shall consider establishing efficiency incentives 
in care related cost categories.  The commissioner may combine 
one or more operating cost categories and may use different 
methods for calculating payment rates for each operating cost 
category or combination of operating cost categories.  For the 
rate year beginning on July 1, 1985, the commissioner shall: 
    (1) allow nursing homes that have an average length of stay 
of 180 days or less in their skilled nursing level of care, 125 
percent of the care related limit and 105 percent of the other 
operating cost limit established by rule; and 
    (2) exempt nursing homes licensed on July 1, 1983, by the 
commissioner to provide residential services for the physically 
handicapped under Minnesota Rules, parts 9570.2000 to 9570.3600, 
from the care related limits and allow 105 percent of the other 
operating cost limit established by rule. 
    For the purpose of calculating the other operating cost 
efficiency incentive for nursing homes referred to in clause (1) 
or (2), the commissioner shall use the other operating cost 
limit established by rule before application of the 105 percent. 
    (e) The commissioner shall establish a composite index or 
indices by determining the appropriate economic change 
indicators to be applied to specific operating cost categories 
or combination of operating cost categories.  
    (f) Each nursing home shall receive an operating cost 
payment rate equal to the sum of the nursing home's operating 
cost payment rates for each operating cost category.  The 
operating cost payment rate for an operating cost category shall 
be the lesser of the nursing home's historical operating cost in 
the category increased by the appropriate index established in 
paragraph (e) for the operating cost category plus an efficiency 
incentive established pursuant to paragraph (d) or the limit for 
the operating cost category increased by the same index.  If a 
nursing home's actual historic operating costs are greater than 
the prospective payment rate for that rate year, there shall be 
no retroactive cost settle-up.  In establishing payment rates 
for one or more operating cost categories, the commissioner may 
establish separate rates for different classes of residents 
based on their relative care needs.  
    (g) The commissioner shall include the reported actual real 
estate tax liability or payments in lieu of real estate tax of 
each proprietary nursing home as an operating cost of that 
nursing home.  For rate years beginning on or after July 1, 
1987, the reported actual real estate tax liability or payments 
in lieu of real estate tax of nursing homes shall be adjusted to 
include an amount equal to one-half of the dollar change in real 
estate taxes from the prior year.  The commissioner shall 
include a reported actual special assessment, and reported 
actual license fees required by the Minnesota department of 
health, for each nursing home as an operating cost of that 
nursing home.  Total adjusted real estate tax liability, 
payments in lieu of real estate tax, actual special assessments 
paid, and license fees paid as required by the Minnesota 
department of health, for each nursing home (1) shall be divided 
by actual resident days in order to compute the operating cost 
payment rate for this operating cost category, (2) shall not be 
used to compute the 60th percentile or other operating cost 
limits established by the commissioner, and (3) shall not be 
increased by the composite index or indices established pursuant 
to paragraph (e). 
     (h) For rate years beginning on or after July 1, 1987, the 
commissioner shall adjust the rates of a nursing home that meets 
the criteria for the special dietary needs of its residents as 
specified in section 144A.071, subdivision 3, clause (c), and 
the requirements in section 31.651.  The adjustment for raw food 
cost shall be the difference between the nursing home's 
allowable historical raw food cost per diem and 115 percent of 
the median historical allowable raw food cost per diem of the 
corresponding geographic group. 
    The rate adjustment shall be reduced by the applicable 
phase-in percentage as provided under section 256B.431, 
subdivision 2h. 
    Sec. 7.  Minnesota Statutes 1986, section 256B.431, 
subdivision 2e, is amended to read:  
    Subd. 2e.  [NEGOTIATED RATES CONTRACTS FOR SERVICES FOR 
VENTILATOR DEPENDENT PERSONS.] Until procedures for determining 
operating cost payment rates according to mix of resident needs 
are established, the commissioner may negotiate, with a nursing 
home that is eligible to receive medical assistance payments, a 
payment rate of up to 125 percent of the allowed payment rate to 
be paid for a period of up to three months for individuals who 
have been hospitalized for more than 100 days, or who have 
extensive care needs based on nursing hours actually provided or 
mental or physical disability, or who need respite care for a 
specified and limited time period.  In addition, the 
commissioner shall take into consideration facilities which 
historically provided nursing hours at or near the maximum 
limits which were subsequently reduced as a consequence of 
payment rate reductions.  The payment rate shall be based on an 
assessment of the nursing home's resident mix as determined by 
the commissioner of health.  When circumstances dictate, the 
commissioner has authority to renegotiate payment rates for an 
additional period of time.  The payment rate negotiated and The 
commissioner may contract with a nursing home eligible to 
receive medical assistance payments to provide services to a 
ventilator dependent person identified by the commissioner 
according to criteria developed by the commissioner, including:  
     (1) nursing home care has been recommended for the person 
by a preadmission screening team; 
     (2) the person has been assessed at case mix classification 
K; 
    (3) the person has been hospitalized for at least six 
months and no longer requires inpatient acute care hospital 
services; and 
     (4) the commissioner has determined that necessary services 
for the person cannot be provided under existing nursing home 
rates.  
     The commissioner may issue a request for proposals to 
provide services to a ventilator dependent person to nursing 
homes eligible to receive medical assistance payments and shall 
select nursing homes from among respondents according to 
criteria developed by the commissioner, including:  
     (1) the cost effectiveness and appropriateness of services; 
     (2) the nursing home's compliance with federal and state 
licensing and certification standards; and 
     (3) the proximity of the nursing home to a ventilator 
dependent person identified by the commissioner who requires 
nursing home placement.  
     The commissioner may negotiate an adjustment to the 
operating cost payment rate for a nursing home selected by the 
commissioner from among respondents to the request for 
proposals.  The negotiated adjustment must reflect only the 
actual additional cost of meeting the specialized care needs of 
a ventilator dependent person identified by the commissioner for 
whom necessary services cannot be provided under existing 
nursing home rates and which are not otherwise covered under 
Minnesota Rules, parts 9549.0010 to 9549.0080 or 9505.0170 to 
9505.0475.  The negotiated adjustment shall not affect the 
payment rate charged to private paying residents under the 
provisions of section 256B.48, subdivision 1.  The negotiated 
adjustment paid pursuant to this paragraph is specifically 
exempt from the definition of "rule" and the rulemaking 
procedures required by chapter 14 and section 256B.502. 
    Sec. 8.  Minnesota Statutes 1986, section 256B.431, 
subdivision 3a, is amended to read:  
    Subd. 3a.  [PROPERTY-RELATED COSTS AFTER JULY 1, 1985.] (a) 
For rate years beginning on or after July 1, 1985, the 
commissioner, by permanent rule, shall reimburse nursing home 
providers that are vendors in the medical assistance program for 
the rental use of real estate and depreciable equipment.  "Real 
estate" means land improvements, buildings, and attached 
fixtures used directly for resident care.  "Depreciable 
equipment" means the standard moveable resident care equipment 
and support service equipment generally used in long-term care 
facilities.  
    (b) In developing the method for determining payment rates 
for the rental use of nursing homes, the commissioner shall 
consider factors designed to:  
    (1) simplify the administrative procedures for determining 
payment rates for property-related costs; 
    (2) minimize discretionary or appealable decisions; 
    (3) eliminate any incentives to sell nursing homes; 
    (4) recognize legitimate costs of preserving and replacing 
property; 
    (5) recognize the existing costs of outstanding 
indebtedness allowable under the statutes and rules in effect on 
May 1, 1983; 
    (6) address the current value of, if used directly for 
patient care, land improvements, buildings, attached fixtures, 
and equipment; 
    (7) establish an investment per bed limitation; 
    (8) reward efficient management of capital assets; 
    (9) provide equitable treatment of facilities; 
    (10) consider a variable rate; and 
    (11) phase-in implementation of the rental reimbursement 
method.  
    (c) No later than January 1, 1984, the commissioner shall 
report to the legislature on any further action necessary or 
desirable in order to implement the purposes and provisions of 
this subdivision.  
     (d) For rate years beginning on or after July 1, 1987, a 
nursing home which has reduced licensed bed capacity after 
January 1, 1986, shall be allowed to: 
     (1) aggregate the applicable investment per bed limits 
based on the number of beds licensed prior to the reduction; and 
     (2) establish capacity days for each rate year following 
the licensure reduction based on the number of beds licensed on 
the previous April 1 if the commissioner is notified of the 
change by April 4.  The notification must include a copy of the 
delicensure request that has been submitted to the commissioner 
of health. 
     (e) Until the rental reimbursement method is fully phased 
in, a nursing home whose final property-related payment rate is 
the rental rate shall continue to have its property-related 
payment rates established based on the rental reimbursement 
method. 
    Sec. 9.  Minnesota Statutes 1986, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [DEPRECIATION RECAPTURE.] The sale of a nursing 
home which occurred on or after July 1, 1987, shall result in 
depreciation recapture payments to be paid by the buyer to the 
commissioner within 60 days of the department's notification if 
the sale price exceeds the nursing home's allowable historical 
cost of capital assets including land recognized by the 
commissioner at the time of the sale, reduced by accumulated 
depreciation.  The gross recapture amount shall be the lesser of 
the actual gain on the sale or actual depreciation recognized 
for the purpose of calculating medical assistance payment rates 
from the latter of the date of previous sale or November 1, 
1972, through the date of the sale.  The gross recapture amount 
shall be allocated to each reporting year from the latter of the 
date of previous sale or November 1, 1972, through the date of 
the sale in the same ratio as depreciation amounts recognized 
for the purpose of calculating medical assistance payment 
rates.  The amount allocated to each reporting year shall be 
divided by the total actual resident days in that reporting 
year, thereby determining a cost-per-resident day.  The 
recapture amount shall be the cost-per-resident day for each 
reporting year times the actual medical assistance resident days 
for the corresponding rate year following each reporting year.  
No payment of depreciation recapture shall be assessed with 
respect to a portion of a rate year beginning after June 30, 
1985, in which the property-related payment rate was based on 
the nursing home's rental value.  The recapture amount shall be 
reduced by one percent for each month of continuous ownership 
since the previous date of sale of the nursing home up to a 
maximum of 100 months.  For the purpose of this subdivision, the 
sale of a nursing home means the sale or transfer of a nursing 
home's capital assets or capital stock or the redemption of 
ownership interests by members of a partnership.  In the case of 
a sale or transfer of a nursing home in which the new operator 
leases depreciable equipment used in the nursing home business 
from the prior operator, or an affiliate of the prior operator, 
the net present value of the lease shall be added to the 
transaction price for the purpose of determining the actual gain 
on the sale.  In the case of a partial sale of a nursing home, 
the provisions of this subdivision will be applied 
proportionately to sales or accumulations of sales that exceed 
20 percent of a nursing home's capital assets or capital stock.  
Depreciation recapture payments resulting from the sale of a 
nursing home which occurred before July 1, 1985, shall be 
calculated in accordance with reimbursement regulations in 
effect on the date of the sale. 
    Sec. 10.  Minnesota Statutes 1986, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [PLANT AND MAINTENANCE COSTS.] For the rate 
years beginning on or after July 1, 1987, the commissioner shall 
allow as an expense in the reporting year of occurrence the 
lesser of the actual allowable plant and maintenance costs for 
supplies, minor equipment, equipment repairs, building repairs, 
purchased services and service contracts, except for arms-length 
service contracts whose primary purpose is supervision, or $325 
per licensed bed. 
    Sec. 11.  Minnesota Statutes 1986, section 256B.431, 
subdivision 4, is amended to read:  
    Subd. 4.  [SPECIAL RATES.] (a) For the rate years beginning 
July 1, 1983, and July 1, 1984, a newly constructed nursing home 
or one with a capacity increase of 50 percent or more may, upon 
written application to the commissioner, receive an interim 
payment rate for reimbursement for property-related costs 
calculated pursuant to the statutes and rules in effect on May 
1, 1983 and for operating costs negotiated by the commissioner 
based upon the 60th percentile established for the appropriate 
group under subdivision 2a, to be effective from the first day a 
medical assistance recipient resides in the home or for the 
added beds.  For newly constructed nursing homes which are not 
included in the calculation of the 60th percentile for any 
group, subdivision 2f, the commissioner shall establish by rule 
procedures for determining interim operating cost payment rates 
and interim property-related cost payment rates.  The interim 
payment rate shall not be in effect for more than 17 months.  
The commissioner shall establish, by emergency and permanent 
rules, procedures for determining the interim rate and for 
making a retroactive cost settle-up after the first year of 
operation; the cost settled operating cost per diem shall not 
exceed 110 percent of the 60th percentile established for the 
appropriate group.  Until procedures determining operating cost 
payment rates according to mix of resident needs are 
established, the commissioner shall establish by rule procedures 
for determining payment rates for nursing homes which provide 
care under a lesser care level than the level for which the 
nursing home is certified.  
    (b) For the rate years beginning on or after July 1, 1985, 
a newly constructed nursing home or one with a capacity increase 
of 50 percent or more may, upon written application to the 
commissioner, receive an interim payment rate for reimbursement 
for property related costs, operating costs, and real estate 
taxes and special assessments calculated under rules promulgated 
by the commissioner. 
    (c) For rate years beginning on or after July 1, 1983, the 
commissioner may exclude from a provision of 12 MCAR S 2.050 any 
facility that is licensed by the commissioner of health only as 
a boarding care home, certified by the commissioner of health as 
an intermediate care facility, is licensed by the commissioner 
of human services under Minnesota Rules, parts 9520.0500 to 
9520.0690, and has less than five percent of its licensed 
boarding care capacity reimbursed by the medical assistance 
program.  Until a permanent rule to establish the payment rates 
for facilities meeting these criteria is promulgated, the 
commissioner shall establish the medical assistance payment rate 
as follows:  
    (1) The desk audited payment rate in effect on June 30, 
1983, remains in effect until the end of the facility's fiscal 
year.  The commissioner shall not allow any amendments to the 
cost report on which this desk audited payment rate is based.  
    (2) For each fiscal year beginning between July 1, 1983, 
and June 30, 1985, the facility's payment rate shall be 
established by increasing the desk audited operating cost 
payment rate determined in clause (1) at an annual rate of five 
percent.  
    (3) For fiscal years beginning on or after July 1, 1985, 
the facility's payment rate shall be established by increasing 
the facility's payment rate in the facility's prior fiscal year 
by the increase indicated by the consumer price index for 
Minneapolis and St. Paul.  
    (4) For the purpose of establishing payment rates under 
this paragraph, the facility's rate and reporting years coincide 
with the facility's fiscal year.  
    A facility that meets the criteria of this paragraph shall 
submit annual cost reports on forms prescribed by the 
commissioner.  
    For the rate year beginning July 1, 1985, each nursing home 
total payment rate must be effective two calendar months from 
the first day of the month after the commissioner issues the 
rate notice to the nursing home.  From July 1, 1985, until the 
total payment rate becomes effective, the commissioner shall 
make payments to each nursing home at a temporary rate that is 
the prior rate year's operating cost payment rate increased by 
2.6 percent plus the prior rate year's property-related payment 
rate and the prior rate year's real estate taxes and special 
assessments payment rate.  The commissioner shall retroactively 
adjust the property-related payment rate and the real estate 
taxes and special assessments payment rate to July 1, 1985, but 
must not retroactively adjust the operating cost payment rate. 
    (d) For the purposes of Minnesota Rules, part 9549.0060, 
subpart 13, item F, the following types of transactions shall 
not be considered a sale or reorganization of a provider entity: 
    (1) the sale or transfer of a nursing home upon death of an 
owner; 
    (2) the sale or transfer of a nursing home due to serious 
illness or disability of an owner as defined under the social 
security act; 
    (3) the sale or transfer of the nursing home upon 
retirement of an owner at 62 years of age or older; 
    (4) any transaction in which a partner, owner, or 
shareholder acquires an interest or share of another partner, 
owner, or shareholder in a nursing home business provided the 
acquiring partner, owner, or shareholder has less than 50 
percent ownership after the acquisition; 
    (5) a sale and leaseback to the same licensee which does 
not constitute a change in facility license; 
    (6) a transfer of an interest to a trust; 
    (7) gifts or other transfers for no consideration; 
    (8) a merger of two or more related organizations; 
    (9) a transfer of interest in a facility held in 
receivership; 
    (10) a change in the legal form of doing business other 
than a publicly held organization which becomes privately held 
or vice versa; 
    (11) the addition of a new partner, owner, or shareholder 
who owns less than 20 percent of the nursing home or the 
issuance of stock; or 
    (12) an involuntary transfer including foreclosure, 
bankruptcy, or assignment for the benefit of creditors. 
    Any increase in allowable debt or allowable interest 
expense or other cost incurred as a result of the foregoing 
transactions shall be a nonallowable cost for purposes of 
reimbursement under Minnesota Rules, parts 9549.0010 to 
9549.0080. 
    (e) For rate years beginning on or after July 1, 1986, the 
commissioner may exclude from a provision of Minnesota Rules, 
parts 9549.0010 to 9549.0080, any facility that is certified by 
the commissioner of health as an intermediate care facility, 
licensed by the commissioner of human services as a chemical 
dependency treatment program and enrolled in the medical 
assistance program as an institution for mental disease.  The 
commissioner of human services shall establish a medical 
assistance payment rate for these facilities.  Chapter 14 does 
not apply to the procedures and criteria used to establish the 
ratesetting structure.  The ratesetting method is not appealable.
    Sec. 12.  Minnesota Statutes 1986, section 256B.50, 
subdivision 2, is amended to read:  
    Subd. 2.  [APPRAISED VALUE; APPEALS BOARD.] (a) Appeals 
concerning the appraised value of a nursing home's real estate 
must be heard by a three-person appeal board appointed by the 
commissioner.  The real estate as defined in section 256B.431, 
subdivision 3, must be appraised using the depreciated 
replacement cost method. 
    (b) Members of the appeals board shall be appointed by the 
commissioner from the list of appraisers approved for state 
contracts by the commissioner of administration.  In making the 
selection, the commissioner of human services shall ensure that 
each member is experienced in the use of the depreciated 
replacement cost method and is free of any personal, political, 
or economic conflict of interest that may impair the member's 
ability to function in a fair and objective manner. 
    (c) The appeals board shall appoint one of its members to 
act as chief representative and shall examine witnesses when it 
is necessary to make a complete record.  Facts to be considered 
by the board are limited to those in existence at the time of 
the appraisal being appealed.  The board shall issue a written 
report regarding each appeal to the commissioner within 30 days 
following the close of the record.  The report must contain 
findings of fact, conclusions, and a recommended disposition 
based on a majority decision of the board.  A copy of the report 
must be served upon all parties. 
    (d) The commissioner shall issue an order adopting, 
rejecting, or modifying the appeal board's recommendation within 
30 days of receipt of the report.  A copy of the decision must 
be served upon all parties. 
    (e) Within 30 days of receipt of the commissioner's order, 
the appealing party may appeal to the Minnesota court of 
appeals.  The court's decision is limited to a determination of 
the appraised value of the real estate and must not include 
costs assessed against either party. (a) An appeal request 
concerning the appraised value of a nursing home's real estate 
as established by an appraisal conducted after July 1, 1986, 
shall state the appraised value the nursing home believes is 
correct for the building, land improvements, and attached 
equipment and the name and address of the firm with whom 
contacts may be made regarding the appeal.  The appeal request 
shall include a separate appraisal report prepared by an 
independent appraiser of real estate which supports the total 
appraised value claimed by the nursing home.  The appraisal 
report shall be based on an on-site inspection of the nursing 
home's real estate using the depreciated replacement cost 
method, must be in a form comparable to that used in the 
commissioner's appraisal, and must pertain to the same time 
period covered by the appealed appraisal.  The appraisal report 
shall include information related to the training, experience, 
and qualifications of the appraiser who conducted and prepared 
the appraisal report for the nursing home. 
     (b) A nursing home which has filed an appeal request prior 
to the effective date of this law concerning the appraised value 
of its real estate as established by an appraisal conducted 
before July 1, 1986, must submit to the commissioner the 
information described under paragraph (a) within 60 days of the 
effective date of this act in order to preserve the appeal. 
     (c) An appeal request which has been filed pursuant to the 
provisions of paragraph (a) or (b) shall be finally resolved 
through an agreement entered into by and between the 
commissioner and the nursing home or by the determination of an 
independent appraiser based upon an on-site inspection of the 
nursing home's real estate using the depreciated replacement 
cost method, in a form comparable to that used in the 
commissioner's appraisal, and pertaining to the same time period 
covered by the appealed appraisal.  The appraiser shall be 
selected by the commissioner and the nursing home by alternately 
striking names from a list of appraisers approved for state 
contracts by the commissioner of administration.  The appraiser 
shall make assurances to the satisfaction of the commissioner 
and the nursing home that the appraiser is experienced in the 
use of the depreciated cost method of appraisals and that the 
appraiser is free of any personal, political, or economic 
conflict of interest that may impair the ability to function in 
a fair and objective manner.  The commissioner shall pay costs 
of the appraiser through a negotiated rate for services of the 
appraiser. 
    (d) The decision of the appraiser is final and is not 
appealable.  Exclusive jurisdiction for appeals of the appraised 
value of nursing homes lies with the procedures set out in this 
subdivision.  No court of law shall possess subject matter 
jurisdiction to hear appeals of appraised value determinations 
of nursing homes. 
    Sec. 13.  [STUDY AND REPORT.] 
    The interagency board for quality assurance shall study the 
following issues and report to the legislature by December 15, 
1988, on its findings and recommendations: 
    (1) the advisability of changing the definition of 
"hardship" for purposes of the nursing home moratorium; 
    (2) the advisability of defining the need for nursing home 
beds in terms of the population aged 75 and older; and 
    (3) the existence of a geographic maldistribution of 
long-term care beds and alternative care services in the state. 
    Sec. 14.  [SPECIAL PROJECTS.] 
    Notwithstanding contrary provisions of section 256.01, 
subdivision 2, clause (15), for the biennium ending June 30, 
1989, the maximum balance in the special projects account is 
increased from $400,000 to $1,000,000, and money in the account 
may be used by the commissioner for projects to accelerate the 
resolution of long-term care rate appeals. 
    Sec. 15.  [EFFECTIVE DATES.] 
    Sections 1 and 2 are effective July 1, 1989.  Sections 3 to 
13 are effective July 1, 1987. 

                               ARTICLE 5 
    Section 1.  Minnesota Statutes 1986, section 245.782, 
subdivision 5, is amended to read:  
    Subd. 5.  "Day care facility" means any facility, public or 
private, which for gain or otherwise regularly provides one or 
more persons with care, training, supervision, habilitation, 
rehabilitation, or developmental guidance on a regular basis, 
for periods of less than 24 hours per day, in a place other than 
the person's own home.  Day care facilities include, but are not 
limited to:  family day care homes, group family day care homes, 
day care centers, day nurseries, nursery schools, developmental 
achievement centers for children, day training and habilitation 
services for adults, day treatment programs, adult day care 
centers, and day services. 
    Sec. 2.  Minnesota Statutes 1986, section 252.21, is 
amended to read:  
    252.21 [COUNTY BOARDS MAY MAKE GRANTS FOR DEVELOPMENTAL 
ACHIEVEMENT CENTER SERVICES FOR PERSONS CHILDREN WITH MENTAL 
RETARDATION OR RELATED CONDITIONS.] 
    In order to assist county boards in carrying out 
responsibilities for the provision of daytime developmental 
achievement center services for eligible persons children, the 
county board or boards are hereby authorized to make grants, 
within the limits of the money appropriated, to developmental 
achievement centers for services to persons children with mental 
retardation or related conditions.  In order to fulfill its 
responsibilities to persons children with mental retardation or 
related conditions as required by section sections 120.17 and 
256E.08, subdivision 1, a county board may, beginning January 1, 
1983, contract with developmental achievement centers or other 
providers.  
    Sec. 3.  Minnesota Statutes 1986, section 252.22, is 
amended to read:  
    252.22 [APPLICANTS FOR ASSISTANCE; TAX LEVY.] 
    Any city, town, or governmental entity, nonprofit 
corporation, or any combination thereof, may apply to the county 
board for assistance in establishing and operating a 
developmental achievement center and program for 
persons children with mental retardation or related conditions.  
Application for such assistance shall be on forms supplied by 
the board.  Each applicant shall annually submit to the board 
its plan and budget for the next fiscal year.  No applicant 
shall be eligible for a grant hereunder unless its plan and 
budget have been approved by the board. 
    Any city, town, or county is authorized, at the discretion 
of its governing body, to make grants from special tax revenues 
or from its general revenue fund to any nonprofit organization, 
governmental or corporate, within or outside its jurisdiction, 
that has established a developmental achievement center 
for persons children with mental retardation or related 
conditions.  Nothing contained herein shall in any way preclude 
the use of funds available for this purpose under any existing 
statute or charter provision relating to cities, towns and 
counties.  
    Sec. 4.  Minnesota Statutes 1986, section 252.23, is 
amended to read:  
    252.23 [ELIGIBILITY REQUIREMENTS.] 
    A developmental achievement center shall satisfy all of the 
following requirements to be eligible for assistance under 
sections 252.21 to 252.26: 
    (1) provide daytime activities for any or all of the 
following classes of persons: developmental services to children 
with mental retardation or related conditions who can benefit 
from the program of services, including those school age 
children who have been excused or excluded from school; 
    Children and adults with mental retardation or related 
conditions who are unable to attend school because of their 
chronological age and are unable to independently engage in 
ordinary community activities; and 
    (2) Provide counseling services to parents or guardians of 
persons with mental retardation or related conditions who may 
register at the center; 
    (3) comply with all rules duly promulgated adopted by the 
commissioner of human services. 
    Sec. 5.  Minnesota Statutes 1986, section 252.24, 
subdivision 1, is amended to read:  
    Subdivision 1.  [SELECTION OF DEVELOPMENTAL ACHIEVEMENT 
CENTERS.] The county board shall administer developmental 
achievement services, including training and habilitation 
services provided by licensed developmental achievement centers 
to residents of intermediate care facilities for the mentally 
retarded.  The county board shall ensure that transportation is 
provided for persons children who fulfill the eligibility 
requirements of section 252.23, clause (1), utilizing the most 
efficient and reasonable means available.  The county board may 
contract for developmental achievement services and 
transportation from a center which is licensed under the 
provisions of sections 245.781 to 245.813, 252.28, and 257.175, 
and in the board's opinion, best provides daytime developmental 
achievement services for persons children with mental 
retardation or related conditions within the appropriation 
and medical assistance resources made available for this 
purpose.  Daytime developmental achievement services 
administered by the county board shall comply with standards 
established by the commissioner pursuant to subdivision 2 and 
applicable federal regulations.  
    Sec. 6.  Minnesota Statutes 1986, section 252.24, 
subdivision 4, is amended to read:  
    Subd. 4.  [FEES.] The county board may, with the approval 
of the commissioner, establish a schedule of fees for daytime 
developmental achievement services as provided in section 
256E.08, subdivision 6.  No person child, or family of a child, 
with mental retardation or a related condition shall be denied 
daytime developmental achievement services because of an 
inability to pay such a fee. 
    Sec. 7.  Minnesota Statutes 1986, section 252.25, is 
amended to read:  
    252.25 [BOARD OF DIRECTORS.] 
    Every city, town, or governmental entity, nonprofit 
corporation, or combination thereof, establishing a 
developmental achievement center for persons children with 
mental retardation or related conditions shall, before it comes 
under the terms of sections 252.21 to 252.26, appoint a board of 
directors for the center program.  When any city or town singly 
establishes such a center, such board shall be appointed by the 
chief executive officer of the city or the chair of the 
governing board of the town.  When any combination of cities, 
towns, or nonprofit corporations, establishes such a center, the 
chief executive officers of the cities or nonprofit corporations 
and the chair of the governing bodies of the towns shall appoint 
the board of directors.  If a nonprofit corporation singly 
establishes such a center, its chief executive officer shall 
appoint the board of directors of the center.  Membership on a 
board of directors while not mandatory, should be representative 
of local health, education and welfare departments, medical 
societies, mental health centers, associations concerned with 
mental retardation and related conditions, civic groups and the 
general public.  Nothing in sections 252.21 to 252.26 shall be 
construed to preclude the appointment of elected or appointed 
public officials or members of the board of directors of the 
sponsoring nonprofit corporation to such board of directors, or 
public schools from administering programs under their present 
administrative structure.  
    Sec. 8.  [252.40] [SERVICE PRINCIPLES AND RATE-SETTING 
PROCEDURES FOR DAY TRAINING AND HABILITATION SERVICES FOR ADULTS 
WITH MENTAL RETARDATION AND RELATED CONDITIONS.] 
    Sections 8 to 15 apply to day training and habilitation 
services for adults with mental retardation and related 
conditions when the services are authorized to be funded by a 
county and provided under a contract between a county board and 
a vendor as defined in section 9.  Nothing in sections 8 to 15 
absolves intermediate care facilities for persons with mental 
retardation or related conditions of the responsibility for 
providing active treatment and habilitation under federal 
regulations with which those facilities must comply to be 
certified by the Minnesota department of health. 
    Sec. 9.  [252.41] [DEFINITIONS.] 
     Subdivision 1.  [SCOPE.] The definitions in this section 
apply to sections 8 to 15.  
    Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
commissioner of the department of human services. 
    Subd. 3.  [DAY TRAINING AND HABILITATION SERVICES FOR 
ADULTS WITH MENTAL RETARDATION, RELATED CONDITIONS.] "Day 
training and habilitation services for adults with mental 
retardation and related conditions" means services that: 
     (1) include supervision, training, assistance, and 
supported employment, work-related activities, or other 
community-integrated activities designed and implemented in 
accordance with the individual service and individual 
habilitation plans required under Minnesota Rules, parts 
9525.0015 to 9525.0165, to help an adult reach and maintain the 
highest possible level of independence, productivity, and 
integration into the community; 
    (2) are provided under contract with the county where the 
services are delivered by a vendor licensed under sections 
245.781 to 245.812 and 252.28, subdivision 2, to provide day 
training and habilitation services; and 
    (3) are regularly provided to one or more adults with 
mental retardation or related conditions in a place other than 
the adult's own home or residence. 
    Day training and habilitation services reimbursable under 
this section do not include special education and related 
services as defined in the Education of the Handicapped Act, 
United States Code, title 20, chapter 33, section 1401, clauses 
(6) and (17), or vocational services funded under section 110 of 
the Rehabilitation Act of 1973, United States Code, title 29, 
section 720, as amended.  
    Subd. 4.  [INDEPENDENCE.] "Independence" means the extent 
to which persons with mental retardation or related conditions 
exert control and choice over their own lives. 
    Subd. 5.  [INTEGRATION.] "Integration" means that persons 
with mental retardation and related conditions: 
    (1) use the same community resources that are used by and 
available to individuals who are not disabled; 
    (2) participate in the same community activities in which 
nondisabled individuals participate; and 
    (3) regularly interact and have contact with nondisabled 
individuals. 
    Subd. 6.  [PRODUCTIVITY.] "Productivity" means that persons 
with mental retardation or a related condition: 
    (1) engage in income-producing work designed to improve 
their income level, employment status, or job advancement; or 
    (2) engage in activities that contribute to a business, 
household, or community. 
    Subd. 7.  [REGIONAL CENTER.] "Regional center" means any 
one of the eight state-operated facilities under the direct 
administrative authority of the commissioner that serve persons 
with mental retardation and related conditions.  The following 
facilities are regional centers:  Anoka-Metro Regional Treatment 
Center; Brainerd Regional Human Services Center; Cambridge 
Regional Treatment Center; Faribault Regional Center; Fergus 
Falls Regional Treatment Center; Moose Lake Regional Treatment 
Center; St. Peter Regional Treatment Center; and Willmar 
Regional Treatment Center. 
    Subd. 8.  [SUPPORTED EMPLOYMENT.] "Supported employment" 
means employment of a person with a disability so severe that 
the person needs ongoing training and support to get and keep a 
job in which: 
    (1) the person engages in paid work at a work site where 
individuals without disabilities who do not require public 
subsidies also may be employed; 
    (2) public funds are necessary to provide ongoing training 
and support services throughout the period of the person's 
employment; and 
    (3) the person has the opportunity for social interaction 
with individuals who do not have disabilities and who are not 
paid caregivers. 
    Subd. 9.  [VENDOR.] "Vendor" means a nonprofit legal entity 
that: 
    (1) is licensed under sections 245.781 to 245.812 and 
252.28, subdivision 2, to provide day training and habilitation 
services to adults with mental retardation and related 
conditions; and 
    (2) does not have a financial interest in the legal entity 
that provides residential services to the same person or persons 
to whom it provides day training and habilitation services.  
This clause does not apply to regional centers or vendors 
licensed prior to April 15, 1983. 
    Sec. 10.  [252.42] [SERVICE PRINCIPLES.] 
     The design and delivery of services eligible for 
reimbursement under the rates established in section 14 should 
reflect the following principles: 
    (1) Services must suit a person's chronological age and be 
provided in the least restrictive environment possible, 
consistent with the needs identified in the person's individual 
service and individual habilitation plans under Minnesota Rules, 
parts 9525.0015 to 9525.0165. 
    (2) A person with mental retardation or a related condition 
whose individual service and individual habilitation plans 
authorize employment or employment-related activities shall be 
given the opportunity to participate in employment and 
employment-related activities in which nondisabled persons 
participate. 
    (3) A person with mental retardation or a related condition 
participating in work shall be paid wages commensurate with the 
rate for comparable work and productivity except as regional 
centers are governed by section 246.151. 
    (4) A person with mental retardation or a related condition 
shall receive services which include services offered in 
settings used by the general public and designed to increase the 
person's active participation in ordinary community activities. 
    (5) A person with mental retardation or a related condition 
shall participate in the patterns, conditions, and rhythms of 
everyday living and working that are consistent with the norms 
of the mainstream of society. 
    Sec. 11.  [252.43] [COMMISSIONER'S DUTIES.] 
    The commissioner shall supervise county boards' provision 
of day training and habilitation services to adults with mental 
retardation and related conditions.  The commissioner shall: 
    (1) determine the need for day training and habilitation 
services under section 252.28; 
    (2) approve payment rates established by a county under 
section 14, subdivision 1; 
    (3) adopt rules for the administration and provision of day 
training and habilitation services under sections 8 to 15 and 
sections 245.781 to 245.812 and 252.28, subdivision 2; 
    (4) enter into interagency agreements necessary to ensure 
effective coordination and provision of day training and 
habilitation services; 
    (5) monitor and evaluate the costs and effectiveness of day 
training and habilitation services; and 
    (6) provide information and technical help to county boards 
and vendors in their administration and provision of day 
training and habilitation services. 
    Sec. 12.  [252.44] [COUNTY BOARD RESPONSIBILITIES.] 
     (a) When the need for day training and habilitation 
services in a county has been determined under section 252.28, 
the board of commissioners for that county shall: 
    (1) authorize the delivery of services according to the 
individual service and habilitation plans required as part of 
the county's provision of case management services under 
Minnesota Rules, parts 9525.0015 to 9525.0165.  For calendar 
years for which section 252.46, subdivisions 2 to 10, apply, the 
county board shall not authorize a change in service days from 
the number of days authorized for the previous calendar year 
unless there is documentation for the change in the individual 
service plan.  An increase in service days must also be 
supported by documentation that the goals and objectives 
assigned to the vendor cannot be met more economically and 
effectively by other available community services and that 
without the additional days of service the individual service 
plan could not be implemented in a manner consistent with the 
service principles in section 252.42;  
    (2) contract with licensed vendors, as specified in 
paragraph (b), under sections 256E.01 to 256E.12 and 256B.092 
and rules adopted under those sections;  
    (3) ensure that transportation is provided or arranged by 
the vendor in the most efficient and reasonable way possible; 
    (4) set payment rates under section 14; 
    (5) monitor and evaluate the cost and effectiveness of the 
services; and 
    (6) reimburse vendors for the provision of authorized 
services according to the rates, procedures, and regulations 
governing reimbursement. 
    (b) With all vendors except regional centers, the contract 
must include the approved payment rates, the projected budget 
for the contract period, and any actual expenditures of previous 
and current contract periods.  With all vendors, including 
regional centers, the contract must also include the amount, 
availability, and components of day training and habilitation 
services to be provided, the performance standards governing 
service provision and evaluation, and the time period in which 
the contract is effective. 
    Sec. 13.  [252.45] [VENDOR'S DUTIES.] 
    A vendor's responsibility under clauses (1), (2), and (3) 
extends only to the provision of services that are reimbursable 
under state and federal law.  A vendor under contract with a 
county board to provide day training and habilitation services 
shall: 
    (1) provide the amount and type of services authorized in 
the individual service plan and specified in the individual 
habilitation plan under Minnesota Rules, parts 9525.0015 to 
9525.0165; 
    (2) design the services to achieve the outcomes assigned to 
the vendor in the individual service plan and specified in the 
individual habilitation plan; 
    (3) provide or arrange for transportation of persons 
receiving services to and from service sites; 
    (4) enter into agreements with community-based intermediate 
care facilities for persons with mental retardation and related 
conditions to ensure compliance with applicable federal 
regulations; and 
    (5) comply with state and federal law. 
    Sec. 14.  [252.46] [PAYMENT RATES.] 
     Subdivision 1.  [RATES ESTABLISHED THROUGH 1988.] Payment 
rates to vendors, except regional centers, for county-funded day 
training and habilitation services and transportation provided 
to persons receiving day training and habilitation services 
established by a county board before January 1, 1989, are 
governed by subdivisions 2 to 10.  
    "Payment rate" as used in subdivisions 2 to 10 refers to 
three kinds of payment rates:  a full-day service rate for 
persons who receive at least six service hours a day, including 
the time it takes to transport the person to and from the 
service site; a partial-day service rate that must not exceed 75 
percent of the full-day service rate for persons who receive 
less than a full day of service; and a transportation rate for 
providing, or arranging and paying for, transportation of a 
person to and from the person's residence to the service site. 
    Subd. 2.  [1987 AND 1988 MINIMUM.] Unless a variance is 
granted under subdivision 6, the minimum payment rates set by a 
county board for each vendor for 1987 and 1988 must be equal to 
the payment rates approved by the commissioner for that vendor 
in effect January 1, 1986, and January 1, 1987, respectively. 
    Subd. 3.  [1987 AND 1988 MAXIMUM.] Unless a variance is 
granted under subdivision 6, the maximum payment rates for each 
vendor for 1987 and 1988 must be equal to the payment rates 
approved by the commissioner for that vendor in effect December 
1, 1986, and December 1, 1987, respectively, increased by no 
more than the projected percentage change in the urban consumer 
price index, all items, published by the United States 
Department of Labor, for the upcoming calendar year over the 
current calendar year. 
    Subd. 4.  [NEW VENDORS.] Payment rates established by a 
county before January 1, 1989, for a new vendor for which there 
were no previous rates must not exceed 125 percent of the 
average payment rates in the regional development commission 
district under sections 462.381 to 462.396 in which the new 
vendor is located. 
    Subd. 5.  [SUBMITTING RECOMMENDED RATES.] The county board 
shall submit recommended payment rates to the commissioner on 
forms supplied by the commissioner by November 1, 1987, and at 
least 60 days before revised payment rates or payment rates for 
new vendors are to be effective.  The forms must require the 
county board's written verification of the individual 
documentation required under section 12, clause (a).  If the 
number of days of service provided by a licensed vendor are 
projected to increase, the county board must recommend payment 
rates based on the projected increased days of attendance and 
resulting lower per unit fixed costs.  If a vendor provides 
services at more than one licensed site, the county board may 
recommend the same payment rates for each site based on the 
average rate for all sites.  The county board may also recommend 
differing payment rates for each licensed site if it would 
result in a total annual payment to the vendor that is equal to 
or less than the total annual payment that would result if the 
average rates had been used for all sites.  For purposes of this 
subdivision, the average payment rate for all service sites used 
by a vendor must be computed by adding the amounts that result 
when the payment rates for each licensed site are multiplied by 
the projected annual number of service units to be provided at 
that site and dividing the sum of those amounts by the total 
units of service to be provided by the vendor at all sites. 
    Subd. 6.  [VARIANCES.] A variance from the minimum or 
maximum payment rates in subdivisions 2 and 3 may be granted by 
the commissioner when the vendor requests and the county board 
submits to the commissioner a written variance request with the 
recommended payment rates.  The county board shall review all 
vendors' payment rates that are 20 percent lower than the 
average rates for the regional development commission district 
to which the county belongs.  If the county determines that the 
payment rates do not provide sufficient revenue to the vendor 
for authorized service delivery the county must recommend a 
variance under this section.  This review must occur prior to 
November 1, 1987.  When the county board contracts for increased 
services from any vendor for some or all individuals receiving 
services from the vendor, the county board shall review the 
vendor's payment rates to determine whether the increase 
requires that a variance to the minimum rates be recommended 
under this section to reflect the vendor's lower per unit fixed 
costs.  The written variance request must include documentation 
that all the following criteria have been met: 
    (1) The commissioner and the county board have both 
conducted a review and have identified a need for a change in 
the payment rates to change the number of direct service staff 
or the level of qualifications of the staff. 
    (2) The proposed changes are required for the vendor to 
deliver authorized individual services in an effective and 
efficient manner. 
    (3) The proposed changes demonstrate compliance with 
minimum licensing standards governing minimum staffing ratios 
and staff qualifications. 
    (4) The vendor documents that the change in staff numbers 
or qualifications cannot be achieved by reallocating current 
staff or by reallocating financial resources to provide or 
purchase the necessary services. 
    (5) The county board submits evidence that the need for 
additional staff cannot be met by using temporary special needs 
rate exceptions under Minnesota Rules, parts 9510.1020 to 
9510.1140. 
    (6) The county board submits a description of the nature 
and cost of the proposed changes.  Allowable costs are limited 
to salaries, related fringe benefits, and payroll taxes. 
    (7) The county board's recommended payment rates do not 
exceed 125 percent of the average payment rates in the regional 
development commission district in which the vendor is located. 
    Subd. 7.  [TIME REQUIREMENTS AND APPEALS PROCESS FOR 
VARIANCES.] The commissioner shall notify in writing county 
boards requesting variances within 60 days of receiving the 
variance request from the county board.  The notification shall 
give reasons for denial of the variance, if it is denied. 
    Subd. 8.  [COMMISSIONER'S NOTICE TO BOARDS, VENDORS.] The 
commissioner shall notify the county boards and vendors of: 
    (1) the average regional payment rates and 125 percent of 
the average regional payments rates for each of the regional 
development commission districts designated in sections 462.381 
to 462.396; and 
    (2) the projected inflation rate for the year in which the 
rates will be effective equal to the most recent projected 
change in the urban consumer price index, all items, published 
by the United States Department of Labor, for the upcoming 
calendar year over the current calendar year. 
    Subd. 9.  [APPROVAL OR DENIAL OF RATES.] The commissioner 
shall approve the county board's recommended payment rates when 
the rates and verification justifying the projected service 
units comply with subdivisions 2 to 10.  The commissioner shall 
notify the county board in writing of the approved payment rates 
within 60 days of receipt of the rate recommendations.  If the 
rates are not approved, or if rates different from those 
originally recommended are approved, the commissioner shall 
within 60 days of receiving the rate recommendation notify the 
county board in writing of the reasons for denying or 
substituting a different rate for the recommended rates.  
Approved payment rates remain effective until the commissioner 
approves different rates in accordance with subdivisions 2 and 3.
    Subd. 10.  [VENDOR'S REPORT; AUDIT.] The vendor shall 
report to the commissioner and the county board on forms 
prescribed by the commissioner at times specified by the 
commissioner.  The reports shall include programmatic and fiscal 
information.  Fiscal information shall be provided in accordance 
with an annual audit that complies with the requirements of 
Minnesota Rules, parts 9550.0010 to 9550.0092.  The audit must 
be done in accordance with generally accepted auditing standards 
to result in statements that include a balance sheet, income 
statement, changes in financial position, and the certified 
public accountant's opinion. 
    Subd. 11.  [IMPROPER TRANSACTIONS.] Transactions that have 
the effect of circumventing subdivisions 1 to 10 must not be 
considered by the commissioner for the purpose of payment rate 
approval under the principle that the substance of the 
transaction prevails over the form. 
    Subd. 12.  [RATES ESTABLISHED AFTER 1988.] Payment rates 
established by a county board on or after January 1, 1989, must 
be determined under permanent rules adopted by the 
commissioner.  No county shall pay a rate that is less than the 
minimum rate determined by the commissioner. 
    In developing procedures for setting minimum payment rates 
and procedures for establishing payment rates, the commissioner 
shall consider the following factors: 
    (1) a vendor's payment rate and historical cost in the 
previous year; 
    (2) current economic trends and conditions; 
    (3) costs that a vendor must incur to operate efficiently, 
effectively and economically and still provide training and 
habilitation services that comply with quality standards 
required by state and federal regulations; 
    (4) increased liability insurance costs; 
    (5) costs incurred for the development and continuation of 
supported employment services; 
    (6) cost variations in providing services to people with 
different needs; 
    (7) the adequacy of reimbursement rates that are more than 
15 percent below the statewide average; and 
    (8) other appropriate factors. 
    The commissioner may develop procedures to establish 
differing hourly rates that take into account variations in the 
number of clients per staff hour, to assess the need for day 
training and habilitation services, and to control the 
utilization of services. 
    In developing procedures for setting transportation rates, 
the commissioner may consider allowing the county board to set 
those rates or may consider developing a uniform standard. 
    Medical assistance rates for home and community-based 
services provided under section 256B.501 by licensed vendors of 
day training and habilitation services must not be greater than 
the rates for the same services established by counties under 
sections 8 to 15. 
    Sec. 15.  [252.47] [RULES.] 
     To implement sections 8 to 15, the commissioner shall adopt 
permanent rules under sections 14.01 to 14.38.  The commissioner 
shall establish an advisory task force to advise and make 
recommendations to the commissioner during the rulemaking 
process.  The advisory task force must include legislators, 
vendors, residential service providers, counties, consumers, 
department personnel, and others as determined by the 
commissioner. 
    Sec. 16.  Minnesota Statutes 1986, section 256B.02, 
subdivision 8, is amended to read:  
    Subd. 8.  [MEDICAL ASSISTANCE; MEDICAL CARE.] "Medical 
assistance" or "medical care" means payment of part or all of 
the cost of the following care and services for eligible 
individuals whose income and resources are insufficient to meet 
all of this cost: 
    (1) Inpatient hospital services.  A second medical opinion 
is required prior to reimbursement for elective surgeries.  The 
commissioner shall publish in the State Register a proposed list 
of elective surgeries that require a second medical opinion 
prior to reimbursement.  The list is not subject to the 
requirements of sections 14.01 to 14.70.  The commissioner's 
decision whether a second medical opinion is required, made in 
accordance with rules governing that decision, is not subject to 
administrative appeal;  
    (2) Skilled nursing home services and services of 
intermediate care facilities, including training and 
habilitation services, as defined in section 256B.50, 
subdivision 1 252.41, subdivision 3, for persons with mental 
retardation or related conditions who are residing in 
intermediate care facilities for persons with mental retardation 
or related conditions.  Medical assistance must not be used to 
pay the costs of nursing care provided to a patient in a swing 
bed as defined in section 144.562; 
    (3) Physicians' services; 
    (4) Outpatient hospital or nonprofit community health 
clinic services or physician-directed clinic services.  The 
physician-directed clinic staff shall include at least two 
physicians, one of whom is on the premises whenever the clinic 
is open, and all services shall be provided under the direct 
supervision of the physician who is on the premises.  Hospital 
outpatient departments are subject to the same limitations and 
reimbursements as other enrolled vendors for all services, 
except initial triage, emergency services, and services not 
provided or immediately available in clinics, physicians' 
offices, or by other enrolled providers.  "Emergency services" 
means those medical services required for the immediate 
diagnosis and treatment of medical conditions that, if not 
immediately diagnosed and treated, could lead to serious 
physical or mental disability or death or are necessary to 
alleviate severe pain.  Neither the hospital, its employees, nor 
any physician or dentist, shall be liable in any action arising 
out of a determination not to render emergency services or care 
if reasonable care is exercised in determining the condition of 
the person, or in determining the appropriateness of the 
facilities, or the qualifications and availability of personnel 
to render these services consistent with this section;  
    (5) Community mental health center services, as defined in 
rules adopted by the commissioner pursuant to section 256B.04, 
subdivision 2, and provided by a community mental health center 
as defined in section 245.62, subdivision 2;  
    (6) Home health care services; 
    (7) Private duty nursing services; 
    (8) Physical therapy and related services; 
    (9) Dental services, excluding cast metal restorations; 
    (10) Laboratory and X-ray services; 
    (11) The following if prescribed by a licensed practitioner:
drugs, eyeglasses, dentures, and prosthetic devices.  The 
commissioner shall designate a formulary committee which shall 
advise the commissioner on the names of drugs for which payment 
shall be made, recommend a system for reimbursing providers on a 
set fee or charge basis rather than the present system, and 
develop methods encouraging use of generic drugs when they are 
less expensive and equally effective as trademark drugs.  The 
commissioner shall appoint the formulary committee members no 
later than 30 days following July 1, 1981.  The formulary 
committee shall consist of nine members, four of whom shall be 
physicians who are not employed by the department of human 
services, and a majority of whose practice is for persons paying 
privately or through health insurance, three of whom shall be 
pharmacists who are not employed by the department of human 
services, and a majority of whose practice is for persons paying 
privately or through health insurance, a consumer 
representative, and a nursing home representative.  Committee 
members shall serve two-year terms and shall serve without 
compensation.  The commissioner may establish a drug formulary.  
Its establishment and publication shall not be subject to the 
requirements of the administrative procedure act, but the 
formulary committee shall review and comment on the formulary 
contents.  Prior authorization may be required by the 
commissioner, with the consent of the drug formulary committee, 
before certain formulary drugs are eligible for payment.  The 
formulary shall not include:  drugs or products for which there 
is no federal funding; over-the-counter drugs, except for 
antacids, acetaminophen, family planning products, aspirin, 
insulin, prenatal vitamins, and vitamins for children under the 
age of seven; or any other over-the-counter drug identified by 
the commissioner, in consultation with the appropriate 
professional consultants under contract with or employed by the 
state agency, as necessary, appropriate and cost effective for 
the treatment of certain specified chronic diseases, conditions 
or disorders, and this determination shall not be subject to the 
requirements of chapter 14, the administrative procedure act; 
nutritional products, except for those products needed for 
treatment of phenylketonuria, hyperlysinemia, maple syrup urine 
disease, a combined allergy to human milk, cow milk, and soy 
formula, or any other childhood or adult diseases, conditions, 
or disorders identified by the commissioner as requiring a 
similarly necessary nutritional product; anorectics; and drugs 
for which medical value has not been established.  Separate 
payment shall not be made for nutritional products for residents 
of long-term care facilities; payment for dietary requirements 
is a component of the per diem rate paid to these facilities.  
Payment to drug vendors shall not be modified before the 
formulary is established except that the commissioner shall not 
permit payment for any drugs which may not by law be included in 
the formulary, and the commissioner's determination shall not be 
subject to chapter 14, the administrative procedure act.  The 
commissioner shall publish conditions for prohibiting payment 
for specific drugs after considering the formulary committee's 
recommendations.  
    The basis for determining the amount of payment shall be 
the actual acquisition costs of the drugs plus a fixed 
dispensing fee established by the commissioner.  Actual 
acquisition cost includes quantity and other special discounts 
except time and cash discounts.  Establishment of this fee shall 
not be subject to the requirements of the administrative 
procedure act.  Whenever a generically equivalent product is 
available, payment shall be on the basis of the actual 
acquisition cost of the generic drug, unless the prescriber 
specifically indicates "dispense as written" on the prescription 
as required by section 151.21, subdivision 2.  
    Notwithstanding the above provisions, implementation of any 
change in the fixed dispensing fee which has not been subject to 
the administrative procedure act shall be limited to not more 
than 180 days, unless, during that time, the commissioner shall 
have initiated rulemaking through the administrative procedure 
act;  
    (12) Diagnostic, screening, and preventive services; 
    (13) Health care prepayment plan premiums and insurance 
premiums if paid directly to a vendor and supplementary medical 
insurance benefits under Title XVIII of the Social Security Act; 
    (14) Abortion services, but only if one of the following 
conditions is met: 
    (a) The abortion is a medical necessity.  "Medical 
necessity" means (1) the signed written statement of two 
physicians indicating the abortion is medically necessary to 
prevent the death of the mother, and (2) the patient has given 
her consent to the abortion in writing unless the patient is 
physically or legally incapable of providing informed consent to 
the procedure, in which case consent will be given as otherwise 
provided by law; 
    (b) The pregnancy is the result of criminal sexual conduct 
as defined in section 609.342, clauses (c), (d), (e)(i), and 
(f), and the incident is reported within 48 hours after the 
incident occurs to a valid law enforcement agency for 
investigation, unless the victim is physically unable to report 
the criminal sexual conduct, in which case the report shall be 
made within 48 hours after the victim becomes physically able to 
report the criminal sexual conduct; or 
    (c) The pregnancy is the result of incest, but only if the 
incident and relative are reported to a valid law enforcement 
agency for investigation prior to the abortion; 
    (15) Transportation costs incurred solely for obtaining 
emergency medical care or transportation costs incurred by 
nonambulatory persons in obtaining emergency or nonemergency 
medical care when paid directly to an ambulance company, common 
carrier, or other recognized providers of transportation 
services.  For the purpose of this clause, a person who is 
incapable of transport by taxicab or bus shall be considered to 
be nonambulatory; 
    (16) To the extent authorized by rule of the state agency, 
costs of bus or taxicab transportation incurred by any 
ambulatory eligible person for obtaining nonemergency medical 
care; 
    (17) Personal care attendant services provided by an 
individual, not a relative, who is qualified to provide the 
services, where the services are prescribed by a physician in 
accordance with a plan of treatment and are supervised by a 
registered nurse.  Payments to personal care attendants shall be 
adjusted annually to reflect changes in the cost of living or of 
providing services by the average annual adjustment granted to 
vendors such as nursing homes and home health agencies; and 
    (18) Any other medical or remedial care licensed and 
recognized under state law unless otherwise prohibited by law, 
except licensed chemical dependency treatment programs or 
primary treatment or extended care treatment units in hospitals 
that are covered under Laws 1986, chapter 394, sections 8 to 
20.  The commissioner shall include chemical dependency services 
in the state medical assistance plan for federal reporting 
purposes, but payment must be made under Laws 1986, chapter 394, 
sections 8 to 20. 
    Sec. 17.  Minnesota Statutes 1986, section 256B.501, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DEFINITIONS.] For the purposes of this 
section, the following terms have the meaning given them.  
    (a) "Commissioner" means the commissioner of human services.
    (b) "Facility" means a facility licensed as a mental 
retardation residential facility under section 252.28, licensed 
as a supervised living facility under chapter 144, and certified 
as an intermediate care facility for persons with mental 
retardation or related conditions.  
    (c) "Waivered service" means home or community-based 
service authorized under United States Code, title 42, section 
1396n(c), as amended through December 31, 1982, and defined in 
the Minnesota state plan for the provision of medical assistance 
services.  Waivered services include, at a minimum, case 
management, family training and support, developmental training 
homes, supervised living arrangements, semi-independent living 
services, respite care, and training and habilitation services.  
    (d) "Training and habilitation services" are those health 
and social services needed to ensure optimal functioning of 
persons with mental retardation or related conditions.  Training 
and habilitation services shall be provided to a client away 
from the residence unless medically contraindicated by an 
organization which does not have a direct or indirect financial 
interest in the organization which provides the person's 
residential services.  This requirement shall not apply to any 
developmental achievement center which has applied for licensure 
prior to April 15, 1983.  
    Sec. 18.  Minnesota Statutes 1986, section 256B.501, 
subdivision 2, is amended to read:  
    Subd. 2.  [AUTHORITY.] The commissioner shall establish 
procedures and rules for determining rates for care of residents 
of intermediate care facilities for persons with mental 
retardation or related conditions which qualify as vendors 
providers of medical assistance, and waivered services, and for 
provision of training and habilitation services.  Approved rates 
shall be established on the basis of methods and standards that 
the commissioner finds adequate to provide for the costs that 
must be incurred for the quality care of residents in 
efficiently and economically operated facilities and services.  
The procedures shall specify the costs that are allowable for 
payment through medical assistance.  The commissioner may use 
experts from outside the department in the establishment of the 
procedures.  
    Sec. 19.  Minnesota Statutes 1986, section 256B.501, 
subdivision 8, is amended to read:  
    Subd. 8.  [PAYMENT FOR PERSONS WITH SPECIAL NEEDS.] The 
commissioner shall establish by December 31, 1983, procedures to 
be followed by the counties to seek authorization from the 
commissioner for medical assistance reimbursement for waivered 
services or training and habilitation services for very 
dependent persons with special needs in an amount in excess of 
the rates allowed pursuant to subdivisions 2, and 4, 5, and 6, 
including rates established under section 252.46 when they apply 
to services provided to residents of intermediate care 
facilities for persons with mental retardation or related 
conditions, and procedures to be followed for rate limitation 
exemptions for intermediate care facilities for persons with 
mental retardation or related conditions.  No excess payment or 
limitation exemption shall be authorized unless the need for the 
service is documented in the individual service plan of the 
person or persons to be served, the type and duration of the 
services needed are stated, and there is a basis for estimated 
cost of the services.  
    The commissioner shall evaluate the services provided 
pursuant to this subdivision through program and fiscal audits.  
    Sec. 20.  Minnesota Statutes 1986, section 256E.09, 
subdivision 3, is amended to read:  
    Subd. 3.  [PLAN CONTENT.] The biennial community social 
services plan published by the county shall include: 
    (a) A statement of the goals of community social service 
programs in the county; 
    (b) Methods used pursuant to subdivision 2 to encourage 
participation of citizens and providers in the development of 
the plan and the allocation of money; 
    (c) Methods used to identify persons in need of service and 
the social problems to be addressed by the community social 
service programs, including efforts the county proposes to make 
in providing for early intervention, prevention and education 
aimed at minimizing or eliminating the need for services for 
groups of persons identified in section 256E.03, subdivision 2;  
    (d) A statement describing how the county will fulfill its 
responsibilities identified in section 256E.08, subdivision 1 to 
the groups of persons described in section 256E.03, subdivision 
2, and a description of each community social service proposed 
and identification of the agency or person proposed to provide 
the service.  The plan shall specify how the county proposes to 
make the following services available for persons identified by 
the county as in need of services:  daytime developmental 
achievement services for children, day training and habilitation 
services for adults, subacute detoxification services, 
residential services and nonresidential social support services 
as appropriate for the groups identified in section 256E.03, 
subdivision 2; 
    (e) The amount of money proposed to be allocated to each 
service; 
    (f) An inventory of public and private resources including 
associations of volunteers which are available to the county for 
social services; 
    (g) Evidence that serious consideration was given to the 
purchase of services from private and public agencies; and 
    (h) Methods whereby community social service programs will 
be monitored and evaluated by the county. 
    Sec. 21.  [TASK FORCE.] 
    Subdivision 1.  [TASK FORCE CREATED.] The director of the 
state planning agency shall form and chair a task force to 
review and make recommendations by February 1, 1988, regarding 
the appropriate roles of development achievement centers and 
sheltered workshops in providing supported work opportunities to 
people with disabilities. 
    Subd. 2.  [MEMBERSHIP.] The task force must include the 
chairs of the health and human services committees of the 
Minnesota senate and house of representatives, or their 
designees, sheltered workshops, developmental achievement 
centers, county government, the departments of human services 
and jobs and training, the special education unit of the 
department of education, the state planning agency, advocacy 
organizations and the Minnesota supported employment project 
advisory committee.  The state planning agency shall consult 
with the associations representing sheltered workshops and 
developmental achievement centers and attempt to select service 
provider members representing all programmatic and philosophical 
perspectives. 
    Subd. 3.  [EXTENDED EMPLOYMENT PROGRAMS.] For purposes of 
this section, "extended employment programs" means programs 
providing paid work and service hours as a step in the 
rehabilitation process for those who cannot readily be absorbed 
in the competitive labor market, or during such time as 
employment opportunities for them in the competitive labor 
market do not exist.  Extended employment programs include the 
following: 
    (1) long-term employment programs as defined at Minnesota 
Rules, part 3300.2050, subpart 16; 
    (2) work activity programs as defined at Minnesota Rules, 
part 3300.2050, subpart 33; 
    (3) work component programs as defined at Minnesota Rules, 
part 3300.2050, subpart 34; 
    (4) community-based employment programs as defined at 
Minnesota Rules, part 3300.2050, subpart 3. 
    Subd. 4.  [SCOPE OF THE TASK FORCE.] The task force shall 
review and make recommendations to the legislature and affected 
state departments on the following: 
    (1) the role and function of developmental achievement 
centers, sheltered workshops, and other services providing 
employment to people who are severely disabled; 
    (2) mechanisms for identifying and placing clients in 
appropriate services; 
    (3) current and recommended funding methods for 
developmental achievement centers and extended employment 
programs and the relationship between funding and placement of 
clients; 
    (4) current regulations and program standards including 
accountability requirements and outcome measures.  
Recommendations for common standards for all similar programs 
shall be included; 
    (5) improved ways of providing employment services to all 
disabled persons regardless of the severity of their 
disabilities, including persons not currently receiving services 
through existing programs; and 
    (6) the need and scope of demonstration projects to 
determine how existing funding can be consolidated or unified to 
expand community-based/supported employment opportunities for 
persons with severe disabilities and whether specific rule 
waiver authority is required to accomplish this purpose. 
    Subd. 5.  [COSTS.] The costs of the task force, if any, 
shall be shared equally by the state planning agency, the 
department of human services, and the department of jobs and 
training. 
    Subd. 6.  [COOPERATION OF STATE DEPARTMENTS.] The 
commissioners shall cooperate with the task force and provide 
information and support as requested.  
    Sec. 22.  [REPEALER.] 
    (a) Minnesota Statutes 1986, sections 256B.501, 
subdivisions 5, 6, 7, and 9; and 256E.06, subdivision 2a, are 
repealed. 
    (b) Minnesota Rules, parts 9525.1210, subparts 11 and 12; 
9525.1230, subpart 2; 9525.1260; 9525.1270; 9525.1280; and 
9525.1310, are repealed. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Except as otherwise provided in section 14, sections 1 to 
21 are effective the day following final enactment.  The rates 
established under section 14, subdivision 11, are effective 
January 1, 1989.  Except as specifically repealed by this act, 
the provisions of Minnesota Rules, parts 9525.1200 to 9525.1330 
remain in effect until amended or repealed by the commissioner. 
    Approved June 12, 1987