Minnesota Session Laws - 2000, Regular Session

                            CHAPTER 271-S.F.No. 2776 
                  An act relating to human services; extending the 
                  deadline for commencing construction for a previously 
                  approved moratorium project; providing for changes to 
                  the rate setting for a nursing facility in St. Louis 
                  county approved for a renovation; amending Minnesota 
                  Statutes 1999 Supplement, section 256B.431, 
                  subdivision 17. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1999 Supplement, section 
        256B.431, subdivision 17, is amended to read: 
           Subd. 17.  [SPECIAL PROVISIONS FOR MORATORIUM EXCEPTIONS.] 
        (a) Notwithstanding Minnesota Rules, part 9549.0060, subpart 3, 
        for rate periods beginning on October 1, 1992, and for rate 
        years beginning after June 30, 1993, a nursing facility that (1) 
        has completed a construction project approved under section 
        144A.071, subdivision 4a, clause (m); (2) has completed a 
        construction project approved under section 144A.071, 
        subdivision 4a, and effective after June 30, 1995; or (3) has 
        completed a renovation, replacement, or upgrading project 
        approved under the moratorium exception process in section 
        144A.073 shall be reimbursed for costs directly identified to 
        that project as provided in subdivision 16 and this subdivision. 
           (b) Notwithstanding Minnesota Rules, part 9549.0060, 
        subparts 5, item A, subitems (1) and (3), and 7, item D, 
        allowable interest expense on debt shall include: 
           (1) interest expense on debt related to the cost of 
        purchasing or replacing depreciable equipment, excluding 
        vehicles, not to exceed six percent of the total historical cost 
        of the project; and 
           (2) interest expense on debt related to financing or 
        refinancing costs, including costs related to points, loan 
        origination fees, financing charges, legal fees, and title 
        searches; and issuance costs including bond discounts, bond 
        counsel, underwriter's counsel, corporate counsel, printing, and 
        financial forecasts.  Allowable debt related to items in this 
        clause shall not exceed seven percent of the total historical 
        cost of the project.  To the extent these costs are financed, 
        the straight-line amortization of the costs in this clause is 
        not an allowable cost; and 
           (3) interest on debt incurred for the establishment of a 
        debt reserve fund, net of the interest earned on the debt 
        reserve fund. 
           (c) Debt incurred for costs under paragraph (b) is not 
        subject to Minnesota Rules, part 9549.0060, subpart 5, item A, 
        subitem (5) or (6). 
           (d) The incremental increase in a nursing facility's rental 
        rate, determined under Minnesota Rules, parts 9549.0010 to 
        9549.0080, and this section, resulting from the acquisition of 
        allowable capital assets, and allowable debt and interest 
        expense under this subdivision shall be added to its 
        property-related payment rate and shall be effective on the 
        first day of the month following the month in which the 
        moratorium project was completed. 
           (e) Notwithstanding subdivision 3f, paragraph (a), for rate 
        periods beginning on October 1, 1992, and for rate years 
        beginning after June 30, 1993, the replacement-costs-new per bed 
        limit to be used in Minnesota Rules, part 9549.0060, subpart 4, 
        item B, for a nursing facility that has completed a renovation, 
        replacement, or upgrading project that has been approved under 
        the moratorium exception process in section 144A.073, or that 
        has completed an addition to or replacement of buildings, 
        attached fixtures, or land improvements for which the total 
        historical cost exceeds the lesser of $150,000 or ten percent of 
        the most recent appraised value, must be $47,500 per licensed 
        bed in multiple-bed rooms and $71,250 per licensed bed in a 
        single-bed room.  These amounts must be adjusted annually as 
        specified in subdivision 3f, paragraph (a), beginning January 1, 
        1993. 
           (f) A nursing facility that completes a project identified 
        in this subdivision and, as of April 17, 1992, has not been 
        mailed a rate notice with a special appraisal for a completed 
        project, or completes a project after April 17, 1992, but before 
        September 1, 1992, may elect either to request a special 
        reappraisal with the corresponding adjustment to the 
        property-related payment rate under the laws in effect on June 
        30, 1992, or to submit their capital asset and debt information 
        after that date and obtain the property-related payment rate 
        adjustment under this section, but not both. 
           (g) For purposes of this paragraph, a total replacement 
        means the complete replacement of the nursing facility's 
        physical plant through the construction of a new physical plant 
        or the transfer of the nursing facility's license from one 
        physical plant location to another.  For total replacement 
        projects completed on or after July 1, 1992, the commissioner 
        shall compute the incremental change in the nursing facility's 
        rental per diem, for rate years beginning on or after July 1, 
        1995, by replacing its appraised value, including the historical 
        capital asset costs, and the capital debt and interest costs 
        with the new nursing facility's allowable capital asset costs 
        and the related allowable capital debt and interest costs.  If 
        the new nursing facility has decreased its licensed capacity, 
        the aggregate investment per bed limit in subdivision 3a, 
        paragraph (d), shall apply.  If the new nursing facility has 
        retained a portion of the original physical plant for nursing 
        facility usage, then a portion of the appraised value prior to 
        the replacement must be retained and included in the calculation 
        of the incremental change in the nursing facility's rental per 
        diem.  For purposes of this part, the original nursing facility 
        means the nursing facility prior to the total replacement 
        project.  The portion of the appraised value to be retained 
        shall be calculated according to clauses (1) to (3): 
           (1) The numerator of the allocation ratio shall be the 
        square footage of the area in the original physical plant which 
        is being retained for nursing facility usage. 
           (2) The denominator of the allocation ratio shall be the 
        total square footage of the original nursing facility physical 
        plant. 
           (3) Each component of the nursing facility's allowable 
        appraised value prior to the total replacement project shall be 
        multiplied by the allocation ratio developed by dividing clause 
        (1) by clause (2). 
           In the case of either type of total replacement as 
        authorized under section 144A.071 or 144A.073, the provisions of 
        this subdivision shall also apply.  For purposes of the 
        moratorium exception authorized under section 144A.071, 
        subdivision 4a, paragraph (s), if the total replacement involves 
        the renovation and use of an existing health care facility 
        physical plant, the new allowable capital asset costs and 
        related debt and interest costs shall include first the 
        allowable capital asset costs and related debt and interest 
        costs of the renovation, to which shall be added the allowable 
        capital asset costs of the existing physical plant prior to the 
        renovation, and if reported by the facility, the related 
        allowable capital debt and interest costs. 
           (h) Notwithstanding Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), for a total replacement, as 
        defined in paragraph (g), authorized under section 144A.071 or 
        144A.073 after July 1, 1999, the replacement-costs-new per bed 
        limit shall be $74,280 per licensed bed in multiple-bed rooms, 
        $92,850 per licensed bed in semiprivate rooms with a fixed 
        partition separating the resident beds, and $111,420 per 
        licensed bed in single rooms.  Minnesota Rules, part 9549.0060, 
        subpart 11, item C, subitem (2), does not apply.  These amounts 
        must be adjusted annually as specified in subdivision 3f, 
        paragraph (a), beginning January 1, 2000.  
           (i) For a total replacement, as defined in paragraph (g), 
        authorized under section 144A.073 for a 96-bed nursing home in 
        Carlton county, the replacement-costs-new per bed limit shall be 
        $74,280 per licensed bed in multiple-bed rooms, $92,850 per 
        licensed bed in semiprivate rooms with a fixed partition 
        separating the resident's beds, and $111,420 per licensed bed in 
        a single room.  Minnesota Rules, part 9549.0060, subpart 11, 
        item C, subitem (2), does not apply.  The resulting maximum 
        allowable replacement-costs-new multiplied by 1.25 shall 
        constitute the project's dollar threshold for purposes of 
        application of the limit set forth in section 144A.071, 
        subdivision 2.  The commissioner of health may waive the 
        requirements of section 144A.073, subdivision 3b, paragraph (b), 
        clause (2), on the condition that the other requirements of that 
        paragraph are met. 
           (j) For a renovation authorized under section 144A.073 for 
        a 65-bed nursing home in St. Louis county, the incremental 
        increase in rental rate for purposes of paragraph (d) shall be 
        $8.16, and the total replacement cost, allowable appraised 
        value, allowable debt, and allowable interest shall be increased 
        according to the incremental increase. 
           Sec. 2.  [NURSING HOME RENOVATION APPROVAL DEADLINE 
        EXTENDED.] 
           Notwithstanding Minnesota Statutes, section 144A.073, 
        subdivision 3, the commissioner of health shall extend approval 
        through July 1, 2001, for a renovation of a 65-bed nursing home 
        located in St. Louis county previously approved under Minnesota 
        Statutes, section 144A.073. 
           Presented to the governor March 20, 2000 
           Signed by the governor March 23, 2000, 10:43 a.m.