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Office of the Revisor of Statutes

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

                              CHAPTER 2-H.F.No. 13 
                  An act relating to legislative enactments; providing 
                  for the correction of miscellaneous oversights, 
                  inconsistencies, ambiguities, unintended results, and 
                  technical errors of a noncontroversial nature; 
                  amending Minnesota Statutes 1996, sections 84.035, 
                  subdivision 5; 103G.005, subdivision 14a; 103G.2243; 
                  119A.31, subdivision 1; 124A.22, subdivision 13; 
                  256B.431, subdivision 25; 366.125; 394.235; and 
                  462.353, subdivision 5; and Laws 1996, chapter 408, 
                  article 2, section 8. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [CORRECTION 51.] Minnesota Statutes 1996, 
        section 366.125, is amended to read: 
           366.125 [MAY MAKE APPLICANT CERTIFY THAT TAXES ARE PAID.] 
           The town board may require, either as part of the necessary 
        information on an application or as a condition of a grant of 
        approval, an applicant for an amendment, permit, or other 
        approval required under a regulation established pursuant to 
        sections 366.10 to 366.18 to certify that there are no 
        delinquent property taxes, special assessments, penalties, and 
        interest due on the parcel to which the application relates.  
        Property taxes which are being paid under the provisions of a 
        stipulation, order, or confession of judgment, or which are 
        being appealed as provided by law, are not considered delinquent 
        for purposes of this section if all required payments that are 
        due under the terms of the stipulation, order, confession of 
        judgment, or appeal have been paid. 
           Sec. 2.  [CORRECTION 51.] Minnesota Statutes 1996, section 
        394.235, is amended to read: 
           394.235 [MAY MAKE APPLICANT CERTIFY THAT TAXES ARE PAID.] 
           The county board may require, either as part of the 
        necessary information on an application or as a condition of a 
        grant of approval, an applicant for an amendment to an official 
        control established pursuant to sections 394.21 to 394.37, or 
        for a permit or other approval required under an official 
        control established pursuant to those sections to certify that 
        there are no delinquent property taxes, special assessments, 
        penalties, and interest due on the parcel to which the 
        application relates.  Property taxes which are being paid under 
        the provisions of a stipulation, order, or confession of 
        judgment, or which are being appealed as provided by law, are 
        not considered delinquent for purposes of this section if all 
        required payments that are due under the terms of the 
        stipulation, order, confession of judgment, or appeal have been 
        paid. 
           Sec. 3.  [CORRECTION 51.] Minnesota Statutes 1996, section 
        462.353, subdivision 5, is amended to read: 
           Subd. 5.  [CERTIFY TAXES PAID.] A municipality may require, 
        either as part of the necessary information on an application or 
        as a condition of a grant of approval, an applicant for an 
        amendment to an official control established pursuant to 
        sections 462.351 to 462.364, or for a permit or other approval 
        required under an official control established pursuant to those 
        sections to certify that there are no delinquent property taxes, 
        special assessments, penalties, interest, and municipal utility 
        fees due on the parcel to which the application relates.  
        Property taxes which are being paid under the provisions of a 
        stipulation, order, or confession of judgment, or which are 
        being appealed as provided by law, are not considered delinquent 
        for purposes of this subdivision if all required payments that 
        are due under the terms of the stipulation, order, confession of 
        judgment, or appeal have been paid. 
           Sec. 4.  [CORRECTION 52.] Laws 1996, chapter 408, article 
        2, section 8, is amended to read: 
           Sec. 8.  [INTENSIVE JUVENILE MONITORING PILOT PROGRAM.] 
           (a) The commissioner of corrections shall establish at 
        least four pilot programs to provide intensive monitoring in the 
        community for juveniles who have committed or are at risk to 
        commit status offenses or delinquent acts.  A juvenile need not 
        be adjudicated for an offense to be eligible for the program.  
        The pilot programs shall provide a work experience for qualified 
        upper division college and graduate students who are majoring in 
        relevant disciplines to supervise and monitor juveniles referred 
        to or placed in community corrections or court services 
        programs.  Referrals to the program may be made by peace 
        officers, juvenile courts, and juvenile probation officers. 
           (b) The commissioner shall collaborate with appropriate 
        faculty members and administrators at the University of 
        Minnesota, the state universities, private colleges and 
        universities, community corrections agencies, and court services 
        agencies to establish general eligibility criteria for upper 
        division college and graduate students to participate in the 
        program and to specify the various ways by which students will 
        be compensated through their college or university for their 
        participation including, but not limited to, monetary 
        compensation, tuition payments, and related mileage and parking 
        expenses.  The compensation program shall allow for long-term 
        placements and corrections experiences for students who are 
        financially dependent on paid internships. 
           (c) The commissioner also shall collaborate with higher 
        education experts, community corrections agencies, court 
        services agencies, law enforcement agencies, and juvenile court 
        judges to: 
           (1) establish general eligibility criteria for juveniles to 
        be referred to or placed in the program; 
           (2) establish maximum caseloads for students, based on 
        their experience and knowledge and on the characteristics of the 
        juveniles to be supervised; 
           (3) specify the types of supervision and monitoring the 
        college students may be expected to provide to the juveniles; 
        and 
           (4) specify the manner in which the students' work and 
        performance measures will be monitored and evaluated by relevant 
        criminal justice and higher education professionals. 
           (d) At the end of the pilot programs, the commissioner of 
        corrections shall report findings and recommendations to the 
        chairs of the house and senate committees with jurisdiction over 
        criminal justice and higher education issues. 
           Sec. 5.  [CORRECTION 54.] Minnesota Statutes 1996, section 
        119A.31, subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAMS.] The commissioner shall, in 
        consultation with the chemical abuse and violence prevention 
        council, administer a grant program to fund community-based 
        programs that are designed to enhance the community's sense of 
        personal security and to assist the community in its crime 
        control and prevention efforts.  Examples of qualifying programs 
        include, but are not limited to, the following: 
           (1) community-based programs designed to provide services 
        for children aged 8 to 13 under 14 years of age who are juvenile 
        offenders or who are at risk of becoming juvenile offenders.  
        The programs must give priority to: 
           (i) juvenile restitution; 
           (ii) prearrest or pretrial diversion, including through 
        mediation; 
           (iii) probation innovation; 
           (iv) teen courts, community service; or 
           (v) post incarceration alternatives to assist youth in 
        returning to their communities; 
           (2) community-based programs designed to provide at-risk 
        children and youth aged 8 to 13 under 14 years of age with 
        after-school and summer enrichment activities; 
           (3) community-based programs designed to discourage young 
        people from involvement in unlawful drug or street gang 
        activities such as neighborhood youth centers; 
           (4) neighborhood block clubs and innovative community-based 
        crime prevention programs; 
           (5) community- and school-based programs designed to enrich 
        the educational, cultural, or recreational opportunities of 
        at-risk children and youth, including programs designed to keep 
        at-risk youth from dropping out of school and encourage school 
        dropouts to return to school; 
           (6) community-based programs designed to intervene with 
        juvenile offenders who are identified as likely to engage in 
        repeated criminal activity in the future unless intervention is 
        undertaken; 
           (7) community-based collaboratives that coordinate multiple 
        programs and funding sources to address the needs of at-risk 
        children and youth, including, but not limited to, 
        collaboratives that address the continuum of services for 
        juvenile offenders and those who are at risk of becoming 
        juvenile offenders; 
           (8) programs that are proven successful at increasing the 
        rate of school success or the rate of post-secondary education 
        attendance for high-risk students; 
           (9) community-based programs that provide services to 
        homeless youth; 
           (10) programs designed to reduce truancy; and 
           (11) other community- and school-based crime prevention 
        programs that are innovative and encourage substantial 
        involvement by members of the community served by the program.  
           Sec. 6.  [CORRECTION 55.] Minnesota Statutes 1996, section 
        124A.22, subdivision 13, is amended to read: 
           Subd. 13.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
        definitions in this subdivision apply to subdivisions 13a and 
        13b. 
           (a) "Sparsity index" for a school district means the 
        greater of .2 or the ratio of the square mile area of the school 
        district to the actual pupil units of the school district. 
           (b) "Density index" for a school district means the ratio 
        of the square mile area of the school district to the actual 
        pupil units of the school district.  However, the density index 
        for a school district cannot be greater than .2 or less than 
        .005. 
           (c) "Fiscal year 1996 base allowance" for a school district 
        means the result of the following computation: 
           (1) sum the following amounts: 
           (i) the fiscal year 1996 regular transportation revenue for 
        the school district according to section 124.225, subdivision 
        7d, paragraph (a), excluding the revenue attributable nonpublic 
        school pupils and to pupils with disabilities receiving special 
        transportation services; plus 
           (ii) the fiscal year 1996 nonregular transportation revenue 
        for the school district according to section 124.225, 
        subdivision 7d, paragraph (b), excluding the revenue for 
        desegregation transportation according to section 124.225, 
        subdivision 1, paragraph (c), clause (4), and the revenue 
        attributable to nonpublic school pupils and to pupils with 
        disabilities receiving special transportation services or board 
        and lodging; plus 
           (iii) the fiscal year 1996 excess transportation levy for 
        the school district according to section 124.226, subdivision 5, 
        excluding the levy attributable to nonpublic school pupils; plus 
           (iv) the fiscal year 1996 late activity bus levy for the 
        school district according to section 124.226, subdivision 9, 
        excluding the levy attributable to nonpublic school pupils; plus 
           (v) an amount equal to one-third of the fiscal year 1996 
        bus depreciation for the school district according to section 
        124.225, subdivision 1, paragraph (b), clauses (2), (3), and (4).
           (2) divide the result in clause (1) by the school districts 
        district's 1995-1996 actual fund balance pupil units. 
           Sec. 7.  [CORRECTION 58.] Minnesota Statutes 1996, section 
        84.035, subdivision 5, is amended to read: 
           Subd. 5.  [ACTIVITIES IN PEATLAND SCIENTIFIC AND NATURAL 
        AREAS.] Areas designated in subdivision 4 as peatland scientific 
        and natural areas are subject to the following conditions: 
           (a) Except as provided in paragraph (b), all restrictions 
        otherwise applicable to scientific and natural areas designated 
        under section 86A.05, subdivision 5, apply to the surface use 
        and to any use of the mineral estate which would significantly 
        modify or alter the peatland water levels or flows, peatland 
        water chemistry, plant or animal species or communities, or 
        other natural features of the peatland scientific and natural 
        areas, including, but not limited to, the following prohibitions:
           (1) construction of any new public drainage systems after 
        the effective date of Laws 1991, chapter 354, or improvement or 
        repair to a public drainage system in existence on the effective 
        date of Laws 1991, chapter 354, under authority of chapter 103E, 
        or any other alteration of surface water or ground water levels 
        or flows unless specifically permitted under paragraph (b), 
        clause (5) or (6); 
           (2) removal of peat, sand, gravel, or other industrial 
        minerals; 
           (3) exploratory boring or other exploration or removal of 
        oil, natural gas, radioactive materials or metallic minerals 
        which would significantly modify or alter the peatland water 
        levels or flows, peatland water chemistry, plant or animal 
        species or communities, or natural features of the peatland 
        scientific and natural areas, except in the event of a national 
        emergency declared by Congress; 
           (4) commercial timber harvesting; 
           (5) construction of new corridors of disturbance, of the 
        kind defined in subdivision 3, after June 5, 1991; and 
           (6) ditching, draining, filling, or any other activities 
        which modify or alter the peatland water levels or flows, 
        peatland water chemistry, plant or animal species or 
        communities, or other natural features of the peatland 
        scientific and natural areas. 
           (b) The following activities are allowed: 
           (1) recreational activities, including hunting, fishing, 
        trapping, cross-country skiing, snowshoeing, nature observation, 
        or other recreational activities permitted in the management 
        plan approved by the commissioner; 
           (2) scientific and educational work and research; 
           (3) maintenance of corridors of disturbance, including 
        survey lines and preparation of winter roads, consistent with 
        protection of the peatland ecosystem; 
           (4) use of corridors of disturbance unless limited by a 
        management plan adopted by the commissioner under subdivision 6; 
           (5) improvements to a public drainage system in existence 
        on the effective date of Laws 1991, chapter 354, only when it is 
        for the protection and maintenance of the ecological integrity 
        of the peatland scientific and natural area and when included in 
        a management plan adopted by the commissioner under subdivision 
        6; 
           (6) repairs to a public drainage system in existence on the 
        effective date of Laws 1991, chapter 354, which crosses a 
        peatland scientific and natural area and is used for the 
        purposes of providing a drainage outlet for lands outside of the 
        peatland scientific and natural area, provided that there are no 
        other feasible and prudent alternative means of providing the 
        drainage outlet.  The commissioner shall cooperate with the 
        ditch authority in the determination of any feasible and prudent 
        alternatives.  No repairs which would significantly modify or 
        alter the peatland water levels or flows, peatland water 
        chemistry, plant or animal species or communities, or other 
        natural features of the peatland scientific and natural areas 
        shall be made unless approved by the commissioner; 
           (7) motorized uses on a corridor of disturbance, if the 
        corridor existed on or before January 1, 1992, provided that 
        recreational motorized users uses may occur only when the 
        substrate is frozen, or the corridor is snow packed, subject to 
        a management plan developed in accordance with subdivision 6; 
           (8) control of forest insects, disease, and wildfires, as 
        described in a management plan adopted by the commissioner under 
        subdivision 6; and 
           (9) geological and geophysical surveys which would not 
        significantly modify or alter the peatland water levels or 
        flows, peatland water chemistry, plant or animal species or 
        communities, or other natural features of the peatland 
        scientific and natural areas. 
           Sec. 8.  [CORRECTION 58B.] Minnesota Statutes 1996, section 
        103G.005, subdivision 14a, is amended to read: 
           Subd. 14a.  [PASTURE.] "Pasture" means an area that was 
        grazed by domesticated livestock or that was planted with 
        annually seeded crops in a crop rotation seeding of grasses or 
        legumes in six of the last ten years prior to January 1, 1991. 
           Sec. 9.  [CORRECTION 58C.] Minnesota Statutes 1996, section 
        103G.2243, is amended to read: 
           103G.2243 [LOCAL COMPREHENSIVE WETLAND PROTECTION AND 
        MANAGEMENT PLANS.]
           Subdivision 1.  [GENERAL REQUIREMENTS; NOTICE AND 
        PARTICIPATION.] (a) As an alternative to the rules adopted under 
        section 103G.2242, subdivision 1, and the public value criteria 
        established or approved under section 103B.3355, a comprehensive 
        wetland protection and management plan may be developed by a 
        local government unit, or one or more local government units 
        operating under a joint powers agreement, provided that: 
           (1) a notice is made at the beginning of the planning 
        process to the board, the commissioner of natural resources, the 
        pollution control agency, local government units, and local 
        citizens to actively participate in the development of the plan; 
        and 
           (2) the plan is implemented by ordinance as part of the 
        local government's official controls under chapter 394, for a 
        county; chapter 462, for a city; chapter 366, for a town; and by 
        rules adopted under chapter 103D, for a watershed district; and 
        chapter 103B, for a watershed management organization. 
           (b) An organization that is invited to participate in the 
        development of the local plan, but declines to do so and fails 
        to participate or to provide written comments during the local 
        review process, waives the right during board review to submit 
        comments, except comments concerning consistency of the plan 
        with laws and rules administered by that agency.  In determining 
        the merit of an agency comment, the board shall consider the 
        involvement of the agency in the development of the local plan. 
           Subd. 2.  [PLAN CONTENTS.] A comprehensive wetland 
        protection and management plan may: 
           (1) provide for classification of wetlands in the plan area 
        based on: 
           (i) an inventory of wetlands in the plan area; 
           (ii) an assessment of the wetland functions listed in 
        section 103B.3355, using a methodology chosen by the technical 
        evaluation panel from one of the methodologies established or 
        approved by the board under that section; and 
           (iii) the resulting public values; 
           (2) vary application of the sequencing standards in section 
        103G.222, subdivision 1, paragraph (b), for projects based on 
        the classification and criteria set forth in the plan; 
           (3) vary the replacement standards of section 103G.222, 
        subdivision 1, paragraphs (f) and (g), based on the 
        classification and criteria set forth in the plan, for specific 
        wetland impacts provided there is no net loss of public values 
        within the area subject to the plan, and so long as: 
           (i) in a 50 to 80 percent area, a minimum acreage 
        requirement of one acre of replaced wetland for each acre of 
        drained or filled wetland requiring replacement is met within 
        the area subject to the plan; and 
           (ii) in a less than 50 percent area, a minimum acreage 
        requirement of two acres of replaced wetland for each acre of 
        drained or filled wetland requiring replacement is met within 
        the area subject to the plan, except that replacement for the 
        amount above a 1:1 ratio can be accomplished as described 
        in section 103G.2242, subdivision 12; 
           (4) in a greater than 80 percent area, allow replacement 
        credit, based on the classification and criteria set forth in 
        the plan, for any project that increases the public value of 
        wetlands, including activities on adjacent upland acres; and 
           (5) in a greater than 80 percent area, based on the 
        classification and criteria set forth in the plan, expand the 
        application of the exemptions in section 103G.2241, subdivision 
        1, paragraph (a), clause (4), to also include nonagricultural 
        land, provided there is no net loss of wetland values. 
           Subd. 3.  [BOARD REVIEW AND APPROVAL; MEDIATION; JUDICIAL 
        REVIEW.] (a) The plan is deemed approved 60 days after the local 
        government submits the final plan to the board, unless the board 
        disagrees with the plan as provided in paragraph (d). 
           (b) The board may not disapprove a plan if the board 
        determines the plan meets the requirements of this section. 
           (c) In its review of a plan, the board shall advise the 
        local government unit of those elements of the plan that are 
        more restrictive than state law and rules for purposes of 
        section 103G.237, subdivision 5. 
           (d) If the board disagrees with the plan or any elements of 
        the plan, the board shall, in writing, notify the local 
        government of the plan deficiencies and suggested changes.  The 
        board shall include in the response to the local government the 
        scientific justification, if applicable, for the board's 
        concerns with the plan.  Upon receipt of the board's concerns 
        with the plan, the local government has 60 days to revise the 
        plan and resubmit the plan to the board for reconsideration, or 
        the local government may request a hearing before the board.  
        The board shall hold a hearing within the boundaries of the 
        jurisdiction of the local government within 60 days of the 
        request for hearing.  After the hearing, the board shall, within 
        60 days, prepare a report of its decision and inform the local 
        government. 
           (e) If, after the hearing, the board and local government 
        disagree on the plan, the board shall, within 60 days, initiate 
        mediation through a neutral party.  If the board and local 
        government unit agree in writing not to use mediation or the 
        mediation does not result in a resolution of the differences 
        between the parties, then the board may commence a declaratory 
        judgment action in the district court of the county where the 
        local government unit is located.  If the board does not 
        commence a declaratory judgment action within the applicable 
        60-day period, the plan is deemed approved. 
           (f) The declaratory judgment action must be commenced 
        within 60 days after the date of the written agreement not to 
        use mediation or 60 days after conclusion of the mediation.  If 
        the board commences a declaratory judgment action, the district 
        court shall review the board's record of decision and the record 
        of decision of the local government unit.  The district court 
        shall affirm the plan if it meets the requirements of this 
        subdivision section. 
           Subd. 4.  [EFFECTIVE DATE; REPLACEMENT DECISIONS.] (a) The 
        plan becomes effective as provided in subdivision 3, paragraphs 
        (d) to (f), and after adoption of the plan into the official 
        controls of the local government. 
           (b) After the effective date of a plan, a local government 
        unit shall make replacement decisions consistent with the plan. 
           Subd. 5.  [PLAN AMENDMENTS.] Amendments to the plan become 
        effective upon completion of the same process required for the 
        original plan. 
           Subd. 6.  [WATER PLANNING PROCESSES APPLY.] Except as 
        otherwise provided for in this section, all other requirements 
        relating to development of the plan must be consistent with the 
        water plan processes under sections 103B.231 and 103B.311. 
           Sec. 10.  [CORRECTION 62B.] Minnesota Statutes 1996, 
        section 256B.431, subdivision 25, is amended to read: 
           Subd. 25.  [CHANGES TO NURSING FACILITY REIMBURSEMENT 
        BEGINNING JULY 1, 1995.] The nursing facility reimbursement 
        changes in paragraphs (a) to (h) (g) shall apply in the sequence 
        specified to Minnesota Rules, parts 9549.0010 to 9549.0080, and 
        this section, beginning July 1, 1995. 
           (a) The eight-cent adjustment to care-related rates in 
        subdivision 22, paragraph (e), shall no longer apply. 
           (b) For rate years beginning on or after July 1, 1995, the 
        commissioner shall limit a nursing facility's allowable 
        operating per diem for each case mix category for each rate year 
        as in clauses (1) to (3). 
           (1) For the rate year beginning July 1, 1995, the 
        commissioner shall group nursing facilities into two groups, 
        freestanding and nonfreestanding, within each geographic group, 
        using their operating cost per diem for the case mix A 
        classification.  A nonfreestanding nursing facility is a nursing 
        facility whose other operating cost per diem is subject to the 
        hospital attached, short length of stay, or the rule 80 limits.  
        All other nursing facilities shall be considered freestanding 
        nursing facilities.  The commissioner shall then array all 
        nursing facilities in each grouping by their allowable case mix 
        A operating cost per diem.  In calculating a nursing facility's 
        operating cost per diem for this purpose, the commissioner shall 
        exclude the raw food cost per diem related to providing special 
        diets that are based on religious beliefs, as determined in 
        subdivision 2b, paragraph (h).  For those nursing facilities in 
        each grouping whose case mix A operating cost per diem: 
           (i) is at or below the median minus 1.0 standard deviation 
        of the array, the commissioner shall limit the nursing 
        facility's allowable operating cost per diem for each case mix 
        category to the lesser of the prior reporting year's allowable 
        operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), increased by six 
        percentage points, or the current reporting year's corresponding 
        allowable operating cost per diem; 
           (ii) is between minus .5 standard deviation and minus 1.0 
        standard deviation below the median of the array, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diems 
        plus the inflation factor as established in paragraph (f), 
        clause (2), increased by four percentage points, or the current 
        reporting year's corresponding allowable operating cost per 
        diem; or 
           (iii) is equal to or above minus .5 standard deviation 
        below the median of the array, the commissioner shall limit the 
        nursing facility's allowable operating cost per diem for each 
        case mix category to the lesser of the prior reporting year's 
        allowable operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), increased by three 
        percentage points, or the current reporting year's corresponding 
        allowable operating cost per diem. 
           (2) For the rate year beginning on July 1, 1996, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the prior reporting year's allowable operating cost per diems 
        plus the inflation factor as established in paragraph (f), 
        clause (2), increased by one percentage point or the current 
        reporting year's corresponding allowable operating cost per 
        diems; and 
           (3) For rate years beginning on or after July 1, 1997, the 
        commissioner shall limit the nursing facility's allowable 
        operating cost per diem for each case mix category to the lesser 
        of the reporting year prior to the current reporting year's 
        allowable operating cost per diems plus the inflation factor as 
        established in paragraph (f), clause (2), or the current 
        reporting year's corresponding allowable operating cost per 
        diems. 
           (c) For rate years beginning on July 1, 1995, the 
        commissioner shall limit the allowable operating cost per diems 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (b) to each nursing facility's operating 
        cost per diems, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diems are 
        subject to hospital attached, short length of stay, or rule 80 
        limits.  All other nursing facilities shall be considered 
        freestanding nursing facilities.  The commissioner shall then 
        array all nursing facilities within each grouping by their 
        allowable case mix A operating cost per diems.  In calculating a 
        nursing facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  For those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diems by two percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diems by one percent. 
           (d) For rate years beginning on or after July 1, 1996, the 
        commissioner shall limit the allowable operating cost per diems 
        for high cost nursing facilities.  After application of the 
        limits in paragraph (b) to each nursing facility's operating 
        cost per diems, the commissioner shall group nursing facilities 
        into two groups, freestanding or nonfreestanding, within each 
        geographic group.  A nonfreestanding nursing facility is a 
        nursing facility whose other operating cost per diems are 
        subject to hospital attached, short length of stay, or rule 80 
        limits.  All other nursing facilities shall be considered 
        freestanding nursing facilities.  The commissioner shall then 
        array all nursing facilities within each grouping by their 
        allowable case mix A operating cost per diems.  In calculating a 
        nursing facility's operating cost per diem for this purpose, the 
        commissioner shall exclude the raw food cost per diem related to 
        providing special diets that are based on religious beliefs, as 
        determined in subdivision 2b, paragraph (h).  In those nursing 
        facilities in each grouping whose case mix A operating cost per 
        diem exceeds 1.0 standard deviation above the median, the 
        commissioner shall reduce their allowable operating cost per 
        diems by three percent.  For those nursing facilities in each 
        grouping whose case mix A operating cost per diem exceeds 0.5 
        standard deviation above the median but is less than or equal to 
        1.0 standard deviation above the median, the commissioner shall 
        reduce their allowable operating cost per diems by two percent. 
           (e) For rate years beginning on or after July 1, 1995, the 
        commissioner shall determine a nursing facility's efficiency 
        incentive by first computing the allowable difference, which is 
        the lesser of $4.50 or the amount by which the facility's other 
        operating cost limit exceeds its nonadjusted other operating 
        cost per diem for that rate year.  The commissioner shall 
        compute the efficiency incentive by: 
           (1) subtracting the allowable difference from $4.50 and 
        dividing the result by $4.50; 
           (2) multiplying 0.20 by the ratio resulting from clause 
        (1), and then; 
           (3) adding 0.50 to the result from clause (2); and 
           (4) multiplying the result from clause (3) times the 
        allowable difference. 
           The nursing facility's efficiency incentive payment shall 
        be the lesser of $2.25 or the product obtained in clause (4). 
           (f) For rate years beginning on or after July 1, 1995, the 
        forecasted price index for a nursing facility's allowable 
        operating cost per diems shall be determined under clauses (1) 
        to (3) using the change in the Consumer Price Index-All Items 
        (United States city average) (CPI-U) or the change in the 
        Nursing Home Market Basket, both as forecasted by Data Resources 
        Inc., whichever is applicable.  The commissioner shall use the 
        indices as forecasted in the fourth quarter of the calendar year 
        preceding the rate year, subject to subdivision 2l, paragraph 
        (c).  If, as a result of federal legislative or administrative 
        action, the methodology used to calculate the Consumer Price 
        Index-All Items (United States city average) (CPI-U) changes, 
        the commissioner shall develop a conversion factor or other 
        methodology to convert the CPI-U index factor that results from 
        the new methodology to an index factor that approximates, as 
        closely as possible, the index factor that would have resulted 
        from application of the original CPI-U methodology prior to any 
        changes in methodology.  The commissioner shall use the 
        conversion factor or other methodology to calculate an adjusted 
        inflation index.  The adjusted inflation index must be used to 
        calculate payment rates under this section instead of the CPI-U 
        index specified in paragraph (d).  If the commissioner is 
        required to develop an adjusted inflation index, the 
        commissioner shall report to the legislature as part of the next 
        budget submission the fiscal impact of applying this index. 
           (1) The CPI-U forecasted index for allowable operating cost 
        per diems shall be based on the 21-month period from the 
        midpoint of the nursing facility's reporting year to the 
        midpoint of the rate year following the reporting year. 
           (2) The Nursing Home Market Basket forecasted index for 
        allowable operating costs and per diem limits shall be based on 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (3) For rate years beginning on or after July 1, 1996, the 
        forecasted index for operating cost limits referred to in 
        subdivision 21, paragraph (b), shall be based on the CPI-U for 
        the 12-month period between the midpoints of the two reporting 
        years preceding the rate year. 
           (g) After applying these provisions for the respective rate 
        years, the commissioner shall index these allowable operating 
        costs per diems by the inflation factor provided for in 
        paragraph (f), clause (1), and add the nursing facility's 
        efficiency incentive as computed in paragraph (e). 
           (h) A nursing facility licensed for 302 beds on September 
        30, 1993, that was approved under the moratorium exception 
        process in section 144A.073 for a partial replacement, and 
        completed the replacement project in December 1994, is exempt 
        from paragraphs (b) to (d) for rate years beginning on or after 
        July 1, 1995. 
           (i) Notwithstanding Laws 1996, chapter 451, article 3, 
        section 11, paragraph (h), for the rate years beginning on July 
        1, 1996, July 1, 1997, and July 1, 1998, a nursing facility 
        licensed for 40 beds effective May 1, 1992, with a subsequent 
        increase of 20 Medicare/Medicaid certified beds, effective 
        January 26, 1993, in accordance with an increase in licensure is 
        exempt from paragraphs (b) to (d). 
           Sec. 11.  [EFFECTIVE DATE.] 
           Section 6 is effective retroactive to July 1, 1996. 
           Presented to the governor February 18, 1997 
           Signed by the governor February 19, 1997, 2:30 p.m.