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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1990 

                        CHAPTER 568-S.F.No. 2621 
           An act relating to the organization and operation of 
          state government; appropriating money for human 
          services and health and other purposes with certain 
          conditions; amending Minnesota Statutes 1988, sections 
          4.071; 13.46, subdivision 5; 144.581, subdivision 1; 
          144A.073, by adding a subdivision; 148B.23, by adding 
          a subdivision; 151.06, subdivision 1; 151.25; 171.07, 
          subdivision 1a; 214.07, subdivision 1, and by adding a 
          subdivision; 241.26, subdivision 2; 244.05, by adding 
          a subdivision; 245.467, subdivision 2; 245A.07, 
          subdivision 3; 245A.08, subdivision 3; 245A.11, 
          subdivision 4; 245A.14, subdivisions 1 and 2; 245A.16, 
          subdivision 4; 252.27, as amended; 253B.17, 
          subdivision 1; 254B.04, as amended; 254B.08; 256.73, 
          subdivision 2; 256.736, subdivisions 1a and 3a; 
          256.7365, subdivision 2; 256.81; 256B.04, subdivisions 
          15 and 16; 256B.055, subdivisions 3, 5, 6, and 12; 
          256B.056, subdivisions 2, 7, and by adding a 
          subdivision; 256B.0625, subdivisions 4, 5, 9, and by 
          adding subdivisions; 256B.091, subdivisions 4 and 6; 
          256B.092, subdivisions 1a, 1b, and by adding 
          subdivisions; 256B.15; 256B.19, by adding a 
          subdivision; 256B.431, subdivision 3e, and by adding 
          subdivisions; 256B.48, subdivision 2, and by adding a 
          subdivision; 256B.49, by adding a subdivision; 
          256B.50, subdivisions 1 and 1b; 256B.501, subdivisions 
          3c, 3e, and by adding a subdivision; 256B.69, 
          subdivision 3; 256B.73, subdivision 7, as amended; 
          256D.01, by adding a subdivision; 256D.02, 
          subdivisions 5, 8, and 12; 256D.03, subdivision 7; 
          256D.052, subdivision 5; 256D.06, subdivision 2; 
          256E.06, subdivisions 2 and 7; 256H.01, by adding 
          subdivisions; 256H.10, subdivisions 1 and 4; 256H.17; 
          260.151, by adding a subdivision; 268.673, 
          subdivisions 3 and 5; 268.6751, subdivision 1; 
          268.676, subdivision 2; 268.677, subdivisions 2 and 3; 
          268.678; 268.681, subdivisions 1, 2, and 3; 268.86, 
          subdivision 8; 268.871, subdivisions 1, 2, and by 
          adding a subdivision; 268.90, subdivisions 1, 3, and 
          4; 462.357, subdivisions 7 and 8; 518.171, 
          subdivisions 1, 3, 4, and 7; 518.54, by adding 
          subdivisions; 518.551, subdivisions 1 and 5; 518.611, 
          subdivisions 1, 2, 8, 8a, and by adding a subdivision; 
          518C.02, by adding subdivisions; 518C.03; 518C.05; 
          518C.09; 518C.12; and 518C.27, subdivision 1; 
          Minnesota Statutes 1989 Supplement, sections 116.76, 
          subdivision 9; 116.78, by adding subdivisions; 144.50, 
          subdivision 6; 144.802, subdivision 3; 144.804, 
          subdivisions 1 and 7; 144.809; 144.8091; 145.894; 
          245.467, subdivision 3; 245.469; 245.70, subdivision 
          1; 245.4711, subdivisions 1, 2, and 3; 245.474; 
          245.487, subdivisions 2 and 5; 245.4871, subdivision 
          3; 245.4873, subdivision 2; 245.4874; 245.4875, 
          subdivision 5; 245.4876, subdivisions 2, 3, and 4; 
          245.4879; 245.488, subdivision 1; 245.4881, 
          subdivisions 1, 2, 3, and 4; 245.4882, subdivision 1; 
          245. 4883, subdivision 1; 245.4885, subdivisions 1 and 
          2; 245.696, subdivision 2; 245.697, subdivision 2a; 
          245.73, subdivision 2; 245A.02, subdivision 6a; 
          245A.03, subdivision 2; 245A.04, subdivisions 3, 3a, 
          and 3b; 245A.12; 245A.13; 245A.16, subdivision 1; 
          252.46, subdivisions 1, 2, 3, 4, and 12; 253B.03, 
          subdivision 6a; 254B.03, subdivision 4; 256.73, 
          subdivision 3a; 256.736, subdivisions 3, 3b, 4, 10, 
          10a, 11, 14, 16, and 18; 256.737, subdivisions 1, 1a, 
          and 2; 256.74, subdivision 1; 256.936, subdivision 1; 
          256.969, subdivisions 2c and 6a; 256.9695, 
          subdivisions 1 and 3; 256B.055, subdivision 7; 
          256B.056, subdivisions 3 and 4; 256B.057, subdivisions 
          1, 2, and by adding subdivisions; 256B.0575; 256B.059, 
          subdivisions 4 and 5; 256B.0595, subdivisions 1, 2, 
          and 4; 256B.0625, subdivision 13; 256B.14; 256B.431, 
          subdivisions 2b and 7; 256B.495, subdivision 1; 
          256B.69, subdivision 16; 256D.01, subdivision 1a; 
          256D.03, subdivisions 3 and 4; 256D.051, subdivisions 
          1a, 1b, 2, 3, and 8; 256D.09, subdivision 2a; 
          256D.425, subdivision 3; 256H.01, subdivisions 7, 8, 
          and 12; 256H.03, subdivisions 2, 2a, and 2b; 256H.05, 
          subdivisions 1b, 1c, 2, and 5; 256H.08; 256H.09, 
          subdivision 1; 256H.10, subdivision 3; 256H.11, 
          subdivision 1; 256H.15, subdivisions 1 and 2; 256H.21, 
          subdivision 9; 256H.22, subdivisions 2, 3, and 10; 
          256I.05, subdivisions 1 and 7; 257.57, subdivision 1; 
          268.0111, subdivision 4; 268.86, subdivision 2; 
          268.88; 268.881; 268.977, subdivision 1; 515.551, 
          subdivision 10; 518.611, subdivision 4; and 518.613, 
          subdivision 2; Minnesota Statutes Second 1989 
          Supplement, sections 256B.091, subdivision 8; and 
          256D.03, subdivisions 2 and 6; Laws 1988, chapter 689, 
          article 2, section 256, subdivision 3; Laws 1989, 
          chapters 282, article 3, section 98, subdivisions 4 
          and 5; and 338, section 11; 1990 S. F. No. 1698, 
          section 1, if enacted; proposing coding for new law in 
          Minnesota Statutes, chapters 62A; 144; 151; 244; 245; 
          245A; 252; 254A; 256; 256B; and 268; repealing 
          Minnesota Statutes 1988, sections 256.736, 
          subdivisions 1b, 2a, 8, and 17; 256.7365, subdivision 
          8; 256D.06, subdivision 1c; 256H.01, subdivision 14; 
          256H.16; 268.672, subdivision 12; 268.86, subdivision 
          9; and 268.872, subdivision 3; Minnesota Statutes 1989 
          Supplement, sections 245.4711, subdivisions 6, 7, and 
          8; 245.4881, subdivisions 6, 7, 8, 9, and 10; 
          256B.055, subdivision 8; 256B.431, subdivisions 3a and 
          3f; 256H.05, subdivisions 1, 1a, and 3a; Laws 1989, 
          chapter 333, section 11, subdivisions 1 and 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                             APPROPRIATIONS 
    Section 1.  [HUMAN SERVICES; HEALTH; APPROPRIATIONS.] 
    The sums shown in the columns marked "APPROPRIATIONS" are 
appropriated from the general fund, or another fund named, to 
the agencies and for the purposes specified in this act, to be 
available for the fiscal years indicated for each purpose.  The 
figures "1990" and "1991," where used in this article, mean that 
the appropriation or appropriations listed under them are 
available for the year ending June 30, 1990, or June 30, 1991, 
respectively.  

                            SUMMARY BY FUND 
                        1990            1991           TOTAL 
General            $   37,870,000  $   60,925,000  $  98,795,000 
Special Revenue    $       50,000  $       91,000  $     141,000 
TOTAL              $   37,920,000  $   61,016,000  $  98,936,000 
                                           APPROPRIATIONS
                                       Available for the Year
                                          Ending June 30,
                                       1990           1991 
     Sec. 2.  HUMAN SERVICES 
     Subdivision 1.  Appropriation 
by Fund 
General Fund                           38,727,000     58,060,000 
 This appropriation is added to the 
appropriation in Laws 1989, chapter 
282, article 1, section 2. 
     Subd. 2.  Human Services 
Administration                           (115,000)       350,000 
 Of this appropriation, $200,000 is for 
distressed county grants.  The 
commissioner shall award grants to 
counties that received aid under 
Minnesota Statutes, section 245.775, 
for state fiscal year 1989.  The amount 
of the grant for each county is 20 
percent of the amount received in state 
fiscal year 1989. 
     Subd. 3.  Legal and 
Intergovernmental Programs                 -0-          (138,000)
     Subd. 4.  Social Services          3,236,000     13,953,000 
 Notwithstanding Minnesota Statutes, 
section 254B.02, money appropriated for 
the consolidated chemical dependency 
treatment fund for fiscal year 1990 may 
be allocated as needed to the reserve 
accounts created by Minnesota Statutes, 
sections 254B.02, subdivision 3, and 
254B.09, subdivisions 5 and 7.  
 Of this appropriation, $20,000 is for a 
pilot project in Stearns county 
involving court-ordered chemical 
dependency assessments and treatment 
for offenders.  Under the pilot 
program, when a court sentences a 
defendant convicted of a felony and it 
appears from the presentence 
investigation that alcohol or 
controlled substance abuse was a 
contributing factor to the commission 
of the crime, the court may order that 
the defendant be assessed for chemical 
dependency.  In addition, any defendant 
convicted of a violation of Minnesota 
Statutes, section 609.21 or a felony 
violation of Minnesota Statutes, 
section 169.09 shall be assessed for 
chemical dependency as part of the 
presentence investigation.  The 
assessment shall be conducted by a 
local agency, as defined in Minnesota 
Statutes, section 254B.01, subdivision 
5, or by a court-designated assessor 
qualified under rules adopted under 
Minnesota Statutes, section 254B.03, 
subdivision 3, or credentialed by the 
Institute for Chemical Dependency 
Professionals. If the local agency or 
the court-appointed assessor finds that 
the defendant is chemically dependent 
or abusive, the court may order that 
the defendant be treated for chemical 
dependency or abuse.  In any case, the 
local agency shall determine the 
appropriate level of care and authorize 
payment under Minnesota Statutes, 
chapter 254B up to the amount of this 
appropriation without a local match; 
provided that if the assessment is 
conducted by a court-appointed 
assessor, its findings shall be 
provided to the local agency and the 
commissioner of human services before 
payment under chapter 254B is 
authorized.  The pilot program expires 
June 30, 1991. 
The amount appropriated in fiscal year 
1991 to pay for child care subsidy 
expenses above the amount allowed by 
the federal government shall not be 
included as a base adjustment in the 
fiscal year 1992-1993 biennial budget 
request.  The commissioner shall report 
to the legislature regarding this 
provision including its effect on 
county record keeping practices and 
federal financial reimbursement.  The 
commissioner may request additional 
money to continue this activity. 
 Money appropriated in Laws 1989, 
chapter 282, article 1, section 2, 
subdivision 4, for the Joining Forces 
pilot projects does not cancel, but is 
available for fiscal year 1991.  The 
amount appropriated for this activity 
shall not be included as a base 
adjustment in the fiscal year 1992-1993 
biennial budget request. 
     Subd. 5.  Mental Health               -0-         (813,000) 
 Notwithstanding Laws 1989, chapter 282, 
article 1, section 2, subdivision 5, 
$102,000 is transferred in fiscal year 
1991 from state mental health grants to 
state mental health administration, and 
2.25 positions are authorized to 
implement federal requirements relating 
to nursing homes and people with mental 
illness. 
The $10,000 appropriated for camping 
activities for persons with mental 
illness by Laws 1989, chapter 282, 
article 1, section 2, subdivision 5, 
shall be used for adults with mental 
illness from across the state, for a 
camping program which utilizes the BWCA 
and is cooperatively sponsored by 
client advocacy, mental health 
treatment, and outdoor recreation 
agencies. 
 $500,000 may be transferred from the 
appropriation in Laws 1989, chapter 
282, article 1, section 2, subdivision 
5, in fiscal year 1990 for state mental 
health grants to fiscal year 1991 for 
state mental health special projects.  
These funds are to be used for 
alternative placements for people being 
discharged from the Metro Regional 
Treatment Center. 
 Notwithstanding the rider relating to 
the family-based community support 
pilot project in Laws 1989, chapter 
282, article 1, section 2, subdivision 
5, the base funding level for the 
project for the 1992-1993 biennial 
budget must be a straight line 
annualization of the fiscal year 1991 
appropriation. 
     Subd. 6.  Family Support 
Programs                               (5,102,000)    (3,485,000)
(a) Aid to Families with Dependent 
Children, General Assistance, Work 
Readiness, and Minnesota Supplemental
Aid
  $(2,352,000)  $(1,143,000)
(b) Family Support Programs 
Administration 
  $(2,750,000)  $(2,342,000)
 During the biennium ending June 30, 
1991, the commissioner may request, and 
providers receiving General Assistance 
or Minnesota Supplemental Aid 
negotiated rate payments must provide, 
information about their operating costs 
and property costs used in determining 
their negotiated rates.  This 
information must be provided in a 
format specified by the commissioner. 
 The commissioner may transfer money 
from other departmental administrative 
accounts to the child support 
enforcement and MAXIS information 
systems account to pay for fiscal year 
1991 system costs, if necessary. 
 Money appropriated in Laws 1989, 
chapter 282, article 1, section 2, 
subdivision 6, for assisting in the 
development of a statewide negotiated 
rate setting system does not cancel to 
the general fund but is available in 
fiscal year 1991. 
 The commissioner of human services 
shall postpone the implementation of 
the establishment of program operating 
cost payment rates as provided in 
Minnesota Statutes, section 256B.501, 
subdivision 3g, until October 1, 1992.  
Beginning January 1, 1990, each 
facility's interdisciplinary team shall 
assess each new admission to the 
facility.  The quality assurance and 
review teams in the department of 
health shall continue to assess all 
residents annually.  The quality 
assurance and review teams and the 
interdisciplinary team shall assess 
residents using a uniform assessment 
instrument developed by the 
commissioner of human services and the 
ICF/MR reimbursement and quality 
assurance and review procedures 
manual.  The commissioner of human 
services shall annually collect client 
statistical data based on assessments 
performed by the quality assurance and 
review teams and by the 
interdisciplinary team on the cost 
reports submitted by the facility and 
may use this data in the calculation of 
operating cost payment rates after 
October 1, 1992.  
 Federal financial participation 
received during the biennium ending 
June 30, 1991, for self-employment 
investment demonstration project 
expenditures is appropriated to the 
commissioner to operate the 
self-employment investment 
demonstration project. 
 Money appropriated in Laws 1989, 
chapter 282, article 1, section 2, 
subdivision 6 for administration and 
maintenance of the child support 
enforcement information system does not 
cancel but is available for fiscal year 
1991 to finalize development of the 
system. 
 $50,000 for fiscal year 1991 is for a 
study of migration of welfare 
recipients and for a study of items 
that should be included in calculating 
the AFDC standard of need.  
     Subd. 7.  Health Care Programs    40,708,000     48,293,000 
(a) Medical Assistance, General 
Assistance Medical Care, Preadmission 
Screening and Alternative Care Grants, 
and Children's Health Plan 
  $ 40,708,000   $ 47,120,000 
 Money appropriated for preadmission 
screening and alternative care grants 
for fiscal year 1991 may be used for 
these purposes in fiscal year 1990. 
 Payments for obstetrical and pediatric 
services rendered on or after July 1, 
1990, to medical assistance recipients 
are increased by 15 percent.  This 
increase must be applied to the 
provider categories under section 
6402(b) of the Omnibus Budget 
Reconciliation Act of 1989, and 
applicable federal guidelines. For 
obstetrical services, this increase is 
in addition to the 10 percent increase 
effective October 1, 1988. 
 Of this appropriation, up to $14,000 
may be used to reimburse the state 
share of medical assistance allowable 
payments to pharmacies providing 
services to one or more nursing homes 
during the period of May to December 
1987, for claims rejected under 
Minnesota Rules, part 9505.0450.  The 
reimbursement is available only if the 
pharmacy demonstrates to the 
satisfaction of the commissioner that 
its computer system failed to recognize 
a claim for electronic billing because 
a computer file indicator designated 
the claim as a manual bill. 
 Effective for services rendered on or 
after July 1, 1990, medical assistance 
payments to ambulance services are 
increased by 7.5 percent from the lower 
of:  (1) the submitted charges; or (2) 
the 50th percentile of the prevailing 
charge for 1982. 
 Medical assistance and general 
assistance medical care payments for 
individual and group psychotherapy 
rendered on or after July 1, 1990, are 
reduced by six percent.  Effective for 
services rendered on or after October 
1, 1990, the payment rate for 
masters-prepared social workers and 
registered nurses providing mental 
health services is 65 percent of the 
rate paid to other mental health 
professionals. 
 Notwithstanding Laws 1989, chapter 282, 
article 1, section 2, subdivision 7, 
clause (a), the 50th percentile of the 
prevailing charge for 1982 must be 
estimated by the commissioner in the 
following situations: 
(1) there were less than ten billings 
in the calendar year specified in 
legislation governing maximum payment 
rates; 
 (2) the service was not available in 
the calendar year specified in 
legislation governing maximum payment 
rates; 
 (3) the payment amount is the result of 
a provider appeal; 
 (4) the procedure code description has 
changed since the calendar year 
specified in legislation governing 
maximum payment rates, and, therefore, 
the prevailing charge information 
reflects the same code but a different 
procedure description; or 
 (5) the 50th percentile reflects a 
payment which is grossly inequitable 
when compared with payment rates for 
procedures or services which are 
substantially similar. 
 When one of the above situations occur, 
the commissioner will use the following 
methodology to reconstruct a rate 
comparable to the 50th percentile of 
the prevailing rate: 
 (1) refer to information which exists 
for the first nine billings in the 
calendar year specified in legislation 
governing maximum payment rates; or 
 (2) refer to surrounding or comparable 
procedure codes; or 
 (3) refer to the 50th percentile of 
years subsequent to the calendar year 
specified in legislation governing 
maximum payment rates and backdown the 
amount by applying an appropriate 
Consumer Price Index formula; or 
 (4) refer to relative value indexes; or 
 (5) refer to reimbursement information 
from other third parties, such as 
Medicare. 
If the federal government approves a 
client-specific invoice payment system, 
the nonfederal share of the costs of 
case management services provided to 
persons with mental retardation or 
related conditions receiving home- and 
community-based services funded through 
the waiver granted under section 
1915(c)(7)(B) of the Social Security 
Act shall be provided from 
state-appropriated medical assistance 
grant funds for the biennium ending 
June 30, 1991.  The division of cost is 
subject to the provisions of Minnesota 
Statutes, section 256B.19, and the 
services are included as covered 
programs and services under Minnesota 
Statutes, section 256.025, subdivision 
2. 
     If the federal government does not 
approve a client-specific invoice 
payment system for this waiver, state 
funds currently appropriated to the 
medical assistance grant fund shall be 
transferred to a separate nonmedical 
assistance account.  The commissioner 
shall use this account to establish a 
pilot program to reimburse counties for 
case management to persons served under 
this waiver.  To be eligible for 
payment, counties must submit requests 
for reimbursement in the form 
prescribed by the commissioner. 
     The rate for case management services 
funded for any person served by this 
waiver shall not exceed the lesser of 
the current average rate for case 
management services provided to all 
persons served under the home- and 
community-based waiver for persons with 
developmental disabilities in the same 
county or $65 per hour.  The amount of 
case management per person funded in 
this manner must not exceed 30 hours 
for a recipient in fiscal year 1991 
unless otherwise authorized by the 
commissioner.  Total state money 
expended under this provision must not 
exceed $67,000 for the biennium ending 
June 30, 1991. 
     Any transfer of money to implement this 
provision must be made by direction of 
the governor after consulting with the 
legislative advisory commission. 
 The maximum pharmacy dispensing fee 
under medical assistance and general 
assistance medical care is $4.10. 
 If approved by the federal government, 
medical assistance payments to American 
Indian health services facilities for 
outpatient medical services billed 
after June 30, 1990, must be in 
accordance with the rate published by 
the United States Assistant Secretary 
for Health under the authority of 
United States Code, title 42, sections 
248(a) and 249(b).  General assistance 
medical care payments to American 
Indian health services facilities for 
the provision of outpatient medical 
care services billed after June 30, 
1990, must be in accordance with the 
general assistance medical care rates 
paid for the same services when 
provided in a facility other than an 
American Indian health service facility.
 In order to facilitate outreach for 
prenatal and infant medical care 
covered under Minnesota Statutes, 
chapters 265B and 256D, such care is 
considered part of Minnesota's plan for 
children's health care and may be 
referred to as the Children's Health 
Plan Medical Assistance portion.  
Eligibility for these services shall be 
included in descriptions, outreach 
materials, and other communications 
about the Children's Health Plan. 
(b) Health Care Programs 
Administration $ -0-        $ 1,173,000 
 For fiscal years 1990 and 1991, federal 
receipts received for review of medical 
assistance prepaid health plan 
activities and for the study of 
utilization of outpatient mental health 
services by children enrolled in 
medical assistance are appropriated to 
the commissioner for these purposes. 
 For fiscal years 1990 and 1991, federal 
money received as a result of state 
expenditures for the development of an 
early childhood screening tool to 
screen for mental health problems in 
children through the early, periodic, 
screening, diagnosis, and treatment 
component of the medical assistance 
program is appropriated to the 
commissioner for development and 
training.  The state appropriation for 
this activity shall not be included as 
a base adjustment in the fiscal year 
1992-1993 biennial budget request. 
 Notwithstanding Laws 1989, chapter 282, 
article 3, section 62, for the biennium 
ending June 30, 1991, the commissioner 
may transfer money from contracts to 
salaries to hire qualified persons to 
provide case management to 
brain-injured persons. 
 For the biennium ending June 30, 1991, 
the commissioner may transfer money 
from contracts to salaries to hire two 
registered nurses to identify and 
restrict medical assistance and general 
assistance medical care recipients who 
have used services frequently or in an 
amount that is not medically necessary. 
 Before collecting the changed parental 
contribution under article 2, section 
56, counties must provide 30 days 
advance, written notice of the amount 
of an increased or new parental 
contribution. 
 The commissioner of human services, in 
consultation with the commissioners of 
revenue and commerce, shall study 
issues related to prescription drug 
costs.  Issues to be examined must 
include, but are not limited to, the 
following:  levels of copayments and 
deductibles for prescription drug 
coverage, the cost of prescription 
drugs, the need for prescription drug 
coverage among the general population, 
and the feasibility of private and 
public initiatives to ensure affordable 
prescription drug coverage.  The study 
must examine the feasibility of a state 
assistance program for persons with 
high out-of-pocket expenses for 
prescription maintenance and 
life-sustaining medications who are 
ineligible for medical assistance or 
general assistance medical care, do not 
have private or employer-sponsored 
health insurance coverage for 
prescription drug expenses, and have 
family incomes equal to or less than 
185 percent of federal poverty 
guidelines.  The study must provide 
recommendations for setting the level 
of out-of-pocket expenses for 
prescription maintenance and 
life-sustaining medications at which 
the state would provide assistance; 
examine the practicality and costs of 
different methods of providing 
assistance, including the provision of 
tax credits and the establishment of a 
state program to provide direct payment 
for out-of-pocket expenses for 
prescription maintenance and 
life-sustaining medications; and 
provide estimates of the eligible 
population and costs of the program for 
different out-of-pocket expense 
eligibility levels and methods of 
providing assistance.  The commissioner 
of human services shall report findings 
and recommendations to the legislature 
by February 15, 1991. 
 Of the appropriation for 1991, $70,000 
is for a regional demonstration project 
under Minnesota Statutes, section 
256B.73, to provide health coverage to 
low-income uninsured persons.  Money 
appropriated in Laws 1988, chapter 689, 
article 1, section 2, subdivision 5, 
for the project does not cancel but is 
available for 1991.  These 
appropriations are available when the 
planning for the project is complete, 
sufficient money has been committed 
from nonstate sources to allow the 
project to proceed, and the project is 
prepared to begin accepting and 
approving applications from uninsured 
individuals.  The commissioner shall 
contract with the coalition formed for 
the nine counties named in Minnesota 
Statutes, section 256B.73, subdivision 
2. 
 The commissioner of human services 
shall study the impact the use of 
nursing and other personnel employed by 
temporary help employment agencies is 
having on nursing homes reimbursed by 
the medical assistance program.  The 
study shall gather information on rates 
charged by employment agencies compared 
with wages paid to nursing home 
employees and shall determine the 
impact the use of employment agency 
personnel is having on nursing homes 
reimbursed by medical assistance, 
including staff retention problems, 
staff morale problems, continuity of 
care concerns, and financial impact.  
The commissioner shall report the 
results of the study to the legislature 
by December 15, 1990, along with 
recommendations for reducing the need 
for nursing homes to use employees 
provided by employment agencies and 
recommendations regarding the need for 
further regulation of temporary help 
employment agencies that supply 
personnel for nursing homes. 
     Subd. 8.  State Residential 
Facilities                                -0-           (100,000)
 Notwithstanding Minnesota Statutes 
sections 94.09 to 94.16, the 
commissioner of administration may 
transfer the title of the state-owned 
electrical substation located at the 
Brainerd regional human service center 
to the Brainerd public utilities 
commission.  The transfer may include 
the substation, allied equipment, and 
real estate needed for access to the 
substation.  
 Notwithstanding Minnesota Statutes, 
section 245.50, subdivision 3, clause 
(5), and section 246.23, the 
commissioner may enter into interstate 
contractual agreements to provide 
chemical dependency services through 
regional treatment center programs if 
the contracts provide for full payment 
for the services from private funds, 
nongovernmental third-party payments, 
or a non-Minnesota state governmental 
entity. 
     Sec. 3.  VETERANS NURSING 
HOMES BOARD                               -0-           (275,000)
 For the biennium ending June 30, 1991, 
the board may set "costs of care" at 
the Silver Bay facility based on costs 
from average skilled nursing care 
provided to residents of the 
Minneapolis Veterans Home.  
     Sec. 4.  COMMISSIONER OF JOBS 
AND TRAINING 
     Subdivision 1.  Appropriation 
by Fund
General Fund                            (600,000)       (317,000)
 This appropriation is added to the 
appropriation in Laws 1989, chapter 
282, article 1, section 5. 
     Subd. 2.  Employment and 
Training         
General Fund           
 $(600,000)     $(317,000)
 Effective the day following final 
enactment, $200,000 of funds made 
available to the state under United 
States Code, title 42, section 1103, is 
appropriated from the unemployment 
compensation fund to the commissioner 
of jobs and training and is available 
for obligation until two years after 
the date of enactment of this section 
for use in the procurement of 
electronic data processing equipment by 
the department of jobs and training for 
administration of the unemployment 
compensation program and the system of 
public employment offices.  The amount 
that may be obligated during a fiscal 
year is limited as required by United 
States Code, title 42, section 
1104(d)(2)(D). 
 MEED service providers may retain 75 
percent of outstanding payback funds 
they collect to be used for the cost of 
collection and for program closeout 
activities without regard to existing 
cost category requirements.  The 
commissioner of jobs and training may 
retain the following money, up to a 
total of $70,000, to be used to close 
out the MEED program:  25 percent of 
the outstanding payback funds collected 
by MEED service providers, 100 percent 
of payback funds collected by the 
collection agency under contract with 
the department, and any remaining 
unspent payback funds in the special 
revenue account. 
 Effective the day following final 
enactment, the commissioner shall 
estimate the amount of unobligated 
funds anticipated by each service 
provider in the Minnesota employment 
and economic development program on 
June 30, 1990, and shall reduce the 
amount available to each local service 
unit service provider by the estimated 
amount.  If the total estimated amount 
is less than $600,000, the commissioner 
shall reduce each local service unit 
service provider proportionately to 
bring the total of unobligated funds to 
$600,000.  This reduction shall not 
apply to money obligated through 
existing contracts with employers that 
are in effect on the day of enactment 
nor shall the reduction impact 
negatively on the integrity of the MEED 
program. 
 Notwithstanding Laws 1989, chapter 282, 
article 1, section 5, subdivision 5, 
any balance remaining in the first year 
of the appropriation for the Minnesota 
employment and economic development 
program does not carry forward to the 
second year. 
Any balance remaining in the first year 
of the appropriation in Laws 1989, 
chapter 282, article 1, section 5, 
subdivision 5, for the inventory, 
referral, and intake system does not 
cancel but is available for the second 
year. 
 The commissioner of finance may include 
as a budget change request in the 
fiscal year 1992 and 1993 detailed 
expenditure budget submitted to the 
legislature under Minnesota Statutes, 
section 16A.11, an annual adjustment in 
the extended employment program grants 
as of July 1 of each year, beginning 
July 1, 1991, by a percentage amount 
equal to the percentage increase, if 
any, in the consumer price index 
(CPI-U-U.S.) city average, as published 
by the Bureau of Labor Statistics, 
United States Department of Labor, 
during the preceding calendar year for 
the biennium ending June 30, 1993. 
     Sec. 5.  CORRECTIONS 
     Subdivision 1.  Total 
Appropriation                              -0-         3,537,000 
 This appropriation is added to the 
appropriation in Laws 1989, chapter 
282, article 1, section 6. 
     Subd. 2.  Correctional 
Institutions             
    $ -0-         $2,105,000
 Of this appropriation, $1,755,000 for 
the biennium ending June 30, 1991, is 
for services to adult women offenders 
committed to the commissioner. 
 For the biennium ending June 30, 1991, 
and effective May 1, 1990, 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 remaining 
from fiscal year 1990 shall not cancel, 
but are available for the second year 
of the biennium. 
     Subd. 3.  Community Services 
     $ -0-     $1,482,000
 Whenever offenders are assigned for the 
purposes of work under agreement with 
any state department or agency, local 
unit of government, or any other 
government subdivision, the state 
department, agency, local unit of 
government, or other government 
subdivision must certify to the 
appropriate bargaining agent that the 
work performed by inmates will not 
result in the displacement of currently 
employed workers or workers on seasonal 
layoff or layoff from a substantially 
equivalent position, including partial 
displacement such as reduction in hours 
of nonovertime work, wages, or other 
employment benefits. 
 Of the appropriation for the community 
corrections act for fiscal year 1991, 
$250,000 must be spent as follows:  
$125,000 for west central Minnesota and 
$125,000 for central Minnesota to 
establish secure juvenile detention 
centers.  This amount must not be 
included in the department's base 
funding level for purposes of preparing 
the budget for fiscal years 1992 and 
1993. 
     Subd. 4.  Management Services
     $ -0-        $(50,000)
     Sec. 6.  SENTENCING GUIDELINES 
COMMISSION                                  3,000          5,000 
 The commission may use the $38,000 
appropriated for fiscal year 1991 for a 
study on the mandatory minimum 
sentencing law to also complete the 
study on correctional resources. 
     Sec. 7.  HEALTH 
     Subdivision 1.  Appropriation 
by Fund 
General Fund                              (260,000)      (85,000)
 This appropriation is added to the 
appropriation in Laws 1989, chapter 
282, article, section 9. 
     Subd. 2.  Preventive and 
Protective Health Services   
   $(210,000)      $(357,000)
 Of this amount, $56,000 is to validate 
the respiratory health findings of the 
Childhood Respiratory Health 
Feasibility Study.  The commissioner 
shall present the results of this 
follow-up study and recommendations to 
the legislature by December 1, 1992. 
 The commissioner shall conduct detailed 
planning and research concerning a 
state occupational health surveillance 
system and report the results to the 
legislature by June 30, 1991. 
 For the fiscal year ending June 30, 
1991, the commissioner is authorized to 
accept up to $231,904 in federal 
funding for indoor radon abatement if 
granted by the United States 
Environmental Protection Agency (EPA). 
 For the fiscal year ending June 30, 
1990, the commissioner may accomplish 
the $210,000 reduction in AIDS case 
management by reductions in other AIDS 
grants or other disease prevention and 
control activities. 
     Subd. 3.  Health Delivery 
Systems             
   $(50,000)    $132,000
 The commissioner shall recover the cost 
of establishing the regulatory systems 
required in Minnesota Statutes, 
sections 153A.13 to 153A.18, by 
assessing hearing instrument sellers an 
annual surcharge of $36 for a period of 
five years.  The receipts from the 
annual surcharge must be deposited in 
the general fund as nondedicated 
receipts. 
 Of the appropriation for the fiscal 
year ending June 30, 1991, $250,000 is 
for financial assistance grants to 
rural hospitals in isolated areas of 
the state.  To qualify for a grant, a 
hospital must (1) be eligible to be 
classified as a sole-community hospital 
according to the criteria in the Code 
of Federal Regulations, title 42, 
section 412.92; (2) have experienced 
net income losses in the two most 
recent consecutive hospital fiscal 
years ending prior to January 1, 1989, 
for which audited financial information 
is available; and (3) consist of 20 or 
fewer licensed beds.  Before applying 
for a grant, the hospital must have 
developed a strategic plan.  The 
commissioner shall award grants in 
equal amounts.  This appropriation 
shall not be included as a base 
adjustment in the fiscal year 1992-1993 
biennial budget request. 
 By January 15, 1991, the department of 
health shall submit to the legislature, 
a bill providing for the licensure of 
residential care homes.  The bill shall 
be based on information contained in 
the joint report of the departments of 
health and human services to the 
legislature prepared in accordance with 
Laws 1989, chapter 282, article 2, 
section 213.  The proposal for the 
licensure of residential care homes 
shall also estimate the fiscal impact 
associated with implementation of a 
licensure program on the state, 
counties, and on providers of these 
services.  The department of human 
services and the interagency board for 
quality assurance shall cooperate with 
the department of health in developing 
the legislative proposal and fiscal 
data.  $70,000 is appropriated from the 
general fund to the department of 
health for the purposes of completing 
this activity. 
 Notwithstanding the provisions of 
Minnesota Statutes, section 245A.03, 
subdivision 2, board and lodging 
establishments licensed by the 
commissioner of health that provide 
services for five or more persons whose 
primary diagnosis is mental illness and 
who have refused an appropriate 
residential program offered by a county 
agency shall be exempt from licensure 
under Minnesota Statutes, sections 
245A.01 to 245A.16, until the 
residential care home license is 
available.  At that time, these 
establishments shall be licensed under 
the provisions of Minnesota Statutes, 
sections 245A.01 to 245A.16, or as a 
residential care home. 
 Notwithstanding the provisions of 
Minnesota Statutes, section 256I.05, 
subdivision 7, payments to recipients 
residing in a board and lodging 
establishment that must meet the 
special services licensing rules 
established by the commissioner of 
health under the provisions of 
Minnesota Statutes, section 157.031, 
for which the county has a negotiated 
rate, shall be increased to cover the 
necessary additional costs incurred by 
the establishment to meet the rule 
requirements.  The necessary additional 
costs shall be determined by the county 
in which the establishment is located 
and approved by the commissioner of 
human services.  In order for a 
recipient to receive the increased 
payment, a board and lodging 
establishment must submit information 
to support the necessary additional 
costs on forms provided by the 
commissioner of human services. 
 The special service licensing rules for 
board and lodging establishments 
required under the provisions of 
Minnesota Statutes, section 157.031, 
shall be adopted by July 1, 1991. 
 Notwithstanding the provisions of 
Minnesota Statutes, section 144A.48, 
subdivision 2, clause (9), the 
commissioner of health may issue a 
hospice license to a free standing 
residential facility that was 
registered and was providing hospice 
services as of March 1, 1990, if such 
facility is licensed as a board and 
lodging facility, provides services to 
no more than six residents, meets Group 
R, Division 3 occupancy requirements 
and meets the fire protection 
provisions of chapter 21 of the 1985 
Life Safety Code, NFPA 101, for 
facilities housing persons with 
impractical evacuation capabilities.  
Continued licensure as a hospice shall 
be contingent on the facility's 
compliance with the department of 
health rules for hospices and for board 
and lodging facilities providing health 
supervision services upon adoption of 
those rules.  The commissioner of 
health, in consultation with the 
interagency board for quality 
assurance, shall report to the 
legislature by February 15, 1991, with 
recommendations regarding the licensure 
of freestanding residential hospice 
facilities and any limitations on 
licensure necessary to maintain the 
moratorium or nursing home licensure. 
     Subd. 4.  Health Support 
Services       
   $ -0-       $140,000
 The commissioner may carry forward into 
fiscal year 1991 up to $260,000 of 
unobligated balances of fiscal year 
1990 appropriations to be used solely 
to pay increased rental costs in fiscal 
year 1991.  If the balances are less 
than $260,000, the commissioner may use 
unobligated salary appropriations for 
fiscal year 1991, up to an amount that 
when added to the unobligated balances 
carried forward does not exceed 
$260,000, to pay for increased rental 
costs.  
     Sec. 8.  HEALTH RELATED BOARDS 
     Subdivision 1.  Total 
Appropriation 
Special Revenue Fund                       50,000         91,000
     Subd. 2.  Social Work 
    $ -0-        $82,000
     Subd. 3.  Psychology    
    $46,000       $ -0- 
     Subd. 4.  Optometry 
     $4,000       $4,000
     Subd. 5.  Pharmacy 
    $ -0-         $5,000

                               ARTICLE 2 

                 HEALTH, LICENSING, AND SOCIAL SERVICES 
    Section 1.  Minnesota Statutes 1988, section 4.071, is 
amended to read: 
    4.071 [OIL OVERCHARGE MONEY.] 
    Subdivision 1.  [APPROPRIATION REQUIRED.] "Oil overcharge 
money" means money received by the state as a result of 
litigation or settlements of alleged violations of federal 
petroleum pricing regulations.  Oil overcharge money may not be 
spent until the legislative commission on Minnesota resources 
has reviewed the proposed projects and the money it is 
specifically appropriated by law. 
    Subd. 2.  [MINNESOTA RESOURCES PROJECTS.] The legislature 
intends to appropriate one-half of the oil overcharge money for 
projects that have been reviewed and recommended by the 
legislative commission on Minnesota resources.  A work plan must 
be prepared for each proposed project for review by the 
commission.  The commission must recommend specific projects to 
the legislature. 
     Subd. 3.  [ENERGY CONSERVATION PROJECTS.] The oil 
overcharge money that is not otherwise appropriated by law or 
dedicated by court order is appropriated to the commissioner of 
jobs and training for energy conservation projects that directly 
serve low-income Minnesotans.  This appropriation is available 
until spent. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
116.76, subdivision 9, is amended to read: 
    Subd. 9.  [GENERATOR.] "Generator" means a person whose 
activities produce infectious waste.  "Generator" does not 
include a person who produces sharps as a result of 
administering medication to oneself.  "Generator" does not 
include an ambulance service licensed under section 144.802, an 
eligible board of health, community health board, or public 
health nursing agency as defined in section 116.78, subdivision 
10, or a program providing school health service under section 
123.35, subdivision 17.  
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
116.78, is amended by adding a subdivision to read:  
    Subd. 9.  [DISPOSAL OF INFECTIOUS WASTE BY AMBULANCE 
SERVICES.] Any infectious waste, as defined in section 116.76, 
subdivision 12, produced by an ambulance service in the 
transport or care of a patient must be properly packaged and 
disposed of at the destination hospital or at the nearest 
hospital if the patient is not transported.  A hospital must 
accept the infectious waste if it is properly packaged according 
to the standards the hospital uses for packaging its own 
infectious wastes.  The hospital may charge the ambulance 
service a reasonable fee for disposal of the infectious waste.  
Nothing in this subdivision shall require a hospital to accept 
infectious waste if the waste is of a type not generated by the 
hospital or if the hospital cannot safely store the waste.  A 
hospital that accepts infectious waste under this subdivision is 
not subject to those provisions of section 116.79, subdivision 
4, paragraph (a), that apply to the storage or decontamination 
of infectious or pathological waste generated at a site other 
than the hospital. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
116.78, is amended by adding a subdivision to read:  
    Subd. 10.  [DISPOSAL OF INFECTIOUS WASTE BY PUBLIC HEALTH 
AGENCIES AND PROGRAMS PROVIDING SCHOOL HEALTH SERVICES.] Any 
infectious waste, as defined in section 116.76, subdivision 12, 
produced by an eligible board of health, community health board, 
or public health nursing agency or a program providing school 
health services under section 123.35, subdivision 17, must be 
properly packaged and may be disposed of at a hospital.  For 
purposes of this subdivision, an "eligible board of health, 
community health board, or public health nursing agency" is 
defined as a board of health, community health board, or public 
health nursing agency located in a county with a population of 
less than 40,000.  A hospital must accept the infectious waste 
if it is properly packaged according to the standards the 
hospital uses for packaging its own infectious wastes.  The 
hospital may charge an eligible board of health, community 
health board, or public health nursing agency or a program 
providing school health services a reasonable fee for disposal 
of the infectious waste.  Nothing in this subdivision shall 
require a hospital to accept infectious waste if the waste is of 
a type not generated by the hospital or if the hospital cannot 
safely store the waste.  A hospital that accepts infectious 
waste under this subdivision is not subject to those provisions 
of section 116.79, subdivision 4, paragraph (a), that apply to 
the storage or decontamination of infectious or pathological 
waste generated at a site other than the hospital. 
     Sec. 5.  [144.062] [VACCINE COST REDUCTION PROGRAM.] 
    The commissioner of administration, after consulting with 
the commissioner of health, shall negotiate discounts or rebates 
on vaccine or may purchase vaccine at reduced prices.  Vaccines 
may be offered for sale to medical care providers at the 
department's cost plus a fee for administrative costs.  As a 
condition of receiving the vaccine at reduced cost, a medical 
care provider must agree to pass on the savings to patients.  
The commissioner of health may transfer money appropriated for 
other department of health programs to the commissioner of 
administration for the initial cost of purchasing vaccine, 
provided the money is repaid by the end of each state fiscal 
year and the commissioner of finance approves the transfer.  
Proceeds from the sale of vaccines to medical care providers, 
including fees collected for administrative costs, are 
appropriated to the commissioner of administration.  If the 
commissioner of administration, in consultation with the 
commissioner of health, determines that a vaccine cost reduction 
program is not economically feasible or cost effective, the 
commissioner may elect not to implement the program, but shall 
provide a report to the legislature that explains the reasons 
for the decision. 
    Sec. 6.  [144.1465] [FINDING AND PURPOSE.] 
    The legislature finds that rural hospitals are an integral 
part of the health care delivery system and are fundamental to 
the development of a sound rural economy.  The legislature 
further finds that access to rural health care must be assured 
to all Minnesota residents.  The rural health care system is 
undergoing a restructuring that threatens to jeopardize access 
in rural areas to quality health services.  To assure continued 
rural health care access the legislature proposes to establish a 
grant program to assist rural hospitals and their communities 
with the development of strategic plans and transition projects, 
provide subsidies for geographically isolated hospitals facing 
closure, and examine the problem of recruitment and retention of 
rural physicians, nurses, and other allied health care 
professionals. 
    Sec. 7.  [144.147] [RURAL HOSPITAL PLANNING AND TRANSITION 
GRANT PROGRAM.] 
    Subdivision 1.  [DEFINITION.] "Eligible rural hospital" 
means any nonfederal, general acute care hospital that: 
    (1) is either located in a rural area, as defined in the 
federal Medicare regulations, Code of Federal Regulations, title 
42, section 405.1041, or located in a community with a 
population of less than 5,000, according to United States Census 
Bureau statistics, outside the seven-county metropolitan area; 
    (2) has 100 or fewer beds; 
    (3) has experienced net income losses in at least two of 
the three most recent consecutive hospital fiscal years for 
which audited financial information is available; 
    (4) is not for profit; and 
     (5) has not been awarded a grant under the federal rural 
health transition grant program.  
    Subd. 2.  [GRANTS AUTHORIZED.] The commissioner shall 
establish a program of grants to assist eligible rural 
hospitals.  The commissioner shall award grants to hospitals and 
communities for the purposes set forth in paragraphs (a) and (b).
    (a) Grants may be used by hospitals and their communities 
to develop strategic plans for preserving access to health 
services.  At a minimum, a strategic plan must consist of:  
    (1) a needs assessment to determine what health services 
are needed and desired by the community.  The assessment must 
include interviews with or surveys of area health professionals, 
local community leaders, and public hearings; 
    (2) an assessment of the feasibility of providing needed 
health services that identifies priorities and timeliness for 
potential changes; and 
    (3) an implementation plan.  
    The strategic plan must be developed by a committee that 
includes representatives from the hospital, local public health 
agencies, other health providers, and consumers from the 
community.  
    (b) The grants may also be used by eligible rural hospitals 
that have developed strategic plans to implement transition 
projects to modify the type and extent of services provided, in 
order to reflect the needs of that plan.  Grants may be used by 
hospitals under this paragraph to develop hospital-based 
physician practices that integrate hospital and existing medical 
practice facilities that agree to transfer their practices, 
equipment, staffing, and administration to the hospital.  Not 
more than one-third of any grant shall be used to offset losses 
incurred by physicians agreeing to transfer their practices to 
hospitals.  
    Subd. 3.  [CONSIDERATION OF GRANTS.] In determining which 
hospitals will receive grants under this section, the 
commissioner shall take into account:  
    (1) improving community access to hospital or health 
services; 
    (2) changes in service populations; 
    (3) demand for ambulatory and emergency services; 
    (4) the extent that the health needs of the community are 
not currently being met by other providers in the service area; 
    (5) the need to recruit and retain health professionals; 
and 
    (6) the involvement and extent of support of the community 
and local health care providers.  
     Subd. 4.  [ALLOCATION OF GRANTS.] (a) Eligible hospitals 
must apply to the commissioner no later than September 1, 1990, 
for grants awarded in the 1991 state fiscal year; and no later 
than September 1, 1990, for grants awarded in the 1992 state 
fiscal year. 
    (b) The commissioner may award at least two grants for each 
fiscal year.  The commissioner must make a final decision on the 
funding of each application within 60 days of the deadline for 
receiving applications. 
     (c) Each relevant community health board has 30 days in 
which to review and comment to the commissioner on grant 
applications from hospitals in their community health service 
area. 
     (d) In determining which hospitals will receive grants 
under this section, the commissioner shall consider the 
following factors: 
     (1) Description of the problem, description of the project 
and the likelihood of successful outcome of the project.  The 
applicant must explain clearly the nature of the health services 
problems in their service area, how the grant funds will be 
used, what will be accomplished, and the results expected.  The 
applicant should describe achievable objectives, a timetable, 
and roles and capabilities of responsible individuals and 
organizations. 
     (2) The extent of community support for the hospital and 
this proposed project.  The applicant should demonstrate support 
for the hospital and for the proposed project from other local 
health service providers and from local community and government 
leaders.  Evidence of such support may include past commitments 
of financial support from local individuals, organization or 
government entities; and commitment of financial support, 
in-kind services or cash, for this project. 
    (3) The comments, if any, resulting from a review of the 
application by the community health board in whose community 
health service area the hospital is located. 
    (e) In evaluating applications, the commissioner shall 
score each application on a 100 point scale, assigning the 
maximum of 70 points for an applicant's understanding of the 
problem, description of the project, and likelihood of 
successful outcome of the project; and a maximum of 30 points 
for the extent of community support for the hospital and this 
project.  The commissioner may also take into account other 
relevant factors. 
     (f) A grant to a hospital, including hospitals that submit 
applications as consortia, may not exceed $50,000 a year, and 
may not exceed a term of two years.  Prior to the receipt of any 
grant, the hospital must certify to the commissioner that at 
least one-half of the amount, which may include in-kind 
services, is available for the same purposes from nonstate 
sources.  A hospital receiving a grant under this section may 
use the grant for any expenses incurred in the development of 
strategic plans or the implementation of transition projects 
with respect to which the grant is made.  Project grants may not 
be used to retire debt incurred with respect to any capital 
expenditure made prior to the date on which the project is 
initiated. 
    Subd. 5.  [EVALUATION.] The commissioner shall evaluate the 
overall effectiveness of the grant program.  The commissioner 
may collect, from the hospital, and communities receiving 
grants, the information necessary to evaluate the grant 
program.  Information related to the financial condition of 
individual hospitals shall be classified as nonpublic data. 
    Sec. 8.  1990 S.F. No. 1698, section 1, if enacted, is 
amended to read: 
    Section 1.  [144.551] [HOSPITAL CONSTRUCTION MORATORIUM.] 
    Subdivision 1.  [RESTRICTED CONSTRUCTION OR MODIFICATION.] 
(a) Until July 1, 1993, the following construction or 
modification may not be commenced:  
    (1) any erection, building, alteration, reconstruction, 
modernization, improvement, extension, lease, or other 
acquisition by or on behalf of a hospital that increases the bed 
capacity of a hospital, relocates hospital beds from one 
physical facility, complex, or site to another, or otherwise 
results in an increase or redistribution of hospital beds within 
the state; and 
    (2) the establishment of a new hospital.  
    (b) This section does not apply to:  
    (1) construction or relocation within a county by a 
hospital, clinic, or other health care facility that is 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 patients from outside the state of Minnesota; 
    (2) a project for construction or modification for which a 
health care facility held an approved certificate of need on May 
1, 1984, regardless of the date of expiration of the 
certificate; 
    (3) a project for which a certificate of need was denied 
before the date of enactment of this section if a timely appeal 
results in an order reversing the denial; 
    (4) a project exempted from certificate of need 
requirements by Laws 1981, chapter 200, section 2; 
    (5) a project involving consolidation of pediatric 
specialty hospital services within the Minneapolis-St. Paul 
metropolitan area that would not result in a net increase in the 
number of pediatric specialty hospital beds among the hospitals 
being consolidated; 
    (6) a project involving the temporary relocation of 
pediatric-orthopedic hospital beds to an existing licensed 
hospital that will allow for the reconstruction of a new 
philanthropic, pediatric-orthopedic hospital on an existing site 
and that will not result in a net increase in the number of 
hospital beds.  Upon completion of the reconstruction, the 
licenses of both hospitals must be reinstated at the capacity 
that existed on each site before the relocation; 
    (7) the relocation or redistribution of hospital beds 
within a hospital building or identifiable complex of buildings 
provided the relocation or redistribution does not result in: 
(i) an increase in the overall bed capacity at that site; (ii) 
relocation of hospital beds from one physical site or complex to 
another; or (iii) redistribution of hospital beds within the 
state or a region of the state; 
    (8) relocation or redistribution of hospital beds within a 
hospital corporate system that involves the transfer of beds 
from a closed facility site or complex to an existing site or 
complex provided that:  (i) no more than 50 percent of the 
capacity of the closed facility is transferred; (ii) the 
capacity of the site or complex to which the beds are 
transferred does not increase by more than 50 percent; (iii) the 
beds are not transferred outside of a federal health systems 
agency boundary in place on July 1, 1983; and (iv) the 
relocation or redistribution does not involve the construction 
of a new hospital building; 
    (9) a construction project involving up to 35 new beds in a 
psychiatric hospital in Rice county that primarily serves 
adolescents and that receives more than 70 percent of its 
patients from outside the state of Minnesota; 
    (10) a project to replace a hospital or hospitals with a 
combined licensed capacity of 130 beds or less if:  (i) the new 
hospital site is located within five miles of the current site; 
and (ii) the total licensed capacity of the replacement 
hospital, either at the time of construction of the initial 
building or as the result of future expansion, will not exceed 
70 licensed hospital beds, or the combined licensed capacity of 
the hospitals, whichever is less; 
    (11) the relocation of licensed hospital beds from an 
existing state facility operated by the commissioner of human 
services to a new or existing facility, building, or complex 
operated by the commissioner of human services, or; from one 
regional treatment center site to another; or from one building 
or site to a new or existing building or site on the same 
campus; or 
    (12) the construction or relocation of hospital beds 
operated by a hospital having a statutory obligation to provide 
hospital and medical services for the indigent that does not 
result in a net increase in the number of hospital beds.  
    Subd. 2.  [EMERGENCY WAIVER.] The commissioner shall grant 
an emergency waiver from the provisions of this section if the 
need for the project is a result of fire, tornado, flood, storm 
damage, or other similar disaster, if adequate health care 
facilities are not available for the people who previously used 
the applicant facility, and if the request for an emergency 
waiver is limited in nature and scope only to those repairs 
necessitated by the natural disaster.  
    Subd. 3.  [ENFORCEMENT.] The district court in Ramsey 
county has jurisdiction to enjoin an alleged violation of 
subdivision 1.  At the request of the commissioner of health, 
the attorney general may bring an action to enjoin an alleged 
violation.  The commissioner of health shall not issue a license 
for any portion of a hospital in violation of subdivision 1.  No 
hospital in violation of subdivision 1 may apply for or receive 
public funds under chapters 245 to 256B, or from any other 
source.  
    Subd. 4.  [DEFINITIONS.] Except as indicated in this 
subdivision, the terms used in this section have the meanings 
given them under Minnesota Statutes 1982, sections 145.832 to 
145.845, and the rules adopted under those sections.  
    The term "hospital" has the meaning given it in section 
144.50. 
    Sec. 9.  Minnesota Statutes 1988, section 144.581, 
subdivision 1, is amended to read: 
    Subdivision 1.  [NONPROFIT CORPORATION POWERS.] A 
municipality, political subdivision, state agency, or other 
governmental entity that owns or operates a hospital authorized, 
organized, or operated under chapters 158, 250, 376, and 397, or 
under sections 246A.01 to 246A.27, 412.221, 447.05 to 447.13, 
447.31, or 471.59, or under any special law authorizing or 
establishing a hospital or hospital district shall, relative to 
the delivery of health care services, have, in addition to any 
authority vested by law, the authority and legal capacity of a 
nonprofit corporation under chapter 317, including authority to 
    (a) enter shared service and other cooperative ventures, 
    (b) join or sponsor membership in organizations intended to 
benefit the hospital or hospitals in general, 
    (c) enter partnerships, 
    (d) incorporate other corporations, 
    (e) have members of its governing authority or its officers 
or administrators serve as directors, officers, or employees of 
the ventures, associations, or corporations, 
    (f) own shares of stock in business corporations, and 
    (g) offer, directly or indirectly, products and services of 
the hospital, organization, association, partnership, or 
corporation to the general public., 
    (h) provide funds for payment of educational expenses of up 
to $20,000 per individual, if the hospital or hospital district 
has at least $1,000,000 in reserve and depreciation funds at the 
time of payment, and these reserve and depreciation funds were 
obtained solely from the operating revenues of the hospital or 
hospital district, and 
    (i) provide funds of up to $50,000 per year per individual 
for a maximum of two years to supplement the incomes of family 
practice physicians, up to a maximum of $100,000 in annual 
income, if the hospital or hospital district has at least 
$250,000 in reserve and depreciation funds at the time of 
payment, and these reserve and depreciation funds were obtained 
solely from the operating revenues of the hospital or hospital 
district. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
144.802, subdivision 3, is amended to read: 
    Subd. 3.  [APPLICATIONS; NOTICE OF APPLICATION; 
RECOMMENDATIONS.] (a) Each prospective licensee and each present 
licensee wishing to offer a new type or types of ambulance 
service, to establish a new base of operation, or to expand a 
primary service area, shall make written application for a 
license to the commissioner on a form provided by the 
commissioner.  
    (b) For applications for the provision of ambulance 
services in a service area located within a county, the 
commissioner shall promptly send notice of the completed 
application to the county board and to each community health 
service board, governing body of a regional emergency medical 
services system designated under section 144.8093, ambulance 
service, and municipality in the area in which ambulance service 
would be provided by the applicant.  The commissioner shall 
publish the notice, at the applicant's expense, in the State 
Register and in a newspaper in the municipality in which the 
base of operation will be located, or if no newspaper is 
published in the municipality or if the service would be 
provided in more than one municipality, in a newspaper published 
at the county seat of the county in which the service would be 
provided.  
    (c) For applications for the provision of ambulance 
services in a service area larger than a county, the 
commissioner shall promptly send notice of the completed 
application to the municipality in which the service's base of 
operation will be located and to each community health board, 
county board, governing body of a regional emergency medical 
services system designated under section 144.8093, and ambulance 
service located within the counties in which any part of the 
service area described by the applicant is located, and any 
contiguous counties.  The commissioner shall publish this 
notice, at the applicant's expense, in the State Register.  
    (d) The commissioner shall request that the chief 
administrative law judge appoint an administrative law judge to 
hold a public hearing in the municipality in which the service's 
base of operation will be located.  The public hearing shall be 
conducted as contested case hearing under chapter 14. 
    (e) Each municipality, county, community health service 
board, governing body of a regional emergency medical services 
system, ambulance service, and other person wishing to make 
recommendations concerning the disposition of the application 
shall make written recommendations to the administrative law 
judge within 30 days of the publication of notice of the 
application in the State Register.  
    (f) The administrative law judge shall:  
    (1) hold a public hearing in the municipality in which the 
service's base of operations is or will be located; 
    (2) provide notice of the public hearing in the newspaper 
or newspapers in which notice was published under paragraph (b) 
for two successive weeks at least ten days before the date of 
the hearing; 
    (3) allow any interested person the opportunity to be 
heard, to be represented by counsel, and to present oral and 
written evidence at the public hearing; 
    (4) provide a transcript of the hearing at the expense of 
any individual requesting it. 
    (g) The administrative law judge shall review and comment 
upon the application and shall make written recommendations as 
to its disposition to the commissioner within 90 days of 
receiving notice of the application.  In making the 
recommendations, the administrative law judge shall consider and 
make written comments as to whether the proposed service, change 
in base of operations, or expansion in primary service area is 
needed, based on consideration of the following factors:  
    (1) the relationship of the proposed service, change in 
base of operations or expansion in primary service area to the 
current community health plan as approved by the commissioner 
under section 145.918 145A.12, subdivision 4; 
    (2) the recommendations or comments of the governing bodies 
of the counties and municipalities in which the service would be 
provided; 
    (3) the deleterious effects on the public health from 
duplication, if any, of ambulance services that would result 
from granting the license; 
      (4) the estimated effect of the proposed service, change in 
base of operation or expansion in primary service area on the 
public health; 
      (5) whether any benefit accruing to the public health would 
outweigh the costs associated with the proposed service, change 
in base of operations, or expansion in primary service area.  
      The administrative law judge shall recommend that the 
commissioner either grant or deny a license or recommend that a 
modified license be granted.  The reasons for the recommendation 
shall be set forth in detail.  The administrative law judge 
shall make the recommendations and reasons available to any 
individual requesting them.  
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
144.804, subdivision 1, is amended to read: 
    Subdivision 1.  [DRIVERS AND ATTENDANTS.] No publicly or 
privately owned basic ambulance service shall be operated in the 
state unless its drivers and attendants possess a current 
emergency medical care course certificate authorized by rules 
adopted by the commissioner of health according to chapter 14.  
Until August 1, 1994, a licensee may substitute a person 
currently certified by the American Red Cross in advanced first 
aid and emergency care or a person who has successfully 
completed the United States Department of Transportation first 
responder curriculum, and who has also been trained to use all 
of the equipment carried in the ambulance basic life support 
equipment as required by rules adopted by the commissioner under 
section 144.804, subdivision 2, for one of the persons on a 
basic ambulance, provided that person will function as the 
driver while transporting a patient.  The commissioner may grant 
a variance to allow a licensed ambulance service to use 
attendants certified by the American Red Cross in advanced first 
aid and emergency care in order to ensure 24-hour emergency 
ambulance coverage.  The variance must expire no later than 
August 1, 1990.  The commissioner shall study the roles and 
responsibilities of first responder units and report the 
findings by January 1, 1991.  This study shall address at a 
minimum:  (1) education and training; (2) appropriate equipment 
and its use; (3) medical direction and supervision; and (4) 
supervisory and regulatory requirements. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
144.804, subdivision 7, is amended to read: 
    Subd. 7.  [DRIVERS OF AMBULANCE SERVICE VEHICLES 
AMBULANCES.] An ambulance service vehicle shall be staffed by a 
driver possessing a current Minnesota driver's license or 
equivalent and whose driving privileges are not under suspension 
or revocation by any state.  If red lights and siren are used, 
the driver must also have completed training approved by the 
commissioner in emergency driving techniques.  An ambulance 
transporting patients must be staffed by at least two persons 
who are trained according to this section subdivision 1, or 
section 144.809, one of whom may be the driver.  A third person 
serving as driver shall be trained according to this subdivision.
    Sec. 13.  Minnesota Statutes 1989 Supplement, section 
144.809, is amended to read: 
    144.809 [RENEWAL OF BASIC EMERGENCY MEDICAL TECHNICIAN'S 
CARE COURSE CERTIFICATE,; FEE.] 
    Subdivision 1.  [STANDARDS FOR RECERTIFICATION.] The 
commissioner shall adopt rules establishing minimum standards 
for expiration and recertification of basic emergency care 
course certificates.  These standards shall require:  
    (1) four years after initial certification, and every four 
years thereafter, formal classroom training and successful 
completion of a written test and practical examination, both of 
which must be approved by the commissioner; and 
    (2) two years after initial certification, and every four 
years thereafter, in-service continuing education, including 
knowledge and skill proficiency testing, all of which must be 
conducted under the supervision of a medical director or medical 
advisor and approved by the commissioner.  
    Course requirements under clause (1) shall not exceed 24 
hours.  Course requirements under clause (2) shall not exceed 36 
hours, of which at least 12 hours may consist of course material 
developed by the medical director or medical advisor.  
    Individuals may choose to complete, two years after initial 
certification, and every two years thereafter, formal classroom 
training and successful completion of a written test and 
practical examination, both of which are approved by the 
commissioner, in lieu of completing requirements in clauses (1) 
and (2).  
    Subd. 2.  [UPGRADING TO BASIC EMERGENCY CARE COURSE 
CERTIFICATE.] By August 1, 1994, the commissioner shall adopt 
rules authorizing the equivalence of the following as credit 
toward successful completion of the commissioner's basic 
emergency care course:  
    (1) successful completion of the United States Department 
of Transportation first responder curriculum; 
    (2) a minimum of two years of documented continuous service 
as an ambulance driver, as authorized in section 144.804, 
subdivision 7; 
    (3) documented clinical experience obtained through work or 
volunteer activity as a first responder; and 
    (4) documented continuing education in emergency care.  
    Subd. 3.  [LIMITATION ON FEES.] No fee set by the 
commissioner for biennial renewal of an a basic emergency 
medical technician's care course certificate by a volunteer 
member of an ambulance service, fire department, or police 
department shall exceed $2.  
    Sec. 14.  Minnesota Statutes 1989 Supplement, section 
144.8091, is amended to read: 
    144.8091 [REIMBURSEMENT TO NONPROFIT AMBULANCE SERVICES.] 
    Subdivision 1.  [REPAYMENT FOR VOLUNTEER TRAINING.] Any 
political subdivision, or nonprofit hospital or nonprofit 
corporation operating a licensed ambulance service shall be 
reimbursed by the commissioner for the necessary expense of the 
initial training of a volunteer ambulance attendant upon 
successful completion by the attendant of a basic emergency 
medical care course, or a continuing education course for basic 
emergency medical care, or both, which has been approved by the 
commissioner, pursuant to section 144.804.  Reimbursement may 
include tuition, transportation, food, lodging, hourly payment 
for the time spent in the training course, and other necessary 
expenditures, except that in no instance shall a volunteer 
ambulance attendant be reimbursed more than $210 $350 for 
successful completion of a basic course, and $70 $140 for 
successful completion of a continuing education course.  
    Subd. 2.  [VOLUNTEER ATTENDANT DEFINED.] For purposes of 
this section, "volunteer ambulance attendant" means a person who 
provides emergency medical services for a Minnesota licensed 
ambulance service without the expectation of remuneration and 
who does not depend in any way upon the provision of these 
services for the person's livelihood.  An individual may be 
considered a volunteer ambulance attendant even though that 
individual receives an hourly stipend for each hour of actual 
service provided, except for hours on standby alert, even though 
this hourly stipend is regarded as taxable income for purposes 
of state or federal law, provided that this hourly stipend does 
not exceed $500 $3,000 within one year of the final 
certification examination.  Reimbursement will be paid under 
provisions of this section when documentation is provided the 
department of health that the individual has served for one year 
from the date of the final certification exam as an active 
member of a Minnesota licensed ambulance service.  
    Sec. 15.  [144.8095] [FUNDING FOR THE EMERGENCY MEDICAL 
SERVICES REGIONS.] 
    The commissioner of health shall distribute funds 
appropriated from the general fund equally among the emergency 
medical service regions.  Each regional board may use this money 
to reimburse eligible emergency medical services personnel for 
continuing education costs related to emergency care that are 
personally incurred and are not reimbursed from other sources.  
Eligible emergency medical services personnel include, but are 
not limited to, dispatchers, emergency room physicians, 
emergency room nurses, first responders, emergency medical 
technicians, and paramedics. 
    Sec. 16.  [144.8097] [EMERGENCY MEDICAL SERVICES ADVISORY 
COUNCIL.] 
    Subdivision 1.  [ADVISORY COUNCIL ESTABLISHED.] There is 
established an emergency medical services advisory council to 
advise, to consult with, and to make recommendations to the 
commissioner of health regarding the formulation of policy and 
plans for the organization, delivery, and evaluation of 
emergency medical services within the state.  The commissioner 
shall establish procedures for the advisory council's proper 
functioning.  The procedures must include, but not be limited 
to, methods for selecting alternate or temporary members and 
methods of communicating recommendations and advice to the 
commissioner for consideration.  
    Subd. 2.  [MEMBERSHIP; TERMS; COMPENSATION.] (a) The 
council shall consist of 17 members.  The members shall be 
appointed by the commissioner of health and shall consist of the 
following:  
    (1) a representative of the governing bodies of the eight 
regional emergency medical systems designated under section 
144.8093; 
    (2) an emergency medical services physician; 
    (3) an emergency department nurse; 
    (4) an emergency medical technician (ambulance, 
intermediate, or paramedic); 
    (5) a representative of an emergency medical care training 
institution; 
    (6) a representative of a licensed ambulance service; 
    (7) a hospital administrator; 
    (8) a first responder; 
    (9) a member of a community health services agency; and 
    (10) a representative of the public at large.  
    (b) As nearly as possible, one-third of the initial 
members' terms must expire each year during the first three 
years of the council.  Successors of the initial members shall 
be appointed for three-year terms.  A person chosen to fill a 
vacancy shall be appointed only for the unexpired term of the 
board member whom the newly appointed member succeeds.  
    (c) Members of the council shall be compensated for 
expenses. 
    (d) The removal of all members and the expiration of the 
council shall be as provided in section 15.059. 
    Sec. 17.  Minnesota Statutes 1988, section 148B.23, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [EXTENSION OF TRANSITION PERIOD ALLOWED.] The 
board may issue a graduate social worker license without 
examination, after the transition period that ends June 30, 
1989, to an applicant: 
    (1) who met the criteria in subdivision 1, clause (2), 
before the transition period ended; and 
    (2) who was unable to submit an application for licensure 
before the transition period ended because the person was in 
another country performing social work training to complete the 
requirements for a master's degree in social work. 
    Sec. 18.  Minnesota Statutes 1988, section 151.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  (a)  [POWERS AND DUTIES.] The board of 
pharmacy shall have the power and it shall be its duty: 
    (1) to regulate the practice of pharmacy; 
    (2) to regulate the manufacture, wholesale, and retail sale 
of drugs within this state; 
    (3) to regulate the identity, labeling, purity, and quality 
of all drugs and medicines dispensed in this state, using the 
United States Pharmacopeia and the National Formulary, or any 
revisions thereof, or standards adopted under the federal act as 
the standard; 
    (4) to enter and inspect by its authorized representative 
any and all places where drugs, medicines, medical gases, or 
veterinary drugs or devices are sold, vended, given away, 
compounded, dispensed, manufactured, wholesaled, or held; it may 
secure samples or specimens of any drugs, medicines, medical 
gases, or veterinary drugs or devices after paying or offering 
to pay for such sample; it shall be entitled to inspect and make 
copies of any and all records of shipment, purchase, 
manufacture, quality control, and sale of these items provided, 
however, that such inspection shall not extend to financial 
data, sales data, or pricing data; 
    (5) to examine and license as pharmacists all applicants 
whom it shall deem qualified to be such; 
    (6) to license wholesale drug distributors; 
     (7) to deny, suspend, revoke, or refuse to renew any 
registration or license required under this chapter, to any 
applicant or registrant or licensee upon any of the following 
grounds: 
     (i) fraud or deception in connection with the securing of 
such license or registration; 
     (ii) in the case of a pharmacist, conviction in any court 
of a felony; 
     (iii) in the case of a pharmacist, conviction in any court 
of an offense involving moral turpitude; 
     (iv) habitual indulgence in the use of narcotics, 
stimulants, or depressant drugs; or habitual indulgence in 
intoxicating liquors in a manner which could cause conduct 
endangering public health; 
     (v) unprofessional conduct or conduct endangering public 
health; 
     (vi) gross immorality; 
     (vii) employing, assisting, or enabling in any manner an 
unlicensed person to practice pharmacy; 
     (viii) conviction of theft of drugs, or the unauthorized 
use, possession, or sale thereof; 
     (ix) violation of any of the provisions of this chapter or 
any of the rules of the state board of pharmacy; 
     (x) in the case of a pharmacy license, operation of such 
pharmacy without a pharmacist present and on duty; 
     (xi) in the case of a pharmacist, physical or mental 
disability which could cause incompetency in the practice of 
pharmacy; or 
    (xii) in the case of a pharmacist, the suspension or 
revocation of a license to practice pharmacy in another state; 
    (7) (8) to employ necessary assistants and make rules for 
the conduct of its business; and 
    (8) (9) to perform such other duties and exercise such 
other powers as the provisions of the act may require.  
    (b)  [TEMPORARY SUSPENSION.] In addition to any other 
remedy provided by law, the board may, without a hearing, 
temporarily suspend a license for not more than 60 days if the 
board finds that a pharmacist has violated a statute or rule 
that the board is empowered to enforce and continued practice by 
the pharmacist would create an imminent risk of harm to others.  
The suspension shall take effect upon written notice to the 
pharmacist, specifying the statute or rule violated.  At the 
time it issues the suspension notice, the board shall schedule a 
disciplinary hearing to be held under the administrative 
procedure act.  The pharmacist shall be provided with at least 
20 days notice of any hearing held under this subdivision. 
    (c)  [RULES.] For the purposes aforesaid it shall be the 
duty of the board to make and publish uniform rules not 
inconsistent herewith for carrying out and enforcing the 
provisions of this chapter.  
    Sec. 19.  Minnesota Statutes 1988, section 151.25, is 
amended to read: 
    151.25 [REGISTRATION OF MANUFACTURERS OR WHOLESALERS; FEE; 
PROHIBITIONS.] 
    The board shall require and provide for the annual 
registration of every person engaged in manufacturing or selling 
at wholesale drugs, medicines, chemicals, or poisons for 
medicinal purposes, now or hereafter doing business with 
accounts in this state.  Upon a payment of a fee as set by the 
board, the board shall issue a registration certificate in such 
form as it may prescribe to such manufacturer or wholesaler.  
Such registration certificate shall be displayed in a 
conspicuous place in such manufacturer's or wholesaler's place 
of business for which it is issued and expire on the date set by 
the board.  It shall be unlawful for any person to manufacture 
or sell at wholesale drugs, medicines, chemicals, or poisons for 
medicinal purposes unless such a certificate has been issued to 
the person by the board.  It shall be unlawful for any person 
engaged in the manufacture or selling at wholesale of drugs, 
medicines, chemicals, or poisons for medicinal purposes, or the 
person's agent, to sell legend drugs to other than a pharmacy, 
except as provided in this chapter. 
    Sec. 20.  [151.42] [CITATION.] 
    Sections 151.42 to 151.51 may be cited as the "wholesale 
drug distribution licensing act of 1990." 
    Sec. 21.  [151.43] [SCOPE.] 
    Sections 151.42 to 151.51 apply to any person, partnership, 
corporation, or business firm engaging in the wholesale 
distribution of prescription drugs within the state. 
    Sec. 22.  [151.44] [DEFINITIONS.] 
    As used in sections 151.42 to 151.51, the following terms 
have the meanings given in paragraphs (a) to (f): 
    (a) "Wholesale drug distribution" means distribution of 
prescription drugs to persons other than a consumer or patient, 
but does not include: 
    (1) a sale between a division, subsidiary, parent, 
affiliated, or related company under the common ownership and 
control of a corporate entity; 
    (2) the purchase or other acquisition, by a hospital or 
other health care entity that is a member of a group purchasing 
organization, of a drug for its own use from the organization or 
from other hospitals or health care entities that are members of 
such organizations; 
    (3) the sale, purchase, or trade of a drug or an offer to 
sell, purchase, or trade a drug by a charitable organization 
described in section 501(c)(3) of the Internal Revenue Code of 
1986, as amended through December 31, 1988, to a nonprofit 
affiliate of the organization to the extent otherwise permitted 
by law; 
    (4) the sale, purchase, or trade of a drug or offer to 
sell, purchase, or trade a drug among hospitals or other health 
care entities that are under common control; 
    (5) the sale, purchase, or trade of a drug or offer to 
sell, purchase, or trade a drug for emergency medical reasons; 
    (6) the sale, purchase, or trade of a drug, an offer to 
sell, purchase, or trade a drug, or the dispensing of a drug 
pursuant to a prescription; 
    (7) the transfer of prescription drugs by a retail pharmacy 
to another retail pharmacy to alleviate a temporary shortage; 
    (8) the distribution of prescription drug samples by 
manufacturers representatives; or 
    (9) the sale, purchase, or trade of blood and blood 
components. 
    (b) "Wholesale drug distributor" means anyone engaged in 
wholesale drug distribution, including but not limited to, 
manufacturers; repackers; own-label distributors; jobbers; 
brokers; warehouses, including manufacturers' and distributors' 
warehouses, chain drug warehouses, and wholesale drug 
warehouses; independent wholesale drug traders; and pharmacies 
that conduct wholesale drug distribution.  A wholesale drug 
distributor does not include a common carrier or individual 
hired primarily to transport prescription drugs. 
    (c) "Manufacturer" means anyone who is engaged in the 
manufacturing, preparing, propagating, compounding, processing, 
packaging, repackaging, or labeling of a prescription drug. 
    (d) "Prescription drug" means a drug required by federal or 
state law or regulation to be dispensed only by a prescription, 
including finished dosage forms and active ingredients subject 
to United States Code, title 21, sections 811 and 812.  
     (e) "Blood" means whole blood collected from a single donor 
and processed either for transfusion or further manufacturing. 
    (f) "Blood components" means that part of blood separated 
by physical or mechanical means. 
    Sec. 23.  [151.45] [WHOLESALE DRUG DISTRIBUTOR ADVISORY 
TASK FORCE.] 
    The board shall appoint a wholesale drug distributor 
advisory task force composed of five members, to be selected and 
to perform duties and responsibilities as follows: 
    (a) One member shall be a pharmacist who is neither a 
member of the board nor a board employee. 
    (b) Two members shall be representatives of wholesale drug 
distributors as defined in section 151.44, paragraph (b). 
    (c) One member shall be a representative of drug 
manufacturers. 
    (d) One member shall be a public member as defined by 
section 214.02. 
    (e) The advisory task force shall review and make 
recommendations to the board on the merit of all rules dealing 
with wholesale drug distributors and drug manufacturers that are 
proposed by the board; and no rule affecting wholesale drug 
distributors proposed by the board shall be adopted without 
first being submitted to the task force for review and comment. 
    (f) In making advisory task force appointments, the board 
shall consider recommendations received from each of the 
wholesale drug distributor, pharmacist, and drug manufacturer 
classes cited in paragraphs (a) to (c), and shall adopt rules 
that provide for solicitation of the recommendations. 
    Sec. 24.  [151.46] [PROHIBITED DRUG PURCHASES OR RECEIPT.] 
    It is unlawful for any person to knowingly purchase or 
receive a prescription drug from a source other than a person or 
entity licensed under the laws of the state, except where 
otherwise provided.  Licensed wholesale drug distributors other 
than pharmacies shall not dispense or distribute prescription 
drugs directly to patients.  A person violating the provisions 
of this section is guilty of a misdemeanor. 
    Sec. 25.  [151.47] [WHOLESALE DRUG DISTRIBUTOR LICENSING 
REQUIREMENTS.] 
    Subdivision 1.  [REQUIREMENTS.] All wholesale drug 
distributors are subject to the requirements in paragraphs (a) 
to (e).  
    (a) No person or distribution outlet shall act as a 
wholesale drug distributor without first obtaining a license 
from the board and paying the required fee. 
    (b) No license shall be issued or renewed for a wholesale 
drug distributor to operate unless the applicant agrees to 
operate in a manner prescribed by federal and state law and 
according to the rules adopted by the board. 
    (c) The board may require a separate license for each 
facility directly or indirectly owned or operated by the same 
business entity within the state, or for a parent entity with 
divisions, subsidiaries, or affiliate companies within the 
state, when operations are conducted at more than one location 
and joint ownership and control exists among all the entities. 
    (d) As a condition for receiving and retaining a wholesale 
drug distributor license issued under sections 151.42 to 151.51, 
an applicant shall satisfy the board that it has and will 
continuously maintain: 
    (1) adequate storage conditions and facilities; 
    (2) minimum liability and other insurance as may be 
required under any applicable federal or state law; 
    (3) a viable security system that includes an after hours 
central alarm, or comparable entry detection capability; 
restricted access to the premises; comprehensive employment 
applicant screening; and safeguards against all forms of 
employee theft; 
    (4) a system of records describing all wholesale drug 
distributor activities set forth in section 151.44 for at least 
the most recent two-year period and which shall be reasonably 
accessible as defined by board regulations in any inspection 
authorized by the board; 
    (5) principals and persons, including officers, directors, 
primary shareholders, and key management executives who must at 
all times demonstrate and maintain their capability of 
conducting business in conformity with sound financial practices 
as well as state and federal law; 
    (6) complete, updated information, to be provided to the 
board as a condition for obtaining and retaining a license, 
about each wholesale drug distributor to be licensed, including 
all pertinent corporate licensee information, if applicable, or 
other ownership, principal, key personnel, and facilities 
information found to be necessary by the board; 
    (7) written policies and procedures that assure reasonable 
wholesale drug distributor preparation for, protection against, 
and handling of any facility security or operation problems, 
including, but not limited to, those caused by natural disaster 
or government emergency, inventory inaccuracies or product 
shipping and receiving, outdated product or other unauthorized 
product control, appropriate disposition of returned goods, and 
product recalls; 
    (8) sufficient inspection procedures for all incoming and 
outgoing product shipments; and 
    (9) operations in compliance with all federal requirements 
applicable to wholesale drug distribution. 
     (e) An agent or employee of any licensed wholesale drug 
distributor need not seek licensure under this section. 
     Subd. 2.  [REQUIREMENTS MUST CONFORM WITH FEDERAL LAW.] All 
requirements set forth in this section shall conform to 
wholesale drug distributor licensing guidelines formally adopted 
by the United States Food and Drug Administration; and in case 
of conflict between a wholesale drug distributor licensing 
requirement imposed by the board and a Food and Drug 
Administration wholesale drug distributor guideline, the latter 
shall control. 
    Sec. 26.  [151.48] [OUT-OF-STATE WHOLESALE DRUG DISTRIBUTOR 
LICENSING REQUIREMENTS.] 
    (a) It is unlawful for an out-of-state wholesale drug 
distributor to conduct business in the state without first 
obtaining a license from the board and paying the required fee. 
    (b) Application for an out-of-state wholesale drug 
distributor license under this section shall be made on a form 
furnished by the board.  
    (c) The issuance of a license under sections 151.42 to 
151.51 shall not change or affect tax liability imposed by the 
department of revenue on any out-of-state wholesale drug 
distributor. 
    (d) No person acting as principal or agent for any 
out-of-state wholesale drug distributor may sell or distribute 
drugs in the state unless the distributor has obtained a license.
    (e) The board may adopt regulations that permit 
out-of-state wholesale drug distributors to obtain a license on 
the basis of reciprocity to the extent that an out-of-state 
wholesale drug distributor: 
    (1) possesses a valid license granted by another state 
under legal standards comparable to those that must be met by a 
wholesale drug distributor of this state as prerequisites for 
obtaining a license under the laws of this state; and 
    (2) can show that the other state would extend reciprocal 
treatment under its own laws to a wholesale drug distributor of 
this state. 
    Sec. 27.  [151.49] [LICENSE RENEWAL APPLICATION 
PROCEDURES.] 
    Application blanks for renewal of a license required by 
sections 151.42 to 151.51 shall be mailed to each licensee on or 
before the first day of the month prior to the month in which 
the license expires and, if application for renewal of the 
license with the required fee is not made before the expiration 
date, the existing license or renewal shall lapse and become 
null and void upon the date of expiration. 
    Sec. 28.  [151.50] [RULES.] 
    The board shall adopt rules to carry out the purposes and 
enforce the provisions of sections 151.42 to 151.51.  All rules 
adopted under this section shall conform to wholesale drug 
distributor licensing guidelines formally adopted by the United 
States Food and Drug Administration; and in case of conflict 
between a rule adopted by the board and a Food and Drug 
Administration wholesale drug distributor guideline, the latter 
shall control. 
    Sec. 29.  [151.51] [BOARD ACCESS TO WHOLESALE DRUG 
DISTRIBUTOR RECORDS.] 
    Wholesale drug distributors may keep records at a central 
location apart from the principal office of the wholesale drug 
distributor or the location at which the drugs were stored and 
from which they were shipped, provided that the records shall be 
made available for inspection within two working days of a 
request by the board.  The records may be kept in any form 
permissible under federal law applicable to prescription drugs 
record keeping. 
    Sec. 30.  Minnesota Statutes 1988, section 171.07, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [PHOTOGRAPHIC NEGATIVES; FILING; DATA 
CLASSIFICATION.] The department shall file, or contract to file, 
all photographic negatives obtained in the process of issuing 
driver licenses or Minnesota identification cards.  The 
negatives shall be private data pursuant to section 13.02, 
subdivision 12.  Notwithstanding section 13.04, subdivision 3, 
the department shall not be required to provide copies of 
photographic negatives to data subjects.  The use of the files 
is restricted: 
     (1) to the issuance and control of driver licenses and; 
     (2)  for law enforcement purposes in the investigation and 
prosecution of felonies and violations of section 169.09; 
169.121; 169.123; 169.129; 171.22; 171.24; 171.30; 609.41; 
609.487, subdivision 3; 609.631, subdivision 4, clause (3); or 
609.821, subdivision 3, clauses (1), item (iv), and (3); and 
     (3) for child support enforcement purposes under section 
256.978. 
    Sec. 31.  Minnesota Statutes 1988, section 241.26, 
subdivision 2, is amended to read: 
    Subd. 2.  [USE OF LOCAL DETENTION FACILITIES.] The 
commissioner of corrections shall designate state correctional 
institutions for participation in the program authorized in 
subdivision 1 and shall adapt facilities of such institutions to 
provide housing and supervision of inmates participating in such 
program.  The commissioner of corrections may also enter into 
contractual agreements with appropriate city and county 
authorities for the confinement of and provision of other 
correctional services to such inmates whose employment, 
educational or vocational training programs so require, and such 
city and county authorities are hereby authorized to make and 
enter such contracts and agreements.  When the commissioner 
determines that the circumstances of a participant in the 
program authorized by subdivision 1 do not require the security 
of a public detention facility, the commissioner may contract 
with public and private agencies for the custody and separate 
care of such participant or house the participant in a community 
correction center or under house arrest and monitored by 
electronic surveillance in an approved residence. 
    Sec. 32.  Minnesota Statutes 1988, section 244.05, is 
amended by adding a subdivision to read: 
    Subd. 6.  [INTENSIVE COMMUNITY SUPERVISION.] The 
commissioner may order that an inmate be placed on intensive 
community supervision, as described in sections 244.14 and 
244.15, for all or part of the inmate's supervised release 
term.  If the inmate violates the conditions of the intensive 
community supervision, the commissioner shall impose sanctions 
as provided in subdivision 3 and section 244.14. 
    Sec. 33.  [244.12] [INTENSIVE COMMUNITY SUPERVISION.] 
    Subdivision 1.  [GENERALLY.] The commissioner may order 
that an inmate be placed on intensive community supervision, as 
described in sections 244.14 and 244.15, for all or part of the 
inmate's supervised release term.  Additionally, the 
commissioner may order that an offender who meets the 
eligibility requirements of subdivisions 2 and 3 be placed on 
intensive community supervision, as described in sections 244.14 
and 244.15, for all or part of the offender's prison sentence if 
the offender agrees to participate in the program and if the 
sentencing court approves in writing of the offender's 
participation in the program.  
    Subd. 2.  [ELIGIBILITY.] The commissioner must limit the 
intensive community supervision program to the following persons:
    (1) inmates who are serving a supervised release term; 
    (2) offenders who are committed to the commissioner's 
custody following revocation of a stayed sentence; and 
    (3) offenders who are committed to the commissioner's 
custody for a prison sentence of 27 months or less, who did not 
receive a dispositional departure under the sentence guidelines, 
and who have already served a period of incarceration as a 
result of the offense for which they are committed. 
    Subd. 3.  [OFFENDERS NOT ELIGIBLE.] The following are not 
eligible to be placed on intensive community supervision, under 
subdivision 2, clause (3): 
    (1) offenders who were committed to the commissioner's 
custody under a statutory mandatory minimum sentence; 
    (2) offenders who were committed to the commissioner's 
custody following a conviction for murder, manslaughter, 
criminal sexual conduct in the first or second degree, or 
criminal vehicular operation resulting in death; and 
    (3) offenders whose presence in the community would present 
a danger to public safety. 
    Sec. 34.  [244.13] [INTENSIVE COMMUNITY SUPERVISION; 
ESTABLISHMENT OF PROGRAMS.] 
    Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
corrections shall establish programs for those designated by the 
commissioner to serve all or part of a prison sentence or a 
supervised release term on intensive community supervision.  The 
adoption of policies and procedures to implement sections 
244.05, subdivision 6, and 244.12 to 244.15 are not subject to 
the rulemaking procedures of chapter 14.  The commissioner shall 
locate the programs so that at least one-half of the money 
appropriated for the programs in each year is used for programs 
in community corrections act counties. 
    Subd. 2.  [TRAINING.] The commissioner shall develop 
specialized training programs for probation officers assigned to 
the intensive community supervision program.  The probation 
officer caseload shall not exceed the ratio of 30 offenders to 
two probation officers.  
    Subd. 3.  [EVALUATION.] The commissioner shall develop a 
system for gathering and analyzing information concerning the 
value and effectiveness of the intensive community supervision 
programs and shall compile a report to the chairs of the senate 
and house judiciary committees by January 1 of each odd-numbered 
year. 
    Sec. 35.  [244.14] [INTENSIVE COMMUNITY SUPERVISION; BASIC 
ELEMENTS.] 
    Subdivision 1.  [REQUIREMENTS.] This section governs the 
intensive community supervision programs established under 
section 244.13.  The commissioner shall operate the programs in 
conformance with this section.  The commissioner shall 
administer the programs to further the following goals: 
    (1) to punish the offender; 
    (2) to protect the safety of the public; 
    (3) to facilitate employment of the offender during the 
intensive community supervision and afterward; and 
    (4) to require the payment of restitution ordered by the 
court to compensate the victims of the offender's crime. 
    Subd. 2.  [GOOD TIME NOT AVAILABLE.] An offender serving a 
prison sentence on intensive community supervision does not earn 
good time, notwithstanding section 244.04. 
    Subd. 3.  [SANCTIONS.] The commissioner shall impose severe 
and meaningful sanctions for violating the conditions of an 
intensive community supervision program.  The commissioner shall 
provide for revocation of intensive community supervision of an 
offender who:  
    (1) fails to follow the rules of the program; 
    (2) commits any misdemeanor, gross misdemeanor, or felony 
offense; or 
    (3) presents a risk to the public, based on the offender's 
behavior, attitude, or abuse of alcohol or controlled substances.
The revocation of intensive community supervision is governed by 
the procedures in the commissioner's rules adopted under section 
244.05, subdivision 2. 
    An offender whose intensive community supervision is 
revoked shall be imprisoned for a time period equal to the 
offender's original term of imprisonment, but in no case for 
longer than the time remaining in the offender's sentence.  
"Original term of imprisonment" means a time period equal to 
two-thirds of the prison sentence originally executed by the 
sentencing court.  
    Subd. 4.  [ALL PHASES.] Throughout all phases of an 
intensive community supervision program, the offender shall 
submit at any time to an unannounced search of the offender's 
person, vehicle, or premises by a probation officer.  If the 
offender received a restitution order as part of the sentence, 
the offender shall make weekly payments as scheduled by the 
probation officer, until the full amount is paid. 
    Sec. 36.  [244.15] [INTENSIVE COMMUNITY SUPERVISION; PHASES 
I TO IV.] 
    Subdivision 1.  [DURATION.] Phase I of an intensive 
community supervision program is six months, or one-half the 
presumptive imprisonment sentence under the sentencing 
guidelines, whichever is less.  Phase II lasts for at least four 
months.  Phase III lasts for at least two months.  Phase IV 
continues indefinitely. 
    Subd. 2.  [RANDOM DRUG TESTING.] (a) During phase I, the 
offender will be subjected to weekly urinalysis and breath tests 
to detect the presence of controlled substances or alcohol.  The 
tests will be random and unannounced. 
    (b) During phase II, the tests will be done twice monthly. 
    (c) During phases III and IV, the tests will be done at 
random at the frequency determined by the probation officer. 
    Subd. 3.  [HOUSE ARREST.] (a) During phase I, the offender 
will be under house arrest in a residence approved by the 
offender's probation officer and may not move to another 
residence without permission.  "House arrest" means that the 
offender's movements will be severely restricted and continually 
monitored by the assigned probation officer. 
    (b) During phase II, modified house arrest is imposed. 
    (c) During phases III and IV, the offender is subjected to 
a daily curfew instead of house arrest. 
    Subd. 4.  [FACE-TO-FACE CONTACTS.] (a) During phase I, the 
assigned probation officer shall have at least four face-to-face 
contacts with the offender each week.  
    (b) During phase II, two face-to-face contacts a week are 
required. 
    (c) During phase III, one face-to-face contact a week is 
required. 
    (d) During phase IV, two face-to-face contacts a month are 
required. 
    Subd. 5.  [WORK REQUIRED.] During phases I, II, III, and 
IV, the offender must spend at least 40 hours a week performing 
approved work, undertaking constructive activity designed to 
obtain employment, or attending a treatment or education program 
as directed by the commissioner.  An offender may not spend more 
than six months in a residential treatment program that does not 
require the offender to spend at least 40 hours a week 
performing approved work or undertaking constructive activity 
designed to obtain employment. 
    Subd. 6.  [ELECTRONIC SURVEILLANCE.] During any phase, the 
offender may be placed on electronic surveillance if the 
probation officer so directs. 
    Subd. 7.  [OTHER REQUIREMENTS.] The commissioner may 
include any other conditions in the various phases of the 
intensive community supervision program that the commissioner 
finds necessary and appropriate. 
    Sec. 37.  [245.036] [LEASES FOR STATE-OPERATED, 
COMMUNITY-BASED PROGRAMS.] 
     Notwithstanding section 16B.24, subdivision 6, paragraph 
(a), or any other law to the contrary, the commissioner of 
administration may lease land or other premises to provide 
state-operated, community-based programs authorized by sections 
252.50, 253.018, and 253.28 for a term of 20 years or less, with 
a ten year option to renew, subject to cancellation upon 30 
days' notice by the state for any reason, except rental of other 
land or premises for the same use.  The commissioner of 
administration may lease land or premises to provide 
state-operated, community-based programs authorized by sections 
252.50, 253.018, and 253.28 for no more than 30 years. 
    Sec. 38.  Minnesota Statutes 1989 Supplement, section 
245.470, subdivision 1, is amended to read: 
    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 adults with mental illness residing in the county.  Services 
may be provided directly by the county through county-operated 
mental health centers or mental health clinics approved by the 
commissioner under section 245.69, subdivision 2; by contract 
with privately operated mental health centers or mental health 
clinics approved by the commissioner under section 245.69, 
subdivision 2; or by contract with a licensed mental health 
professional as defined in section 245.462, subdivision 18, 
clauses (1) to (4).  Clients may be required to pay a fee 
according to section 245.481.  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 an adult's mental health needs through 
therapy; 
    (6) prescribing and managing medication and evaluating the 
effectiveness of prescribed 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.
    Sec. 39.  Minnesota Statutes 1989 Supplement, section 
245.488, subdivision 1, is amended to read: 
    Subdivision 1.  [AVAILABILITY OF OUTPATIENT SERVICES.] (a) 
County boards must provide or contract for enough outpatient 
services within the county to meet the needs of each child with 
emotional disturbance residing in the county and the child's 
family.  Services may be provided directly by the county through 
county-operated mental health centers or mental health clinics 
approved by the commissioner under section 245.69, subdivision 
2; by contract with privately operated mental health centers or 
mental health clinics approved by the commissioner under section 
245.69, subdivision 2; or by contract with a licensed mental 
health professional as defined in section 245.4871, subdivision 
27, clauses (1) to (4).  A child or a child's parent may be 
required to pay a fee based in accordance with section 245.481.  
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 the child's mental health needs through 
therapy; and 
    (6) prescribing and managing medication and evaluating the 
effectiveness of prescribed medication. 
    (b) County boards may request a waiver allowing outpatient 
services to be provided in a nearby trade area if it is 
determined that the child requires necessary and appropriate 
services that are only available outside the county. 
    (c) Outpatient services offered by the county board to 
prevent placement must be at the level of treatment appropriate 
to the child's diagnostic assessment. 
    Sec. 40.  Minnesota Statutes 1989 Supplement, section 
245A.02, subdivision 6a, is amended to read: 
    Subd. 6a.  [DROP-IN CHILD CARE PROGRAM.] "Drop-in child 
care program" means a nonresidential program of child care 
provided to children for a maximum per child of five hours in 
any one day and 40 hours in any one calendar month at a child 
care center that does not have a regularly scheduled, ongoing 
child care program with a stable enrollment, and that is 
licensed exclusively for that purpose. in which children 
participate on a one-time only or occasional basis up to a 
maximum of 45 hours per child, per month.  A drop-in child care 
program must be licensed under Minnesota Rules governing child 
care centers.  A drop-in child care program must meet one of the 
following requirements to qualify for the rule exemptions 
specified in section 245A.14, subdivision 6: 
    (1) the drop-in child care program operates in a child care 
center which houses no child care program except the drop-in 
child care program; 
    (2) the drop-in child care program operates in the same 
child care center but not during the same hours as a regularly 
scheduled ongoing child care program with a stable enrollment; 
or 
    (3) the drop-in child care program operates in a child care 
center at the same time as a regularly scheduled ongoing child 
care program with a stable enrollment but the program's 
activities, except for bathroom use and outdoor play, are 
conducted separately from each other. 
    Sec. 41.  Minnesota Statutes 1989 Supplement, section 
245A.03, subdivision 2, is amended to read: 
    Subd. 2.  [EXCLUSION FROM LICENSURE.] Sections 245A.01 to 
245A.16 do not apply to: 
      (1) residential or nonresidential programs that are 
provided to a person by an individual who is related; 
      (2) nonresidential programs that are provided by an 
unrelated individual to persons from a single related family; 
      (3) residential or nonresidential programs that are 
provided to adults who do not abuse chemicals or who do not have 
a chemical dependency, a mental illness, mental retardation or a 
related condition, a functional impairment, or a physical 
handicap; 
      (4) sheltered workshops or work activity programs that are 
certified by the commissioner of jobs and training; 
      (5) programs for children enrolled in kindergarten to the 
12th grade and prekindergarten special education programs that 
are operated by the commissioner of education or a school as 
defined in section 120.101, subdivision 4; 
      (6) nonresidential programs for children that provide care 
or supervision for periods of less than three hours a day while 
the child's parent or legal guardian is in the same building or 
present on property that is contiguous with the physical 
facility where the nonresidential program is provided; 
     (7) nursing homes or hospitals licensed by the commissioner 
of health except as specified under section 245A.02; 
     (8) board and lodge facilities licensed by the commissioner 
of health that provide services for five or more persons whose 
primary diagnosis is mental illness who have refused an 
appropriate residential program offered by a county agency.  
This exclusion expires on July 1, 1990; 
     (9) homes providing programs for persons placed there by a 
licensed agency for legal adoption, unless the adoption is not 
completed within two years; 
     (10) programs licensed by the commissioner of corrections; 
     (11) recreation programs for children or adults that 
operate for fewer than 40 calendar days in a calendar year; 
     (12) programs whose primary purpose is to provide social or 
recreational activities for adults or school-age children, such 
as scouting, boys clubs, girls clubs, sports, or the arts; 
except that a program operating in a school building is not 
excluded unless it is approved by the district's school board; 
     (13) head start nonresidential programs which operate for 
less than 31 days in each calendar year; 
     (14) noncertified boarding care homes unless they provide 
services for five or more persons whose primary diagnosis is 
mental illness or mental retardation; 
     (15) nonresidential programs for nonhandicapped children 
provided for a cumulative total of less than 30 days in any 
12-month period; 
     (16) residential programs for persons with mental illness, 
that are located in hospitals, until the commissioner adopts 
appropriate rules; 
    (17) the religious instruction of school-age children; 
Sabbath or Sunday schools; or the congregate care of children by 
a church, congregation, or religious society during the period 
used by the church, congregation, or religious society for its 
regular worship; 
    (18) camps licensed by the commissioner of health under 
Minnesota Rules, chapter 4630; 
    (19) until July 1, 1991, nonresidential programs mental 
health outpatient services for persons adults with mental 
illness or children with emotional disturbance; or 
    (20) residential programs serving school-age children whose 
sole purpose is cultural or educational exchange, until the 
commissioner adopts appropriate rules. 
    Sec. 42.  Minnesota Statutes 1989 Supplement, section 
245A.04, subdivision 3, is amended to read: 
    Subd. 3.  [STUDY OF THE APPLICANT.] (a) Before the 
commissioner issues a license, the commissioner shall conduct a 
study of the individuals specified in clauses (1) to (4) 
according to rules of the commissioner.  The applicant, license 
holder, the bureau of criminal apprehension, and county 
agencies, after written notice to the individual who is the 
subject of the study, shall help with the study by giving the 
commissioner criminal conviction data and reports about abuse or 
neglect of adults in licensed programs substantiated under 
section 626.557 and the maltreatment of minors in licensed 
programs substantiated under section 626.556.  The individuals 
to be studied shall include: 
    (1) the applicant; 
    (2) persons over the age of 13 living in the household 
where the licensed program will be provided; 
    (3) current employees or contractors of the applicant who 
will have direct contact with persons served by the program; and 
    (4) volunteers who have direct contact with persons served 
by the program to provide program services, if the contact is 
not directly supervised by the individuals listed in clause (1) 
or (3). 
    For purposes of this subdivision, "direct contact" means 
providing face-to-face care, training, supervision, counseling, 
consultation, or medication assistance to persons served by a 
program.  For purposes of this subdivision, "directly supervised"
means an individual listed in clause (1) or (3) is within sight 
or hearing of a volunteer to the extent that the individual 
listed in clause (1) or (3) is capable at all times of 
intervening to protect the health and safety of the persons 
served by the program who have direct contact with the volunteer.
    A study of an individual in clauses (1) to (4) shall be 
conducted on at least an annual basis.  No applicant, license 
holder, or individual who is the subject of the study shall pay 
any fees required to conduct the study.  
    (b) The individual who is the subject of the study must 
provide the applicant or license holder with sufficient 
information to ensure an accurate study including the 
individual's first, middle, and last name; home address, city, 
county, and state of residence; zip code; sex; date of birth; 
and driver's license number.  The applicant or license holder 
shall provide this information about an individual in paragraph 
(a), clauses (1) to (4), on forms prescribed by the 
commissioner.  The commissioner may request additional 
information of the individual, which shall be optional for the 
individual to provide, such as the individual's social security 
number or race. 
    (c) A study must include information from the county 
agency's record of substantiated abuse of adults, or neglect of 
adults in licensed programs, and the maltreatment of minors in 
licensed programs, and information from the bureau of criminal 
apprehension. 
     The commissioner may also review arrest and investigative 
information from the bureau of criminal apprehension, a county 
attorney, county sheriff, county agency, local chief of police, 
other states, the courts, or a national criminal record 
repository if the commissioner has reasonable cause to believe 
the information is pertinent to the disqualification of an 
individual listed in paragraph (a), clauses (1) to (4). 
     (d) An applicant's or license holder's failure or refusal 
to cooperate with the commissioner is reasonable cause to deny 
an application or immediately suspend, suspend, or revoke a 
license.  Failure or refusal of an individual to cooperate with 
the study is just cause for denying or terminating employment of 
the individual if the individual's failure or refusal to 
cooperate could cause the applicant's application to be denied 
or the license holder's license to be immediately suspended, 
suspended, or revoked. 
     (e) The commissioner shall not consider an application to 
be complete until all of the information required to be provided 
under this subdivision has been received.  
     (f) No person in paragraph (a), clause (1), (2), (3), or 
(4) who is disqualified as a result of this act may be retained 
by the agency in a position involving direct contact with 
persons served by the program. 
     (g) The commissioner shall not implement the procedures 
contained in this subdivision until appropriate rules have been 
adopted, except for the applicants and license holders for child 
foster care, adult foster care, and family day care homes. 
     (h) Termination of persons in paragraph (a), clause (1), 
(2), (3), or (4) made in good faith reliance on a notice of 
disqualification provided by the commissioner shall not subject 
the applicant or license holder to civil liability. 
     (i) The commissioner may establish records to fulfill the 
requirements of this section.  The information contained in the 
records is only available to the commissioner for the purpose 
authorized in this section. 
    Sec. 43.  Minnesota Statutes 1989 Supplement, section 
245A.04, subdivision 3a, is amended to read: 
    Subd. 3a.  [NOTIFICATION TO SUBJECT OF STUDY RESULTS.] The 
commissioner shall notify the applicant or license holder and 
the individual who is the subject of the study, in writing, of 
the results of the study.  When the study is completed, a notice 
that the study was undertaken and completed shall be maintained 
in the personnel files of the program. 
    The commissioner shall notify the individual studied if the 
information contained in the study could cause disqualification 
indicates the individual is disqualified from direct contact 
with persons served by the program.  The commissioner shall 
disclose the information to the individual studied.  An 
applicant or license holder who is not the subject of the study 
shall be informed that the commissioner has found information 
that could cause disqualification of disqualifies the subject 
from direct contact with persons served by the program.  
However, the applicant or license holder shall not be told what 
that information is unless the data practices act provides for 
release of the information and the individual studied authorizes 
the release of the information. 
    Sec. 44.  Minnesota Statutes 1989 Supplement, section 
245A.04, subdivision 3b, is amended to read: 
    Subd. 3b.  [RECONSIDERATION OF DISQUALIFICATION.] (a) 
Within 30 days after receiving notice of possible 
disqualification under subdivision 3a, the individual who is the 
subject of the study may request reconsideration of the notice 
of possible disqualification.  The individual must submit the 
request for reconsideration to the commissioner in writing.  The 
individual must present information to show that: 
    (1) the information the commissioner relied upon is 
incorrect; or 
    (2) the subject of the study does not pose a risk of harm 
to any person served by the applicant or license holder. 
    (b) The commissioner may set aside the disqualification if 
the commissioner finds that the information the commissioner 
relied upon is incorrect or the individual does not pose a risk 
of harm to any person served by the applicant or license holder 
and rules adopted by the commissioner do not preclude 
reconsideration.  The commissioner shall review the consequences 
of the event or events that could lead to disqualification, the 
vulnerability of the victim at the time of the event, the time 
elapsed without a repeat of the same or similar event, and 
documentation of successful completion by the individual studied 
of training or rehabilitation pertinent to the event. 
    (c) The commissioner shall respond in writing to all 
reconsideration requests within 15 working days after receiving 
the request for reconsideration.  If the disqualification is set 
aside, the commissioner shall notify the applicant or license 
holder in writing of the decision. 
     (d) Except as provided in subdivision 3c, the 
commissioner's decision to grant or deny a reconsideration of 
disqualification under this subdivision, or to set aside or 
uphold the results of the study under subdivision 3, is the 
final administrative agency action.  
    Sec. 45.  Minnesota Statutes 1988, section 245A.07, 
subdivision 3, is amended to read: 
    Subd. 3.  [SUSPENSION, REVOCATION, PROBATION.] The 
commissioner may suspend, revoke, or make probationary a license 
if a license holder fails to comply fully with applicable laws 
or rules.  A license holder who has had a license suspended, 
revoked, or made probationary must be given notice of the action 
by certified mail.  The notice must be mailed to the address 
shown on the application or the last known address of the 
license holder.  The notice must state the reasons the license 
was suspended, revoked, or made probationary and. 
    (a) If the license was suspended or revoked, the notice 
must inform the license holder of the right to a contested case 
hearing under chapter 14.  The license holder may appeal an 
order suspending, or revoking, or making a license probationary 
by notifying the commissioner in writing by certified mail 
within ten calendar days after receiving notice that the license 
has been suspended, or revoked, or made probationary.  
    (b) If the license was made probationary, the notice must 
inform the license holder of the right to request a 
reconsideration by the commissioner.  The request for 
reconsideration must be made in writing by certified mail within 
ten calendar days after receiving notice that the license has 
been made probationary.  The license holder may submit with the 
request for reconsideration written argument or evidence in 
support of the request for reconsideration.  The commissioner's 
disposition of a request for reconsideration is final, and is 
not subject to appeal under chapter 14.  
    Sec. 46.  Minnesota Statutes 1988, section 245A.08, 
subdivision 3, is amended to read: 
    Subd. 3.  [BURDEN OF PROOF.] (a) At a hearing regarding 
suspension, immediate suspension, or revocation, or making 
probationary of a license for family day care or foster care, 
the commissioner may demonstrate reasonable cause for action 
taken by submitting statements, reports, or affidavits to 
substantiate the allegations that the license holder failed to 
comply fully with applicable law or rule.  If the commissioner 
demonstrates that reasonable cause existed, the burden of proof 
in hearings involving suspension, immediate suspension, or 
revocation, or making probationary of a family day care or 
foster care license shifts to the license holder to demonstrate 
by a preponderance of the evidence that the license holder was 
in full compliance with those laws or rules that the 
commissioner alleges the license holder violated, at the time 
that the commissioner alleges the violations of law or rules 
occurred. 
    (b) At a hearing on denial of an application, the applicant 
bears the burden of proof to demonstrate by a preponderance of 
the evidence that the appellant has complied fully with sections 
245A.01 to 245A.15 and other applicable law or rule and that the 
application should be approved and a license granted. 
    (c) At all other hearings under this section, the 
commissioner bears the burden of proof to demonstrate, by a 
preponderance of the evidence, that the violations of law or 
rule alleged by the commissioner occurred. 
    Sec. 47.  Minnesota Statutes 1988, section 245A.11, 
subdivision 4, is amended to read: 
    Subd. 4.  [LOCATION OF RESIDENTIAL PROGRAMS.] In 
determining whether to grant a license, the commissioner shall 
specifically consider the population, size, land use plan, 
availability of community services, and the number and size of 
existing licensed residential programs in the town, 
municipality, or county in which the applicant seeks to operate 
a residential program.  The commissioner shall not grant an 
initial license to any residential program if the residential 
program will be within 1,320 feet of an existing residential 
program unless one of the following conditions apply:  (1) the 
existing residential program is located in a hospital licensed 
by the commissioner of health; or (2) the town, municipality, or 
county zoning authority grants the residential program a 
conditional use or special use permit.  In cities of the first 
class, this subdivision applies even if a residential program is 
considered a permitted single-family residential use of property 
under subdivision 2.  Foster care homes are exempt from this 
subdivision. 
    Sec. 48.  Minnesota Statutes 1989 Supplement, section 
245A.12, is amended to read: 
    245A.12 [VOLUNTARY RECEIVERSHIP FOR RESIDENTIAL PROGRAMS.] 
    Subdivision 1.  [DEFINITIONS.] For purposes of this section 
and section 245A.13, the following terms have the meanings given 
them. 
    (a) "Controlling individual" has the meaning in section 
245A.02, subdivision 5a.  When used in this section and section 
245A.13, it means only those individuals controlling the 
residential program prior to the commencement of the 
receivership period. 
    (b) "Physical plant" means the building or buildings in 
which a residential program is located; all equipment affixed to 
the building and not easily subject to transfer as specified in 
the building and fixed equipment tables of the depreciation 
guidelines; and auxiliary buildings in the nature of sheds, 
garages, and storage buildings located on the same site if used 
for purposes related to resident care. 
    (c) "Related party" means a person who is a close relative 
of a provider or a provider group; an affiliate of a provider or 
a provider group; a close relative of an affiliate of a provider 
or provider group; or an affiliate of a close relative of an 
affiliate of a provider or provider group.  For the purposes of 
this paragraph, the following terms have the meanings given them.
    (1) "Affiliate" means a person that directly, or indirectly 
through one or more intermediaries, controls, or is controlled 
by, or is under common control with another person. 
    (2) "Person" means an individual, a corporation, a 
partnership, an association, a trust, an unincorporated 
organization, or a government or political subdivision. 
    (3) "Close relative of an affiliate of a provider or 
provider group" means an individual whose relationship by blood, 
marriage, or adoption to an individual who is an affiliate to a 
provider or a provider group is no more remote than first cousin.
    (4) "Control" includes the terms "controlling," "controlled 
by," and "under common control with" and means the possession, 
direct or indirect, of the power to direct or cause the 
direction of the management, operations, or policies of a 
person, whether through the ownership of voting securities, by 
contract, or otherwise. 
     (5) "Provider or provider group" means the license holder 
or controlling individual prior to the effective date of the 
receivership. 
    Subd. 2.  [RECEIVERSHIP AGREEMENT.] A majority of 
controlling individuals of a residential program may at any time 
ask the commissioner to assume operation of the residential 
program through appointment of a receiver.  On receiving the 
request for a receiver, the commissioner may enter into an 
agreement with a majority of controlling individuals and provide 
for the appointment of a become the receiver to and operate the 
residential program under conditions acceptable to both the 
commissioner and the majority of controlling persons individuals.
The agreement must specify the terms and conditions of the 
receivership and preserve the rights of the persons being served 
by the residential program.  A receivership set up under this 
section terminates at the time specified by the parties to the 
agreement or 30 days after either of the parties gives written 
notice to the other party of termination of the receivership 
agreement. 
    Subd. 3.  [MANAGEMENT AGREEMENT.] When the commissioner 
agrees to become the receiver of a residential program, the 
commissioner may enter into a management agreement with another 
entity or group to act as the managing agent during the 
receivership period.  The managing agent will be responsible for 
the day-to-day operations of the residential program subject at 
all times to the review and approval of the commissioner.  A 
reasonable fee may be paid to the managing agent for the 
performance of these services. 
    Subd. 4.  [RATE ADJUSTMENT.] The provisions of section 
245A.13, subdivisions 7 and 8, shall also apply to voluntary 
receiverships. 
    Subd. 5.  [CONTROLLING INDIVIDUALS; RESTRICTIONS ON 
LICENSURE.] No controlling individual of a residential program 
placed into receivership under this section shall apply for or 
receive a license to operate a residential program for five 
years from the commencement of the receivership period.  This 
subdivision does not apply to residential programs that are 
owned or operated by controlling individuals, that were in 
existence prior to the date of the receivership agreement, and 
that have not been placed into receivership. 
    Subd. 6.  [LIABILITY.] The controlling individuals of a 
residential program placed into receivership remain liable for 
any claims made against the residential program that arose from 
incidents or events that occurred prior to the commencement of 
the receivership period.  Neither the commissioner nor the 
managing agent of the commissioner assumes this liability. 
    Subd. 7.  [LIABILITY FOR FINANCIAL OBLIGATIONS.] Neither 
the commissioner nor the managing agent of the commissioner 
shall be liable for payment of any financial obligations of the 
residential program or of its controlling individuals incurred 
prior to the commencement of the receivership period unless such 
liability is expressly assumed in the receivership agreement.  
Those financial obligations remain the liability of the 
residential program and its controlling individuals.  Financial 
obligations of the residential program incurred after the 
commencement of the receivership period are the responsibility 
of the commissioner or the managing agent of the commissioner to 
the extent such obligations are expressly assumed by each in the 
receivership or management agreements.  The controlling 
individuals of the residential program remain liable for any 
financial obligations incurred after the commencement of the 
receivership period to the extent these obligations are not 
reimbursed in the rate paid to the residential program and are 
reasonable and necessary to the operation of the residential 
program.  These financial obligations, or any other financial 
obligations incurred by the residential program prior to the 
commencement of the receivership period which are necessary to 
the continued operation of the residential program, may be 
deducted from any rental payments owed to the controlling 
individuals of the residential program as part of the 
receivership agreement. 
    Subd. 8.  [PHYSICAL PLANT OF THE RESIDENTIAL 
PROGRAM.] Occupation of the physical plant after commencement of 
the receivership period shall be controlled by paragraphs (a) 
and (b). 
    (a) If the physical plant of a residential program placed 
in receivership is owned by a controlling individual or related 
party, the physical plant may be used by the commissioner or the 
managing agent for purposes of the receivership as long as the 
receivership period continues.  A fair monthly rental for the 
physical plant shall be paid by the commissioner or managing 
agent to the owner of the physical plant.  This fair monthly 
rental shall be determined by considering all relevant factors 
necessary to meet required arms-length obligations of 
controlling individuals such as the mortgage payments owed on 
the physical plant, the real estate taxes, special assessments, 
and the conditions of the physical plant.  This rental shall not 
include any allowance for profit or be based on any formula that 
includes an allowance for profit. 
    (b) If the owner of the physical plant of a residential 
program placed in receivership is not a related party, the 
controlling individual shall continue as the lessee of the 
property.  However, during the receivership period, rental 
payments shall be made to the owner of the physical plant by the 
commissioner or the managing agent on behalf of the controlling 
individual.  Neither the commissioner nor the managing agent 
assumes the obligations of the lease unless expressly stated in 
the receivership agreement.  Should the lease expire during the 
receivership, the commissioner or the managing agent may 
negotiate a new lease for the term of the receivership period. 
    Subd. 9.  [RECEIVERSHIP ACCOUNTING.] The commissioner may 
use the medical assistance account and funds for receivership 
cash flow and accounting purposes. 
    Subd. 10.  [RECEIVERSHIP COSTS.] The commissioner may use 
the accounts and funds that would have been available for the 
room and board, services, and program costs of persons in the 
residential program for costs, cash flow, and accounting 
purposes related to the receivership. 
    Sec. 49.  Minnesota Statutes 1989 Supplement, section 
245A.13, is amended to read: 
    245A.13 [INVOLUNTARY RECEIVERSHIP FOR RESIDENTIAL 
PROGRAMS.] 
    Subdivision 1.  [APPLICATION.] In addition to any other 
remedy provided by law, the commissioner may petition the 
district court in the county where the residential program is 
located for an order directing the controlling individuals of 
the residential program to show cause why the commissioner or 
the commissioner's designated representative should not be 
appointed receiver to operate the residential program.  The 
petition to the district court must contain proof by affidavit:  
(1) that the commissioner has either begun license suspension or 
revocation proceedings, suspended or revoked a license, or has 
decided to deny an application for licensure of the residential 
program; or (2) it appears to the commissioner that the health, 
safety, or rights of the residents may be in jeopardy because of 
the manner in which the residential program may close, the 
residential program's financial condition, or violations 
committed by the residential program of federal or state laws or 
rules.  If the license holder, applicant, or controlling 
individual operates more than one residential program, the 
commissioner's petition must specify and be limited to the 
residential program for which it seeks receivership.  The 
affidavit submitted by the commissioner must set forth 
alternatives to receivership that have been considered, 
including rate adjustments.  The order to show cause is 
returnable not less than five days after service is completed 
and must provide for personal service of a copy to the 
residential program administrator and to the persons designated 
as agents by the controlling individuals to accept service on 
their behalf. 
    Subd. 2.  [APPOINTMENT OF RECEIVER; RENTAL.] If the court 
finds that involuntary receivership is necessary as a means of 
protecting the health, safety, or rights of persons being served 
by the residential program, the court shall appoint a the 
commissioner as receiver to operate the residential program.  In 
the event that no receiver can be found who meets the conditions 
of this section, the commissioner or commissioner's designated 
representative may serve as the receiver.  The court shall 
determine a fair monthly rental for the physical plant, taking 
into account all relevant factors necessary to meet required 
arms-length obligations of controlling individuals such as 
mortgage payments, real estate taxes, special assessments, and 
the conditions of the physical plant.  The rental fee must be 
paid by the receiver to the appropriate controlling individuals 
for each month that the receivership remains in effect.  No 
payment made to a controlling individual by the receiver or any 
state agency during a period of involuntary receivership shall 
include any allowance for profit or be based on any formula that 
includes an allowance for profit.  The commissioner as receiver 
may contract with another entity or group to act as the managing 
agent during the receivership period.  The managing agent will 
be responsible for the day-to-day operations of the residential 
program subject at all times to the review and approval of the 
commissioner.  
    Subd. 3.  [POWERS AND DUTIES OF THE RECEIVER.] Within 36 
months after the receivership order, a the receiver appointed to 
operate a residential program during a period of involuntary 
receivership shall provide for the orderly transfer of the 
persons served by the residential program to other residential 
programs or make other provisions to protect their health, 
safety, and rights.  The receiver or the managing agent shall 
correct or eliminate deficiencies in the residential program 
that the commissioner determines endanger the health, safety, or 
welfare of the persons being served by the residential program 
unless the correction or elimination of deficiencies involves 
major alteration in the structure of the physical plant.  If the 
correction or elimination of the deficiencies requires major 
alterations in the structure of the physical plant, the receiver 
shall take actions designed to result in the immediate transfer 
of persons served by the residential program.  During the period 
of the receivership, the receiver and the managing agent shall 
operate the residential program in a manner designed to preserve 
the health, safety, rights, adequate care, and supervision of 
the persons served by the residential program.  The receiver or 
the managing agent may make contracts and incur lawful 
expenses.  The receiver or the managing agent shall collect 
incoming payments from all sources and apply them to the cost 
incurred in the performance of the receiver's functions of the 
receivership including the receiver's fee set under subdivision 
4.  No security interest in any real or personal property 
comprising the residential program or contained within it, or in 
any fixture of the physical plant, shall be impaired or 
diminished in priority by the receiver or the managing agent.  
The receiver shall pay all valid obligations of the residential 
program and may deduct these expenses, if necessary, from rental 
payments owed to any controlling individual by virtue of the 
receivership. 
    Subd. 3a.  [LIABILITY.] The provisions contained in section 
245A.12, subdivision 6, shall also apply to receiverships 
ordered according to this section. 
    Subd. 3b.  [LIABILITY FOR FINANCIAL OBLIGATIONS.] The 
provisions contained in section 245A.12, subdivision 7, also 
apply to receiverships ordered according to this section. 
    Subd. 3c.  [PHYSICAL PLANT OF THE RESIDENTIAL 
PROGRAM.] Occupation of the physical plant under an involuntary 
receivership shall be governed by paragraphs (a) and (b). 
    (a) The physical plant owned by a controlling individual of 
the residential program or related party must be made available 
for the use of the residential program throughout the 
receivership period.  The court shall determine a fair monthly 
rental for the physical plant, taking into account all relevant 
factors necessary to meet required arms-length obligations of 
controlling individuals such as mortgage payments, real estate 
taxes, special assessments, and the conditions of the physical 
plant.  The rental fee must be paid by the receiver to the 
appropriate controlling individuals or related parties for each 
month that the receivership remains in effect.  No payment made 
to a controlling individual or related party by the receiver or 
the managing agent or any state agency during a period of the 
receivership shall include any allowance for profit or be based 
on any formula that includes an allowance for profit. 
    (b) If the owner of the physical plant of a residential 
program is not a related party, the court shall order the 
controlling individual to continue as the lessee of the property 
during the receivership period.  Rental payments during the 
receivership period shall be made to the owner of the physical 
plant by the commissioner or the managing agent on behalf of the 
controlling individual. 
    Subd. 4.  [RECEIVER'S FEE; LIABILITY; ASSISTANCE FROM THE 
COMMISSIONER.] A receiver appointed under an involuntary 
receivership or the managing agent is entitled to a reasonable 
receiver's fee as determined by the court.  The receiver's fee 
is governed by section 256B.495.  The receiver is liable only in 
an official capacity for injury to person and property by reason 
of the conditions of the residential program.  The receiver is 
not personally liable, except for gross negligence and 
intentional acts.  
    Subd. 5.  [TERMINATION.] An involuntary receivership 
terminates 36 months after the date on which it was ordered or 
at any other time designated by the court or when any of the 
following events occurs: 
    (1) the commissioner determines that the residential 
program's license application should be granted or should not be 
suspended or revoked; 
    (2) a new license is granted to the residential program; or 
    (3) the commissioner determines that all persons residing 
in the residential program have been provided with alternative 
residential programs; or 
    (4) the residential program closes. 
    Subd. 6.  [EMERGENCY PROCEDURE.] If it appears from the 
petition filed under subdivision 1, from an affidavit or 
affidavits filed with the petition, or from testimony of 
witnesses under oath if the court determines it necessary, that 
there is probable cause to believe that an emergency exists in a 
residential program, the court shall issue a temporary order for 
appointment of a receiver within five days after receipt of the 
petition.  Notice of the petition must be served on the 
residential program administrator and on the persons designated 
as agents by the controlling individuals to accept service on 
their behalf.  A hearing on the petition must be held within 
five days after notice is served unless the administrator or 
designated agent consents to a later date.  After the hearing, 
the court may continue, modify, or terminate the temporary order.
    Subd. 7.  [RATE RECOMMENDATION.] The commissioner of human 
services may review rates of a residential program participating 
in the medical assistance program which is in involuntary 
receivership and that has needs or deficiencies documented by 
the department of health or the department of human services.  
If the commissioner of human services determines that a review 
of the rate established under section 256B.501 is needed, the 
commissioner shall: 
    (1) review the order or determination that cites the 
deficiencies or needs; and 
    (2) determine the need for additional staff, additional 
annual hours by type of employee, and additional consultants, 
services, supplies, equipment, repairs, or capital assets 
necessary to satisfy the needs or deficiencies. 
    Subd. 8.  [ADJUSTMENT TO THE RATE.] Upon review of rates 
under subdivision 7, the commissioner may adjust the residential 
program's payment rate.  The commissioner shall review the 
circumstances, together with the residential program cost 
report, to determine whether or not the deficiencies or needs 
can be corrected or met by reallocating residential program 
staff, costs, revenues, or other resources including any 
investments, efficiency incentives, or allowances.  If the 
commissioner determines that any deficiency cannot be corrected 
or the need cannot be met with the payment rate currently being 
paid, the commissioner shall determine the payment rate 
adjustment by dividing the additional annual costs established 
during the commissioner's review by the residential program's 
actual resident days from the most recent desk-audited cost 
report or the estimated resident days in the projected 
receivership period.  The payment rate adjustment must meet the 
conditions in Minnesota Rules, parts 9553.0010 to 9553.0080, and 
remains in effect during the period of the receivership or until 
another date set by the commissioner.  Upon the subsequent sale 
or transfer of the residential program, the commissioner may 
recover amounts that were paid as payment rate adjustments under 
this subdivision.  The buyer or transferee shall repay this 
amount to the commissioner within 60 days after the commissioner 
notifies the buyer or transferee of the obligation to repay.  
This provision does not limit the liability of the seller to the 
commissioner pursuant to section 256B.0641. 
    Subd. 9.  [RECEIVERSHIP ACCOUNTING.] The commissioner may 
use the medical assistance account and funds for receivership 
cash flow and accounting purposes. 
     Subd. 10.  [RECEIVERSHIP COSTS.] The commissioner may use 
the accounts and funds that would have been available for the 
room and board, services, and program costs of persons in the 
residential program for costs, cash flow, and accounting 
purposes related to the receivership. 
    Sec. 50.  Minnesota Statutes 1988, section 245A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PERMITTED SINGLE-FAMILY RESIDENTIAL USE.] 
A licensed nonresidential program with a licensed capacity of 12 
or fewer persons and a group family day care facility licensed 
under Minnesota Rules, parts 9502.0315 to 9502.0445, to serve 14 
or fewer children shall be considered a permitted single-family 
residential use of property for the purposes of zoning and other 
land use regulations. 
    Sec. 51.  Minnesota Statutes 1988, section 245A.14, 
subdivision 2, is amended to read: 
    Subd. 2.  [PERMITTED MULTIFAMILY USE.] Unless Except as 
otherwise provided in subdivision 1 or in a town, municipal, or 
county regulation, a licensed nonresidential program with a 
licensed capacity of 13 to 16 persons shall be considered a 
permitted multifamily residential use of property for purposes 
of zoning.  A town, municipal, or county zoning authority may 
require a conditional use or special use permit in order to 
assure proper maintenance and operation of the program.  
Conditions imposed on the nonresidential program must not be 
more restrictive than those imposed on other conditional uses or 
special uses of residential property in the same zones unless 
the additional conditions are necessary to protect the health 
and safety of the persons being served by the nonresidential 
program.  Nothing in sections 245A.01 to 245A.16 shall be 
construed to exclude or prohibit nonresidential programs from 
single-family zones if otherwise permitted by local zoning 
regulations. 
    Sec. 52.  Minnesota Statutes 1989 Supplement, section 
245A.16, subdivision 1, is amended to read: 
    Subdivision 1.  [DELEGATION OF AUTHORITY TO AGENCIES.] (a) 
County agencies and private agencies that have been designated 
or licensed by the commissioner to perform licensing functions 
and activities under section 245A.04, to recommend denial of 
applicants under section 245A.05, to recommend issue correction 
orders and recommend fines under section 245A.06, or to 
recommend suspending, revoking, and making licenses probationary 
under section 245A.07, shall comply with rules and directives of 
the commissioner governing those functions and with this section.
    (b) By January 1, 1991, the commissioner shall study and 
make recommendations to the legislature regarding the licensing 
and provision of support services to child foster homes.  In 
developing the recommendations, the commissioner shall consult 
licensed private agencies, county agencies, and licensed foster 
home providers. 
    Sec. 53.  Minnesota Statutes 1988, section 245A.16, 
subdivision 4, is amended to read: 
    Subd. 4.  [ENFORCEMENT OF THE COMMISSIONER'S ORDERS.] The 
county or private agency shall enforce the commissioner's orders 
under sections 245A.07 and 245A.08, subdivision 5, according to 
the instructions of the commissioner.  The county attorney shall 
assist the county agency in the enforcement and defense of the 
commissioner's orders under sections 245A.07 and 245A.08 
according to the instructions of the commissioner, unless a 
conflict of interest exists between the county attorney and the 
commissioner. 
    Sec. 54.  [245A.18] [SEAT BELT USE REQUIRED.] 
    (a) When a nonresidential license holder provides or 
arranges for transportation for children served by the license 
holder, children four years old and older must be restrained by 
a properly adjusted and fastened seat belt and children under 
age four must be properly fastened in a child passenger 
restraint system meeting federal motor vehicle safety 
standards.  A child passenger restraint system is not required 
for a child who, in the judgment of a licensed physician, cannot 
be safely transported in a child passenger restraint system 
because of a medical condition, body size, or physical 
disability, if the license holder possesses a written statement 
from the physician that satisfies the requirements in section 
169.685, subdivision 5, paragraph (b). 
    (b) Paragraph (a) does not apply to transportation of 
children in a school bus inspected under section 169.451 that 
has a gross vehicle weight rating of more than 10,000 pounds, is 
designed for carrying more than ten persons, and was 
manufactured after 1977. 
    Sec. 55.  [STUDY OF SEAT BELT REQUIREMENTS.] 
    The commissioner of human services with the assistance of 
the commissioners of education and public safety shall study and 
make recommendations to the 1991 legislature for standards for 
the transportation of children by nonresidential programs 
licensed by the commissioner of human services. 
    Sec. 56.  Minnesota Statutes 1988, section 252.27, as 
amended by Laws 1989, chapter 282, article 2, section 92, is 
amended to read: 
    252.27 [COST OF BOARDING CARE OUTSIDE OF HOME OR 
INSTITUTION PARENTAL CONTRIBUTION FOR THE COST OF CHILDREN'S 
SERVICES.] 
    Subdivision 1.  [COUNTY RESPONSIBILITY.] Whenever any child 
who has mental retardation or a related condition, or a physical 
or emotional handicap is in 24-hour care outside the home 
including respite care, in a facility licensed by the 
commissioner of human services, the cost of care services shall 
be paid by the county of financial responsibility determined 
pursuant to chapter 256G.  If the child's parents or guardians 
do not reside in this state, the cost shall be paid by the 
responsible governmental agency in the state from which the 
child came, by the parents or guardians of the child if they are 
financially able, or, if no other payment source is available, 
by the commissioner of human services.  
    Subd. 1a.  [DEFINITIONS.] A person has a "related 
condition" if that person has a severe, chronic disability that 
is (a) attributable to cerebral palsy, epilepsy, autism, 
Prader-Willi syndrome, or any other condition, other than mental 
illness, found to be closely related to mental retardation 
because the condition results in impairment of general 
intellectual functioning or adaptive behavior similar to that of 
persons with mental retardation or requires treatment or 
services similar to those required for persons with mental 
retardation; (b) is likely to continue indefinitely; and (c) 
results in substantial functional limitations in three or more 
of the following areas of major life activity:  self-care, 
understanding and use of language, learning, mobility, 
self-direction, or capacity for independent living.  For the 
purposes of this section, a child has an "emotional handicap" if 
the child has a psychiatric or other emotional disorder which 
substantially impairs the child's mental health and requires 
24-hour treatment or supervision. 
    Subd. 2.  [PARENTAL RESPONSIBILITY.] Responsibility of the 
parents for the cost of care services shall be based upon 
ability to pay.  The state agency shall adopt rules to determine 
responsibility of the parents for the cost of care services when:
    (a) Insurance or other health care benefits pay some but 
not all of the cost of care services; and 
    (b) No insurance or other health care benefits are 
available.  
    Subd. 2a.  [CONTRIBUTION AMOUNT.] (a) The natural or 
adoptive parents of a minor child, including a child determined 
eligible for medical assistance without consideration of 
parental income, must contribute monthly to the cost of 
services, unless the child is married or has been married, 
parental rights have been terminated, or the child's adoption is 
subsidized according to section 259.40 or through title IV-E of 
the Social Security Act. 
    (b) The parental contribution equals the following 
percentage of that portion of the income of the natural or 
adoptive parents that exceeds 200 percent of the federal poverty 
guidelines for the applicable household size: 
        Adjusted Gross         Percentage contribution
            Income         exceeding 200 percent of poverty
        Under $40,000                      0
     $40,000 to $49,999                   10 
     $50,000 to $59,999                   12 
     $60,000 to $74,999                   14 
       $75,000 or more                    15
    If the child lives with the parent, the parental 
contribution is reduced by $200.  If the child resides in an 
institution specified in section 256B.35, the parent is 
responsible for the personal needs allowance specified under 
that section in addition to the parental contribution determined 
under this section.  The parental contribution is reduced by any 
amount required to be paid directly to the child pursuant to a 
court order, but only if actually paid. 
    (c) The household size to be used in determining the amount 
of contribution under paragraph (b) includes natural and 
adoptive parents and their dependents under age 21, including 
the child receiving services.  Adjustments in the contribution 
amount due to annual changes in the federal poverty guidelines 
shall be implemented on the first day of July following 
publication of the changes. 
    (d) For purposes of paragraph (b), "income" means the 
adjusted gross income of the natural or adoptive parents 
determined according to the previous year's federal tax form. 
    (e) The contribution shall be explained in writing to the 
parents at the time eligibility for services is being 
determined.  The contribution shall be made on a monthly basis 
effective with the first month in which the child receives 
services.  Annually upon redetermination or at termination of 
eligibility, if the contribution exceeded the cost of services 
provided, the local agency or the state shall reimburse that 
excess amount to the parents, either by direct reimbursement if 
the parent is no longer required to pay a contribution, or by a 
reduction in or waiver of parental fees until the excess amount 
is exhausted. 
    (f) The monthly contribution amount must be reviewed at 
least every 12 months; when there is a change in household size; 
and when there is a loss of or gain in income from one month to 
another in excess of ten percent.  The local agency shall mail a 
written notice 30 days in advance of the effective date of a 
change in the contribution amount.  A decrease in the 
contribution amount is effective in the month that the parent 
verifies a reduction in income or change in household size. 
    (g) Parents of a minor child who do not live with each 
other shall each pay the contribution required under paragraph 
(a), except that a court-ordered child support payment actually 
paid on behalf of the child receiving services shall be deducted 
from the contribution of the parent making the payment. 
    (h) The contribution under paragraph (b) shall be increased 
by an additional five percent if the local agency determines 
that insurance coverage is available but not obtained for the 
child.  For purposes of this section, "available" means the 
insurance is a benefit of employment for a family member at an 
annual cost of no more than five percent of the family's annual 
income.  For purposes of this section, insurance means health 
and accident insurance coverage, enrollment in a nonprofit 
health service plan, health maintenance organization, 
self-insured plan, or preferred provider organization. 
    Parents who have more than one child in out-of-home care 
receiving services shall not be required to pay more than the 
amount for one the child in out-of-home care.  In no event shall 
the parents be required to pay more than five percent of their 
income as defined in section 290A.03, subdivision 3 with the 
highest expenditures.  There shall be no resource contribution 
from the parents.  The parent shall not be required to pay a 
contribution in excess of the cost of the services provided to 
the child, not counting payments made to school districts for 
education-related services.  Notice of an increase in fee 
payment must be given at least 30 days before the increased fee 
is due.  
    Subd. 2b.  [CHILD'S RESPONSIBILITY.] Responsibility of the 
child for the cost of care shall be up to the maximum amount of 
the total income and resources attributed to the child except 
for the clothing and personal needs allowance as provided in 
section 256B.35, subdivision 1.  Reimbursement by the parents 
and child shall be made to the county making any payments 
for care and treatment services.  The county board may require 
payment of the full cost of caring for children whose parents or 
guardians do not reside in this state. 
    To the extent that a child described in subdivision 1 is 
eligible for benefits under chapter 62A, 62C, 62D, 62E, or 64B, 
the county is not liable for the cost of care services.  A 
parent or legal guardian who discontinues payment of health 
insurance premiums, subscriber fees or enrollment fees for a 
child who is otherwise eligible for those benefits is ineligible 
for payment of the cost of care of that child under this section.
    The commissioner's determination shall be conclusive in any 
action to enforce payment of the cost of care.  Any appeals from 
the commissioner's determination shall be made pursuant to 
section 256.045, subdivisions 2 and 3. 
    Subd. 2c.  [APPEALS.] A parent may appeal the determination 
of an obligation to make a contribution under this section, 
according to section 256.045. 
    Subd. 3.  [CIVIL ACTIONS.] If the parent fails to make 
appropriate reimbursement as required in subdivision 2, the 
county attorney may initiate a civil action to collect any 
unpaid reimbursement 2a and 2b, the attorney general, at the 
request of the commissioner, may institute or direct the 
appropriate county attorney to institute civil action to recover 
the required reimbursement. 
    Subd. 4.  [ORDER OF PAYMENT.] If the parental contribution 
is for reimbursement for the cost of services to both the local 
agency and the medical assistance program, the local agency 
shall be reimbursed for its expenses first and the remainder 
must be deposited in the medical assistance account. 
    Sec. 57.  [254A.17] [PREVENTION AND TREATMENT INITIATIVES.] 
    Subdivision 1.  [MATERNAL AND CHILD SERVICE PROGRAMS.] The 
commissioner shall fund maternal and child health and social 
service programs designed to improve the health and functioning 
of children born to mothers using alcohol and controlled 
substances.  Comprehensive programs shall include immediate and 
ongoing intervention, treatment, and coordination of medical, 
educational, and social services through a child's preschool 
years.  Programs shall also include research and evaluation to 
identify methods most effective in improving outcomes among this 
high-risk population.  
    Subd. 2.  [CHILD PROTECTION PROGRAMS.] The commissioner 
shall fund innovative child protection programs for children and 
families at risk due to substance abuse.  Funding of a program 
under this subdivision must result in (1) earlier intervention; 
(2) the provision of in-home supervision; and (3) case 
management of all services required.  Programs must also include 
research and evaluation to identify methods most effective in 
child protection services for this high-risk population.  
    Subd. 3.  [STATEWIDE DETOXIFICATION TRANSPORTATION 
PROGRAM.] The commissioner shall provide grants to counties, 
Indian reservations, other nonprofit agencies, or local 
detoxification programs for provision of transportation of 
intoxicated individuals to detoxification programs.  
    Sec. 58.  Minnesota Statutes 1989 Supplement, section 
254B.03, subdivision 4, is amended to read: 
    Subd. 4.  [DIVISION OF COSTS.] Except for services provided 
by a county under section 254B.09, subdivision 1, or services 
provided under section 256B.69 or 256D.03, subdivision 4, 
paragraph (b), the county shall, out of local money, pay the 
state for 15 percent of the cost of chemical dependency 
services, including those services provided to persons eligible 
for medical assistance under chapter 256B and general assistance 
medical care under chapter 256D.  Counties may use the indigent 
hospitalization levy for treatment and hospital payments made 
under this section.  Fifteen percent of any state collections 
from private or third-party pay, less 15 percent of the cost of 
payment and collections, must be distributed to the county that 
paid for a portion of the treatment under this section.  If all 
funds allocated according to section 254B.02 are exhausted by a 
county and the county has met or exceeded the base level of 
expenditures under section 254B.02, subdivision 3, the county 
shall pay the state for 15 percent of the costs paid by the 
state under this section.  The commissioner may refuse to pay 
state funds for services to persons not eligible under section 
254B.04, subdivision 1, if the county financially responsible 
for the persons has exhausted its allocation. 
    Sec. 59.  Minnesota Statutes 1988, section 254B.04, as 
amended by Laws 1989, chapter 282, article 2, section 106, is 
amended to read: 
     254B.04 [ELIGIBILITY FOR CHEMICAL DEPENDENCY FUND 
SERVICES.] 
    Subdivision 1.  [ELIGIBILITY.] (a) Persons eligible for 
benefits under sections 256D.01 to 256D.21, or for federal 
benefits under Code of Federal Regulations, title 25, part 
20, and persons eligible for federal health care medical 
assistance benefits under sections 256B.055, and 256B.056, and 
256B.06 or who meet the income standards of section 256B.056, 
subdivision 4, and persons eligible for general assistance 
medical care under section 256D.03, subdivision 3 are entitled 
to chemical dependency fund services. 
    (b) A person not entitled to services under paragraph (a), 
but with family income that is less than 60 percent of the state 
median income for a family of like size and composition, shall 
be eligible to receive chemical dependency fund services within 
the limit of funds available after persons entitled to services 
under paragraph (a) have been served.  A county may spend money 
from its own sources to serve persons under this paragraph. 
    (c) Persons whose income is between 60 percent and 115 
percent of the state median income shall be eligible for 
chemical dependency services on a sliding fee basis, within the 
limit of funds available, after persons entitled to services 
under paragraph (a) and persons eligible for services under 
paragraph (b) have been served.  Persons eligible under this 
paragraph must contribute to the cost of services according to 
the sliding fee scale established under subdivision 3.  A county 
may spend money from its own sources to provide services to 
persons under this paragraph. 
    Subd. 3.  [AMOUNT OF CONTRIBUTION.] The commissioner shall 
adopt a sliding fee scale to determine the amount of 
contribution to be required from persons whose income is greater 
than the standard of assistance under sections 256B.055, 
256B.056, 256B.06, and 256D.01 to 256D.21 under this section.  
The commissioner may adopt rules to amend existing fee scales.  
The commissioner may establish a separate fee scale for 
recipients of chemical dependency transitional and extended care 
rehabilitation services that provides for the collection of fees 
for board and lodging expenses.  The fee schedule shall ensure 
that employed persons are allowed the income disregards and 
savings accounts that are allowed residents of community mental 
illness facilities under section 256D.06, subdivisions 1 and 
1b.  The fee scale must not provide assistance to persons whose 
income is more than 115 percent of the state median income.  
Payments of liabilities under this section are medical expenses 
for purposes of determining spend-down under sections 256B.055, 
256B.056, 256B.06, and 256D.01 to 256D.21.  The required amount 
of contribution established by the fee scale in this subdivision 
is also the cost of care responsibility subject to collection 
under section 254B.06, subdivision 1. 
    Sec. 60.  Minnesota Statutes 1988, section 254B.08, is 
amended to read: 
    254B.08 [FEDERAL WAIVERS.] 
    The commissioner shall apply for any federal waivers 
necessary to secure, to the extent allowed by law, federal 
financial participation for the provision of services to persons 
who need chemical dependency services.  The commissioner may 
seek amendments to the waivers or apply for additional waivers 
to contain costs.  The commissioner shall ensure that payment 
for the cost of providing chemical dependency services under the 
federal waiver plan does not exceed the cost of chemical 
dependency services that would have been provided without the 
waivered services.  
    Notwithstanding sections 254B.04 and 256B.02, subdivision 
8, clause (18), and rules adopted under section 254B.03, 
subdivision 5, persons eligible under sections 256B.055, 
256B.056, and 256B.06 for medical assistance benefits shall not 
be eligible for services reimbursed through the consolidated 
chemical dependency fund, except for transitional 
rehabilitation, extended care programs, and culturally specific 
programs as defined by Minnesota Rules, part 9530.6605, subpart 
13, until the federal Social Security Act, section 2108 (1915B), 
program waivers are secured.  Until the necessary federal 
program waivers are secured, persons eligible for medical 
assistance benefits under sections 256B.055, 256B.056, and 
256B.06 shall be eligible for chemical dependency treatment 
services under sections 256B.02, subdivision 8, and 256B.0625. 
    Sec. 61.  Minnesota Statutes 1989 Supplement, 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; 
    (3) the first $90 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) thirty dollars plus one-third of each individual's 
earned income 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; (b) refused without good cause to 
accept an offer of suitable employment; (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 earned 
income in this clause 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 subclauses (a) to (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 this clause, 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; 
    (5) an amount equal to the actual expenditures for the care 
of each dependent child or incapacitated individual living in 
the same home and receiving aid, not to exceed:  (a) $175 for 
each individual age two and older, and $200 for each individual 
under the age of two, when the family member whose needs are 
included in the eligibility determination is employed for 30 or 
more hours per week; or (b) $174 for each individual age two or 
older, and $199 for each individual under the age of two, when 
the family member whose needs are included in the eligibility 
determination is not employed throughout the month or when 
employment is less than 30 hours per week.  The dependent care 
disregard must be applied after all other disregards under this 
subdivision have been applied; 
    (6) the first $50 per assistance unit of the monthly 
support obligation collected by the support and recovery (IV-D) 
unit.  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 must be paid to the assistance 
unit within 15 days after the end of the month in which the 
collection of the periodic support payments occurred and must be 
disregarded when determining the amount of assistance.  A review 
of a payment decision under this clause must be requested within 
30 days after receiving the notice of collection of assigned 
support, or within 90 days after receiving the notice if good 
cause can be shown for not making the request within the 30-day 
limit; 
    (7) that portion of an insurance settlement earmarked and 
used to pay medical expenses, funeral and burial costs, or to 
repair or replace insured property; and 
    (8) all earned income tax credit payments received by the 
family as a refund of federal income taxes or made as advance 
payments by an employer.  
    Sec. 62.  [256.9791] [MEDICAL SUPPORT BONUS INCENTIVES.] 
    Subdivision 1.  [BONUS INCENTIVE.] (a) A bonus incentive 
program is created to increase the identification and 
enforcement by county agencies of dependent health insurance 
coverage for persons who are receiving medical assistance under 
section 256B.055 and for whom the county agency is providing 
child support enforcement services.  
    (b) The bonus shall be awarded to a county child support 
agency for each person for whom coverage is identified and 
enforced by the child support enforcement program when the 
obligor is under a court order to provide dependent health 
insurance coverage.  
    Subd. 2.  [DEFINITIONS.] For the purpose of this section, 
the following definitions apply.  
    (a) "Case" means a family unit that is receiving medical 
assistance under section 256B.055 and for whom the county agency 
is providing child support enforcement services.  
    (b) "Commissioner" means the commissioner of the department 
of human services.  
    (c) "County agency" means the county child support 
enforcement agency.  
    (d) "Coverage" means initial dependent health insurance 
benefits for a case or individual member of a case.  
    (e) "Enforce" or "enforcement" means obtaining proof of 
current or future dependent health insurance coverage through an 
overt act by the county agency. 
    (f) "Enforceable order" means a child support court order 
containing the statutory language in section 518.171 or other 
language ordering an obligor to provide dependent health 
insurance coverage.  
    (g) "Identify" or "identification" means obtaining proof of 
dependent health insurance coverage through an overt act by the 
county agency.  
    Subd. 3.  [ELIGIBILITY; REPORTING REQUIREMENTS.] (a) In 
order for a county to be eligible to claim a bonus incentive 
payment, the county agency must report to the commissioner, no 
later than August 1 of each fiscal year, the number of cases as 
of June 30 of the preceding fiscal year in which (1) the court 
has established an obligation for coverage by the obligor and 
(2) coverage was in effect as of June 30.  The ratio resulting 
when the number of cases reported under (2) is divided by the 
number of cases reported under (1) shall be used to determine 
the amount of the bonus incentive according to subdivision 4.  
    (b) A county that fails to submit the required information 
by August 1 of each fiscal year is not eligible for any bonus 
payments under this section for that fiscal year. 
    Subd. 4.  [RATE OF BONUS INCENTIVE.] The rate of the bonus 
incentive shall be determined according to paragraphs (a) to (c).
    (a) When a county agency has identified or enforced 
coverage in up to and including 50 percent of its cases, the 
county shall receive $15 for each additional person for whom 
coverage is identified or enforced.  
    (b) When a county agency has identified or enforced 
coverage in more than 50 percent but less than 80 percent of its 
cases, the county shall receive $20 for each person for whom 
coverage is identified or enforced.  
    (c) When a county agency has identified or enforced 
coverage in 80 percent or more of its cases, the county shall 
receive $25 for each person for whom coverage is identified or 
enforced.  
    (d) Bonus payments according to paragraphs (a) to (c) are 
limited to one bonus for each covered person each time the 
county agency identifies or enforces previously unidentified 
health insurance coverage and apply only to coverage identified 
or enforced after the effective date of this section. 
    Subd. 5.  [CLAIMS FOR BONUS INCENTIVE.] (a) Beginning July 
1, 1990, county agencies shall file a claim for a medical 
support bonus payment by reporting to the commissioner the 
following information for each case where dependent health 
insurance is identified or enforced as a result of an overt act 
of the county agency: 
    (1) child support enforcement system case number or county 
specific case number; 
    (2) names and dates of birth for each person covered; and 
    (3) the effective date of coverage. 
    (b) The report must be made upon enrollment in coverage but 
no later than September 30 for coverage identified or 
established during the preceding fiscal year. 
     (c) The county agency making the initial contact resulting 
in the establishment of coverage is the county agency entitled 
to claim the bonus incentive even if the case is transferred to 
another county agency prior to the time coverage is established. 
    (d) Disputed claims must be submitted to the commissioner 
and the commissioner's decision is final. 
    Subd. 6.  [DISTRIBUTION.] (a) Bonus incentives must be 
issued to the county agency quarterly, within 45 days after the 
last day of each quarter for which a bonus incentive is being 
claimed, and must be paid up to the limit of the appropriation 
in the order in which claims are received.  
    (b) Total bonus incentives must be computed by multiplying 
the number of persons included in claims submitted in accordance 
with this section by the applicable bonus payment as determined 
in subdivision 4. 
    (c) The county agency must repay any bonus erroneously 
issued. 
    (d) A county agency must maintain a record of bonus 
incentives claimed and received for each quarter.  
    Sec. 63.  Minnesota Statutes 1988, section 256E.06, 
subdivision 2, is amended to read: 
    Subd. 2.  [FORMULA LIMITATION.] The amounts computed 
pursuant to subdivision 1 shall be subject to the following 
limitations: 
    (a) No county shall be allocated more than 130 percent of 
the amount received prior to any penalty imposed under 
subdivision 7 in the immediately preceding year.  If the amount 
allocated to any county pursuant to subdivision 1 is greater 
than this amount, the excess shall be reallocated to all 
counties in direct proportion to their initial allocations.  
    (b) Each county shall be guaranteed a percentage increase 
over the previous year's allocation equal to 0.2 percent for 
each percentage increase in the statewide allocation, up to a 
maximum guaranteed increase of one percent when the statewide 
allocation increases by five percent or more.  If the amount 
allocated to any county pursuant to subdivision 1 is less than 
this amount, the shortage shall be recovered from all counties 
in direct proportion to their initial allocations. 
    (c) If the amount to be allocated statewide in any year is 
less than the amount allocated in the previous year, then the 
provisions of clause (b) shall not apply, and each county's 
allocation shall be equal to its previous year's allocation 
reduced by the same percentage that the statewide allocation was 
reduced. 
     (d) For the purpose of calculating the 1991 community 
social services act allocation, the 1990 allocation must be 
increased by the following amounts:  $46,487 for Crow Wing 
county, $21,995 for Fillmore county, $5,368 for Hubbard county, 
$24,225 for Lac Qui Parle county, and $4,444 for Red Lake county.
    Sec. 64.  Minnesota Statutes 1988, section 256E.06, 
subdivision 7, is amended to read: 
    Subd. 7.  [FAILURE TO LEVY.] A county which levies less 
than the levy required in subdivision 5, shall receive a 
reduction in the aid calculated pursuant to subdivisions 1 and 
2.  The commissioner shall calculate the reduced aid as follows: 
    (a) Divide the amount levied by the amount required to be 
levied in subdivision 5; and 
    (b) Multiply the ratio derived in clause (a) times the aid 
calculated under subdivision subdivisions 1 and 2.  
    The amount of the reduction in aid shall be returned to the 
general fund.  The reduction in aid imposed under this 
subdivision shall be effective for one year, and aid in the 
following year shall be calculated under subdivisions 1 and 2 as 
though the reduction had not occurred.  This provision applies 
to penalties imposed for the year 1989 and all subsequent years. 
     Sec. 65.  Minnesota Statutes 1989 Supplement, section 
257.57, subdivision 1, is amended to read: 
    Subdivision 1.  A child, the child's biological mother, or 
a man presumed to be the child's father under section 257.55, 
subdivision 1, clause (a), (b), or (c) may bring an action: 
    (a) At any time for the purpose of declaring the existence 
of the father and child relationship presumed under section 
257.55, subdivision 1, clause (a), (b), or (c); or 
    (b) Within three years after the child's birth for the 
purpose of declaring the nonexistence of the father and child 
relationship presumed under section 257.55, subdivision 1, 
clause (a), (b), or (c).  However, if the presumed father was 
divorced from the child's mother after service by publication, 
and, if, on or before the 280th day after the judgment and 
decree of divorce or dissolution became final, he did not know 
that the child was born during the marriage or within 280 days 
after the marriage was terminated, the action is not barred 
until one year after the child reaches the age of majority or 
one year after the presumed father knows or reasonably should 
have known of the birth of the child, whichever is earlier.  
After the presumption has been rebutted, paternity of the child 
by another man may be determined in the same action, if he has 
been made a party. 
    Sec. 66.  Minnesota Statutes 1988, section 462.357, 
subdivision 7, is amended to read: 
    Subd. 7.  [PERMITTED SINGLE FAMILY USE.] A state licensed 
residential facility serving six or fewer persons or, a licensed 
day care facility serving 12 or fewer persons, and a group 
family day care facility licensed under Minnesota Rules, parts 
9502.0315 to 9502.0445 to serve 14 or fewer children shall be 
considered a permitted single family residential use of property 
for the purposes of zoning. 
    Sec. 67.  Minnesota Statutes 1988, section 462.357, 
subdivision 8, is amended to read: 
    Subd. 8.  [PERMITTED MULTIFAMILY USE.] Unless Except as 
otherwise provided in subdivision 7 or in any town, municipal or 
county zoning regulation as authorized by this subdivision, a 
state licensed residential facility serving from 7 through 16 
persons or a licensed day care facility serving from 13 through 
16 persons shall be considered a permitted multifamily 
residential use of property for purposes of zoning.  A township, 
municipal or county zoning authority may require a conditional 
use or special use permit in order to assure proper maintenance 
and operation of a facility, provided that no conditions shall 
be imposed on the facility which are more restrictive than those 
imposed on other conditional uses or special uses of residential 
property in the same zones, unless the additional conditions are 
necessary to protect the health and safety of the residents of 
the residential facility.  Nothing herein shall be construed to 
exclude or prohibit residential or day care facilities from 
single family zones if otherwise permitted by a local zoning 
regulation. 
     Sec. 68.  Minnesota Statutes 1988, section 518.54, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [DEPOSIT ACCOUNT.] "Deposit account" means funds 
deposited with a financial institution in the form of a savings 
account, checking account, NOW account, or demand deposit 
account. 
    Sec. 69.  Minnesota Statutes 1988, section 518.54, is 
amended by adding a subdivision to read: 
    Subd. 2b.  [FINANCIAL INSTITUTION.] "Financial institution" 
means a savings association, bank, trust company, credit union, 
industrial loan and thrift company, bank and trust company, or 
building and loan association, and includes a branch or detached 
facility of a financial institution. 
    Sec. 70.  Minnesota Statutes 1988, 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.  Public authorities responsible 
for child support enforcement may act on behalf of other public 
authorities responsible for child support enforcement.  This 
includes the authority to represent the legal interests of or 
execute documents on behalf of the other public authority in 
connection with the establishment, enforcement, and collection 
of child support, maintenance, or medical support, and 
collection on judgments.  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. 71.  Minnesota Statutes 1988, section 518.551, 
subdivision 5, is amended to read:  
    Subd. 5.  [NOTICE TO PUBLIC AUTHORITY; GUIDELINES.] (a) The 
petitioner shall notify the public authority of all proceedings 
for dissolution, legal separation, determination of parentage or 
for the custody of a child, if either party is receiving aid to 
families with dependent children or applies for it subsequent to 
the commencement of the proceeding.  After receipt of the 
notice, the court shall set child support as provided in this 
subdivision.  The court may order either or both parents owing a 
duty of support to a child of the marriage to pay an amount 
reasonable or necessary for the child's support, without regard 
to marital misconduct.  The court shall approve a child support 
agreement of the parties if each party is represented by 
independent counsel, unless the agreement is not in the interest 
of justice.  In other cases the court shall determine and order 
child support in a specific dollar amount in accordance with the 
guidelines and the other factors set forth in paragraph (b) and 
any departure therefrom. 
    The court shall multiply derive a specific dollar amount by 
multiplying the obligor's net income by the percentage indicated 
by the following guidelines:  
Net Income Per            Number of Children 
Month of Obligor 
                   1      2      3      4      5      6    7 or 
                                                           more 
$400 and Below          Order based on the ability of the 
                        obligor to provide support  
                        at these income levels, or at higher  
                        levels, if the obligor has 
                        the earning ability.  
$401 - 500        14%    17%    20%    22%    24%    26%    28% 
$501 - 550        15%    18%    21%    24%    26%    28%    30% 
$551 - 600        16%    19%    22%    25%    28%    30%    32% 
$601 - 650        17%    21%    24%    27%    29%    32%    34% 
$651 - 700        18%    22%    25%    28%    31%    34%    36% 
$701 - 750        19%    23%    27%    30%    33%    36%    38% 
$751 - 800        20%    24%    28%    31%    35%    38%    40% 
$801 - 850        21%    25%    29%    33%    36%    40%    42% 
$851 - 900        22%    27%    31%    34%    38%    41%    44% 
$901 - 950        23%    28%    32%    36%    40%    43%    46% 
$951 - 1000       24%    29%    34%    38%    41%    45%    48% 
$1001- 4000       25%    30%    35%    39%    43%    47%    50% 
    Guidelines for support for an obligor with a monthly income 
of $4,001 or more shall be the same dollar amounts as provided 
for in the guidelines for an obligor with a monthly income of 
$4,000.  
         Net Income defined as:  
         Total monthly 
         income less           *(i) Federal Income Tax 
                              *(ii) State Income Tax 
                              (iii) Social Security 
                                     Deductions 
                               (iv) Reasonable 
                                     Pension Deductions 
         *Standard 
         Deductions apply-      (v) Union Dues 
         use of tax tables     (vi) Cost of Dependent 
               recommended           Insurance Coverage  
                              (vii) Cost of Individual or Group 
                                     Health/Hospitalization 
                                     Coverage or an 
                                     Amount for Actual 
                                     Medical Expenses 
                             (viii) A Child Support or 
                                     Maintenance Order that is
                                     Currently Being Paid.  
    "Net income" does not include the income of the obligor's 
spouse, but does include in-kind payments received by the 
obligor in the course of employment, self-employment, or 
operation of a business if the payments reduce the obligor's 
living expenses.  
    (b) In addition to the child support guidelines, the court 
shall take into consideration the following factors in setting 
or modifying child support:  
    (1) all earnings, income, and resources of the parents, 
including real and personal property; 
    (2) the financial needs and resources, physical and 
emotional condition, and educational needs of the child or 
children to be supported; 
    (3) the standards of living the child would have enjoyed 
had the marriage not been dissolved, but recognizing that the 
parents now have separate households; 
    (4) the amount of the aid to families with dependent 
children grant for the child or children; 
    (5) which parent receives the income taxation dependency 
exemption and what financial benefit the parent receives from 
it; and 
    (6) the parents' debts as provided in paragraph (c).  
    (c) In establishing or modifying a support obligation, the 
court may consider debts owed to private creditors, but only if: 
    (1) the right to support has not been assigned under 
section 256.74; 
    (2) the court determines that the debt was reasonably 
incurred for necessary support of the child or parent or for the 
necessary generation of income.  If the debt was incurred for 
the necessary generation of income, the court shall consider 
only the amount of debt that is essential to the continuing 
generation of income; and 
    (3) the party requesting a departure produces a sworn 
schedule of the debts, with supporting documentation, showing 
goods or services purchased, the recipient of them, the amount 
of the original debt, the outstanding balance, the monthly 
payment, and the number of months until the debt will be fully 
paid.  
    Any schedule prepared under paragraph (c), clause (3), 
shall contain a statement that the debt will be fully paid after 
the number of months shown in the schedule, barring emergencies 
beyond the party's control.  
    Any further departure below the guidelines that is based on 
a consideration of debts owed to private creditors shall not 
exceed 18 months in duration, after which the support shall 
increase automatically to the level ordered by the court.  
Nothing in this section shall be construed to prohibit one or 
more step increases in support to reflect debt retirement during 
the 18-month period.  
    Where payment of debt is ordered pursuant to this section, 
the payment shall be ordered to be in the nature of child 
support.  
    (d) Nothing shall preclude the court from receiving 
evidence on the above factors to determine if the guidelines 
should be exceeded or modified in a particular case.  
    (e) The above guidelines are binding in each case unless 
the court makes express findings of fact as to the reason for 
departure below or above the guidelines.  
    Sec. 72.  Minnesota Statutes 1989 Supplement, section 
518.551, subdivision 10, is amended to read:  
    Subd. 10.  [ADMINISTRATIVE PROCESS FOR CHILD AND MEDICAL 
SUPPORT ORDERS.] An administrative process is established to 
obtain, modify, and enforce child and medical support orders and 
maintenance.  
    The commissioner of human services may designate counties 
to participate in the administrative process established by this 
section.  All proceedings for obtaining, modifying, or enforcing 
child and medical support orders and maintenance and 
adjudicating uncontested parentage proceedings, required to be 
conducted in counties designated by the commissioner of human 
services in which the county human services agency 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 contested parentage; 
    (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 district 
judge.  
    For the purpose of this process, all powers, duties, and 
responsibilities conferred on judges of the 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.  
    Before implementing the process in a county, the chief 
administrative law judge, the commissioner of human services, 
the director of the county human services agency, the county 
attorney, and the county court administrator shall jointly 
establish procedures and the county shall provide hearing 
facilities for implementing this process in a county.  
    Nonattorney employees of the public agency responsible for 
child support in the counties designated by the commissioner, 
acting at the direction of the county attorney, may prepare, 
sign, serve, and file complaints and 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.  
    The hearings shall be conducted under the rules of the 
office of administrative hearings, Minnesota Rules, parts 
1400.7100 to 1400.7500, 1400.7700, and 1400.7800, as adopted by 
the chief administrative law judge.  All other aspects of the 
case, including, but not limited to, pleadings, discovery, and 
motions, shall be conducted under the rules of family court, the 
rules of civil procedure, and chapter 518.  The administrative 
law judge shall make findings of fact, conclusions, and a final 
decision and issue an order.  Orders issued by an administrative 
law judge are enforceable by the contempt powers of the county 
and district courts.  
    The decision and order of the administrative law judge 
shall be a final agency decision for purposes of sections 14.63 
to 14.69 is appealable to the court of appeals in the same 
manner as a decision of the district court.  
    Sec. 73.  Minnesota Statutes 1988, 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, 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.  Every order for 
maintenance or support must include the obligor's social 
security number and date of birth and the name and address of 
the obligor's employer or other payor of funds.  
    Sec. 74.  Minnesota Statutes 1988, section 518.611, 
subdivision 2, is amended to read:  
    Subd. 2.  [CONDITIONS OF INCOME WITHHOLDING.] (a) 
Withholding shall result whenever the obligor fails to make the 
maintenance or support payments, and the following conditions 
are met:  
    (1) the obligor is at least 30 days in arrears; 
    (2) the obligee or the public authority serves written 
notice 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 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; and 
    (4) the obligee or the public authority serves a copy of 
the notice of income withholding, a copy of the court's 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 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.  
An order without this notice remains subject to this subdivision.
     (f) Absent a court order to the contrary, if an arrearage 
exists at the time an order for ongoing support or maintenance 
would otherwise terminate, income withholding shall continue in 
effect in an amount equal to the former support or maintenance 
obligation plus an additional amount equal to 20 percent of the 
monthly child support obligation, until all arrears have been 
paid in full. 
    Sec. 75.  Minnesota Statutes 1988, section 518.611, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [PREAUTHORIZED TRANSFERS FROM OBLIGOR ACCOUNTS.] 
In any case where income withholding is ineffective due to the 
obligor's method of obtaining income, the court shall order the 
obligor to identify a child support deposit account owned solely 
by the obligor, or to establish an account, in a financial 
institution located in this state for the purpose of depositing 
court-ordered child support payments.  The court shall order the 
obligor to execute an agreement with the appropriate public 
authority authorizing preauthorized transfers from the obligor's 
child support deposit account payable to an account of the 
public authority responsible for child support enforcement.  The 
court shall order the obligor to disclose to the court all 
deposit accounts owned by the obligor in whole or in part in any 
financial institution.  The court may order the obligor to 
disclose to the court the opening or closing of any deposit 
account owned in whole or in part by the obligor within 30 days 
of the opening or closing.  The court may order the obligor to 
execute an agreement with the appropriate public authority 
authorizing preauthorized transfers from any deposit account 
owned in whole or in part by the obligor to the obligor's child 
support deposit account if necessary to satisfy court-ordered 
child support payments.  The court may order a financial 
institution to disclose to the court the account number and any 
other account identification information regarding accounts 
owned in whole or in part by the obligor.  An obligor who fails 
to comply with this section, fails to deposit funds in at least 
one deposit account sufficient to pay court-ordered child 
support, or stops payment or revokes authorization of any 
preauthorized transfer is subject to contempt of court 
procedures under chapter 588. 
    Sec. 76.  Minnesota Statutes 1989 Supplement, 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, or financial institution 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.  In the case of a financial 
institution, preauthorized transfers must occur in accordance 
with a court-ordered payment schedule.  An employer or other, 
payor of funds, or financial institution 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.  The payor 
shall identify on the remittance information the date the 
obligor is paid the remainder of the income.  The financial 
institution shall execute preauthorized transfers from the 
deposit accounts of the obligor in the amount specified in the 
order and amounts required under subdivision 2 as directed by 
the public authority responsible for child support enforcement. 
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.  A financial institution is liable to 
the obligee if funds in any of the obligor's deposit accounts 
identified in the court order equal the amount stated in the 
preauthorization agreement but are not transferred by the 
financial institution in accordance with the agreement. 
    Sec. 77.  Minnesota Statutes 1988, section 518.611, 
subdivision 8, is amended to read:  
    Subd. 8.  [EMPLOYER 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 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. 78.  Minnesota Statutes 1988, section 518.611, 
subdivision 8a, is amended to read:  
    Subd. 8a.  [LUMP SUM PAYMENTS.] (a) Upon the transmittal of 
the last reimbursement payment to the employee, where a lump sum 
payment including, but not limited to, severance pay, 
accumulated sick pay or vacation pay is paid upon termination of 
employment, and where the employee is in arrears in making court 
ordered child support payments, the employer shall withhold an 
amount which is the lesser of (1) the amount in arrears or (2) 
that portion of the arrearages which is the product of the 
obligor's monthly court ordered support amount multiplied by the 
number of months of net income that the lump sum payment 
represents.  
    (b) An employer, trustee, or other payor of funds who has 
been served with a notice of income withholding under 
subdivision 2 or section 518.613 must:  
    (1) notify the public authority of any lump sum payment of 
$500 or more that is to be paid to the obligor; 
    (2) hold the lump sum payment for 30 days after the date on 
which the lump sum payment would otherwise have been paid to the 
obligor, notwithstanding sections 181.08, 181.101, 181.11, 
181.13, and 181.145; and 
    (3) upon order of the court, pay any specified amount of 
the lump sum payment to the public authority for support.  
    Sec. 79.  Minnesota Statutes 1989 Supplement, section 
518.613, subdivision 2, is amended to read:  
    Subd. 2.  [ORDER; COLLECTION SERVICES.] Every order for 
child support must include the obligor's social security number 
and date of birth 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 automatic income withholding 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 authority 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 unless the 
requirements of this section have been waived under subdivision 
7.  No later than January 1, 1990, the supreme court shall 
develop a standard automatic income withholding form to be used 
by all Minnesota courts.  This form shall be made a part of any 
order for support or decree by reference.  
    Sec. 80.  Minnesota Statutes 1988, section 518C.02, is 
amended by adding a subdivision to read:  
    Subd. 1a.  [CENTRAL REGISTRY.] "Central registry" means a 
single unit within the department of human services that 
receives and disseminates incoming interstate actions filed 
under title IV-D of the Social Security Act, as amended, 
including any proceedings under this section.  
    Sec. 81.  Minnesota Statutes 1988, section 518C.02, is 
amended by adding a subdivision to read:  
    Subd. 9a.  [PUBLIC AUTHORITY.] "Public authority" means the 
public authority responsible for child support enforcement.  
    Sec. 82.  Minnesota Statutes 1988, section 518C.03, is 
amended to read:  
    518C.03 [HOW DUTIES OF SUPPORT ENFORCED.] 
    Subdivision 1.  [DUTIES OF SUPPORT.] All duties of support, 
including the duty to pay arrearages, are enforceable by a 
proceeding under sections 518C.01 to 518C.36, including a 
proceeding for civil contempt.  The defense that the parties are 
immune to suit because of their relationship as husband and 
wife, or parent and child is not available to the obligor.  
    Subd. 2.  [ARREARAGES.] Arrearages that have become a 
support judgment, which is final by operation of law of this 
state or of any other jurisdiction, shall be given full faith 
and credit for enforcement purposes.  No arrearages or judgment 
for support may be retroactively modified, except as provided in 
section 518.64.  A Minnesota court may order that judgment be 
entered for a child support arrearage owed under an order of 
another state or order that payments be made toward an arrearage 
or existing judgment if the matter is before the court whether 
by petition or by registration. 
    Sec. 83.  Minnesota Statutes 1988, section 518C.05, is 
amended to read:  
    518C.05 [JURISDICTION.] 
    Except in Hennepin and Ramsey counties, jurisdiction of a 
proceeding under sections 518C.01 to 518C.36 is vested in the 
county court.  In Hennepin and Ramsey counties as provided for 
in section 518.551, subdivision 10, jurisdiction of a proceeding 
under sections 518C.01 to 518C.36 is vested in the district 
court.  
    Sec. 84.  Minnesota Statutes 1988, section 518C.09, is 
amended to read:  
    518C.09 [DUTY OF INITIATING COURT.] 
    If the initiating court finds that the petition sets forth 
facts from which it may be determined that the obligor owes a 
duty of support, and that a court of the responding state may 
obtain jurisdiction of the obligor or the obligor's property, it 
shall so certify and cause three copies of the petition and its 
certificate and one copy of sections 518C.01 to 518C.36 to be 
sent to the responding court.  If the complaint is filed by the 
public authority, the initiating court shall send the documents 
to the central registry in the responding state.  Certification 
shall be in accordance with the requirements of the initiating 
state.  If the name and address of the responding court are 
unknown and the responding state has an information agency 
comparable to that established in the initiating state, it shall 
cause the copies to be sent to the state information agency or 
other proper official of the responding state, with a request 
that the agency or official forward them to the proper court and 
that the court of the responding state acknowledge their receipt 
to the initiating court.  
    Sec. 85.  Minnesota Statutes 1988, section 518C.12, is 
amended to read:  
    518C.12 [DUTY OF THE COURT AND THE PROSECUTING ATTORNEY OF 
THIS STATE AS RESPONDING STATE.] 
    Subdivision 1.  [CENTRAL REGISTRY.] The central registry 
shall receive filings under title IV-D of the federal Social 
Security Act, as amended, from the initiating state and shall 
transmit the filings to the local public authority.  The local 
public authority shall promptly submit the documents to the 
court administrator.  
    Subd. 1a.  [DOCKETING CASE.] After the responding court 
receives copies of the petition, the certificate and the 
substantially similar reciprocal act from the initiating court, 
the court administrator of the court shall docket the case and 
notify the prosecuting attorney of the action.  
    Subd. 2.  [PROSECUTION OF CASE.] The prosecuting attorney 
shall prosecute the case diligently, taking all action necessary 
in accordance with the laws of this state to enable the court to 
obtain jurisdiction over the obligor or the obligor's property 
and shall request the court to set a time and place for a 
hearing and give notice thereof to the obligor in accordance 
with law.  
    Subd. 3.  [INVESTIGATION BY PROSECUTING ATTORNEY.] The 
prosecuting attorney, on personal initiative, shall use all 
means available to locate the obligor or the obligor's property, 
and if, because of inaccuracies in the petition or otherwise, 
the court cannot obtain jurisdiction, the prosecuting attorney 
shall inform the court of action taken and request the court to 
continue the case pending receipt of more accurate information 
or an amended petition from the initiating court.  
    Subd. 4.  [OBLIGOR LOCATED IN ANOTHER COUNTY OR STATE.] If 
the obligor or the obligor's property is not found in the 
county, and the prosecuting attorney discovers that the obligor 
or the obligor's property may be found in another county of this 
state, or another state, the attorney shall so inform the 
court.  Thereupon, the court administrator shall forward the 
documents received from the court in the initiating state to a 
court in the other county, or to a court in the other state, or 
to the information agency or other proper official of the other 
state, with a request that the documents be forwarded to the 
proper court.  All powers and duties provided by sections 
518C.01 to 518C.36 apply to the recipient of the documents so 
forwarded.  If the court administrator of this state forwards 
documents to another court, the court administrator shall 
forthwith notify the initiating court.  
    Subd. 5.  [NO INFORMATION.] If the prosecuting attorney has 
no information as to the location of the obligor or the 
obligor's property the attorney shall so inform the initiating 
court.  
    Sec. 86.  Minnesota Statutes 1988, section 518C.27, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DUTIES OF RESPONDING COURT.] A responding 
court has the following duties that shall be carried out through 
the public authority responsible for support enforcement:  
    (1) according to the requirements of the initiating court, 
to collect and transmit to the initiating court, designated 
collection unit, county of the obligee's residence, or the 
obligee under section 518.551, subdivision 1, a payment made by 
the obligor pursuant to an order of the court or otherwise; and 
    (2) to furnish to the initiating court, upon request, a 
certified statement of each payment made by the obligor.  
    Sec. 87.  Laws 1989, chapter 338, section 11, is amended to 
read: 
    Sec. 11.  [OIL OVERCHARGE MONEY; APPROPRIATION.] 
    Subdivision 1.  [LIMITATION.] The money appropriated by 
this section is money received by the state, or to be made 
available to the state in the future, as a result of litigation 
or settlements of alleged violations of federal petroleum 
pricing regulations that is not otherwise appropriated by law or 
dedicated by court order. 
    Subd. 2.  [ENERGY RELATED PROJECTS.] $3,100,000 of the 
money specified in subdivision 1 oil overcharge money, as 
defined in Minnesota Statutes, section 4.071, is appropriated 
for transfer to the housing development fund for home energy 
loans.  Of that amount, $2,200,000 must be made available as 
soon as federal approval is received.  The balance must be made 
available from money received later in the fiscal years ending 
June 30, 1990, and June 30, 1991. 
    Subd. 2a.  [ENERGY CONSERVATION PROJECTS.] $6,000,000 of 
oil overcharge money, as defined in Minnesota Statutes, section 
4.071, is appropriated to the commissioner of jobs and training 
for energy conservation projects that directly serve low-income 
Minnesotans.  $50,000 of this appropriation must be transferred 
to the commissioner of administration to administer the oil 
overcharge funds for the fiscal year ending June 30, 1991.  Of 
the total appropriation, $4,500,000 must be made available as 
soon as federal approval is received.  The balance must be made 
available from money received later in the fiscal years ending 
June 30, 1990, and June 30, 1991.  If the amount received by 
June 30, 1991, is not sufficient to fully fund all 
appropriations of oil overcharge money to that date, this 
appropriation is reduced to the amount that can be fully funded 
with those receipts.  
    Subd. 3.  [OTHER PROJECTS.] One-half of the remainder of 
the money specified in subdivision 1 must be appropriated to the 
commissioner of jobs and training for energy conservation 
projects that directly serve low-income Minnesotans.  Money 
appropriated under subdivision 2 and under this subdivision is 
not governed by Minnesota Statutes, section 4.071, and is 
available until spent. 
    Sec. 88.  [PRENATAL CARE AND PREVENTIVE CARE FOR CHILDREN.] 
    The commissioner of health, in consultation with the 
commissioner of human services, the commissioner of state 
planning, and the commissioner of education, shall prepare a 
state plan to improve utilization rates of medically appropriate 
prenatal care and preventive care for children.  The plan must 
address at least the following issues:  (1) methods of 
addressing barriers such as the need for child care and 
transportation; (2) techniques for improving public awareness of 
the need for prenatal care and preventive care, both statewide 
and within high-risk target populations; and (3) strategies for 
overcoming cultural factors that may discourage minority 
populations from obtaining medically appropriate prenatal care 
and preventive care.  To the extent possible, the commissioner 
shall identify methods of improving access and utilization rates 
that would not require a significant increase in legislative 
appropriations, such as reallocation of existing money, 
coordination and increased efficiency of existing programs, 
techniques for generating private contributions or federal 
money, and increased use of volunteers and donated services and 
facilities.  The commissioner shall also include in the plan an 
analysis of the extent to which improved utilization rates, both 
statewide and within target populations, could result in cost 
savings in the medical assistance program, the general 
assistance medical care program, and the children's health 
plan.  The commissioner shall present the plan to the governor 
and the legislature by December 15, 1990.  It is the intent of 
the legislature to enact legislation to implement the plan 
during the 1991 session. 
    Sec. 89.  [CHILD SUPPORT JUDGMENT BY OPERATION OF LAW; 
APPLICATION.] 
    Minnesota Statutes, section 548.091, subdivision 1a, 
applies retroactively to any child support arrearage that 
accrued before August 1, 1988, except that no arrearage may be 
docketed under Minnesota Statutes, section 548.091, subdivision 
2a, if the arrearage is more than ten years past due at the time 
of docketing. 
    Sec. 90.  [STUDIES AND PLANS RELATING TO CHEMICAL 
DEPENDENCY TREATMENT.] 
    Subdivision 1.  [TREATMENT PROGRAM ACCOUNTABILITY.] The 
commissioner of human services shall develop standards to 
provide increased accountability for chemical dependency 
treatment programs.  The commissioner shall work in conjunction 
with treatment providers and clinicians.  The commissioner shall 
report the results of this work to the legislature by January 1, 
1992.  
    Subd. 2.  [AFTERCARE SERVICES STUDY.] The commissioner of 
human services shall study funding and licensing options for 
providing aftercare services to high-risk or special need 
populations including, but not limited to, women, minorities, 
and adult and juvenile offenders.  The commissioner shall 
present the results of this study and recommendations to the 
legislature by January 1, 1991.  
    Subd. 3.  [INDIAN YOUTH TREATMENT PLANNING.] The 
commissioner of human services shall develop a plan for the 
establishment of one or more treatment programs specializing in 
chemically dependent Indian youth.  The commissioner shall 
involve diverse members of the Indian community in conducting 
this assessment and shall present recommendations to the 
legislature by January 1, 1991.  
    Subd. 4.  [AFRICAN AMERICAN YOUTH TREATMENT PLANNING.] The 
commissioner of human services shall develop a plan for a 
program in the Summit-University area of St. Paul to address the 
culturally-based drug prevention, treatment, and aftercare needs 
of high-risk youth.  The commissioner shall involve existing 
neighborhood and governmental agencies in developing the plan 
and shall present recommendations to the legislature by January 
1, 1991.  
    Sec. 91.  [254B.041] [CHEMICAL DEPENDENCY RULES.] 
    Subdivision 1.  [RULE AMENDMENT.] The commissioner shall, 
by emergency rulemaking, amend Minnesota Rules, parts 9530.6600 
to 9530.7030, in order to contain costs and increase collections 
for the consolidated chemical dependency treatment fund.  The 
amendment must establish criteria that will:  
    (1) increase the use of outpatient treatment for 
individuals who can abstain from mood-altering chemicals long 
enough to benefit from outpatient treatment; 
    (2) increase the use of outpatient treatment in combination 
with primary residential treatment; 
    (3) increase the use of long-term treatment programs for 
individuals who are not likely to benefit from primary 
residential treatment; and 
    (4) limit the repeated use of residential placements for 
individuals who have been shown not to benefit from residential 
placements, including long-term residential treatment.  
    Subd. 2.  [VENDOR COLLECTIONS; RULE AMENDMENT.] The 
commissioner may amend Minnesota Rules, parts 9530.7000 to 
9530.7025, to require a vendor of chemical dependency 
transitional and extended care rehabilitation services to 
collect the cost of care received under a program from an 
eligible person who has been determined to be partially 
responsible for treatment costs, and to remit the collections to 
the commissioner.  The commissioner shall pay to a vendor, for 
the collections, an amount equal to five percent of the 
collections remitted to the commissioner by the vendor.  The 
amendment may be adopted under the emergency rulemaking 
provisions of sections 14.29 to 14.36. 
      Sec. 92.  [TASK FORCE ON COMPENSATION FOR DIRECT CARE 
EMPLOYEES.] 
    The commissioner of human services, in consultation with 
the commissioner of employee relations, shall establish a task 
force on the compensation and training of direct care 
employees.  The purpose of the task force is to address staff 
turnover, recruitment, and training in order to have a 
significant number of qualified people working in programs that 
provide direct care services to individuals.  Programs include 
intermediate care facilities for persons with mental 
retardation, semi-independent living services, day training and 
habilitation, waivered services, supported employment, 
rehabilitation facilities, services for persons with mental 
illness, child care, and chemical dependency.  Members of the 
task force shall be appointed by the commissioner.  Task force 
membership shall consist of at least one representative from the 
department of human services, the department of employee 
relations, the department of jobs and training, and the 
department of health, advocates, direct care staff from 
unionized and nonunionized facilities, providers, collective 
bargaining representatives, and representatives from 
institutions of post-secondary education, metro and greater 
Minnesota counties, and the governor's council on developmental 
disabilities.  The task force shall submit a report to the 
commissioner by November 1, 1990, that includes recommendations 
on the following: 
    (1) entry and promotional level wage ranges for various job 
classifications which reduce wage and benefit inequities between 
community and state-operated facilities and services; 
    (2) implementation of wage and benefit increases over a 
four-year period to ensure that wages and benefits are brought 
up to a level competitive within the community marketplace; 
    (3) mechanisms to link wage increases to initial training, 
continuing education, and competency; 
    (4) recruitment and retention of qualified staff; and 
    (5) the impact of making adjustments pursuant to complying 
with United States Code, title 29, section 157 (Supp. 1988), and 
Minnesota Statutes, sections 179.16 and 179A.12. 
    By January 15, 1991, the commissioner shall submit the 
report and recommended legislation to implement the report to 
the chairs of the house of representatives and senate health and 
human services committees. 
    Sec. 93.  [REPORT ON METHODS OF COORDINATING SOCIAL WORK 
AND MENTAL HEALTH BOARDS.] 
    (a) The commissioner of health shall convene an interagency 
task force consisting of health department staff and 
representatives from the commissioner of human services and the 
boards of social work, marriage and family therapy, unlicensed 
mental health service providers, medical examiners, nursing, and 
psychology to study the current system of monitoring and 
regulating both licensed and unlicensed individuals who practice 
mental health counseling, psychotherapy, psychiatry, psychiatric 
nursing, social work, professional counseling, chemical 
dependency counseling, and similar activities.  The task force 
shall make recommendations for improving coordination, 
administrative efficiency, and effectiveness of the activities 
of the department of health and the boards that monitor and 
regulate these social work and mental health occupations and 
professions.  The task force shall solicit and consider the 
comments and recommendations of affected individuals, 
associations, and government agencies.  In developing its 
recommendations, the task force shall consider: 
    (1) methods of monitoring or regulating unlicensed 
practitioners and whether this activity should be administered 
by the health department, an independent administrative agency, 
a board, or another entity; 
    (2) a surcharge on license fees of all social work and 
mental health boards to finance the monitoring or regulation of 
unlicensed practitioners; 
    (3) methods of coordinating the various systems for 
accepting and investigating complaints; 
    (4) coordinated information systems to identify individuals 
who have been denied a license or have been subject to 
disciplinary action by another licensing board or agency; and 
    (5) other relevant issues identified by the task force. 
    (b) The commissioner of health shall report to the 
legislature by December 1, 1990, with the results of the study 
and the recommendations of the task force. 
    Sec. 94.  [EXEMPTION.] 
    For the biennium ending June 30, 1991, the board of 
unlicensed mental health service providers is exempt from 
Minnesota Statutes, sections 16A.128, subdivision 1, and 214.06, 
subdivision 1. 
    Sec. 95.  [COMPREHENSIVE REVIEW OF THE STATE EMERGENCY 
MEDICAL SERVICE SYSTEM.] 
    The commissioner of health shall conduct a comprehensive 
assessment of all aspects of the emergency medical service 
system in Minnesota.  This assessment must include an inventory 
of current service capabilities by emergency medical service 
regions and an examination of the effectiveness of the present 
administrative structure for emergency medical services, actual 
or potential gaps in services or coverage, funding needs, 
problems in service coordination and administration, and the 
capabilities and availability of hospital emergency services.  
The assessment must also include a study of the role of air 
ambulances and their coordination with and impact on local 
ambulance services.  The commissioner shall present this 
assessment and provide recommendations to the legislature by 
January 1, 1992. 
    Sec. 96.  [MEDICAL SCHOOL GRADUATES.] 
    The commissioner of health shall encourage efforts by the 
University of Minnesota medical school, the Mayo medical school, 
and the University of Minnesota-Duluth medical school to develop 
and implement plans to increase the number of medical school 
graduates practicing in nonmetropolitan areas.  The commissioner 
shall meet regularly with the administrators of the three 
medical schools to obtain information on progress toward this 
goal. 
    Sec. 97.  [STUDY OF MEDICAL ASSISTANCE REIMBURSEMENT FOR 
RURAL PHYSICIANS.] 
    The commissioner of human services shall examine methods to 
increase medical assistance reimbursement to medical doctors and 
doctors of osteopathy.  The commissioner may consider selective 
reimbursement increases for the following primary care services 
as defined by the commissioner by the appropriate current 
procedure terminology (CPT); preventive care, office visits, 
maternity and delivery services, and pediatric immunization, and 
may consider other changes in medical assistance reimbursement 
designed to target reimbursement increases to medical doctors 
and doctors of osteopathy providing primary care services.  The 
commissioner shall present recommendations to the legislature by 
January 15, 1991. 
    Sec. 98.  [RURAL HEALTH PROFESSIONALS STUDY.] 
    The commissioner of health shall conduct an examination of 
the critical shortage of health care professionals experienced 
by rural areas. The study may consider, at a minimum, the 
following: 
    (1) distribution of health care professionals; 
    (2) geographic distribution of educational programs; 
    (3) recruitment and retention programs; 
    (4) regulatory barriers; 
    (5) impediments caused by additional professional 
requirements; 
    (6) appropriate education and training programs directed to 
rural health care; and 
    (7) competition from other health care providers, 
especially those located in urban settings providing similar 
services.  
    In conducting the study, the commissioner shall consult 
with rural health care providers, hospitals, and higher 
education institutions.  The commissioner shall require state 
health care professional licensing boards to submit data upon 
request to the department by July 1 for each preceding calendar 
year.  The commissioner must report the findings and present 
recommendations to relieve current and projected health care 
professional shortages in different areas of the state, to the 
legislature by February 1, 1991. 
    Sec. 99.  [TRANSFER OF FUNDS.] 
    All money raised under section 100, through the license 
renewal surcharges for registered nurses and licensed practical 
nurses shall be transferred each year from the board of nursing 
to the higher education coordinating board for the purposes of 
the nursing grant programs for licensed practical nurses and 
registered nurses, provided in Senate File 2618, article 5, 
sections 3 and 4, and shall be available until expended. 
    Sec. 100.  [148.236] [FUNDING FOR NURSING GRANTS.] 
    Subdivision 1.  [REGISTERED NURSE FUNDING.] (a) The nursing 
grant program shall be funded by a $5.50 fee on each 
registration renewal of registered nurses as provided under 
Minnesota Statutes, section 148.231, unless the applicant 
specifically indicates on the renewal form that the applicant 
does not wish to participate in the funding of this program.  
The board of nursing shall transfer all money received under 
this subdivision, less an amount sufficient to pay the costs of 
administering the program not to exceed 12 percent of the fee 
collected under this subdivision, to the higher education 
coordinating board on a quarterly basis.  This money is 
available until expended by the higher education coordinating 
board.  By January 1, 1991, and each subsequent year, the board 
of nursing shall provide an estimate to the higher education 
coordinating board of the amount of money that may be available 
each year based on the number of anticipated registration 
renewals in that year.  
    (b) Notwithstanding paragraph (a), up to the first $11,000 
of fees collected under this subdivision may be used to program 
the board of nursing's computer system for purposes of 
administering this section. 
    Subd. 2.  [LICENSED PRACTICAL NURSE FUNDING.] (a) The 
nursing grant program shall be funded by a $5.50 fee on each 
registration renewal of licensed practical nurses as provided 
under Minnesota Statutes, section 148.231, unless the applicant 
specifically indicates on the renewal form that the applicant 
does not wish to participate in the funding of this program.  
The board of nursing shall transfer all money received under 
this subdivision, less an amount sufficient to pay the costs of 
administering the program not to exceed 12 percent of the fee 
collected under this subdivision, to the higher education 
coordinating board on a quarterly basis.  This money is 
available until expended by the higher education coordinating 
board.  By January 1, 1991, and each subsequent year, the board 
of nursing shall provide an estimate to the higher education 
coordinating board of the amount of money that may be available 
each year based on the number of anticipated registration 
renewals in that year.  
    (b) Notwithstanding paragraph (a), up to the first $6,000 
of fees collected under this subdivision may be used to program 
the board of nursing's computer system for purposes of 
administering this section. 
    Sec. 101.  [SPECIAL REPORT ON THE CONSOLIDATED CHEMICAL 
DEPENDENCY TREATMENT FUND.] 
    The commissioner of human services shall report to the 
legislature by February 1, 1991, on plans for implementing the 
changes in operation of the chemical dependency consolidated 
treatment fund required by section 59. 
    Sec. 102.  [244.16] [DAY-FINES.] 
    Subdivision 1.  [MODEL SYSTEM.] By June 1, 1991, the 
sentencing guidelines commission shall develop a model day-fine 
system.  Each judicial district must adopt either the model 
system or its own day-fine system by January 1, 1992. 
    Subd. 2.  [COMPONENTS.] A day-fine system adopted under 
this section must provide for a two-step sentencing procedure 
for those receiving a fine as part of a probationary felony 
sentence.  In the first step, the court determines how many 
punishment points a person will receive, taking into account the 
severity of the offense and the criminal history of the 
offender.  The second step is to multiply the punishment points 
by a factor that accounts for the offender's financial 
circumstances.  The goal of the system is to provide a fine that 
is proportional to the seriousness of the offense and largely 
equal in impact among offenders with different financial 
circumstances.  The system may provide for community service in 
lieu of fines for offenders whose means are so limited that the 
payment of a fine would be unlikely. 
    Sec. 103.  [REPEALER.] 
     Laws 1989, chapter 338, section 11, subdivisions 1 and 3, 
are repealed.  
    Sec. 104.  [EFFECTIVE DATES.] 
    Subdivision 1.  [VOLUNTARY AND INVOLUNTARY 
RECEIVERSHIP.] Sections 48 and 49 are effective the day 
following final enactment. 
    Subd. 2.  [SEAT BELT REQUIREMENTS.] Sections 54 and 55 are 
effective the day following final enactment. 
    Subd. 3.  [CHEMICAL DEPENDENCY.] Sections 57, 58, 60, 90, 
and 91 are effective the day following final enactment.  Section 
59 is effective July 1, 1991. 
    Subd. 4.  [PATERNITY ACTIONS.] Section 65 is effective the 
day following final enactment and applies to actions brought 
after January 1, 1986, except that section 65 does not bar an 
action by a presumed father who discovered the birth of the 
child within two years before the effective date of section 65 
if the action is brought within one year after the effective 
date. 
    Subd. 5.  [CHILD SUPPORT.] Sections 61 and 72 are effective 
the day following final enactment.  Section 62 is effective July 
1, 1990, and applies to coverage identified or enforced on or 
after that date.  
    Subd. 6.  [WHOLESALE DRUG DISTRIBUTORS; LICENSING.] 
Sections 18 to 29 are effective on January 1, 1991.  
    Subd. 7.  [OIL OVERCHARGE MONEY; ENERGY CONSERVATION.] 
Sections 1, subdivision 1; 87; and 103 are effective the day 
following final enactment.  Section 1, subdivisions 2 and 3, are 
effective July 1, 1991. 
    Subd. 8.  [LOCATION OF RESIDENTIAL PROGRAMS.] Section 47 is 
effective the day following final enactment. 

                               ARTICLE 3 

                          HEALTH CARE PROGRAMS 
    Section 1.  Minnesota Statutes 1988, section 13.46, 
subdivision 5, is amended to read: 
    Subd. 5.  [MEDICAL DATA; CONTRACTS.] Data relating to the 
medical, psychiatric, or mental health of any individual, 
including diagnosis, progress charts, treatment received, case 
histories, and opinions of health care providers, that is 
collected, maintained, used, or disseminated by any agency to 
the welfare system is private data on individuals and will be 
available to the data subject, unless the private health care 
provider has clearly requested in writing that the data be 
withheld pursuant to section 144.335.  Data on individuals that 
is collected, maintained, used, or disseminated by a private 
health care provider under contract to any agency of the welfare 
system is private data on individuals, and is subject to the 
provisions of sections 13.02 to 13.07 and this section, except 
that the provisions of section 13.04, subdivision 3, shall not 
apply.  Access to medical data referred to in this subdivision 
by the individual who is the subject of the data is subject to 
the provisions of section 144.335.  Access to information that 
is maintained by the public authority responsible for support 
enforcement and that is needed to enforce medical support is 
subject to the provisions of section 518.171. 
    Sec. 2.  [62A.62] [DEMONSTRATION PROJECT.] 
    Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
establish demonstration projects to allow health insurers 
regulated under this chapter and nonprofit health service plan 
corporations regulated under chapter 62C to extend coverage for 
health and services to individuals or groups currently unable to 
afford such coverage.  For purposes of this section, the 
commissioner may recommend legislation granting an exemption 
from minimum benefits required under chapter 62A, and any 
applicable rules if there is reasonable evidence that the rules 
prohibit the operation of the demonstration project.  The 
commissioner shall provide for public comment before 
recommending an exemption from any statute or rule. 
    Subd. 2.  [APPLICATION AND APPROVAL.] An insurer or health 
service plan corporation electing to participate in a 
demonstration project shall apply to the commissioner for 
approval on a form developed by the commissioner.  The 
application shall include at least the following: 
    (1) a statement identifying the population that the project 
is designed to serve; 
    (2) a description of the proposed project including a 
statement projecting a schedule of costs and benefits for the 
enrollee; 
    (3) reference to the sections of Minnesota Statutes and 
department of commerce rules for which waiver is requested; 
    (4) evidence that application of the requirements of 
applicable Minnesota Statutes and department of commerce rules 
would, unless waived, prohibit the operation of the 
demonstration project; 
    (5) an estimate of the number of years needed to adequately 
demonstrate the project's effects; and 
    (6) other information the commissioner may reasonably 
require. 
    Subd. 3.  [COMMISSIONER'S REVIEW OF APPLICATION FOR 
DEMONSTRATION PROJECT.] The commissioner shall approve, deny, or 
refer back to the insurer or health service plan corporation for 
modification, the application for a demonstration project within 
60 days of receipt from the insurer or health service plan 
corporation.  If the commissioner approves a project that 
requires legislation exempting the project from minimum benefit 
requirements, the commissioner shall make the approval 
contingent on enactment of the required legislation. 
    Subd. 4.  [LENGTH OF PROJECT.] The commissioner may approve 
an application for a demonstration project for a maximum of six 
years, with an option to renew. 
    Subd. 5.  [REPORT REQUIRED.] Each insurer or health service 
plan corporation for which a demonstration project is approved 
shall annually file a report with the commissioner summarizing 
the project's experience at the same time it files its annual 
report.  The report shall be on a form developed by the 
commissioner and shall be separate from the annual report. 
    Subd. 6.  [APPROVAL MAY BE RESCINDED.] The commissioner may 
rescind approval of a demonstration project if the commissioner 
finds that the project's operation is contrary to the 
information contained in the approved application. 
    Subd. 7.  [APPLICABILITY.] This section does not apply to 
the demonstration project established under section 256B.73. 
     Sec. 3.  Minnesota Statutes 1989 Supplement, section 
144.50, subdivision 6, is amended to read: 
    Subd. 6.  [SUPERVISED LIVING FACILITY LICENSES.] (a) The 
commissioner may license as a supervised living facility a 
facility seeking medical assistance certification as an 
intermediate care facility for persons with mental retardation 
or related conditions for four or more persons as authorized 
under section 252.291. 
    (b) Class B supervised living facilities for six or less 
persons seeking medical assistance certification as an 
intermediate care facility for persons with mental retardation 
or related conditions shall be classified as follows for 
purposes of the state building code: 
    (1) Class B supervised living facilities for six or less 
persons must meet Group R, Division 3, occupancy requirements; 
and 
    (2) Class B supervised living facilities for seven to 16 
persons must meet Group R, Division 1, occupancy requirements. 
    (c) Class B facilities classified under paragraph (b), 
clauses (1) and (2), must meet Group R, Division 3, occupancy 
requirements of the state building code, the fire protection 
provisions of chapter 21 of the 1985 life safety code, NFPA 101, 
for facilities housing persons with impractical evacuation 
capabilities, and except that Class B facilities licensed prior 
to the effective date of this section need only continue to meet 
institutional fire safety provisions.  Class B supervised living 
facilities shall provide the necessary physical plant 
accommodations to meet the needs and functional disabilities of 
the residents.  For Class B supervised living facilities 
licensed after the effective date of this section and housing 
nonambulatory or nonmobile persons, the corridor access to 
bedrooms, common spaces, and other resident use spaces must be 
at least five feet in clear width, except that a waiver may be 
requested in accordance with Minnesota Rules, part 4665.0600. 
    Sec. 4.  Minnesota Statutes 1988, section 144A.073, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [EXTENSION OF APPROVAL OF A PROJECT REQUIRING AN 
EXCEPTION TO THE NURSING HOME MORATORIUM.] Notwithstanding 
subdivision 3, a construction project that was approved by the 
commissioner under the moratorium exception approval process in 
this section prior to February 1, 1990, may be commenced more 
than 12 months after the date of the commissioner's approval but 
no later than July 1, 1992.  
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
145.894, is amended to read: 
    145.894 [STATE COMMISSIONER OF HEALTH; DUTIES, 
RESPONSIBILITIES.] 
    The commissioner of health shall: 
    (a) Develop a comprehensive state plan for the delivery of 
nutritional supplements to pregnant and lactating women, 
infants, and children; 
    (b) Contract with existing local public or private 
nonprofit organizations for the administration of the 
nutritional supplement program; 
    (c) Develop and implement a public education program 
promoting the provisions of sections 145.891 to 145.897, and 
provide for the delivery of individual and family nutrition 
education and counseling at project sites.  The education 
programs must include a campaign to promote breast feeding; 
    (d) Develop in cooperation with other agencies and vendors 
a uniform state voucher system for the delivery of nutritional 
supplements; 
    (e) Authorize local health agencies to issue vouchers 
bimonthly to some or all eligible individuals served by the 
agency, provided the agency demonstrates that the federal 
minimum requirements for providing nutrition education will 
continue to be met and that the quality of nutrition education 
and health services provided by the agency will not be adversely 
impacted; 
    (f) Investigate and implement an infant formula cost 
reduction a system that will to reduce the cost of nutritional 
supplements so that by October 1, 1988, additional mothers and 
children will be served and maintain ongoing negotiations with 
nonparticipating manufacturers and suppliers to maximize cost 
savings; 
    (g) Develop, analyze, and evaluate the health aspects of 
the nutritional supplement program and establish nutritional 
guidelines for the program; 
    (h) Apply for, administer, and annually expend at least 99 
percent of available federal or private funds; 
    (i) Aggressively market services to eligible individuals by 
conducting ongoing outreach activities and by coordinating with 
and providing marketing materials and technical assistance to 
local human services and community service agencies and 
nonprofit service providers; 
    (j) Determine, on July 1 of each year, the number of 
pregnant women participating in each special supplemental food 
program for women, infants, and children (W.I.C.) and, in 1986, 
1987, and 1988, at the commissioner's discretion, designate a 
different food program deliverer if the current deliverer fails 
to increase the participation of pregnant women in the program 
by at least ten percent over the previous year's participation 
rate; 
    (k) Promulgate all rules necessary to carry out the 
provisions of sections 145.891 to 145.897; 
    (l) Report to the legislature by November 15 of every year 
on the expenditures and activities under sections 145.891 to 
145.897 of the state and local health agencies for the preceding 
fiscal year; and 
     (m) Ensure that any state appropriation to supplement the 
federal program is spent consistent with federal requirements. 
    Sec. 6.  Minnesota Statutes 1988, section 214.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BOARD REPORTS.] The health-related 
licensing boards and the non-health-related licensing boards 
shall prepare reports according to this subdivision and 
subdivision 1a by October 1 of each even-numbered year.  Copies 
of the reports shall be delivered to the legislature in 
accordance with section 3.195, and to the governor.  Copies of 
the reports of the health-related licensing boards shall also be 
delivered to the commissioner of health.  The reports shall 
contain the following information relating to the two-year 
period ending the previous June 30: 
    (a) a general statement of board activities; 
    (b) the number of meetings and approximate total number of 
hours spent by all board members in meetings and on other board 
activities; 
    (c) the receipts and disbursements of board funds; 
    (d) the names of board members and their addresses, 
occupations, and dates of appointment and reappointment to the 
board; 
    (e) the names and job classifications of board employees; 
    (f) a brief summary of board rules proposed or adopted 
during the reporting period with appropriate citations to the 
State Register and published rules; 
    (g) the number of persons having each type of license and 
registration issued by the board as of June 30 in the year of 
the report; 
    (h) the locations and dates of the administration of 
examinations by the board; 
     (i) the number of persons examined by the board with the 
persons subdivided into groups showing age categories, sex, and 
states of residency; 
     (j) the number of persons licensed or registered by the 
board after taking the examinations referred to in clause (h) 
with the persons subdivided by age categories, sex, and states 
of residency; 
     (k) the number of persons not licensed or registered by the 
board after taking the examinations referred to in clause (h) 
with the persons subdivided by age categories, sex, and states 
of residency; 
     (l) the number of persons not taking the examinations 
referred to in clause (h) who were licensed or registered by the 
board or who were denied licensing or registration with the 
reasons for the licensing or registration or denial thereof and 
with the persons subdivided by age categories, sex, and states 
of residency; 
     (m) the number of persons previously licensed or registered 
by the board whose licenses or registrations were revoked, 
suspended, or otherwise altered in status with brief statements 
of the reasons for the revocation, suspension or alteration; 
     (n) the number of written and oral complaints and other 
communications received by the executive secretary of the board, 
a board member, or any other person performing services for the 
board (1) which allege or imply a violation of a statute or rule 
which the board is empowered to enforce and (2) which are 
forwarded to other agencies as required by section 214.10; 
     (o) a summary, by specific category, of the substance of 
the complaints and communications referred to in clause (n) and, 
for each specific category, the responses or dispositions 
thereof pursuant to section 214.10 or 214.11; 
     (p) any other objective information which the board members 
believe will be useful in reviewing board activities. 
    Sec. 7.  Minnesota Statutes 1988, section 214.07, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [REPORT REQUIREMENT FOR BOARD OF MEDICAL 
EXAMINERS AND BOARD OF NURSING.] The board of medical examiners 
and the board of nursing shall include in the report required 
under subdivision 1, clause (o), specific information regarding 
complaints and communications involving obstetrics, gynecology, 
prenatal care, and delivery, and the boards' responses or 
dispositions. 
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
252.46, subdivision 1, is amended to read: 
    Subdivision 1.  [RATES FOR CALENDAR YEARS 1989 AND 1990.] 
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 for calendar 
years 1989 and 1990 are governed by subdivisions 2 to 10 11.  
    "Payment rate" as used in subdivisions 2 to 10 11 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. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
252.46, subdivision 2, is amended to read:  
    Subd. 2.  [1989 AND 1990 RATE MINIMUM.] Unless a variance 
is granted under subdivision 6, the minimum payment rates set by 
a county board for each vendor for calendar years 1989 and 1990 
must be equal to the payment rates approved by the commissioner 
for that vendor in effect January 1, 1988, and January 1, 1989, 
respectively of the previous calendar year. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
252.46, subdivision 3, is amended to read:  
    Subd. 3.  [1989 AND 1990 RATE MAXIMUM.] Unless a variance 
is granted under subdivision 6, the maximum payment rates for 
each vendor for calendar years 1989 and 1990 a calendar year 
must be equal to the payment rates approved by the commissioner 
for that vendor in effect December 1, 1988, and December 1, 
1989, respectively, of the previous calendar year 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. 
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
252.46, subdivision 4, is amended to read:  
    Subd. 4.  [NEW VENDORS.] Payment rates established by a 
county for calendar years 1989 and 1990, 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.  When at least 50 percent of the 
persons to be served by the new vendor are persons discharged 
from a regional treatment center on or after January 1, 1990, 
the recommended payment rates for the new vendor shall not 
exceed twice the current statewide average payment rates.  
    For purposes of this subdivision, persons discharged from 
the regional treatment center do not include persons who 
received temporary care under section 252A.111, subdivision 3. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
252.46, subdivision 12, is amended to read: 
    Subd. 12.  [RATES ESTABLISHED AFTER 1990.] Unless a 
variance is granted under subdivision 6, payment rates 
established by a county for calendar year 1990 and which are in 
effect December 31, 1990, remain in effect until June 30, 1991.  
Payment rates established by a county board to be paid to a 
vendor on or after January July 1, 1991, must be determined 
under permanent rules adopted by the commissioner.  Until 
permanent rules are adopted, the payment rates must be 
determined according to subdivisions 1 to 11 except for the 
period from July 1, 1991, through December 31, 1991, when the 
increase determined under subdivision 3 must not exceed the 
projected percentage change in the urban consumer price index, 
all items, published by the United States Department of Labor, 
for the current calendar year over the previous calendar year.  
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 252.40 to 252.47. 
    Sec. 13.  [252.478] [METRO TRANSPORTATION SUPPORT GRANTS.] 
    Subdivision 1.  [ESTABLISHMENT OF PROGRAM.] The 
commissioner of human services shall establish and operate a 
metro transportation support grants program to provide 
reimbursement for client transportation by metro mobility to day 
training and habilitation services for which client 
transportation is a required and funded component, and to 
maximize use of federal funds for this reimbursement.  A metro 
transportation support grants account shall be established in 
the department of human services chart of accounts. 
    Subd. 2.  [RATES.] Costs of transportation to and from a 
day training and habilitation service agency must be a part of 
the payment rate established for each day training and 
habilitation services agency. 
    The commissioner may approve payment rates for day training 
and habilitation services that exceed the limits in Minnesota 
Statutes, section 252.46, subdivision 6, for vendors whose 
transportation costs increase as a result of action taken by the 
regional transit board under Laws of Minnesota 1988, chapter 
684, article 2, section 3, or Laws of Minnesota 1989, chapter 
269, section 35, or Minnesota Statutes, section 473.386, 
subdivision 4.  
    Subd. 3.  [COUNTY SHARE.] The county share of the metro 
transportation support grants program costs will be distributed 
by the department to all metropolitan counties from the metro 
transportation support grants account.  For state fiscal year 
1991, the funds transferred from the regional transit board to 
this account shall be distributed to:  Ramsey county, 48 
percent; Hennepin county, 46 percent; Dakota county, five 
percent; and Anoka county, one percent.  For subsequent fiscal 
years, funds shall be distributed annually based on each 
county's percentage of total expenses incurred for trips 
provided on metro mobility to and from day training and 
habilitation services during the preceding 12-month period.  
Counties should deposit these funds into the program accounts 
that will incur the transportation expenses.  
    Sec. 14.  Minnesota Statutes 1989 Supplement, section 
256.936, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this section 
the following terms shall have the meanings given them: 
    (a) "Eligible persons" means children who are one year of 
age or older but less than 18 years of age 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.  The period of eligibility extends from the 
first day of the month in which the child's first birthday 
occurs to the last day of the month in which the child becomes 
18 years old. 
    (b) "Covered services" means children's health services. 
    (c) "Children's health services" means the health services 
reimbursed under chapter 256B, with the exception of inpatient 
hospital services, special education services, private duty 
nursing services, orthodontic services, medical transportation 
services, personal care assistant and case management services, 
hospice care services, nursing home or intermediate care 
facilities services, inpatient mental health services, 
outpatient mental health services in excess of $1,000 per 
enrolled child per 12-month eligibility period, and chemical 
dependency services.  Outpatient mental health services covered 
under the children's health plan are limited to diagnostic 
assessments, psychological testing, explanation of findings, and 
individual, family, and group psychotherapy. 
    (d) "Eligible providers" means those health care providers 
who provide children's health services to medical assistance 
recipients 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. 
    (e) "Commissioner" means the commissioner of human services.
    (f) "Gross family income" for farm and nonfarm 
self-employed means income calculated using as the baseline the 
adjusted gross income reported on the applicant's federal income 
tax form for the previous year and adding back in reported 
depreciation, carryover loss, and net operating loss amounts 
that apply to the business in which the family is currently 
engaged.  Applicants shall report the most recent financial 
situation of the family if it has changed from the period of 
time covered by the federal income tax form.  The report may be 
in the form of percentage increase or decrease. 
    Sec. 15.  [256.9365] [PURCHASE OF CONTINUATION COVERAGE FOR 
AIDS PATIENTS.] 
    Subdivision 1.  [PROGRAM ESTABLISHED.] The commissioner of 
human services shall establish a program to pay private health 
plan premiums for persons who have contracted human 
immunodeficiency virus (HIV) to enable them to continue coverage 
under a group or individual health plan.  If a person is 
determined to be eligible under subdivision 2, the commissioner 
shall pay the eligible person's group plan continuation coverage 
premium for 18 months after termination of employment, or pay 
the eligible person's individual plan premium for 24 months 
after initial application.  
    Subd. 2.  [ELIGIBILITY REQUIREMENTS.] To be eligible for 
the program, an applicant must satisfy the following 
requirements: 
    (1) the applicant must provide a physician's statement 
verifying that the applicant is infected with HIV and is, or 
within three months is likely to become, too ill to work in the 
applicant's current employment because of HIV-related disease; 
    (2) the applicant's monthly gross family income must not 
exceed 300 percent of the federal poverty guidelines, after 
deducting medical expenses and insurance premiums; 
    (3) the applicant must not own assets with a combined value 
of more than $25,000; 
    (4) if applying for payment of group plan premiums, the 
applicant must be covered by an employer's or former employer's 
group insurance plan and be eligible to purchase continuation 
coverage; and 
    (5) if applying for payment of individual plan premiums, 
the applicant must be covered by an individual health plan whose 
coverage and premium costs satisfy additional requirements 
established by the commissioner in rule. 
    Subd. 3.  [RULES.] The commissioner shall establish rules 
as necessary to implement the program.  Special requirements for 
the payment of individual plan premiums under subdivision 2, 
clause (5), must be designed to ensure that the state cost of 
paying an individual plan premium over a two-year period does 
not exceed the estimated state cost that would otherwise be 
incurred in the medical assistance program. 
    Sec. 16.  Minnesota Statutes 1989 Supplement, section 
256.969, subdivision 2c, is amended to read: 
    Subd. 2c.  [PROPERTY PAYMENT RATES.] For each hospital's 
first two consecutive fiscal years beginning on or after July 1, 
1988, the commissioner shall limit the annual increase in 
property payment rates for depreciation, rents and leases, and 
interest expense to the annual growth in the hospital cost index 
derived from the methodology in effect on the day before July 1, 
1989.  When computing budgeted and settlement property payment 
rates, the commissioner shall use the annual increase in the 
hospital cost index forecasted by Data Resources, Inc., 
consistent with the quarter of the hospital's fiscal year end.  
For admissions occurring on or after the rate year beginning 
January 1, 1991, the commissioner shall obtain property data 
from an updated base year and establish property payment rates 
per admission for each hospital.  Property payment rates shall 
be derived from data from the same base year that is used to 
establish operating payment rates.  The property information 
shall include cost categories not subject to the hospital cost 
index and shall reflect the cost-finding methods and allowable 
costs of the Medicare program in effect during the base year.  
The property payment rate per admission shall be adjusted for 
positive percentage change differences in the net book value of 
hospital property and equipment by increasing the property 
payment rate per admission 85 percent of the percentage change 
from the base year through the most recent year ending prior to 
the rate year for which required information is available.  The 
percentage change shall be derived from equivalent audited 
information in both years and shall be adjusted to account for 
changes in generally accepted accounting principles, 
reclassification of assets, allocations to nonhospital areas, 
and fiscal years.  The cost, audit, and charge data used to 
establish property rates shall only reflect inpatient services 
covered by medical assistance and shall not include operating 
cost information.  To be eligible for the property payment rate 
per admission adjustment, the hospital must provide the 
necessary information to the commissioner, in a format specified 
by the commissioner, by the October 1 preceding the rate year.  
The commissioner shall adjust rates for the rate year beginning 
January 1, 1991, to ensure that all hospitals are subject to the 
hospital cost index limitation for two complete years. 
    Sec. 17.  Minnesota Statutes 1989 Supplement, section 
256.969, subdivision 6a, is amended to read: 
    Subd. 6a.  [SPECIAL CONSIDERATIONS.] (a) In determining the 
payment rates, the commissioner shall consider whether the 
following circumstances exist: 
    (1) [MINIMAL MEDICAL ASSISTANCE USE.] Minnesota hospitals 
with 30 or fewer annualized admissions of Minnesota medical 
assistance recipients in the base year, excluding Medicare 
crossover admissions, may have the base year operating rates, as 
adjusted by the case mix index, and property payment rates 
established at the 70th percentile of hospitals in the peer 
group in effect during the base year as established by the 
Minnesota department of health for use by the rate review 
program.  Rates within a peer group shall be adjusted for 
differences in fiscal years and outlier percentage payments 
before establishing the 70th percentile.  The operating payment 
rate portion of the 70th percentile shall be adjusted by the 
hospital cost index.  To have rates established under this 
paragraph, the hospital must notify the commissioner in writing 
by November 1 of the year preceding the rate year.  This 
paragraph shall be applied to all payment rates of the affected 
hospital. 
    (2) [UNUSUAL COST OR LENGTH OF STAY EXPERIENCE.] The 
commissioner shall establish day and cost outlier thresholds for 
each diagnostic category established under subdivision 2 at two 
standard deviations beyond the geometric mean length of stay or 
allowable cost.  Payment for the days and cost beyond the 
outlier threshold shall be in addition to the operating and 
property payment rates per admission established under 
subdivisions 2, 2b, and 2c.  Payment for outliers shall be at 70 
percent of the allowable operating cost calculated by dividing 
the operating payment rate per admission, after adjustment by 
the case mix index, hospital cost index, relative values and the 
disproportionate population adjustment, by the arithmetic mean 
length of stay for the diagnostic category.  The outlier 
threshold for neonatal and burn diagnostic categories shall be 
established at one standard deviation beyond the geometric mean 
length of stay or allowable cost, and payment shall be at 90 
percent of allowable operating cost calculated in the same 
manner as other outliers.  A hospital may choose an alternative 
percentage outlier payment to a minimum of 60 percent and a 
maximum of 80 percent if the commissioner is notified in writing 
of the request by October 1 of the year preceding the rate 
year.  The chosen percentage applies to all diagnostic 
categories except burns and neonates.  The percentage of 
allowable cost that is unrecognized by the outlier payment shall 
be added back to the base year operating payment rate per 
admission.  Cost outliers shall be calculated using hospital 
specific allowable cost data.  If a stay is both a day and a 
cost outlier, outlier payments shall be based on the higher 
outlier payment. 
    (3) [DISPROPORTIONATE NUMBERS OF LOW-INCOME PATIENTS 
SERVED.] For admissions occurring on or after July 1, 1989, the 
medical assistance disproportionate population adjustment shall 
comply with federal law at fully implemented rates.  The 
commissioner may establish a separate disproportionate 
population operating payment rate adjustment under the general 
assistance medical care program.  For admissions occurring on or 
after the rate year beginning January 1, 1991, the 
disproportionate population adjustment shall be derived from 
base year Medicare cost report data and may be adjusted by data 
reflecting actual claims paid by the department. 
    (4) [SEPARATE BILLING BY CERTIFIED REGISTERED NURSE 
ANESTHETISTS.] Hospitals may exclude certified registered nurse 
anesthetist costs from the operating payment rate as allowed by 
section 256B.0625, subdivision 11.  To be eligible, a hospital 
must notify the commissioner in writing by October 1 of the year 
preceding the rate year of the request to exclude certified 
registered nurse anesthetist costs.  The hospital must agree 
that all hospital claims for the cost and charges of certified 
registered nurse anesthetist services will not be included as 
part of the rates for inpatient services provided during the 
rate year.  In this case, the operating payment rate shall be 
adjusted to exclude the cost of certified registered nurse 
anesthetist services.  Payments made through separate claims for 
certified registered nurse anesthetist services shall not be 
paid directly through the hospital provider number or indirectly 
by the certified registered nurse anesthetist to the hospital or 
related organizations. 
    (5) [SPECIAL RATES.] The commissioner may establish special 
rate-setting methodologies, including a per day operating and 
property payment system, for hospice, ventilator dependent, and 
other services on a hospital and recipient specific basis taking 
into consideration such variables as federal designation, 
program size, and admission from a medical assistance waiver or 
home care program.  The data and rate calculation method shall 
conform to the requirements of paragraph (7), except that 
hospice rates shall not exceed the amount allowed under federal 
law and payment shall be secondary to any other medical 
assistance hospice program.  Rates and payments established 
under this paragraph must meet the requirements of section 
256.9685, subdivisions 1 and 2, and must not exceed payments 
that would otherwise be made to a hospital in total for rate 
year admissions under subdivisions 2, 2b, 2c, 3, 4, 5, and 6.  
The cost and charges used to establish rates shall only reflect 
inpatient medical assistance covered services.  Hospital and 
claims data that are used to establish rates under this 
paragraph shall not be used to establish payments or relative 
values under subdivisions 2, 2b, 2c, 3, 4, 5, and 6. 
    (6) [REHABILITATION DISTINCT PARTS.] Units of hospitals 
that are recognized as rehabilitation distinct parts by the 
Medicare program shall have separate provider numbers under the 
medical assistance program for rate establishment and billing 
purposes only.  These units shall also have operating and 
property payment rates and the disproportionate population 
adjustment established separately from other inpatient hospital 
services, based on the methods of subdivisions 2, 2b, 2c, 3, 4, 
5, and 6.  The commissioner may establish separate relative 
values under subdivision 2 for rehabilitation hospitals and 
distinct parts as defined by the Medicare program.  For 
individual hospitals that did not have separate medical 
assistance rehabilitation provider numbers or rehabilitation 
distinct parts in the base year, hospitals shall provide the 
information needed to separate rehabilitation distinct part cost 
and claims data from other inpatient service data.  
    (7) [NEONATAL TRANSFERS.] For admissions occurring on or 
after July 1, 1989, neonatal diagnostic category transfers shall 
have operating and property payment rates established at 
receiving hospitals which have neonatal intensive care units on 
a per day payment system that is based on the cost finding 
methods and allowable costs of the Medicare program during the 
base year.  Other neonatal diagnostic category transfers shall 
have rates established according to paragraph (8).  The rate per 
day for the neonatal service setting within the hospital shall 
be determined by dividing base year neonatal allowable costs by 
neonatal patient days.  The operating payment rate portion of 
the rate shall be adjusted by the hospital cost index and the 
disproportionate population adjustment.  The cost and charges 
used to establish rates shall only reflect inpatient services 
covered by medical assistance.  Hospital and claims data used to 
establish rates under this paragraph shall not be used to 
establish payments or relative values under subdivisions 2, 2b, 
2c, 3, 4, 5, and 6. 
    (8) [TRANSFERS.] Except as provided in paragraphs (5) and 
(7), operating and property payment rates for admissions that 
result in transfers and transfers shall be established on a per 
day payment system.  The per day payment rate shall be the sum 
of the adjusted operating and property payment rates determined 
in subdivisions 2b and 2c, divided by the arithmetic mean length 
of stay for the diagnostic category.  Each admission that 
results in a transfer and each transfer is considered a separate 
admission to each hospital, and the total of the admission and 
transfer payments to each hospital must not exceed the total per 
admission payment that would otherwise be made to each hospital 
under paragraph (2) and subdivisions 2b and 2c. 
    (b) The computation of each hospital's payment rate and the 
relative values of the diagnostic categories are not subject to 
the routine service cost limitation imposed under the Medicare 
program. 
    (c) Indian health service facilities are exempt from the 
rate establishment methods required by this section and shall be 
reimbursed at the facility's usual and customary charges to the 
general public.  This exemption is not effective for payments 
under general assistance medical care. 
    (d) Except as provided in paragraph (a), clauses (1) and 
(3), out-of-state hospitals that are located within a Minnesota 
local trade area shall have rates established using the same 
procedures and methods that apply to Minnesota hospitals.  
Hospitals that are not required by law to file information in a 
format necessary to establish rates shall have rates established 
based on the commissioner's estimates of the information.  
Relative values of the diagnostic categories shall not be 
redetermined under this paragraph until required by rule. 
Hospitals affected by this paragraph shall then be included in 
determining relative values.  However, hospitals that have rates 
established based upon the commissioner's estimates of 
information shall not be included in determining relative values.
This paragraph is effective for hospital fiscal years beginning 
on or after July 1, 1988.  A hospital shall provide the 
information necessary to establish rates under this paragraph at 
least 90 days before the start of the hospital's fiscal year. 
    (e) Hospitals that are not located within Minnesota or a 
Minnesota local trade area shall have operating and property 
rates established at the average of statewide and local trade 
area rates or, at the commissioner's discretion, at an amount 
negotiated by the commissioner.  Relative values shall not 
include data from hospitals that have rates established under 
this paragraph.  Payments, including third party liability, 
established under this paragraph may not exceed the charges on a 
claim specific basis for inpatient services that are covered by 
medical assistance.  
    (f) Medical assistance inpatient payment rates must include 
the cost incurred by hospitals to pay the department of health 
for metabolic disorder testing of newborns who are medical 
assistance recipients, if the cost is not recognized by another 
payment source. 
    (g) Medical assistance inpatient payments shall increase 20 
percent for inpatient hospital originally paid admissions, 
excluding Medicare crossovers, that occurred between July 1, 
1988, and December 31, 1990, if:  (i) the hospital had 100 or 
fewer Minnesota medical assistance annualized paid admissions, 
excluding Medicare crossovers, that were paid by March 1, 1988, 
for the period January 1, 1987, to June 30, 1987; (ii) the 
hospital had 100 or fewer licensed beds on March 1, 1988; (iii) 
the hospital is located in Minnesota; and (iv) the hospital is 
not located in a city of the first class as defined in section 
410.01.  For this paragraph, medical assistance does not include 
general assistance medical care. 
    (h) Medical assistance inpatient payments shall increase 15 
percent for inpatient hospital originally paid admissions, 
excluding Medicare crossovers, that occurred between July 1, 
1988, and December 31, 1990, if:  (i) the hospital had more than 
100 but fewer than 250 Minnesota medical assistance annualized 
paid admissions, excluding Medicare crossovers, that were paid 
by March 1, 1988, for the period January 1, 1987, to June 30, 
1987; (ii) the hospital had 100 or fewer licensed beds on March 
1, 1988; (iii) the hospital is located in Minnesota; and (iv) 
the hospital is not located in a city of the first class as 
defined in section 410.01.  For this paragraph, medical 
assistance does not include general assistance medical care. 
    (i) Admissions occurring on or after July 1, 1990, that are 
classified to a diagnostic category of mental health or chemical 
dependency shall have rates established according to the methods 
of paragraph (a), clause (8), except the per day rate shall be 
multiplied by a factor of 2, provided that the total of the per 
day rates shall not exceed the per admission rate.  This 
methodology shall also apply when a hold or commitment is 
ordered by the court for the days that inpatient hospital 
services are medically necessary.  Stays which are medically 
necessary for inpatient hospital services and covered by medical 
assistance shall not be billable to any other governmental 
entity.  Medical necessity shall be determined under criteria 
established to meet the requirements of section 256B.04, 
subdivision 15, or 256D.03, subdivision 7, paragraph (b). 
    Sec. 18.  Minnesota Statutes 1989 Supplement, section 
256.9695, subdivision 1, is amended to read: 
    Subdivision 1.  [APPEALS.] A hospital may appeal a decision 
arising from the application of standards or methods under 
section 256.9685, 256.9686, or 256.969, if an appeal would 
result in a change to the hospital's payment rate or payments.  
Both overpayments and underpayments that result from the 
submission of appeals shall be implemented.  Regardless of any 
appeal outcome, relative values shall not be recalculated.  The 
appeal shall be heard by an administrative law judge according 
to sections 14.48 to 14.56, or upon agreement by both parties, 
according to a modified appeals procedure established by the 
commissioner and the office of administrative hearings.  In any 
proceeding under this section, the appealing party must 
demonstrate by a preponderance of the evidence that the 
commissioner's determination is incorrect or not according to 
law. 
     (a) To appeal a payment rate or payment determination or a 
determination made from base year information, the hospital 
shall file a written appeal request to the commissioner within 
60 days of the date the payment rate determination was mailed.  
The appeal request shall specify:  (i) the disputed items; (ii) 
the authority in federal or state statute or rule upon which the 
hospital relies for each disputed item; and (iii) the name and 
address of the person to contact regarding the appeal.  A change 
to a payment rate or payments that results from a successful 
appeal to the Medicare program of the base year information 
establishing rates for the rate year beginning in 1991 and after 
is a prospective adjustment to subsequent rate years.  After 
December 31, 1990, payment rates shall not be adjusted for 
appeals of base year information that affect years prior to the 
rate year beginning January 1, 1991.  Facts to be considered in 
any appeal of base year information are limited to those in 
existence at the time the payment rates of the first rate year 
were established from the base year information.  In the case of 
Medicare settled appeals, the 60-day appeal period shall begin 
on the mailing date of the notice by the Medicare program or the 
date the medical assistance payment rate determination notice is 
mailed, whichever is later. 
    (b) To appeal a payment rate or payment change that results 
from a difference in case mix between the base year and a rate 
year, the procedures and requirements of paragraph (a) apply.  
However, the appeal must be filed with the commissioner within 
60 120 days after the end of a rate year.  A case mix appeal 
must apply to the cost of services to all medical assistance 
patients that received inpatient services from the hospital 
during the rate year appealed.  For this paragraph, hospital 
means a facility holding the provider number as an inpatient 
service facility. 
    Sec. 19.  Minnesota Statutes 1989 Supplement, section 
256.9695, subdivision 3, is amended to read: 
    Subd. 3.  [TRANSITION.] Except as provided in section 
256.969, subdivision 6a, paragraph (a), clause (3), the 
commissioner shall establish a transition period for the 
calculation of payment rates from July 1, 1989, to December 31, 
1990, as follows the implementation date of the upgrade to the 
Medicaid management information system. 
    During the transition period: 
    (a) Changes resulting from section 256.969, subdivision 6a, 
paragraph (a), clauses (1), (2), (4), (5), (6), and (8), shall 
not be implemented, except as provided in section 256.969, 
subdivision 6a, paragraph (a), clause (7), and paragraph (i). 
    (b) Rates established for hospital fiscal years beginning 
on or after July 1, 1989, shall not be adjusted for the one 
percent technology factor included in the hospital cost 
index The beginning of the 1991 rate year shall be delayed and 
the rates notification requirement shall not be applicable. 
    (c) Operating payment rates shall be indexed from the 
hospital's most recent fiscal year ending prior to January 1, 
1991, by prorating the hospital cost index methodology in effect 
on January 1, 1989.  Payments made for admissions occurring on 
or after July June 1, 1990, shall not include be adjusted by 
the one percent technology factor included in the hospital cost 
index and the hospital cost index shall not exceed five 
percent.  This hospital cost index limitation shall not apply to 
hospitals that meet the requirements of section 256.969, 
subdivision 6a, paragraphs (g) and (h). 
    (d) Property and pass-through payment rates shall be 
maintained at the most recent payment rate effective for June 1, 
1990.  However, all hospitals are subject to the hospital cost 
index limitation of subdivision 2c, for two complete fiscal 
years.  Property and pass-through costs shall be retroactively 
settled through December 31, 1990 the transition period.  The 
laws in effect on the day before July 1, 1989, apply to the 
retroactive settlement from July 1, 1989, to December 31, 1990. 
    Sec. 20.  [256B.035] [MANAGED CARE.] 
    The commissioner of human services may contract with public 
or private entities for health care services for medical 
assistance and general assistance medical care recipients 
identified by the commissioner as inappropriately using health 
care services.  The commissioner may enter into risk-based and 
nonrisk-based contracts.  Contracts may be for the full range of 
health services, or a portion thereof, for medical assistance 
and general assistance medical care populations to determine the 
effectiveness of various provider reimbursement and care 
delivery mechanisms.  The commissioner may seek necessary 
federal waivers and implement projects when approval of the 
waivers is obtained from the Health Care Financing 
Administration of the United States Department of Health and 
Human Services. 
    Sec. 21.  Minnesota Statutes 1988, 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 or health care consultant 
appointed by the commissioner.  
    (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. 
    (4) The commissioner may select providers to provide case 
management services to recipients who use health care services 
inappropriately or to recipients who are eligible for other 
managed care projects.  The providers shall be selected based 
upon criteria that may include a comparison with a peer group of 
providers related to the quality, quantity, or cost of health 
care services delivered or a review of sanctions previously 
imposed by health care services programs or the provider's 
professional licensing board. 
    Sec. 22.  Minnesota Statutes 1988, section 256B.04, 
subdivision 16, is amended to read:  
    Subd. 16.  [PERSONAL CARE ASSISTANTS SERVICES.] (a) The 
commissioner shall adopt permanent rules to implement, 
administer, and operate the personal care assistant services 
program.  The rules must incorporate the standards and 
requirements adopted by the commissioner of health under section 
144A.45 which are applicable to the provision of personal care 
assistant program.  Limits on the extent of personal care 
assistant services that may be provided to an individual must be 
based on the cost-effectiveness of the services in relation to 
the costs of inpatient hospital care, nursing home care, and 
other available types of care.  The rules must provide, at a 
minimum:  
    (1) that agencies be selected to contract with or employ 
and train staff to provide and supervise the provision of 
personal care services; 
    (2) that agencies employ or contract with a qualified 
applicant that a qualified recipient proposes to the agency as 
the recipient's choice of assistant; 
    (3) that agencies bill the medical assistance program for a 
personal care service by a personal care assistant and visits 
supervision by the registered nurse supervising the personal 
care assistant; 
    (4) that agencies establish a grievance mechanism; and 
    (5) that agencies have a quality assurance program.  
    (b) For personal care assistants under contract with an 
agency under paragraph (a), the provision of training and 
supervision by the agency does not create an employment 
relationship.  The commissioner may waive the requirement for 
the provision of personal care services through an agency in a 
particular county, when there are less than two agencies 
providing services in that county.  
    Sec. 23.  Minnesota Statutes 1988, section 256B.055, 
subdivision 3, is amended to read: 
    Subd. 3.  [AFDC FAMILIES.] Medical assistance may be paid 
for a person who is eligible for or receiving, or who would be 
eligible for, except for excess income or assets, public 
assistance under the aid to families with dependent children 
program.  
    Sec. 24.  Minnesota Statutes 1988, section 256B.055, 
subdivision 5, is amended to read: 
    Subd. 5.  [PREGNANT WOMEN; DEPENDENT UNBORN CHILD.] Medical 
assistance may be paid for a pregnant woman, as certified in 
writing by a physician or nurse midwife who has written 
verification of a positive pregnancy test from a physician or 
licensed registered nurse, who meets the other eligibility 
criteria of this section and who 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 subdivision, a woman is considered 
pregnant for 60 days postpartum. 
    Sec. 25.  Minnesota Statutes 1988, section 256B.055, 
subdivision 6, is amended to read: 
    Subd. 6.  [PREGNANT WOMEN; NEEDY UNBORN CHILD.] Medical 
assistance may be paid for a pregnant woman, as certified in 
writing by a physician or nurse midwife who has written 
verification of a positive pregnancy test from a physician or 
licensed registered nurse, who meets the other eligibility 
criteria of this section and whose unborn child would be 
eligible as a needy child under subdivision 1h 10 if born and 
living with the woman.  For purposes of this subdivision, a 
woman is considered pregnant for 60 days postpartum.  
    Sec. 26.  Minnesota Statutes 1989 Supplement, section 
256B.055, subdivision 7, is amended to read: 
    Subd. 7.  [AGED, BLIND, OR DISABLED PERSONS.] Medical 
assistance may be paid for a person who meets the categorical 
eligibility requirements of the supplemental security income 
program and or, who would meet those requirements except for 
excess income or assets, and who meets the other eligibility 
requirements of this section.  The methodology for calculating 
income must be the same methodology used for calculating income 
for the supplemental security income program except as specified 
otherwise by state or federal law, rule, or regulation. 
    Effective February 1, 1989, and to the extent allowed by 
federal law the commissioner shall deduct state and federal 
income taxes and federal insurance contributions act payments 
withheld from the individual's earned income in determining 
eligibility under this subdivision. 
    Sec. 27.  Minnesota Statutes 1988, section 256B.055, 
subdivision 12, is amended to read: 
    Subd. 12.  [DISABLED CHILDREN.] (a) A person is eligible 
for medical assistance if the person is under age 19 and 
qualifies as a disabled individual under United States Code, 
title 42, section 1382c(a), and would be eligible for medical 
assistance under the state plan if residing in a medical 
institution, and who requires a level of care provided in a 
hospital, skilled nursing facility, intermediate care facility, 
or intermediate care facility for persons with mental 
retardation or related conditions, for whom home care is 
appropriate, provided that the cost to medical assistance for 
home care services is not more than the amount that medical 
assistance would pay for appropriate institutional care. 
     (b) For purposes of this subdivision, "hospital" means an 
acute care institution as defined in section 144.696, 
subdivision 3, licensed pursuant to sections 144.50 to 144.58, 
which is appropriate if a person is technology dependent or has 
a chronic health condition which requires frequent intervention 
by a health care professional to avoid death. 
    (c) For purposes of this subdivision, "skilled nursing 
facility" and "intermediate care facility" means a facility 
which provides nursing care as defined in section 144A.01, 
subdivision 5, licensed pursuant to sections 144A.02 to 144A.10, 
which is appropriate if a person is in active restorative 
treatment; is in need of special treatments provided or 
supervised by a licensed nurse; or has unpredictable episodes of 
active disease processes requiring immediate judgment by a 
licensed nurse.  
     (d) For purposes of this subdivision, "intermediate care 
facility for the mentally retarded" or "ICF/MR" means a program 
licensed to provide services to persons with mental retardation 
under section 252.28, and chapter 245A, and a physical plant 
licensed as a supervised living facility under chapter 144, 
which together are certified by the Minnesota department of 
health as meeting the standards in Code of Federal Regulations, 
title 42, part 483, for an intermediate care facility which 
provides services for persons with mental retardation or persons 
with related conditions who require 24-hour supervision and 
active treatment for medical, behavioral, or habilitation needs. 
    (e) For purposes of this subdivision, a person "requires a 
level of care provided in a hospital, skilled nursing facility, 
intermediate care facility, or intermediate care facility for 
persons with mental retardation or related conditions" if the 
person requires 24-hour supervision because the person exhibits 
suicidal or homicidal ideation or behavior, psychosomatic 
disorders or somatopsychic disorders that may become life 
threatening, severe socially unacceptable behavior associated 
with psychiatric disorder, psychosis or severe developmental 
problems requiring continuous skilled observation, or disabling 
symptoms that do not respond to office-centered outpatient 
treatment. 
    Sec. 28.  Minnesota Statutes 1988, section 256B.056, is 
amended by adding a subdivision to read:  
    Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
specifically required by state law or rule or federal law or 
regulation, the methodologies used in counting income and assets 
to determine eligibility for medical assistance shall be as 
follows:  (a) for persons whose eligibility category is based on 
blindness, disability, or age of 65 or more years, the 
methodologies for the supplemental security income program shall 
be used; and (b) for families and children, which includes all 
other eligibility categories, the methodologies for the aid to 
families with dependent children program under section 256.73 
shall be used.  For these purposes, a "methodology" does not 
include an asset or income standard, budgeting or accounting 
method, or method of determining effective dates. 
    Sec. 29.  Minnesota Statutes 1988, section 256B.056, 
subdivision 2, is amended to read: 
    Subd. 2.  [HOMESTEAD.] To be eligible for medical 
assistance, a person must not own, individually or together with 
the person's spouse, 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. one of the following individuals:  
     (a) the spouse; 
     (b) a child under age 21; 
     (c) a child of any age who is blind or permanently and 
totally disabled as defined in the supplemental security income 
program; 
     (d) a sibling who has equity interest in the home and who 
resided in the home for at least one year immediately before the 
date of the person's admission to the facility; or 
    (e) a child of any age, or, subject to federal approval, a 
grandchild of any age, who resided in the home for at least two 
years immediately before the date of the person's admission to 
the facility, and who provided care to the person that permitted 
the person to reside at home rather than in an institution.  
    The homestead is also excluded for the first six calendar 
months of the person's stay in the long-term care facility.  The 
person's equity in 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 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.  
    Sec. 30.  Minnesota Statutes 1989 Supplement, section 
256B.056, subdivision 3, is amended to read: 
    Subd. 3.  [ASSET LIMITATIONS.] To be eligible for medical 
assistance, a person must not individually own more than $3,000 
in assets, or if a member of a household with two family members 
(husband and wife, or parent and child), the household must not 
own more than $6,000 in 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.  The 
value of the items in paragraphs (a) to (i) are not considered 
in determining medical assistance eligibility. 
    (a) The homestead is not considered. 
    (b) Household goods and personal effects are not considered.
    (c) Personal property used as a regular abode by the 
applicant or recipient is not considered.  
    (d) A lot in a burial plot for each member of the household 
is not considered. 
    (e) 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 are not considered. 
    (f) For a period of six months, Insurance settlements to 
repair or replace damaged, destroyed, or stolen property are not 
considered to the same extent as in the related cash assistance 
programs. 
    (g) 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 is not considered. 
    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 asset limit. 
    (h) Life insurance policies and assets designated as burial 
expenses, according to the standards and restrictions of the 
supplemental security income (SSI) program. 
    (i) Other items which may be excluded by federal law are 
not considered. 
    Sec. 31.  Minnesota Statutes 1989 Supplement, section 
256B.056, subdivision 4, is amended to read: 
    Subd. 4.  [INCOME.] To be eligible for medical assistance, 
a person must not have, or anticipate receiving, semiannual 
income in excess of 120 percent of the income standards by 
family size used in the aid to families with dependent children 
program, 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 Numbers 94-566, 
section 503; 99-272; and 99-509. 
    Sec. 32.  Minnesota Statutes 1988, section 256B.056, 
subdivision 7, is amended to read: 
    Subd. 7.  [PERIOD OF INELIGIBILITY ELIGIBILITY.] 
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. 33.  Minnesota Statutes 1989 Supplement, section 
256B.057, subdivision 1, is amended to read: 
    Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] An infant 
less than one year of age or a pregnant woman, as certified in 
writing by a physician or nurse midwife who has written 
verification of a positive pregnancy test from a physician or 
licensed registered nurse, is eligible for medical assistance if 
countable family income is equal to or less than 185 percent of 
the federal poverty guideline for the same family size.  
Eligibility for a pregnant woman or infant less than one year of 
age under this subdivision must be determined without regard to 
asset standards established in section 256B.056, subdivision 3.  
Adjustments in the income limits due to annual changes in the 
federal poverty guidelines shall be implemented the first day of 
July following publication of the changes.  
    Sec. 34.  Minnesota Statutes 1989 Supplement, section 
256B.057, subdivision 2, is amended to read: 
    Subd. 2.  [CHILDREN.] A child one through seven five years 
of age in a family whose countable income is less than 100 133 
percent of the federal poverty guidelines for the same family 
size, is eligible for medical assistance.  A child six through 
seven years of age, who was born after September 30, 1983, in a 
family whose countable income is less than 100 percent of the 
federal poverty guidelines for the same family size is eligible 
for medical assistance.  Eligibility for children under this 
subdivision must be determined without regard to asset standards 
established in section 256B.056, subdivision 3.  Adjustments in 
the income limits due to annual changes in the federal poverty 
guidelines shall be implemented the first day of July following 
publication of the changes.  
    Sec. 35.  Minnesota Statutes 1989 Supplement, section 
256B.057, is amended by adding a subdivision to read: 
    Subd. 4.  [QUALIFIED WORKING DISABLED ADULTS.] A person who 
is entitled to Medicare Part A benefits under section 1818A of 
the Social Security Act; whose income does not exceed 200 
percent of the federal poverty guidelines for the applicable 
family size; whose nonexempt assets do not exceed twice the 
maximum amount allowable under the supplemental security income 
program, according to family size; and who is not otherwise 
eligible for medical assistance, is eligible for medical 
assistance reimbursement of the Medicare Part A premium.  
Adjustments in the income limits due to annual changes in the 
federal poverty guidelines shall be implemented the first day of 
July following publication of the changes. 
    Sec. 36.  Minnesota Statutes 1989 Supplement, section 
256B.057, is amended by adding a subdivision to read: 
    Subd. 5.  [DISABLED ADULT CHILDREN.] A person who is at 
least 18 years old, who was eligible for supplemental security 
income benefits on the basis of blindness or disability, who 
became disabled or blind before he or she reached the age of 22, 
and who lost eligibility as a result of becoming entitled to a 
child's insurance benefits on or after July 1, 1987, under 
section 202(d) of the Social Security Act, or because of an 
increase in those benefits effective on or after July 1, 1987, 
is eligible for medical assistance as long as he or she would be 
entitled to supplemental security income in the absence of 
child's insurance benefits or increases in those benefits. 
    Sec. 37.  Minnesota Statutes 1989 Supplement, section 
256B.0575, is amended to read: 
    256B.0575 [AVAILABILITY OF INCOME FOR INSTITUTIONALIZED 
PERSONS.] 
    When an institutionalized person is determined eligible for 
medical assistance, the income that exceeds the deductions in 
paragraphs (a) and (b) must be applied to the cost of 
institutional care.  
    (a) The following amounts must be deducted from the 
institutionalized person's income in the following order: 
    (1) the personal needs allowance under section 256B.35; 
    (2) the personal allowance for disabled individuals under 
section 256B.36; 
    (3) if the institutionalized person has a legally-appointed 
guardian or conservator, five percent of the recipient's gross 
monthly income up to $100 as reimbursement for guardianship or 
conservatorship services; 
    (4) a monthly income allowance determined under section 
256B.058, subdivision 2, but only to the extent income of the 
institutionalized spouse is made available to the community 
spouse; 
    (5) a monthly allowance for children under age 18 which, 
together with the net income of the children, would provide 
income equal to the medical assistance standard for a family 
size that includes only the minor children.  This deduction 
applies only if the children do not live with the community 
spouse, and only if the children resided with the 
institutionalized person immediately prior to admission; 
    (6) a monthly family allowance for other family members, 
equal to one-third of the difference between 122 percent of the 
federal poverty guidelines and the monthly income for that 
family member; and 
    (6) (7) amounts for reasonable expenses incurred for 
necessary medical or remedial care for the institutionalized 
spouse that are not medical assistance covered expenses and that 
are not subject to payment by a third party.  
    For purposes of clause (5) (6), "other family member" 
includes only minor or dependent children, dependent parents, or 
dependent siblings of the institutionalized or community spouse 
if the sibling resides with the community spouse. means a person 
who resides with the community spouse and who is a minor or 
dependent child, dependent parent, or dependent sibling of 
either spouse.  "Dependent" means a person who could be claimed 
as a dependent for federal income tax purposes under the 
Internal Revenue Code. 
    (b) Income shall be allocated to an institutionalized 
person 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:  
    (1) a physician certifies that the person is expected to 
reside in the long-term care facility for three calendar months 
or less; 
    (2) if the person has expenses of maintaining a residence 
in the community; and 
    (3) if one of the following circumstances apply:  
    (i) the person was not living together with a spouse or a 
family member as defined in paragraph (a) when the person 
entered a long-term care facility; or 
    (ii) the person and the person's spouse become 
institutionalized on the same date, in which case the allocation 
shall be applied to the income of one of the spouses.  
For purposes of this paragraph, a person is determined to be 
residing in a licensed nursing home, regional treatment center, 
or medical institution if the person is expected to remain for a 
period of one full calendar month or more. 
    Sec. 38.  Minnesota Statutes 1989 Supplement, section 
256B.059, subdivision 4, is amended to read: 
    Subd. 4.  [INCREASED COMMUNITY SPOUSE ASSET ALLOWANCE; WHEN 
ALLOWED.] (a) If either the institutionalized spouse or 
community spouse establishes that the community spouse asset 
allowance under subdivision 3 (in relation to the amount of 
income generated by such an allowance) is not sufficient to 
raise the community spouse's income to the minimum monthly 
maintenance needs allowance in section 256B.058, subdivision 2, 
paragraph (c), there shall be substituted for the amount allowed 
to be transferred an amount sufficient, when combined with the 
monthly income otherwise available to the spouse, to provide the 
minimum monthly maintenance needs allowance.  A substitution 
under this paragraph may be made only if the assets of the 
couple have been arranged so that the maximum amount of 
income-producing assets, at the maximum rate of return, are 
available to the community spouse under the community spouse 
asset allowance.  The maximum rate of return is the average rate 
of return available from the financial institution holding the 
asset, or a rate determined by the commissioner to be reasonable 
according to community standards, if the asset is not held by a 
financial institution. 
    (b) The community spouse asset allowance under subdivision 
3 can be increased by court order or hearing that complies with 
the requirements of United States Code, title 42, section 1924. 
    Sec. 39.  Minnesota Statutes 1989 Supplement, section 
256B.059, subdivision 5, is amended to read: 
    Subd. 5.  [ASSET AVAILABILITY.] (a) At the time of 
application for medical assistance benefits, assets considered 
available to the institutionalized spouse shall be the total 
value of all assets in which either spouse has an ownership 
interest, reduced by the greater of: 
    (1) $12,000; or 
    (2) the lesser of the spousal share or $60,000; or 
    (3) the amount required by court order to be paid to the 
community spouse.  If the community spouse asset allowance has 
been increased under subdivision 4, then the assets considered 
available to the institutionalized spouse under this subdivision 
shall be further reduced by the value of additional amounts 
allowed under subdivision 4. 
    (b) An institutionalized spouse may be found eligible for 
medical assistance even though assets in excess of the allowable 
amount are found to be available under paragraph (a) if the 
assets are owned jointly or individually by the community 
spouse, and the institutionalized spouse cannot use those assets 
to pay for the cost of care without the consent of the community 
spouse, and if:  (i) the institutionalized spouse assigns to the 
commissioner the right to support from the community spouse 
under section 256B.14, subdivision 2; (ii) the institutionalized 
spouse lacks the ability to execute an assignment due to a 
physical or mental impairment; or (iii) the denial of 
eligibility would cause an imminent threat to the 
institutionalized spouse's health and well-being. 
    (c) After the month in which the institutionalized spouse 
is determined eligible for medical assistance, during the 
continuous period of institutionalization, no assets of the 
community spouse are considered available to the 
institutionalized spouse, unless the institutionalized spouse 
has been found eligible under clause (b). 
    (c) (d) For purposes of this section, assets do not include 
assets excluded under section 256B.056, without regard to the 
limitations on total value in that section. 
    Sec. 40.  Minnesota Statutes 1989 Supplement, section 
256B.0595, subdivision 1, is amended to read: 
    Subdivision 1.  [PROHIBITED TRANSFERS.] If an 
institutionalized a person or the person's spouse has given 
away, sold, or disposed of, for less than fair market value, any 
asset or interest therein, except assets other than the 
homestead that are excluded under section 256B.056, subdivision 
3, within 30 months of before or any time after the date of 
institutionalization if the person has been determined eligible 
for medical assistance, or within 30 months of before or any 
time after the date of the first approved application for 
medical assistance if the person has not yet been determined 
eligible for medical assistance, the person is ineligible for 
long-term care services for the period of time determined under 
subdivision 2.  For purposes of this section, long-term care 
services include nursing facility services, and home and 
community-based services provided pursuant to section 256B.491.  
For purposes of this subdivision and subdivisions 2, 3, and 4, 
"institutionalized person" includes a person who is an inpatient 
in a nursing facility, or who is receiving home and 
community-based services under section 256B.491. 
    Sec. 41.  Minnesota Statutes 1989 Supplement, section 
256B.0595, subdivision 2, is amended to read: 
    Subd. 2.  [PERIOD OF INELIGIBILITY.] For any uncompensated 
transfer, the number of months of ineligibility for long-term 
care services shall be the lesser of 30 months, or the 
uncompensated transfer amount divided by the average medical 
assistance rate for nursing facility services in the state in 
effect on the date of application.  The amount used to calculate 
the average medical assistance payment rate shall be adjusted 
each July 1 to reflect payment rates for the previous calendar 
year.  The period of ineligibility begins with the month in 
which the assets were transferred.  If the transfer was not 
reported to the local agency at the time of application, and the 
applicant received long-term care services during what would 
have been the period of ineligibility if the transfer had been 
reported, a cause of action exists against the transferee for 
the cost of long-term care services provided during the period 
of ineligibility, or for the uncompensated amount of the 
transfer, whichever is less.  The action may be brought by the 
state or the local agency responsible for providing medical 
assistance under chapter 256G.  The uncompensated transfer 
amount is the fair market value of the asset at the time it was 
given away, sold, or disposed of, less the amount of 
compensation received.  
    Sec. 42.  Minnesota Statutes 1989 Supplement, section 
256B.0595, subdivision 4, is amended to read: 
    Subd. 4.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] An 
institutionalized person receiving medical assistance on the 
date of institutionalization who has transferred assets for less 
than fair market value within the 30 months immediately before 
the date of institutionalization or an institutionalized person 
who was not receiving medical assistance on the date of 
institutionalization and who has transferred assets for less 
than fair market value within 30 months immediately before the 
month of application who has made, or whose spouse has made a 
transfer prohibited by subdivision 1, is not ineligible for 
long-term care services if one of the following conditions apply 
applies: 
    (1) the assets were transferred to the community spouse, as 
defined in section 256B.059; or 
    (2) the institutionalized spouse, prior to being 
institutionalized, transferred assets to his or her spouse, 
provided that the spouse to whom the assets were transferred 
does not then transfer those assets to another person for less 
than fair market value.  (At the time when one spouse is 
institutionalized, assets must be allocated between the spouses 
as provided under section 256B.059); or 
    (3) the assets were transferred to the individual's child 
who is blind or permanently and totally disabled as determined 
in the supplemental security income program; or 
    (4) a satisfactory showing is made that the individual 
intended to dispose of the assets either at fair market value or 
for other valuable consideration; or 
    (5) the local agency determines that denial of eligibility 
for long-term care services would work an undue hardship and 
grants a waiver of excess assets.  When a waiver is granted, a 
cause of action exists against the person to whom the assets 
were transferred for that portion of long-term care services 
granted within 30 months of the transfer, or the amount of the 
uncompensated transfer, whichever is less, together with the 
costs incurred due to the action.  The action may be brought by 
the state or the local agency responsible for providing medical 
assistance under this chapter. 
    Sec. 43.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 4, is amended to read: 
    Subd. 4.  [OUTPATIENT AND CLINIC SERVICES.] Medical 
assistance covers 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 a 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 
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.  
    Sec. 44.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 5, is amended to read: 
    Subd. 5.  [COMMUNITY MENTAL HEALTH CENTER SERVICES.] 
Medical assistance covers 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. 
    Sec. 45.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 8a.  [OCCUPATIONAL THERAPY.] Medical assistance 
covers occupational therapy and related services. 
    Sec. 46.  Minnesota Statutes 1988, section 256B.0625, 
subdivision 9, is amended to read: 
    Subd. 9.  [DENTAL SERVICES.] Medical assistance covers 
dental services, excluding cast metal restorations.  Dental 
services include, with prior authorization, fixed cast metal 
restorations that are cost-effective for persons who cannot use 
removable dentures because of their medical condition. 
    Sec. 47.  Minnesota Statutes 1989 Supplement, section 
256B.0625, subdivision 13, is amended to read: 
    Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs if 
prescribed by a licensed practitioner.  The commissioner shall 
designate a formulary committee to advise the commissioner on 
the names of drugs for which payment is 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, and vitamins for children under the age of seven and 
pregnant or nursing women; 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.  
    (b) 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 
multisource 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 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 
legend drug 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.  Over-the-counter 
medications must be dispensed in the manufacturer's unopened 
package.  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.  Implementation of 
any change in the fixed dispensing fee that has not been subject 
to the administrative procedure act is limited to not more than 
180 days, unless, during that time, the commissioner initiates 
rulemaking through the administrative procedure act. 
    Sec. 48.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 28.  [CERTIFIED PEDIATRIC OR FAMILY NURSE 
PRACTITIONER SERVICES.] Medical assistance covers services 
performed by a certified pediatric nurse practitioner or a 
certified family nurse practitioner in independent practice, if 
the services are otherwise covered under this chapter as a 
physician service, and if the service is within the scope of 
practice of the nurse practitioner's license as a registered 
nurse, as defined in section 148.171. 
    Sec. 49.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 29.  [PUBLIC HEALTH NURSING CLINIC SERVICES.] Medical 
assistance covers the services of a certified public health 
nurse practicing in a public health nursing clinic that is a 
department of, or that operates under the direct authority of, a 
unit of government, if the service is within the scope of 
practice of the public health nurse's license as a registered 
nurse, as defined in section 148.171.  
    Sec. 50.  Minnesota Statutes 1988, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 30.  [OTHER CLINIC SERVICES.] Medical assistance 
covers rural health clinic, federally qualified health center, 
and nonprofit community health clinic services.  Rural health 
clinic services and federally qualified health center services 
mean services defined in United States Code, title 42, section 
1396d(a)(2)(B) and (C).  Payment for rural health clinic and 
federally qualified health center services shall be made 
according to applicable federal law and regulation.  
    Sec. 51.  [256B.0627] [COVERED SERVICE; HOME CARE 
SERVICES.] 
    Subdivision 1.  [DEFINITION.] "Home care services" means a 
medically necessary health service that is ordered by a 
physician and documented in a plan of care that is reviewed and 
revised as medically necessary by the physician at least once 
every 60 days.  Home care services include personal care and 
nursing supervision of personal care services which is reviewed 
and revised as medically necessary by the physician at least 
once every 365 days.  Home care services are provided to the 
recipient at the recipient's residence that is a place other 
than a hospital or long-term care facility.  
    Subd. 2.  [SERVICES COVERED.] Home care services covered 
under this section include:  
    (1) nursing services; 
    (2) private duty nursing services; 
    (3) home health aide services; 
    (4) personal care services; and 
    (5) nursing supervision of personal care services.  
    Subd. 3.  [PRIVATE DUTY NURSING SERVICES; WHO MAY PROVIDE.] 
Private duty nursing services may be provided by a registered 
nurse or licensed practical nurse who is not the recipient's 
spouse, legal guardian, or parent of a minor child.  
    Subd. 4.  [PERSONAL CARE SERVICES.] (a) Personal care 
services may be provided by a qualified individual who is not 
the recipient's spouse, legal guardian, or parent of a minor 
child.  
    (b) The personal care services that are eligible for 
payment are the following:  
    (1) bowel and bladder care; 
    (2) skin care to maintain the health of the skin; 
    (3) range of motion exercises; 
    (4) respiratory assistance; 
    (5) transfers; 
    (6) bathing, grooming, and hairwashing necessary for 
personal hygiene; 
    (7) turning and positioning; 
    (8) assistance with furnishing medication that is normally 
self-administered; 
    (9) application and maintenance of prosthetics and 
orthotics; 
    (10) cleaning medical equipment; 
    (11) dressing or undressing; 
    (12) assistance with food, nutrition, and diet activities; 
    (13) accompanying a recipient to obtain medical diagnosis 
or treatment; 
    (14) services provided for the recipient's personal health 
and safety; 
    (15) helping the recipient to complete daily living skills 
such as personal and oral hygiene and medication schedules; and 
     (16) incidental household services that are an integral 
part of a personal care service described in clauses (1) to (15).
    (c) The personal care services that are not eligible for 
payment are the following:  
    (1) personal care services that are not in the plan of care 
developed by the supervising registered nurse in consultation 
with the personal care assistants and the recipient or family of 
the recipient; 
    (2) services that are not supervised by the registered 
nurse; 
    (3) services provided bv the recipient's spouse, legal 
guardian, or parent of a minor child; 
    (4) sterile procedures; and 
    (5) injections of fluids into veins, muscles, or skin.  
    Subd. 5.  [LIMITATION ON PAYMENTS.] Medical assistance 
payments for home care services shall be limited according to 
paragraphs (a) to (e).  
    (a) [EXEMPTION FROM PAYMENT LIMITATIONS.] The level, or the 
number of hours or visits of a specific service, of home health 
care services to a recipient that began before and is continued 
without increase on or after December 1987, shall be exempt from 
the payment limitations of this section, as long as the services 
are medically necessary.  
    (b) [LEVEL I HOME CARE.] For all new cases after December 
1987, medically necessary home care services up to $800 may be 
provided in a calendar month.  
    If the services in the recipient's home care plan will 
exceed the $800 threshold for 30 days or less, the medically 
necessary services may be provided.  
    (c) [LEVEL II HOME CARE.] If the services in the 
recipient's home care plan exceed $800 for more than 30 days, a 
public health nurse from the local preadmission screening team 
shall determine the recipient's maximum level of home care 
according to this paragraph.  
    (1) The public health nurse from the local preadmission 
screening team shall base the determination of the recipient's 
maximum level of care on the need and eligibility of the 
recipient for one of the following placements:  
    (i) residential facility for persons with mental 
retardation or related conditions operated under section 
256B.501; 
    (ii) inpatient hospital care for a ventilator-dependent 
recipient.  "Ventilator dependent" means an individual who 
receives mechanical ventilation for life support at least six 
hours per day and is expected to or has been dependent for at 
least 30 consecutive days; or 
    (iii) all other recipients not appropriate for one of the 
above placements.  
    (2) If the recipient is eligible under clause (1)(i), the 
monthly medical assistance reimbursement for home care services 
shall not exceed the total monthly statewide average payment 
rate for residential facilities for children or adults with 
mental retardation or related conditions as appropriate for the 
recipient's age and level of self-preservation as determined 
according to Minnesota Rules, parts 9553.0010 to 9553.0080.  
    (3) If the recipient is eligible under clause (1)(ii), the 
monthly medical assistance reimbursement for home care services 
shall not exceed the monthly cost of care at the highest cost 
hospital designated as a long-term hospital under the Medicare 
program.  For purposes of this clause, home care services means 
all services provided in the home that would be included in the 
payment for care at the long-term hospital.  
    (4) If the recipient is not eligible under either clause 
(1)(i) or (1)(ii), the monthly medical assistance reimbursement 
for home care services shall not exceed the total monthly 
statewide average payment for the case mix classification most 
appropriate to the recipient.  The case mix classification is 
established under section 256B.431.  
    (5) The determination of the recipient's maximum level of 
home care by the public health nurse is called a home care cost 
assessment.  The home care cost assessment must be requested by 
the home care provider before the end of the first 30 days of 
provided service and must be conducted by the public health 
nurse within ten working days following request.  
    (6) A home care provider shall request a new home care cost 
assessment when the needs of the individual have changed enough 
to require that a revised care plan be implemented that will 
increase costs beyond what was approved by the previous home 
care cost assessment and the change is anticipated to last for 
more than 30 days.  The home care provider must request the home 
care cost assessment before the end of the first 30 days of 
provided service.  Whenever a home care cost assessment is 
completed, the public health nurse that completes the home care 
cost assessment, in consultation with the home care provider, 
shall determine the time period for which a home care cost 
assessment shall remain valid.  If the recipient continues to 
require home care services beyond the limited duration of the 
home care cost assessment, the home care provider must request a 
reassessment through the home care cost assessment process 
described above.  Under no circumstances shall a home care cost 
assessment be valid for more than 12 months.  
    (7) Reimbursement for the home care cost assessment shall 
be made through the Medicaid administrative authority.  The 
state shall pay the nonfederal share.  
    (d) [LEVEL III HOME CARE.] If the home care provider 
determines that the recipient's needs exceed the amount approved 
for the appropriate level of care as determined in paragraph 
(c), the home care provider may refer the case to the department 
for a level III determination.  Based on the client needs, 
physician orders, diagnosis, condition, and plan of care, the 
department may give prior approval for care that exceeds level 
II described in paragraph (c).  The amount approved shall not 
exceed the maximum cost for the appropriate level of care as 
determined in paragraph (c), clause (1), which will be the 
maximum ICF/MR rate for intermediate care facilities for persons 
with mental retardation or related conditions, or the maximum 
nursing home case mix payment, or the highest hospital cost for 
the state.  
    The department has 30 days from receipt of the request to 
complete the level III determination, during which time it may 
approve the higher level while reviewing the case.  
    Case reviews or approval of home care services in levels II 
and III may result in assignment of a case manager.  
    (e) [PRIOR APPROVAL REQUIRED IN FOSTER CARE SETTING.] Any 
home care service provided in an adult or child foster care 
setting must receive prior approval by the department.  
    Subd. 6.  [RECOVERY OF EXCESSIVE PAYMENTS.] The 
commissioner shall seek monetary recovery from providers of 
payments made for services which exceed the limits established 
in this section.  
    Sec. 52.  [256B.0629] [ADVISORY COMMITTEE ON ORGAN AND 
TISSUE TRANSPLANTS.] 
    Subdivision 1.  [CREATION AND MEMBERSHIP.] By July 1, 1990, 
the commissioner shall appoint and convene a 12 member advisory 
committee to provide advice and recommendations to the 
commissioner concerning the eligibility of organ and tissue 
transplant procedures for reimbursement by medical assistance 
and general assistance medical care.  The committee must include 
representatives of the transplant provider community, hospitals, 
patient recipient groups or organizations, the department of 
human services, the department of finance, and the department of 
health, at least one representative of a health plan regulated 
under chapter 62A, 62C, or 62D, and persons with expertise in 
ethics, law, and economics.  The terms and removal of members 
shall be governed by section 15.059.  Members shall not receive 
per diems but shall be compensated for expenses.  The advisory 
committee does not expire as provided in section 15.059, 
subdivision 6. 
    Subd. 2.  [FUNCTION AND OBJECTIVES.] The advisory committee 
shall meet at least twice a year.  The committee's activities 
include, but are not limited to: 
    (1) collection of information on the efficacy and 
experience of various forms of transplantation not approved by 
medicare; 
    (2) collection of information from Minnesota transplant 
providers on available services, success rates, and the current 
status of transplant activity in the state; 
    (3) development of guidelines for determining when and 
under what conditions, organ and tissue transplants not approved 
by medicare should be eligible for reimbursement by medical 
assistance and general assistance medical care; 
    (4) providing recommendations, at least annually, to the 
commissioner on:  (i) organ and tissue transplant procedures, 
beyond those approved by medicare, that should also be eligible 
for reimbursement under medical assistance and general 
assistance medical care; and (ii) which transplant centers 
should be eligible for reimbursement from medical assistance and 
general assistance medical care. 
    Subd. 3.  [ANNUAL REPORT.] The advisory committee shall 
present an annual report to the commissioner and the chairs of 
the health and human services appropriations divisions of the 
house appropriations committee and the senate finance committee 
by January 1 of each year on the findings and recommendations of 
the committee. 
    Subd. 4.  [RESPONSIBILITIES OF THE COMMISSIONER.] The 
commissioner shall periodically: 
    (1) Recommend to the legislature criteria governing the 
eligibility of organ and tissue transplant procedures for 
reimbursement from medical assistance and general assistance 
medical care.  Procedures approved by medicare are automatically 
eligible for medical assistance and general assistance medical 
care reimbursement.  Additional procedures are eligible for 
reimbursement only upon approval by the legislature.  Only 
procedures recommended by the task force and the commissioner 
may be considered by the legislature.  
    (2) Recommend to the legislature criteria for certifying 
transplant centers within and outside of Minnesota where 
Minnesotans receiving medical assistance and general assistance 
medical care may obtain transplants.  Additional centers may be 
certified only upon approval of the legislature.  Only centers 
recommended by the task force and the commissioner may be 
considered by the legislature. 
    Sec. 53.  [256B.0643] [VENDOR REQUEST FOR CONTESTED CASE 
PROCEEDING.] 
    Unless otherwise provided by law, a vendor of medical care, 
as defined in section 256B.02, subdivision 7, must use this 
procedure to request a contested case, as defined in section 
14.02, subdivision 3.  A request for a contested case must be 
filed with the commissioner in writing within 60 days after the 
date the notification of an action or determination was mailed.  
The appeal request must specify: 
    (1) each disputed action or item; 
    (2) the reason for the dispute; 
    (3) an estimate of the dollar amount involved, if any, for 
each disputed item; 
    (4) the computation or other disposition that the appealing 
party believes is correct; 
    (5) the authority in statute or rule upon which the 
appealing party relies for each disputed item; 
    (6) the name and address of the person or firm with whom 
contacts may be made regarding the appeal; and 
    (7) other information required by the commissioner.  
Nothing in this section shall be construed to create a right to 
an administrative appeal or contested case proceeding. 
    Sec. 54.  Minnesota Statutes 1988, section 256B.091, 
subdivision 4, is amended to read:  
    Subd. 4.  [SCREENING OF PERSONS.] Prior to nursing home or 
boarding care home admission, screening teams shall assess the 
needs of all applicants, except (1) patients transferred from 
other certified nursing homes or boarding care homes; (2) 
patients who, having entered acute care facilities from nursing 
homes or boarding care homes, are returning to a nursing home or 
boarding care home; (3) persons entering a facility described in 
section 256B.431, subdivision 4, paragraph (c) individuals who 
are screened by another state within three months before 
admission to a Minnesota nursing home; (4) individuals not 
eligible for medical assistance whose length of stay is expected 
to be 30 days or less based on a physician's certification, if 
the facility notifies the screening team upon admission and 
provides an update to the screening team on the 30th day after 
admission; (5) individuals who have a contractual right to have 
their nursing home care paid for indefinitely by the veteran's 
administration; or (6) persons entering a facility conducted by 
and for the adherents of a recognized church or religious 
denomination for the purpose of providing care and services for 
those who depend upon spiritual means, through prayer alone, for 
healing.  The total screening cost for each county for 
applicants and residents of nursing homes who request a 
screening must be paid monthly by nursing homes and boarding 
care homes participating in the medical assistance program in 
the county.  The monthly amount to be paid by each nursing home 
and boarding care home for fiscal year 1991 must be determined 
by dividing the county's estimate of the total annual cost of 
screenings allowed by the commissioner in the county for the 
following rate year by 12 to determine the monthly cost estimate 
and allocating the monthly cost estimate to each nursing home 
and boarding care home based on the number of licensed beds in 
the nursing home or boarding care home.  The rate allowed for a 
screening where two team members are present shall be the actual 
costs up to $195.  The rate allowed for a screening where only 
one team member is present shall be the actual costs up to 
$117.  The commissioner shall establish by rulemaking an annual 
adjustment of the state maximum screening rate.  The monthly 
cost estimate for each nursing home or boarding care home must 
be submitted to the nursing home or boarding care home and the 
state by the county no later than February 15 of each year for 
inclusion in the nursing home's or boarding care home's payment 
rate on the following rate year.  The commissioner shall include 
the reported annual estimated cost of screenings for each 
nursing home or boarding care home as an operating cost of that 
nursing home in accordance with section 256B.431, subdivision 
2b, clause (g).  For all individuals regardless of payment 
source, if delay-of-screening timelines are not met because a 
county is late in screening an individual who meets the 
delay-of-screening criteria, the county is solely responsible 
for paying the cost of the preadmission screening.  If in more 
than ten percent of the total number of screenings performed by 
a county in a fiscal year for all individuals regardless of 
payment source, the screening timelines were not met because a 
county was late in screening the individual, the county is 
solely responsible for paying the cost of those delayed 
screenings that exceed ten percent.  Notwithstanding section 
256B.0641, overpayments attributable to payment of the screening 
costs under the medical assistance program may not be recovered 
from a facility.  Any other interested person may be screened 
under this subdivision if the person pays a fee for the 
screening based upon a sliding fee scale determined by the 
commissioner.  
    Sec. 55.  Minnesota Statutes 1988, section 256B.091, 
subdivision 6, is amended to read:  
    Subd. 6.  [REIMBURSEMENT.] The commissioner of human 
services shall amend the Minnesota medical assistance plan to 
include reimbursement for the local screening teams.  Medical 
assistance reimbursement shall not be provided for any recipient 
placed in a nursing home in opposition to the screening team's 
recommendation after January 1, 1981; provided, however, the 
commissioner shall not deny reimbursement for (1) an individual 
admitted to a nursing home or boarding care home who is assessed 
to need long-term supportive services if long-term supportive 
services other than nursing home care are not available in that 
community; (2) any eligible individual placed in the nursing 
home or boarding care home pending an appeal of the preadmission 
screening team's decision; (3) any eligible individual placed in 
the nursing home or boarding care home by a physician in an 
emergency situation and where the screening team has not made a 
decision within five working days of its initial contact; or (4) 
any medical assistance recipient when, after full discussion of 
all appropriate alternatives including those that are expected 
to be less costly than care in a nursing home or boarding care 
home, the individual or the individual's legal representative 
insists on nursing home or boarding care home 
placement.  Medical assistance reimbursement for nursing homes 
shall not be provided for any recipient who the team has 
determined does not meet the level of care criteria for nursing 
home placement.  The screening team shall provide documentation 
that the most cost effective alternatives available were offered 
to this individual or the individual's legal representative.  
    Sec. 56.  Minnesota Statutes Second 1989 Supplement, 
section 256B.091, subdivision 8, is amended to read:  
    Subd. 8.  [ALTERNATIVE CARE GRANTS.] (a) The commissioner 
shall provide grants funds to counties participating in the 
program to pay costs of providing alternative care to 
individuals screened under subdivision 4 and nursing home or 
boarding care home residents who request a screening.  
    (b) Prior to July of each year, the commissioner shall 
allocate state funds available for alternative care grants to 
each local agency.  This allocation must be made as follows:  
half of the state funds available for alternative care grants 
must be allocated to each county according to the total number 
of adults in that county who are recipients age 65 or older who 
are reported to the department by March 1 of each state fiscal 
year and half of the state funds available for alternative care 
grants must be allocated to a county according to that county's 
number of Medicare enrollments age 65 or older for the most 
recent statistical report.  
    (c) For fiscal year 1991 only, the appropriation shall be 
distributed as specified in paragraphs (1) and (2). 
    (1) Sufficient state funds shall be set aside for payment 
for unreimbursed services provided prior to April 1, 1990, as 
billed by each county by June 1, 1990. 
    (2) The remainder of the state funds available for 
alternative care grants must be allocated to each county in the 
same proportion as each county's share of the actual payments 
made plus claims submitted for services rendered in the base 
year.  The base year for each county shall be either fiscal year 
1989 or calendar year 1989, whichever period contains a larger 
total dollar amount of payments plus claims submitted for each 
county.  To be counted in the allocation process, claims must be 
submitted by June 1, 1990.  This allocation will include the 
state share for medical assistance recipients as well as the 
state share for those who would be eligible within 180 days 
after nursing home admission.  No reallocation between counties 
will be made.  The county agency shall not be reimbursed for 
services which exceed the county allocation.  To receive 
reimbursement for persons who are eligible within 180 days, the 
county must submit invoices within 90 days following the month 
of service.  The number of medical assistance waiver recipients 
which each county may serve is allocated according to the number 
of open medical assistance waiver cases on July 1, 1990.  
Additional recipients may be served with the approval of the 
commissioner.  These additional recipients must be served within 
the county's allocation.  
    (d) The alternative care grant appropriation for fiscal 
years 1992 and beyond shall cover only individuals who would be 
eligible for medical assistance within 180 days after admission 
to a nursing home.  The commissioner shall allocate state funds 
available for alternative care grants to each county agency.  
The allocation must be made as follows:  the state funds 
available for alternative care grants, up to the amount of the 
previous year's allocation increased by the percentage for rates 
in Minnesota Rules, part 9505.2490, must be allocated to each 
county in the same proportion as the previous year's 
allocation.  If the appropriation is less than the previous 
year's allocation plus inflation, it shall be prorated according 
to the county's share of the formula.  Any funds appropriated in 
excess of the previous year's allocation plus inflation shall be 
allocated to county agencies by methodologies that target funds 
for programs designed to reduce premature nursing home 
placements and promote cost-effective alternatives to increasing 
nursing home beds and nursing home utilization.  The additional 
allocation to counties will become part of the allocation base.  
The commissioner shall appoint a work group including county and 
senior representatives to assist in developing criteria for 
allocating funds which may include identifying special target 
populations, geographic areas, or projects.  No reallocation 
between counties shall be made.  The county agency shall not be 
reimbursed for services which exceed the county allocation.  To 
receive reimbursement, the county must submit invoices within 90 
days following the date of service.  The number of medical 
assistance waiver recipients which a county may serve must be 
allocated according to the number of open medical assistance 
waiver cases on July 1 of each fiscal year.  Additional 
recipients may be served with the approval of the commissioner.  
    (e) The commissioner is directed to conduct a review of the 
preadmission screening program and alternative care grant 
program including screening requirements, screening 
reimbursement, program effectiveness, eligibility criteria for 
alternative care, accessibility to services, copayment and 
sliding fee issues, county utilization, rates for services, the 
payment system, funding and forecasting issues, administrative 
requirements, incentives for innovation, improved consistency 
with the community assistance for disabled individuals program 
and medical assistance home care services, and the allocation 
formula.  In conducting this review, special attention should be 
given to ways to increase sliding fee collections and reduce or 
minimize administrative and program requirements and associated 
county costs.  The commissioner shall appoint a work group 
including county and senior citizen representatives to assist in 
the program review.  The commissioner must present a report on 
the findings of the review and recommendations for change to the 
legislature by February 15, 1991.  
    (f) Payment is available under this subdivision only for 
individuals (1) for whom the screening team would recommend 
nursing home or boarding care home admission, or continued stay 
if alternative care were not available; (2) who are receiving 
medical assistance or who would be eligible for medical 
assistance within 180 days of admission to a nursing home; (3) 
who need services that are not available at that time in the 
county through other public assistance; and (4) who are age 65 
or older.  
    (g) The commissioner shall establish by rule, in accordance 
with chapter 14, procedures for determining grant reallocations, 
limits on the rates for payment of approved services, including 
screenings, and submittal and approval of a biennial county plan 
for the administration of the preadmission screening and 
alternative care grants program.  
    (h) Grants may be used for payment of costs of providing 
care-related supplies, equipment, and the following services 
such as, but not limited to,:  adult foster care for elderly 
persons, adult day care whether or not offered through a nursing 
home, nutritional counseling, or medical social services, which, 
home health aide, homemaker, personal care, case management, and 
respite care.  These services are must be provided by a licensed 
health care provider, a home health service eligible for 
reimbursement under Titles XVIII and XIX of the federal Social 
Security Act, or by persons employed by or contracted with by 
the county board or the local welfare agency. 
    (i) The county agency shall ensure that a plan of care is 
established for each individual in accordance with subdivision 
3, clause (e)(2), and that a client's service needs and 
eligibility is reassessed at least every six months.  The plan 
shall include any services prescribed by the individual's 
attending physician as necessary and follow up services as 
necessary.  The county agency shall provide documentation to the 
commissioner verifying that the individual's alternative care is 
not available at that time through any other public assistance 
or service program and shall provide documentation in each 
individual's plan of care and to the commissioner that the most 
cost-effective alternatives available have been offered to the 
individual and that the individual was free to choose among 
available qualified providers, both public and private.  The 
county agency shall document to the commissioner that the agency 
made reasonable efforts to inform potential providers of the 
anticipated need for services under the alternative care grants 
program, including a minimum of 14 days written advance notice 
of the opportunity to be selected as a service provider and an 
annual public meeting with providers to explain and review the 
criteria for selection, and that the agency allowed potential 
providers an opportunity to be selected to contract with the 
county board.  Grants to counties under this subdivision are 
subject to audit by the commissioner for fiscal and utilization 
control.  
    (j) The county must select providers for contracts or 
agreements using the following criteria and other criteria 
established by the county:  
    (1) the need for the particular services offered by the 
provider; 
    (2) the population to be served, including the number of 
clients, the length of time services will be provided, and the 
medical condition of clients; 
    (3) the geographic area to be served; 
    (4) quality assurance methods, including appropriate 
licensure, certification, or standards, and supervision of 
employees when needed; 
    (5) rates for each service and unit of service exclusive of 
county administrative costs; 
    (6) evaluation of services previously delivered by the 
provider; and 
    (7) contract or agreement conditions, including billing 
requirements, cancellation, and indemnification.  
    (k) The county must evaluate its own agency services under 
the criteria established for other providers.  The county shall 
provide a written statement of the reasons for not selecting 
providers.  
    (l) The commissioner shall establish a sliding fee schedule 
for requiring payment for the cost of providing services under 
this subdivision to persons who are eligible for the services 
but who are not yet eligible for medical assistance.  The 
sliding fee schedule is not subject to chapter 14 but the 
commissioner shall publish the schedule and any later changes in 
the State Register and allow a period of 20 working days from 
the publication date for interested persons to comment before 
adopting the sliding fee schedule in final forms.  
   (m) The commissioner shall apply for a waiver for federal 
financial participation to expand the availability of services 
under this subdivision.  Waivered services provided to medical 
assistance recipients must comply with the same criteria as 
defined in this section and in the approved waiver.  
Reimbursement for the medical assistance recipients shall be 
made from the regular medical assistance account.  The 
commissioner shall provide grants to counties from the 
nonfederal share, unless the commissioner obtains a federal 
waiver for medical assistance payments, of medical assistance 
appropriations.  A county agency may use grant money to 
supplement but not supplant services available through other 
public assistance or service programs and shall not use grant 
money to establish new programs for which public money is 
available through sources other than grants provided under this 
subdivision.  A county agency shall not use grant money to 
provide care under this subdivision to an individual if the 
anticipated cost of providing this care would exceed the average 
payment, as determined by the commissioner, for the level of 
care that the recipient would receive if placed in a nursing 
home or boarding care home.  The nonfederal share may be used to 
pay up to 90 percent of the start-up and service delivery costs 
of providing care under this subdivision.  The state share of 
the nonfederal portion of costs shall be 90 percent and the 
county share shall be ten percent.  Each county agency that 
receives a grant shall pay ten percent of the costs for persons 
who are eligible for the services but who are not yet eligible 
for medical assistance.  
   (n) Beginning July 1, 1991, the state will reimburse 
counties according to the payment schedule in section 256.025 
for the county share of costs incurred under this subdivision 
from January 1, 1991, on, for individuals who are receiving 
medical assistance.  
   (o) Beginning July 1, 1991, the state will reimburse 
counties, up to the limit of state appropriations, according to 
the payment schedule in section 256.025 for the county share of 
costs incurred under this subdivision from January 1, 1991, on, 
for individuals who would be eligible for medical assistance 
within 180 days of admission to a nursing home.  
    (p) The commissioner shall promulgate emergency rules in 
accordance with sections 14.29 to 14.36, to establish required 
documentation and reporting of care delivered.  
    Sec. 57.  Minnesota Statutes 1988, section 256B.092, 
subdivision 1a, is amended to read:  
    Subd. 1a.  [CASE MANAGEMENT SERVICES.] Case management 
services include are limited to diagnosis, an assessment of the 
individual's service needs, development of an individual service 
plan, an individual habilitation plan, and specification of 
methods for providing, evaluating services, and the evaluation 
and monitoring of the services identified in the plan.  
    Sec. 58.  Minnesota Statutes 1988, section 256B.092, 
subdivision 1b, is amended to read:  
    Subd. 1b.  [INDIVIDUAL SERVICE AND HABILITATION PLANS 
PLAN.] The individual service and habilitation plans plan must 
    (1) include the results of the diagnosis and assessment, 
    (2) identify goals and objectives for the client, and 
    (3) identify specific services to be provided to the 
client., 
    (4) identify the need for an habilitation component of the 
plan, and 
    The individual habilitation plan shall (5) identify and 
coordinate methodologies to carry out the goals and objectives 
of the individual service plan.  
    Sec. 59.  Minnesota Statutes 1988, section 256B.092, is 
amended by adding a subdivision to read:  
    Subd. 1c.  [FISCAL LIMITATIONS.] Subdivision 1 shall not be 
construed as requiring expenditure of money not available to 
county agencies for services to persons with, or who might have, 
mental retardation or related conditions, except for:  
    (1) services specifically required by federal law or state 
statute such as case management and day training and 
habilitation services; and 
    (2) services identified in the person's individual service 
plan as services that the county will provide until the person's 
individual service plan is amended.  
    Sec. 60.  Minnesota Statutes 1988, section 256B.092, is 
amended by adding a subdivision to read:  
    Subd. 1d.  [COUNTY REQUIREMENTS.] Before a county denies, 
reduces, or terminates a service to an individual due to fiscal 
limitations, the county agency must show that money is not 
available for services to persons with mental retardation or 
related conditions, and that good faith efforts have been made 
to identify needs and obtain available funds.  The county agency 
must show this by documenting that the following actions have 
been taken: 
    (1) the county case manager has identified the person's 
service needs and the actions that will be taken to develop or 
obtain those services in the person's individual service plan 
and action that will be taken to prevent abuse or neglect as 
defined in sections 626.556, subdivision 2, paragraphs (a), (c), 
and (d), and 626.557, subdivision 2, paragraphs (d) and (e); 
    (2) prior to the admission of a person to a regional 
treatment center program for persons with developmental 
disabilities, the county agency made efforts to secure 
community-based alternatives.  If these alternatives were 
rejected in favor of a regional treatment center placement, the 
county agency must also document the reasons why they were 
rejected; and 
    (3) the county agency has made a request for state funds or 
new capacity for services to meet the individual's unmet needs, 
since those needs have been identified in the person's 
individual service plan. 
    Sec. 61.  Minnesota Statutes 1988, section 256B.092, is 
amended by adding a subdivision to read: 
    Subd. 1e.  [COUNTY WAITING LIST.] The county agency shall 
maintain a waiting list of persons with developmental 
disabilities specifying the services needed but not provided. 
    Sec. 62.  Minnesota Statutes 1989 Supplement, section 
256B.14, is amended to read: 
    256B.14 [RELATIVE'S RESPONSIBILITY.] 
    Subdivision 1.  [IN GENERAL.] Subject to the provisions of 
sections 256B.055, 256B.056, and 256B.06, responsible relative 
means the parent of a minor recipient of medical assistance or 
the spouse of a medical assistance recipient.  
    Subd. 2.  [ACTIONS TO OBTAIN PAYMENT.] The state agency 
shall promulgate rules to determine the ability of responsible 
relatives to contribute partial or complete payment or repayment 
of medical assistance furnished to recipients for whom they are 
responsible.  These rules shall not require payment or repayment 
when payment would cause undue hardship to the responsible 
relative or that relative's immediate family.  These rules shall 
be consistent with the requirements of section 252.27, 
subdivision 2, for parents of children whose eligibility for 
medical assistance was determined without deeming of the 
parents' resources and income.  For parents of children 
receiving services under a federal medical assistance waiver or 
under section 134 of the Tax Equity and Fiscal Responsibility 
Act of 1982, United States Code, title 42, section 1396a(e)(3), 
while living in their natural home, including in-home family 
support services, respite care, homemaker services, and minor 
adaptations to the home, the state agency shall take into 
account the room, board, and services provided by the parents in 
determining the parental contribution to the cost of care.  The 
county agency shall give the responsible relative notice of the 
amount of the payment or repayment.  If the state agency or 
county agency finds that notice of the payment obligation was 
given to the responsible relative, but that the relative failed 
or refused to pay, a cause of action exists against the 
responsible relative for that portion of medical assistance 
granted after notice was given to the responsible relative, 
which the relative was determined to be able to pay.  
    The action may be brought by the state agency or the county 
agency in the county where assistance was granted, for the 
assistance, together with the costs of disbursements incurred 
due to the action.  
    In addition to granting the county or state agency a money 
judgment, the court may, upon a motion or order to show cause, 
order continuing contributions by a responsible relative found 
able to repay the county or state agency.  The order shall be 
effective only for the period of time during which the recipient 
receives medical assistance from the county or state agency. 
    Subd. 3.  [COMMUNITY SPOUSE CONTRIBUTION.] The community 
spouse of an institutionalized person who receives medical 
assistance under section 256B.059, subdivision 5, paragraph (b), 
has an obligation to pay for the cost of care equal to the 
dollar value of assets considered available under section 
256B.059, subdivision 5. 
    Subd. 4.  [APPEALS.] A responsible relative may appeal the 
determination of an obligation to make a contribution under this 
section, according to section 256.045. 
    Sec. 63.  Minnesota Statutes 1988, section 256B.15, is 
amended to read: 
    256B.15 [CLAIMS AGAINST ESTATES.] 
    Subdivision 1.  [ESTATES SUBJECT TO CLAIMS.] If a person 
receives any medical assistance hereunder, on the person's 
death, if single, or on the death of the survivor of a married 
couple, either or both of whom received medical assistance, 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.  A claim shall be 
filed if medical assistance was rendered for either or both 
persons under one of the following circumstances: 
    (a) the person was over 65 years of age; or 
    (b) the person resided in a medical institution for six 
months or longer and, at the time of institutionalization or 
application for medical assistance, whichever is later, the 
person could not have reasonably been expected to be discharged 
and returned home, as certified in writing by the person's 
treating physician.  For purposes of this section only, a 
"medical institution" means a skilled nursing facility, 
intermediate care facility, intermediate care facility for 
persons with mental retardation, nursing facility, or inpatient 
hospital.  
    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 are entitled to one-half of the nonfederal 
share of medical assistance collections from estates that are 
directly attributable to county effort.  
    Subd. 2.  [LIMITATIONS ON CLAIMS.] The claim shall include 
only the total amount of medical assistance rendered after age 
65 or during a period of institutionalization described in 
subdivision 1, clause (b), and shall not include interest.  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.  
     Subd. 3.  [MINOR, BLIND, OR DISABLED CHILDREN.] If a 
decedent who was single, or who was the surviving spouse of a 
married couple, is survived by a child who is under age 21 or 
blind or permanently and totally disabled according to the 
supplemental security income program criteria, no claim shall be 
filed against the estate. 
    Subd. 4.  [OTHER SURVIVORS.] If the decedent who was single 
or the surviving spouse of a married couple is survived by one 
of the following persons, a claim exists against the estate in 
an amount not to exceed the value of the nonhomestead property 
included in the estate: 
    (a) a sibling who resided in the decedent medical 
assistance recipient's home at least one year before the 
decedent's institutionalization and continuously since the date 
of institutionalization; or 
    (b) a son or daughter or, subject to federal approval, a 
grandchild, who resided in the decedent medical assistance 
recipient's home for at least two years immediately before the 
parent's institutionalization and continuously since the date of 
institutionalization, and who establishes by a preponderance of 
the evidence that he or she provided care to the parent or 
grandparent who received medical assistance, the care was 
provided before institutionalization, and the care permitted the 
parent to reside at home rather than in an institution. 
    Sec. 64.  Minnesota Statutes 1988, section 256B.19, is 
amended by adding a subdivision to read: 
    Subd. 2b.  [PILOT PROJECT REIMBURSEMENT.] In counties where 
a pilot or demonstration project is operated under the medical 
assistance program, the state may pay 100 percent of the 
administrative costs for the pilot or demonstration project 
after June 30, 1990.  Reimbursement for these costs is subject 
to section 256.025. 
    Sec. 65.  Minnesota Statutes 1989 Supplement, 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 
1989, facilities located in geographic group I as described in 
Minnesota Rules, part 9549.0052 (Emergency), on January 1, 1987 
1989, 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 or payments in lieu of real estate tax of 
each nursing home as an operating cost of that nursing home.  
Allowable costs under this subdivision for payments made by a 
nonprofit nursing home that are in lieu of real estate taxes 
shall not exceed the amount which the nursing home would have 
paid to a city or township and county for fire, police, 
sanitation services, and road maintenance costs had real estate 
taxes been levied on that property for those purposes.  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.  For rate years beginning 
on or after July 1, 1989, the commissioner shall include a 
nursing home's reported public employee retirement act 
contribution for the reporting year as apportioned to the 
care-related operating cost categories and other operating cost 
categories multiplied by the appropriate composite index or 
indices established pursuant to paragraph (e) as costs under 
this paragraph.  Total adjusted real estate tax liability, 
payments in lieu of real estate tax, actual special assessments 
paid, the indexed public employee retirement act contribution, 
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 care-related operating cost limits 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), unless otherwise 
indicated in this paragraph. 
     (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 subdivision 2h. 
    Sec. 66.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 2l.  [INFLATION ADJUSTMENTS AFTER JULY 1, 1990.] For 
rate years beginning on or after July 1, 1990, the forecasted 
composite price index for a nursing home's allowable operating 
cost per diems shall be determined using Data Resources, Inc., 
forecast for change in the Nursing Home Market Basket.  The 
commissioner of human services shall use the indices as 
forecasted by Data Resources, Inc., in the fourth quarter of the 
calendar year preceding the rate year. 
    Sec. 67.  Minnesota Statutes 1988, section 256B.431, 
subdivision 3e, is amended to read: 
    Subd. 3e.  [HOSPITAL-ATTACHED CONVALESCENT AND NURSING CARE 
FACILITIES.] If a nonprofit or community-operated hospital and 
attached convalescent and nursing care facility suspend 
operation of the hospital, the surviving nursing care facility 
must be allowed to continue its status as a hospital-attached 
convalescent and nursing care facility for reimbursement 
purposes in three subsequent rate years. 
    Sec. 68.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 3h.  [SPECIAL PROPERTY RATE.] Notwithstanding 
contrary provisions of chapter 256B or rules adopted under it, 
for rate years beginning July 1, 1990, a nursing home under 
lease from 1968 until 1983 with a lessee or related party having 
an option to purchase the nursing home, which option was 
subsequently exercised, shall be allowed debt and interest costs 
incurred by the lessee or related party on indebtedness created 
when the option to purchase was exercised before the end of the 
1983 calendar year.  The nursing home must demonstrate to the 
commissioner's satisfaction that the interest rate on the debt 
was less than market interest rates for similar arms-length 
transactions at the time the debt was incurred. 
    Sec. 69.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read:  
    Subd. 3i.  [PROPERTY COSTS FOR THE RATE YEAR BEGINNING JULY 
1, 1990.] Notwithstanding Minnesota Rules, part 9549.0060, 
subpart 13, item H, the commissioner shall determine 
property-related payment rates for nursing homes for the rate 
year beginning July 1, 1990, as follows:  
    (a) The property-related payment rate for a nursing home 
that qualifies under subdivision 3g is the greater of the rate 
determined under that subdivision or the rate determined under 
paragraph (c), (d), or (e), whichever is applicable. 
    (b) Nursing homes shall be grouped according to the type of 
property-related payment rate the commissioner determined for 
the rate year beginning July 1, 1989.  A nursing home whose 
property-related payment rate was determined under Minnesota 
Rules, part 9549.0060, subpart 13, item A (full rental 
reimbursement), shall be considered group A.  A nursing home 
whose property-related payment rate was determined under 
Minnesota Rules, part 9549.0060, subpart 13, item B (phase-down 
to full rental reimbursement), shall be considered group B.  A 
nursing home whose property-related payment rate was determined 
under Minnesota Rules, part 9549.0060, subpart 13, item C or D 
(phase-up to full rental reimbursement), shall be considered 
group C. 
    (c) For the rate year beginning July 1, 1990, a group A 
nursing home shall receive its property-related payment rate 
determined under Minnesota Rules, parts 9549.0010 to 9549.0080, 
and this section. 
    (d) For the rate year beginning July 1, 1990, a Group B 
nursing home shall receive the greater of 87 percent of the 
property-related payment rate in effect on July 1, 1989; or the 
rental per diem rate determined under Minnesota Rules, parts 
9549.0010 to 9549.0080, and this section in effect on July 1, 
1990; or the sum of 100 percent of the nursing home's allowable 
principal and interest expense, plus its equipment allowance 
multiplied by the resident days for the reporting year ending 
September 30, 1989, divided by the nursing home's capacity days 
as determined under Minnesota Rules, part 9549.0060, subpart 11, 
as modified by subdivision 3f, paragraph (c); except that the 
nursing home's property-related payment rate must not exceed its 
property-related payment rate in effect on July 1, 1989. 
    (e) For the rate year beginning July 1, 1990, a group C 
nursing home shall receive its property-related payment rate 
determined under Minnesota Rules, parts 9549.0010 to 9549.0080, 
and this section, except the rate must not exceed the lesser of 
its property-related payment rate determined for the rate year 
beginning July 1, 1989, multiplied by 116 percent or its rental 
per diem rate determined effective July 1, 1990. 
    (f) The property-related payment rate for a nursing home 
that qualifies for a rate adjustment under Minnesota Rules, part 
9549.0060, subpart 13, item G (special reappraisals), shall have 
the property-related payment rate determined in paragraphs (a) 
to (e) adjusted according to the provisions in that rule. 
    (g) Except as provided in subdivision 4, paragraph (f), and 
subdivision 11, a nursing home that has a change in ownership or 
a reorganization of provider entity is subject to the provisions 
of Minnesota Rules, part 9549.0060, subpart 13, item F. 
    Sec. 70.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 3j.  [PROPERTY RATE ADJUSTMENT FOR REQUIRED 
IMPROVEMENTS.] The commissioner shall add an adjustment to the 
property-related payment rate of a certified, freestanding 
boarding care home reflecting the costs incurred by that nursing 
home to install a communications system in every room and 
hallway handrails, as required under the 1987 federal Omnibus 
Budget Reconciliation Act, Public Law Number 100-203.  The 
property-related payment rate increase is only available if, and 
to the extent that, the nursing home's existing property-related 
payment rate, minus the nursing home's allowable principal and 
interest costs and equipment allowance, is not sufficient to 
cover the costs of the required improvements.  Each nursing home 
eligible for the adjustment shall submit to the commissioner a 
detailed estimate of the cost increases the facility will incur 
to meet the new physical plant requirements.  Ten percent of the 
amount of the costs that are determined by the commissioner to 
be reasonable for the nursing home to meet the new requirements, 
divided by resident days, must be added to the nursing home's 
property-related payment rate.  The adjustment shall be added to 
the property-related payment rate determined under subdivision 
3i.  The resulting recalculated property-related payment rate is 
effective October 1, 1990, or 60 days after a nursing home 
submits its detailed cost estimate, whichever occurs later.  
    The adjustment is only available to a certified, 
freestanding boarding care home that cannot meet the 
requirements of Public Law Number 100-203 for communications 
systems and handrails as demonstrated to the satisfaction of the 
commissioner of health.  When the commissioner of human services 
establishes that it is not cost-effective to upgrade an eligible 
certified, freestanding boarding care home to the new standards, 
the commissioner of human services may exclude the certified 
freestanding boarding care home if it is either an institution 
for mental disease or a certified, freestanding boarding care 
home that would have been determined to be an institution for 
mental disease but for the fact that it has 16 or fewer licensed 
beds. 
    Sec. 71.  Minnesota Statutes 1989 Supplement, section 
256B.431, subdivision 7, is amended to read: 
    Subd. 7.  [ONE-TIME ADJUSTMENT TO NURSING HOME PAYMENT 
RATES TO COMPLY WITH OMNIBUS BUDGET RECONCILIATION ACT.] The 
commissioner shall determine a one-time nursing staff adjustment 
to the payment rate to adjust payment rates to upgrade certain 
nursing homes' professional nursing staff complement to meet the 
minimum standards of 1987 Public Law Number 100-203.  The 
adjustments to the payment rates determined under this 
subdivision cover cost increases to meet minimum standards for 
professional nursing staff.  For a nursing home to be eligible 
for the payment rate adjustment, a nursing home must have all of 
its current licensed beds certified solely for the intermediate 
level of care.  When the commissioner establishes that it is not 
cost effective to upgrade an eligible nursing home to the new 
minimum staff standards, the commissioner may exclude the 
nursing home if it is either an institution for mental disease 
or a nursing home that would have been determined to be an 
institution for mental disease, but for the fact that it has 16 
or fewer licensed beds. 
     (a) The increased cost of professional nursing for an 
eligible nursing home shall be determined according to clauses 
(1) to (4): 
     (1) subtract from the number 8760 the compensated hours for 
professional nurses, both employed and contracted, and, if the 
result is greater than zero, then multiply the result by $4.55; 
     (2) subtract from the number 2920 the compensated hours for 
registered nurses, both employed and contracted, and, if the 
result is greater than zero, then multiply the result by $9.30; 
     (3) if an eligible nursing home has less than 61 licensed 
beds, the director of nurses' compensated hours must be included 
in the compensated hours for professional nurses in clause (1).  
If the director of nurses is also a registered nurse, the 
director of nurses' hours must be included in the compensated 
hours for registered nurses in clause (2); and 
     (4) the one-time nursing staff adjustment to the payment 
rate shall be the sum of clauses (1) and (2) as adjusted by 
clause (3), if appropriate, and then divided by the nursing 
home's actual resident days for the reporting year ending 
September 30, 1988. 
     (b) The one-time nursing staff adjustment to the payment 
rate is effective from January 1, 1990, to June 30, 1991. 
     (c) If a nursing home is granted a waiver to the minimum 
professional nursing staff standards under Public Law Number 
100-203 for either the professional nurse adjustment referred to 
in clause (1), or the registered nurse adjustment in clause (2), 
the commissioner must recover the portion of the nursing home's 
payment rate that relates to a one-time nursing staff adjustment 
granted under this subdivision.  The amount to be recovered 
shall be based on the type and extent of the waiver granted. 
    (d) Notwithstanding the provisions of paragraph (a), clause 
(3), if an eligible nursing home has less than 61 licensed beds, 
the director of nurses' compensated hours must be excluded from 
the computation of compensated hours for professional nurses and 
registered nurses in paragraph (a), clauses (1) and (2).  The 
commissioner shall recompute the one-time nursing staff 
adjustment to the payment rate using the data from the cost 
report for the reporting year ending September 30, 1989, and the 
adjustment computed under this paragraph shall replace the 
adjustment previously computed under this subdivision effective 
October 1, 1990, and shall be effective for the period October 
1, 1990, to June 30, 1992. 
     Sec. 72.  Minnesota Statutes 1988, section 256B.431, is 
amended by adding a subdivision to read: 
    Subd. 11.  [SPECIAL PROPERTY RATE SETTING PROCEDURES FOR 
CERTAIN NURSING HOMES.] Notwithstanding Minnesota Rules, part 
9549.0060, subpart 13, item H, to the contrary, for the rate 
year beginning July 1, 1990, a nursing home leased prior to 
January 1, 1986, and currently subject to adverse licensure 
action under section 144A.04, subdivision 4, paragraph (a), or 
section 144A.11, subdivision 2, and whose ownership changes 
prior to July 1, 1990, shall be allowed a property-related 
payment equal to the lesser of its current lease obligation 
divided by its capacity days as determined in Minnesota Rules, 
part 9549.0060, subpart 11, as modified by subdivision 3f, 
paragraph (c), or the frozen property-related payment rate in 
effect for the rate year beginning July 1, 1989.  For rate years 
beginning on or after July 1, 1991, the property-related payment 
rate shall be its rental rate computed using the previous 
owner's allowable principal and interest expense as allowed by 
the department prior to that prior owner's sale and lease-back 
transaction of December 1985. 
    Sec. 73.  [256B.432] [LONG-TERM CARE FACILITIES; CENTRAL, 
AFFILIATED, OR CORPORATE OFFICE COSTS.] 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given them. 
    (a) "Management agreement" means an agreement in which one 
or more of the following criteria exist:  
    (1) the central, affiliated, or corporate office has or is 
authorized to assume day-to-day operational control of the 
long-term care facility for any six-month period within a 
24-month period.  "Day-to-day operational control" means that 
the central, affiliated, or corporate office has the authority 
to require, mandate, direct, or compel the employees of the 
long-term care facility to perform or refrain from performing 
certain acts, or to supplant or take the place of the top 
management of the long-term care facility.  "Day-to-day 
operational control" includes the authority to hire or terminate 
employees or to provide an employee of the central, affiliated, 
or corporate office to serve as administrator of the long-term 
care facility; 
    (2) the central, affiliated, or corporate office performs 
or is authorized to perform two or more of the following:  the 
execution of contracts; authorization of purchase orders; 
signature authority for checks, notes, or other financial 
instruments; requiring the long-term care facility to use the 
group or volume purchasing services of the central, affiliated, 
or corporate office; or the authority to make annual capital 
expenditures for the long-term care facility exceeding $50,000, 
or $500 per licensed bed, whichever is less, without first 
securing the approval of the long-term care facility board of 
directors; 
    (3) the central, affiliated, or corporate office becomes or 
is required to become the licensee under applicable state law; 
    (4) the agreement provides that the compensation for 
services provided under the agreement is directly related to any 
profits made by the long-term care facility; or 
    (5) the long-term care facility entering into the agreement 
is governed by a governing body that meets fewer than four times 
a year, that does not publish notice of its meetings, or that 
does not keep formal records of its proceedings.  
    (b) "Consulting agreement" means any agreement the purpose 
of which is for a central, affiliated, or corporate office to 
advise, counsel, recommend, or suggest to the owner or operator 
of the nonrelated long-term care facility measures and methods 
for improving the operations of the long-term care facility.  
     (c) "Long-term care facility" means a nursing home whose 
medical assistance rates are determined according to section 
256B.431 or an intermediate care facility for persons with 
mental retardation and related conditions whose medical 
assistance rates are determined according to section 256B.501. 
    Subd. 2.  [EFFECTIVE DATE.] For rate years beginning on or 
after July 1, 1990, the central, affiliated, or corporate office 
cost allocations in subdivisions 3 to 6 must be used when 
determining medical assistance rates under sections 256B.431 and 
256B.501.  
    Subd. 3.  [ALLOCATION; DIRECT IDENTIFICATION OF COSTS OF 
LONG-TERM CARE FACILITIES; MANAGEMENT AGREEMENT.] All costs that 
can be directly identified with a specific long-term care 
facility that is a related organization to the central, 
affiliated, or corporate office, or that is controlled by the 
central, affiliated, or corporate office under a management 
agreement, must be allocated to that long-term care facility. 
    Subd. 4.  [ALLOCATION; DIRECT IDENTIFICATION OF COSTS TO 
OTHER ACTIVITIES.] All costs that can be directly identified 
with any other activity or function not described in subdivision 
3 must be allocated to that activity or function. 
    Subd. 5.  [ALLOCATION OF REMAINING COSTS; ALLOCATION 
RATIO.] (a) After the costs that can be directly identified 
according to subdivisions 3 and 4 have been allocated, the 
remaining central, affiliated, or corporate office costs must be 
allocated between the long-term care facility operations and the 
other activities or facilities unrelated to the long-term care 
facility operations based on the ratio of expenses. 
    (b) For purposes of allocating these remaining central, 
affiliated, or corporate office costs, the numerator for the 
allocation ratio shall be determined as follows:  
    (1) for long-term care facilities that are related 
organizations or are controlled by a central, affiliated, or 
corporate office under a management agreement, the numerator of 
the allocation ratio shall be equal to the sum of the total 
costs incurred by each related organization or controlled 
long-term care facility; 
    (2) for a central, affiliated, or corporate office 
providing goods or services to related organizations that are 
not long-term care facilities, the numerator of the allocation 
ratio shall be equal to the sum of the total costs incurred by 
the non-long-term care related organizations; 
    (3) for a central, affiliated, or corporate office 
providing goods or services to unrelated long-term care 
facilities under a consulting agreement, the numerator of the 
allocation ratio shall be equal to the greater of directly 
identified central, affiliated, or corporate costs or the 
contracted amount; or 
    (4) for business activities that involve the providing of 
goods or services to unrelated parties which are not long-term 
care facilities, the numerator of the allocation ratio shall be 
equal to the greater of directly identified costs or revenues 
generated by the activity or function.  
     (c) The denominator for the allocation ratio is the sum of 
the numerators in paragraph (b), clauses (1) to (4). 
    Subd. 6.  [COST ALLOCATION BETWEEN LONG-TERM CARE 
FACILITIES.] (a) Those long-term care operations that have 
long-term care facilities both in Minnesota and outside of 
Minnesota must allocate the long-term care operation's central, 
affiliated, or corporate office costs identified in subdivision 
5 to Minnesota based on the ratio of total resident days in 
Minnesota long-term care facilities to the total resident days 
in all facilities.  
    (b) The Minnesota long-term care operation's central, 
affiliated, or corporate office costs identified in paragraph 
(a) must be allocated to each Minnesota long-term care facility 
on the basis of resident days. 
     Sec. 74.  Minnesota Statutes 1988, section 256B.48, is 
amended by adding a subdivision to read: 
    Subd. 1c.  [CASE MIX RATE FOR PROVIDER WITH ADDENDUM TO 
PROVIDER AGREEMENT.] A nursing home with an addendum to its 
provider agreement effective beginning July 1, 1983, or 
September 24, 1985, shall have its payment rates established by 
the commissioner under this subdivision.  To save medical 
assistance resources, for rate years beginning after July 1, 
1991, the provider's payment rates shall be the payment rates 
established by the commissioner July 1, 1990, multiplied by a 
12-month inflation factor based on the forecasted inflation 
between the mid-points of rate years using the inflation index 
applied by the commissioner to other nursing homes. 
    The provider and the department of health shall complete 
case mix assessments under Minnesota Rules, chapter 4656, and 
parts 9549.0058 and 9549.0059, on only those residents receiving 
medical assistance.  The commissioner of health may audit and 
verify the limited provider assessments at any time. 
    Sec. 75.  Minnesota Statutes 1988, section 256B.48, 
subdivision 2, is amended to read:  
    Subd. 2.  [REPORTING REQUIREMENTS.] No later than December 
31 of each year, a skilled nursing facility or intermediate care 
facility, including boarding care facilities, which receives 
medical assistance payments or other reimbursements from the 
state agency shall:  
    (a) Provide the state agency with a copy of its audited 
financial statements.  The audited financial statements must 
include a balance sheet, income statement, statement of the rate 
or rates charged to private paying residents, statement of 
retained earnings, statements of changes in financial position 
(cash and working capital methods) statement of cash flows, 
notes to the financial statements, audited applicable 
supplemental information, and the certified public accountant's 
or licensed public accountant's opinion.  The examination by the 
certified public accountant or licensed public accountant shall 
be conducted in accordance with generally accepted auditing 
standards as promulgated and adopted by the American Institute 
of Certified Public Accountants; 
    (b) Provide the state agency with a statement of ownership 
for the facility; 
    (c) Provide the state agency with separate, audited 
financial statements as specified in clause (a) for every other 
facility owned in whole or part by an individual or entity which 
has an ownership interest in the facility; 
    (d) Upon request, provide the state agency with separate, 
audited financial statements as specified in clause (a) for 
every organization with which the facility conducts business and 
which is owned in whole or in part by an individual or entity 
which has an ownership interest in the facility; 
    (e) Provide the state agency with copies of leases, 
purchase agreements, and other documents related to the lease or 
purchase of the nursing facility; 
    (f) Upon request, provide the state agency with copies of 
leases, purchase agreements, and other documents related to the 
acquisition of equipment, goods, and services which are claimed 
as allowable costs; and 
    (g) Permit access by the state agency to the certified 
public accountant's and licensed public accountant's audit 
workpapers which support the audited financial statements 
required in clauses (a), (c), and (d).  
    Documents or information provided to the state agency 
pursuant to this subdivision shall be public.  If the 
requirements of clauses (a) to (g) are not met, the 
reimbursement rate may be reduced to 80 percent of the rate in 
effect on the first day of the fourth calendar month after the 
close of the reporting year, and the reduction shall continue 
until the requirements are met.  
    Sec. 76.  Minnesota Statutes 1988, section 256B.49, is 
amended by adding a subdivision to read:  
    Subd. 3.  [CONTINUED SERVICES FOR PERSONS OVER AGE 65.] 
Persons who are found eligible for services under this section 
before their 65th birthday may remain eligible for these 
services after their 65th birthday if they meet all other 
eligibility factors.  
    Sec. 77.  Minnesota Statutes 1989 Supplement, section 
256B.495, subdivision 1, is amended to read:  
    Subdivision 1.  [PAYMENT OF RECEIVERSHIP FEES.] The 
commissioner in consultation with the commissioner of health may 
establish a receivership fee payment that exceeds a long-term 
care facility payment rate when the commissioner of health 
determines a long-term care facility is subject to the 
receivership provisions under section 144A.14 or 144A.15 or the 
commissioner of human services determines that a facility is 
subject to the receivership under section 245A.12 or 245A.13.  
In establishing the receivership fee payment, the commissioner 
must reduce the receiver's requested receivership fee by amounts 
that the commissioner determines are included in the long-term 
care facility's payment rate and that can be used to cover part 
or all of the receivership fee.  Amounts that can be used to 
reduce the receivership fee shall be determined by reallocating 
facility staff or costs that were formerly paid by the long-term 
care facility before the receivership and are no longer required 
to be paid.  The amounts may include any efficiency incentive, 
allowance, and other amounts not specifically required to be 
paid for expenditures of the long-term care facility.  
    If the receivership fee cannot be covered by amounts in the 
long-term care facility's payment rate, a receivership fee 
payment shall be set according to paragraphs (a) and (b) and 
payment shall be according to paragraphs (c) to (e).  
    (a) The receivership fee per diem shall be determined by 
dividing the annual receivership fee payment by the long-term 
care facility's resident days from the most recent cost report 
for which the commissioner has established a payment rate or the 
estimated resident days in the projected receivership fee period.
    (b) The receivership fee per diem shall be added to the 
long-term care facility's payment rate.  
    (c) Notification of the payment rate increase must meet the 
requirements of section 256B.47, subdivision 2.  
    (d) The payment rate in paragraph (b) for a nursing home 
shall be effective the first day of the month following the 
receiver's compliance with the notice conditions in paragraph 
(c).  The payment rate in paragraph (b) for an intermediate care 
facility for the mentally retarded shall be effective on the 
first day of the rate year in which the receivership fee per 
diem is determined.  
    (e) The commissioner may elect to make a lump sum payment 
of a portion of the receivership fee to the receiver or managing 
agent.  In this case, the commissioner and the receiver or 
managing agent shall agree to a repayment plan.  Regardless of 
whether the commissioner makes a lump sum payment under this 
paragraph, the provisions of paragraphs (a) to (d) and 
subdivision 2 also apply.  
    Sec. 78.  Minnesota Statutes 1988, section 256B.50, 
subdivision 1, is amended to read:  
    Subdivision 1.  [SCOPE.] A provider may appeal from a 
determination of a payment rate established pursuant to this 
chapter and reimbursement rules of the commissioner if the 
appeal, if successful, would result in a change to the 
provider's payment rate or to the calculation of maximum charges 
to therapy vendors as provided by section 256B.433, subdivision 
3.  Appeals must be filed in accordance with procedures in this 
section.  This section does not apply to a request from a 
resident or nursing home for reconsideration of the 
classification of a resident under section 144.0722.  
    Sec. 79.  Minnesota Statutes 1988, section 256B.50, 
subdivision 1b, is amended to read:  
    Subd. 1b.  [FILING AN APPEAL.] To appeal, the provider 
shall file with the commissioner a written notice of appeal; the 
appeal must be received by the commissioner within 60 days of 
the date the determination of the payment rate was mailed.  The 
notice of appeal must specify each disputed item; the reason for 
the dispute; the total dollar amount and the dollar amount per 
bed in dispute for each separate disallowance, allocation, or 
adjustment of each cost item or part of a cost item; the 
computation that the provider believes is correct; the authority 
in statute or rule upon which the provider 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. 80.  Minnesota Statutes 1988, section 256B.501, 
subdivision 3c, is amended to read: 
    Subd. 3c.  [COMPOSITE FORECASTED INDEX.] For rate years 
beginning on or after October 1, 1988, the commissioner shall 
establish a statewide composite forecasted index to take into 
account economic trends and conditions between the midpoint of 
the facility's reporting year and the midpoint of the rate year 
following the reporting year.  The statewide composite index 
must incorporate the forecast by Data Resources, Inc. of 
increases in the average hourly earnings of nursing and personal 
care workers indexed in Standard Industrial Code 805 in 
"Employment and Earnings," published by the Bureau of Labor 
Statistics, United States Department of Labor.  This portion of 
the index must be weighted annually by the proportion of total 
allowable salaries and wages to the total allowable operating 
costs in the program, maintenance, and administrative operating 
cost categories for all facilities. 
     For adjustments to the other operating costs in the 
program, maintenance, and administrative operating cost 
categories, the statewide index must incorporate the Data 
Resources, Inc. forecast for increases in the national CPI-U.  
This portion of the index must be weighted annually by the 
proportion of total allowable other operating costs to the total 
allowable operating costs in the program, maintenance, and 
administrative operating cost categories for all facilities.  
The commissioner shall use the indices as forecasted by Data 
Resources, Inc., in the fourth quarter of the reporting year. 
     For rate years beginning on or after October 1, 1990, the 
commissioner shall index a facility's allowable operating costs 
in the program, maintenance, and administrative operating cost 
categories by using Data Resources, Inc., forecast for change in 
the Consumer Price Index-All Items (U.S. city average) (CPI-U).  
The commissioner shall use the indices as forecasted by Data 
Resources, Inc., in the first quarter of the calendar year in 
which the rate year begins. 
    Sec. 81.  Minnesota Statutes 1988, section 256B.501, 
subdivision 3e, is amended to read: 
    Subd. 3e.  [INCREASE IN LIMITS.] For rate years beginning 
on or after October 1, 1990, the commissioner shall increase the 
administrative cost per licensed bed limit in subdivision 3d, 
paragraph (c), and the maintenance operating cost limit in 
Minnesota Rules, part 9553.0050, subpart 1, item A, subitem (2), 
by multiplying the administrative operating cost per bed limit 
and the maintenance operating cost limit by the composite 
forecasted index in subdivision 3c except that the index shall 
be based on the 12 months between the midpoints of the two 
preceding reporting years. 
    Sec. 82.  Minnesota Statutes 1988, section 256B.501, is 
amended by adding a subdivision to read:  
    Subd. 11.  [INVESTMENT PER BED LIMITS, INTEREST EXPENSE 
LIMITATIONS, AND ARMS-LENGTH LEASES.] (a) The provisions of 
Minnesota Rules, part 9553.0075, except as modified under this 
subdivision, shall apply to newly constructed or established 
facilities that are certified for medical assistance on or after 
May 1, 1990.  
    (b) For purposes of establishing payment rates under this 
subdivision and Minnesota Rules, parts 9553.0010 to 9553.0080, 
the term "newly constructed or newly established" means a 
facility (1) for which a need determination has been approved by 
the commissioner under sections 252.28 and 252.291; (2) whose 
program is newly licensed under Minnesota Rules, parts 9525.0215 
to 9525.0355, and certified under Code of Federal Regulations, 
title 42, section 442.400, et seq.; and (3) that is part of a 
proposal that meets the requirements of section 252.291, 
subdivision 2, paragraph (2).  The term does not include a 
facility for which a need determination was granted solely for 
other reasons such as the relocation of a facility; a change in 
the facility's name, program, number of beds, type of beds, or 
ownership; or the sale of a facility, unless the relocation of a 
facility to one or more service sites is the result of a closure 
of a facility under section 252.292, in which case clause (3) 
shall not apply.  The term does include a facility that converts 
more than 50 percent of its licensed beds from class A to class 
B residential or class B institutional to serve persons 
discharged from state regional treatment centers on or after May 
1, 1990, in which case clause (3) does not apply.  
    (c) Newly constructed or newly established facilities that 
are certified for medical assistance on or after May 1, 1990, 
shall be allowed the capital asset investment per bed limits as 
provided in clauses (1) to (4).  
    (1) The 1990 calendar year investment per bed limit for a 
facility's land must not exceed $5,700 per bed for newly 
constructed or newly established facilities in Hennepin, Ramsey, 
Anoka, Washington, Dakota, Scott, Carver, Chisago, Isanti, 
Wright, Benton, Sherburne, Stearns, St. Louis, Clay, and Olmsted 
counties, and must not exceed $3,000 per bed for newly 
constructed or newly established facilities in other counties.  
    (2) The 1990 calendar year investment per bed limit for a 
facility's depreciable capital assets must not exceed $44,800 
for class B residential beds, and $45,200 for class B 
institutional beds.  
    (3) The investment per bed limit in clause (2) must not be 
used in determining the three-year average percentage increase 
adjustment in Minnesota Rules, part 9553.0060, subpart 1, item 
C, subitem (4), for facilities that were newly constructed or 
newly established before May 1, 1990.  
    (4) The investment per bed limits in clause (2) shall be 
adjusted annually beginning January 1, 1991, and each January 1 
following, as provided in Minnesota Rules, part 9553.0060, 
subpart 1, item C, subitem (2).  
    (d) A newly constructed or newly established facility's 
interest expense limitation as provided for in Minnesota Rules, 
part 9553.0060, subpart 3, item F, on capital debt for capital 
assets acquired during the interim or settle-up period, shall be 
increased by 2.5 percentage points for each full .25 percentage 
points that the facility's interest rate on its mortgage is 
below the maximum interest rate as established in Minnesota 
Rules, part 9553.0060, subpart 2, item A, subitem (2).  For all 
following rate periods, the interest expense limitation on 
capital debt in Minnesota Rules, part 9553.0060, subpart 3, item 
F, shall apply to the facility's capital assets acquired, 
leased, or constructed after the interim or settle-up period.  
If a newly constructed or newly established facility is acquired 
by the state, the limitations of this paragraph and Minnesota 
Rules, part 9553.0060, subpart 3, item F, shall not apply.  
    (e) If a newly constructed or newly established facility is 
leased with an arms-length lease as provided for in Minnesota 
Rules, part 9553.0060, subpart 7, the lease agreement shall be 
subject to the following conditions:  
    (1) the term of the lease, including option periods, must 
not be less than 20 years; 
    (2) the maximum interest rate used in determining the 
present value of the lease must not exceed the lesser of the 
interest rate limitation in Minnesota Rules, part 9553.0060, 
subpart 2, item A, subitem (2), or 16 percent; and 
    (3) the residual value used in determining the net present 
value of the lease must be established using the provisions of 
Minnesota Rules, part 9553.0060.  
    (f) All leases of the physical plant of an intermediate 
care facility for the mentally retarded shall contain a clause 
that requires the owner to give the commissioner notice of any 
requests or orders to vacate the premises 90 days before such 
vacation of the premises is to take place.  In the case of 
unlawful detainer actions, the owner shall notify the 
commissioner within three days of notice of an unlawful detainer 
action being served upon the tenant.  The only exception to this 
notice requirement is in the case of emergencies where immediate 
vacation of the premises is necessary to assure the safety and 
welfare of the residents.  In such an emergency situation, the 
owner shall give the commissioner notice of the request to 
vacate at the time the owner of the property is aware that the 
vacating of the premises is necessary.  This section applies to 
all leases entered into after the effective date of this section.
Rentals set in leases entered into after that date that do not 
contain this clause are not allowable costs for purposes of 
medical assistance reimbursement.  
    (g) A newly constructed or newly established facility's 
preopening costs are subject to the provisions of Minnesota 
Rules, part 9553.0035, subpart 12, and must be limited to only 
those costs incurred during one of the following periods, 
whichever is shorter:  
    (1) between the date the commissioner approves the 
facility's need determination and 30 days before the date the 
facility is certified for medical assistance; or 
    (2) the 12-month period immediately preceding the 30 days 
before the date the facility is certified for medical assistance.
    Sec. 83.  Minnesota Statutes 1988, section 256B.69, 
subdivision 3, is amended to read: 
    Subd. 3.  [GEOGRAPHIC AREA.] The commissioner shall 
designate the geographic areas in which eligible individuals may 
be included in the demonstration project.  The geographic areas 
may include one urban, one suburban, and one rural county.  In 
order to encourage the participation of long-term care 
providers, the project area may be expanded beyond the 
designated counties for eligible individuals over age 65 medical 
assistance prepayment programs. 
    Sec. 84.  Minnesota Statutes 1989 Supplement, section 
256B.69, subdivision 16, is amended to read: 
    Subd. 16.  [PROJECT EXTENSION.] Minnesota Rules, parts 
9500.1450; 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. 85.  Minnesota Statutes 1988, section 256B.73, 
subdivision 7, as amended by Laws 1990, chapter 454, section 1, 
is amended to read: 
    Subd. 7.  [CONTRACT WITH COALITION.] The commissioner of 
human services shall contract with the coalition to administer 
and direct the demonstration project and to select and retain 
the demonstration provider for the duration of the project.  
This contract shall be for 24 months with an option to renew for 
no more than 12 months.  This contract may be canceled without 
cause by the commissioner upon 90 days' written notice to 
the demonstration provider coalition or by the demonstration 
provider coalition with 90 days' written notice to the 
commissioner.  The commissioner shall assure the cooperation of 
the county human services or social services staff in all 
counties participating in the project. 
    Sec. 86.  Minnesota Statutes 1989 Supplement, section 
256D.03, subdivision 3, is amended to read: 
    Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
(a) General assistance medical care may be paid for any person: 
    (1) who is eligible for receiving assistance under section 
256D.05 or 256D.051 and is not eligible for medical assistance 
under chapter 256B including eligibility for medical assistance 
based on a spend-down of excess income according to section 
256B.056, subdivision 5; or 
    (2)(i) who is a resident of Minnesota; and whose equity in 
assets is not in excess of $1,000 per assistance unit.  Exempt 
assets, the reduction of excess assets, and the waiver of excess 
assets must conform to the medical assistance program in chapter 
256B; and 
    (ii) who has countable income not in excess of the 
assistance standards established in section 256B.056, 
subdivision 4, or whose excess income is spent down pursuant to 
section 256B.056, subdivision 5, using a six-month budget 
period, except that a one-month budget period must be used for 
recipients residing in a long-term care facility.  The method 
for calculating earned income disregards and deductions for a 
person who resides with a dependent child under age 21 shall be 
as specified in section 256.74, subdivision 1.  However, if a 
disregard of $30 and one-third of the remainder described in 
section 256.74, subdivision 1, clause (4), has been applied to 
the wage earner's income, the disregard shall not be applied 
again until the wage earner's income has not been considered in 
an eligibility determination for general assistance, general 
assistance medical care, medical assistance, or aid to families 
with dependent children for 12 consecutive months.  The earned 
income and work expense deductions for a person who does not 
reside with a dependent child under age 21 shall be the same as 
the method used to determine eligibility for a person under 
section 256D.06, subdivision 1, except for the disregard of the 
first $50 of earned income is not allowed; or 
    (3) who is over age 18 and who would be eligible for 
medical assistance except that the person resides in a facility 
that is determined by the commissioner or the federal health 
care financing administration to be an institution for mental 
diseases. 
    (b) 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. 
    (c) General assistance medical care may be paid for a 
person, regardless of age, who is detained by law for less than 
one year in a county correctional or detention facility as a 
person accused or convicted of a crime, or admitted as an 
inpatient to a hospital on a criminal hold order, if the person 
is a recipient of general assistance medical care at the time 
the person is detained by law or admitted on a criminal hold 
order and as long as the person continues to meet other 
eligibility requirements of this subdivision.  
    (d) General assistance medical care is not available for 
applicants or recipients who do not cooperate with the local 
agency to meet the requirements of medical assistance. 
    (e) In determining the amount of assets of an individual, 
there shall be included any asset or interest in an asset, 
including an asset excluded under paragraph (a), that was given 
away, sold, or disposed of for less than fair market value 
within the 30 months preceding application for general 
assistance medical care or during the period of eligibility.  
Any transfer described in this paragraph shall be presumed to 
have been for the purpose of establishing eligibility for 
general assistance medical care, unless the individual furnishes 
convincing evidence to establish that the transaction was 
exclusively for another purpose.  For purposes of this 
paragraph, the value of the asset or interest shall be the fair 
market value at the time it was given away, sold, or disposed 
of, less the amount of compensation received.  For any 
uncompensated transfer, the number of months of ineligibility, 
including partial months, shall be calculated by dividing the 
uncompensated transfer amount by the average monthly per person 
payment made by the medical assistance program to skilled 
nursing facilities for the previous calendar year.  The 
individual shall remain ineligible until this fixed period has 
expired.  The period of ineligibility may exceed 30 months, and 
a reapplication for benefits after 30 months from the date of 
the transfer shall not result in eligibility unless and until 
the period of ineligibility has expired.  The period of 
ineligibility begins in the month the transfer was reported to 
the local agency, or if the transfer was not reported, the month 
in which the local agency discovered the transfer, whichever 
comes first.  For applicants, the period of ineligibility begins 
on the date of the first approved application. 
    Sec. 87.  Minnesota Statutes 1989 Supplement, 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: 
    (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 9520.0010 to 9520.0230 
established under section 245.62; 
    (2) day treatment services for mental illness provided 
under contract with the county board; 
    (3) prescribed medications for persons who have been 
diagnosed as mentally ill as necessary to prevent more 
restrictive institutionalization; 
    (4) case management services for a person with serious and 
persistent mental illness who would be eligible for medical 
assistance except that the person resides in an institution for 
mental diseases; 
     (5) psychological services, medical supplies and equipment, 
and Medicare premiums, coinsurance and deductible payments for a 
person who would be eligible for medical assistance except that 
the person resides in an institution for mental diseases; and 
     (6) equipment not specifically listed in this paragraph 
when the use of the equipment will prevent the need for costlier 
services that are reimbursable under this subdivision. 
     (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 sections 256B.02, 
subdivision 8, and 256B.0625.  For payments made during fiscal 
year 1990 and later years, the commissioner shall contract with 
an independent actuary to establish prepayment rates. 
     (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 
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. 
    (g) The conditions of payment for services under this 
subdivision are the same as the conditions specified in rules 
adopted under chapter 256B governing the medical assistance 
program, unless otherwise provided by statute or rule. 
    Sec. 88.  Minnesota Statutes Second 1989 Supplement, 
section 256D.03, subdivision 6, is amended to read: 
    Subd. 6.  [DIVISION OF COSTS.] The state share of local 
agency expenditures for general assistance medical care shall be 
90 percent and the county share shall be ten percent.  Payments 
made under this subdivision shall be made in accordance with 
sections 256B.041, subdivision 5 and 256B.19, subdivision 1.  In 
counties where a pilot or demonstration project is operated for 
general assistance medical care services, the state may pay 100 
percent of the costs of administering the pilot or demonstration 
project.  Reimbursement for these costs is subject to section 
256.025. 
     Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 256.025 for the 
county share of costs incurred under this subdivision from 
January 1, 1991, on.  Payment to counties under this subdivision 
is subject to the provisions of section 256.017. 
     Notwithstanding any provision to the contrary, beginning 
July 1, 1991, the state shall pay 100 percent of the costs for 
centralized claims processing by the department of 
administration relative to claims beginning January 1, 1991, and 
submitted on behalf of general assistance medical care 
recipients by vendors in the general assistance medical care 
program. 
     Beginning July 1, 1991, the state shall reimburse counties 
up to the limit of state appropriations for general assistance 
medical care common carrier transportation and related travel 
expenses provided for medical purposes after December 31, 1990.  
Reimbursement shall be provided according to the payment 
schedule set forth in section 256.025.  For purposes of this 
subdivision, transportation shall have the meaning given it in 
Code of Federal Regulations, title 42, section 440.170(a), as 
amended through October 1, 1987, and travel expenses shall have 
the meaning given in Code of Federal Regulations, title 42, 
section 440.170(a)(3), as amended through October 1, 1987. 
     The county shall ensure that only the least costly most 
appropriate transportation and travel expenses are used.  The 
state may enter into volume purchase contracts, or use a 
competitive bidding process, whenever feasible, to minimize the 
costs of transportation services.  If the state has entered into 
a volume purchase contract or used the competitive bidding 
procedures of chapter 16B to arrange for transportation 
services, the county may be required to use such arrangements to 
be eligible for state reimbursement for general assistance 
medical care common carrier transportation and related travel 
expenses provided for medical purposes. 
    In counties where prepaid health plans are under contract 
to the commissioner to provide services to general assistance 
medical care recipients, the cost of court ordered treatment 
that does not include diagnostic evaluation, recommendation, or 
referral for treatment by the prepaid health plan is the 
responsibility of the county of financial responsibility. 
    Sec. 89.  Minnesota Statutes 1988, section 256D.03, 
subdivision 7, is amended to read: 
    Subd. 7.  [DUTIES OF THE COMMISSIONER.] The commissioner 
shall promulgate emergency and permanent rules as necessary to 
establish:  
    (a) standards of eligibility, utilization of services, and 
payment levels; 
    (b) standards for quality assurance, surveillance, and 
utilization review procedures that conform to those established 
for the medical assistance program pursuant to chapter 256B, 
including general criteria and procedures for the identification 
and prompt investigation of suspected fraud, theft, abuse, 
presentment of false or duplicate claims, presentment of claims 
for services not medically necessary, or false statements or 
representations of material facts by a vendor or recipient of 
general assistance medical care, and for the imposition of 
sanctions against such vendor or recipient of medical care.  The 
rules relating to sanctions shall be consistent with the 
provisions of section 256B.064, subdivisions 1a and 2; and 
    (c) administrative and fiscal procedures for payment of the 
state share of the medical costs incurred by the counties under 
section 256D.02, subdivision 4a.  Rules promulgated pursuant to 
this clause may include:  (1) procedures by which state 
liability for the costs of medical care incurred pursuant to 
section 256D.02, subdivision 4a may be deducted from county 
liability to the state under any other public assistance program 
authorized by law; (2) procedures for processing claims of 
counties for reimbursement by the state for expenditures for 
medical care made by the counties pursuant to section 256D.02, 
subdivision 4a; and (3) procedures by which the local agencies 
may contract with the commissioner of human services for state 
administration of general assistance medical care payments.  
     Sec. 90.  Minnesota Statutes 1989 Supplement, section 
256D.425, subdivision 3, is amended to read: 
    Subd. 3.  [TRANSFERS.] The transfer policies and procedures 
of the Minnesota supplemental aid program are those used by 
the medical general assistance medical care program under 
section 256B.17 256D.03, subdivision 3, paragraph (e), except 
that a resource that is transferred while otherwise excluded 
under subdivision 2 is not an available resource for purposes of 
eligibility for Minnesota supplemental aid. 
    Sec. 91.  Minnesota Statutes 1988, 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.  "Health insurance coverage" as 
used in this section does not include medical assistance 
provided under chapter 256, 256B, or 256D. 
    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. 92.  Minnesota Statutes 1988, section 518.171, 
subdivision 3, is amended to read: 
    Subd. 3.  [IMPLEMENTATION.] A copy of the court order for 
insurance coverage shall be forwarded to the obligor's employer 
or union by the obligee or the public authority responsible for 
support enforcement only when ordered by the court or when the 
following conditions are met: 
    (1) the obligor fails to provide written proof to the 
obligee or the public authority, within 30 days of receiving 
effective notice of the court order, that the insurance has been 
obtained or that application for insurability has been made; 
    (2) the obligee or the public authority serves written 
notice of its intent to enforce medical support on the obligor 
by mail at the obligor's last known post office address; and 
    (3) the obligor fails within 15 days after the mailing of 
the notice to provide written proof to the obligee or the public 
authority that the insurance coverage existed as of the date of 
mailing. 
    The employer or union shall forward a copy of the order to 
the health and dental insurance plan offered by the employer. 
    Sec. 93.  Minnesota Statutes 1988, section 518.171, 
subdivision 4, is amended to read: 
    Subd. 4.  [EFFECT OF ORDER.] The order is binding on the 
employer or union and the health and dental insurance plan when 
service under subdivision 3 has been made. Upon receipt of the 
order, or upon application of the obligor pursuant to the order, 
the employer or union and its health and dental insurance plan 
shall enroll the minor child as a beneficiary in the group 
insurance plan and withhold any required premium from the 
obligor's income or wages.  If more than one plan is offered by 
the employer or union, the child shall be enrolled in the 
insurance plan in which the obligor is enrolled or the least 
costly plan otherwise available to the obligor that is 
comparable to a number two qualified plan.  Failure of the 
obligor to execute any documents necessary to enroll the 
dependent in the group health and dental insurance plan will not 
affect the obligation of the employer or union and group health 
and dental insurance plan to enroll the dependent in a plan for 
which other eligibility requirements are met.  Information and 
authorization provided by the public authority responsible for 
child support enforcement, or by the custodial parent or 
guardian, is valid for the purposes of meeting enrollment 
requirements of the health plan.  The insurance coverage for a 
child eligible under subdivision 5 shall not be terminated 
except as authorized in subdivision 5. 
    Sec. 94.  Minnesota Statutes 1988, section 518.171, 
subdivision 7, is amended to read: 
    Subd. 7.  [RELEASE OF INFORMATION.] When an order for 
dependent insurance coverage is in effect, the obligor's 
employer or union shall release to the obligee or the public 
authority, upon request, information on the dependent coverage, 
including the name of the insurer.  Notwithstanding any other 
law, information reported pursuant to section 268.121 shall be 
released to the public agency responsible for support 
enforcement that is enforcing an order for medical or dental 
insurance coverage under this section.  The public agency 
responsible for support enforcement is authorized to release to 
the obligor's insurer or employer information necessary to 
obtain or enforce medical support. 
    Sec. 95.  Laws 1989, chapter 282, article 3, section 98, 
subdivision 4, is amended to read:  
    Subd. 4.  Minnesota Statutes 1988, section 256B.17, 
subdivisions 1, 2, 3, 4, 5, 6, and 8, are repealed for transfers 
occurring on or after July 1, 1988.  Minnesota Statutes, section 
256B.17, subdivisions 1, 2, 3, 4, 5, 6, and 8, are revived for 
transfers occurring before July 1, 1988. 
    Sec. 96.  Laws 1989, chapter 282, article 3, section 98, 
subdivision 5, is amended to read:  
    Subd. 5.  Minnesota Statutes 1988, section 256B.17, 
subdivision 7, is repealed effective October 1, 1989, for those 
persons who become institutionalized on or after that date but 
remains in effect for those who were institutionalized before 
October 1, 1989.  Minnesota Statutes 1988, section 256B.17, 
subdivision 7, is revived for persons institutionalized before 
October 1, 1989. 
     Sec. 97.  [RULES RELATING TO MENTAL HEALTH PRACTITIONERS.] 
    The commissioner of human services shall adopt or amend 
rules to allow a mental health practitioner with only a 
bachelor's degree to provide mental health services under 
clinical supervision when employed by a private, nonprofit 
agency specializing in mental health services to low income 
children under age 15.  To be eligible, the mental health 
practitioner must have provided outpatient mental health 
services, with a primary emphasis on family-oriented mental 
health services, to children under age 15 under clinical 
supervision for at least ten years after receiving a bachelor's 
degree. 
    Sec. 98.  Laws 1988, chapter 689, article 2, section 256, 
subdivision 3, is amended to read:  
    Subd. 3.  [REPORT.] The commissioner shall monitor and 
evaluate the pilot projects and report to the legislature by 
January 31, 1991 1993.  The report must address at least the 
following:  
    (1) the extent to which each pilot project succeeded in 
moving elderly persons out of nursing homes into less 
restrictive settings or in delaying placement in a nursing home; 
    (2) the ability of each project to target low-income, frail 
elderly; 
    (3) the cost-effectiveness of each project, including the 
financial impact on the resident, the state, and the county; 
    (4) the success of each project in meeting other goals 
established by the commissioner; and 
    (5) recommendations on whether the pilot projects should be 
continued or expanded.  
     Sec. 99.  [INFLATION ADJUSTMENT FOR PAYMENTS FOR CERTAIN 
HOME AND COMMUNITY-BASED MEDICAL CARE AND NURSING HOME 
SCREENINGS.] 
    Until June 30, 1993, the commissioner of human services 
shall provide an annual inflation adjustment of not more than 
four percent for payment rates for private duty nursing 
services, personal care services, home and community-based 
waivered services, and alternative care grant services for 
persons classified as 180-day eligible. 
    Sec. 100.  [MENTAL RETARDATION SERVICES COST STUDY.] 
    By January 1, 1991, the commissioner of human services, in 
consultation with counties, the department of education, and the 
state planning agency, shall provide a report to the senate and 
house health and human services policy committees and finance 
and appropriations divisions that contains a description of all 
current state spending on mental retardation services, including 
special education services and vocational rehabilitation 
services, and estimates of the future growth in spending that 
would occur in the absence of new cost containment measures.  
The report must also identify service system alternatives, 
including fiscal incentives, mandates, and rule changes, that 
will encourage cost containment without adversely affecting 
quality or the provision of appropriate services.  The proposals 
must include specific recommendations for semi-independent 
living services, respite care, case management, and day training 
and habilitation services. 
    Sec. 101.  [RECOMMENDATIONS REGARDING PROPERTY COST 
PAYMENTS.] 
    (a) By December 15, 1990, the rule 50 property 
reimbursement advisory task force shall recommend to the 
commissioner of human services a new system for determining 
property-related payment rates for nursing homes.  The system 
recommended by the advisory task force must not increase total 
medical assistance spending for nursing home property costs.  
The system must be designed to:  
    (1) reimburse nursing homes for their legitimate and 
reasonable property-related costs; 
    (2) permit appropriate sales of facilities within 
reasonable limitations; 
    (3) allow for the reasonable accumulation of funds to 
replace capital assets; 
    (4) take into consideration Medicare principles and 
required state plan assurances; 
    (5) provide equitable treatment of facilities; 
    (6) establish limitations on investment per bed; and 
    (7) encourage long-term ownership of nursing facilities 
through providing a return on an owner's actual investment which 
is related to the length of ownership at the time of an 
arm's-length sale. 
    (b) By January 15, 1991, the commissioner shall provide a 
report to the legislature that contains the report and 
recommendations of the property reimbursement advisory task 
force as well as the commissioner's comments and recommendations 
regarding nursing home property reimbursement. 
    Sec. 102.  [FEDERAL WAIVER TO REDUCE THE FREQUENCY OF 
ELIGIBILITY REDETERMINATIONS FOR INFANTS ON MEDICAL ASSISTANCE.] 
    The commissioner of human services shall seek federal 
approval to eliminate eligibility redeterminations for pregnant 
women and infants eligible for medical assistance under 
Minnesota Statutes, section 256B.055, subdivisions 6 and 10, 
until one year after the birth of the child.  The commissioner 
shall begin the process of seeking federal approval no later 
than December 31, 1990.  
    Sec. 103.  [CONSUMER AWARENESS CAMPAIGN.] 
   The department of commerce shall establish a consumer 
awareness campaign to inform the public of cost effective 
strategies for the purchase of affordable health insurance.  The 
department of commerce may accept public and private funds to 
establish and promote this consumer awareness campaign. 
    Sec. 104.  [REPEALERS.] 
    Subdivision 1.  [MEDICAL ASSISTANCE ELIGIBILITY.] Minnesota 
Statutes 1989 Supplement, section 256B.055, subdivision 8, is 
repealed. 
    Subd. 2.  [SWING BEDS.] The amendments to Minnesota 
Statutes, section 256B.0625, subdivision 2, in Laws 1989, 
chapter 282, article 3, section 54, are repealed, and the 
stricken language is reenacted. 
    Sec. 105.  [EFFECTIVE DATES.] 
    Subdivision 1.  [CLAIMS AGAINST ESTATES.] Section 63 is 
effective for all claims filed for deaths occurring on or after 
the date of enactment. 
    Subd. 2.  [PROHIBITED TRANSFERS OF PROPERTY.] Section 40 is 
effective the day after final enactment. 
    Subd. 3.  [METRO MOBILITY.] Section 13 is effective October 
1, 1990. 
    Subd. 4.  [NURSING HOME PROPERTY RATES INVOLVING 
LEASES.] Section 68 is effective the day following final 
enactment. 
    Subd. 5.  [SWING BEDS.] Section 104, subdivision 2, is 
effective the day following final enactment. 
    Subd. 6.  [NEW ICF/MR FACILITIES.] Section 82 is effective 
May 1, 1990. 
    Subd. 7.  [ADVISORY COMMITTEE ON TRANSPLANTS.] Section 52 
is effective the day following final enactment. 

                               ARTICLE 4 

                           INCOME MAINTENANCE 
    Section 1.  Minnesota Statutes 1988, section 256.73, 
subdivision 2, is amended to read: 
    Subd. 2.  [ALLOWANCE BARRED BY OWNERSHIP OF PROPERTY.] 
Ownership by an assistance unit of property as follows is a bar 
to any allowance under sections 256.72 to 256.87: 
    (1) The value of real property other than the homestead, 
which when combined with other assets exceeds the limits of 
paragraph (2), unless the assistance unit is making a good faith 
effort to sell the nonexcludable real property.  The time period 
for disposal must not exceed nine months and the assistance unit 
shall execute an agreement to dispose of the property to repay 
assistance received during the nine months up to the amount of 
the net sale proceeds.  The payment must be made when the 
property is sold.  If the property is not sold within the 
required time or the assistance unit becomes ineligible for any 
reason the entire amount received during the nine months is an 
overpayment and subject to recovery.  For the purposes of this 
section, "homestead" means the home owned and occupied by the 
child, relative, or other member of the assistance unit as a 
dwelling place, that is owned by, and is the usual residence of, 
the child, relative, or other member of the assistance unit 
together with the surrounding property which is not separated 
from the home by intervening property owned by others.  "Usual 
residence" includes the home from which the child, relative, or 
other members of the assistance unit is temporarily absent due 
to an employability development plan approved by the local human 
service agency, which includes education, training, or job 
search within the state but outside of the immediate geographic 
area.  Public rights-of-way, such as roads which run through the 
surrounding property and separate it from the home, will not 
affect the exemption of the property; or 
    (2) Personal property of an equity value in excess of 
$1,000 for the entire assistance unit, exclusive of personal 
property used as the home, one motor vehicle of an equity value 
not exceeding $1,500 or the entire equity value of a motor 
vehicle determined to be necessary for the operation of a 
self-employment business, one burial plot for each member of the 
assistance unit, one prepaid burial contract with an equity 
value of no more than $1,000 for each member of the assistance 
unit, clothing and necessary household furniture and equipment 
and other basic maintenance items essential for daily living, in 
accordance with rules promulgated by and standards established 
by the commissioner of human services. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
256.73, subdivision 3a, is amended to read: 
    Subd. 3a.  [PERSONS INELIGIBLE.] No assistance shall be 
given under sections 256.72 to 256.87:  
     (1) on behalf of any person who is receiving supplemental 
security income under title XVI of the Social Security Act 
unless permitted by federal regulations; 
     (2) for any month in which the assistance unit's gross 
income, without application of deductions or disregards, exceeds 
185 percent of the standard of need for a family of the same 
size and composition; except that the earnings of a dependent 
child who is a full-time student may be disregarded for six 
calendar months per year and the earnings of a dependent child 
who is a full-time student that are derived from the jobs 
training and partnership act may be disregarded for six calendar 
months per year.  If a stepparent's income is taken into account 
in determining need, the disregards specified in section 256.74, 
subdivision 1a, shall be applied to determine income available 
to the assistance unit before calculating the unit's gross 
income for purposes of this paragraph; 
      (3) to any assistance unit for any month in which any 
caretaker relative with whom the child is living is, on the last 
day of that month, participating in a strike; 
      (4) on behalf of any other individual in the assistance 
unit, nor shall the individual's needs be taken into account for 
any month in which, on the last day of the month, the individual 
is participating in a strike; 
    (5) on behalf of any individual who is the principal earner 
in an assistance unit whose eligibility is based on the 
unemployment of a parent when the principal earner, without good 
cause, fails or refuses to seek work, to participate in the job 
search program under section 256.736, or a community work 
experience program under section 256.737 if this program is 
available and participation is mandatory in the county, to 
accept employment, or to register with a public employment 
office, unless the principal earner is exempt from these work 
requirements. 
    Sec. 3.  Minnesota Statutes 1988, section 256.736, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [DEFINITIONS.] As used in this section and 
section 256.7365, 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, including 
a pregnant woman, 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, and job creation, 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 job search, counseling, case 
management, 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 a public, private, or nonprofit agency 
certified by the commissioner of jobs and training to deliver 
employment and training services under section 268.0122, 
subdivision 3 and section 268.871, subdivision 1. 
    (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 16. 
    (h) "Suitable employment" means employment which:  
    (1) is within the recipient's physical and mental capacity; 
    (2) meets health and safety standards established by the 
Occupational Safety and Health Administration and the department 
of jobs and training; 
    (3) pays hourly gross earnings which are not less than the 
federal or state minimum wage for that type of employment, 
whichever is applicable; 
    (4) does not result in a net loss of income.  Employment 
results in a net loss of income when the income remaining after 
subtracting necessary work-related expenses from the family's 
gross income, which includes cash assistance, is less than the 
cash assistance the family was receiving at the time the offer 
of employment was made.  For purposes of this definition, "work 
expenses" means the amount withheld or paid for; state and 
federal income taxes; social security withholding taxes; 
mandatory retirement fund deductions; dependent care costs; 
transportation costs to and from work at the amount allowed by 
the Internal Revenue Service for personal car mileage; costs of 
work uniforms, union dues, and medical insurance premiums; costs 
of tools and equipment used on the job; $1 per work day for the 
costs of meals eaten during employment; public liability 
insurance required by an employer when an automobile is used in 
employment and the cost is not reimbursed by the employer; and 
the amount paid by an employee from personal funds for business 
costs which are not reimbursed by the employer; 
    (5) offers a job vacancy which is not the result of a 
strike, lockout, or other bona fide labor dispute; 
    (6) requires a round trip commuting time from the 
recipient's residence of less than two hours by available 
transportation, exclusive of the time to transport children to 
and from child care; 
    (7) does not require the recipient to leave children under 
age 12 unattended in order to work, or if child care is 
required, such care is available; and 
    (8) does not discriminate at the job site on the basis of 
age, sex, race, color, creed, marital status, status with regard 
to public assistance, disability, religion, or place of national 
origin. 
    (i) "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. 4.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 3, is amended to read: 
    Subd. 3.  [REGISTRATION.] (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; 
    (2) ill, incapacitated, or age 60 or older; 
    (3) a person for whom participation in an employment and 
training service would require a round trip commuting time by 
available transportation of more than two hours; 
    (4) a person whose presence in the home is required because 
of illness or incapacity of another member of the household; 
    (5) a caretaker or other caretaker relative of a child 
under the age of three who personally provides full-time care 
for the child.  In AFDC-UP cases, only one parent or other 
relative may qualify for this exemption; 
    (6) a caretaker or other caretaker relative personally 
providing care for a child under six years of age, except that 
when child care is arranged for or provided, the caretaker or 
caretaker relative may be required to register and participate 
in employment and training services up to a maximum of 20 hours 
per week.  In AFDC-UP cases, only one parent or other relative 
may qualify for this exemption; 
    (7) a 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; 
    (8) a pregnant woman, if it has been medically verified 
that the child is expected to be born in the current month or 
within the next six months; or 
    (9) (8) employed at least 30 hours per week; or. 
    (10) a parent who is not the principal earner if the parent 
who is the principal earner is required to register. 
    (b) 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 or after July 1, 1987, 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. 5.  Minnesota Statutes 1988, section 256.736, 
subdivision 3a, is amended 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.  (a) Except as provided under 
paragraphs (b) and (c), participation in employment and training 
services under this section is limited to the following 
recipients:  
    (1) caretakers who are required to participate in a job 
search under subdivision 14; 
    (2) custodial parents who are subject to the school 
attendance or case management participation requirements under 
subdivision 3b; 
    (3) caretakers whose participation in employment and 
training services began prior to May 1, 1990, if the caretaker's 
AFDC eligibility has not been interrupted for 30 days or more 
and the caretaker's employability development plan has not been 
completed; 
    (4) recipients who are members of a family in which the 
youngest child is within two years of being ineligible for AFDC 
due to age; 
    (5) effective September 1, 1990, custodial parents under 
the age of 22 who:  (i) have not completed a high school 
education and who, at the time of application for AFDC, were not 
enrolled in high school or in a high school equivalency program; 
or (ii) have had little or no work experience in the preceding 
year; 
    (6) recipients who have received AFDC for 48 or more months 
out of the last 60 months; 
    (7) recipients who are participants in the self-employment 
investment demonstration project under section 268.95; and 
    (8) recipients who participate in the new chance research 
and demonstration project under contract with the department of 
human services. 
    (b) If the commissioner determines that participation of 
persons listed in paragraph (a) in employment and training 
services is insufficient either to meet federal performance 
targets or to fully utilize funds appropriated under this 
section, the commissioner may, after notifying the chairs of the 
senate and house health and human services committees, the 
health and human services division of the senate finance 
committee, and the health and human services division of the 
house appropriations committee, permit additional groups of 
recipients to participate until the next meeting of the 
legislative advisory commission, after which the additional 
groups may continue to enroll for participation unless the 
legislative advisory commission disapproves the continued 
enrollment.  The commissioner shall allow participation of 
additional groups in the following order only as needed to meet 
performance targets or fully utilize funding for employment and 
training services under this section: 
    (1) recipients who have received at least 42 months of AFDC 
out of the previous 60 months; 
    (2) custodial parents under the age of 24 who meet the 
criteria in paragraph (a), clause (5), subclause (i) or (ii); 
    (3) recipients who have received at least 36 months of AFDC 
out of the previous 60 months; 
    (4) recipients who have received 24 or more months of AFDC 
out of the previous 48 months; and 
    (5) recipients who have not completed a high school 
education or a high school equivalency program. 
    (c) To the extent of money appropriated specifically for 
this paragraph, the commissioner may permit AFDC caretakers who 
are not eligible for participation in employment and training 
services under the provisions of paragraphs (a) or (b), to 
participate.  Money must be allocated to county agencies based 
on the county's percentage of participants statewide in services 
under this section in the prior calendar year.  Counties must 
provide equal or greater services to participants enrolled under 
this paragraph, as measured in average per client expenditures, 
as provided to other participants in employment and training 
services under this section.  Caretakers must be selected on a 
first-come, first-served basis from a waiting list of caretakers 
who volunteer to participate.  The commissioner may, on a 
quarterly basis, reallocate unused allocations to county 
agencies that have sufficient volunteers.  If funding under this 
paragraph is discontinued in future fiscal years, caretakers who 
began participating under this paragraph must be deemed eligible 
under paragraph (a), clause (3). 
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 3b, is amended to read: 
    Subd. 3b.  [MANDATORY ASSESSMENT AND SCHOOL ATTENDANCE FOR 
CERTAIN CUSTODIAL PARENTS.] This subdivision applies to the 
extent permitted under federal law and regulation. 
    (a)  [DEFINITIONS.] The definitions in this paragraph apply 
to this subdivision. 
    (1) "Custodial parent" means a recipient of AFDC who is the 
natural or adoptive parent of a child living with the custodial 
parent. 
    (2) "School" means: 
    (i) an educational program which leads to a high school 
diploma.  The program or coursework may be, but is not limited 
to, a program under the post-secondary enrollment options of 
section 123.3514, a regular or alternative program of an 
elementary or secondary school, a technical institute, or a 
college; 
    (ii) coursework for a general educational development (GED) 
diploma of not less than six hours of classroom instruction per 
week; or 
     (iii) any other post-secondary educational program that is 
approved by the public school or the local agency under 
subdivision 11. 
     (b)  [ASSESSMENT AND PLAN; REQUIREMENT; CONTENT.] The 
county agency must examine the educational level of each 
custodial parent under the age of 20 to determine if the 
recipient has completed a high school education or its 
equivalent.  If the custodial parent has not completed a high 
school education or its equivalent and is not exempt from the 
requirement to attend school under paragraph (c), the county 
agency must complete an individual assessment for the custodial 
parent.  The assessment must be performed as soon as possible 
but within 60 days of determining AFDC eligibility for the 
custodial parent.  The assessment must provide an initial 
examination of the custodial parent's educational progress and 
needs, literacy level, child care and supportive service needs, 
family circumstances, skills, and work experience.  In the case 
of a custodial parent under the age of 18, the assessment must 
also consider the results of the early and periodic screening, 
diagnosis and treatment (EPSDT) screening, if available, and the 
effect of a child's development and educational needs on the 
parent's ability to participate in the program.  The county 
agency must advise the parent that the parent's first goal must 
be to complete an appropriate educational option if one is 
identified for the parent through the assessment and, in 
consultation with educational agencies, must review the various 
school completion options with the parent and assist the parent 
in selecting the most appropriate option. 
     (c)  [RESPONSIBILITY FOR ASSESSMENT AND PLAN.] For 
custodial parents who are under age 18, the assessment and the 
employability plan must be completed by the county social 
services agency, as specified in section 257.33.  For custodial 
parents who are age 18 or 19, the assessment and employability 
plan must be completed by the case manager.  The social services 
agency or the case manager shall consult with representatives of 
educational agencies required to assist in developing 
educational plans under section 126.235. 
     (d)  [EDUCATION DETERMINED TO BE APPROPRIATE.] If the case 
manager or county social services agency identifies an 
appropriate educational option, it must develop an employability 
plan in consultation with the custodial parent which reflects 
the assessment.  The plan must specify that participation in an 
educational activity is required, what school or educational 
program is most appropriate, the services that will be provided, 
the activities the parent will take part in including child care 
and supportive services, the consequences to the custodial 
parent for failing to participate or comply with the specified 
requirements, and the right to appeal any adverse action.  The 
employability plan must, to the extent possible, reflect the 
preferences of the participant. 
     (e)  [EDUCATION DETERMINED TO BE NOT APPROPRIATE.] If the 
case manager determines that there is no appropriate educational 
option for a custodial parent who is age 18 or 19, the case 
manager shall indicate the reasons for the determination.  The 
case manager shall then notify the county agency which must 
refer the custodial parent to case management services under 
subdivision 11 for completion of an employability plan and 
services.  If the custodial parent fails to participate or 
cooperate with case management services and does not have good 
cause for the failure, the county agency shall apply the 
sanctions listed in subdivision 4, beginning with the first 
payment month after issuance of notice.  If the county social 
services agency determines that school attendance is not 
appropriate for a custodial parent under age 18, the county 
agency shall refer the custodial parent to social services for 
services as provided in section 257.33. 
     (f)  [SCHOOL ATTENDANCE REQUIRED.] Notwithstanding 
subdivision 3, a custodial parent must attend school if all of 
the following apply: 
     (1) the custodial parent is less than 20 years of age; 
     (2) transportation services needed to enable the custodial 
parent to attend school are available; 
     (3) licensed or legal nonlicensed child care services 
needed to enable the custodial parent to attend school are 
available; 
     (4) the custodial parent has not already received a high 
school diploma or its equivalent; and 
     (5) the custodial parent is not exempt because the 
custodial parent: 
     (i) is ill or incapacitated seriously enough to prevent him 
or her from attending school; 
     (ii) is needed in the home because of the illness or 
incapacity of another member of the household; this includes a 
custodial parent of a child who is younger than six weeks of 
age; 
    (iii) works 30 or more hours a week; or 
    (iv) is pregnant if it has been medically verified that the 
child's birth is expected in the current month or within the 
next six months. 
    (g)  [ENROLLMENT AND ATTENDANCE.] The custodial parent must 
be enrolled in school and meeting the school's attendance 
requirements.  The custodial parent is considered to be 
attending when he or she is enrolled but the school is not in 
regular session, including during holiday and summer breaks. 
    (h)  [GOOD CAUSE FOR NOT ATTENDING SCHOOL.] The local 
agency shall not impose the sanctions in subdivision 4 if it 
determines that a custodial parent has good cause for not being 
enrolled or for not meeting the school's attendance 
requirements.  The local agency shall determine whether good 
cause for not attending or not enrolling in school exists, 
according to this paragraph: 
    (1) Good cause exists when the local agency has verified 
that the only available school program requires round trip 
commuting time from the custodial parent's residence of more 
than two hours by available means of transportation, excluding 
the time necessary to transport children to and from child care. 
    (2) Good cause exists when the custodial parent has 
indicated a desire to attend school, but the public school 
system is not providing for his or her education and alternative 
programs are not available. 
     (i)  [FAILURE TO COMPLY.] The case manager and social 
services agency shall establish ongoing contact with appropriate 
school staff to monitor problems that custodial parents may have 
in pursuing their educational plan and shall jointly seek 
solutions to prevent parents from failing to complete 
education.  If the school notifies the local agency that the 
custodial parent is not enrolled or is not meeting the school's 
attendance requirements, or appears to be facing barriers to 
completing education, the information must be conveyed to the 
case manager for a custodial parent age 18 or 19, or to the 
social services agency for a custodial parent under age 18.  The 
case manager or social services agency shall reassess the 
appropriateness of school attendance as specified in paragraph 
(f).  If after consultation, school attendance is still 
appropriate and the case manager or social services agency 
determines that the custodial parent has failed to enroll or is 
not meeting the school's attendance requirements and the 
custodial parent does not have good cause, the case manager or 
social services agency shall inform the custodial parent's 
financial worker who shall apply the sanctions listed in 
subdivision 4 beginning with the first payment month after 
issuance of notice. 
    (j)  [NOTICE AND HEARING.] A right to notice and fair 
hearing shall be provided in accordance with section 256.045 and 
the Code of Federal Regulations, title 45, section 205.10. 
    (k)  [SOCIAL SERVICES.] When a custodial parent under the 
age of 18 has failed to attend school, is not exempt, and does 
not have good cause, the local agency shall refer the custodial 
parent to the social services agency for services, as provided 
in section 257.33. 
    (l)  [VERIFICATION.] No less often than quarterly, the 
financial worker must verify that the custodial parent is 
meeting the requirements of this subdivision.  Notwithstanding 
section 13.32, subdivision 3, when the local agency notifies the 
school that a custodial parent is subject to this subdivision, 
the school must furnish verification of school enrollment, 
attendance, and progress to the local agency.  The county agency 
must not impose the sanctions in paragraph (i) if the school 
fails to cooperate in providing verification of the minor 
parent's education, attendance, or progress. 
    Sec. 7.  Minnesota Statutes 1989 Supplement, 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 caretaker or child required 
to participate in employment and training services pursuant to 
this section with child-care services, transportation, and other 
necessary family services; 
    (2) 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 regulation; and 
    (3) Provide that the county board shall impose the 
sanctions in clause (4) when the county board: 
    (a) determines that a custodial parent under the age of 16 
who is required to attend school under subdivision 3b has, 
without good cause, failed to attend school; or 
    (b) determines that subdivision 3c applies to a minor 
parent and the minor parent has, without good cause, failed to 
cooperate with development of a social service plan or to 
participate in execution of the plan, to live in a group or 
foster home, or to participate in a program that teaches skills 
in parenting and independent living; or 
    (c) determines that a caretaker has, without good cause, 
failed to attend orientation. 
    (4) To the extent permissible by federal law, impose the 
following sanctions for a recipient's failure to participate in 
required education, orientation, or the requirements of 
subdivision 3b or 3c: 
    (a) For the first failure, 50 percent of the grant provided 
to the family for the month following the failure shall be made 
in the form of protective or vendor payments; 
    (b) For the second and subsequent failures, the entire 
grant provided to the family must be made in the form of 
protective or vendor payments.  Assistance provided to the 
family must be in the form of protective or vendor payments 
until the recipient complies with the requirement; and 
    (c) When protective payments are required, the local agency 
may continue payments to the caretaker if a protective payee 
cannot reasonably be found.; 
    (5) Provide that the county board shall impose the 
sanctions in clause (6) when the county board: 
    (a) determines that a caretaker or child required to 
participate in employment and training services has been found 
by the employment and training service provider to have failed 
without good cause to participate in appropriate employment and 
training services or to have failed without good cause to 
accept, through the job search program described in subdivision 
14, or the community work experience program described in 
section 256.737 provisions of an employability development plan 
if the caretaker is a custodial parent age 18 or 19 and subject 
to the requirements of subdivision 3b, a bona fide offer of 
public or other employment; or 
    (b) determines that a custodial parent aged 16 to 19 who is 
required to attend school under subdivision 3b has, without good 
cause, failed to enroll or attend school.; or 
    (c) determines that a caretaker has, without good cause, 
failed to attend orientation; 
    (6) To the extent required by federal law, the following 
sanctions must be imposed impose the following sanctions for a 
recipient's failure to participate in required employment and 
training services, to accept a bona fide offer of public or 
other employment, or to enroll or attend school under 
subdivision 3b., or to attend orientation: 
    (a) For the first failure, the needs of the noncompliant 
individual shall not be taken into account in making the grant 
determination, until the individual complies with the 
requirements.; 
    (b) For the second failure, the needs of the noncompliant 
individual shall not be taken into account in making the grant 
determination until the individual complies with the requirement 
or for three consecutive months, whichever is longer.; 
    (c) For subsequent failures, the needs of the noncompliant 
individual shall not be taken into account in making the grant 
determination until the individual complies with the requirement 
or for six consecutive months, whichever is longer.; 
    (d) Aid with respect to a dependent child will be denied if 
a child who fails to participate is the only child receiving aid 
in the family. who has been sanctioned under this paragraph 
shall be continued for the parent or parents of the child if the 
child is the only child receiving aid in the family, the child 
continues to meet the conditions of section 256.73, and the 
family is otherwise eligible for aid; 
    (e) If the noncompliant individual is a parent or other 
relative caretaker, payments of aid for any dependent child in 
the family must be made in the form of protective or vendor 
payments.  When protective payments are required, the county 
agency may continue payments to the caretaker if a protective 
payee cannot reasonably be found.  When protective payments are 
imposed on assistance units whose basis of eligibility is 
unemployed parent or incapacitated parent, cash payments may 
continue to the nonsanctioned caretaker in the assistance unit, 
subject to clause (f). paragraph (g); 
    (f) If, after removing a caretaker's needs from the 
grant, the standard of assistance applicable to the remaining 
eligible members of the assistance unit is the standard that is 
used in other instances in which the caretaker is excluded from 
the assistance unit for noncompliance with a program requirement.
only dependent children remain eligible for AFDC, the standard 
of assistance shall be computed using the special children 
standard; 
    (f) (g) If the noncompliant individual is a parent or other 
caretaker of principal wage earner in a family whose basis of 
eligibility is the unemployment of a parent and the noncompliant 
individual's spouse nonprincipal wage earner is not 
participating in an approved employment and training service, 
the needs of both the spouse principal and nonprincipal wage 
earner must not be taken into account in making the grant 
determination.; and 
    (7) Request approval from the secretary of health and human 
services to use vendor payment sanctions for persons listed in 
paragraph (5), clause (b).  If approval is granted, the 
commissioner must begin using vendor payment sanctions as soon 
as changes to the state plan are approved. 
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 10, is amended to read: 
    Subd. 10.  [COUNTY DUTIES.] (a) To the extent of available 
state appropriations, county boards shall:  
    (1) refer all priority mandatory and eligible volunteer 
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 meets 
the requirements in subdivisions 10a and 10b; 
     (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 or other available funds to caretakers who 
participate in employment and training programs, with priority 
for services to caretakers in priority groups; 
    (11) ensure that orientation, employment job search, 
services to custodial parents under the age of 20, 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; 
    (12) explain in its local service unit plan under 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; 
    (13) to the extent allowed by federal laws and regulations, 
provide a job search program as defined in subdivision 14 and at 
least one of the following employment and training services:  
community work experience program (CWEP) as defined in section 
256.737, grant diversion as defined in section 268.86 256.739, 
on-the-job training as defined in section 256.738, or another 
work and training program approved by the commissioner and the 
secretary of the United States Department of Health and Human 
Services.  Planning and approval for employment and training 
services listed in this clause must be obtained through 
submission of the local service unit plan as specified under 
section 268.88.  Each county is urged to adopt grant diversion 
as the second program required under this clause; 
    (14) prior to participation, provide an assessment of each 
AFDC recipient who is required or volunteers to participate 
in one of the an approved employment and training services 
specified in clause (13) service, including job search, and to 
recipients who volunteer for participation in case management 
under subdivision 11.  The assessment must include an evaluation 
of the participant's (i) educational, child care, and other 
supportive service needs; (ii) skills and prior work experience; 
and (iii) ability to secure and retain a job which, when wages 
are added to child support, will support the participant's 
family.  The assessment must also include a review of the 
results of the early and periodic screening, diagnosis and 
treatment (EPSDT) screening and preschool screening under 
chapter 123, if available; the participant's family 
circumstances; and, in the case of a custodial parent under the 
age of 18, a review of the effect of a child's development and 
educational needs on the parent's ability to participate in the 
program; 
    (15) develop an employability development plan for each 
recipient for whom an assessment is required under clause (14) 
which:  (i) reflects the assessment required by clause 14; (ii) 
takes into consideration the recipient's physical capacity, 
skills, experience, health and safety, family responsibilities, 
place of residence, proficiency, child care and other supportive 
service needs; (iii) is based on available resources and local 
employment opportunities; (iv) specifies the services to be 
provided by the employment and training service provider; (v) 
specifies the activities the recipient will participate in; (vi) 
specifies necessary supportive services such as child care; 
(vii) to the extent possible, reflects the preferences of the 
participant; and (viii) specifies the recipient's long-term 
employment goal which shall lead to self-sufficiency; and 
    (16) assure that no work assignment under this section or 
sections 256.737 and, 256.738, and 256.739 results in:  (i) 
termination, layoff, or reduction of the work hours of an 
employee for the purpose of hiring an individual under this 
section or sections 256.737 and, 256.738, and 256.739; (ii) the 
hiring of an individual if any other person is on layoff from 
the same or a substantially equivalent job; (iii) any 
infringement of the promotional opportunities of any currently 
employed individual; (iv) the impairment of existing contracts 
for services or collective bargaining agreements; or (v) except 
for on-the-job training under section 256.738, a participant 
filling an established unfilled position vacancy.  
    (b) Funds available under this subdivision may not be used 
to assist, promote, or deter union organizing. 
    (c) A county board may provide other employment and 
training services that it considers necessary to help caretakers 
obtain self-sufficiency. 
    (d) Notwithstanding section 256G.07, when a priority 
caretaker relocates to another county to implement the 
provisions of the caretaker's case management contract or other 
written employability development plan approved by the county 
human service agency or, its case manager or employment and 
training service provider, the county that approved the plan is 
responsible for the costs of case management, child care, and 
other services required to carry out the plan, including 
employment and training services.  The county agency's 
responsibility for the costs ends when all plan obligations have 
been met, when the caretaker loses AFDC eligibility for at least 
30 days, or when approval of the plan is withdrawn for a reason 
stated in the plan, whichever occurs first.  Responsibility for 
the costs of child care must be determined under chapter 256H.  
A county human service agency may pay for the costs of case 
management, child care, and other services required in an 
approved employability development plan when the nonpriority 
caretaker relocates to another county or when a priority 
caretaker again becomes eligible for AFDC after having been 
ineligible for at least 30 days.  
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 10a, is amended to read: 
    Subd. 10a.  [ORIENTATION.] (a) Each county agency must 
provide an orientation to all caretakers within its jurisdiction 
who are determined eligible for AFDC on or after July 1, 1989, 
and who are required to attend an orientation.  The county 
agency shall require attendance at orientation of all caretakers 
except those who are:  
    (1) physically disabled, mentally ill, or developmentally 
disabled and whose condition has or is expected to continue for 
at least 90 days and will prevent participation in educational 
programs or employment and training services; 
    (2) aged 60 or older; 
    (3) currently employed in unsubsidized employment that is 
expected to continue at least 30 days and that provides an 
average of at least 30 hours of employment per week; or 
    (4) currently employed in subsidized employment that is 
expected to continue at least 30 days and that provides an 
average of at least 30 hours of employment per week and is 
expected to result in full-time permanent employment.  
    (1) caretakers who are exempt from registration under 
subdivision 3; and 
    (2) caretakers who are not a member of one of the groups 
listed in subdivision 3a, paragraph (a), and who are either 
responsible for the care of an incapacitated person or a 
dependent child under the age of six or enrolled at least half 
time in any recognized school, training program, or institution 
of higher learning.  The county agency shall require attendance 
at orientation of caretakers described in subdivision 3a, 
paragraph (b), of this section if they become eligible for 
participation in employment and training services. 
    (b) Except as provided in paragraph (e) below, the 
orientation must consist of a presentation that informs 
caretakers of: 
    (1) the identity, location, and phone numbers of employment 
and training and support services available in the county; 
    (2) the types and locations of child care services 
available through the county agency that are accessible to 
enable a caretaker to participate in educational programs or 
employment and training services; 
    (3) the availability of assistance for participants to help 
select appropriate child care services and that, on request, 
assistance will be provided to select appropriate child care 
services child care resource and referral program designated by 
the commissioner providing education and assistance to select 
child care services and a referral to the child care resource 
and referral when assistance is requested; 
    (4) the obligations of the county agency and service 
providers under contract to the county agency; 
    (5) the rights, responsibilities, and obligations of 
participants; 
    (6) the grounds for exemption from mandatory employment and 
training services or educational requirements; 
    (7) the consequences for failure to participate in 
mandatory services or requirements; 
    (8) the method of entering educational programs or 
employment and training services available through the county; 
and 
    (9) the availability and the benefits of the early and 
periodic, screening, diagnosis and treatment (EPSDT) program and 
preschool screening under chapter 123; 
    (10) their eligibility for transition year child care 
assistance when they lose eligibility for AFDC due to their 
earnings; and 
    (11) their eligibility for extended medical assistance when 
they lose eligibility for AFDC due to their earnings. 
    (c) Orientation must encourage recipients to view AFDC as a 
temporary program providing grants and services to individuals 
who set goals and develop strategies for supporting their 
families without AFDC assistance.  The content of the 
orientation must not imply that a recipient's eligibility for 
AFDC is time limited.  Orientation may be provided through 
audio-visual methods, but the caretaker must be given an 
opportunity for face-to-face interaction with staff of the 
county agency or the entity providing the orientation, and an 
opportunity to express the desire to participate in educational 
programs and employment and training services offered through 
the county agency. 
    (d) County agencies shall not require caretakers to attend 
orientation for more than three hours during any period of 12 
continuous months.  The local agency shall also arrange for or 
provide needed transportation and child care to enable 
caretakers to attend. 
    (e) Orientation for caretakers not eligible for 
participation in employment and training services under the 
provisions of subdivision 3a, paragraphs (a) and (b) shall 
present information only on those employment, training, and 
support services available to those caretakers, and information 
on clauses (2), (3), (9), (10), and (11) of paragraph (a) and 
all of paragraph (c), and may not last more than two hours. 
    (f) Persons required to attend orientation must be informed 
of the penalties for failure to attend orientation, support 
services to enable the person to attend, what constitutes good 
cause for failure to attend, and rights to appeal.  Persons 
required to attend orientation must be offered a choice of at 
least two dates for their first scheduled orientation.  No 
person may be sanctioned for failure to attend orientation until 
after a second failure to attend. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 11, is amended to read: 
    Subd. 11.  [CASE MANAGEMENT SERVICES.] (a) For clients 
described in subdivision 2a, the case manager shall: The county 
agency may, to the extent of available resources, enroll 
priority caretakers described in subdivision 16 in case 
management services and for those enrolled shall: 
    (1) Provide an assessment as described in subdivision 10, 
paragraph (a), clause (14).  As part of the assessment, the case 
manager shall inform caretakers of the screenings available 
through the early periodic screening, diagnosis and treatment 
(EPSDT) program under chapter 256B and preschool screening under 
chapter 123, and encourage caretakers to have their children 
screened.  The case manager must work with the caretaker in 
completing this task; 
    (2) Develop an employability development plan as described 
in subdivision 10, paragraph (a), clause (15).  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 should be to complete 
literacy training or a general equivalency 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).  The case manager 
shall refer caretakers to resource and referral services, if 
available, and shall assist caretakers in securing appropriate 
child care services.  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 equivalency 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 be based upon 
the employability development plan described in subdivision 10, 
paragraph (a), clause (15), and but must be a separate 
document.  It must include:  (a) specific goals of the caretaker 
including stated measurements of progress toward each goal, the 
estimated length of participation in the program, and the number 
of hours of participation per week; (b) specific educational, 
training, and employment activities and support services 
provided by the county agency, including child care; and (c) the 
participant's obligations and the conditions under which the 
county will withdraw the services provided; 
    The contract must be signed and dated by the case manager 
and participant, and may include other terms as desired or 
needed by either party.  In all cases, however, the case manager 
must assist the participant in reviewing and understanding the 
contract, and 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 and pregnant minors, the case manager shall: 
     (1) Ensure that the contract developed under paragraph (a), 
clause (4), considers all factors set forth in section 257.33, 
subdivision 2; 
     (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 and pregnant minors who are not living with friends or 
relatives to live in a group home or foster care setting.  If 
minor parents and pregnant minors 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 their 
need for training in parenting and independent living skills and 
when appropriate shall refer them to available counseling 
programs designed to teach needed skills; and 
     (3) Inform minor parents or pregnant minors of, and assist 
them in evaluating the appropriateness of, the high school 
graduation incentives program under section 126.22, including 
post-secondary enrollment options, and the employment-related 
and community-based instruction programs.  
     (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. 11.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 14, is amended to read: 
    Subd. 14.  [JOB SEARCH.] (a) The commissioner of human 
services shall establish a job search program under Public Law 
Number 100-485.  Unless exempt, the principal wage earner in an 
AFDC-UP assistance unit must be referred to and must begin 
participation in the job search program within 30 days of being 
determined eligible for AFDC, and must begin participation 
within four months of being determined eligible for AFDC-UP 
unless.  The principal wage earner is exempt from job search 
participation if: 
    (1) the caretaker is already participating in another 
approved employment and training service; 
    (2) the caretaker's employability plan specifies other 
activities; 
    (3) the caretaker is exempt from registration under 
subdivision 3; or 
    (4) the caretaker is unable to secure employment due to 
inability to communicate in the English language, is 
participating in an English as a second language course, and is 
making satisfactory progress towards completion of the course.  
If an English as a second language course is not available to 
the caretaker, the caretaker is exempt from participation until 
a course becomes available. 
    (b) The job 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 job 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 for any 12 consecutive month period beginning 
with the month of application. 
    (c) The employment job search program may provide services 
to non-AFDC-UP caretakers. 
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 16, is amended 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: as specified 
in paragraphs (b) to (i). 
    (b) For purposes of this section, "priority caretaker" 
means a recipient who: 
    (1) is a custodial parent under the age of 24 who:  (i) has 
not completed a high school education and at the time of 
application for AFDC is not enrolled in high school or in a high 
school equivalency program; or (ii) had little or no work 
experience in the preceding year; 
    (2) is a member of a family in which the youngest child is 
within two years of being ineligible for AFDC due to age; or 
    (3) has received 36 months or more of AFDC over the last 60 
months. 
    (c) One hundred percent of the money appropriated for case 
management services as described in subdivision 11 must be 
allocated to counties based on the average number of cases in 
each county described in clause (1).  Money appropriated for 
employment and training services as described in subdivision 1a, 
paragraph (d), other than case management services, 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 cases 
receiving AFDC in the county who are under age 21 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 December 31 of the previous fiscal 
year which either have been open for 36 or more consecutive 
months or have a caretaker who is under age 24 and who has no 
high school or general equivalency diploma.  The average number 
of cases must be based on counts of these cases as of March 31, 
June 30, September 30, and December 31 of the previous year. 
    (2) Twenty percent of the state money must be allocated 
based on the average monthly number of nonpriority caretakers 
cases receiving AFDC in the county for the period ending 
December 31 of the previous fiscal year which are not counted 
under clause (1).  The average number of cases must be based on 
counts of cases as of March 31, June 30, September 30, and 
December 31 of the previous 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 
December 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) (d) No more than 15 percent of the money allocated 
under paragraph (a) (b) and no more than 15 percent of the money 
allocated under paragraph (c) may be used for administrative 
activities. 
    (c) Except as provided in paragraph (d), (e) At least 70 55 
percent of the money allocated to counties under clause (c) must 
be used for case management services and employment and training 
services for caretakers in the priority groups., and up to 30 45 
percent of the money may be used for employment search 
activities and employment and training services for nonpriority 
caretakers.  One hundred percent of the money allocated to 
counties for case management services must be used to provide 
those services to caretakers in the priority groups. 
    (d) A county having a high proportion of nonpriority 
caretakers that interferes with the county's ability to meet the 
70 percent spending requirement of paragraph (c) may, with the 
approval of the commissioner of human services, use up to 40 
percent of the money allocated under this section for 
orientation and employment and training services for nonpriority 
caretakers. 
    (e) (f) Money appropriated to cover the nonfederal share of 
costs for bilingual case management services to refugees for the 
employment and training programs under this section are 
allocated to counties based on each county's proportion of the 
total statewide number of AFDC refugee cases.  However, counties 
with less than one percent of the statewide number of AFDC 
refugee cases do not receive an allocation.  
    (f) (g) 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 and the United States 
Department of Agriculture for the reimbursement and appropriate 
the reimbursed money to the county, the department of jobs and 
training, or employment and training service provider that 
submitted the original bill.  The reimbursed money must be used 
to expand employment and training services. 
    (g) (h) The commissioner of human services shall review 
county expenditures of case management and employment and 
training block grant money at the end of the fourth quarter of 
the biennium and each quarter after that, and may reallocate 
unencumbered or unexpended money allocated under this section to 
those counties that can demonstrate a need for additional 
money.  Reallocation of funds must be based on the formula set 
forth in paragraph (a), excluding the counties that have not 
demonstrated a need for additional funds. 
     (i) The county agency may continue to provide case 
management and supportive services to a participant for up to 90 
days after the participant loses AFDC eligibility, and may 
continue providing a specific employment and training service 
for the duration of that service to a participant if funds for 
the service are obligated or expended prior to the participant 
losing AFDC eligibility. 
    Sec. 13.  Minnesota Statutes 1989 Supplement, section 
256.736, subdivision 18, is amended to read: 
    Subd. 18.  [PROGRAM OPERATION BY INDIAN TRIBES.] (a) The 
commissioner may enter into agreements with any federally 
recognized Indian tribe with a reservation in the state to 
provide employment and training programs under this section to 
members of the Indian tribe receiving AFDC.  For purposes of 
this section, "Indian tribe" means a tribe, band, nation, or 
other organized group or community of Indians that is recognized 
as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians; 
and for which a reservation exists as is consistent with Public 
Law Number 100-485, as amended. 
    (b) Agreements entered into under this subdivision must 
require the governing body of the Indian tribe to fulfill all 
county responsibilities required under this section in operation 
of the employment and training services covered by the contract, 
excluding the county share of costs in subdivision 13 and any 
county function related to AFDC eligibility determination or 
grant payment.  The commissioner may enter into an agreement 
with a consortium of Indian tribes providing the governing body 
of each Indian tribe in the consortium agrees to these 
conditions. 
     (c) Agreements entered into under this subdivision must 
require the Indian tribe to operate the employment and training 
services within a geographic service area not to exceed the 
counties within which a border of the reservation falls.  Indian 
tribes may also operate services in Hennepin and Ramsey counties 
or other geographic areas as approved by the commissioner of 
human services in consultation with the commissioner of jobs and 
training. 
      (d) Agreements entered into under this section must require 
the Indian tribe to operate a federal jobs program under Public 
Law Number 100-485, section 482(i). 
      (e) Agreements entered into under this section must require 
conformity with section 13.46 and any applicable federal 
regulations in the use of data about AFDC recipients. 
     (f) Agreements entered into under this section must require 
financial and program participant activity record keeping and 
reporting in the manner and using the forms and procedures 
specified by the commissioner and that federal reimbursement 
received must be used to expand operation of the employment and 
training services. 
      (g) Agreements entered into under this section must require 
that the Indian tribe coordinate operation of the programs with 
county employment and training programs, Indian Job Training 
Partnership Act programs, and educational programs in the 
counties in which the tribal unit's program operates. 
      (h) Agreements entered into under this section must require 
the Indian tribe to allow inspection of program operations and 
records by representatives of the department. 
    (i) Agreements entered into under this subdivision must 
require the Indian tribe to contract with an have its employment 
and training service provider certified by the commissioner of 
jobs and training for operation of the programs, or become 
certified itself. 
    (j) Agreements entered into under this subdivision must 
require the Indian tribe to specify a starting date for each 
program with a procedure to enable tribal members participating 
in county-operated employment and training services to make the 
transition to the program operated by the tribal unit.  Programs 
must begin on the first day of a month specified by the 
agreement. 
    (k) If the commissioner and Indian tribe enter into an 
agreement, the commissioner, after consulting with the 
commissioner of jobs and training regarding tribal plan status, 
may immediately reallocate county case management and employment 
and training block grant money from the counties in the Indian 
tribe's service area to the Indian tribe, prorating each 
county's annual allocations according to that percentage of the 
number of adult tribal unit members receiving AFDC residing in 
the county compared to the total number of adult AFDC recipients 
residing in the county and also prorating the annual allocation 
according to the month in which the Indian tribe program 
starts.  If the Indian tribe cancels the agreement or fails, in 
the commissioner's judgment, to fulfill any requirement of the 
agreement, the commissioner shall reallocate money back to the 
counties in the Indian tribe's service area. 
     (l) Indian tribe members receiving AFDC and residing in the 
service area of an Indian tribe operating employment and 
training services under an agreement with the commissioner must 
be referred by county agencies in the service area to the Indian 
tribe for employment and training services. 
     (m) The Indian tribe shall bill the commissioner of human 
services for services performed under the contract.  The 
commissioner shall bill the United States Department of Health 
and Human Services for reimbursement.  Federal receipts are 
appropriated to the commissioner to be provided to the Indian 
tribe that submitted the original bill. 
    Sec. 14.  Minnesota Statutes 1988, section 256.7365, 
subdivision 2, is amended to read: 
    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 
section 256.736, subdivision 11. 
    Sec. 15.  Minnesota Statutes 1989 Supplement, section 
256.737, subdivision 1, is amended to read: 
    Subdivision 1.  [ESTABLISHMENT AND PURPOSE.] 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 shall continue the pilot community work experience 
demonstration programs that were approved by January 1, 1984.  
The commissioner may establish additional community work 
experience programs in as many counties as necessary to comply 
with the participation requirements of the Family Support Act of 
1988, Public Law Number 100-485.  Programs established on or 
after July 1, 1989, must be operated on a volunteer basis, and 
must be operated according to the Family Support Act of 1988, 
Public Law Number 100-485. 
    Sec. 16.  Minnesota Statutes 1989 Supplement, section 
256.737, subdivision 1a, is amended to read: 
    Subd. 1a.  [COMMISSIONER'S DUTIES.] The commissioner shall: 
(a) assist counties in the design and implementation of these 
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 June 30, 
1990 1993, unless superseded by permanent rules; (c) seek any 
federal waivers necessary for proper implementation of this 
section in accordance with federal law; and (d) prohibit the 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, 1989.  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. 
    Sec. 17.  Minnesota Statutes 1989 Supplement, section 
256.737, subdivision 2, is amended to read: 
    Subd. 2.  [PROGRAM REQUIREMENTS.] (a) Programs under this 
section are limited to projects that serve a useful public 
service such as:  health, social service, environmental 
protection, education, urban and rural development and 
redevelopment, welfare, recreation, public facilities, public 
safety and child care.  To the extent possible, the prior 
training, skills, and experience of a recipient must be used in 
making appropriate work experience assignments.  
    (b) As a condition to placing a person receiving aid to 
families with dependent children in a program under this 
subdivision, the county agency shall first provide the recipient 
the opportunity to participate in the following services:  
    (1) placement in suitable subsidized or unsubsidized 
employment through participation in job search under section 
256.736, subdivision 14; or 
    (2) basic educational or vocational or occupational 
training for an identifiable job opportunity.  
    (c) If the A recipient refuses who has completed a job 
search under section 256.736, subdivision 14, who is unable to 
secure suitable employment, and a who is not enrolled in an 
approved training program, the county agency may, subject to 
subdivision 1, require the recipient to participate in a 
community work experience program as a condition of eligibility. 
    (d) The county agency shall limit the maximum number of 
hours any participant under this section may be required to work 
in any month to a number equal to the amount of the aid to 
families with dependent children payable to the family divided 
by the greater of the federal minimum wage or the applicable 
state minimum wage. 
    (e) After a participant has been assigned to a position 
under this section for nine months, the participant may not be 
required to continue in that assignment unless the maximum 
number of hours a participant is required to work works is no 
greater than the amount of the aid to families with dependent 
children payable with respect to the family divided by the 
higher of (1) the federal minimum wage or the applicable state 
minimum wage, whichever is greater, or (2) the rate of pay for 
individuals employed in the same or similar occupations by the 
same employer at the same site. 
    (f) After each six months of a recipient's participation in 
an assignment, and at the conclusion of each assignment under 
this section., the county agency shall reassess and revise, as 
appropriate, each participant's employability development plan. 
    (g) The county agency shall apply the grant reduction 
sanctions specified in section 256.736, subdivision 4, clause 
(6), when it is determined that a mandatory participant has 
failed, without good cause, to participate in the program. 
    Sec. 18.  [256.739] [GRANT DIVERSION.] 
    (a) County agencies may, according to section 256.736, 
subdivision 10, develop grant diversion programs that permit 
voluntary participation by AFDC recipients.  A county agency 
that chooses to provide grant diversion as one of its optional 
employment and training services may divert to an employer part 
or all of the AFDC payment for the participant's assistance 
unit, in compliance with federal regulations and laws.  Such 
payments to an employer are to subsidize employment for AFDC 
recipients as an alternative to public assistance payments. 
    (b) County agencies shall limit the length of training to 
nine months.  Placement in a grant diversion training position 
with an employer is for the purpose of training and employment 
with the same employer, who has agreed to retain the person upon 
satisfactory completion of training.  
    (c) Placement of any recipient in a grant diversion 
subsidized training position must be compatible with the 
assessment and employability development plan established for 
the recipient under section 256.736, subdivision 10, paragraph 
(a), clauses (14) and (15).  
    (d) No grant diversion participant may be assigned to fill 
any established, unfilled position vacancy with an employer. 
    (e) In addition to diverting the AFDC grant to the 
employer, employment and training block grant funds may be used 
to subsidize the grant diversion placement. 
    Sec. 19.  Minnesota Statutes 1988, section 256.81, is 
amended to read: 
    256.81 [COUNTY AGENCY, DUTIES.] 
    (1) The county agency shall keep such records, accounts, 
and statistics in relation to aid to families with dependent 
children as the state agency shall prescribe.  
    (2) Each grant of aid to families with dependent children 
shall be paid to the recipient by the county agency unless paid 
by the state agency.  Payment must be by check or electronic 
means except in those instances in which the county agency, 
subject to the rules of the state agency, determines that 
payments for care shall be made to an individual other than the 
parent or relative with whom the dependent child is living or to 
vendors of goods and services for the benefit of the child 
because such parent or relative is unable to properly manage the 
funds in the best interests and welfare of the child.  At the 
request of a recipient, the state or county may make payments 
directly to vendors of goods and services, but only for goods 
and services appropriate to maintain the health and safety of 
the child, as determined by the county. 
    (3) The county shall be paid from state and federal funds 
available therefor the amount provided for in section 256.82.  
    (4) Federal funds available for administrative purposes 
shall be distributed between the state and the counties in the 
same proportion that expenditures were made except as provided 
for in section 256.017.  
    Sec. 20.  Minnesota Statutes 1989 Supplement, section 
256D.01, subdivision 1a, is amended to read: 
    Subd. 1a.  [STANDARDS.] (a) A principal objective in 
providing general assistance is to provide for persons 
ineligible for federal programs who are unable to provide for 
themselves.  The minimum standard of assistance determines the 
total amount of the general assistance grant without separate 
standards for shelter, utilities, or other needs. 
    (b) 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 children and spouse 
and who does not live with a parent or parents or a legal 
custodian.  When the other standards specified in this 
subdivision increase, this standard must also be increased by 
the same percentage. 
    (c) For an assistance unit consisting of a single adult who 
lives with a parent or parents, the general assistance standard 
of assistance is 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, except that the standard may 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, may not be counted in the 
determination of eligibility or benefit level for the assistance 
unit.  Except as provided below, the assistance unit is 
ineligible for general assistance if the available resources or 
the countable income of the assistance unit and the parent or 
parents with whom the assistance unit lives are such that a 
family consisting of the assistance unit's parent or parents, 
the parent or parents' other family members and the assistance 
unit as the only or additional minor child would be financially 
ineligible for general assistance.  For the purposes of 
calculating the countable income of the assistance unit's parent 
or parents, the calculation methods, income deductions, 
exclusions, and disregards used when calculating the countable 
income for a single adult or childless couple must be used. 
     (d) For an assistance unit consisting of a childless 
couple, the standards of assistance are the same as 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, the standard of assistance for 
the other is the second adult standard of the aid to families 
with dependent children program. 
     (e) For an assistance unit consisting of all members of a 
family, the standards of assistance are the same as the 
standards of assistance that apply 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 are the same as the 
standards of assistance that apply to an assistance unit 
composed of the entire family, less the standards of assistance 
for 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.  However, 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 is the same as the special child standard of the 
aid to families with dependent children program.  In no case 
shall the standard for family members who are in the assistance 
unit for general assistance, when combined with the standard for 
family members who are not in the general assistance unit, total 
more than the standard for the entire family if all members were 
in an AFDC assistance unit.  A child may not be excluded from 
the assistance unit unless income intended for its benefit is 
received from a federally aided categorical assistance program 
or supplemental security income.  The income of a child who is 
excluded from the assistance unit may not be counted in the 
determination of eligibility or benefit level for the assistance 
unit. 
    (f) An assistance unit consisting of one or more members of 
a family must have its grant determined using the policies and 
procedures of the aid to families with dependent children 
program.  However, the standard of assistance must be determined 
according to paragraph (e), the first $50 of total child support 
received by an assistance unit in a month must be excluded and 
the balance counted as unearned income, and nonrecurring lump 
sums received by the family must be considered income in the 
month received and a resource in the following months. 
    Sec. 21.  Minnesota Statutes 1988, section 256D.01, is 
amended by adding a subdivision to read: 
    Subd. 1e.  [RULES REGARDING EMERGENCY ASSISTANCE.] In order 
to maximize the use of federal funds, the commissioner shall 
adopt rules, to the extent permitted by federal law, for 
eligibility for the emergency assistance program under aid to 
families with dependent children, and under the terms of 
sections 256D.01 to 256D.21 for general assistance, to require 
use of the emergency program under aid to families with 
dependent children as the primary financial resource when 
available.  The commissioner shall adopt rules for eligibility 
for general assistance of persons with seasonal income and may 
attribute seasonal income to other periods not in excess of one 
year from receipt by an applicant or recipient.  General 
assistance payments may not be made for foster care, child 
welfare services, or other social services.  Vendor payments and 
vouchers may be issued only as authorized in sections 256D.05, 
subdivision 6, and 256D.09. 
    Sec. 22.  Minnesota Statutes 1988, section 256D.02, 
subdivision 5, is amended to read: 
    Subd. 5.  "Family" means 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. applicant or 
recipient and the following persons who reside with the 
applicant or recipient:  
    (1) the applicant's spouse; 
    (2) any minor child of whom the applicant is a parent, 
stepparent, or legal custodian, and that child's minor siblings, 
including half-siblings and step-siblings; 
    (3) the other parent of the applicant's minor child or 
children together with that parent's minor children, and, if 
that parent is a minor, his or her parents, stepparents, legal 
guardians, and minor siblings; and 
    (4) if the applicant or recipient is a minor, the minor's 
parents, stepparents, or legal guardians, and any other minor 
children for whom those parents, stepparents, or legal guardians 
are financially responsible.  
    A "family" must contain at least one minor child and at 
least one of that child's natural or adoptive parents, 
stepparents, or legal custodians. 
    Sec. 23.  Minnesota Statutes 1988, 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 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, and payments 
made on behalf of an applicant or recipient which the applicant 
or recipient could legally require to be paid in cash to himself 
or herself, must be included as income. 
    Sec. 24.  Minnesota Statutes 1988, section 256D.02, 
subdivision 12, is amended to read: 
    Subd. 12.  "Local County agency" means the agency 
designated by the county board of commissioners, human services 
boards, county welfare boards in the several counties of the 
state or multicounty welfare boards or departments where those 
have been established in accordance with law.  
    Sec. 25.  Minnesota Statutes Second 1989 Supplement, 
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 and 
work readiness grants up to the standards of sections 256D.01, 
subdivision 1a, and 256D.051, and according to procedures 
established by the commissioner, except as provided for under 
section 256.017 and except that, after December 31, 1987 until 
January 1, 1991, state aid is reduced to 65 percent of all work 
readiness assistance 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.051.  
    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. 
    Beginning July 1, 1991, the state will reimburse counties 
according to the payment schedule in section 256.025 for the 
county share of local agency expenditures made under this 
subdivision from January 1, 1991, on.  Payment to counties under 
this subdivision is subject to the provisions of section 256.017.
    Sec. 26.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 1a, is amended to read: 
    Subd. 1a.  [WORK READINESS PAYMENTS.] (a) Grants of work 
readiness shall be determined using the standards of assistance, 
exclusions, disregards, and procedures which are used in the 
general assistance program.  Work readiness shall be granted in 
an amount that, when added to the nonexempt income actually 
available to the assistance unit, the total amount equals the 
applicable standard of assistance.  
    (b) Work readiness payments must be provided to persons 
determined eligible for the work readiness program as provided 
in this subdivision except when the special payment provisions 
in subdivision 1b are utilized.  The initial payment must be 
prorated to provide assistance for the period beginning with the 
date the completed application is received by the county agency 
or the date the assistance unit meets all work readiness 
eligibility factors, whichever is later, and ending on the final 
day of that month.  The amount of the first payment must be 
determined by dividing the number of days to be covered under 
the payment by the number of days in the month, to determine the 
percentage of days in the month that are covered by the payment, 
and multiplying the monthly payment amount by this percentage.  
Subsequent payments must be paid monthly on the first day of 
each month. 
    There shall be an initial certification period which shall 
begin on the date the completed application is received by the 
county agency or the date that the assistance unit meets all 
work readiness eligibility factors, whichever is later, and 
ending on the date that mandatory registrants in the assistance 
unit must attend a work readiness orientation.  This initial 
certification period may not cover a period in excess of 30 
calendar days.  All mandatory registrants in the assistance unit 
must be informed of the period of certification, the requirement 
to attend orientation, and that work readiness eligibility will 
end at the end of the certification period unless the 
registrants attend orientation.  A registrant who fails to 
comply with requirements during the certification period, 
including attendance at orientation, will lose work readiness 
eligibility without notice under section 256D.101, subdivision 
1, paragraph (b). 
    At the time the county agency notifies the assistance unit 
that it is eligible for work readiness assistance, the county 
agency must inform all mandatory registrants in the assistance 
unit that they must attend an orientation within 30 days, and 
that work readiness eligibility will end at the end of the month 
in which the orientation is scheduled unless the registrants 
attend orientation.  A registrant who fails, without good cause, 
to comply with requirements during this time period, including 
attendance at orientation, will lose work readiness eligibility 
without notice under section 256D.101, subdivision 1, paragraph 
(b).  The registrant shall, however, be sent a notice, on or 
before the date that eligibility ends, which informs the 
registrant that work readiness eligibility has ended in 
accordance with this section for failure to comply with work 
readiness requirements.  The notice shall set forth the factual 
basis for such determination, and advises the registrant of the 
right to reinstate eligibility upon a showing of good cause for 
the failure to meet the requirements.  Subsequent assistance 
must not be issued unless the person completes an application, 
is determined eligible, and attends an orientation, or 
demonstrates that the person had good cause for failing to 
comply with the requirement.  
    Sec. 27.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 1b, is amended to read: 
    Subd. 1b.  [SPECIAL PAYMENT PROVISIONS.] A county agency 
may, at its option, provide work readiness payments as provided 
under section 256D.05, subdivision 6, during the initial 
certification period prorated to cover only an initial 
certification period.  The initial certification period shall 
cover the time from the date the completed application is 
received by the county agency or the date that the assistance 
unit meets all work readiness eligibility factors, whichever is 
later, and ending on the date that mandatory registrants in the 
assistance unit must attend a work readiness orientation.  This 
initial certification period may not cover a period in excess of 
30 calendar days.  All mandatory registrants in the assistance 
unit must be informed of the period of certification, the 
requirement to attend orientation, and that work readiness 
eligibility will end at the end of the certification period 
unless the registrants attend orientation.  A registrant who 
fails, without good cause, to comply with requirements during 
the certification period, including attendance at orientation, 
will lose work readiness eligibility without notice under 
section 256D.101, subdivision 1, paragraph (b).  The registrant 
shall, however, be sent a notice, on or before the date that 
eligibility ends, which informs the registrant that work 
readiness eligibility has ended in accordance with this section 
for failure to comply with work readiness requirements.  The 
notice shall set forth the factual basis for such determination, 
and advises the registrant of the right to reinstate eligibility 
upon a showing of good cause for the failure to meet the 
requirements.  If all mandatory registrants attend orientation, 
an additional grant of work readiness assistance must be issued 
to cover the period beginning the day after the scheduled 
orientation and ending on the final day of that month.  
Subsequent payments of work readiness shall be governed by 
subdivision 1a or section 256D.05, subdivision 6.  If one or 
more mandatory registrants from the assistance unit fail to 
attend the orientation, those who failed to attend orientation 
will be removed from the assistance unit without further notice 
and shall be ineligible for additional assistance.  Subsequent 
assistance to such persons shall be dependent upon the person 
completing application for assistance and, being determined 
eligible, and attending an orientation or demonstrating that the 
person had good cause for failing to comply with the requirement.
    A local agency that utilizes the provisions in this 
subdivision must implement the provisions consistently for all 
applicants or recipients in the county.  A local agency must pay 
emergency general assistance to a registrant whose prorated work 
readiness payment does not meet emergency needs.  A local agency 
which elects to pay work readiness assistance on a prorated 
basis under this subdivision may not provide payments under 
section 256D.05, subdivision 6, for the same time period.  A 
county agency may, at its option, provide work readiness 
payments as provided under section 256D.05, subdivision 6, 
during the initial certification period.  
    Sec. 28.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 2, is amended to read: 
    Subd. 2.  [LOCAL AGENCY DUTIES.] (a) The local agency shall 
provide to registrants a work readiness program.  The work 
readiness program must include: 
    (1) orientation to the work readiness program; 
    (2) an individualized employability assessment and 
development plan that includes assessment of literacy, ability 
to communicate in the English language, eligibility for 
displaced homemaker services under section 268.96, educational 
history, and that estimates the length of time it will take the 
registrant to obtain employment.  The employability assessment 
and development plan must be completed in consultation with the 
registrant, must assess the registrant's assets, barriers, and 
strengths, and must identify steps necessary to overcome 
barriers to employment; 
    (3) referral to available accredited remedial or skills 
training programs designed to address registrant's barriers to 
employment; 
    (4) referral to available programs including the Minnesota 
employment and economic development program; 
    (5) a job search program, including job seeking skills 
training; and 
    (6) other activities, including public employment 
experience programs to the extent of available resources 
designed by the local agency to prepare the registrant for 
permanent employment. 
     The work readiness program may include a public sector or 
nonprofit work experience component only if the component is 
established according to section 268.90. 
    In order to allow time for job search, the local agency may 
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 shall prepare an annual plan for the 
operation of its work readiness program.  The plan must be 
submitted to and approved by the commissioner of jobs and 
training.  The plan must include: 
     (1) a description of the services to be offered by the 
local agency; 
     (2) a plan to coordinate the activities of all public 
entities providing employment-related services in order to avoid 
duplication of effort and to provide services more efficiently; 
     (3) a description of the factors that will be taken into 
account when determining a client's employability development 
plan; and 
     (4) provisions to assure that applicants and recipients are 
evaluated for eligibility for general assistance prior to 
termination from the work readiness program. 
    Sec. 29.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 3, is amended to read: 
    Subd. 3.  [REGISTRANT DUTIES.] In order to receive work 
readiness assistance, a registrant shall:  (1) cooperate with 
the local agency in all aspects of the work readiness program; 
(2) accept any suitable employment, including employment offered 
through the job training partnership act, Minnesota employment 
and economic development act, and other employment and training 
options; and (3) participate in work readiness activities 
assigned by the local agency.  The local agency may terminate 
assistance to a registrant who fails to cooperate in the work 
readiness program, as provided in subdivision 3b 3c.  
    Sec. 30.  Minnesota Statutes 1989 Supplement, section 
256D.051, subdivision 8, is amended to read: 
    Subd. 8.  [VOLUNTARY QUIT.] A person is not eligible for 
work readiness payments or services if, without good cause, the 
person refuses a legitimate offer of, or quits, 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 
terminated from the work readiness program and disqualified for 
two months according to rules adopted by the commissioner. 
    Sec. 31.  Minnesota Statutes 1988, section 256D.052, 
subdivision 5, is amended to read: 
    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. 
    Sec. 32.  Minnesota Statutes 1988, 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 an applicant or recipient relates facts to the 
local agency which may be sufficient to constitute an emergency 
situation, the local agency shall advise the recipient person of 
the procedure for applying for assistance pursuant to this 
subdivision.  
    Sec. 33.  Minnesota Statutes 1989 Supplement, section 
256D.09, subdivision 2a, is amended to read: 
    Subd. 2a.  [REPRESENTATIVE PAYEE.] Notwithstanding 
subdivision 1, the commissioner shall adopt rules, and may adopt 
emergency rules, governing the assignment of a representative 
payee and management of the general assistance or work readiness 
assistance grant of a drug dependent person as defined in 
section 254A.02, subdivision 5.  The representative payee is 
responsible for deciding how the drug dependent person's 
benefits can best be used to meet that person's needs.  The 
determination of drug dependency must be made by an assessor 
qualified under Minnesota Rules, part 9530.6615, subpart 2, to 
perform an assessment of chemical use.  Upon receipt of the 
assessor's determination of drug dependency, the county shall 
determine whether a representative payee will be assigned to 
manage the person's benefits.  The chemical use assessment, the 
decision to refer a person for the assessment, and the county 
determination of whether a representative payee will be assigned 
are subject to the administrative and judicial review provisions 
of section 256.045.  However, notwithstanding any provision of 
section 256.045 to the contrary, an applicant or recipient who 
is referred for an assessment and is otherwise eligible to 
receive a general assistance or work readiness benefit, may only 
be provided with emergency general assistance or vendor payments 
pending the outcome of an administrative or judicial review.  
If, at the time of application or at any other time, there is a 
reasonable basis for questioning whether a person can 
responsibly manage that person's money due to possible is drug 
dependency dependent, the person may be referred for a chemical 
health assessment, and only emergency assistance payments or 
general assistance vendor payments may be provided until the 
assessment is complete and the results of the assessment made 
available to the county agency.  A reasonable basis for 
questioning whether a person is drug dependent exists when: 
    (1) the person has required detoxification two or more 
times in the past 12 months; 
    (2) the person appears intoxicated at the county agency as 
indicated by two or more of the following: 
    (i) the odor of alcohol; 
    (ii) slurred speech; 
    (iii) disconjugate gaze; 
    (iv) impaired balance; 
    (v) difficulty remaining awake; 
    (vi) consumption of alcohol; 
    (vii) responding to sights or sounds that are not actually 
present; 
    (viii) extreme restlessness, fast speech, or unusual 
belligerence; 
    (3) the person has been involuntarily committed for drug 
dependency at least once in the past 12 months; or 
    (4) the person has received treatment, including 
domiciliary care, for drug abuse or dependency at least twice in 
the past 12 months.  
     The assignment to representative payee status must be 
reviewed at least every 12 months.  The county agency shall 
designate the representative payee after consultation with the 
recipient.  The county agency shall select the representative 
payee from appropriate individuals, or public or nonprofit 
agencies, including those suggested by the recipient, but the 
county agency's designation of representative payee is prevails, 
subject to the administrative and judicial review provisions of 
section 256.045. 
    Sec. 34.  Minnesota Statutes 1989 Supplement, section 
256H.01, subdivision 7, is amended to read: 
    Subd. 7.  [EDUCATION PROGRAM.] "Education program" means 
remedial or basic education or English as a second language 
instruction, a program leading to a general equivalency or high 
school diploma, post-secondary programs excluding 
postbaccalaureate programs, and other education and training 
needs as documented in an employability plan that is developed 
by an employment and training service provider certified by the 
commissioner of jobs and training or an individual designated by 
the county to provide employment and training services.  The 
employability plan must outline education and training needs of 
a recipient, meet state requirements for employability 
plans, meet the requirements of Minnesota Rules, parts 9565.5000 
to 9565.5200 and meet the requirements of other programs that 
provide federal reimbursement for child care services.  The 
county must incorporate into a recipient's employability plan an 
educational plan developed by a post-secondary institution for a 
nonpriority AFDC recipient who is enrolled or planning to enroll 
at that institution.  
    Sec. 35.  Minnesota Statutes 1989 Supplement, section 
256H.01, subdivision 8, is amended to read: 
    Subd. 8.  [EMPLOYMENT PROGRAM.] "Employment program" means 
employment of recipients financially eligible for child care 
assistance, preemployment activities, or other activities 
approved in an employability plan that is developed by an 
employment and training service provider certified by the 
commissioner of jobs and training or an individual designated by 
the county to provide employment and training services.  The 
plans must meet the requirements of Minnesota Rules, parts 
9565.5000 to 9565.5200, and other programs that provide federal 
reimbursement for child care services. 
    Sec. 36.  Minnesota Statutes 1989 Supplement, section 
256H.01, subdivision 12, is amended to read: 
    Subd. 12.  [PROVIDER.] "Provider" means a child care 
license holder who operates a family day care home, a group 
family day care home, a day care center, a nursery school, a day 
nursery, an extended day school age child care program; a person 
exempt from licensure who meets child care standards established 
by the state board of education; or a legal nonlicensed 
caregiver who is at least 18 years of age, and who is not a 
member of the AFDC assistance unit.  
     Sec. 37.  Minnesota Statutes 1988, section 256H.01, is 
amended by adding a subdivision to read: 
    Subd. 16.  [TRANSITION YEAR FAMILIES.] "Transition year 
families" means families who lose eligibility for AFDC due to 
increased hours of employment, increased income from employment, 
or the loss of income disregards due to time limitations, as 
provided under Public Law Number 100-485.  
    Sec. 38.  Minnesota Statutes 1988, section 256H.01, is 
amended by adding a subdivision to read: 
    Subd. 17.  [CHILD CARE FUND.] "Child care fund" means a 
program providing:  
    (1) financial assistance for child care to parents engaged 
in employment or education and training leading to employment; 
and 
    (2) grants to develop, expand, and improve the access and 
availability of child care services statewide. 
    Sec. 39.  Minnesota Statutes 1989 Supplement, section 
256H.03, subdivision 2, is amended to read: 
    Subd. 2.  [ALLOCATION; LIMITATIONS.] The commissioner shall 
allocate 66 percent of the money appropriated under the child 
care fund for the basic sliding fee program and shall allocate 
those funds between the metropolitan area, comprising the 
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
Washington, and the area outside the metropolitan area as 
follows: 
    (1) 50 percent of the money shall be allocated among the 
counties on the basis of the number of families below the 
poverty level, as determined from the most recent census or 
special census; and 
    (2) 50 percent of the money shall be allocated among the 
counties on the basis of the counties' portion of the AFDC 
caseload for the preceding state fiscal year. 
    If, under the preceding formula, either the seven-county 
metropolitan area consisting of Anoka, Carver, Dakota, Hennepin, 
Ramsey, Scott, and Washington counties or the area consisting of 
counties outside the seven-county metropolitan area is allocated 
more than 55 percent of the basic sliding fee funds, each 
county's allocation in that area shall be proportionally reduced 
until the total for the area is no more than 55 percent of the 
basic sliding fee funds.  The amount of the allocations 
proportionally reduced shall be used to proportionally increase 
each county's allocation in the other area. 
    Sec. 40.  Minnesota Statutes 1989 Supplement, section 
256H.03, subdivision 2a, is amended to read: 
    Subd. 2a.  [ELIGIBLE RECIPIENTS.] Families that meet the 
eligibility requirements under sections 256H.10, except AFDC 
recipients and transition year families, and 256H.11 are 
eligible for child care assistance under the basic sliding fee 
program.  From July 1, 1990, to June 30, 1991, a county may not 
accept new applications for the basic sliding fee program unless 
the county can demonstrate that its state money expenditures for 
the basic sliding fee program for this period will not exceed 95 
percent of the county's allocation of state money for the fiscal 
year ending June 30, 1990.  As basic sliding fee program money 
becomes available to serve new families, eligible families whose 
benefits were terminated during the fiscal year ending June 30, 
1990, for reasons other than loss of eligibility shall be 
reinstated.  Families enrolled in the basic sliding fee program 
as of July 1, 1990, shall be continued until they are no longer 
eligible.  Counties shall make vendor payments to the child care 
provider or pay the parent directly for eligible child care 
expenses on a reimbursement basis. 
    Sec. 41.  Minnesota Statutes 1989 Supplement, section 
256H.03, subdivision 2b, is amended to read: 
    Subd. 2b.  [FUNDING PRIORITY.] (a) First priority for child 
care assistance under the basic sliding fee program must be 
given to eligible recipients non-AFDC families who do not have a 
high school or general equivalency diploma or who need remedial 
and basic skill courses in order to pursue employment or to 
pursue education leading to employment.  Priority for child care 
assistance under the basic sliding fee program must be given to 
non-AFDC families for this first priority unless a county can 
demonstrate that funds available in the AFDC child care program 
allocation are inadequate to serve all AFDC families needing 
child care services.  Within this priority, the following 
subpriorities must be used: 
    (1) child care needs of minor parents; 
    (2) child care needs of parents under 21 years of age; and 
    (3) child care needs of other parents within the priority 
group described in this paragraph. 
    (b) Second priority must be given to all other parents who 
are eligible for the basic sliding fee program. 
    Sec. 42.  Minnesota Statutes 1989 Supplement, section 
256H.05, subdivision 1b, is amended to read: 
    Subd. 1b.  [ELIGIBLE RECIPIENTS.] Families eligible for 
guaranteed child care assistance under the AFDC child care 
program are families receiving AFDC and former AFDC recipients 
who, during their first year of employment, continue to require 
a child care subsidy in order to retain employment.  The 
commissioner shall designate between 20 to 60 percent of the 
AFDC child care program as the minimum to be reserved for AFDC 
recipients in an educational program.  If a family meets the 
eligibility requirements of the AFDC child care program and the 
caregiver has an approved employability plan that meets the 
requirements of appropriate federal reimbursement programs, that 
family is eligible for child care assistance.: 
    (1) persons receiving services under section 256.736; 
    (2) AFDC recipients who are employed; and 
    (3) persons who are members of transition year families 
under section 256H.01, subdivision 16. 
    Sec. 43.  Minnesota Statutes 1989 Supplement, section 
256H.05, subdivision 1c, is amended to read: 
    Subd. 1c.  [FUNDING PRIORITY.] Priority for child care 
assistance under the AFDC child care program shall be given to 
AFDC priority groups who are engaged in an employment or 
education program consistent with their employability plan.  If 
the AFDC recipient is employed, the AFDC child care disregard 
shall be applied before the remaining child care costs are 
subsidized by the AFDC child care program.  AFDC recipients 
leaving AFDC due to their earned income, who have been on AFDC 
three out of the last six months and who apply for child care 
assistance under subdivision 1b within the first year after 
leaving AFDC, shall be entitled to one year of child care 
subsidies during the first year of employment.  AFDC recipients 
must be put on a waiting list for the basic sliding fee program 
when they leave AFDC due to their earned income. 
    Sec. 44.  Minnesota Statutes 1989 Supplement, section 
256H.05, subdivision 2, is amended to read: 
    Subd. 2.  [COOPERATION WITH OTHER PROGRAMS.] 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 all AFDC 
recipients who receive services under section 256.736.  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 child care 
assistance from the county of their residence responsible for 
the current employability development plan.  
    Sec. 45.  Minnesota Statutes 1989 Supplement, section 
256H.05, subdivision 5, is amended to read: 
    Subd. 5.  [FEDERAL REIMBURSEMENT.] Counties shall maximize 
their federal reimbursement under the AFDC special needs program 
Public Law Number 100-485 or other federal reimbursement 
programs for money spent for persons listed in this section and 
section 256H.03.  The commissioner shall allocate any federal 
earnings to the county to be used to expand child care services 
under these sections. 
    Sec. 46.  Minnesota Statutes 1989 Supplement, section 
256H.08, is amended to read: 
    256H.08 [USE OF MONEY.] 
    Money for persons listed in sections 256H.03, subdivision 
2a, and 256H.05, subdivision 1b, 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.  Counties may not 
limit the duration of child care subsidies for a person in an 
employment or educational program, except when the person is 
found to be ineligible under the child care fund eligibility 
standards.  Any limitation must be based on a person's 
employability plan in the case of an AFDC recipient, and county 
policies included in the child care allocation plan.  Time 
limitations for child care assistance, as specified in Minnesota 
Rules, parts 9565.5000 to 9565.5200, do not apply to basic or 
remedial educational programs needed to prepare for 
post-secondary education or employment.  These programs 
include:  high school, general equivalency diploma, and English 
as a second language.  Programs exempt from this time limit must 
not run concurrently with a post-secondary program.  Financially 
eligible students who have received child care assistance for 
one academic year shall be provided child care assistance in the 
following academic year if funds allocated under sections 
256H.03 and 256H.05.  If a student an AFDC recipient who is 
receiving AFDC child care assistance under this chapter moves to 
another county as specified authorized in their employability 
plan, continues to be enrolled in a post-secondary institution, 
and continues to be eligible for AFDC child care assistance 
under this chapter, the student must receive continued child 
care assistance from their county of origin without interruption 
to the limit of the county's allocation participate in 
educational or training programs authorized in their 
employability development plans, and continues to be eligible 
for AFDC child care assistance under this chapter, the AFDC 
caretaker must receive continued child care assistance from the 
county responsible for their current employability development 
plan, without interruption. 
    Sec. 47.  Minnesota Statutes 1989 Supplement, section 
256H.09, subdivision 1, is amended to read: 
    Subdivision 1.  [QUARTERLY REPORTS.] The commissioner shall 
specify requirements for reports, including quarterly fiscal 
reports, according to section 256.01, subdivision 2, paragraph 
(17).  Counties shall submit on forms prescribed by the 
commissioner a quarterly financial and program activity report.  
The failure to submit a complete report by the end of the 
quarter in which the report is due may result in a reduction of 
child care fund allocations equal to the next quarter's 
allocation.  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 and other federal reimbursement 
programs; 
    (3) a description of activities and concomitant 
expenditures of child care money; 
    (4) information on money encumbered at the quarter's end 
but not yet reimbursable, for use in adjusting allocations as 
provided in sections section 256H.03, subdivision 3, and 
256H.05, subdivision 1a; 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.  
    Sec. 48.  Minnesota Statutes 1988, section 256H.10, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY FACTORS.] 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: 
    (a) receive aid to families with dependent children and are 
receiving employment and training services under section 
256.736; 
    (b) have household income below the eligibility levels for 
aid to families with dependent children; or 
    (c) have household income within a range established by the 
commissioner. 
    (d) 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. 
    Sec. 49.  Minnesota Statutes 1989 Supplement, section 
256H.10, subdivision 3, is amended to read: 
    Subd. 3.  [PRIORITIES; ALLOCATIONS.] If more than 75 
percent of the available money is provided to any one of the 
groups described in section 256H.03 or 256H.05, the county board 
shall document to the commissioner the reason the group received 
a disproportionate share unless approved in the plan.  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 that remain to be served after the county has 
complied with the priority requirements of sections section 
256H.03 and 256H.05.  Counties that have established a 
priority for non-AFDC families beyond those established under 
section 256H.03 must submit the policy in the annual allocation 
plan. 
    Sec. 50.  Minnesota Statutes 1988, section 256H.10, 
subdivision 4, is amended to read: 
    Subd. 4.  [ELIGIBILITY; ANNUAL INCOME; CALCULATION.] Annual 
income of the applicant family is the current monthly income of 
the family multiplied by 12 or the income for the 12-month 
period immediately preceding the date of application, 
whichever or income calculated by the method which provides the 
most accurate assessment of income available to the family.  
Self-employment income must be calculated based on gross 
receipts less operating expenses.  Income must be redetermined 
when the family's income changes, but no less often than every 
six months.  Income must be verified with documentary evidence.  
If the applicant does not have sufficient evidence of income, 
verification must be obtained from the source of the income. 
    Sec. 51.  Minnesota Statutes 1989 Supplement, section 
256H.11, subdivision 1, is amended to read: 
    Subdivision 1.  [ASSISTANCE FOR PERSONS SEEKING AND 
RETAINING EMPLOYMENT.] Persons who are seeking employment and 
who are eligible for assistance under this section are eligible 
to receive the equivalent of up to 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 
continued child care assistance.  
    Sec. 52.  Minnesota Statutes 1989 Supplement, section 
256H.15, subdivision 1, is amended to read: 
    Subdivision 1.  [SUBSIDY RESTRICTIONS.] (a) Until June 30, 
1991, the maximum child care rate is determined under this 
paragraph.  The county board may limit the subsidy allowed by 
setting a maximum on the provider child care rate that the 
county shall subsidize.  The maximum rate set by any county 
shall not be lower than 110 percent or higher than 125 percent 
of the median rate in that county for like care arrangements for 
all types of care, including special needs and handicapped care, 
as determined by the commissioner.  If the county sets a maximum 
rate, it must pay the provider's rate for each child receiving a 
subsidy, up to the maximum rate set by the county.  In order to 
be reimbursed for more than 110 percent of the median rate, a 
provider with employees must pay wages for teachers, assistants, 
and aides that are more than 110 percent of the county average 
rate for child care workers.  If a county does not set a maximum 
provider rate, it shall pay the provider's rate for every child 
in care.  The maximum state payment is 125 percent of the median 
provider rate.  If the county has not set a maximum provider 
rate and the provider rate is greater than 125 percent of the 
median provider rate in the county, the county shall pay the 
amount in excess of 125 percent of the median provider rate from 
county funding sources.  The county shall pay the provider's 
full charges for every child in care, up to the maximum 
established.  The commissioner shall determine the maximum rate 
for each type of care, including special needs and handicapped 
care.  
    (b) Effective July 1, 1991, the maximum rate paid for child 
care assistance under the child care fund is the maximum rate 
eligible for federal reimbursement except as allowed under 
subdivision 2.  The county shall pay the provider's full charges 
for every child in care, up to the maximum established.  The 
commissioner shall determine the maximum rate for each type of 
care, including special needs and handicapped care.  
    (c) When the provider charge is greater than the maximum 
provider rate set by the county allowed, the parent is 
responsible for payment of the difference in the rates in 
addition to any family copayment fee. 
    Sec. 53.  Minnesota Statutes 1989 Supplement, section 
256H.15, subdivision 2, is amended to read: 
    Subd. 2.  [PROVIDER RATE BONUS FOR ACCREDITATION.] 
Currently accredited child care centers shall be paid a five ten 
percent bonus above the maximum rate established by the county 
in subdivision 1, if the center can demonstrate that its staff 
wages are greater than 110 percent of the average wages in the 
county for similar care, up to the actual provider rate.  A 
family day care provider shall be paid a five ten percent bonus 
above the maximum rate established by the county in subdivision 
1, if the provider holds a current child early childhood 
development associate certificate credential approved by the 
commissioner, up to the actual provider rate.  A county is not 
required to review wages under this subdivision unless the 
county has set a maximum above 110 percent for all providers 
with employees in their county. 
    Sec. 54.  Minnesota Statutes 1988, section 256H.17, is 
amended to read: 
    256H.17 [EXTENSION OF EMPLOYMENT OPPORTUNITIES.] 
    The county board shall insure that child care services 
available to county eligible residents are well advertised and 
that everyone who receives or applies for aid to families with 
dependent children is informed of training and employment 
opportunities and programs, including child care assistance and 
child care resource and referral services. 
    Sec. 55.  Minnesota Statutes 1989 Supplement, section 
256H.21, subdivision 9, is amended to read: 
    Subd. 9.  [MINI-GRANTS.] "Mini-grants" means child care 
grants for facility improvements that are less than up to $1,000.
Mini-grants include, but are not limited to, improvements to 
meet licensing requirements, improvements to expand a child care 
facility or program, toys and equipment, start-up costs, staff 
training, and development costs. 
    Sec. 56.  Minnesota Statutes 1989 Supplement, section 
256H.22, subdivision 2, is amended to read: 
    Subd. 2.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
shall allocate grant money appropriated for child care service ( 
development and resource and referral services) among the 
development regions designated by the governor under section 
462.385, as follows: 
    (1) 50 percent of the child care service development grant 
appropriation shall be allocated to the metropolitan area 
economic development region; and 
    (2) 50 percent of the child care service development grant 
appropriation shall be allocated to greater Minnesota counties 
economic development regions other than the metropolitan 
economic development region. 
    (b) The following formulas shall be used to allocate grant 
appropriations among the counties economic development regions:  
    (1) 50 percent of the funds shall be allocated in 
proportion to the ratio of children under 12 years of age in 
each county economic development region to the total number of 
children under 12 years of age in all counties economic 
development regions; and 
    (2) 50 percent of the funds shall be allocated in 
proportion to the ratio of children under 12 years of age in 
each county economic development region to the number of 
licensed child care spaces currently available in each county 
economic development region. 
    (c) Out of the amount allocated for each economic 
development region and county, the commissioner shall award 
grants based on the recommendation of the grant review advisory 
task force.  In addition, the commissioner shall award no more 
than 75 percent of the money either to child care facilities for 
the purpose of facility improvement or interim financing or to 
child care workers for staff training expenses.  The 
commissioner shall award no more than 50 percent of the money 
for resource and referral services to maintain or improve an 
existing resource and referral until all regions are served by 
resource and referral programs. 
    (d) Any funds unobligated may be used by the commissioner 
to award grants to proposals that received funding 
recommendations by the advisory task force but were not awarded 
due to insufficient funds.  
    Sec. 57.  Minnesota Statutes 1989 Supplement, section 
256H.22, subdivision 3, is amended to read: 
    Subd. 3.  [CHILD CARE REGIONAL ADVISORY COMMITTEES.] Child 
care regional advisory committees shall review and make 
recommendations to the commissioner on applications for service 
development grants under this section.  The commissioner shall 
appoint the child care regional advisory committees in each 
governor's economic development regions.  People appointed under 
this subdivision must represent the following constituent 
groups:  family child care providers, group center providers, 
parent users, health services, social services, public schools, 
and other citizens with demonstrated interest in child care 
issues.  Members of the advisory task force with a direct 
financial interest in a pending grant proposal may not provide a 
recommendation or participate in the ranking of that grant 
proposal.  Committee members may be reimbursed for their actual 
travel, child care, and child care provider substitute expenses 
for up to six committee meetings per year.  The child care 
regional advisory committees shall complete their reviews and 
forward their recommendations to the commissioner by the date 
specified by the commissioner. 
    Sec. 58.  Minnesota Statutes 1989 Supplement, section 
256H.22, subdivision 10, is amended to read: 
    Subd. 10.  [ADVISORY TASK FORCE.] The commissioner shall 
convene a statewide advisory task force which shall advise the 
commissioner on grants and other child care issues.  The 
statewide advisory task force shall review and make 
recommendations to the commissioner on child care resource and 
referral grants and on statewide service development and child 
care training grants.  Members of the advisory task force with a 
direct financial interest in a resource and referral or a 
statewide training proposal may not provide a recommendation or 
participate in the ranking of that grant proposal.  Each 
regional grant review committee formed under subdivision 3, 
shall appoint a representative to the advisory task force.  The 
commissioner may convene meetings of the task force as needed.  
Terms of office and removal from office are governed by the 
appointing body.  The commissioner may compensate members for 
their expenses of travel to, child care, and child care provider 
substitute expenses for meetings of the task force.  The members 
of the child care advisory task force shall also meet once with 
the interagency advisory committee on child care under section 
256H.25. 
    Sec. 59.  Minnesota Statutes 1989 Supplement, section 
256I.05, subdivision 1, is amended to read: 
    Subdivision 1.  [MONTHLY RATES.] Monthly payments for rates 
negotiated by a county agency on behalf of a recipient living in 
a negotiated rate residence may be paid at the rates in effect 
on March 1, 1985, not to exceed $919.80 in 1989.  These rates 
The maximum negotiated rate must be increased annually according 
to subdivision 7.  The county agency may provide an annual 
increase in the March 1, 1985, payment rate using the formula in 
subdivision 7, provided the resulting rate does not exceed the 
maximum negotiated rate.  The county agency may at any time 
negotiate a lower payment rate than the rate that would 
otherwise be paid under this subdivision and subdivision 7. 
    Sec. 60.  Minnesota Statutes 1989 Supplement, section 
256I.05, subdivision 7, is amended to read: 
    Subd. 7.  [RATE INCREASES.] The maximum negotiated rate 
must be adjusted by the annual percentage change in the consumer 
price index (CPI-U U.S. city average), as published by the 
Bureau of Labor Statistics between the previous two Septembers, 
new series index (1967-100) or 2.5 percent, whichever is 
less.  A county may provide an annual negotiated rate increase 
that does not exceed the percentage increase in the maximum 
negotiated rate. 
    Sec. 61.  Minnesota Statutes 1989 Supplement, section 
268.0111, subdivision 4, is amended to read: 
    Subd. 4.  [EMPLOYMENT AND TRAINING SERVICES.] "Employment 
and training services" means programs, activities, and services 
related to job training, job placement, and job creation 
including job service programs, job training partnership act 
programs, wage subsidies, work readiness programs, job search, 
counseling, case management, community work experience programs, 
displaced homemaker programs, disadvantaged job training 
programs, grant diversion, employment experience programs, youth 
employment programs, conservation corps, apprenticeship 
programs, community investment programs, supported work 
programs, community development corporations, economic 
development programs, and opportunities industrialization 
centers. 
    Sec. 62.  Minnesota Statutes 1988, section 268.673, 
subdivision 3, is amended to read: 
    Subd. 3.  [DEPARTMENT OF JOBS AND TRAINING.] The 
commissioner shall supervise wage subsidies and shall provide 
technical assistance to the eligible local service units for the 
purpose of delivering wage subsidies.  
    Sec. 63.  Minnesota Statutes 1988, section 268.673, 
subdivision 5, is amended to read: 
    Subd. 5.  [REPORT.] Each entity delivering wage subsidies 
shall report to the commissioner and the coordinator on a 
quarterly basis:  
    (1) the number of persons 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; 
    (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; 
    (5) the age, educational experience, family status, gender, 
priority group status, race, and work experience of each person 
in the program; 
    (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 
    (8) any other information requested by the commissioner.  
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. 64.  Minnesota Statutes 1988, section 268.6751, 
subdivision 1, 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 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) Five percent of the money available for wage subsidy 
programs must be allocated at the discretion of the 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.  
    (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). 
    Sec. 65.  Minnesota Statutes 1988, section 268.676, 
subdivision 2, is amended to read: 
    Subd. 2.  [AMONG EMPLOYERS.] Allocation of funds among 
eligible employers within an eligible a 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. 66.  Minnesota Statutes 1988, section 268.677, 
subdivision 2, is amended to read: 
    Subd. 2.  Reimbursement to the commissioner for the costs 
of administering wage subsidies must not exceed one-half percent 
of the money appropriated.  Reimbursement to an eligible local 
service unit for the costs of administering wage subsidies must 
not exceed five percent and for the purchase of supplies and 
materials necessary to create permanent improvements to public 
property must not exceed one percent of the money allocated to 
that local service unit.  The commissioner and the eligible 
local service units shall reallocate money from other sources to 
cover the costs of administering wage subsidies whenever 
possible.  
    Sec. 67.  Minnesota Statutes 1988, section 268.677, 
subdivision 3, is amended to read: 
    Subd. 3.  Eligible Local service units may use up to 25 
percent of their wage subsidy allocations to provide eligible 
applicants with job search assistance, labor market orientation, 
job seeking skills, necessary child care services, relocation, 
and transportation, and to subsidize fringe benefits.  
    Sec. 68.  Minnesota Statutes 1988, section 268.678, is 
amended to read: 
    268.678 [ELIGIBLE LOCAL SERVICE UNITS; POWERS AND DUTIES.] 
    Subdivision 1.  [GENERAL POWERS.] Eligible Local service 
units have the powers and duties given in this section and any 
additional duties given by the commissioner.  
    Subd. 3.  [OUTREACH.] Each eligible local service unit 
shall publicize the availability of wage subsidies within its 
area to seek maximum participation by eligible job applicants 
and employers.  
    Subd. 4.  [CONTRACTS.] Each eligible local service unit 
that has not agreed to a contract under section 268.673, 
subdivision 4a, may enter into contracts with certified service 
providers to deliver wage subsidies. 
    Subd. 5.  [SCREENING AND COORDINATION.] Each eligible local 
service unit shall provide for the screening of job applicants 
and employers to achieve the best possible placement of eligible 
job applicants with eligible employers.  
    Subd. 6.  [ELIGIBLE JOB APPLICANT PRIORITY LISTS.] Each 
eligible local service unit shall provide for the maintenance of 
a list of eligible job applicants unable to secure employment 
under the program at the time of application.  The list shall 
prioritize eligible job applicants and shall be used to fill 
jobs with eligible employers as they become available.  
    Sec. 69.  Minnesota Statutes 1988, section 268.681, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBLE BUSINESSES.] A business employer 
is an eligible employer if it enters into a written contract, 
signed and subscribed to under oath, with an eligible local 
service unit or its contractor, containing assurances that: 
    (a) funds received by a business shall be used only as 
permitted under sections 268.672 to 268.682; 
    (b) the business has submitted information to the eligible 
local service unit or its contractor (1) describing the duties 
and proposed compensation of each employee proposed to be hired 
under the program; and (2) demonstrating that, with the funds 
provided under sections 268.672 to 268.682, the business is 
likely to succeed and continue to employ persons hired using 
wage subsidies; 
    (c) the business will use funds exclusively for 
compensation and fringe benefits of eligible job applicants and 
will provide employees hired with these funds with fringe 
benefits and other terms and conditions of employment comparable 
to those provided to other employees of the business who do 
comparable work; 
    (d) the funds are necessary to allow the business to begin, 
or to employ additional people, but not to fill positions which 
would be filled even in the absence of wage subsidies; 
    (e) the business will cooperate with the eligible local 
service unit and the commissioner in collecting data to assess 
the result of wage subsidies; and 
     (f) the business is in compliance with all applicable 
affirmative action, fair labor, health, safety, and 
environmental standards.  
    Sec. 70.  Minnesota Statutes 1988, 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 a local 
service unit must give priority to businesses that: 
    (1) have a high potential for growth and long-term job 
creation; 
    (2) are labor intensive; 
    (3) make high use of local and Minnesota resources; 
    (4) are under ownership of women and minorities; 
    (5) make high use of new technology; 
    (6) produce energy conserving materials or services or are 
involved in development of renewable sources of energy; and 
    (7) have their primary place of business in Minnesota.  
    Sec. 71.  Minnesota Statutes 1988, 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 payments forwarded to the 
commissioner under this subdivision in the Minnesota wage 
subsidy account created by subdivision 4.  
    Sec. 72.  Minnesota Statutes 1989 Supplement, section 
268.86, subdivision 2, is amended to read: 
    Subd. 2.  [INTERAGENCY AGREEMENTS.] By October 1, 1987, the 
commissioner and the commissioner of human services shall 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 work readiness, including AFDC 
employment and training programs, and general assistance or work 
readiness 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, Indian tribes, 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. 73.  Minnesota Statutes 1988, section 268.86, 
subdivision 8, is amended to read: 
    Subd. 8.  [GRANT DIVERSION.] The commissioner shall develop 
grant diversion processes for recipients of aid to families with 
dependent children general assistance and work readiness 
assistance payments and shall supervise the counties in the 
administration of the employment and training services to meet 
the needs and circumstances of public assistance these 
recipients.  A grant diversion program that places general 
assistance and work readiness recipients in public sector 
employment must operate as a community investment program under 
section 268.90.  
    Sec. 74.  Minnesota Statutes 1988, section 268.871, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RESPONSIBILITY AND CERTIFICATION.] (a) 
Unless prohibited by federal law or otherwise determined by 
state law, a local service unit is responsible for the delivery 
of employment and training services.  After February 1, 1988, 
employment and training services must be delivered by certified 
employment and training service providers.  
    (b) The local service unit's employment and training 
service provider must meet the certification standards in this 
subdivision in order to be certified to deliver any of the 
following employment and training services and programs:  wage 
subsidies; work readiness; work readiness and general assistance 
grant diversion; food stamp employment and training programs; 
community work experience programs; AFDC job search; AFDC grant 
diversion; AFDC on-the-job training; and AFDC case management.  
    (c) The commissioner shall certify a local service unit's 
service provider to provide these employment and training 
services and programs if the commissioner determines that the 
provider has:  
    (1) past experience in direct delivery of the programs 
specified in paragraph (b); 
    (2) staff capabilities and qualifications, including 
adequate staff to provide timely and effective services to 
clients, and proven staff experience in providing specific 
services such as assessments, career planning, job development, 
job placement, support services, and knowledge of community 
services and educational resources; 
    (3) demonstrated effectiveness in providing services to 
public assistance recipients and other economically 
disadvantaged clients; and 
    (4) demonstrated administrative capabilities, including 
adequate fiscal and accounting procedures, financial management 
systems, participant data systems, and record retention 
procedures. 
    (d) When the only service provider that meets the criterion 
in paragraph (c), clause (1), has been decertified, pursuant to 
subdivision 1a, in that local service unit, the following 
criteria shall be substituted:  past experience in direct 
delivery of multiple, coordinated, nonduplicative services, 
including outreach, assessments, identification of client 
barriers, employability development plans, and provision or 
referral to support services. 
     Employment and training service providers shall be 
certified by the commissioner for two fiscal years beginning 
July 1, 1991, and every second year thereafter. 
    Sec. 75.  Minnesota Statutes 1988, section 268.871, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [DECERTIFICATION.] (a) The department, on its 
own initiative, or at the request of the local service unit, 
shall begin decertification processes for employment and 
training service providers who: 
     (1) no longer meet one or more of the certification 
standards; 
    (2) are delivering services in a manner that does not 
comply with the Family Support Act of 1988, Public Law Number 
100-485 or relevant state law after corrective actions have been 
cited, technical assistance has been provided, and a reasonable 
period of time for remedial action has been provided; or 
     (3) are not complying with other state and federal laws or 
policy which are necessary for effective delivery of services. 
    (b) The initiating of decertification processes shall not 
result in decertification of the service provider unless and 
until adequate fact-finding and investigation has been performed 
by the department. 
    Sec. 76.  Minnesota Statutes 1988, section 268.871, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONTRACTING PREFERENCE RESPONSIBILITY.] In 
contracting, A local service unit must give preference, whenever 
possible, to contract with certified employment and training 
service providers 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 achieve effective 
results in serving public assistance clients as well as other 
unemployed people.  
    Sec. 77.  Minnesota Statutes 1989 Supplement, 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 April 15 of each year 1990 an annual plan for 
the subsequent fiscal year.  By April 15, 1991, and by April 15 
of each second year thereafter, local service units shall 
prepare and submit to the commissioner a plan that covers the 
next two state fiscal years.  The commissioner shall notify each 
local service unit within 60 days of receipt of its plan that 
the 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 the two work 
programs required by section 256.736, subdivision 10, paragraph 
(a), clause (13), what services will be provided, number of 
clients served, per service expenditures, type of clients 
served, and projected outcomes; 
    (7) a report on the use of wage subsidies, grant 
diversions, community investment programs, and other services 
administered under this chapter; 
    (8) an annual update of the community investment program 
plan according to standards established by the commissioner; 
    (9) a performance review of the employment and training 
service providers delivering employment and training services 
for the local service unit; 
    (10) (9) 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; and 
    (11) (10) a copy of any other agreements between 
educational institutions, family support services, and child 
care providers. 
    (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 commissioner shall resolve their dispute.  In counties 
in which a federally recognized Indian tribe is operating an 
employment and training program under an agreement with the 
commissioner of human services, the plan must provide that the 
county will coordinate its employment and training programs, 
including developing a system for referrals, sanctions, and the 
provision of supporting services such as access to child care 
funds and transportation with programs operated by the Indian 
tribe.  The plan may not be given final approval by the 
commissioner until the tribal unit and county have submitted 
written agreement on these provisions in the plan.  If the 
county and Indian tribe cannot agree on these provisions, the 
local service unit shall notify the commissioner of jobs and 
training and the commissioners of jobs and training and human 
services shall resolve the 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 commissioner until an acceptable amended plan 
has been submitted.  
    (d) Notwithstanding Minnesota Statutes 1988, section 
268.88, local service units shall prepare and submit to the 
commissioner by June 1, 1989, an annual plan for fiscal year 
1990.  The commissioner shall notify each local service unit 
within 30 days of receipt of its plan if its plan has been 
approved or disapproved.  Beginning April 15, 1992, and by April 
15 of each second year thereafter, local service units must 
prepare and submit to the commissioner an interim year plan 
update that deals with performance in that state fiscal year and 
changes anticipated for the second year of the biennium.  The 
update must include information about employment and training 
programs addressed in the local service unit's two-year plan and 
shall be completed in accordance with criteria established by 
the commissioner. 
    Sec. 78.  Minnesota Statutes 1989 Supplement, section 
268.881, is amended to read: 
    268.881 [INDIAN TRIBE PLANS.] 
    The commissioner, in consultation with the commissioner of 
human services, shall review and comment on Indian tribe plans 
submitted to the commissioner for provision of employment and 
training services.  The plan must be submitted by April 15 for 
the state fiscal year ending June 30, 1990.  For subsequent 
years, the plan must be submitted at least 60 days before the 
program commences.  The commissioner shall approve or disapprove 
the plan for the state fiscal year ending June 30, 1990, within 
30 days of receipt.  The commissioner shall notify the Indian 
tribe of approval or disapproval of plans for subsequent years 
within 60 days of submission of the plans.  The grant proposal 
must contain information that has been established by the 
commissioner and the commissioner of human services for the 
employment and training services grant program for Indian tribes.
    (a) The commissioner, in consultation with the commissioner 
of human services, shall review and comment on Indian tribe 
plans submitted to the commissioner for provision of employment 
and training services.  Beginning April 15, 1991, and by April 
15 of each second year thereafter, the Indian tribe shall 
prepare and submit to the commissioner a plan that covers the 
next two state fiscal years.  Beginning April 15, 1992, and by 
April 15 of each second year thereafter, the Indian tribe shall 
prepare and submit to the commissioner an interim year plan 
update that deals with performance during the past state fiscal 
year and that covers changes anticipated for the second year of 
the biennium.  The commissioner shall notify the Indian tribe of 
approval or disapproval of the plans and updates for existing 
programs within 60 days of submission. 
    (b) A plan for a new tribal program must be submitted at 
least 45 days before the program is to commence.  The 
commissioner shall approve or disapprove the plan for new 
programs within 30 days of receipt. 
    (c) The tribal plan and update must contain information 
that has been established by the commissioner and the 
commissioner of human services for the tribal employment and 
training service program. 
    (d) The commissioner may recommend to the commissioner of 
human services withholding the distribution of employment and 
training money from a tribe whose plan or update is disapproved 
by the commissioner or a tribe that does not submit a plan or 
update by the date established in this section. 
    Sec. 79.  Minnesota Statutes 1988, section 268.90, 
subdivision 1, is amended to read: 
    Subdivision 1.  Community investment programs provide 
temporary employment to people who are experiencing prolonged 
unemployment and economic hardship.  Community investment 
programs consist of one or more projects.  Community investment 
programs must be beneficial to the state and the communities in 
which they are located and must provide program employees 
participants with training and work experience that will enhance 
their employability.  The projects must include activities that: 
    (1) expand or improve services, including education, 
health, social services, recreation, and safety; 
    (2) improve or maintain natural resources, including 
rivers, streams and lakes, forest lands and roads, and soil 
conservation; 
    (3) make permanent improvements to lands and buildings; or 
    (4) weatherize public buildings and private residential 
dwellings. 
    Community investment programs may not include job 
placements that replace work that was part or all of the duties 
or responsibilities of an authorized public employee position 
established as of January 1, 1985. 
    Community investment programs that include other sources of 
money or authorized programs may provide employment for the 
groups eligible for the included programs under the terms and 
conditions of those programs.  These programs include the 
Minnesota conservation corps, Minnesota summer youth program, 
county emergency jobs program, and the jobs training partnership 
act. 
    Sec. 80.  Minnesota Statutes 1988, section 268.90, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMMISSIONER OF JOBS AND TRAINING.] The 
commissioner shall: 
    (1) Make emergency or permanent rules governing plan 
content, criteria for approval, and administrative standards; 
    (2) refer community investment program administrators to 
the appropriate state agency for technical assistance in 
developing and administering community investment programs; 
    (3) establish the method by which community investment 
programs will be approved or disapproved through the community 
investment program plan and the annual update component of the 
county plan; 
    (4) review and comment on community investment program 
plans; 
    (5) institute ongoing methods to monitor and evaluate 
community investment programs; and 
    (6) inform consult with the commissioner of human services 
of on the counties that do not have an approved plan approval of 
county plans for community investment programs relating to the 
participation of public assistance recipients. 
    Sec. 81.  Minnesota Statutes 1988, section 268.90, 
subdivision 4, is amended to read: 
    Subd. 4.  [COUNTY BOARDS OF COMMISSIONERS.] The county 
boards of commissioners shall: 
    (1) be encouraged to establish community investment 
programs that are administered jointly according to section 
471.59, or through multicounty human service boards under 
chapter 402; 
    (2) develop community investment programs in consultation 
with the exclusive representatives of their employees; 
    (3) plan community investment programs by involving 
nonprofit organizations and other governmental units, community 
action agencies, community-based organizations, local union 
representatives, and representatives of client groups; 
    (4) submit to the commissioner a community investment 
program plan identifying the program funding source and amount, 
before the initiation of a community investment program, for 
approval according to standards established by the commissioner; 
    (5) plan community investment projects that, whenever 
possible, utilize existing programs that are administered under 
contract by nonprofit organizations and governmental units, 
including departments and agencies of cities, counties, towns, 
school districts, state and federal agencies, park reserve 
districts, and other special districts; 
    (6) include in their local service unit plans an annual 
update to their community investment program plans for approval 
according to standards established by the commissioner; 
    (7) submit reports and meet administrative standards 
established by rule the commissioner; 
    (8) monitor the performance of entities under contract to 
administer individual community investment projects; 
    (9) enter into contracts with other governmental and 
private bodies to jointly fund or jointly administer approvable 
projects when agreements expand the resources available, the 
scope of people employed, or further recognized public purposes; 
and 
    (10) be encouraged to enter into contracts with businesses 
or individuals for eligible projects under subdivision 1 and 
charge a fee for the completion of a project. 
    Sec. 82.  [WELFARE FRAUD DISQUALIFICATION DEMONSTRATION 
PROJECT.] 
    The commissioner of human services is authorized to seek 
federal approval to develop a demonstration project, using the 
administrative appeals process of section 256.045, to hear cases 
involving persons accused of wrongfully obtaining assistance in 
the AFDC or food stamps programs.  Allegations of fraud must be 
proven by clear and convincing evidence.  If a person is found 
to have wrongfully obtained assistance in the AFDC or food 
stamps program, that person shall be disqualified from the 
program and the needs of that individual shall not be taken into 
account in determining the grant or assistance level.  The 
period of disqualification may be up to six months for a first 
offense and up to 12 months for a second offense.  For a third 
or subsequent offense, the disqualification period may be in 
excess of one year and can be permanent.  In determining the 
sanction to impose, the appeals referee shall consider the 
amount of assistance wrongfully obtained, the actions whereby 
assistance was wrongfully obtained, and the effect of proposed 
sanctions on other members of the affected assistance unit.  
When federal approval is received, the agency shall develop an 
implementation plan which includes criteria for sanctions to be 
applied, and shall present the plan to the legislature for 
approval. 
    Sec. 83.  [WELFARE MIGRATION STUDY.] 
    The commissioner of human services shall conduct a study to 
determine the patterns of migration of welfare recipients to and 
from the state.  The study must determine:  (1) the numbers of 
new applicants for AFDC and general assistance who moved to the 
state a short time before applying for assistance; (2) the 
former states or countries of residence of these applicants and 
whether the applicants lived in Minnesota in the past; (3) the 
number of welfare recipients who leave the state and the states 
to which these recipients are moving; and (4) the reasons 
welfare applicants or recipients move to or from Minnesota.  
This information must be collected and analyzed to determine 
whether migration patterns are different for border counties; 
nonborder, rural counties where there is a perception that there 
is an unusually high incidence of recipient immigration; and 
metropolitan area counties.  The commissioner shall provide a 
report to the legislature by December 15, 1990.  The report must 
include:  (1) a summary and analysis of the information 
collected in the study regarding welfare migration patterns; (2) 
a comparison of welfare recipient migration patterns to 
migration patterns in the general population; (3) a survey of 
existing research and reports relating to welfare migration; (4) 
a description of the decline in economic support from the 
federal government in these areas over the past ten years; (5) a 
description and analysis of federal statutes or regulations or 
constitutional law restrictions that limit the authority of 
states and local communities to take action relating to the 
migration of recipients; and (6) a list of options available to 
the legislature and local governments relating to migration of 
recipients. 
    Sec. 84.  [INSTRUCTION TO REVISOR.] 
    In the next edition of Minnesota Statutes, the revisor of 
statutes shall substitute the phrase "target group," "target 
groups," "targeted caretaker," or "targeted caretakers" for the 
phrases "priority group," "priority groups," "priority 
caretaker," or "priority caretakers" wherever it appears in 
Minnesota Statutes, section 256.736.  The revisor of statutes 
shall also substitute the phrase "county agency" or "county 
agencies" for the phrase "local agency" or "local agencies" 
wherever it appears in Minnesota Statutes, chapters 256 and 256D.
    Sec. 85.  [REPEALER.] 
    Subdivision 1.  [AFDC PROGRAM.] Minnesota Statutes 1988, 
sections 256.736, subdivisions 1b, 2a, 8, and 17; and 256.7365, 
subdivision 8, are repealed. 
    Subd. 2.  [GENERAL ASSISTANCE.] Minnesota Statutes 1988, 
section 256D.06, subdivision 1c, is repealed.  
    Subd. 3.  [JOBS AND TRAINING.] Minnesota Statutes 1988, 
sections 268.672, subdivision 12; 268.86, subdivision 9; and 
268.872, subdivision 3, are repealed. 
    Subd. 4.  [CHILD CARE.] Minnesota Statutes 1988, sections 
256H.01, subdivision 14, and 256H.16, are repealed.  Minnesota 
Statutes 1989 Supplement, section 256H.05, subdivisions 1, 1a, 
and 3a, are repealed. 
    Sec. 86.  [EFFECTIVE DATE.] 
    Subdivision 1.  [AFDC; CHILD CARE.] Sections 1 to 18; 33 to 
81; 84; and 85, subdivisions 1, 3, and 4, are effective May 1, 
1990. 
    Subd. 2.  [GENERAL ASSISTANCE.] Sections 20, 22 to 24; 26 
to 32; and 85, subdivision 2, are effective October 1, 1990. 

                               ARTICLE 5 

                              MENTAL HEALTH
    Section 1.  Minnesota Statutes 1988, section 245.467, 
subdivision 2, is amended to read:  
    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 five days after the adult's second visit 
or within 30 days of admission after intake, whichever occurs 
first.  In cases where a diagnostic assessment is available and 
has been completed within 90 180 days preceding admission, only 
updating is necessary.  "Updating" means a written summary by a 
mental health professional of the adult's current mental health 
status and service needs.  If the adult's mental health status 
has changed markedly since the adult's most recent diagnostic 
assessment, a new diagnostic assessment is required.  Compliance 
with the provisions of this subdivision does not ensure 
eligibility for medical assistance or general assistance medical 
care reimbursement under chapters 256B and 256D. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
245.467, subdivision 3, is amended to read:  
    Subd. 3.  [INDIVIDUAL TREATMENT PLANS.] All providers of 
outpatient services, day treatment services, residential 
treatment, acute care hospital inpatient treatment, and all 
regional treatment centers must develop an individual treatment 
plan for each of their adult clients.  The individual treatment 
plan must be based on a diagnostic assessment.  To the extent 
possible, the adult client shall be involved in all phases of 
developing and implementing the individual treatment 
plan.  Providers of residential treatment and acute care 
hospital inpatient treatment, and all regional treatment centers 
must develop the individual treatment plan must be developed 
within ten days of client intake and reviewed must review the 
individual treatment plan every 90 days thereafter after intake. 
Providers of day treatment services must develop the individual 
treatment plan before the completion of five working days in 
which service is provided or within 30 days after the diagnostic 
assessment is completed or obtained, whichever occurs 
first.  Providers of outpatient services must develop the 
individual treatment plan within 30 days after the diagnostic 
assessment is completed or obtained or by the end of the second 
session of an outpatient service, not including the session in 
which the diagnostic assessment was provided, whichever occurs 
first.  Outpatient and day treatment services providers must 
review the individual treatment plan every 90 days after intake. 
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
245.469, is amended to read:  
    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 adults 
in the county who are experiencing an emotional crisis or mental 
illness.  Clients may be required to pay a fee according to 
section 245.481.  Emergency services must include 
assessment, crisis intervention, and appropriate case 
disposition.  Emergency services must:  
    (1) promote the safety and emotional stability of adults 
with mental illness or emotional crises; 
    (2) minimize further deterioration of adults with mental 
illness or emotional crises; 
    (3) help adults 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 to 
adults with mental illness provide immediate direct access to a 
mental health professional 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 until January 1, 1991, a 
designated person with training in human services who receives 
clinical supervision from a mental health professional.  The 
commissioner may waive the requirement that the evening, 
weekend, and holiday service be provided by a mental health 
professional or mental health practitioner after January 1, 
1991, if the county documents that: 
    (1) mental health professionals or mental health 
practitioners are unavailable to provide this service; 
    (2) services are provided by a designated person with 
training in human services who receives clinical supervision 
from a mental health professional; and 
    (3) the service provider is not also the provider of fire 
and public safety emergency services. 
     Whenever emergency service during nonbusiness hours is 
provided by anyone other than a mental health professional, a 
mental health professional must be available for at least 
telephone consultation within 30 minutes.  
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
245.4711, subdivision 1, is amended to read:  
    245.4711 [CASE MANAGEMENT AND COMMUNITY SUPPORT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT SERVICES.] 
(a) By January 1, 1989, the county board shall provide case 
management activities services for all adults with serious and 
persistent mental illness residing in who are residents of the 
county and who request or consent to the services and to each 
adult for whom the court appoints a case manager.  Staffing 
ratios must be sufficient to serve the needs of the clients.  
The case manager must meet the requirements in section 245.462, 
subdivision 4.  
    (b) Case management services provided to adults with 
serious and persistent mental illness eligible for medical 
assistance must be billed to the medical assistance program 
under sections 256B.02, subdivision 8, and 256B.0625. 
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
245.4711, subdivision 2, is amended to read:  
    Subd. 2.  [NOTIFICATION AND DETERMINATION OF CASE 
MANAGEMENT ELIGIBILITY.] (a) The county board shall notify the 
client adult of the person's adult's potential eligibility for 
case management services within five working days after 
receiving a request from an individual or a referral from a 
provider under section 245.467, subdivision 4.  The county board 
shall send a written notice to the client adult and the client's 
adult's representative, if any, that identifies the designated 
case management providers.  
    (b) The county board must determine whether an adult who 
requests or is referred for case management services meets the 
criteria of section 245.462, subdivision 20, paragraph (c).  If 
a diagnostic assessment is needed to make the determination, the 
county board shall offer to assist the adult in obtaining a 
diagnostic assessment.  The county board shall notify, in 
writing, the adult and the adult's representative, if any, of 
the eligibility determination.  If the adult is determined to be 
eligible for case management services, the county board shall 
refer the adult to the case management provider for case 
management services.  If the adult is determined not to be 
eligible or refuses case management services, the local agency 
shall offer to refer the adult to a mental health provider or 
other appropriate service provider and to assist the adult in 
making an appointment with the provider of the adult's choice.  
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
245.4711, subdivision 3, is amended to read:  
    Subd. 3.  [DUTIES OF CASE MANAGER.] (a) 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 an adult 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.  
    (b) Upon a determination of eligibility for community 
support case management services, and if the adult consents to 
the services, the case manager shall complete a written 
functional assessment according to section 245.462, subdivision 
11a.  The case manager shall develop an individual community 
support plan for an the adult according to subdivision 4, 
paragraph (a), review the client's adult'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. 7.  [245.4712] [COMMUNITY SUPPORT AND DAY TREATMENT 
SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF COMMUNITY SUPPORT 
SERVICES.] County boards must provide or contract for sufficient 
community support services within the county to meet the needs 
of adults with serious and persistent mental illness who are 
residents of the county.  Adults may be required to pay a fee 
according to section 245.481.  The community support services 
program must be designed to improve the ability of adults 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; and 
    (5) obtain and maintain appropriate living arrangements. 
     The community support services program must also be 
designed to reduce the need for and use of more intensive, 
costly, or restrictive placements both in number of admissions 
and length of stay.  
    Subd. 2.  [DAY TREATMENT SERVICES PROVIDED.] (a) Day 
treatment services must be developed as a part of the community 
support services available to adults with serious and persistent 
mental illness residing in the county.  Adults may be required 
to pay a fee according to section 245.481.  Day treatment 
services must be designed to:  
    (1) provide a structured environment for treatment; 
    (2) provide support for residing in the community; 
    (3) prevent placement in settings that are more intensive, 
costly, or restrictive than necessary and appropriate to meet 
client need; 
    (4) coordinate with or be offered in conjunction with a 
local education agency's special education program; and 
    (5) operate on a continuous basis throughout the year.  
    (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 services for clients who would otherwise need 
day treatment services; 
    (2) day treatment, if included, would be duplicative of 
other components of the community support services; and 
    (3) county demographics and geography make the provision of 
day treatment services cost ineffective and infeasible.  
    Subd. 3.  [BENEFITS ASSISTANCE.] The county board must 
offer to help adults with serious and persistent mental illness 
in applying for state and federal benefits, including 
supplemental security income, medical assistance, Medicare, 
general assistance, general assistance medical care, and 
Minnesota supplemental aid.  The help must be offered as part of 
the community support program available to adults with serious 
and persistent mental illness for whom the county is financially 
responsible and who may qualify for these benefits.  
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
245.474, is amended to read: 
    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 adults with mental illness throughout the state who 
need this level of care.  Services must be as close to the 
patient's county of residence as possible.  Regional treatment 
centers are responsible to:  
    (1) provide acute care inpatient hospitalization; 
     (2) stabilize the medical and mental health condition of 
the adult requiring the admission; 
    (2) (3) improve functioning to the point where discharge to 
community-based mental health services is possible; 
    (3) (4) strengthen family and community support; and 
    (4) (5) facilitate appropriate discharge and referrals for 
follow-up mental health care in the community.  
    Subd. 2.  [QUALITY OF SERVICE.] The commissioner shall 
biennially determine the needs of all adults with mental illness 
who are 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 and the types of state-operated services 
needed.  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.  
    Subd. 3.  [TRANSITION TO COMMUNITY.] Regional treatment 
centers must plan for and assist clients in making a transition 
from regional treatment centers to other community-based 
services.  In coordination with the client's case manager, if 
any, regional treatment centers must also arrange for 
appropriate follow-up care in the community during the 
transition period.  Before a client is discharged, the regional 
treatment center must notify the client's case manager, so that 
the case manager can monitor and coordinate the transition and 
arrangements for the client's appropriate follow-up care in the 
community. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
245.487, subdivision 2, is amended to read: 
    Subd. 2.  [FINDINGS.] The legislature finds there is a need 
for further development of existing clinical services for 
emotionally disturbed children and their families and the 
creation of new services for this population.  Although the 
services specified in sections 245.487 to 245.4887 are mental 
health services, sections 245.487 to 245.4887 emphasize the need 
for a child-oriented and family-oriented approach of therapeutic 
programming and the need for continuity of care with other 
community agencies.  At the same time, sections 245.487 to 
245.4887 emphasize the importance of developing special mental 
health expertise in children's mental health services because of 
the unique needs of this population.  
    Nothing in this act shall be construed to abridge the 
authority of the court to make dispositions under chapter 260 
but the mental health services due any child with serious and 
persistent mental illness, as defined in section 245.462, 
subdivision 20, or with severe emotional disturbance, as defined 
in section 245.4871, subdivision 6, shall be made a part of any 
disposition affecting that child. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
245.487, subdivision 5, is amended to read: 
    Subd. 5.  [CONTINUATION OF EXISTING MENTAL HEALTH SERVICES 
FOR CHILDREN.] Counties shall make available case management, 
community support services, and day treatment to children 
eligible to receive these services under Minnesota Statutes 
1988, section 245.471.  No later than August 1, 1989, the county 
board shall notify providers in the local system of care of 
their obligations to refer children eligible for case management 
and community support services as of January 1, 1989.  The 
county board shall forward a copy of this notice to the 
commissioner.  The notice shall indicate which children are 
eligible, a description of the services, and the name of the 
county employee designated to coordinate case management 
activities and shall include a copy of the plain language 
notification described in section 245.4881, subdivision 2, 
paragraph (b).  Providers shall distribute copies of this 
notification when making a referral for case management. 
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
245.4871, subdivision 3, is amended to read:  
    Subd. 3.  [CASE MANAGEMENT SERVICES.] "Case management 
services" means activities that are coordinated with the family 
community support services and are designed to help the child 
with severe emotional disturbance and the child's family obtain 
needed mental health services, social services, educational 
services, health services, vocational services, recreational 
services, and related services in the areas of volunteer 
services, advocacy, transportation, and legal services.  Case 
management services include obtaining a comprehensive diagnostic 
assessment, assisting in obtaining a comprehensive diagnostic 
assessment, if needed, developing a functional assessment, 
developing an individual family community support plan, and 
assisting the child and the child's family in obtaining needed 
services by coordination with other agencies and assuring 
continuity of care.  Case managers must assess and reassess the 
delivery, appropriateness, and effectiveness of these services 
over time.  
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
245.4873, subdivision 2, is amended to read:  
    Subd. 2.  [STATE LEVEL; COORDINATION.] The commissioners or 
designees of commissioners of the departments of human services, 
health, education, state planning, and corrections, and a 
representative of the Minnesota district judges association 
juvenile committee, in conjunction with the commissioner of 
commerce or a designee of the commissioner, shall meet at least 
quarterly through 1992 to:  
    (1) educate each agency about the policies, procedures, 
funding, and services for children with emotional disturbances 
of all agencies represented; 
    (2) develop mechanisms for interagency coordination on 
behalf of children with emotional disturbances; 
    (3) identify barriers including policies and procedures 
within all agencies represented that interfere with delivery of 
mental health services for children; 
    (4) recommend policy and procedural changes needed to 
improve development and delivery of mental health services for 
children in the agency or agencies they represent; 
    (5) identify mechanisms for better use of federal and state 
funding in the delivery of mental health services for children; 
and 
    (6) until February 15, 1992, prepare an annual report on 
the policy and procedural changes needed to implement a 
coordinated, effective, and cost-efficient children's mental 
health delivery system.  
    This report shall be submitted to the legislature and the 
state mental health advisory council annually until February 15, 
1992, as part of the report required under section 245.487, 
subdivision 4.  The report shall include information from each 
department represented on:  
    (1) the number of children in each department's system who 
require mental health services; 
    (2) the number of children in each system who receive 
mental health services; 
    (3) how mental health services for children are funded 
within each system; 
    (4) how mental health services for children could be 
coordinated to provide more effectively appropriate mental 
health services for children; and 
    (5) recommendations for the provision of early screening 
and identification of mental illness in each system.  
    Sec. 13.  Minnesota Statutes 1989 Supplement, section 
245.4874, is amended to read: 
    245.4874 [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 children's 
mental health service proposal required under section 245.4887, 
and approved by the commissioner.  The county board must: 
    (1) develop a system of affordable and locally available 
children's mental health services according to sections 245.487 
to 245.4887; 
    (2) assure that parents and providers in the county receive 
information about how to gain access to services provided 
according to sections 245.487 to 245.4887; 
     (3) coordinate the delivery of children's mental health 
services with services provided by social services, education, 
corrections, health, and vocational agencies to improve the 
availability of mental health services to children and the cost 
effectiveness of their delivery; 
    (3) (4) assure that mental health services delivered 
according to sections 245.487 to 245.4887 are delivered 
expeditiously and are appropriate to the child's diagnostic 
assessment and individual treatment plan; 
    (4) (5) provide the community with information about 
predictors and symptoms of emotional disturbances and how to 
access children's mental health services according to sections 
245.4877 and 245.4878; 
    (5) (6) provide for case management services to each child 
with severe emotional disturbance according to sections 245.486; 
245.4871, subdivisions 3 and 4; and 245.4881, subdivisions 1, 3, 
and 5; 
    (6) (7) provide for screening of each child under section 
245.4885 upon admission to a residential treatment facility, 
acute care hospital inpatient treatment, or informal admission 
to a regional treatment center; 
    (7) (8) prudently administer grants and purchase-of-service 
contracts that the county board determines are necessary to 
fulfill its responsibilities under sections 245.487 to 245.4887; 
    (8) (9) assure that mental health professionals, mental 
health practitioners, and case managers employed by or under 
contract to the county to provide mental health services are 
qualified under section 245.4871; and 
    (9) (10) assure that children's mental health services are 
coordinated with adult mental health services specified in 
sections 245.461 to 245.486 so that a continuum of mental health 
services is available to serve persons with mental illness, 
regardless of the person's age.  
    Sec. 14.  Minnesota Statutes 1989 Supplement, section 
245.4875, subdivision 5, is amended to read: 
    Subd. 5.  [LOCAL CHILDREN'S ADVISORY COUNCIL.] (a) By 
October 1, 1989, the county board, individually or in 
conjunction with other county boards, shall establish a local 
children's mental health advisory council or children's mental 
health subcommittee of the existing local mental health advisory 
council or shall include persons on its existing mental health 
advisory council who are representatives of children's mental 
health interests.  The following individuals must serve on the 
local children's mental health advisory council, the children's 
mental health subcommittee of an existing local mental health 
advisory council, or be included on an existing mental health 
advisory council:  (1) at least one person who was in a mental 
health program as a child or adolescent; (2) at least one parent 
of a child or adolescent with severe emotional disturbance; (3) 
one children's mental health professional; (4) representatives 
of minority populations of significant size residing in the 
county; (5) a representative of the children's mental health 
local coordinating council; and (6) one family community support 
services program representative. 
    (b) The local children's mental health advisory council or 
children's mental health subcommittee of an existing advisory 
council shall seek input from parents, former consumers, 
providers, and others about the needs of children with emotional 
disturbance in the local area and services needed by families of 
these children, and shall meet at least quarterly monthly, 
unless otherwise determined by the council or subcommittee, but 
not less than quarterly, to review, evaluate, and make 
recommendations regarding the local children's mental health 
system.  Annually, the local children's mental health advisory 
council or children's mental health subcommittee of the existing 
local mental health advisory council shall: 
    (1) arrange for input from the local system of care 
providers regarding coordination of care between the services; 
and 
    (2) identify for the county board the individuals, 
providers, agencies, and associations as specified in section 
245.4877, clause (2). 
    (c) The county board shall consider the advice of its local 
children's mental health advisory council or children's mental 
health subcommittee of the existing local mental health advisory 
council in carrying out its authorities and responsibilities. 
    Sec. 15.  Minnesota Statutes 1989 Supplement, section 
245.4876, subdivision 2, is amended to read:  
    Subd. 2.  [DIAGNOSTIC ASSESSMENT.] All residential 
treatment facilities and acute care hospital inpatient treatment 
services facilities that provide mental health services for 
children must complete a diagnostic assessment for each of their 
child clients within five working days of admission.  Providers 
of outpatient and day treatment services for children must 
complete a diagnostic assessment within ten working days of 
admission five days after the child's second visit or 30 days 
after intake, whichever occurs first.  In cases where a 
diagnostic assessment is available and has been completed within 
90 180 days preceding admission, only updating is 
necessary.  "Updating" means a written summary by a mental 
health professional of the child's current mental health status 
and service needs.  If the child's mental health status has 
changed markedly since the child's most recent diagnostic 
assessment, a new diagnostic assessment is required.  Compliance 
with the provisions of this subdivision does not ensure 
eligibility for medical assistance or general assistance medical 
care reimbursement under chapters 256B and 256D. 
    Sec. 16.  Minnesota Statutes 1989 Supplement, section 
245.4876, subdivision 3, is amended to read:  
    Subd. 3.  [INDIVIDUAL TREATMENT PLANS.] All providers of 
outpatient services, day treatment services, family community 
support services, professional home-based family treatment, 
residential treatment facilities, and acute care hospital 
inpatient treatment facilities, and all regional treatment 
centers that provide mental health facilities services for 
children must develop an individual treatment plan for each 
child client.  The individual treatment plan must be based on a 
diagnostic assessment.  To the extent appropriate, the child and 
the child's family shall be involved in all phases of developing 
and implementing the individual treatment plan.  Providers of 
residential treatment, professional home-based family treatment, 
and acute care hospital inpatient treatment, and regional 
treatment centers must develop the individual treatment plan 
must be developed within ten working days of client intake or 
admission and reviewed must review the individual treatment plan 
every 90 days after that date intake, except that the 
administrative review of the treatment plan of a child placed in 
a residential facility shall be as specified in section 257.071, 
subdivisions 2 and 4.  Providers of day treatment services must 
develop the individual treatment plan before the completion of 
five working days in which service is provided or within 30 days 
after the diagnostic assessment is completed or obtained, 
whichever occurs first.  Providers of outpatient services must 
develop the individual treatment plan within 30 days after the 
diagnostic assessment is completed or obtained or by the end of 
the second session of an outpatient service, not including the 
session in which the diagnostic assessment was provided, 
whichever occurs first.  Providers of outpatient and day 
treatment services must review the individual treatment plan 
every 90 days after intake.  
     Sec. 17.  Minnesota Statutes 1989 Supplement, section 
245.4876, subdivision 4, is amended to read: 
    Subd. 4.  [REFERRAL FOR CASE MANAGEMENT.] Each provider of 
emergency services, outpatient treatment, community support 
services, family community support services, day treatment 
services, screening under section 245.4885, professional 
home-based family treatment services, residential treatment 
facilities, acute care hospital inpatient treatment facilities, 
or regional treatment center services must inform each child 
with severe emotional disturbance, and the child's parent or 
legal representative, of the availability and potential benefits 
to the child of case management.  The information shall be 
provided as specified in subdivision 5.  If consent is obtained 
according to subdivision 5, the provider must refer the child by 
notifying the county employee designated by the county board to 
coordinate case management activities of the child's name and 
address and by informing the child's family of whom to contact 
to request case management.  The provider must document 
compliance with this subdivision in the child's record.  The 
parent or child may directly request case management even if 
there has been no referral. 
    Sec. 18.  Minnesota Statutes 1989 Supplement, section 
245.4879, is amended to read:  
    245.4879 [EMERGENCY SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF EMERGENCY SERVICES.] 
County boards must provide or contract for enough mental health 
emergency services within the county to meet the needs of 
children, and children's families when clinically appropriate, 
in the county who are experiencing an emotional crisis or 
emotional disturbance.  The county board shall ensure that 
parents, providers, and county residents are informed about when 
and how to access emergency mental health services for 
children.  A child or the child's parent may be required to pay 
a fee according to section 245.481.  Emergency service providers 
shall not delay the timely provision of emergency service 
because of delays in determining this fee or because of the 
unwillingness or inability of the parent to pay the fee.  
Emergency services must include assessment, crisis intervention, 
and appropriate case disposition.  Emergency services must:  
    (1) promote the safety and emotional stability of children 
with emotional disturbances or emotional crises; 
    (2) minimize further deterioration of the child with 
emotional disturbance or emotional crisis; 
    (3) help each child with an emotional disturbance or 
emotional crisis 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 
the child's needs.  
    Subd. 2.  [SPECIFIC REQUIREMENTS.] The county board shall 
require that all service providers of emergency services to the 
child with an emotional disturbance provide immediate direct 
access to a mental health professional 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 until January 1, 
1991, a designated person with training in human services who 
receives clinical supervision from a mental health 
professional.  The commissioner may waive the requirement that 
the evening, weekend, and holiday service be provided by a 
mental health professional or mental health practitioner after 
January 1, 1991, if the county documents that:  
    (1) mental health professionals or mental health 
practitioners are unavailable to provide this service; 
    (2) services are provided by a designated person with 
training in human services who receives clinical supervision 
from a mental health professional; and 
    (3) the service provider is not also the provider of fire 
and public safety emergency services. 
     When emergency service during nonbusiness hours is provided 
by anyone other than a mental health professional, a mental 
health professional must be available for at least telephone 
consultation within 30 minutes. 
    Sec. 19.  Minnesota Statutes 1989 Supplement, section 
245.4881, subdivision 1, is amended to read:  
    Subdivision 1.  [AVAILABILITY OF CASE MANAGEMENT SERVICES.] 
(a) By July 1, 1991, the county board shall provide case 
management activities services for each child with severe 
emotional disturbance residing in who is a resident of the 
county and the child's family who request or consent to the 
services.  Staffing ratios must be sufficient to serve the needs 
of the clients.  The case manager must meet the requirements in 
section 245.4871, subdivision 4.  
    (b) Case management services provided to children with 
severe emotional disturbance eligible for medical assistance 
must be billed to the medical assistance program under sections 
256B.02, subdivision 8, and 256B.0625.  
    Sec. 20.  Minnesota Statutes 1989 Supplement, section 
245.4881, subdivision 2, is amended to read:  
    Subd. 2.  [NOTIFICATION AND DETERMINATION OF CASE 
MANAGEMENT ELIGIBILITY.] (a) The county board shall notify, as 
appropriate, the child, child's parent, or child's legal 
representative of the child's potential eligibility for case 
management services within five working days after receiving a 
request from an individual or a referral from a provider under 
section 245.4876, subdivision 4.  
     (b) The county board shall send a notification written in 
plain language of potential eligibility for case management and 
family community support services.  The notification shall 
identify the designated case management providers and shall 
contain: 
    (1) a brief description of case management and family 
community support services; 
    (2) the potential benefits of these services; 
    (3) the identity and current phone number of the county 
employee designated to coordinate case management activities; 
    (4) an explanation of how to obtain county assistance in 
obtaining a diagnostic assessment, if needed; and 
    (5) an explanation of the appeal process. 
    The county board shall send a written notice that 
identifies the designated case management providers.  The county 
board shall send the notice, as appropriate, to the child, the 
child's parent, or the child's legal representative, if any.  
    (c) The county board must promptly determine whether a 
child who requests or is referred for case management services 
meets the criteria of sections 245.471 or 245.4871, subdivision 
6.  If a diagnostic assessment is needed to make the 
determination, the county board must offer to assist the child 
and the child's family in obtaining one.  The county board shall 
notify, in writing, the child and the child's representative, if 
any, of the eligibility determination.  If the child is 
determined to be eligible for case management services, and if 
the child and the child's family consent to the services, the 
county board shall refer the child to the case management 
provider for case management services.  If the child is 
determined not to be eligible or refuses case management 
services, the county board shall notify the child of the appeal 
process and shall offer to refer the child to a mental health 
provider or other appropriate service provider and to assist the 
child in making an appointment with the provider of the child's 
choice.  
    Sec. 21.  Minnesota Statutes 1989 Supplement, section 
245.4881, subdivision 3, is amended to read:  
    Subd. 3.  [DUTIES OF CASE MANAGER.] (a) The case manager 
shall promptly arrange for a diagnostic assessment of the child 
when one is not available as described in section 245.4876, 
subdivision 2, to determine the child's eligibility as a child 
with severe emotional disturbance for family community support 
services.  The county board shall notify in writing, as 
appropriate, the child, the child's parent, or the child's legal 
representative, if any, if the child is determined ineligible 
for family community support services.  
    (b) Upon a determination of eligibility for family support 
case management services, the case manager shall complete a 
written functional assessment according to section 245.4871, 
subdivision 18.  The case manager shall develop an individual 
family community support plan for a child as specified in 
subdivision 4, review the child'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.  
    (b) The case manager shall perform a functional assessment 
and note in the client's child's record the services needed by 
the child and the child's family, the services requested by the 
family, services that are not available, and the unmet needs of 
the child and family's unmet needs child's family.  The 
information required under section 245.4886 shall be provided in 
writing to the child and the child's family.  The case manager 
shall note this provision in the client child's record.  
    Sec. 22.  Minnesota Statutes 1989 Supplement, section 
245.4881, subdivision 4, is amended to read:  
    Subd. 4.  [INDIVIDUAL FAMILY COMMUNITY SUPPORT PLAN.] (a) 
For each child, the case manager must develop an individual 
family community support plan that incorporates the child's 
individual treatment plan.  The individual treatment plan may 
not be a substitute for the development of an individual family 
community support plan.  The case manager is responsible for 
developing the individual family community support plan within 
30 days of intake based on a diagnostic assessment and a 
functional assessment and for implementing and monitoring the 
delivery of services according to the individual family 
community support plan.  The case manager must review the plan 
every 90 calendar days after it is developed.  To the extent 
appropriate, the child with severe emotional disturbance, the 
child's family, advocates, service providers, and significant 
others must be involved in all phases of development and 
implementation of the individual family community support plan.  
Notwithstanding the lack of a an individual family community 
support plan, the case manager shall assist the child 
and child's family in accessing the needed services listed in 
subdivision 6.  
    (b) The child's individual family community support plan 
must state:  
    (1) the goals and expected outcomes of each service and 
criteria for evaluating the effectiveness and appropriateness of 
the service; 
    (2) the activities for accomplishing each goal; 
    (3) a schedule for each activity; and 
    (4) the frequency of face-to-face contacts by the case 
manager, as appropriate to client need and the implementation of 
the individual family community support plan.  
    Sec. 23.  Minnesota Statutes 1989 Supplement, section 
245.4882, subdivision 1, is amended to read:  
    Subdivision 1.  [AVAILABILITY OF RESIDENTIAL TREATMENT 
SERVICES.] County boards must provide or contract for enough 
residential treatment services to meet the needs of each child 
with severe emotional disturbance residing in the county and 
needing this level of care.  Length of stay is based on the 
child's residential treatment need and shall be subject to the 
six-month review process established in section 257.071, 
subdivisions 2 and 4.  Services must be appropriate to the 
child's age and treatment needs and must be made available 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 
the child's needs; 
    (2) help the child improve family living and social 
interaction skills; 
    (3) help the child gain the necessary skills to return to 
the community; 
    (4) stabilize crisis admissions; and 
    (5) work with families throughout the placement to improve 
the ability of the families to care for children with severe 
emotional disturbance in the home.  
    Sec. 24.  Minnesota Statutes 1989 Supplement, section 
245.4883, subdivision 1, is amended to read:  
    Subdivision 1.  [AVAILABILITY OF ACUTE CARE HOSPITAL 
INPATIENT SERVICES.] County boards must make available through 
contract or direct provision enough acute care hospital 
inpatient treatment services as close to the county as possible 
for children with severe emotional disturbances residing in the 
county needing this level of care.  Acute care hospital 
inpatient treatment services must be designed to:  
    (1) stabilize the medical and mental health condition for 
which admission is required; 
    (2) improve functioning to the point where discharge to 
residential treatment or community-based mental health services 
is possible; 
    (3) facilitate appropriate referrals for follow-up mental 
health care in the community; 
    (4) work with families to improve the ability of the 
families to care for those children with severe emotional 
disturbances at home; and 
    (5) assist families and children in the transition from 
inpatient services to community-based services or home setting, 
and provide notification to the child's case manager, if any, so 
that the case manager can monitor the transition and make timely 
arrangements for the child's appropriate follow-up care in the 
community.  
    Sec. 25.  [245.4884] [FAMILY COMMUNITY SUPPORT SERVICES.] 
    Subdivision 1.  [AVAILABILITY OF FAMILY COMMUNITY SUPPORT 
SERVICES.] By July 1, 1991, county boards must provide or 
contract for sufficient family community support services within 
the county to meet the needs of each child with severe emotional 
disturbance who resides in the county and the child's family.  
Children or their parents may be required to pay a fee in 
accordance with section 245.481.  
    Family community support services must be designed to 
improve the ability of children with severe emotional 
disturbance to:  
    (1) handle basic activities of daily living; 
    (2) improve functioning in school settings; 
    (3) participate in leisure time or community youth 
activities; 
    (4) set goals and plans; 
    (5) reside with the family in the community; 
    (6) participate in after-school and summer activities; 
    (7) make a smooth transition among mental health services 
provided to children; and 
    (8) make a smooth transition into the adult mental health 
system as appropriate.  
    In addition, family community support services must be 
designed to improve overall family functioning if clinically 
appropriate to the child's needs, and to reduce the need for and 
use of placements more intensive, costly, or restrictive both in 
the number of admissions and lengths of stay than indicated by 
the child's diagnostic assessment.  
    Subd. 2.  [DAY TREATMENT SERVICES PROVIDED.] (a) Day 
treatment services must be part of the family community support 
services available to each child with severe emotional 
disturbance residing in the county.  A child or the child's 
parent may be required to pay a fee according to section 
245.481.  Day treatment services must be designed to:  
    (1) provide a structured environment for treatment; 
    (2) provide support for residing in the community; 
    (3) prevent placements that are more intensive, costly, or 
restrictive than necessary to meet the child's need; 
    (4) coordinate with or be offered in conjunction with the 
child's education program; 
    (5) provide therapy and family intervention for children 
that are coordinated with education services provided and funded 
by schools; and 
    (6) operate during all 12 months of the year.  
    (b) County boards may request a waiver from including day 
treatment services if they can document that:  
    (1) alternative services exist through the county's family 
community support services for each child who would otherwise 
need day treatment services; and 
    (2) county demographics and geography make the provision of 
day treatment services cost ineffective and unfeasible.  
    Subd. 3.  [PROFESSIONAL HOME-BASED FAMILY TREATMENT 
PROVIDED.] (a) By January 1, 1991, county boards must provide or 
contract for sufficient professional home-based family treatment 
within the county to meet the needs of each child with severe 
emotional disturbance who is at risk of out-of-home placement 
due to the child's emotional disturbance or who is returning to 
the home from out-of-home placement.  The child or the child's 
parent may be required to pay a fee according to section 
245.481.  The county board shall require that all service 
providers of professional home-based family treatment set fee 
schedules approved by the county board that are based on the 
child's or family's ability to pay.  The professional home-based 
family treatment must be designed to assist each child with 
severe emotional disturbance who is at risk of or who is 
returning from out-of-home placement and the child's family to:  
    (1) improve overall family functioning in all areas of 
life; 
    (2) treat the child's symptoms of emotional disturbance 
that contribute to a risk of out-of-home placement; 
    (3) provide a positive change in the emotional, behavioral, 
and mental well-being of children and their families; and 
    (4) reduce risk of out-of-home placement for the identified 
child with severe emotional disturbance and other siblings or 
successfully reunify and reintegrate into the family a child 
returning from out-of-home placement due to emotional 
disturbance. 
    (b) Professional home-based family treatment must be 
provided by a team consisting of a mental health professional 
and others who are skilled in the delivery of mental health 
services to children and families in conjunction with other 
human service providers.  The professional home-based family 
treatment team must maintain flexible hours of service 
availability and must provide or arrange for crisis services for 
each family, 24 hours a day, seven days a week.  Case loads for 
each professional home-based family treatment team must be small 
enough to permit the delivery of intensive services and to meet 
the needs of the family.  Professional home-based family 
treatment providers shall coordinate services and service needs 
with case managers assigned to children and their families.  The 
treatment team must develop an individual treatment plan that 
identifies the specific treatment objectives for both the child 
and the family. 
    Subd. 4.  [THERAPEUTIC SUPPORT OF FOSTER CARE.] By January 
1, 1992, county boards must provide or contract for foster care 
with therapeutic support as defined in section 245.4871, 
subdivision 34.  Foster families caring for children with severe 
emotional disturbance must receive training and supportive 
services, as necessary, at no cost to the foster families within 
the limits of available resources.  
    Subd. 5.  [BENEFITS ASSISTANCE.] The county board must 
offer help to a child with severe emotional disturbance and the 
child's family in applying for federal benefits, including 
supplemental security income, medical assistance, and Medicare.  
    Sec. 26.  Minnesota Statutes 1989 Supplement, section 
245.4885, subdivision 1, is amended to read:  
    Subdivision 1.  [SCREENING REQUIRED.] The county board 
shall ensure that, upon admission, screen all children are 
screened upon admission admitted for treatment of severe 
emotional disturbance 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.  If a child is admitted to a residential treatment 
facility or acute care hospital for emergency treatment of 
emotional disturbance or held for emergency care by a regional 
treatment center under section 253B.05, subdivision 1, screening 
must occur within five working days of admission.  Screening 
shall determine whether the proposed treatment:  
    (1) is necessary; 
    (2) is appropriate to the child's individual treatment 
needs; 
    (3) cannot be effectively provided in the child's home; and 
    (4) the provides a length of stay is as short as possible 
consistent with the individual child's need; and.  
    (5) the case manager, if assigned, is developing an During 
the screening process, the child, child's family, or child's 
legal representative, as appropriate, must be informed of the 
child's eligibility for case management services and that an 
individual family community support plan is being developed by 
the case manager, if assigned.  
    Screening shall be in compliance with section 256F.07 or 
257.071, whichever applies.  Wherever possible, the parent shall 
be consulted in the screening process, unless clinically 
inappropriate.  
    The screening process and placement decision must be 
documented in the child's record.  
    An alternate review process may be approved by the 
commissioner if the county board demonstrates that an alternate 
review process has been established by the county board and the 
times of review, persons responsible for the review, and review 
criteria are comparable to the standards in clauses (1) 
to (3) (5).  
    Sec. 27.  Minnesota Statutes 1989 Supplement, section 
245.4885, subdivision 2, is amended to read: 
    Subd. 2.  [QUALIFICATIONS.] No later than January July 1, 
1992 1991, screening of children 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 for mental health professional 
participation in sparsely populated areas after July 1, 1991, if 
the county documents that: 
    (1) mental health professionals or mental health 
practitioners are unavailable to provide this service; and 
    (2) services are provided by a designated person with 
training in human services who receives clinical supervision 
from a mental health professional. 
    Sec. 28.  Minnesota Statutes 1989 Supplement, section 
245.696, subdivision 2, is amended to read:  
    Subd. 2.  [SPECIFIC DUTIES.] In addition to the powers and 
duties already conferred by law, the commissioner of human 
services shall:  
    (1) review and evaluate local programs and the performance 
of administrative and mental health personnel and make 
recommendations to county boards and program administrators; 
    (2) provide consultative staff service to communities and 
advocacy groups to assist in ascertaining local needs and in 
planning and establishing community mental health programs; 
    (3) employ qualified personnel to implement this chapter; 
    (4) adopt rules for minimum standards in community mental 
health services as directed by the legislature; 
    (5) cooperate with the commissioners of health and jobs and 
training to coordinate services and programs for people with 
mental illness; 
    (6) convene meetings with the commissioners of corrections, 
health, education, and commerce at least four times each year 
for the purpose of coordinating services and programs for 
children with emotional or behavioral disorders; 
    (7) evaluate the needs of people with mental illness as 
they relate to assistance payments, medical benefits, nursing 
home care, and other state and federally funded services; 
    (8) (7) provide data and other information, as requested, 
to the advisory council on mental health; 
    (9) (8) develop and maintain a data collection system to 
provide information on the prevalence of mental illness, the 
need for specific mental health services and other services 
needed by people with mental illness, funding sources for those 
services, and the extent to which state and local areas are 
meeting the need for services; 
    (10) (9) apply for grants and develop pilot programs to 
test and demonstrate new methods of assessing mental health 
needs and delivering mental health services; 
    (11) (10) study alternative reimbursement systems and make 
waiver requests that are deemed necessary by the commissioner; 
    (12) (11) provide technical assistance to county boards to 
improve fiscal management and accountability and quality of 
mental health services, and consult regularly with county 
boards, public and private mental health agencies, and client 
advocacy organizations for purposes of implementing this 
chapter; 
    (13) (12) promote coordination between the mental health 
system and other human service systems in the planning, funding, 
and delivery of services; entering into cooperative agreements 
with other state and local agencies for that purpose as deemed 
necessary by the commissioner; 
    (14) (13) conduct research regarding the relative 
effectiveness of mental health treatment methods as the 
commissioner deems appropriate, and for this purpose, enter 
treatment facilities, observe clients, and review records in a 
manner consistent with the Minnesota government data practices 
act, chapter 13; and 
    (15) (14) enter into contracts and promulgate rules the 
commissioner deems necessary to carry out the purposes of this 
chapter.  
     Sec. 29.  Minnesota Statutes 1989 Supplement, section 
245.697, subdivision 2a, is amended to read: 
    Subd. 2a.  [SUBCOMMITTEE ON CHILDREN'S MENTAL HEALTH.] The 
state advisory council on mental health (the "advisory council") 
must have a subcommittee on children's mental health.  The 
subcommittee must make recommendations to the advisory council 
on policies, laws, regulations, and services relating to 
children's mental health.  Members of the subcommittee must 
include: 
    (1) the commissioners or designees of the commissioners of 
the departments of human services, health, education, state 
planning, finance, and corrections; 
    (2) the commissioner of commerce or a designee of the 
commissioner who is knowledgeable about medical insurance 
issues; 
    (3) at least one representative of an advocacy group for 
children with emotional disturbances; 
    (4) providers of children's mental health services, 
including at least one provider of services to preadolescent 
children, one provider of services to adolescents, and one 
hospital-based provider; 
    (5) parents of children who have emotional disturbances; 
    (6) a present or former consumer of adolescent mental 
health services; 
    (7) educators currently working with emotionally disturbed 
children; 
    (8) people knowledgeable about the needs of emotionally 
disturbed children of minority races and cultures; 
    (9) people experienced in working with emotionally 
disturbed children who have committed status offenses; 
    (10) members of the advisory council; 
    (11) one person from the local corrections department and 
one representative of the Minnesota district judges association 
juvenile committee; and 
    (12) county commissioners and social services agency 
representatives. 
    The chair of the advisory council shall appoint 
subcommittee members described in clauses (3) to (11) through 
the process established in section 15.0597.  The chair shall 
appoint members to ensure a geographical balance on the 
subcommittee.  Terms, compensation, removal, and filling of 
vacancies are governed by subdivision 1, except that terms of 
subcommittee members who are also members of the advisory 
council are coterminous with their terms on the advisory 
council.  The subcommittee shall meet at the call of the 
subcommittee chair who is elected by the subcommittee from among 
its members.  The subcommittee expires with the expiration of 
the advisory council. 
    Sec. 30.  Minnesota Statutes 1989 Supplement, section 
245.73, subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION; CRITERIA.] County boards may submit 
an application and budget for use of the money in the form 
specified by the commissioner.  The commissioner shall make 
grants only to counties whose applications and budgets are 
approved by the commissioner for residential programs for adult 
mentally ill persons adults with mental illness to meet 
licensing requirements pursuant to sections 245A.01 to 245A.16.  
Funds shall not be used to supplant or reduce local, state, or 
federal expenditure levels supporting existing resources unless 
the reduction in available money is the result of a state or 
federal decision not to refund an existing program.  State funds 
received by a county pursuant to this section shall be used only 
for direct service costs.  Both direct service and other costs, 
including but not limited to renovation, construction or rent of 
buildings, purchase or lease of vehicles or equipment as 
required for licensure as a residential program for adult 
mentally ill persons adults with mental illness under sections 
245A.01 to 245A.16, may be paid out of the matching funds 
required under subdivision 3.  Neither the state funds nor the 
matching funds shall be used for room and board costs. 
    Sec. 31.  Minnesota Statutes 1989 Supplement, section 
253B.03, subdivision 6a, is amended to read: 
    Subd. 6a.  [ADMINISTRATION OF NEUROLEPTIC MEDICATIONS.] (a) 
Neuroleptic medications may be administered to persons committed 
as mentally ill or mentally ill and dangerous only as described 
in this subdivision. 
    (b) A neuroleptic medication may be administered to a 
patient who is competent to consent to neuroleptic medications 
only if the patient has given written, informed consent to 
administration of the neuroleptic medication. 
    (c) A neuroleptic medication may be administered to a 
patient who is not competent to consent to neuroleptic 
medications only if a court approves the administration of the 
neuroleptic medication or:. 
     (d) A neuroleptic medication may be administered without 
court review to a patient who is not competent to consent to 
neuroleptic medications if:  
    (1) the patient does not object to or refuse the 
medication; 
    (2) a guardian ad litem appointed by the court with 
authority to consent to neuroleptic medications gives written, 
informed consent to the administration of the neuroleptic 
medication; and 
    (3) a multidisciplinary treatment review panel composed of 
persons who are not engaged in providing direct care to the 
patient gives written approval to administration of the 
neuroleptic medication. 
    (e) A neuroleptic medication may be administered without 
judicial review and without consent in an emergency situation 
for so long as the emergency continues to exist if the treating 
physician determines that the medication is necessary to prevent 
serious, immediate physical harm to the patient or to others. 
The treatment facility shall document the emergency in the 
patient's medical record in specific behavioral terms. 
    (d) (f) A person who consents to treatment pursuant to this 
subdivision is not civilly or criminally liable for the 
performance of or the manner of performing the treatment.  A 
person is not liable for performing treatment without consent if 
written, informed consent was given pursuant to this 
subdivision.  This provision does not affect any other liability 
that may result from the manner in which the treatment is 
performed. 
    (e) (g) The court may allow and order paid to a guardian ad 
litem a reasonable fee for services provided under paragraph 
(c), or the court may appoint a volunteer guardian ad litem. 
    (h) A medical director or patient may petition the 
committing court, or the court to which venue has been 
transferred, for a hearing concerning the administration of 
neuroleptic medication.  A hearing may also be held pursuant to 
section 253B.08, 253B.09, 253B.12, or 253B.18.  The hearing 
concerning the administration of neuroleptic medication must be 
held within 14 days from the date of the filing of the 
petition.  The court may extend the time for hearing up to an 
additional 15 days for good cause shown. 
    Sec. 32.  Minnesota Statutes 1988, section 253B.17, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PETITION.] Any patient, except one 
committed as mentally ill and dangerous to the public, or any 
interested person may petition the committing court or the court 
to which venue has been transferred for an order that the 
patient is not in need of continued institutionalization or for 
an order that an individual is no longer mentally ill, mentally 
retarded, or chemically dependent, or for any other relief as 
the court deems just and equitable.  A patient committed as 
mentally ill or mentally ill and dangerous may petition the 
committing court or the court to which venue has been 
transferred for a hearing concerning the administration of 
neuroleptic medication.  A hearing may also be held pursuant to 
sections 253B.08, 253B.09 and, 253B.12, and 253B.18. 
    Sec. 33.  Minnesota Statutes 1988, section 260.151, is 
amended by adding a subdivision to read: 
    Subd. 3.  [JUVENILE TREATMENT SCREENING TEAM.] (a) The 
county welfare board, at its option, may establish a juvenile 
treatment screening team to conduct screenings and prepare case 
plans under this subdivision.  The team, which may be the team 
constituted under section 245.4885 or 256B.092 or Minnesota 
Rules, parts 9530.6600 to 9530.6655, shall consist of social 
workers, juvenile justice professionals, and persons with 
expertise in the treatment of juveniles who are emotionally 
disabled, chemically dependent, or have a developmental 
disability.  The team shall involve parents or guardians in the 
screening process as appropriate.  
     (b) This paragraph applies only in counties that have 
established a juvenile treatment screening team under paragraph 
(a).  If the court, prior to, or as part of, a final 
disposition, proposes to place a child for the primary purpose 
of treatment for an emotional disturbance, a developmental 
disability, or chemical dependency in a residential treatment 
facility out of state or in one which is within the state and 
licensed by the commissioner of human services under chapter 
245A, the court shall notify the county welfare agency.  The 
county's juvenile treatment screening team must either:  (1) 
screen and evaluate the child and file its recommendations with 
the court within 14 days of receipt of the notice; or (2) elect 
not to screen a given case, and notify the court of that 
decision within three working days.  
    (c) If the screening team has elected to screen and 
evaluate the child, the child may not be placed for the primary 
purpose of treatment for an emotional disturbance, a 
developmental disability, or chemical dependency, in a 
residential treatment facility out of state nor in a residential 
treatment facility within the state that is licensed under 
chapter 245A, unless one of the following conditions applies:  
    (1) a treatment professional certifies that an emergency 
requires the placement of the child in a facility within the 
state; 
    (2) the screening team has evaluated the child and 
recommended that a residential placement is necessary to meet 
the child's treatment needs and the safety needs of the 
community, that it is a cost-effective means of meeting the 
treatment needs, and that it will be of therapeutic value to the 
child; or 
     (3) the court, having reviewed a screening team 
recommendation against placement, determines to the contrary 
that a residential placement is necessary.  The court shall 
state the reasons for its determination in writing, on the 
record, and shall respond specifically to the findings and 
recommendation of the screening team in explaining why the 
recommendation was rejected.  The attorney representing the 
child and the prosecuting attorney shall be afforded an 
opportunity to be heard on the matter. 
    Sec. 34.  [INSTRUCTION TO REVISOR.] 
    In each section of Minnesota Statutes referred to in column 
A, the revisor of statutes shall delete the reference in column 
B and insert the reference in column C. 
          Column A            Column B             Column C 
     245.462, subd. 8,    245.4711, subd. 7   245.4712, subd. 2
     clause (3) 
     245.4871, subd. 10,  245.4881, subd. 7   245.4884, subd. 2
     clauses (3) and (4) 
     245.4871, subd. 17,  245.4881, subd. 10  245.4884, subd. 5
     clause (11)
     245.4875, subd. 2,   245.4881, subd. 7   245.4884, subd. 2 
     clause (6) 
     245.4875, subd. 2,   245.4881, subd. 9   245.4884, subd. 4
     clauses (11) and (12) 
     245.4881, subd. 4,   subd. 6             245.4884, subd. 1 
     paragraph (a)
    Sec. 35.  [REPEALER.] 
    Minnesota Statutes 1989 Supplement, sections 245.4711, 
subdivisions 6, 7, and 8; and 245.4881, subdivisions 6, 7, 8, 9, 
and 10, are repealed. 
    Sec. 36.  [EFFECTIVE DATE.] 
    Sections 31 and 32 are effective May 1, 1990. 

                                ARTICLE 6

                           DISLOCATED WORKERS
    Section 1.  [268.022] [DISLOCATED WORKER FUND.] 
    Subdivision 1.  [DETERMINATION AND COLLECTION OF SPECIAL 
ASSESSMENT.] (a) In addition to all other contributions, 
assessments and payment obligations under chapter 268, each 
employer is liable for a special assessment levied at the rate 
of one-tenth of one percent per year on all wages, as defined in 
section 268.04, subdivision 25.  Such assessment shall become 
due and be paid by each employer to the department of jobs and 
training on the same schedule and in the same manner as other 
contributions required by section 268.06. 
    (b) The special assessment levied under this section shall 
not affect the computation of any other contributions, 
assessments, or payment obligations due under this chapter. 
    Subd. 2.  [DISBURSEMENT OF SPECIAL ASSESSMENT FUNDS.] (a) 
The money collected under this section shall be deposited in the 
state treasury and credited to a dedicated fund to provide for 
the dislocated worker programs established under sections 
268.975 to 268.98; including vocational guidance, training, 
placement, and job development. 
    (b) All money in the dedicated fund is appropriated to the 
commissioner who must act as the fiscal agent for the money and 
must disburse the money for the purposes of this section, not 
allowing the money to be used for any other obligation of the 
state.  All money in the dedicated fund shall be deposited, 
administered, and disbursed in the same manner and under the 
same conditions and requirements as are provided by law for the 
other dedicated funds in the state treasury, except that all 
interest or net income resulting from the investment or deposit 
of money in the fund shall accrue to the fund for the purposes 
of the fund. 
    (c) No more than five percent of the dedicated funds 
collected in each fiscal year may be used by the department of 
jobs and training for its administrative costs. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
268.977, subdivision 1, is amended to read: 
     Subdivision 1.  [PROGRAM ESTABLISHMENT.] (a) The 
commissioner shall establish a rapid response program to assist 
employees, employers, business organizations or associations, 
labor organizations, local government units, and community 
organizations to quickly and effectively respond to announced or 
actual plant closings and substantial layoffs. 
     (b) The program must include or address at least the 
following: 
     (1) within five working days after becoming aware of an 
announced or actual plant closing or substantial layoff, 
establish on-site contact with the employer, employees, labor 
organizations if there is one representing the employees, and 
leaders of the local government units and community 
organizations to provide coordination of efforts to formulate a 
communitywide response to the plant closing or substantial 
layoff, provide information on the public and private service 
and programs that might be available, inform the affected 
parties of the prefeasibility study grants under section 
268.978, and collect any information required by the 
commissioner to assist in responding to the plant closing or 
substantial layoff; 
     (2) provide ongoing technical assistance to employers, 
employees, business organizations or associations, labor 
organizations, local government units, and community 
organizations to assist them in reacting to or developing 
responses to plant closings or substantial layoffs; 
    (3) establish and administer the prefeasibility study grant 
program under section 268.978 to provide an initial assessment 
of the feasibility of alternatives to plant closings or 
substantial layoffs; 
    (4) work with employment and training service providers, 
employers, business organizations or associations, labor 
organizations, local government units, dislocated workers, and 
community organizations in providing training, education, 
community support service, job search programs, job clubs, and 
other services to address the needs of potential or actual 
dislocated workers; 
    (5) coordinate with providers of economic development 
related financial and technical assistance services so that 
communities that are experiencing plant closings or substantial 
layoffs have immediate access to economic development related 
services; and 
    (6) collect and make available information on programs that 
might assist dislocated workers and the communities affected by 
plant closings or substantial layoffs. 
    Sec. 3.  [STUDY.] 
    The governor shall appoint a commission to study and make 
legislative recommendations regarding worker displacement caused 
by corporate takeovers, buy outs, and other similar business 
ownership transfers and publicly funded economic development.  
The commission shall complete the study and report 
recommendations to the legislature before February 1, 1991. 
     Sec. 4.  [SUNSET.] 
     Section 1 is repealed effective June 30, 1992. 
    Sec. 5.  [EFFECTIVE DATE.] 
    Section 2 is effective the day following final enactment.  
Section 1 is effective January 1, 1991. 
    Presented to the governor April 26, 1990 
    Signed by the governor May 3, 1990, 2:05 p.m.