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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 107-S.F.No. 101 
                  An act relating to human services; adding an exclusion 
                  to elderly housing with services establishment; 
                  downsizing the number of IMD beds; modifying the 
                  appeal process for nursing facilities; changing 
                  procedure for permanent placement of a child and 
                  provisions for reimbursement for family foster care; 
                  removing the time limitation on family general 
                  assistance; amending Minnesota Statutes 1996, sections 
                  144D.01, subdivision 4; 245.466, by adding a 
                  subdivision; 256B.059, subdivisions 1, 2, 5, and by 
                  adding a subdivision; 256B.17, subdivision 7; 
                  256B.431, subdivision 18; 256B.50, subdivisions 1, 1b, 
                  1c, and 1e; 256D.01, subdivision 1a; 257.071, 
                  subdivision 2; 260.191, subdivision 3b; 260.192; 
                  260.242, subdivision 2; and 382.18; repealing 
                  Minnesota Statutes 1996, sections 256B.17, 
                  subdivisions 1, 2, 3, 4, 5, 6, and 8; and 256B.50, 
                  subdivisions 1d, 1g, 1h, and 2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 144D.01, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELDERLY HOUSING WITH SERVICES ESTABLISHMENT OR 
        ESTABLISHMENT.] "Elderly housing with services establishment" or 
        "establishment" means an establishment providing sleeping 
        accommodations to one or more adult residents, at least 80 
        percent of which are 55 years of age or older, and offering or 
        providing, for a fee, one or more health-related or supportive 
        service, whether offered or provided directly by the 
        establishment or by another entity arranged for by the 
        establishment. 
           Elderly housing with services establishment does not 
        include: 
           (1) a nursing home licensed under chapter 144A; 
           (2) a hospital, boarding care home, or supervised living 
        facility licensed under sections 144.50 to 144.56; 
           (3) a board and lodging establishment licensed under 
        chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 
        9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 
        9530.4450; 
           (4) a board and lodging establishment which serves as a 
        shelter for battered women or other similar purpose; 
           (5) a family adult foster care home licensed under 
        Minnesota Rules, parts 9543.0010 to 9543.0150; or 
           (6) private homes in which the residents are related by 
        kinship, law, or affinity with the providers of services; or 
           (7) residential settings for persons with mental 
        retardation or related conditions in which the services are 
        licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 
        applicable successor rules or laws. 
           Sec. 2.  Minnesota Statutes 1996, section 245.466, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [IMD DOWNSIZING FLEXIBILITY.] (a) If a county 
        presents a budget-neutral plan for a net reduction in the number 
        of institution for mental disease (IMD) beds funded under group 
        residential housing, the commissioner may transfer the net 
        savings from group residential housing and general assistance 
        medical care to medical assistance and mental health grants to 
        provide appropriate services in non-IMD settings.  For the 
        purposes of this subdivision, "a budget neutral plan" means a 
        plan that does not increase the state share of costs. 
           (b) The provisions of paragraph (a) do not apply to a 
        facility that has its reimbursement rate established under 
        section 256B.431, subdivision 4, paragraph (c). 
           Sec. 3.  Minnesota Statutes 1996, section 256B.059, is 
        amended by adding a subdivision to read: 
           Subdivision 1.  [INSTITUTIONALIZED SPOUSE.] The provisions 
        of this section apply only when a spouse is institutionalized 
        for a continuous period beginning on or after October 1, 1989. 
           Sec. 4.  Minnesota Statutes 1996, section 256B.059, 
        subdivision 1, is amended to read: 
           Subdivision 1. Subd. 1a.  [DEFINITIONS.] (a) For purposes 
        of this section, the terms defined in this subdivision have the 
        meanings given them. 
           (b) "Community spouse" means the spouse of an 
        institutionalized spouse. 
           (c) "Spousal share" means one-half of the total value of 
        all assets, to the extent that either the institutionalized 
        spouse or the community spouse had an ownership interest at the 
        time of institutionalization. 
           (d) "Assets otherwise available to the community spouse" 
        means assets individually or jointly owned by the community 
        spouse, other than assets excluded by subdivision 5, paragraph 
        (c). 
           (e) "Community spouse asset allowance" is the value of 
        assets that can be transferred under subdivision 3. 
           (f) "Institutionalized spouse" means a person who is: 
           (1) in a hospital, nursing facility, or intermediate care 
        facility for persons with mental retardation, or receiving home 
        and community-based services under section 256B.0915 or 256B.49, 
        and is expected to remain in the facility or institution or 
        receive the home and community-based services for at least 30 
        consecutive days; and 
           (2) married to a person who is not in a hospital, nursing 
        facility, or intermediate care facility for persons with mental 
        retardation, and is not receiving home and community-based 
        services under section 256B.0915 or 256B.49. 
           Sec. 5.  Minnesota Statutes 1996, section 256B.059, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ASSESSMENT OF SPOUSAL SHARE.] At the beginning 
        of a the first continuous period of institutionalization of a 
        person beginning on or after October 1, 1989, at the request of 
        either the institutionalized spouse or the community spouse, or 
        upon application for medical assistance, the total value of 
        assets in which either the institutionalized spouse or the 
        community spouse had an interest at the time of the first period 
        of institutionalization of 30 days or more shall be assessed and 
        documented and the spousal share shall be assessed and 
        documented. 
           Sec. 6.  Minnesota Statutes 1996, section 256B.059, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ASSET AVAILABILITY.] (a) At the time of initial 
        determination of eligibility for medical assistance benefits 
        following the first continuous period of institutionalization on 
        or after October 1, 1989, 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 
        following: 
           (1) prior to July 1, 1994, the greater of:  
           (i) $14,148; 
           (ii) the lesser of the spousal share or $70,740; or 
           (iii) the amount required by court order to be paid to the 
        community spouse; 
           (2) for persons whose date of initial determination of 
        eligibility for medical assistance following their first 
        continuous period of institutionalization occurs on or after 
        July 1, 1994, the greater of:  
           (i) $20,000; 
           (ii) the lesser of the spousal share or $70,740; or 
           (iii) 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 3; (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 paragraph (b). 
           (d) Assets determined to be available to the 
        institutionalized spouse under this section must be used for the 
        health care or personal needs of the institutionalized spouse. 
           (e) For purposes of this section, assets do not include 
        assets excluded under the supplemental security income program. 
           Sec. 7.  Minnesota Statutes 1996, section 256B.17, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EXCEPTION FOR ASSET TRANSFERS.] Notwithstanding 
        the provisions of subdivisions 1 to 6, An institutionalized 
        spouse, institutionalized before October 1, 1989, for a 
        continuous period, who applies for medical assistance on or 
        after July 1, 1983, may transfer liquid assets to a 
        noninstitutionalized spouse without loss of eligibility if all 
        of the following conditions apply: 
           (a) The noninstitutionalized spouse is not applying for or 
        receiving assistance; 
           (b) Either (1) the noninstitutionalized spouse has less 
        than $10,000 in liquid assets, including assets singly owned and 
        50 percent of assets owned jointly with the institutionalized 
        spouse; or (2) the noninstitutionalized spouse has less than 50 
        percent of the total value of nonexempt assets owned by both 
        parties, jointly or individually; 
           (c) The amount transferred, together with the 
        noninstitutionalized spouse's own assets, totals no more than 
        one-half of the total value of the liquid assets of the parties 
        or $10,000 in liquid assets, whichever is greater; and 
           (d) The transfer may be effected only once, at the time of 
        initial medical assistance application. 
           Sec. 8.  Minnesota Statutes 1996, section 256B.431, 
        subdivision 18, is amended to read: 
           Subd. 18.  [APPRAISALS; UPDATING APPRAISALS, ADDITIONS, AND 
        REPLACEMENTS.] (a) Notwithstanding Minnesota Rules, part 
        9549.0060, subparts 1 to 3, the appraised value, routine 
        updating of the appraised value, and special reappraisals are 
        subject to this subdivision. 
           (1) For rate years beginning after June 30, 1993, the 
        commissioner shall permit a nursing facility to appeal its 
        appraisal according to the procedures provided in section 
        256B.50, subdivision 2.  Any reappraisals conducted in 
        connection with that appeal must utilize the comparative-unit 
        method as described in the Marshall Valuation Service published 
        by Marshall-Swift in establishing the nursing facility's 
        depreciated replacement cost. 
           Nursing facilities electing to appeal their appraised value 
        shall file written notice of appeal with the commissioner of 
        human services before December 30, 1992.  The cost of the 
        reappraisal, if any, shall be considered an allowable cost under 
        Minnesota Rules, parts 9549.0040, subpart 9, and 9549.0061. 
           (2) The redetermination of a nursing facility's appraised 
        value under this paragraph shall have no impact on the rental 
        payment rate determined under subdivision 13 but shall only be 
        used for calculating the nursing facility's rental rate under 
        Minnesota Rules, parts 9549.0010 to 9549.0080, and this section 
        for rate years beginning after June 30, 1993.  
           (3) For all rate years after June 30, 1993, the 
        commissioner shall no longer conduct any appraisals under 
        Minnesota Rules, part 9549.0060, for the purpose of determining 
        property-related payment rates. 
           (b) Notwithstanding Minnesota Rules, part 9549.0060, 
        subpart 2, for rate years beginning after June 30, 1993, the 
        commissioner shall routinely update the appraised value of each 
        nursing facility by adding the cost of capital asset 
        acquisitions to its allowable appraised value.  
           The commissioner shall also annually index each nursing 
        facility's allowable appraised value by the inflation index 
        referenced in subdivision 3f, paragraph (a), for the purpose of 
        computing the nursing facility's annual rental rate.  In 
        annually adjusting the nursing facility's appraised value, the 
        commissioner must not include the historical cost of capital 
        assets acquired during the reporting year in the nursing 
        facility's appraised value. 
           In addition, the nursing facility's appraised value must be 
        reduced by the historical cost of capital asset disposals or 
        applicable credits such as public grants and insurance 
        proceeds.  Capital asset additions and disposals must be 
        reported on the nursing facility's annual cost report in the 
        reporting year of acquisition or disposal.  The incremental 
        increase in the nursing facility's rental rate resulting from 
        this annual adjustment as determined under Minnesota Rules, 
        parts 9549.0010 to 9549.0080, and this section shall be added to 
        the nursing facility's property-related payment rate for the 
        rate year following the reporting year.  
           Sec. 9.  Minnesota Statutes 1996, 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 long-term care facility for reconsideration 
        of the classification of a resident under section 144.0722 or 
        144.0723.  
           Sec. 10.  Minnesota Statutes 1996, 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 postmarked or received by the commissioner within 
        60 days of the date the determination of the payment rate was 
        mailed or personally received by a provider, whichever is 
        earlier.  The notice of appeal must specify each disputed item; 
        the reason for the dispute; the total dollar amount 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.  The commissioner shall review an appeal by a 
        nursing facility, if the appeal was sent by certified mail and 
        postmarked prior to August 1, 1991, and would have been received 
        by the commissioner within the 60-day deadline if it had not 
        been delayed due to an error by the postal service. 
           Sec. 11.  Minnesota Statutes 1996, section 256B.50, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [CONTESTED CASE PROCEDURES APPEALS REVIEW 
        PROCESS.] Except as provided in subdivision 2, the appeal (a) 
        Effective for desk audit appeals for rate years beginning on or 
        after July 1, 1997, and for field audit appeals filed on or 
        after that date, the commissioner shall review appeals and issue 
        a written appeal determination on each appealed item within one 
        year of the due date of the appeal.  Upon mutual agreement, the 
        commissioner and the provider may extend the time for issuing a 
        determination for a specified period.  The commissioner shall 
        notify the provider by first class mail of the appeal 
        determination.  The appeal determination takes effect 30 days 
        following the date of issuance specified in the determination. 
           (b) In reviewing the appeal, the commissioner may request 
        additional written or oral information from the provider.  The 
        provider has the right to present information by telephone, in 
        writing, or in person concerning the appeal to the commissioner 
        prior to the issuance of the appeal determination within six 
        months of the date the appeal was received by the commissioner.  
        Written requests for conferences must be submitted separately 
        from the appeal letter.  Statements made during the review 
        process are not admissible in a contested case hearing absent an 
        express stipulation by the parties to the contested case. 
           (c) For an appeal item on which the provider disagrees with 
        the appeal determination, the provider may file with the 
        commissioner a written demand for a contested case hearing to 
        determine the proper resolution of specified appeal items.  The 
        demand must be postmarked or received by the commissioner within 
        30 days of the date of issuance specified in the determination.  
        A contested case demand for an appeal item nullifies the written 
        appeal determination issued by the commissioner for that appeal 
        item.  The commissioner shall refer any contested case demand to 
        the office of the attorney general. 
           (d) A contested case hearing must be heard by an 
        administrative law judge according to sections 14.48 to 14.56.  
        In any proceeding under this section, the appealing party must 
        demonstrate by a preponderance of the evidence that the 
        commissioner's determination of a payment rate is incorrect.  
           (e) Regardless of any rate appeal, the rate established 
        must be the rate paid and must remain in effect until final 
        resolution of the appeal or subsequent desk or field audit 
        adjustment, notwithstanding any provision of law or rule to the 
        contrary.  
           (f) To challenge the validity of rules established by the 
        commissioner pursuant to this section and sections 256B.41, 
        256B.421, 256B.431, 256B.47, 256B.48, 256B.501, and 256B.502, a 
        provider shall comply with section 14.44. 
           (g) The commissioner has discretion to issue to the 
        provider a proposed resolution for specified appeal items upon a 
        request from the provider filed separately from the notice of 
        appeal.  The proposed resolution is final upon written 
        acceptance by the provider within 30 days of the date the 
        proposed resolution was mailed to or personally received by the 
        provider, whichever is earlier.  
           (h) The commissioner may use the procedures described in 
        this subdivision to resolve appeals filed prior to July 1, 1997. 
           Sec. 12.  Minnesota Statutes 1996, section 256B.50, 
        subdivision 1e, is amended to read: 
           Subd. 1e.  [ATTORNEY'S FEES AND COSTS.] (a) Notwithstanding 
        section 15.472, paragraph (a), for an issue appealed under 
        subdivision 1, the prevailing party in a contested case 
        proceeding or, if appealed, in subsequent judicial review, must 
        be awarded reasonable attorney's fees and costs incurred in 
        litigating the appeal, if the prevailing party shows that the 
        position of the opposing party was not substantially justified.  
        The procedures for awarding fees and costs set forth in section 
        15.474 must be followed in determining the prevailing party's 
        fees and costs except as otherwise provided in this 
        subdivision.  For purposes of this subdivision, "costs" means 
        subpoena fees and mileage, transcript costs, court reporter 
        fees, witness fees, postage and delivery costs, photocopying and 
        printing costs, amounts charged the commissioner by the office 
        of administrative hearings, and direct administrative costs of 
        the department; and "substantially justified" means that a 
        position had a reasonable basis in law and fact, based on the 
        totality of the circumstances prior to and during the contested 
        case proceeding and subsequent review. 
           (b) When an award is made to the department under this 
        subdivision, attorney fees must be calculated at the cost to the 
        department.  When an award is made to a provider under this 
        subdivision, attorney fees must be calculated at the rate 
        charged to the provider except that attorney fees awarded must 
        be the lesser of the attorney's normal hourly fee or $100 per 
        hour. 
           (c) In contested case proceedings involving more than one 
        issue, the administrative law judge shall determine what portion 
        of each party's attorney fees and costs is related to the issue 
        or issues on which it prevailed and for which it is entitled to 
        an award.  In making that determination, the administrative law 
        judge shall consider the amount of time spent on each issue, the 
        precedential value of the issue, the complexity of the issue, 
        and other factors deemed appropriate by the administrative law 
        judge.  
           (d) When the department prevails on an issue involving more 
        than one provider, the administrative law judge shall allocate 
        the total amount of any award for attorney fees and costs among 
        the providers.  In determining the allocation, the 
        administrative law judge shall consider each provider's monetary 
        interest in the issue and other factors deemed appropriate by 
        the administrative law judge.  
           (e) Attorney fees and costs awarded to the department for 
        proceedings under this subdivision must not be reported or 
        treated as allowable costs on the provider's cost report.  
           (f) Fees and costs awarded to a provider for proceedings 
        under this subdivision must be reimbursed to them by reporting 
        the amount of fees and costs awarded as allowable costs on the 
        provider's cost report for the reporting year in which they were 
        awarded.  Fees and costs reported pursuant to this subdivision 
        must be included in the general and administrative cost category 
        but are not subject to either the general and administrative or 
        other operating cost limits categorical or overall cost 
        limitations established in rule or statute. 
           (g) If the provider fails to pay the awarded attorney fees 
        and costs within 120 days of the final decision on the award of 
        attorney fees and costs, the department may collect the amount 
        due through any method available to it for the collection of 
        medical assistance overpayments to providers.  Interest charges 
        must be assessed on balances outstanding after 120 days of the 
        final decision on the award of attorney fees and costs.  The 
        annual interest rate charged must be the rate charged by the 
        commissioner of revenue for late payment of taxes that is in 
        effect on the 121st day after the final decision on the award of 
        attorney fees and costs.  
           (h) Amounts collected by the commissioner pursuant to this 
        subdivision must be deemed to be recoveries pursuant to section 
        256.01, subdivision 2, clause 15. 
           (i) This subdivision applies to all contested case 
        proceedings set on for hearing by the commissioner on or after 
        April 29, 1988, regardless of the date the appeal was filed. 
           Sec. 13.  Minnesota Statutes 1996, 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.  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, except that, until June 30, 1995, in cases where a 
        county agency has developed or approved a case plan that 
        includes reunification with the children, foster care 
        maintenance payments made under state or local law for a child 
        who is temporarily absent from the assistance unit must not be 
        considered income to the child and the payments must not be 
        counted in the determination of the eligibility or benefit level 
        of the assistance unit.  Otherwise, 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. 
           Sec. 14.  Minnesota Statutes 1996, section 257.071, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SIX-MONTH REVIEW OF PLACEMENTS.] There shall be 
        an administrative review of the case plan of each child placed 
        in a residential facility no later than 180 days after the 
        initial placement of the child in a residential facility and at 
        least every six months thereafter if the child is not returned 
        to the home of the parent or parents within that time.  The case 
        plan must be monitored and updated at each administrative 
        review.  As an alternative to the administrative review, the 
        social service agency responsible for the placement may bring a 
        petition as provided in section 260.131, subdivision 1a, to the 
        court for review of the foster care to determine if placement is 
        in the best interests of the child.  This petition must be 
        brought to the court within the applicable six months and is not 
        in lieu of the requirements contained in subdivision 3 or 4.  A 
        court review conducted pursuant to section 260.191, subdivision 
        3b, shall satisfy the requirement for an administrative review 
        so long as the other requirements of this section are met. 
           Sec. 15.  Minnesota Statutes 1996, section 260.191, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [REVIEW OF COURT ORDERED PLACEMENTS; PERMANENT 
        PLACEMENT DETERMINATION.] (a) If the court places a child in a 
        residential facility, as defined in section 257.071, subdivision 
        1, the court shall conduct a hearing to determine the permanent 
        status of the child not later than 12 months after the child was 
        placed out of the home of the parent.  Not later than ten days 
        prior to this hearing, the responsible social service agency 
        shall file pleadings to establish the basis for the permanent 
        placement determination.  Notice of the hearing and copies of 
        the pleadings must be provided pursuant to section 260.141.  If 
        a termination of parental rights petition is filed before the 
        date required for the permanency planning determination, no 
        hearing need be conducted under this section.  The court shall 
        determine whether the child is to be returned home or, if not, 
        what permanent placement is consistent with the child's best 
        interests.  The "best interests of the child" means all relevant 
        factors to be considered and evaluated. 
           If the child is not returned to the home, the dispositions 
        available for permanent placement determination are: 
           (1) permanent legal and physical custody to a relative 
        pursuant to the standards and procedures applicable under 
        chapter 257 or 518.  The social service agency may petition on 
        behalf of the proposed custodian; 
           (2) termination of parental rights and adoption; the social 
        service agency shall file a petition for termination of parental 
        rights under section 260.231 and all the requirements of 
        sections 260.221 to 260.245 remain applicable; or 
           (3) long-term foster care; transfer of legal custody and 
        adoption are preferred permanency options for a child who cannot 
        return home.  The court may order a child into long-term foster 
        care only if it finds that neither an award of legal and 
        physical custody to a relative, nor termination of parental 
        rights nor adoption is in the child's best interests.  Further, 
        the court may only order long-term foster care for the child 
        under this section if it finds the following: 
           (i) the child has reached age 12 and reasonable efforts by 
        the responsible social service agency have failed to locate an 
        adoptive family for the child; or 
           (ii) the child is a sibling of a child described in clause 
        (i) and the siblings have a significant positive relationship 
        and are ordered into the same long-term foster care home. 
           (b) The court may extend the time period for determination 
        of permanent placement to 18 months after the child was placed 
        in a residential facility if: 
           (1) there is a substantial probability that the child will 
        be returned home within the next six months; 
           (2) the agency has not made reasonable, or, in the case of 
        an Indian child, active efforts, to correct the conditions that 
        form the basis of the out-of-home placement; or 
           (3) extraordinary circumstances exist precluding a 
        permanent placement determination, in which case the court shall 
        make written findings documenting the extraordinary 
        circumstances and order one subsequent review after six months 
        to determine permanent placement.  A court finding that 
        extraordinary circumstances exist precluding a permanent 
        placement determination must be supported by detailed factual 
        findings regarding those circumstances. 
           (c) In ordering a permanent placement of a child, the court 
        must be governed by the best interests of the child, including a 
        review of the relationship between the child and relatives and 
        the child and other important persons with whom the child has 
        resided or had significant contact. 
           (d) Once a permanent placement determination has been made 
        and permanent placement has been established, further court 
        reviews and dispositional hearings are only necessary if 
        otherwise required by federal law, an adoption has not yet been 
        finalized, or there is a disruption of the permanent or 
        long-term placement.  If required, reviews must take place no 
        less frequently than every six months. 
           (e) An order under this subdivision must include the 
        following detailed findings: 
           (1) how the child's best interests are served by the order; 
           (2) the nature and extent of the responsible social service 
        agency's reasonable efforts, or, in the case of an Indian child, 
        active efforts, to reunify the child with the parent or parents; 
           (3) the parent's or parents' efforts and ability to use 
        services to correct the conditions which led to the out-of-home 
        placement; 
           (4) whether the conditions which led to the out-of-home 
        placement have been corrected so that the child can return home; 
        and 
           (5) if the child cannot be returned home, whether there is 
        a substantial probability of the child being able to return home 
        in the next six months.  
           (f) An order for permanent legal and physical custody of a 
        child may be modified under sections 518.18 and 518.185.  The 
        social service agency is a party to the proceeding and must 
        receive notice.  An order for long-term foster care is 
        reviewable upon motion and a showing by the parent of a 
        substantial change in the parent's circumstances such that the 
        parent could provide appropriate care for the child and that 
        removal of the child from the child's permanent placement and 
        the return to the parent's care would be in the best interest of 
        the child. 
           Sec. 16.  Minnesota Statutes 1996, section 260.192, is 
        amended to read: 
           260.192 [DISPOSITIONS; VOLUNTARY FOSTER CARE PLACEMENTS.] 
           Upon a petition for review of the foster care status of a 
        child, the court may:  
           (a) In the case of a petition required to be filed under 
        section 257.071, subdivision 3, find that the child's needs are 
        being met, that the child's placement in foster care is in the 
        best interests of the child, and that the child will be returned 
        home in the next six months, in which case the court shall 
        approve the voluntary arrangement and continue the matter for 
        six months to assure the child returns to the parent's home.  
           (b) In the case of a petition required to be filed under 
        section 257.071, subdivision 4, find that the child's needs are 
        being met and that the child's placement in foster care is in 
        the best interests of the child, in which case the court shall 
        approve the voluntary arrangement.  The court shall order the 
        social service agency responsible for the placement to bring a 
        petition under section 260.131, subdivision 1 or 1a, as 
        appropriate, within two years 12 months. 
           (c) Find that the child's needs are not being met, in which 
        case the court shall order the social service agency or the 
        parents to take whatever action is necessary and feasible to 
        meet the child's needs, including, when appropriate, the 
        provision by the social service agency of services to the 
        parents which would enable the child to live at home, and order 
        a disposition under section 260.191. 
           (d) Find that the child has been abandoned by parents 
        financially or emotionally, or that the developmentally disabled 
        child does not require out-of-home care because of the 
        handicapping condition, in which case the court shall order the 
        social service agency to file an appropriate petition pursuant 
        to sections 260.131, subdivision 1, or 260.231. 
           Nothing in this section shall be construed to prohibit 
        bringing a petition pursuant to section 260.131, subdivision 1 
        or 2, sooner than required by court order pursuant to this 
        section. 
           Sec. 17.  Minnesota Statutes 1996, section 260.242, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GUARDIAN'S RESPONSIBILITIES.] (a) A guardian 
        appointed under the provisions of this section has legal custody 
        of a ward unless the court which appoints the guardian gives 
        legal custody to some other person.  If the court awards custody 
        to a person other than the guardian, the guardian nonetheless 
        has the right and responsibility of reasonable visitation, 
        except as limited by court order.  
           (b) The guardian may make major decisions affecting the 
        person of the ward, including but not limited to giving consent 
        (when consent is legally required) to the marriage, enlistment 
        in the armed forces, medical, surgical, or psychiatric 
        treatment, or adoption of the ward.  When, pursuant to this 
        section, the commissioner of human services is appointed 
        guardian, the commissioner may delegate to the local social 
        services agency of the county in which, after the appointment, 
        the ward resides, the authority to act for the commissioner in 
        decisions affecting the person of the ward, including but not 
        limited to giving consent to the marriage, enlistment in the 
        armed forces, medical, surgical, or psychiatric treatment of the 
        ward. 
           (c) A guardianship created under the provisions of this 
        section shall not of itself include the guardianship of the 
        estate of the ward.  
           (d) If the ward is in foster care, the court shall, upon 
        its own motion or that of the guardian, conduct a dispositional 
        hearing within 18 months of the child's initial foster care 
        placement and once every two years 12 months thereafter to 
        determine the future status of the ward including, but not 
        limited to, whether the child should be continued in foster care 
        for a specified period, should be placed for adoption, or 
        should, because of the child's special needs or circumstances, 
        be continued in foster care on a permanent or long-term basis.  
        When the court has determined that the special needs of the ward 
        are met through a permanent or long-term foster care placement, 
        no subsequent dispositional hearings are required.  
           Sec. 18.  Minnesota Statutes 1996, section 382.18, is 
        amended to read: 
           382.18 [OFFICIALS NOT TO BE INTERESTED IN CONTRACTS.] 
           No county official, or deputy or clerk or employee of such 
        official; and no commissioner for tax-forfeited lands or 
        commissioner's assistants, shall be directly or indirectly 
        interested in any contract, work, labor, or business to which 
        the county is a party or in which it is or may be interested or 
        in the furnishing of any article to, or the purchase or sale of 
        any property, real or personal, by, the county, or of which the 
        consideration, price, or expense is payable from the county 
        treasury.  Nothing in this section shall prevent a person from 
        receiving reimbursement from a county for providing licensed or 
        tribally approved family foster care.  Any violation of the 
        provisions of this section shall be a gross misdemeanor.  
           Sec. 19.  [REPEALER.] 
           Minnesota Statutes 1996, sections 256B.17, subdivisions 1, 
        2, 3, 4, 5, 6, and 8; and 256B.50, subdivisions 1d, 1g, 1h, and 
        2, are repealed. 
           Presented to the governor May 5, 1997 
           Signed by the governor May 6, 1997, 2:50 p.m.