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

                              CHAPTER 14-H.F.No. 6 
                  An act relating to state government; making changes to 
                  public assistance programs, long-term care, continuing 
                  care for persons with disabilities, children's 
                  services, occupational licenses, human services 
                  licensing, county initiatives, local public health 
                  grants, child care provisions, child support 
                  provisions, and health care; establishing the 
                  Community Services Act; establishing alternative care 
                  liens; modifying petroleum product specifications; 
                  conveying land in Cass county; making forecast 
                  adjustments; appropriating money; amending Minnesota 
                  Statutes 2002, sections 13.69, subdivision 1; 41A.09, 
                  subdivision 2a; 61A.072, subdivision 6; 62A.31, 
                  subdivisions 1f, 1u, by adding a subdivision; 62A.315; 
                  62A.316; 62A.48, by adding a subdivision; 62A.49, by 
                  adding a subdivision; 62A.65, subdivision 7; 62D.095, 
                  subdivision 2, by adding a subdivision; 62E.06, 
                  subdivision 1; 62J.17, subdivision 2; 62J.23, by 
                  adding a subdivision; 62J.52, subdivisions 1, 2; 
                  62J.692, subdivisions 3, 4, 5, 7, 8; 62J.694, by 
                  adding a subdivision; 62L.05, subdivision 4; 62Q.19, 
                  subdivisions 1, 2; 62S.22, subdivision 1; 69.021, 
                  subdivision 11; 119B.011, subdivisions 5, 6, 15, 19, 
                  20, 21, by adding a subdivision; 119B.02, subdivision 
                  1; 119B.03, subdivisions 4, 9; 119B.05, subdivision 1; 
                  119B.08, subdivision 3; 119B.09, subdivisions 1, 2, 7, 
                  by adding subdivisions; 119B.11, subdivision 2a; 
                  119B.12, subdivision 2; 119B.13, subdivisions 1, 6, by 
                  adding a subdivision; 119B.16, subdivision 2, by 
                  adding subdivisions; 119B.19, subdivision 7; 119B.21, 
                  subdivision 11; 119B.23, subdivision 3; 124D.23, 
                  subdivision 1; 144.1222, by adding a subdivision; 
                  144.125; 144.128; 144.1481, subdivision 1; 144.1483; 
                  144.1488, subdivision 4; 144.1491, subdivision 1; 
                  144.1502, subdivision 4; 144.396, subdivisions 1, 5, 
                  7, 10, 11, 12; 144.414, subdivision 3; 144.551, 
                  subdivision 1; 144A.04, subdivision 3, by adding a 
                  subdivision; 144A.071, subdivision 4c, as added; 
                  144A.10, by adding a subdivision; 144A.4605, 
                  subdivision 4; 144E.11, subdivision 6; 144E.50, 
                  subdivision 5; 145.88; 145.881, subdivisions 1, 2; 
                  145.882, subdivisions 1, 2, 3, 7, by adding a 
                  subdivision; 145.883, subdivisions 1, 9; 145A.02, 
                  subdivisions 5, 6, 7; 145A.06, subdivision 1; 145A.09, 
                  subdivisions 2, 4, 7; 145A.10, subdivisions 2, 10, by 
                  adding a subdivision; 145A.11, subdivisions 2, 4; 
                  145A.12, subdivisions 1, 2, by adding a subdivision; 
                  145A.13, by adding a subdivision; 145A.14, subdivision 
                  2, by adding a subdivision; 147A.08; 148.5194, 
                  subdivisions 1, 2, 3, by adding a subdivision; 
                  148.6445, subdivision 7; 148C.01, subdivisions 2, 12, 
                  by adding subdivisions; 148C.03, subdivision 1; 
                  148C.0351, subdivision 1, by adding a subdivision; 
                  148C.04; 148C.05, subdivision 1, by adding 
                  subdivisions; 148C.07; 148C.10, subdivisions 1, 2; 
                  148C.11; 153A.17; 171.06, subdivision 3; 171.07, by 
                  adding a subdivision; 174.30, subdivision 1; 239.761, 
                  subdivisions 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 
                  239.792; 245.0312; 245.4874; 245.493, subdivision 1a; 
                  245A.035, subdivision 3; 245A.04, subdivisions 3, 3b, 
                  3d; 245A.09, subdivision 7; 245A.10; 245A.11, 
                  subdivisions 2a, 2b, by adding a subdivision; 245B.03, 
                  subdivision 2, by adding a subdivision; 245B.04, 
                  subdivision 2; 245B.06, subdivisions 2, 5, 8; 245B.07, 
                  subdivisions 6, 9, 11; 245B.08, subdivision 1; 
                  246.014; 246.015, subdivision 3; 246.018, subdivisions 
                  2, 3, 4; 246.13; 246.15; 246.16; 246.54; 246.57, 
                  subdivisions 1, 4, 6; 246.71, subdivisions 4, 5; 
                  246B.02; 246B.03; 246B.04; 252.025, subdivision 7; 
                  252.06; 252.27, subdivision 2a; 252.32, subdivisions 
                  1, 1a, 3, 3c; 252.41, subdivision 3; 252.46, 
                  subdivision 1; 253.015, subdivision 1; 253.017; 
                  253.20; 253.26; 253B.02, subdivision 18a; 253B.04, 
                  subdivision 1; 253B.05, subdivision 3; 253B.09, 
                  subdivision 1; 256.01, subdivision 2; 256.012; 
                  256.046, subdivision 1; 256.0471, subdivision 1; 
                  256.476, subdivisions 1, 3, 4, 5, 11; 256.482, 
                  subdivision 8; 256.955, subdivisions 2a, 3, by adding 
                  a subdivision; 256.9657, subdivisions 1, 4, by adding 
                  a subdivision; 256.969, subdivisions 2b, 3a, by adding 
                  a subdivision; 256.975, by adding a subdivision; 
                  256.98, subdivisions 3, 4, 8; 256.984, subdivision 1; 
                  256B.055, by adding a subdivision; 256B.056, 
                  subdivisions 1a, 1c, 3c, 6; 256B.057, subdivisions 1, 
                  2, 3b, 9, 10; 256B.0595, subdivisions 1, 2, by adding 
                  subdivisions; 256B.06, subdivision 4; 256B.061; 
                  256B.0621, subdivisions 4, 7; 256B.0623, subdivisions 
                  2, 4, 5, 6, 8; 256B.0625, subdivisions 5a, 9, 13, 17, 
                  19c, 23, by adding subdivisions; 256B.0627, 
                  subdivisions 1, 4, 9; 256B.0635, subdivisions 1, 2; 
                  256B.064, subdivision 2; 256B.0911, subdivision 4d; 
                  256B.0913, subdivisions 2, 4, 5, 6, 7, 8, 10, 12; 
                  256B.0915, subdivision 3, by adding a subdivision; 
                  256B.092, subdivisions 1a, 5, by adding a subdivision; 
                  256B.0945, subdivisions 2, 4; 256B.095; 256B.0951, 
                  subdivisions 1, 2, 3, 5, 7, 9; 256B.0952, subdivision 
                  1; 256B.0953, subdivision 2; 256B.0955; 256B.15, 
                  subdivisions 1, 1a, 2, 3, 4, by adding subdivisions; 
                  256B.19, subdivision 1; 256B.195, subdivisions 3, 5; 
                  256B.32, subdivision 1; 256B.431, subdivisions 2r, 32, 
                  36, by adding subdivisions; 256B.434, subdivisions 4, 
                  10; 256B.47, subdivision 2; 256B.49, subdivision 15; 
                  256B.501, subdivision 1, by adding a subdivision; 
                  256B.5012, by adding a subdivision; 256B.5013, by 
                  adding a subdivision; 256B.5015; 256B.69, subdivisions 
                  2, 4, 5, 5a, 5c, 6a, 6b, 8, by adding subdivisions; 
                  256B.75; 256B.76; 256B.761; 256B.82; 256D.03, 
                  subdivisions 3, 3a, 4; 256D.06, subdivision 2; 
                  256D.44, subdivision 5; 256D.46, subdivisions 1, 3; 
                  256D.48, subdivision 1; 256G.05, subdivision 2; 
                  256I.02; 256I.04, subdivision 3; 256I.05, subdivisions 
                  1, 1a, 7c; 256J.01, subdivision 5; 256J.02, 
                  subdivision 2; 256J.021; 256J.08, subdivisions 35, 65, 
                  82, 85, by adding subdivisions; 256J.09, subdivisions 
                  2, 3, 3a, 3b, 8, 10; 256J.14; 256J.20, subdivision 3; 
                  256J.21, subdivisions 1, 2; 256J.24, subdivisions 3, 
                  5, 6, 7, 10; 256J.30, subdivision 9; 256J.32, 
                  subdivisions 2, 4, 5a, by adding a subdivision; 
                  256J.37, subdivision 9, by adding subdivisions; 
                  256J.38, subdivisions 3, 4; 256J.40; 256J.42, 
                  subdivisions 4, 5, 6; 256J.425, subdivisions 1, 1a, 2, 
                  3, 4, 6, 7; 256J.45, subdivision 2; 256J.46, 
                  subdivisions 1, 2, 2a; 256J.49, subdivisions 4, 5, 9, 
                  13, by adding subdivisions; 256J.50, subdivisions 1, 
                  9, 10; 256J.51, subdivisions 1, 2, 3, 4; 256J.53, 
                  subdivisions 1, 2, 5; 256J.54, subdivisions 1, 2, 3, 
                  5; 256J.55, subdivisions 1, 2; 256J.56; 256J.57; 
                  256J.62, subdivision 9; 256J.645, subdivision 3; 
                  256J.66, subdivision 2; 256J.69, subdivision 2; 
                  256J.75, subdivision 3; 256J.751, subdivisions 1, 2, 
                  5; 256L.03, subdivision 1; 256L.04, subdivisions 1, 
                  10; 256L.05, subdivisions 3a, 4; 256L.06, subdivision 
                  3; 256L.07, subdivisions 1, 3; 256L.12, subdivisions 
                  6, 9, by adding a subdivision; 256L.15, subdivisions 
                  1, 2, 3; 256L.17, subdivision 2; 257.05; 257.0769; 
                  259.21, subdivision 6; 259.67, subdivisions 4, 7; 
                  260B.157, subdivision 1; 260B.176, subdivision 2; 
                  260B.178, subdivision 1; 260B.193, subdivision 2; 
                  260B.235, subdivision 6; 260C.141, subdivision 2; 
                  261.063; 295.53, subdivision 1; 295.55, subdivision 2; 
                  296A.01, subdivisions 2, 7, 8, 14, 19, 20, 22, 23, 24, 
                  25, 26, 28, by adding a subdivision; 297I.15, 
                  subdivisions 1, 4; 326.42; 393.07, subdivisions 1, 5, 
                  10; 471.59, subdivision 1; 514.981, subdivision 6; 
                  518.167, subdivision 1; 518.551, subdivisions 7, 12, 
                  13; 518.6111, subdivisions 2, 3, 4, 16; 524.3-805; 
                  626.559, subdivision 5; 641.15, subdivision 2; Laws 
                  1997, chapter 203, article 9, section 21, as amended; 
                  Laws 1997, chapter 245, article 2, section 11; 2003 
                  S.F. No. 1019, sections 2, 3, 7, if enacted; proposing 
                  coding for new law in Minnesota Statutes, chapters 
                  62J; 62Q; 62S; 97A; 119B; 144; 144A; 145; 145A; 148C; 
                  245; 246; 256; 256B; 256I; 256J; 256L; 514; proposing 
                  coding for new law as Minnesota Statutes, chapter 
                  256M; repealing Minnesota Statutes 2002, sections 
                  62J.15; 62J.152; 62J.451; 62J.452; 62J.66; 62J.68; 
                  119B.061; 119B.13, subdivision 2; 144.126; 144.1484; 
                  144.1494; 144.1495; 144.1496; 144.1497; 144.401; 
                  144A.071, subdivision 5; 144A.35; 144A.36; 144A.38; 
                  145.882, subdivisions 4, 5, 6, 8; 145.883, 
                  subdivisions 4, 7; 145.884; 145.885; 145.886; 145.888; 
                  145.889; 145.890; 145A.02, subdivisions 9, 10, 11, 12, 
                  13, 14; 145A.09, subdivision 6; 145A.10, subdivisions 
                  5, 6, 8; 145A.11, subdivision 3; 145A.12, subdivisions 
                  3, 4, 5; 145A.14, subdivisions 3, 4; 145A.17, 
                  subdivision 2; 148.5194, subdivision 3a; 148.6445, 
                  subdivision 9; 148C.0351, subdivision 2; 148C.05, 
                  subdivisions 2, 3, 4; 148C.06; 148C.10, subdivision 
                  1a; 245.478; 245.4886; 245.4888; 245.496; 246.017, 
                  subdivision 2; 246.022; 246.06; 246.07; 246.08; 
                  246.11; 246.19; 246.42; 252.025, subdivisions 1, 2, 4, 
                  5, 6; 252.032; 252.10; 252.32, subdivision 2; 253.015, 
                  subdivisions 2, 3; 253.10; 253.19; 253.201; 253.202; 
                  253.25; 253.27; 254A.17; 256.05; 256.06; 256.08; 
                  256.09; 256.10; 256.955, subdivision 8; 256.973; 
                  256.9772; 256B.055, subdivision 10a; 256B.057, 
                  subdivision 1b; 256B.0625, subdivisions 35, 36; 
                  256B.0945, subdivision 10; 256B.437, subdivision 2; 
                  256B.5013, subdivision 4; 256E.01; 256E.02; 256E.03; 
                  256E.04; 256E.05; 256E.06; 256E.07; 256E.08; 256E.081; 
                  256E.09; 256E.10; 256E.11; 256E.115; 256E.13; 256E.14; 
                  256E.15; 256F.01; 256F.02; 256F.03; 256F.04; 256F.05; 
                  256F.06; 256F.07; 256F.08; 256F.11; 256F.12; 256F.14; 
                  256J.02, subdivision 3; 256J.08, subdivisions 28, 70; 
                  256J.24, subdivision 8; 256J.30, subdivision 10; 
                  256J.462; 256J.47; 256J.48; 256J.49, subdivisions 1a, 
                  2, 6, 7; 256J.50, subdivisions 2, 3, 3a, 5, 7; 
                  256J.52; 256J.55, subdivision 5; 256J.62, subdivisions 
                  1, 2a, 4, 6, 7, 8; 256J.625; 256J.655; 256J.74, 
                  subdivision 3; 256J.751, subdivisions 3, 4; 256J.76; 
                  256K.30; 257.075; 257.81; 260.152; 268A.08; 626.562; 
                  Laws 1998, chapter 407, article 4, section 63; Laws 
                  2000, chapter 488, article 10, section 29; Laws 2000, 
                  chapter 489, article 1, section 36; Laws 2001, First 
                  Special Session chapter 3, article 1, section 16; Laws 
                  2001, First Special Session chapter 9, article 13, 
                  section 24; Laws 2002, chapter 374, article 9, section 
                  8; Laws 2003, chapter 55, sections 1, 4; Minnesota 
                  Rules, parts 4705.0100; 4705.0200; 4705.0300; 
                  4705.0400; 4705.0500; 4705.0600; 4705.0700; 4705.0800; 
                  4705.0900; 4705.1000; 4705.1100; 4705.1200; 4705.1300; 
                  4705.1400; 4705.1500; 4705.1600; 4736.0010; 4736.0020; 
                  4736.0030; 4736.0040; 4736.0050; 4736.0060; 4736.0070; 
                  4736.0080; 4736.0090; 4736.0120; 4736.0130; 4747.0030, 
                  subparts 25, 28, 30; 4747.0040, subpart 3, item A; 
                  4747.0060, subpart 1, items A, B, D; 4747.0070, 
                  subparts 4, 5; 4747.0080; 4747.0090; 4747.0100; 
                  4747.0300; 4747.0400, subparts 2, 3; 4747.0500; 
                  4747.0600; 4747.1000; 4747.1100, subpart 3; 4747.1600; 
                  4763.0100; 4763.0110; 4763.0125; 4763.0135; 4763.0140; 
                  4763.0150; 4763.0160; 4763.0170; 4763.0180; 4763.0190; 
                  4763.0205; 4763.0215; 4763.0220; 4763.0230; 4763.0240; 
                  4763.0250; 4763.0260; 4763.0270; 4763.0285; 4763.0295; 
                  4763.0300; 9505.0324; 9505.0326; 9505.0327; 9505.3045; 
                  9505.3050; 9505.3055; 9505.3060; 9505.3068; 9505.3070; 
                  9505.3075; 9505.3080; 9505.3090; 9505.3095; 9505.3100; 
                  9505.3105; 9505.3107; 9505.3110; 9505.3115; 9505.3120; 
                  9505.3125; 9505.3130; 9505.3138; 9505.3139; 9505.3140; 
                  9505.3680; 9505.3690; 9505.3700; 9545.2000; 9545.2010; 
                  9545.2020; 9545.2030; 9545.2040; 9550.0010; 9550.0020; 
                  9550.0030; 9550.0040; 9550.0050; 9550.0060; 9550.0070; 
                  9550.0080; 9550.0090; 9550.0091; 9550.0092; 9550.0093. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                                 WELFARE REFORM 
           Section 1.  Minnesota Statutes 2002, section 119B.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FUNDING PRIORITY.] (a) First priority for child 
        care assistance under the basic sliding fee program must be 
        given to eligible non-MFIP families who do not have a high 
        school or general equivalency diploma or who need remedial and 
        basic skill courses in order to pursue employment or to pursue 
        education leading to employment and who need child care 
        assistance to participate in the education program.  Within this 
        priority, the following subpriorities must be used: 
           (1) child care needs of minor parents; 
           (2) child care needs of parents under 21 years of age; and 
           (3) child care needs of other parents within the priority 
        group described in this paragraph. 
           (b) Second priority must be given to parents who have 
        completed their MFIP or work first transition year, or parents 
        who are no longer receiving or eligible for diversionary work 
        program supports.  
           (c) Third priority must be given to families who are 
        eligible for portable basic sliding fee assistance through the 
        portability pool under subdivision 9. 
           Sec. 2.  Minnesota Statutes 2002, section 256.984, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DECLARATION.] Every application for public 
        assistance under this chapter and/or or chapters 256B, 256D, 
        256K, MFIP program 256J, and food stamps or food support under 
        chapter 393 shall be in writing or reduced to writing as 
        prescribed by the state agency and shall contain the following 
        declaration which shall be signed by the applicant: 
           "I declare under the penalties of perjury that this 
           application has been examined by me and to the best of my 
           knowledge is a true and correct statement of every material 
           point.  I understand that a person convicted of perjury may 
           be sentenced to imprisonment of not more than five years or 
           to payment of a fine of not more than $10,000, or both." 
           Sec. 3.  Minnesota Statutes 2002, section 256D.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMERGENCY NEED.] Notwithstanding the provisions 
        of subdivision 1, a grant of emergency general assistance shall, 
        to the extent funds are available, be made to an eligible single 
        adult, married couple, or family for an emergency need, as 
        defined in rules promulgated by the commissioner, where the 
        recipient requests temporary assistance not exceeding 30 days if 
        an emergency situation appears to exist and (a) until March 31, 
        1998, the individual is ineligible for the program of emergency 
        assistance under aid to families with dependent children and is 
        not a recipient of aid to families with dependent children at 
        the time of application; or (b) the individual or family is (i) 
        ineligible for MFIP or DWP or is not a participant of MFIP; and 
        (ii) is ineligible for emergency assistance under section 
        256J.48 or DWP.  If an applicant or recipient relates facts to 
        the county agency which may be sufficient to constitute an 
        emergency situation, the county agency shall, to the extent 
        funds are available, advise the person of the procedure for 
        applying for assistance according to this subdivision.  An 
        emergency general assistance grant is available to a recipient 
        not more than once in any 12-month period.  Funding for an 
        emergency general assistance program is limited to the 
        appropriation.  Each fiscal year, the commissioner shall 
        allocate to counties the money appropriated for emergency 
        general assistance grants based on each county agency's average 
        share of state's emergency general expenditures for the 
        immediate past three fiscal years as determined by the 
        commissioner, and may reallocate any unspent amounts to other 
        counties.  Any emergency general assistance expenditures by a 
        county above the amount of the commissioner's allocation to the 
        county must be made from county funds. 
           Sec. 4.  Minnesota Statutes 2002, section 256D.44, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SPECIAL NEEDS.] In addition to the state 
        standards of assistance established in subdivisions 1 to 4, 
        payments are allowed for the following special needs of 
        recipients of Minnesota supplemental aid who are not residents 
        of a nursing home, a regional treatment center, or a group 
        residential housing facility. 
           (a) The county agency shall pay a monthly allowance for 
        medically prescribed diets payable under the Minnesota family 
        investment program if the cost of those additional dietary needs 
        cannot be met through some other maintenance benefit.  The need 
        for special diets or dietary items must be prescribed by a 
        licensed physician.  Costs for special diets shall be determined 
        as percentages of the allotment for a one-person household under 
        the thrifty food plan as defined by the United States Department 
        of Agriculture.  The types of diets and the percentages of the 
        thrifty food plan that are covered are as follows: 
           (1) high protein diet, at least 80 grams daily, 25 percent 
        of thrifty food plan; 
           (2) controlled protein diet, 40 to 60 grams and requires 
        special products, 100 percent of thrifty food plan; 
           (3) controlled protein diet, less than 40 grams and 
        requires special products, 125 percent of thrifty food plan; 
           (4) low cholesterol diet, 25 percent of thrifty food plan; 
           (5) high residue diet, 20 percent of thrifty food plan; 
           (6) pregnancy and lactation diet, 35 percent of thrifty 
        food plan; 
           (7) gluten-free diet, 25 percent of thrifty food plan; 
           (8) lactose-free diet, 25 percent of thrifty food plan; 
           (9) antidumping diet, 15 percent of thrifty food plan; 
           (10) hypoglycemic diet, 15 percent of thrifty food plan; or 
           (11) ketogenic diet, 25 percent of thrifty food plan. 
           (b) Payment for nonrecurring special needs must be allowed 
        for necessary home repairs or necessary repairs or replacement 
        of household furniture and appliances using the payment standard 
        of the AFDC program in effect on July 16, 1996, for these 
        expenses, as long as other funding sources are not available.  
           (c) A fee for guardian or conservator service is allowed at 
        a reasonable rate negotiated by the county or approved by the 
        court.  This rate shall not exceed five percent of the 
        assistance unit's gross monthly income up to a maximum of $100 
        per month.  If the guardian or conservator is a member of the 
        county agency staff, no fee is allowed. 
           (d) The county agency shall continue to pay a monthly 
        allowance of $68 for restaurant meals for a person who was 
        receiving a restaurant meal allowance on June 1, 1990, and who 
        eats two or more meals in a restaurant daily.  The allowance 
        must continue until the person has not received Minnesota 
        supplemental aid for one full calendar month or until the 
        person's living arrangement changes and the person no longer 
        meets the criteria for the restaurant meal allowance, whichever 
        occurs first. 
           (e) A fee of ten percent of the recipient's gross income or 
        $25, whichever is less, is allowed for representative payee 
        services provided by an agency that meets the requirements under 
        SSI regulations to charge a fee for representative payee 
        services.  This special need is available to all recipients of 
        Minnesota supplemental aid regardless of their living 
        arrangement.  
           (f) Notwithstanding the language in this subdivision, an 
        amount equal to the maximum allotment authorized by the federal 
        Food Stamp Program for a single individual which is in effect on 
        the first day of January of the previous year will be added to 
        the standards of assistance established in subdivisions 1 to 4 
        for individuals under the age of 65 who are relocating from an 
        institution and who are shelter needy.  An eligible individual 
        who receives this benefit prior to age 65 may continue to 
        receive the benefit after the age of 65. 
           "Shelter needy" means that the assistance unit incurs 
        monthly shelter costs that exceed 40 percent of the assistance 
        unit's gross income before the application of this special needs 
        standard.  "Gross income" for the purposes of this section is 
        the applicant's or recipient's income as defined in section 
        256D.35, subdivision 10, or the standard specified in 
        subdivision 3, whichever is greater.  A recipient of a federal 
        or state housing subsidy, that limits shelter costs to a 
        percentage of gross income, shall not be considered shelter 
        needy for purposes of this paragraph. 
           Sec. 5.  Minnesota Statutes 2002, section 256D.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] A county agency must grant 
        emergency Minnesota supplemental aid must be granted, to the 
        extent funds are available, if the recipient is without adequate 
        resources to resolve an emergency that, if unresolved, will 
        threaten the health or safety of the recipient.  For the 
        purposes of this section, the term "recipient" includes persons 
        for whom a group residential housing benefit is being paid under 
        sections 256I.01 to 256I.06. 
           Sec. 6.  Minnesota Statutes 2002, section 256D.46, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT AMOUNT.] The amount of assistance 
        granted under emergency Minnesota supplemental aid is limited to 
        the amount necessary to resolve the emergency.  An emergency 
        Minnesota supplemental aid grant is available to a recipient no 
        more than once in any 12-month period.  Funding for emergency 
        Minnesota supplemental aid is limited to the appropriation.  
        Each fiscal year, the commissioner shall allocate to counties 
        the money appropriated for emergency Minnesota supplemental aid 
        grants based on each county agency's average share of state's 
        emergency Minnesota supplemental aid expenditures for the 
        immediate past three fiscal years as determined by the 
        commissioner, and may reallocate any unspent amounts to other 
        counties.  Any emergency Minnesota supplemental aid expenditures 
        by a county above the amount of the commissioner's allocation to 
        the county must be made from county funds. 
           Sec. 7.  Minnesota Statutes 2002, section 256D.48, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NEED FOR PROTECTIVE PAYEE.] The county 
        agency shall determine whether a recipient needs a protective 
        payee when a physical or mental condition renders the recipient 
        unable to manage funds and when payments to the recipient would 
        be contrary to the recipient's welfare.  Protective payments 
        must be issued when there is evidence of:  (1) repeated 
        inability to plan the use of income to meet necessary 
        expenditures; (2) repeated observation that the recipient is not 
        properly fed or clothed; (3) repeated failure to meet 
        obligations for rent, utilities, food, and other essentials; (4) 
        evictions or a repeated incurrence of debts; or (5) lost or 
        stolen checks; or (6) use of emergency Minnesota supplemental 
        aid more than twice in a calendar year.  The determination of 
        representative payment by the Social Security Administration for 
        the recipient is sufficient reason for protective payment of 
        Minnesota supplemental aid payments.  
           Sec. 8.  Minnesota Statutes 2002, section 256J.01, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMPLIANCE SYSTEM.] The commissioner shall 
        administer a compliance system for the state's temporary 
        assistance for needy families (TANF) program, the food stamp 
        program, emergency assistance, general assistance, medical 
        assistance, general assistance medical care, emergency general 
        assistance, Minnesota supplemental aid, preadmission screening, 
        child support program, and alternative care grants under the 
        powers and authorities named in section 256.01, subdivision 2.  
        The purpose of the compliance system is to permit the 
        commissioner to supervise the administration of public 
        assistance programs and to enforce timely and accurate 
        distribution of benefits, completeness of service and efficient 
        and effective program management and operations, to increase 
        uniformity and consistency in the administration and delivery of 
        public assistance programs throughout the state, and to reduce 
        the possibility of sanction and fiscal disallowances for 
        noncompliance with federal regulations and state statutes. 
           Sec. 9.  Minnesota Statutes 2002, section 256J.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USE OF MONEY.] State money appropriated for 
        purposes of this section and TANF block grant money must be used 
        for: 
           (1) financial assistance to or on behalf of any minor child 
        who is a resident of this state under section 256J.12; 
           (2) employment and training services under this chapter or 
        chapter 256K; 
           (3) emergency financial assistance and services under 
        section 256J.48; 
           (4) diversionary assistance under section 256J.47; 
           (5) the health care and human services training and 
        retention program under chapter 116L, for costs associated with 
        families with children with incomes below 200 percent of the 
        federal poverty guidelines; 
           (6) (3) the pathways program under section 116L.04, 
        subdivision 1a; 
           (7) welfare-to-work extended employment services for MFIP 
        participants with severe impairment to employment as defined in 
        section 268A.15, subdivision 1a; 
           (8) the family homeless prevention and assistance program 
        under section 462A.204; 
           (9) the rent assistance for family stabilization 
        demonstration project under section 462A.205; 
           (10) (4) welfare to work transportation authorized under 
        Public Law Number 105-178; 
           (11) (5) reimbursements for the federal share of child 
        support collections passed through to the custodial parent; 
           (12) (6) reimbursements for the working family credit under 
        section 290.0671; 
           (13) intensive ESL grants under Laws 2000, chapter 489, 
        article 1; 
           (14) transitional housing programs under section 119A.43; 
           (15) programs and pilot projects under chapter 256K; and 
           (16) (7) program administration under this chapter; 
           (8) the diversionary work program under section 256J.95; 
           (9) the MFIP consolidated fund under section 256J.626; and 
           (10) the Minnesota department of health consolidated fund 
        under Laws 2001, First Special Session chapter 9, article 17, 
        section 3, subdivision 2. 
           Sec. 10.  Minnesota Statutes 2002, section 256J.021, is 
        amended to read: 
           256J.021 [SEPARATE STATE PROGRAM FOR USE OF STATE MONEY.] 
           Beginning October 1, 2001, and each year thereafter, the 
        commissioner of human services must treat financial assistance 
        MFIP expenditures made to or on behalf of any minor child under 
        section 256J.02, subdivision 2, clause (1), who is a resident of 
        this state under section 256J.12, and who is part of a 
        two-parent eligible household as expenditures under a separately 
        funded state program and report those expenditures to the 
        federal Department of Health and Human Services as separate 
        state program expenditures under Code of Federal Regulations, 
        title 45, section 263.5. 
           Sec. 11.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 11a.  [CHILD ONLY CASE.] "Child only case" means a 
        case that would be part of the child only TANF program under 
        section 256J.88. 
           Sec. 12.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 24b.  [DIVERSIONARY WORK PROGRAM OR DWP.] 
        "Diversionary work program" or "DWP" has the meaning given in 
        section 256J.95. 
           Sec. 13.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 28b.  [EMPLOYABLE.] "Employable" means a person is 
        capable of performing existing positions in the local labor 
        market, regardless of the current availability of openings for 
        those positions. 
           Sec. 14.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 34a.  [FAMILY VIOLENCE.] (a) "Family violence" means 
        the following, if committed against a family or household member 
        by a family or household member: 
           (1) physical harm, bodily injury, or assault; 
           (2) the infliction of fear of imminent physical harm, 
        bodily injury, or assault; or 
           (3) terroristic threats, within the meaning of section 
        609.713, subdivision 1; criminal sexual conduct, within the 
        meaning of section 609.342, 609.343, 609.344, 609.345, or 
        609.3451; or interference with an emergency call within the 
        meaning of section 609.78, subdivision 2. 
           (b) For the purposes of family violence, "family or 
        household member" means:  
           (1) spouses and former spouses; 
           (2) parents and children; 
           (3) persons related by blood; 
           (4) persons who are residing together or who have resided 
        together in the past; 
           (5) persons who have a child in common regardless of 
        whether they have been married or have lived together at any 
        time; 
           (6) a man and woman if the woman is pregnant and the man is 
        alleged to be the father, regardless of whether they have been 
        married or have lived together at anytime; and 
           (7) persons involved in a current or past significant 
        romantic or sexual relationship. 
           Sec. 15.  Minnesota Statutes, section 256J.08, is amended 
        by adding a subdivision to read: 
           Subd. 34b.  [FAMILY VIOLENCE WAIVER.] "Family violence 
        waiver" means a waiver of the 60-month time limit for victims of 
        family violence who meet the criteria in section 256J.545 and 
        are complying with an employment plan in section 256J.521, 
        subdivision 3. 
           Sec. 16.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 35, is amended to read: 
           Subd. 35.  [FAMILY WAGE LEVEL.] "Family wage level" means 
        110 percent of the transitional standard as specified in section 
        256J.24, subdivision 7. 
           Sec. 17.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 51b.  [LEARNING DISABLED.] "Learning disabled," for 
        purposes of an extension to the 60-month time limit under 
        section 256J.425, subdivision 3, clause (3), means the person 
        has a disorder in one or more of the psychological processes 
        involved in perceiving, understanding, or using concepts through 
        verbal language or nonverbal means.  Learning disabled does not 
        include learning problems that are primarily the result of 
        visual, hearing, or motor handicaps, mental retardation, 
        emotional disturbance, or due to environmental, cultural, or 
        economic disadvantage. 
           Sec. 18.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 65, is amended to read: 
           Subd. 65.  [PARTICIPANT.] "Participant" means a person who 
        is currently receiving cash assistance or the food portion 
        available through MFIP as funded by TANF and the food stamp 
        program.  A person who fails to withdraw or access 
        electronically any portion of the person's cash and food 
        assistance payment by the end of the payment month, who makes a 
        written request for closure before the first of a payment month 
        and repays cash and food assistance electronically issued for 
        that payment month within that payment month, or who returns any 
        uncashed assistance check and food coupons and withdraws from 
        the program is not a participant.  A person who withdraws a cash 
        or food assistance payment by electronic transfer or receives 
        and cashes an MFIP assistance check or food coupons and is 
        subsequently determined to be ineligible for assistance for that 
        period of time is a participant, regardless whether that 
        assistance is repaid.  The term "participant" includes the 
        caregiver relative and the minor child whose needs are included 
        in the assistance payment.  A person in an assistance unit who 
        does not receive a cash and food assistance payment because the 
        person case has been suspended from MFIP is a participant.  A 
        person who receives cash payments under the diversionary work 
        program under section 256J.95 is a participant. 
           Sec. 19.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 65a.  [PARTICIPATION REQUIREMENTS OF 
        TANF.] "Participation requirements of TANF" means activities and 
        hourly requirements allowed under title IV-A of the federal 
        Social Security Act. 
           Sec. 20.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 73a.  [QUALIFIED PROFESSIONAL.] (a) For physical 
        illness, injury, or incapacity, a "qualified professional" means 
        a licensed physician, a physician's assistant, a nurse 
        practitioner, or a licensed chiropractor. 
           (b) For mental retardation and intelligence testing, a 
        "qualified professional" means an individual qualified by 
        training and experience to administer the tests necessary to 
        make determinations, such as tests of intellectual functioning, 
        assessments of adaptive behavior, adaptive skills, and 
        developmental functioning.  These professionals include licensed 
        psychologists, certified school psychologists, or certified 
        psychometrists working under the supervision of a licensed 
        psychologist. 
           (c) For learning disabilities, a "qualified professional" 
        means a licensed psychologist or school psychologist with 
        experience determining learning disabilities.  
           (d) For mental health, a "qualified professional" means a 
        licensed physician or a qualified mental health professional.  A 
        "qualified mental health professional" means: 
           (1) for children, in psychiatric nursing, a registered 
        nurse who is licensed under sections 148.171 to 148.285, and who 
        is certified as a clinical specialist in child and adolescent 
        psychiatric or mental health nursing by a national nurse 
        certification organization or who has a master's degree in 
        nursing or one of the behavioral sciences or related fields from 
        an accredited college or university or its equivalent, with at 
        least 4,000 hours of post-master's supervised experience in the 
        delivery of clinical services in the treatment of mental 
        illness; 
           (2) for adults, in psychiatric nursing, a registered nurse 
        who is licensed under sections 148.171 to 148.285, and who is 
        certified as a clinical specialist in adult psychiatric and 
        mental health nursing by a national nurse certification 
        organization or who has a master's degree in nursing or one of 
        the behavioral sciences or related fields from an accredited 
        college or university or its equivalent, with at least 4,000 
        hours of post-master's supervised experience in the delivery of 
        clinical services in the treatment of mental illness; 
           (3) in clinical social work, a person licensed as an 
        independent clinical social worker under section 148B.21, 
        subdivision 6, or a person with a master's degree in social work 
        from an accredited college or university, with at least 4,000 
        hours of post-master's supervised experience in the delivery of 
        clinical services in the treatment of mental illness; 
           (4) in psychology, an individual licensed by the board of 
        psychology under sections 148.88 to 148.98, who has stated to 
        the board of psychology competencies in the diagnosis and 
        treatment of mental illness; 
           (5) in psychiatry, a physician licensed under chapter 147 
        and certified by the American Board of Psychiatry and Neurology 
        or eligible for board certification in psychiatry; and 
           (6) in marriage and family therapy, the mental health 
        professional must be a marriage and family therapist licensed 
        under sections 148B.29 to 148B.39, with at least two years of 
        post-master's supervised experience in the delivery of clinical 
        services in the treatment of mental illness. 
           Sec. 21.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 82, is amended to read: 
           Subd. 82.  [SANCTION.] "Sanction" means the reduction of a 
        family's assistance payment by a specified percentage of the 
        MFIP standard of need because:  a nonexempt participant fails to 
        comply with the requirements of sections 256J.52 256J.515 to 
        256J.55 256J.57; a parental caregiver fails without good cause 
        to cooperate with the child support enforcement requirements; or 
        a participant fails to comply with the insurance, tort 
        liability, or other requirements of this chapter. 
           Sec. 22.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 84a.  [SSI RECIPIENT.] "SSI recipient" means a person 
        who receives at least $1 in SSI benefits, or who is not 
        receiving an SSI benefit due to recoupment or a one month 
        suspension by the Social Security Administration due to excess 
        income. 
           Sec. 23.  Minnesota Statutes 2002, section 256J.08, 
        subdivision 85, is amended to read: 
           Subd. 85.  [TRANSITIONAL STANDARD.] "Transitional standard" 
        means the basic standard for a family with no other income or a 
        nonworking family without earned income and is a combination of 
        the cash assistance needs portion and food assistance needs for 
        a family of that size portion as specified in section 256J.24, 
        subdivision 5. 
           Sec. 24.  Minnesota Statutes 2002, section 256J.08, is 
        amended by adding a subdivision to read: 
           Subd. 90.  [SEVERE FORMS OF TRAFFICKING IN 
        PERSONS.] "Severe forms of trafficking in persons" means:  (1) 
        sex trafficking in which a commercial sex act is induced by 
        force, fraud, or coercion, or in which the person induced to 
        perform the act has not attained 18 years of age; or (2) the 
        recruitment, harboring, transportation, provision, or obtaining 
        of a person for labor or services through the use of force, 
        fraud, or coercion for the purposes of subjection to involuntary 
        servitude, peonage, debt bondage, or slavery. 
           Sec. 25.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COUNTY AGENCY RESPONSIBILITY TO PROVIDE 
        INFORMATION.] When a person inquires about assistance, a county 
        agency must: 
           (1) explain the eligibility requirements of, and how to 
        apply for, diversionary assistance as provided in section 
        256J.47; emergency assistance as provided in section 256J.48; 
        MFIP as provided in section 256J.10; or any other assistance for 
        which the person may be eligible; and 
           (2) offer the person brochures developed or approved by the 
        commissioner that describe how to apply for assistance. 
           Sec. 26.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SUBMITTING THE APPLICATION FORM.] (a) A county 
        agency must offer, in person or by mail, the application forms 
        prescribed by the commissioner as soon as a person makes a 
        written or oral inquiry.  At that time, the county agency must: 
           (1) inform the person that assistance begins with the date 
        the signed application is received by the county agency or the 
        date all eligibility criteria are met, whichever is later; 
           (2) inform the person that any delay in submitting the 
        application will reduce the amount of assistance paid for the 
        month of application; 
           (3) inform a person that the person may submit the 
        application before an interview; 
           (4) explain the information that will be verified during 
        the application process by the county agency as provided in 
        section 256J.32; 
           (5) inform a person about the county agency's average 
        application processing time and explain how the application will 
        be processed under subdivision 5; 
           (6) explain how to contact the county agency if a person's 
        application information changes and how to withdraw the 
        application; 
           (7) inform a person that the next step in the application 
        process is an interview and what a person must do if the 
        application is approved including, but not limited to, attending 
        orientation under section 256J.45 and complying with employment 
        and training services requirements in sections 256J.52 256J.515 
        to 256J.55 256J.57; 
           (8) explain the child care and transportation services that 
        are available under paragraph (c) to enable caregivers to attend 
        the interview, screening, and orientation; and 
           (9) identify any language barriers and arrange for 
        translation assistance during appointments, including, but not 
        limited to, screening under subdivision 3a, orientation under 
        section 256J.45, and the initial assessment under section 
        256J.52 256J.521.  
           (b) Upon receipt of a signed application, the county agency 
        must stamp the date of receipt on the face of the application.  
        The county agency must process the application within the time 
        period required under subdivision 5.  An applicant may withdraw 
        the application at any time by giving written or oral notice to 
        the county agency.  The county agency must issue a written 
        notice confirming the withdrawal.  The notice must inform the 
        applicant of the county agency's understanding that the 
        applicant has withdrawn the application and no longer wants to 
        pursue it.  When, within ten days of the date of the agency's 
        notice, an applicant informs a county agency, in writing, that 
        the applicant does not wish to withdraw the application, the 
        county agency must reinstate the application and finish 
        processing the application. 
           (c) Upon a participant's request, the county agency must 
        arrange for transportation and child care or reimburse the 
        participant for transportation and child care expenses necessary 
        to enable participants to attend the screening under subdivision 
        3a and orientation under section 256J.45.  
           Sec. 27.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [SCREENING.] The county agency, or at county 
        option, the county's employment and training service provider as 
        defined in section 256J.49, must screen each applicant to 
        determine immediate needs and to determine if the applicant may 
        be eligible for: 
           (1) another program that is not partially funded through 
        the federal temporary assistance to needy families block grant 
        under Title I of Public Law Number 104-193, including the 
        expedited issuance of food stamps under section 256J.28, 
        subdivision 1.  If the applicant may be eligible for another 
        program, a county caseworker must provide the appropriate 
        referral to the program; 
           (2) the diversionary assistance program under section 
        256J.47; or 
           (3) the emergency assistance program under section 
        256J.48.  If the applicant appears eligible for another program, 
        including any program funded by the MFIP consolidated fund, the 
        county must make a referral to the appropriate program. 
           Sec. 28.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [INTERVIEW TO DETERMINE REFERRALS AND SERVICES.] 
        If the applicant is not diverted from applying for MFIP, and if 
        the applicant meets the MFIP eligibility requirements, then a 
        county agency must: 
           (1) identify an applicant who is under the age of 
        20 without a high school diploma or its equivalent and explain 
        to the applicant the assessment procedures and employment plan 
        requirements for minor parents under section 256J.54; 
           (2) explain to the applicant the eligibility criteria in 
        section 256J.545 for an exemption under the family violence 
        provisions in section 256J.52, subdivision 6 waiver, and explain 
        what an applicant should do to develop an alternative employment 
        plan; 
           (3) determine if an applicant qualifies for an exemption 
        under section 256J.56 from employment and training services 
        requirements, explain how a person should report to the county 
        agency any status changes, and explain that an applicant who is 
        exempt may volunteer to participate in employment and training 
        services; 
           (4) for applicants who are not exempt from the requirement 
        to attend orientation, arrange for an orientation under section 
        256J.45 and an initial assessment under section 256J.52 
        256J.521; 
           (5) inform an applicant who is not exempt from the 
        requirement to attend orientation that failure to attend the 
        orientation is considered an occurrence of noncompliance with 
        program requirements and will result in an imposition of a 
        sanction under section 256J.46; and 
           (6) explain how to contact the county agency if an 
        applicant has questions about compliance with program 
        requirements. 
           Sec. 29.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ADDITIONAL APPLICATIONS.] Until a county agency 
        issues notice of approval or denial, additional applications 
        submitted by an applicant are void.  However, an application for 
        monthly assistance or other benefits funded under section 
        256J.626 and an application for emergency assistance or 
        emergency general assistance may exist concurrently.  More than 
        one application for monthly assistance, emergency assistance, or 
        emergency general assistance may exist concurrently when the 
        county agency decisions on one or more earlier applications have 
        been appealed to the commissioner, and the applicant asserts 
        that a change in circumstances has occurred that would allow 
        eligibility.  A county agency must require additional 
        application forms or supplemental forms as prescribed by the 
        commissioner when a payee's name changes, or when a caregiver 
        requests the addition of another person to the assistance unit.  
           Sec. 30.  Minnesota Statutes 2002, section 256J.09, 
        subdivision 10, is amended to read: 
           Subd. 10.  [APPLICANTS WHO DO NOT MEET ELIGIBILITY 
        REQUIREMENTS FOR MFIP OR THE DIVERSIONARY WORK PROGRAM.] When an 
        applicant is not eligible for MFIP or the diversionary work 
        program under section 256J.95 because the applicant does not 
        meet eligibility requirements, the county agency must determine 
        whether the applicant is eligible for food stamps, medical 
        assistance, diversionary assistance, or has a need for emergency 
        assistance when the applicant meets the eligibility requirements 
        for those programs or health care programs.  The county must 
        also inform applicants about resources available through the 
        county or other agencies to meet short-term emergency needs. 
           Sec. 31.  Minnesota Statutes 2002, section 256J.14, is 
        amended to read: 
           256J.14 [ELIGIBILITY FOR PARENTING OR PREGNANT MINORS.] 
           (a) The definitions in this paragraph only apply to this 
        subdivision. 
           (1) "Household of a parent, legal guardian, or other adult 
        relative" means the place of residence of: 
           (i) a natural or adoptive parent; 
           (ii) a legal guardian according to appointment or 
        acceptance under section 260C.325, 525.615, or 525.6165, and 
        related laws; 
           (iii) a caregiver as defined in section 256J.08, 
        subdivision 11; or 
           (iv) an appropriate adult relative designated by a county 
        agency. 
           (2) "Adult-supervised supportive living arrangement" means 
        a private family setting which assumes responsibility for the 
        care and control of the minor parent and minor child, or other 
        living arrangement, not including a public institution, licensed 
        by the commissioner of human services which ensures that the 
        minor parent receives adult supervision and supportive services, 
        such as counseling, guidance, independent living skills 
        training, or supervision. 
           (b) A minor parent and the minor child who is in the care 
        of the minor parent must reside in the household of a parent, 
        legal guardian, other adult relative, or in an adult-supervised 
        supportive living arrangement in order to receive MFIP unless: 
           (1) the minor parent has no living parent, other adult 
        relative, or legal guardian whose whereabouts is known; 
           (2) no living parent, other adult relative, or legal 
        guardian of the minor parent allows the minor parent to live in 
        the parent's, other adult relative's, or legal guardian's home; 
           (3) the minor parent lived apart from the minor parent's 
        own parent or legal guardian for a period of at least one year 
        before either the birth of the minor child or the minor parent's 
        application for MFIP; 
           (4) the physical or emotional health or safety of the minor 
        parent or minor child would be jeopardized if the minor parent 
        and the minor child resided in the same residence with the minor 
        parent's parent, other adult relative, or legal guardian; or 
           (5) an adult supervised supportive living arrangement is 
        not available for the minor parent and child in the county in 
        which the minor parent and child currently reside.  If an adult 
        supervised supportive living arrangement becomes available 
        within the county, the minor parent and child must reside in 
        that arrangement. 
           (c) The county agency shall inform minor applicants both 
        orally and in writing about the eligibility requirements, their 
        rights and obligations under the MFIP program, and any other 
        applicable orientation information.  The county must advise the 
        minor of the possible exemptions under section 256J.54, 
        subdivision 5, and specifically ask whether one or more of these 
        exemptions is applicable.  If the minor alleges one or more of 
        these exemptions, then the county must assist the minor in 
        obtaining the necessary verifications to determine whether or 
        not these exemptions apply. 
           (d) If the county worker has reason to suspect that the 
        physical or emotional health or safety of the minor parent or 
        minor child would be jeopardized if they resided with the minor 
        parent's parent, other adult relative, or legal guardian, then 
        the county worker must make a referral to child protective 
        services to determine if paragraph (b), clause (4), applies.  A 
        new determination by the county worker is not necessary if one 
        has been made within the last six months, unless there has been 
        a significant change in circumstances which justifies a new 
        referral and determination. 
           (e) If a minor parent is not living with a parent, legal 
        guardian, or other adult relative due to paragraph (b), clause 
        (1), (2), or (4), the minor parent must reside, when possible, 
        in a living arrangement that meets the standards of paragraph 
        (a), clause (2). 
           (f) Regardless of living arrangement, MFIP must be paid, 
        when possible, in the form of a protective payment on behalf of 
        the minor parent and minor child according to section 256J.39, 
        subdivisions 2 to 4. 
           Sec. 32.  Minnesota Statutes 2002, section 256J.20, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OTHER PROPERTY LIMITATIONS.] To be eligible for 
        MFIP, the equity value of all nonexcluded real and personal 
        property of the assistance unit must not exceed $2,000 for 
        applicants and $5,000 for ongoing participants.  The value of 
        assets in clauses (1) to (19) must be excluded when determining 
        the equity value of real and personal property: 
           (1) a licensed vehicle up to a loan value of less than or 
        equal to $7,500.  The county agency shall apply any excess loan 
        value as if it were equity value to the asset limit described in 
        this section.  If the assistance unit owns more than one 
        licensed vehicle, the county agency shall determine the vehicle 
        with the highest loan value and count only the loan value over 
        $7,500, excluding:  (i) the value of one vehicle per physically 
        disabled person when the vehicle is needed to transport the 
        disabled unit member; this exclusion does not apply to mentally 
        disabled people; (ii) the value of special equipment for a 
        handicapped member of the assistance unit; and (iii) any vehicle 
        used for long-distance travel, other than daily commuting, for 
        the employment of a unit member. 
           The county agency shall count the loan value of all other 
        vehicles and apply this amount as if it were equity value to the 
        asset limit described in this section.  To establish the loan 
        value of vehicles, a county agency must use the N.A.D.A. 
        Official Used Car Guide, Midwest Edition, for newer model cars.  
        When a vehicle is not listed in the guidebook, or when the 
        applicant or participant disputes the loan value listed in the 
        guidebook as unreasonable given the condition of the particular 
        vehicle, the county agency may require the applicant or 
        participant document the loan value by securing a written 
        statement from a motor vehicle dealer licensed under section 
        168.27, stating the amount that the dealer would pay to purchase 
        the vehicle.  The county agency shall reimburse the applicant or 
        participant for the cost of a written statement that documents a 
        lower loan value; 
           (2) the value of life insurance policies for members of the 
        assistance unit; 
           (3) one burial plot per member of an assistance unit; 
           (4) the value of personal property needed to produce earned 
        income, including tools, implements, farm animals, inventory, 
        business loans, business checking and savings accounts used at 
        least annually and used exclusively for the operation of a 
        self-employment business, and any motor vehicles if at least 50 
        percent of the vehicle's use is to produce income and if the 
        vehicles are essential for the self-employment business; 
           (5) the value of personal property not otherwise specified 
        which is commonly used by household members in day-to-day living 
        such as clothing, necessary household furniture, equipment, and 
        other basic maintenance items essential for daily living; 
           (6) the value of real and personal property owned by a 
        recipient of Supplemental Security Income or Minnesota 
        supplemental aid; 
           (7) the value of corrective payments, but only for the 
        month in which the payment is received and for the following 
        month; 
           (8) a mobile home or other vehicle used by an applicant or 
        participant as the applicant's or participant's home; 
           (9) money in a separate escrow account that is needed to 
        pay real estate taxes or insurance and that is used for this 
        purpose; 
           (10) money held in escrow to cover employee FICA, employee 
        tax withholding, sales tax withholding, employee worker 
        compensation, business insurance, property rental, property 
        taxes, and other costs that are paid at least annually, but less 
        often than monthly; 
           (11) monthly assistance, emergency assistance, and 
        diversionary payments for the current month's needs or 
        short-term emergency needs under section 256J.626, subdivision 
        2; 
           (12) the value of school loans, grants, or scholarships for 
        the period they are intended to cover; 
           (13) payments listed in section 256J.21, subdivision 2, 
        clause (9), which are held in escrow for a period not to exceed 
        three months to replace or repair personal or real property; 
           (14) income received in a budget month through the end of 
        the payment month; 
           (15) savings from earned income of a minor child or a minor 
        parent that are set aside in a separate account designated 
        specifically for future education or employment costs; 
           (16) the federal earned income credit, Minnesota working 
        family credit, state and federal income tax refunds, state 
        homeowners and renters credits under chapter 290A, property tax 
        rebates and other federal or state tax rebates in the month 
        received and the following month; 
           (17) payments excluded under federal law as long as those 
        payments are held in a separate account from any nonexcluded 
        funds; 
           (18) the assets of children ineligible to receive MFIP 
        benefits because foster care or adoption assistance payments are 
        made on their behalf; and 
           (19) the assets of persons whose income is excluded under 
        section 256J.21, subdivision 2, clause (43). 
           Sec. 33.  Minnesota Statutes 2002, section 256J.21, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INCOME INCLUSIONS.] To determine MFIP 
        eligibility, the county agency must evaluate income received by 
        members of an assistance unit, or by other persons whose income 
        is considered available to the assistance unit, and only count 
        income that is available to the member of the assistance unit.  
        Income is available if the individual has legal access to the 
        income.  All payments, unless specifically excluded in 
        subdivision 2, must be counted as income.  The county agency 
        shall verify the income of all MFIP recipients and applicants. 
           Sec. 34.  Minnesota Statutes 2002, section 256J.21, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCOME EXCLUSIONS.] The following must be 
        excluded in determining a family's available income: 
           (1) payments for basic care, difficulty of care, and 
        clothing allowances received for providing family foster care to 
        children or adults under Minnesota Rules, parts 9545.0010 to 
        9545.0260 and 9555.5050 to 9555.6265, and payments received and 
        used for care and maintenance of a third-party beneficiary who 
        is not a household member; 
           (2) reimbursements for employment training received through 
        the Job Training Partnership Workforce Investment Act 1998, 
        United States Code, title 29 20, chapter 19 73, sections 1501 
        to 1792b section 9201; 
           (3) reimbursement for out-of-pocket expenses incurred while 
        performing volunteer services, jury duty, employment, or 
        informal carpooling arrangements directly related to employment; 
           (4) all educational assistance, except the county agency 
        must count graduate student teaching assistantships, 
        fellowships, and other similar paid work as earned income and, 
        after allowing deductions for any unmet and necessary 
        educational expenses, shall count scholarships or grants awarded 
        to graduate students that do not require teaching or research as 
        unearned income; 
           (5) loans, regardless of purpose, from public or private 
        lending institutions, governmental lending institutions, or 
        governmental agencies; 
           (6) loans from private individuals, regardless of purpose, 
        provided an applicant or participant documents that the lender 
        expects repayment; 
           (7)(i) state income tax refunds; and 
           (ii) federal income tax refunds; 
           (8)(i) federal earned income credits; 
           (ii) Minnesota working family credits; 
           (iii) state homeowners and renters credits under chapter 
        290A; and 
           (iv) federal or state tax rebates; 
           (9) funds received for reimbursement, replacement, or 
        rebate of personal or real property when these payments are made 
        by public agencies, awarded by a court, solicited through public 
        appeal, or made as a grant by a federal agency, state or local 
        government, or disaster assistance organizations, subsequent to 
        a presidential declaration of disaster; 
           (10) the portion of an insurance settlement that is used to 
        pay medical, funeral, and burial expenses, or to repair or 
        replace insured property; 
           (11) reimbursements for medical expenses that cannot be 
        paid by medical assistance; 
           (12) payments by a vocational rehabilitation program 
        administered by the state under chapter 268A, except those 
        payments that are for current living expenses; 
           (13) in-kind income, including any payments directly made 
        by a third party to a provider of goods and services; 
           (14) assistance payments to correct underpayments, but only 
        for the month in which the payment is received; 
           (15) emergency assistance payments for short-term emergency 
        needs under section 256J.626, subdivision 2; 
           (16) funeral and cemetery payments as provided by section 
        256.935; 
           (17) nonrecurring cash gifts of $30 or less, not exceeding 
        $30 per participant in a calendar month; 
           (18) any form of energy assistance payment made through 
        Public Law Number 97-35, Low-Income Home Energy Assistance Act 
        of 1981, payments made directly to energy providers by other 
        public and private agencies, and any form of credit or rebate 
        payment issued by energy providers; 
           (19) Supplemental Security Income (SSI), including 
        retroactive SSI payments and other income of an SSI recipient, 
        except as described in section 256J.37, subdivision 3b; 
           (20) Minnesota supplemental aid, including retroactive 
        payments; 
           (21) proceeds from the sale of real or personal property; 
           (22) adoption assistance payments under section 259.67; 
           (23) state-funded family subsidy program payments made 
        under section 252.32 to help families care for children with 
        mental retardation or related conditions, consumer support grant 
        funds under section 256.476, and resources and services for a 
        disabled household member under one of the home and 
        community-based waiver services programs under chapter 256B; 
           (24) interest payments and dividends from property that is 
        not excluded from and that does not exceed the asset limit; 
           (25) rent rebates; 
           (26) income earned by a minor caregiver, minor child 
        through age 6, or a minor child who is at least a half-time 
        student in an approved elementary or secondary education 
        program; 
           (27) income earned by a caregiver under age 20 who is at 
        least a half-time student in an approved elementary or secondary 
        education program; 
           (28) MFIP child care payments under section 119B.05; 
           (29) all other payments made through MFIP to support a 
        caregiver's pursuit of greater self-support economic stability; 
           (30) income a participant receives related to shared living 
        expenses; 
           (31) reverse mortgages; 
           (32) benefits provided by the Child Nutrition Act of 1966, 
        United States Code, title 42, chapter 13A, sections 1771 to 
        1790; 
           (33) benefits provided by the women, infants, and children 
        (WIC) nutrition program, United States Code, title 42, chapter 
        13A, section 1786; 
           (34) benefits from the National School Lunch Act, United 
        States Code, title 42, chapter 13, sections 1751 to 1769e; 
           (35) relocation assistance for displaced persons under the 
        Uniform Relocation Assistance and Real Property Acquisition 
        Policies Act of 1970, United States Code, title 42, chapter 61, 
        subchapter II, section 4636, or the National Housing Act, United 
        States Code, title 12, chapter 13, sections 1701 to 1750jj; 
           (36) benefits from the Trade Act of 1974, United States 
        Code, title 19, chapter 12, part 2, sections 2271 to 2322; 
           (37) war reparations payments to Japanese Americans and 
        Aleuts under United States Code, title 50, sections 1989 to 
        1989d; 
           (38) payments to veterans or their dependents as a result 
        of legal settlements regarding Agent Orange or other chemical 
        exposure under Public Law Number 101-239, section 10405, 
        paragraph (a)(2)(E); 
           (39) income that is otherwise specifically excluded from 
        MFIP consideration in federal law, state law, or federal 
        regulation; 
           (40) security and utility deposit refunds; 
           (41) American Indian tribal land settlements excluded under 
        Public Law Numbers Laws 98-123, 98-124, and 99-377 to the 
        Mississippi Band Chippewa Indians of White Earth, Leech Lake, 
        and Mille Lacs reservations and payments to members of the White 
        Earth Band, under United States Code, title 25, chapter 9, 
        section 331, and chapter 16, section 1407; 
           (42) all income of the minor parent's parents and 
        stepparents when determining the grant for the minor parent in 
        households that include a minor parent living with parents or 
        stepparents on MFIP with other children; 
           (43) income of the minor parent's parents and stepparents 
        equal to 200 percent of the federal poverty guideline for a 
        family size not including the minor parent and the minor 
        parent's child in households that include a minor parent living 
        with parents or stepparents not on MFIP when determining the 
        grant for the minor parent.  The remainder of income is deemed 
        as specified in section 256J.37, subdivision 1b; 
           (44) payments made to children eligible for relative 
        custody assistance under section 257.85; 
           (45) vendor payments for goods and services made on behalf 
        of a client unless the client has the option of receiving the 
        payment in cash; and 
           (46) the principal portion of a contract for deed payment. 
           Sec. 35.  Minnesota Statutes 2002, section 256J.24, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INDIVIDUALS WHO MUST BE EXCLUDED FROM AN 
        ASSISTANCE UNIT.] (a) The following individuals who are part of 
        the assistance unit determined under subdivision 2 are 
        ineligible to receive MFIP: 
           (1) individuals receiving who are recipients of 
        Supplemental Security Income or Minnesota supplemental aid; 
           (2) individuals disqualified from the food stamp program or 
        MFIP, until the disqualification ends; 
           (3) children on whose behalf federal, state or local foster 
        care payments are made, except as provided in sections 256J.13, 
        subdivision 2, and 256J.74, subdivision 2; and 
           (4) children receiving ongoing monthly adoption assistance 
        payments under section 259.67.  
           (b) The exclusion of a person under this subdivision does 
        not alter the mandatory assistance unit composition. 
           Sec. 36.  Minnesota Statutes 2002, section 256J.24, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MFIP TRANSITIONAL STANDARD.] The following table 
        represents the MFIP transitional standard table when all members 
        of is based on the number of persons in the assistance unit are 
        eligible for both food and cash assistance unless the 
        restrictions in subdivision 6 on the birth of a child apply.  
        The following table represents the transitional standards 
        effective October 1, 2002. 
            Number of       Transitional         Cash       Food
         Eligible People     Standard           Portion    Portion
              1                $351   $370:      $250       $120
              2                $609   $658:      $437       $221
              3                $763   $844:      $532       $312
              4                $903   $998:      $621       $377
              5              $1,025 $1,135:      $697       $438
              6              $1,165 $1,296:      $773       $523
              7              $1,273 $1,414:      $850       $564
              8              $1,403 $1,558:      $916       $642
              9              $1,530 $1,700:      $980       $720
             10              $1,653 $1,836:    $1,035       $801
        over 10            add $121   $136:       $53        $83
        per additional member.
           The commissioner shall annually publish in the State 
        Register the transitional standard for an assistance unit sizes 
        1 to 10 including a breakdown of the cash and food portions. 
           Sec. 37.  Minnesota Statutes 2002, section 256J.24, 
        subdivision 6, is amended to read: 
           Subd. 6.  [APPLICATION OF ASSISTANCE STANDARDS FAMILY CAP.] 
        The standards apply to the number of eligible persons in the 
        assistance unit.  (a) MFIP assistance units shall not receive an 
        increase in the cash portion of the transitional standard as a 
        result of the birth of a child, unless one of the conditions 
        under paragraph (b) is met.  The child shall be considered a 
        member of the assistance unit according to subdivisions 1 to 3, 
        but shall be excluded in determining family size for purposes of 
        determining the amount of the cash portion of the transitional 
        standard under subdivision 5.  The child shall be included in 
        determining family size for purposes of determining the food 
        portion of the transitional standard.  The transitional standard 
        under this subdivision shall be the total of the cash and food 
        portions as specified in this paragraph.  The family wage level 
        under this subdivision shall be based on the family size used to 
        determine the food portion of the transitional standard. 
           (b) A child shall be included in determining family size 
        for purposes of determining the amount of the cash portion of 
        the MFIP transitional standard when at least one of the 
        following conditions is met: 
           (1) for families receiving MFIP assistance on July 1, 2003, 
        the child is born to the adult parent before May 1, 2004; 
           (2) for families who apply for the diversionary work 
        program under section 256J.95 or MFIP assistance on or after 
        July 1, 2003, the child is born to the adult parent within ten 
        months of the date the family is eligible for assistance; 
           (3) the child was conceived as a result of a sexual assault 
        or incest, provided that the incident has been reported to a law 
        enforcement agency; 
           (4) the child's mother is a minor caregiver as defined in 
        section 256J.08, subdivision 59, and the child, or multiple 
        children, are the mother's first birth; or 
           (5) any child previously excluded in determining family 
        size under paragraph (a) shall be included if the adult parent 
        or parents have not received benefits from the diversionary work 
        program under section 256J.95 or MFIP assistance in the previous 
        ten months.  An adult parent or parents who reapply and have 
        received benefits from the diversionary work program or MFIP 
        assistance in the past ten months shall be under the ten-month 
        grace period of their previous application under clause (2). 
           (c) Income and resources of a child excluded under this 
        subdivision, except child support received or distributed on 
        behalf of this child, must be considered using the same policies 
        as for other children when determining the grant amount of the 
        assistance unit. 
           (d) The caregiver must assign support and cooperate with 
        the child support enforcement agency to establish paternity and 
        collect child support on behalf of the excluded child.  Failure 
        to cooperate results in the sanction specified in section 
        256J.46, subdivisions 2 and 2a.  Current support paid on behalf 
        of the excluded child shall be distributed according to section 
        256.741, subdivision 15. 
           (e) County agencies must inform applicants of the 
        provisions under this subdivision at the time of each 
        application and at recertification.  
           (f) Children excluded under this provision shall be deemed 
        MFIP recipients for purposes of child care under chapter 119B. 
           Sec. 38.  Minnesota Statutes 2002, section 256J.24, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FAMILY WAGE LEVEL STANDARD.] The family wage 
        level standard is 110 percent of the transitional standard under 
        subdivision 5 or 6, when applicable, and is the standard used 
        when there is earned income in the assistance unit.  As 
        specified in section 256J.21, earned income is subtracted from 
        the family wage level to determine the amount of the assistance 
        payment.  Not including The family wage level standard, 
        assistance payments payment may not exceed the MFIP standard of 
        need transitional standard under subdivision 5 or 6, or the 
        shared household standard under subdivision 9, whichever is 
        applicable, for the assistance unit. 
           Sec. 39.  Minnesota Statutes 2002, section 256J.24, 
        subdivision 10, is amended to read: 
           Subd. 10.  [MFIP EXIT LEVEL.] The commissioner shall adjust 
        the MFIP earned income disregard to ensure that most 
        participants do not lose eligibility for MFIP until their income 
        reaches at least 120 115 percent of the federal poverty 
        guidelines in effect in October of each fiscal year.  The 
        adjustment to the disregard shall be based on a household size 
        of three, and the resulting earned income disregard percentage 
        must be applied to all household sizes.  The adjustment under 
        this subdivision must be implemented at the same time as the 
        October food stamp cost-of-living adjustment is reflected in the 
        food portion of MFIP transitional standard as required under 
        subdivision 5a. 
           Sec. 40.  Minnesota Statutes 2002, section 256J.30, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CHANGES THAT MUST BE REPORTED.] A caregiver must 
        report the changes or anticipated changes specified in clauses 
        (1) to (17) (16) within ten days of the date they occur, at the 
        time of the periodic recertification of eligibility under 
        section 256J.32, subdivision 6, or within eight calendar days of 
        a reporting period as in subdivision 5 or 6, whichever occurs 
        first.  A caregiver must report other changes at the time of the 
        periodic recertification of eligibility under section 256J.32, 
        subdivision 6, or at the end of a reporting period under 
        subdivision 5 or 6, as applicable.  A caregiver must make these 
        reports in writing to the county agency.  When a county agency 
        could have reduced or terminated assistance for one or more 
        payment months if a delay in reporting a change specified under 
        clauses (1) to (16) (15) had not occurred, the county agency 
        must determine whether a timely notice under section 256J.31, 
        subdivision 4, could have been issued on the day that the change 
        occurred.  When a timely notice could have been issued, each 
        month's overpayment subsequent to that notice must be considered 
        a client error overpayment under section 256J.38.  Calculation 
        of overpayments for late reporting under clause (17) (16) is 
        specified in section 256J.09, subdivision 9.  Changes in 
        circumstances which must be reported within ten days must also 
        be reported on the MFIP household report form for the reporting 
        period in which those changes occurred.  Within ten days, a 
        caregiver must report: 
           (1) a change in initial employment; 
           (2) a change in initial receipt of unearned income; 
           (3) a recurring change in unearned income; 
           (4) a nonrecurring change of unearned income that exceeds 
        $30; 
           (5) the receipt of a lump sum; 
           (6) an increase in assets that may cause the assistance 
        unit to exceed asset limits; 
           (7) a change in the physical or mental status of an 
        incapacitated member of the assistance unit if the physical or 
        mental status is the basis of exemption from an MFIP employment 
        services program under section 256J.56, or as the basis for 
        reducing the hourly participation requirements under section 
        256J.55, subdivision 1, or the type of activities included in an 
        employment plan under section 256J.521, subdivision 2; 
           (8) a change in employment status; 
           (9) information affecting an exception under section 
        256J.24, subdivision 9; 
           (10) a change in health insurance coverage; 
           (11) the marriage or divorce of an assistance unit member; 
           (12) (11) the death of a parent, minor child, or 
        financially responsible person; 
           (13) (12) a change in address or living quarters of the 
        assistance unit; 
           (14) (13) the sale, purchase, or other transfer of 
        property; 
           (15) (14) a change in school attendance of a custodial 
        parent caregiver under age 20 or an employed child; 
           (16) (15) filing a lawsuit, a workers' compensation claim, 
        or a monetary claim against a third party; and 
           (17) (16) a change in household composition, including 
        births, returns to and departures from the home of assistance 
        unit members and financially responsible persons, or a change in 
        the custody of a minor child. 
           Sec. 41.  Minnesota Statutes 2002, section 256J.32, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DOCUMENTATION.] The applicant or participant 
        must document the information required under subdivisions 4 to 6 
        or authorize the county agency to verify the information.  The 
        applicant or participant has the burden of providing documentary 
        evidence to verify eligibility.  The county agency shall assist 
        the applicant or participant in obtaining required documents 
        when the applicant or participant is unable to do so.  When an 
        applicant or participant and the county agency are unable to 
        obtain documents needed to verify information, the county agency 
        may accept an affidavit from an applicant or participant as 
        sufficient documentation.  The county agency may accept an 
        affidavit only for factors specified under subdivision 8.  
           Sec. 42.  Minnesota Statutes 2002, section 256J.32, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FACTORS TO BE VERIFIED.] The county agency shall 
        verify the following at application: 
           (1) identity of adults; 
           (2) presence of the minor child in the home, if 
        questionable; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; 
           (4) age, if necessary to determine MFIP eligibility; 
           (5) immigration status; 
           (6) social security number according to the requirements of 
        section 256J.30, subdivision 12; 
           (7) income; 
           (8) self-employment expenses used as a deduction; 
           (9) source and purpose of deposits and withdrawals from 
        business accounts; 
           (10) spousal support and child support payments made to 
        persons outside the household; 
           (11) real property; 
           (12) vehicles; 
           (13) checking and savings accounts; 
           (14) savings certificates, savings bonds, stocks, and 
        individual retirement accounts; 
           (15) pregnancy, if related to eligibility; 
           (16) inconsistent information, if related to eligibility; 
           (17) medical insurance; 
           (18) burial accounts; 
           (19) (18) school attendance, if related to eligibility; 
           (20) (19) residence; 
           (21) (20) a claim of family violence if used as a basis for 
        a to qualify for the family violence waiver from the 60-month 
        time limit in section 256J.42 and regular employment and 
        training services requirements in section 256J.56; 
           (22) (21) disability if used as the basis for an exemption 
        from employment and training services requirements under section 
        256J.56 or as the basis for reducing the hourly participation 
        requirements under section 256J.55, subdivision 1, or the type 
        of activity included in an employment plan under section 
        256J.521, subdivision 2; and 
           (23) (22) information needed to establish an exception 
        under section 256J.24, subdivision 9. 
           Sec. 43.  Minnesota Statutes 2002, section 256J.32, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [INCONSISTENT INFORMATION.] When the county 
        agency verifies inconsistent information under subdivision 4, 
        clause (16), or 6, clause (4) (5), the reason for verifying the 
        information must be documented in the financial case record. 
           Sec. 44.  Minnesota Statutes 2002, section 256J.32, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [AFFIDAVIT.] The county agency may accept an 
        affidavit from the applicant or recipient as sufficient 
        documentation at the time of application or recertification only 
        for the following factors: 
           (1) a claim of family violence if used as a basis to 
        qualify for the family violence waiver; 
           (2) information needed to establish an exception under 
        section 256J.24, subdivision 9; 
           (3) relationship of a minor child to caregivers in the 
        assistance unit; and 
           (4) citizenship status from a noncitizen who reports to be, 
        or is identified as, a victim of severe forms of trafficking in 
        persons, if the noncitizen reports that the noncitizen's 
        immigration documents are being held by an individual or group 
        of individuals against the noncitizen's will.  The noncitizen 
        must follow up with the Office of Refugee Resettlement (ORR) to 
        pursue certification.  If verification that certification is 
        being pursued is not received within 30 days, the MFIP case must 
        be closed and the agency shall pursue overpayments.  The ORR 
        documents certifying the noncitizen's status as a victim of 
        severe forms of trafficking in persons, or the reason for the 
        delay in processing, must be received within 90 days, or the 
        MFIP case must be closed and the agency shall pursue 
        overpayments. 
           Sec. 45.  Minnesota Statutes 2002, section 256J.37, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [RENTAL SUBSIDIES; UNEARNED INCOME.] (a) 
        Effective July 1, 2003, the county agency shall count $50 of the 
        value of public and assisted rental subsidies provided through 
        the Department of Housing and Urban Development (HUD) as 
        unearned income to the cash portion of the MFIP grant.  The full 
        amount of the subsidy must be counted as unearned income when 
        the subsidy is less than $50.  The income from this subsidy 
        shall be budgeted according to section 256J.34. 
           (b) The provisions of this subdivision shall not apply to 
        an MFIP assistance unit which includes a participant who is: 
           (1) age 60 or older; 
           (2) a caregiver who is suffering from an illness, injury, 
        or incapacity that has been certified by a qualified 
        professional when the illness, injury, or incapacity is expected 
        to continue for more than 30 days and prevents the person from 
        obtaining or retaining employment; or 
           (3) a caregiver whose presence in the home is required due 
        to the illness or incapacity of another member in the assistance 
        unit, a relative in the household, or a foster child in the 
        household when the illness or incapacity and the need for the 
        participant's presence in the home has been certified by a 
        qualified professional and is expected to continue for more than 
        30 days. 
           (c) The provisions of this subdivision shall not apply to 
        an MFIP assistance unit where the parental caregiver is an SSI 
        recipient. 
           (d) Prior to implementing this provision, the commissioner 
        must identify the MFIP participants subject to this provision 
        and provide written notice to these participants at least 30 
        days before the first grant reduction.  The notice must inform 
        the participant of the basis for the potential grant reduction, 
        the exceptions to the provision, if any, and inform the 
        participant of the steps necessary to claim an exception.  A 
        person who is found not to meet one of the exceptions to the 
        provision must be notified and informed of the right to a fair 
        hearing under section 256J.40.  The notice must also inform the 
        participant that the participant may be eligible for a rent 
        reduction resulting from a reduction in the MFIP grant, and 
        encourage the participant to contact the local housing authority.
           Sec. 46.  Minnesota Statutes 2002, section 256J.37, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [TREATMENT OF SUPPLEMENTAL SECURITY 
        INCOME.] Effective July 1, 2003, the county shall reduce the 
        cash portion of the MFIP grant by $125 per SSI recipient who 
        resides in the household, and who would otherwise be included in 
        the MFIP assistance unit under section 256J.24, subdivision 2, 
        but is excluded solely due to the SSI recipient status under 
        section 256J.24, subdivision 3, paragraph (a), clause (1).  If 
        the SSI recipient receives less than $125 of SSI, only the 
        amount received shall be used in calculating the MFIP cash 
        assistance payment.  This provision does not apply to relative 
        caregivers who could elect to be included in the MFIP assistance 
        unit under section 256J.24, subdivision 4, unless the 
        caregiver's children or stepchildren are included in the MFIP 
        assistance unit. 
           Sec. 47.  Minnesota Statutes 2002, section 256J.37, 
        subdivision 9, is amended to read: 
           Subd. 9.  [UNEARNED INCOME.] (a) The county agency must 
        apply unearned income to the MFIP standard of need.  When 
        determining the amount of unearned income, the county agency 
        must deduct the costs necessary to secure payments of unearned 
        income.  These costs include legal fees, medical fees, and 
        mandatory deductions such as federal and state income taxes. 
           (b) Effective July 1, 2003, the county agency shall count 
        $100 of the value of public and assisted rental subsidies 
        provided through the Department of Housing and Urban Development 
        (HUD) as unearned income.  The full amount of the subsidy must 
        be counted as unearned income when the subsidy is less than $100.
           (c) The provisions of paragraph (b) shall not apply to MFIP 
        participants who are exempt from the employment and training 
        services component because they are: 
           (i) individuals who are age 60 or older; 
           (ii) individuals who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which is expected to continue for more than 30 days and which 
        prevents the person from obtaining or retaining employment; or 
           (iii) caregivers whose presence in the home is required 
        because of the professionally certified illness or incapacity of 
        another member in the assistance unit, a relative in the 
        household, or a foster child in the household. 
           (d) The provisions of paragraph (b) shall not apply to an 
        MFIP assistance unit where the parental caregiver receives 
        supplemental security income. 
           Sec. 48.  Minnesota Statutes 2002, section 256J.38, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RECOVERING OVERPAYMENTS FROM FORMER 
        PARTICIPANTS.] A county agency must initiate efforts to recover 
        overpayments paid to a former participant or caregiver.  Adults 
        Caregivers, both parental and nonparental, and minor caregivers 
        of an assistance unit at the time an overpayment occurs, whether 
        receiving assistance or not, are jointly and individually liable 
        for repayment of the overpayment.  The county agency must 
        request repayment from the former participants and caregivers.  
        When an agreement for repayment is not completed within six 
        months of the date of discovery or when there is a default on an 
        agreement for repayment after six months, the county agency must 
        initiate recovery consistent with chapter 270A, or section 
        541.05.  When a person has been convicted of fraud under section 
        256.98, recovery must be sought regardless of the amount of 
        overpayment.  When an overpayment is less than $35, and is not 
        the result of a fraud conviction under section 256.98, the 
        county agency must not seek recovery under this subdivision.  
        The county agency must retain information about all overpayments 
        regardless of the amount.  When an adult, adult caregiver, or 
        minor caregiver reapplies for assistance, the overpayment must 
        be recouped under subdivision 4. 
           Sec. 49.  Minnesota Statutes 2002, section 256J.38, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOUPING OVERPAYMENTS FROM PARTICIPANTS.] A 
        participant may voluntarily repay, in part or in full, an 
        overpayment even if assistance is reduced under this 
        subdivision, until the total amount of the overpayment is 
        repaid.  When an overpayment occurs due to fraud, the county 
        agency must recover from the overpaid assistance unit, including 
        child only cases, ten percent of the applicable standard or the 
        amount of the monthly assistance payment, whichever is less.  
        When a nonfraud overpayment occurs, the county agency must 
        recover from the overpaid assistance unit, including child only 
        cases, three percent of the MFIP standard of need or the amount 
        of the monthly assistance payment, whichever is less.  
           Sec. 50.  Minnesota Statutes 2002, section 256J.40, is 
        amended to read: 
           256J.40 [FAIR HEARINGS.] 
           Caregivers receiving a notice of intent to sanction or a 
        notice of adverse action that includes a sanction, reduction in 
        benefits, suspension of benefits, denial of benefits, or 
        termination of benefits may request a fair hearing.  A request 
        for a fair hearing must be submitted in writing to the county 
        agency or to the commissioner and must be mailed within 30 days 
        after a participant or former participant receives written 
        notice of the agency's action or within 90 days when a 
        participant or former participant shows good cause for not 
        submitting the request within 30 days.  A former participant who 
        receives a notice of adverse action due to an overpayment may 
        appeal the adverse action according to the requirements in this 
        section.  Issues that may be appealed are: 
           (1) the amount of the assistance payment; 
           (2) a suspension, reduction, denial, or termination of 
        assistance; 
           (3) the basis for an overpayment, the calculated amount of 
        an overpayment, and the level of recoupment; 
           (4) the eligibility for an assistance payment; and 
           (5) the use of protective or vendor payments under section 
        256J.39, subdivision 2, clauses (1) to (3). 
           Except for benefits issued under section 256J.95, a county 
        agency must not reduce, suspend, or terminate payment when an 
        aggrieved participant requests a fair hearing prior to the 
        effective date of the adverse action or within ten days of the 
        mailing of the notice of adverse action, whichever is later, 
        unless the participant requests in writing not to receive 
        continued assistance pending a hearing decision.  An appeal 
        request cannot extend benefits for the diversionary work program 
        under section 256J.95 beyond the four-month time limit.  
        Assistance issued pending a fair hearing is subject to recovery 
        under section 256J.38 when as a result of the fair hearing 
        decision the participant is determined ineligible for assistance 
        or the amount of the assistance received.  A county agency may 
        increase or reduce an assistance payment while an appeal is 
        pending when the circumstances of the participant change and are 
        not related to the issue on appeal.  The commissioner's order is 
        binding on a county agency.  No additional notice is required to 
        enforce the commissioner's order. 
           A county agency shall reimburse appellants for reasonable 
        and necessary expenses of attendance at the hearing, such as 
        child care and transportation costs and for the transportation 
        expenses of the appellant's witnesses and representatives to and 
        from the hearing.  Reasonable and necessary expenses do not 
        include legal fees.  Fair hearings must be conducted at a 
        reasonable time and date by an impartial referee employed by the 
        department.  The hearing may be conducted by telephone or at a 
        site that is readily accessible to persons with disabilities. 
           The appellant may introduce new or additional evidence 
        relevant to the issues on appeal.  Recommendations of the 
        appeals referee and decisions of the commissioner must be based 
        on evidence in the hearing record and are not limited to a 
        review of the county agency action. 
           Sec. 51.  Minnesota Statutes 2002, section 256J.42, 
        subdivision 4, is amended to read: 
           Subd. 4.  [VICTIMS OF FAMILY VIOLENCE.] Any cash assistance 
        received by an assistance unit in a month when a caregiver 
        complied with a safety plan, an alternative employment plan, or 
        an employment plan or after October 1, 2001, complied or is 
        complying with an alternative employment plan under section 
        256J.49 256J.521, subdivision 1a 3, does not count toward the 
        60-month limitation on assistance. 
           Sec. 52.  Minnesota Statutes 2002, section 256J.42, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXEMPTION FOR CERTAIN FAMILIES.] (a) Any cash 
        assistance received by an assistance unit does not count toward 
        the 60-month limit on assistance during a month in which the 
        caregiver is in the category in age 60 or older, including 
        months during which the caregiver was exempt under section 
        256J.56, paragraph (a), clause (1). 
           (b) From July 1, 1997, until the date MFIP is operative in 
        the caregiver's county of financial responsibility, any cash 
        assistance received by a caregiver who is complying with 
        Minnesota Statutes 1996, section 256.73, subdivision 5a, and 
        Minnesota Statutes 1998, section 256.736, if applicable, does 
        not count toward the 60-month limit on assistance.  Thereafter, 
        any cash assistance received by a minor caregiver who is 
        complying with the requirements of sections 256J.14 and 256J.54, 
        if applicable, does not count towards the 60-month limit on 
        assistance. 
           (c) Any diversionary assistance or emergency assistance 
        received prior to July 1, 2003, does not count toward the 
        60-month limit. 
           (d) Any cash assistance received by an 18- or 19-year-old 
        caregiver who is complying with the requirements of an 
        employment plan that includes an education option under section 
        256J.54 does not count toward the 60-month limit. 
           (e) Payments provided to meet short-term emergency needs 
        under section 256J.626 and diversionary work program benefits 
        provided under section 256J.95 do not count toward the 60-month 
        time limit. 
           Sec. 53.  Minnesota Statutes 2002, section 256J.42, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CASE REVIEW.] (a) Within 180 days, but not less 
        than 60 days, before the end of the participant's 60th month on 
        assistance, the county agency or job counselor must review the 
        participant's case to determine if the employment plan is still 
        appropriate or if the participant is exempt under section 
        256J.56 from the employment and training services component, and 
        attempt to meet with the participant face-to-face. 
           (b) During the face-to-face meeting, a county agency or the 
        job counselor must: 
           (1) inform the participant how many months of counted 
        assistance the participant has accrued and when the participant 
        is expected to reach the 60th month; 
           (2) explain the hardship extension criteria under section 
        256J.425 and what the participant should do if the participant 
        thinks a hardship extension applies; 
           (3) identify other resources that may be available to the 
        participant to meet the needs of the family; and 
           (4) inform the participant of the right to appeal the case 
        closure under section 256J.40. 
           (c) If a face-to-face meeting is not possible, the county 
        agency must send the participant a notice of adverse action as 
        provided in section 256J.31, subdivisions 4 and 5. 
           (d) Before a participant's case is closed under this 
        section, the county must ensure that: 
           (1) the case has been reviewed by the job counselor's 
        supervisor or the review team designated in by the county's 
        approved local service unit plan county to determine if the 
        criteria for a hardship extension, if requested, were applied 
        appropriately; and 
           (2) the county agency or the job counselor attempted to 
        meet with the participant face-to-face. 
           Sec. 54.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] (a) To be eligible for a 
        hardship extension, a participant in an assistance unit subject 
        to the time limit under section 256J.42, subdivision 1, in which 
        any participant has received 60 counted months of assistance, 
        must be in compliance in the participant's 60th counted month 
        the participant is applying for the extension.  For purposes of 
        determining eligibility for a hardship extension, a participant 
        is in compliance in any month that the participant has not been 
        sanctioned. 
           (b) If one participant in a two-parent assistance unit is 
        determined to be ineligible for a hardship extension, the county 
        shall give the assistance unit the option of disqualifying the 
        ineligible participant from MFIP.  In that case, the assistance 
        unit shall be treated as a one-parent assistance unit and the 
        assistance unit's MFIP grant shall be calculated using the 
        shared household standard under section 256J.08, subdivision 82a.
           Sec. 55.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [REVIEW.] If a county grants a hardship 
        extension under this section, a county agency shall review the 
        case every six or 12 months, whichever is appropriate based on 
        the participant's circumstances and the extension 
        category.  More frequent reviews shall be required if 
        eligibility for an extension is based on a condition that is 
        subject to change in less than six months. 
           Sec. 56.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ILL OR INCAPACITATED.] (a) An assistance unit 
        subject to the time limit in section 256J.42, subdivision 1, in 
        which any participant has received 60 counted months of 
        assistance, is eligible to receive months of assistance under a 
        hardship extension if the participant who reached the time limit 
        belongs to any of the following groups: 
           (1) participants who are suffering from a professionally 
        certified an illness, injury, or incapacity which has been 
        certified by a qualified professional when the illness, injury, 
        or incapacity is expected to continue for more than 30 days 
        and which prevents the person from obtaining or retaining 
        employment and who are following.  These participants must 
        follow the treatment recommendations of the health care provider 
        qualified professional certifying the illness, injury, or 
        incapacity; 
           (2) participants whose presence in the home is required as 
        a caregiver because of a professionally certified the illness, 
        injury, or incapacity of another member in the assistance unit, 
        a relative in the household, or a foster child in the 
        household and when the illness or incapacity and the need for a 
        person to provide assistance in the home has been certified by a 
        qualified professional and is expected to continue for more than 
        30 days; or 
           (3) caregivers with a child or an adult in the household 
        who meets the disability or medical criteria for home care 
        services under section 256B.0627, subdivision 1, paragraph 
        (c) (f), or a home and community-based waiver services program 
        under chapter 256B, or meets the criteria for severe emotional 
        disturbance under section 245.4871, subdivision 6, or for 
        serious and persistent mental illness under section 245.462, 
        subdivision 20, paragraph (c).  Caregivers in this category are 
        presumed to be prevented from obtaining or retaining employment. 
           (b) An assistance unit receiving assistance under a 
        hardship extension under this subdivision may continue to 
        receive assistance as long as the participant meets the criteria 
        in paragraph (a), clause (1), (2), or (3). 
           Sec. 57.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 3, is amended to read: 
           Subd. 3.  [HARD-TO-EMPLOY PARTICIPANTS.] An assistance unit 
        subject to the time limit in section 256J.42, subdivision 1, in 
        which any participant has received 60 counted months of 
        assistance, is eligible to receive months of assistance under a 
        hardship extension if the participant who reached the time limit 
        belongs to any of the following groups: 
           (1) a person who is diagnosed by a licensed physician, 
        psychological practitioner, or other qualified professional, as 
        mentally retarded or mentally ill, and that condition prevents 
        the person from obtaining or retaining unsubsidized employment; 
           (2) a person who: 
           (i) has been assessed by a vocational specialist or the 
        county agency to be unemployable for purposes of this 
        subdivision; or 
           (ii) has an IQ below 80 who has been assessed by a 
        vocational specialist or a county agency to be employable, but 
        not at a level that makes the participant eligible for an 
        extension under subdivision 4 or,.  The determination of IQ 
        level must be made by a qualified professional.  In the case of 
        a non-English-speaking person for whom it is not possible to 
        provide a determination due to language barriers or absence of 
        culturally appropriate assessment tools, is determined by a 
        qualified professional to have an IQ below 80.  A person is 
        considered employable if positions of employment in the local 
        labor market exist, regardless of the current availability of 
        openings for those positions, that the person is capable of 
        performing:  (A) the determination must be made by a qualified 
        professional with experience conducting culturally appropriate 
        assessments, whenever possible; (B) the county may accept 
        reports that identify an IQ range as opposed to a specific 
        score; (C) these reports must include a statement of confidence 
        in the results; 
           (3) a person who is determined by the county agency a 
        qualified professional to be learning disabled or, and the 
        disability severely limits the person's ability to obtain, 
        perform, or maintain suitable employment.  For purposes of the 
        initial approval of a learning disability extension, the 
        determination must have been made or confirmed within the 
        previous 12 months.  In the case of a non-English-speaking 
        person for whom it is not possible to provide a medical 
        diagnosis due to language barriers or absence of culturally 
        appropriate assessment tools, is determined by a qualified 
        professional to have a learning disability.  If a rehabilitation 
        plan for the person is developed or approved by the county 
        agency, the plan must be incorporated into the employment plan.  
        However, a rehabilitation plan does not replace the requirement 
        to develop and comply with an employment plan under section 
        256J.52.  For purposes of this section, "learning disabled" 
        means the applicant or recipient has a disorder in one or more 
        of the psychological processes involved in perceiving, 
        understanding, or using concepts through verbal language or 
        nonverbal means.  The disability must severely limit the 
        applicant or recipient in obtaining, performing, or maintaining 
        suitable employment.  Learning disabled does not include 
        learning problems that are primarily the result of visual, 
        hearing, or motor handicaps; mental retardation; emotional 
        disturbance; or due to environmental, cultural, or economic 
        disadvantage:  (i) the determination must be made by a qualified 
        professional with experience conducting culturally appropriate 
        assessments, whenever possible; and (ii) these reports must 
        include a statement of confidence in the results.  If a 
        rehabilitation plan for a participant extended as learning 
        disabled is developed or approved by the county agency, the plan 
        must be incorporated into the employment plan.  However, a 
        rehabilitation plan does not replace the requirement to develop 
        and comply with an employment plan under section 256J.521; or 
           (4) a person who is a victim of has been granted a family 
        violence as defined in section 256J.49, subdivision 2 waiver, 
        and who is participating in complying with an alternative 
        employment plan under section 256J.49 256J.521, subdivision 1a 
        3.  
           Sec. 58.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYED PARTICIPANTS.] (a) An assistance unit 
        subject to the time limit under section 256J.42, subdivision 1, 
        in which any participant has received 60 months of assistance, 
        is eligible to receive assistance under a hardship extension if 
        the participant who reached the time limit belongs to: 
           (1) a one-parent assistance unit in which the participant 
        is participating in work activities for at least 30 hours per 
        week, of which an average of at least 25 hours per week every 
        month are spent participating in employment; 
           (2) a two-parent assistance unit in which the participants 
        are participating in work activities for at least 55 hours per 
        week, of which an average of at least 45 hours per week every 
        month are spent participating in employment; or 
           (3) an assistance unit in which a participant is 
        participating in employment for fewer hours than those specified 
        in clause (1), and the participant submits verification from a 
        health care provider qualified professional, in a form 
        acceptable to the commissioner, stating that the number of hours 
        the participant may work is limited due to illness or 
        disability, as long as the participant is participating in 
        employment for at least the number of hours specified by 
        the health care provider qualified professional.  The 
        participant must be following the treatment recommendations of 
        the health care provider qualified professional providing the 
        verification.  The commissioner shall develop a form to be 
        completed and signed by the health care provider qualified 
        professional, documenting the diagnosis and any additional 
        information necessary to document the functional limitations of 
        the participant that limit work hours.  If the participant is 
        part of a two-parent assistance unit, the other parent must be 
        treated as a one-parent assistance unit for purposes of meeting 
        the work requirements under this subdivision. 
           (b) For purposes of this section, employment means: 
           (1) unsubsidized employment under section 256J.49, 
        subdivision 13, clause (1); 
           (2) subsidized employment under section 256J.49, 
        subdivision 13, clause (2); 
           (3) on-the-job training under section 256J.49, subdivision 
        13, clause (4) (2); 
           (4) an apprenticeship under section 256J.49, subdivision 
        13, clause (19) (1); 
           (5) supported work.  For purposes of this section, 
        "supported work" means services supporting a participant on the 
        job which include, but are not limited to, supervision, job 
        coaching, and subsidized wages under section 256J.49, 
        subdivision 13, clause (2); 
           (6) a combination of clauses (1) to (5); or 
           (7) child care under section 256J.49, subdivision 13, 
        clause (25) (7), if it is in combination with paid employment. 
           (c) If a participant is complying with a child protection 
        plan under chapter 260C, the number of hours required under the 
        child protection plan count toward the number of hours required 
        under this subdivision.  
           (d) The county shall provide the opportunity for subsidized 
        employment to participants needing that type of employment 
        within available appropriations. 
           (e) To be eligible for a hardship extension for employed 
        participants under this subdivision, a participant in a 
        one-parent assistance unit or both parents in a two-parent 
        assistance unit must be in compliance for at least ten out of 
        the 12 months immediately preceding the participant's 61st month 
        on assistance.  If only one parent in a two-parent assistance 
        unit fails to be in compliance ten out of the 12 months 
        immediately preceding the participant's 61st month, the county 
        shall give the assistance unit the option of disqualifying the 
        noncompliant parent.  If the noncompliant participant is 
        disqualified, the assistance unit must be treated as a 
        one-parent assistance unit for the purposes of meeting the work 
        requirements under this subdivision and the assistance unit's 
        MFIP grant shall be calculated using the shared household 
        standard under section 256J.08, subdivision 82a. 
           (f) The employment plan developed under section 256J.52 
        256J.521, subdivision 5 2, for participants under this 
        subdivision must contain the number of hours specified in 
        paragraph (a) related to employment and work activities.  The 
        job counselor and the participant must sign the employment plan 
        to indicate agreement between the job counselor and the 
        participant on the contents of the plan. 
           (g) Participants who fail to meet the requirements in 
        paragraph (a), without good cause under section 256J.57, shall 
        be sanctioned or permanently disqualified under subdivision 6.  
        Good cause may only be granted for that portion of the month for 
        which the good cause reason applies.  Participants must meet all 
        remaining requirements in the approved employment plan or be 
        subject to sanction or permanent disqualification.  
           (h) If the noncompliance with an employment plan is due to 
        the involuntary loss of employment, the participant is exempt 
        from the hourly employment requirement under this subdivision 
        for one month.  Participants must meet all remaining 
        requirements in the approved employment plan or be subject to 
        sanction or permanent disqualification.  This exemption is 
        available to one-parent assistance units a participant two times 
        in a 12-month period, and two-parent assistance units, two times 
        per parent in a 12-month period. 
           (i) This subdivision expires on June 30, 2004. 
           Sec. 59.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SANCTIONS FOR EXTENDED CASES.] (a) If one or 
        both participants in an assistance unit receiving assistance 
        under subdivision 3 or 4 are not in compliance with the 
        employment and training service requirements in sections 256J.52 
        256J.521 to 256J.55 256J.57, the sanctions under this 
        subdivision apply.  For a first occurrence of noncompliance, an 
        assistance unit must be sanctioned under section 256J.46, 
        subdivision 1, paragraph (d) (c), clause (1).  For a second or 
        third occurrence of noncompliance, the assistance unit must be 
        sanctioned under section 256J.46, subdivision 1, 
        paragraph (d) (c), clause (2).  For a fourth occurrence of 
        noncompliance, the assistance unit is disqualified from MFIP.  
        If a participant is determined to be out of compliance, the 
        participant may claim a good cause exception under section 
        256J.57, however, the participant may not claim an exemption 
        under section 256J.56.  
           (b) If both participants in a two-parent assistance unit 
        are out of compliance at the same time, it is considered one 
        occurrence of noncompliance.  
           Sec. 60.  Minnesota Statutes 2002, section 256J.425, 
        subdivision 7, is amended to read: 
           Subd. 7.  [STATUS OF DISQUALIFIED PARTICIPANTS.] (a) An 
        assistance unit that is disqualified under subdivision 6, 
        paragraph (a), may be approved for MFIP if the participant 
        complies with MFIP program requirements and demonstrates 
        compliance for up to one month.  No assistance shall be paid 
        during this period. 
           (b) An assistance unit that is disqualified under 
        subdivision 6, paragraph (a), and that reapplies under paragraph 
        (a) is subject to sanction under section 256J.46, subdivision 1, 
        paragraph (d) (c), clause (1), for a first occurrence of 
        noncompliance.  A subsequent occurrence of noncompliance results 
        in a permanent disqualification. 
           (c) If one participant in a two-parent assistance unit 
        receiving assistance under a hardship extension under 
        subdivision 3 or 4 is determined to be out of compliance with 
        the employment and training services requirements under sections 
        256J.52 256J.521 to 256J.55 256J.57, the county shall give the 
        assistance unit the option of disqualifying the noncompliant 
        participant from MFIP.  In that case, the assistance unit shall 
        be treated as a one-parent assistance unit for the purposes of 
        meeting the work requirements under subdivision 4 and the 
        assistance unit's MFIP grant shall be calculated using the 
        shared household standard under section 256J.08, subdivision 
        82a.  An applicant who is disqualified from receiving assistance 
        under this paragraph may reapply under paragraph (a).  If a 
        participant is disqualified from MFIP under this subdivision a 
        second time, the participant is permanently disqualified from 
        MFIP. 
           (d) Prior to a disqualification under this subdivision, a 
        county agency must review the participant's case to determine if 
        the employment plan is still appropriate and attempt to meet 
        with the participant face-to-face.  If a face-to-face meeting is 
        not conducted, the county agency must send the participant a 
        notice of adverse action as provided in section 256J.31.  During 
        the face-to-face meeting, the county agency must: 
           (1) determine whether the continued noncompliance can be 
        explained and mitigated by providing a needed preemployment 
        activity, as defined in section 256J.49, subdivision 13, clause 
        (16), or services under a local intervention grant for 
        self-sufficiency under section 256J.625 (9); 
           (2) determine whether the participant qualifies for a good 
        cause exception under section 256J.57; 
           (3) inform the participant of the family violence waiver 
        criteria and make appropriate referrals if the waiver is 
        requested; 
           (4) inform the participant of the participant's sanction 
        status and explain the consequences of continuing noncompliance; 
           (4) (5) identify other resources that may be available to 
        the participant to meet the needs of the family; and 
           (5) (6) inform the participant of the right to appeal under 
        section 256J.40. 
           Sec. 61.  Minnesota Statutes 2002, section 256J.45, 
        subdivision 2, is amended to read: 
           Subd. 2.  [GENERAL INFORMATION.] The MFIP orientation must 
        consist of a presentation that informs caregivers of: 
           (1) the necessity to obtain immediate employment; 
           (2) the work incentives under MFIP, including the 
        availability of the federal earned income tax credit and the 
        Minnesota working family tax credit; 
           (3) the requirement to comply with the employment plan and 
        other requirements of the employment and training services 
        component of MFIP, including a description of the range of work 
        and training activities that are allowable under MFIP to meet 
        the individual needs of participants; 
           (4) the consequences for failing to comply with the 
        employment plan and other program requirements, and that the 
        county agency may not impose a sanction when failure to comply 
        is due to the unavailability of child care or other 
        circumstances where the participant has good cause under 
        subdivision 3; 
           (5) the rights, responsibilities, and obligations of 
        participants; 
           (6) the types and locations of child care services 
        available through the county agency; 
           (7) the availability and the benefits of the early 
        childhood health and developmental screening under sections 
        121A.16 to 121A.19; 123B.02, subdivision 16; and 123B.10; 
           (8) the caregiver's eligibility for transition year child 
        care assistance under section 119B.05; 
           (9) the caregiver's eligibility for extended medical 
        assistance when the caregiver loses eligibility for MFIP due to 
        increased earnings or increased child or spousal support the 
        availability of all health care programs, including transitional 
        medical assistance; 
           (10) the caregiver's option to choose an employment and 
        training provider and information about each provider, including 
        but not limited to, services offered, program components, job 
        placement rates, job placement wages, and job retention rates; 
           (11) the caregiver's option to request approval of an 
        education and training plan according to section 256J.52 
        256J.53; 
           (12) the work study programs available under the higher 
        education system; and 
           (13) effective October 1, 2001, information about the 
        60-month time limit exemption and waivers of regular employment 
        and training requirements for family violence victims exemptions 
        under the family violence waiver and referral information about 
        shelters and programs for victims of family violence. 
           Sec. 62.  Minnesota Statutes 2002, section 256J.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PARTICIPANTS NOT COMPLYING WITH PROGRAM 
        REQUIREMENTS.] (a) A participant who fails without good 
        cause under section 256J.57 to comply with the requirements of 
        this chapter, and who is not subject to a sanction under 
        subdivision 2, shall be subject to a sanction as provided in 
        this subdivision.  Prior to the imposition of a sanction, a 
        county agency shall provide a notice of intent to sanction under 
        section 256J.57, subdivision 2, and, when applicable, a notice 
        of adverse action as provided in section 256J.31. 
           (b) A participant who fails to comply with an alternative 
        employment plan must have the plan reviewed by a person trained 
        in domestic violence and a job counselor or the county agency to 
        determine if components of the alternative employment plan are 
        still appropriate.  If the activities are no longer appropriate, 
        the plan must be revised with a person trained in domestic 
        violence and approved by a job counselor or the county agency.  
        A participant who fails to comply with a plan that is determined 
        not to need revision will lose their exemption and be required 
        to comply with regular employment services activities.  
           (c) A sanction under this subdivision becomes effective the 
        month following the month in which a required notice is given.  
        A sanction must not be imposed when a participant comes into 
        compliance with the requirements for orientation under section 
        256J.45 or third-party liability for medical services under 
        section 256J.30, subdivision 10, prior to the effective date of 
        the sanction.  A sanction must not be imposed when a participant 
        comes into compliance with the requirements for employment and 
        training services under sections 256J.49 256J.515 to 
        256J.55 256J.57 ten days prior to the effective date of the 
        sanction.  For purposes of this subdivision, each month that a 
        participant fails to comply with a requirement of this chapter 
        shall be considered a separate occurrence of noncompliance.  A 
        participant who has had one or more sanctions imposed must 
        remain in compliance with the provisions of this chapter for six 
        months in order for a subsequent occurrence of noncompliance to 
        be considered a first occurrence.  If both participants in a 
        two-parent assistance unit are out of compliance at the same 
        time, it is considered one occurrence of noncompliance.  
           (d) (c) Sanctions for noncompliance shall be imposed as 
        follows: 
           (1) For the first occurrence of noncompliance by a 
        participant in an assistance unit, the assistance unit's grant 
        shall be reduced by ten percent of the MFIP standard of need for 
        an assistance unit of the same size with the residual grant paid 
        to the participant.  The reduction in the grant amount must be 
        in effect for a minimum of one month and shall be removed in the 
        month following the month that the participant returns to 
        compliance.  
           (2) For a second or subsequent, third, fourth, fifth, or 
        sixth occurrence of noncompliance by a participant in an 
        assistance unit, or when each of the participants in a 
        two-parent assistance unit have a first occurrence of 
        noncompliance at the same time, the assistance unit's shelter 
        costs shall be vendor paid up to the amount of the cash portion 
        of the MFIP grant for which the assistance unit is eligible.  At 
        county option, the assistance unit's utilities may also be 
        vendor paid up to the amount of the cash portion of the MFIP 
        grant remaining after vendor payment of the assistance unit's 
        shelter costs.  The residual amount of the grant after vendor 
        payment, if any, must be reduced by an amount equal to 30 
        percent of the MFIP standard of need for an assistance unit of 
        the same size before the residual grant is paid to the 
        assistance unit.  The reduction in the grant amount must be in 
        effect for a minimum of one month and shall be removed in the 
        month following the month that the participant in a one-parent 
        assistance unit returns to compliance.  In a two-parent 
        assistance unit, the grant reduction must be in effect for a 
        minimum of one month and shall be removed in the month following 
        the month both participants return to compliance.  The vendor 
        payment of shelter costs and, if applicable, utilities shall be 
        removed six months after the month in which the participant or 
        participants return to compliance.  If an assistance unit is 
        sanctioned under this clause, the participant's case file must 
        be reviewed as required under paragraph (e) to determine if the 
        employment plan is still appropriate. 
           (e) When a sanction under paragraph (d), clause (2), is in 
        effect (d) For a seventh occurrence of noncompliance by a 
        participant in an assistance unit, or when the participants in a 
        two-parent assistance unit have a total of seven occurrences of 
        noncompliance, the county agency shall close the MFIP assistance 
        unit's financial assistance case, both the cash and food 
        portions.  The case must remain closed for a minimum of one full 
        month.  Closure under this paragraph does not make a participant 
        automatically ineligible for food support, if otherwise eligible.
        Before the case is closed, the county agency must review the 
        participant's case to determine if the employment plan is still 
        appropriate and attempt to meet with the participant 
        face-to-face.  The participant may bring an advocate to the 
        face-to-face meeting.  If a face-to-face meeting is not 
        conducted, the county agency must send the participant a written 
        notice that includes the information required under clause (1). 
           (1) During the face-to-face meeting, the county agency must:
           (i) determine whether the continued noncompliance can be 
        explained and mitigated by providing a needed preemployment 
        activity, as defined in section 256J.49, subdivision 13, clause 
        (16), or services under a local intervention grant for 
        self-sufficiency under section 256J.625 (9); 
           (ii) determine whether the participant qualifies for a good 
        cause exception under section 256J.57, or if the sanction is for 
        noncooperation with child support requirements, determine if the 
        participant qualifies for a good cause exemption under section 
        256.741, subdivision 10; 
           (iii) determine whether the participant qualifies for an 
        exemption under section 256J.56 or the work activities in the 
        employment plan are appropriate based on the criteria in section 
        256J.521, subdivision 2 or 3; 
           (iv) determine whether the participant qualifies for an 
        exemption from regular employment services requirements for 
        victims of family violence under section 256J.52, subdivision 
        6 determine whether the participant qualifies for the family 
        violence waiver; 
           (v) inform the participant of the participant's sanction 
        status and explain the consequences of continuing noncompliance; 
           (vi) identify other resources that may be available to the 
        participant to meet the needs of the family; and 
           (vii) inform the participant of the right to appeal under 
        section 256J.40. 
           (2) If the lack of an identified activity or service can 
        explain the noncompliance, the county must work with the 
        participant to provide the identified activity, and the county 
        must restore the participant's grant amount to the full amount 
        for which the assistance unit is eligible.  The grant must be 
        restored retroactively to the first day of the month in which 
        the participant was found to lack preemployment activities or to 
        qualify for an exemption under section 256J.56, a good cause 
        exception under section 256J.57, or an exemption for victims of 
        family violence under section 256J.52, subdivision 6. 
           (3) If the participant is found to qualify for a good cause 
        exception or an exemption, the county must restore the 
        participant's grant to the full amount for which the assistance 
        unit is eligible.  The grant must be restored to the full amount 
        for which the assistance unit is eligible retroactively to the 
        first day of the month in which the participant was found to 
        lack preemployment activities or to qualify for an exemption 
        under section 256J.56, a family violence waiver, or for a good 
        cause exemption under section 256.741, subdivision 10, or 
        256J.57. 
           (e) For the purpose of applying sanctions under this 
        section, only occurrences of noncompliance that occur after the 
        effective date of this section shall be considered.  If the 
        participant is in 30 percent sanction in the month this section 
        takes effect, that month counts as the first occurrence for 
        purposes of applying the sanctions under this section, but the 
        sanction shall remain at 30 percent for that month. 
           (f) An assistance unit whose case is closed under paragraph 
        (d) or (g), or under an approved county option sanction plan 
        under section 256J.462 in effect June 30, 2003, or a county 
        pilot project under Laws 2000, chapter 488, article 10, section 
        29, in effect June 30, 2003, may reapply for MFIP and shall be 
        eligible if the participant complies with MFIP program 
        requirements and demonstrates compliance for up to one month.  
        No assistance shall be paid during this period. 
           (g) An assistance unit whose case has been closed for 
        noncompliance, that reapplies under paragraph (f) is subject to 
        sanction under paragraph (c), clause (2), for a first occurrence 
        of noncompliance.  Any subsequent occurrence of noncompliance 
        shall result in case closure under paragraph (d). 
           Sec. 63.  Minnesota Statutes 2002, section 256J.46, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SANCTIONS FOR REFUSAL TO COOPERATE WITH SUPPORT 
        REQUIREMENTS.] The grant of an MFIP caregiver who refuses to 
        cooperate, as determined by the child support enforcement 
        agency, with support requirements under section 256.741, shall 
        be subject to sanction as specified in this subdivision and 
        subdivision 1.  For a first occurrence of noncooperation, the 
        assistance unit's grant must be reduced by 25 30 percent of the 
        applicable MFIP standard of need.  Subsequent occurrences of 
        noncooperation shall be subject to sanction under subdivision 1, 
        paragraphs (c), clause (2), and (d).  The residual amount of the 
        grant, if any, must be paid to the caregiver.  A sanction under 
        this subdivision becomes effective the first month following the 
        month in which a required notice is given.  A sanction must not 
        be imposed when a caregiver comes into compliance with the 
        requirements under section 256.741 prior to the effective date 
        of the sanction.  The sanction shall be removed in the month 
        following the month that the caregiver cooperates with the 
        support requirements.  Each month that an MFIP caregiver fails 
        to comply with the requirements of section 256.741 must be 
        considered a separate occurrence of noncompliance for the 
        purpose of applying sanctions under subdivision 1, paragraphs 
        (c), clause (2), and (d).  An MFIP caregiver who has had one or 
        more sanctions imposed must remain in compliance with the 
        requirements of section 256.741 for six months in order for a 
        subsequent sanction to be considered a first occurrence. 
           Sec. 64.  Minnesota Statutes 2002, section 256J.46, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DUAL SANCTIONS.] (a) Notwithstanding the 
        provisions of subdivisions 1 and 2, for a participant subject to 
        a sanction for refusal to comply with child support requirements 
        under subdivision 2 and subject to a concurrent sanction for 
        refusal to cooperate with other program requirements under 
        subdivision 1, sanctions shall be imposed in the manner 
        prescribed in this subdivision. 
           A participant who has had one or more sanctions imposed 
        under this subdivision must remain in compliance with the 
        provisions of this chapter for six months in order for a 
        subsequent occurrence of noncompliance to be considered a first 
        occurrence.  Any vendor payment of shelter costs or utilities 
        under this subdivision must remain in effect for six months 
        after the month in which the participant is no longer subject to 
        sanction under subdivision 1. 
           (b) If the participant was subject to sanction for: 
           (i) noncompliance under subdivision 1 before being subject 
        to sanction for noncooperation under subdivision 2; or 
           (ii) noncooperation under subdivision 2 before being 
        subject to sanction for noncompliance under subdivision 1, the 
        participant is considered to have a second occurrence of 
        noncompliance and shall be sanctioned as provided in subdivision 
        1, paragraph (d) (c), clause (2).  Each subsequent occurrence of 
        noncompliance shall be considered one additional occurrence and 
        shall be subject to the applicable level of sanction under 
        subdivision 1, paragraph (d), or section 256J.462.  The 
        requirement that the county conduct a review as specified in 
        subdivision 1, paragraph (e) (d), remains in effect. 
           (c) A participant who first becomes subject to sanction 
        under both subdivisions 1 and 2 in the same month is subject to 
        sanction as follows: 
           (i) in the first month of noncompliance and noncooperation, 
        the participant's grant must be reduced by 25 30 percent of the 
        applicable MFIP standard of need, with any residual amount paid 
        to the participant; 
           (ii) in the second and subsequent months of noncompliance 
        and noncooperation, the participant shall be subject to the 
        applicable level of sanction under subdivision 1, paragraph (d), 
        or section 256J.462. 
           The requirement that the county conduct a review as 
        specified in subdivision 1, paragraph (e) (d), remains in effect.
           (d) A participant remains subject to sanction under 
        subdivision 2 if the participant: 
           (i) returns to compliance and is no longer subject to 
        sanction under subdivision 1 or section 256J.462 for 
        noncompliance with section 256J.45 or sections 256J.515 to 
        256J.57; or 
           (ii) has the sanction under subdivision 1, paragraph (d), 
        or section 256J.462 for noncompliance with section 256J.45 or 
        sections 256J.515 to 256J.57 removed upon completion of the 
        review under subdivision 1, paragraph (e). 
           A participant remains subject to the applicable level of 
        sanction under subdivision 1, paragraph (d), or section 256J.462 
        if the participant cooperates and is no longer subject to 
        sanction under subdivision 2. 
           Sec. 65.  Minnesota Statutes 2002, section 256J.49, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYMENT AND TRAINING SERVICE PROVIDER.] 
        "Employment and training service provider" means: 
           (1) a public, private, or nonprofit employment and training 
        agency certified by the commissioner of economic security under 
        sections 268.0122, subdivision 3, and 268.871, subdivision 1, or 
        is approved under section 256J.51 and is included in the county 
        plan service agreement submitted under section 256J.50 256J.626, 
        subdivision 7 4; 
           (2) a public, private, or nonprofit agency that is not 
        certified by the commissioner under clause (1), but with which a 
        county has contracted to provide employment and training 
        services and which is included in the county's plan service 
        agreement submitted under section 256J.50 256J.626, 
        subdivision 7 4; or 
           (3) a county agency, if the county has opted to provide 
        employment and training services and the county has indicated 
        that fact in the plan service agreement submitted under section 
        256J.50 256J.626, subdivision 7 4. 
           Notwithstanding section 268.871, an employment and training 
        services provider meeting this definition may deliver employment 
        and training services under this chapter. 
           Sec. 66.  Minnesota Statutes 2002, section 256J.49, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EMPLOYMENT PLAN.] "Employment plan" means a plan 
        developed by the job counselor and the participant which 
        identifies the participant's most direct path to unsubsidized 
        employment, lists the specific steps that the caregiver will 
        take on that path, and includes a timetable for the completion 
        of each step.  The plan should also identify any subsequent 
        steps that support long-term economic stability.  For 
        participants who request and qualify for a family violence 
        waiver, an employment plan must be developed by the job 
        counselor and the participant, and in consultation with a person 
        trained in domestic violence and follow the employment plan 
        provisions in section 256J.521, subdivision 3. 
           Sec. 67.  Minnesota Statutes 2002, section 256J.49, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [FUNCTIONAL WORK LITERACY.] "Functional work 
        literacy" means an intensive English as a second language 
        program that is work focused and offers at least 20 hours of 
        class time per week. 
           Sec. 68.  Minnesota Statutes 2002, section 256J.49, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PARTICIPANT.] "Participant" means a recipient of 
        MFIP assistance who participates or is required to participate 
        in employment and training services under sections 256J.515 to 
        256J.57 and 256J.95. 
           Sec. 69.  Minnesota Statutes 2002, section 256J.49, is 
        amended by adding a subdivision to read: 
           Subd. 12a.  [SUPPORTED WORK.] "Supported work" means a 
        subsidized or unsubsidized work experience placement with a 
        public or private sector employer, which may include services 
        such as individualized supervision and job coaching to support 
        the participant on the job. 
           Sec. 70.  Minnesota Statutes 2002, section 256J.49, 
        subdivision 13, is amended to read: 
           Subd. 13.  [WORK ACTIVITY.] "Work activity" means any 
        activity in a participant's approved employment plan that is 
        tied to the participant's leads to employment goal.  For 
        purposes of the MFIP program, any activity that is included in a 
        participant's approved employment plan meets this includes 
        activities that meet the definition of work activity as counted 
        under the federal participation standards requirements of TANF.  
        Work activity includes, but is not limited to: 
           (1) unsubsidized employment, including work study and paid 
        apprenticeships or internships; 
           (2) subsidized private sector or public sector employment, 
        including grant diversion as specified in section 256J.69, 
        on-the-job training as specified in section 256J.66, the 
        self-employment investment demonstration program (SEID) as 
        specified in section 256J.65, paid work experience, and 
        supported work when a wage subsidy is provided; 
           (3) unpaid work experience, including CWEP community 
        service, volunteer work, the community work experience program 
        as specified in section 256J.67, unpaid apprenticeships or 
        internships, and including work associated with the refurbishing 
        of publicly assisted housing if sufficient private sector 
        employment is not available supported work when a wage subsidy 
        is not provided; 
           (4) on-the-job training as specified in section 256J.66 job 
        search including job readiness assistance, job clubs, job 
        placement, job-related counseling, and job retention services; 
           (5) job search, either supervised or unsupervised; 
           (6) job readiness assistance; 
           (7) job clubs, including job search workshops; 
           (8) job placement; 
           (9) job development; 
           (10) job-related counseling; 
           (11) job coaching; 
           (12) job retention services; 
           (13) job-specific training or education; 
           (14) job skills training directly related to employment; 
           (15) the self-employment investment demonstration (SEID), 
        as specified in section 256J.65; 
           (16) preemployment activities, based on availability and 
        resources, such as volunteer work, literacy programs and related 
        activities, citizenship classes, English as a second language 
        (ESL) classes as limited by the provisions of section 256J.52, 
        subdivisions 3, paragraph (d), and 5, paragraph (c), or 
        participation in dislocated worker services, chemical dependency 
        treatment, mental health services, peer group networks, 
        displaced homemaker programs, strength-based resiliency 
        training, parenting education, or other programs designed to 
        help families reach their employment goals and enhance their 
        ability to care for their children; 
           (17) community service programs; 
           (18) vocational educational training or educational 
        programs that can reasonably be expected to lead to employment, 
        as limited by the provisions of section 256J.53; 
           (19) apprenticeships; 
           (20) satisfactory attendance in general educational 
        development diploma classes or an adult diploma program; 
           (21) satisfactory attendance at secondary school, if the 
        participant has not received a high school diploma; 
           (22) adult basic education classes; 
           (23) internships; 
           (24) bilingual employment and training services; 
           (25) providing child care services to a participant who is 
        working in a community service program; and 
           (26) activities included in an alternative employment plan 
        that is developed under section 256J.52, subdivision 6. 
           (5) job readiness education, including English as a second 
        language (ESL) or functional work literacy classes as limited by 
        the provisions of section 256J.531, subdivision 2, general 
        educational development (GED) course work, high school 
        completion, and adult basic education as limited by the 
        provisions of section 256J.531, subdivision 1; 
           (6) job skills training directly related to employment, 
        including education and training that can reasonably be expected 
        to lead to employment, as limited by the provisions of section 
        256J.53; 
           (7) providing child care services to a participant who is 
        working in a community service program; 
           (8) activities included in the employment plan that is 
        developed under section 256J.521, subdivision 3; and 
           (9) preemployment activities including chemical and mental 
        health assessments, treatment, and services; learning 
        disabilities services; child protective services; family 
        stabilization services; or other programs designed to enhance 
        employability. 
           Sec. 71.  Minnesota Statutes 2002, section 256J.50, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYMENT AND TRAINING SERVICES COMPONENT 
        OF MFIP.] (a) By January 1, 1998, Each county must develop and 
        implement provide an employment and training services component 
        of MFIP which is designed to put participants on the most direct 
        path to unsubsidized employment.  Participation in these 
        services is mandatory for all MFIP caregivers, unless the 
        caregiver is exempt under section 256J.56. 
           (b) A county must provide employment and training services 
        under sections 256J.515 to 256J.74 within 30 days after 
        the caregiver's participation becomes mandatory under 
        subdivision 5 or within 30 days of receipt of a request for 
        services from a caregiver who under section 256J.42 is no longer 
        eligible to receive MFIP but whose income is below 120 percent 
        of the federal poverty guidelines for a family of the same 
        size.  The request must be made within 12 months of the date the 
        caregivers' MFIP case was closed caregiver is determined 
        eligible for MFIP, or within ten days when the caregiver 
        participated in the diversionary work program under section 
        256J.95 within the past 12 months. 
           Sec. 72.  Minnesota Statutes 2002, section 256J.50, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EXCEPTION; FINANCIAL HARDSHIP.] Notwithstanding 
        subdivision 8, a county that explains in the plan service 
        agreement required under section 256J.626, subdivision 7 4, that 
        the provision of alternative employment and training service 
        providers would result in financial hardship for the county is 
        not required to make available more than one employment and 
        training provider. 
           Sec. 73.  Minnesota Statutes 2002, section 256J.50, 
        subdivision 10, is amended to read: 
           Subd. 10.  [REQUIRED NOTIFICATION TO VICTIMS OF FAMILY 
        VIOLENCE.] (a) County agencies and their contractors must 
        provide universal notification to all applicants and recipients 
        of MFIP that: 
           (1) referrals to counseling and supportive services are 
        available for victims of family violence; 
           (2) nonpermanent resident battered individuals married to 
        United States citizens or permanent residents may be eligible to 
        petition for permanent residency under the federal Violence 
        Against Women Act, and that referrals to appropriate legal 
        services are available; 
           (3) victims of family violence are exempt from the 60-month 
        limit on assistance while the individual is if they are 
        complying with an approved safety plan or, after October 1, 
        2001, an alternative employment plan, as defined in under 
        section 256J.49 256J.521, subdivision 1a 3; and 
           (4) victims of family violence may choose to have regular 
        work requirements waived while the individual is complying with 
        an alternative employment plan as defined in under section 
        256J.49 256J.521, subdivision 1a 3.  
           (b) If an alternative employment plan under section 
        256J.521, subdivision 3, is denied, the county or a job 
        counselor must provide reasons why the plan is not approved and 
        document how the denial of the plan does not interfere with the 
        safety of the participant or children. 
           Notification must be in writing and orally at the time of 
        application and recertification, when the individual is referred 
        to the title IV-D child support agency, and at the beginning of 
        any job training or work placement assistance program. 
           Sec. 74.  Minnesota Statutes 2002, section 256J.51, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROVIDER APPLICATION.] An employment and 
        training service provider that is not included in a county's 
        plan service agreement under section 256J.50 256J.626, 
        subdivision 7 4, because the county has demonstrated financial 
        hardship under section 256J.50, subdivision 9 of that section, 
        may appeal its exclusion to the commissioner of economic 
        security under this section. 
           Sec. 75.  Minnesota Statutes 2002, section 256J.51, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPEAL; ALTERNATE APPROVAL.] (a) An employment 
        and training service provider that is not included by a county 
        agency in the plan service agreement under section 
        256J.50 256J.626, subdivision 7 4, and that meets the criteria 
        in paragraph (b), may appeal its exclusion to the commissioner 
        of economic security, and may request alternative approval by 
        the commissioner of economic security to provide services in the 
        county.  
           (b) An employment and training services provider that is 
        requesting alternative approval must demonstrate to the 
        commissioner that the provider meets the standards specified in 
        section 268.871, subdivision 1, paragraph (b), except that the 
        provider's past experience may be in services and programs 
        similar to those specified in section 268.871, subdivision 1, 
        paragraph (b). 
           Sec. 76.  Minnesota Statutes 2002, section 256J.51, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSIONER'S REVIEW.] (a) The commissioner 
        must act on a request for alternative approval under this 
        section within 30 days of the receipt of the request.  If after 
        reviewing the provider's request, and the county's plan service 
        agreement submitted under section 256J.50 256J.626, 
        subdivision 7 4, the commissioner determines that the provider 
        meets the criteria under subdivision 2, paragraph (b), and that 
        approval of the provider would not cause financial hardship to 
        the county, the county must submit a revised plan service 
        agreement under subdivision 4 that includes the approved 
        provider.  
           (b) If the commissioner determines that the approval of the 
        provider would cause financial hardship to the county, the 
        commissioner must notify the provider and the county of this 
        determination.  The alternate approval process under this 
        section shall be closed to other requests for alternate approval 
        to provide employment and training services in the county for up 
        to 12 months from the date that the commissioner makes a 
        determination under this paragraph. 
           Sec. 77.  Minnesota Statutes 2002, section 256J.51, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REVISED PLAN SERVICE AGREEMENT REQUIRED.] The 
        commissioner of economic security must notify the county agency 
        when the commissioner grants an alternative approval to an 
        employment and training service provider under subdivision 2.  
        Upon receipt of the notice, the county agency must submit a 
        revised plan service agreement under section 256J.50 256J.626, 
        subdivision 7 4, that includes the approved provider.  The 
        county has 90 days from the receipt of the commissioner's notice 
        to submit the revised plan service agreement. 
           Sec. 78.  [256J.521] [ASSESSMENT; EMPLOYMENT PLANS.] 
           Subdivision 1.  [ASSESSMENTS.] (a) For purposes of MFIP 
        employment services, assessment is a continuing process of 
        gathering information related to employability for the purpose 
        of identifying both participant's strengths and strategies for 
        coping with issues that interfere with employment.  The job 
        counselor must use information from the assessment process to 
        develop and update the employment plan under subdivision 2. 
           (b) The scope of assessment must cover at least the 
        following areas: 
           (1) basic information about the participant's ability to 
        obtain and retain employment, including:  a review of the 
        participant's education level; interests, skills, and abilities; 
        prior employment or work experience; transferable work skills; 
        child care and transportation needs; 
           (2) identification of personal and family circumstances 
        that impact the participant's ability to obtain and retain 
        employment, including:  any special needs of the children, the 
        level of English proficiency, family violence issues, and any 
        involvement with social services or the legal system; 
           (3) the results of a mental and chemical health screening 
        tool designed by the commissioner and results of the brief 
        screening tool for special learning needs.  Screening tools for 
        mental and chemical health and special learning needs must be 
        approved by the commissioner and may only be administered by job 
        counselors or county staff trained in using such screening 
        tools.  The commissioner shall work with county agencies to 
        develop protocols for referrals and follow-up actions after 
        screens are administered to participants, including guidance on 
        how employment plans may be modified based upon outcomes of 
        certain screens.  Participants must be told of the purpose of 
        the screens and how the information will be used to assist the 
        participant in identifying and overcoming barriers to 
        employment.  Screening for mental and chemical health and 
        special learning needs must be completed by participants who are 
        unable to find suitable employment after six weeks of job search 
        under subdivision 2, paragraph (b), and participants who are 
        determined to have barriers to employment under subdivision 2, 
        paragraph (d).  Failure to complete the screens will result in 
        sanction under section 256J.46; and 
           (4) a comprehensive review of participation and progress 
        for participants who have received MFIP assistance and have not 
        worked in unsubsidized employment during the past 12 months.  
        The purpose of the review is to determine the need for 
        additional services and supports, including placement in 
        subsidized employment or unpaid work experience under section 
        256J.49, subdivision 13. 
           (c) Information gathered during a caregiver's participation 
        in the diversionary work program under section 256J.95 must be 
        incorporated into the assessment process. 
           (d) The job counselor may require the participant to 
        complete a professional chemical use assessment to be performed 
        according to the rules adopted under section 254A.03, 
        subdivision 3, including provisions in the administrative rules 
        which recognize the cultural background of the participant, or a 
        professional psychological assessment as a component of the 
        assessment process, when the job counselor has a reasonable 
        belief, based on objective evidence, that a participant's 
        ability to obtain and retain suitable employment is impaired by 
        a medical condition.  The job counselor may assist the 
        participant with arranging services, including child care 
        assistance and transportation, necessary to meet needs 
        identified by the assessment.  Data gathered as part of a 
        professional assessment must be classified and disclosed 
        according to the provisions in section 13.46. 
           Subd. 2.  [EMPLOYMENT PLAN; CONTENTS.] (a) Based on the 
        assessment under subdivision 1, the job counselor and the 
        participant must develop an employment plan that includes 
        participation in activities and hours that meet the requirements 
        of section 256J.55, subdivision 1.  The purpose of the 
        employment plan is to identify for each participant the most 
        direct path to unsubsidized employment and any subsequent steps 
        that support long-term economic stability.  The employment plan 
        should be developed using the highest level of activity 
        appropriate for the participant.  Activities must be chosen from 
        clauses (1) to (6), which are listed in order of preference.  
        The employment plan must also list the specific steps the 
        participant will take to obtain employment, including steps 
        necessary for the participant to progress from one level of 
        activity to another, and a timetable for completion of each 
        step.  Levels of activity include: 
           (1) unsubsidized employment; 
           (2) job search; 
           (3) subsidized employment or unpaid work experience; 
           (4) unsubsidized employment and job readiness education or 
        job skills training; 
           (5) unsubsidized employment or unpaid work experience, and 
        activities related to a family violence waiver or preemployment 
        needs; and 
           (6) activities related to a family violence waiver or 
        preemployment needs. 
           (b) Participants who are determined to possess sufficient 
        skills such that the participant is likely to succeed in 
        obtaining unsubsidized employment must job search at least 30 
        hours per week for up to six weeks, and accept any offer of 
        suitable employment.  The remaining hours necessary to meet the 
        requirements of section 256J.55, subdivision 1, may be met 
        through participation in other work activities under section 
        256J.49, subdivision 13.  The participant's employment plan must 
        specify, at a minimum:  (1) whether the job search is supervised 
        or unsupervised; (2) support services that will be provided; and 
        (3) how frequently the participant must report to the job 
        counselor.  Participants who are unable to find suitable 
        employment after six weeks must meet with the job counselor to 
        determine whether other activities in paragraph (a) should be 
        incorporated into the employment plan.  Job search activities 
        which are continued after six weeks must be structured and 
        supervised. 
           (c) Beginning July 1, 2004, activities and hourly 
        requirements in the employment plan may be adjusted as necessary 
        to accommodate the personal and family circumstances of 
        participants identified under section 256J.561, subdivision 2, 
        paragraph (d).  Participants who no longer meet the provisions 
        of section 256J.561, subdivision 2, paragraph (d), must meet 
        with the job counselor within ten days of the determination to 
        revise the employment plan. 
           (d) Participants who are determined to have barriers to 
        obtaining or retaining employment that will not be overcome 
        during six weeks of job search under paragraph (b) must work 
        with the job counselor to develop an employment plan that 
        addresses those barriers by incorporating appropriate activities 
        from paragraph (a), clauses (1) to (6).  The employment plan 
        must include enough hours to meet the participation requirements 
        in section 256J.55, subdivision 1, unless a compelling reason to 
        require fewer hours is noted in the participant's file. 
           (e) The job counselor and the participant must sign the 
        employment plan to indicate agreement on the contents.  Failure 
        to develop or comply with activities in the plan, or voluntarily 
        quitting suitable employment without good cause, will result in 
        the imposition of a sanction under section 256J.46. 
           (f) Employment plans must be reviewed at least every three 
        months to determine whether activities and hourly requirements 
        should be revised. 
           Subd. 3.  [EMPLOYMENT PLAN; FAMILY VIOLENCE WAIVER.] (a) A 
        participant who requests and qualifies for a family violence 
        waiver shall develop or revise the employment plan as specified 
        in this subdivision with a job counselor or county, and a person 
        trained in domestic violence.  The revised or new employment 
        plan must be approved by the county or the job counselor.  The 
        plan may address safety, legal, or emotional issues, and other 
        demands on the family as a result of the family violence.  
        Information in section 256J.515, clauses (1) to (8), must be 
        included as part of the development of the plan. 
           (b) The primary goal of an employment plan developed under 
        this subdivision is to ensure the safety of the caregiver and 
        children.  To the extent it is consistent with ensuring safety, 
        the plan shall also include activities that are designed to lead 
        to economic stability.  An activity is inconsistent with 
        ensuring safety if, in the opinion of a person trained in 
        domestic violence, the activity would endanger the safety of the 
        participant or children.  A plan under this subdivision may not 
        automatically include a provision that requires a participant to 
        obtain an order for protection or to attend counseling. 
           (c) If at any time there is a disagreement over whether the 
        activities in the plan are appropriate or the participant is not 
        complying with activities in the plan under this subdivision, 
        the participant must receive the assistance of a person trained 
        in domestic violence to help resolve the disagreement or 
        noncompliance with the county or job counselor.  If the person 
        trained in domestic violence recommends that the activities are 
        still appropriate, the county or a job counselor must approve 
        the activities in the plan or provide written reasons why 
        activities in the plan are not approved and document how denial 
        of the activities do not endanger the safety of the participant 
        or children. 
           Subd. 4.  [SELF-EMPLOYMENT.] (a) Self-employment activities 
        may be included in an employment plan contingent on the 
        development of a business plan which establishes a timetable and 
        earning goals that will result in the participant exiting MFIP 
        assistance.  Business plans must be developed with assistance 
        from an individual or organization with expertise in small 
        business as approved by the job counselor. 
           (b) Participants with an approved plan that includes 
        self-employment must meet the participation requirements in 
        section 256J.55, subdivision 1.  Only hours where the 
        participant earns at least minimum wage shall be counted toward 
        the requirement.  Additional activities and hours necessary to 
        meet the participation requirements in section 256J.55, 
        subdivision 1, must be included in the employment plan. 
           (c) Employment plans which include self-employment 
        activities must be reviewed every three months.  Participants 
        who fail, without good cause, to make satisfactory progress as 
        established in the business plan must revise the employment plan 
        to replace the self-employment with other approved work 
        activities. 
           (d) The requirements of this subdivision may be waived for 
        participants who are enrolled in the self-employment investment 
        demonstration program (SEID) under section 256J.65, and who make 
        satisfactory progress as determined by the job counselor and the 
        SEID provider. 
           Subd. 5.  [TRANSITION FROM THE DIVERSIONARY WORK 
        PROGRAM.] Participants who become eligible for MFIP assistance 
        after completing the diversionary work program under section 
        256J.95 must comply with all requirements of subdivisions 1 and 
        2.  Participants who become eligible for MFIP assistance after 
        being determined unable to benefit from the diversionary work 
        program must comply with the requirements of subdivisions 1 and 
        2, with the exception of subdivision 2, paragraph (b). 
           Subd. 6.  [LOSS OF EMPLOYMENT.] Participants who are laid 
        off, quit with good cause, or are terminated from employment 
        through no fault of their own must meet with the job counselor 
        within ten working days to ascertain the reason for the job loss 
        and to revise the employment plan as necessary to address the 
        problem. 
           Sec. 79.  Minnesota Statutes 2002, section 256J.53, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LENGTH OF PROGRAM.] In order for a 
        post-secondary education or training program to be an approved 
        work activity as defined in section 256J.49, subdivision 13, 
        clause (18) (6), it must be a program lasting 24 months or less, 
        and the participant must meet the requirements of subdivisions 2 
        and, 3, and 5.  
           Sec. 80.  Minnesota Statutes 2002, section 256J.53, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DOCUMENTATION SUPPORTING PROGRAM APPROVAL OF 
        POSTSECONDARY EDUCATION OR TRAINING.] (a) In order for a 
        post-secondary education or training program to be an approved 
        activity in a participant's an employment plan, the participant 
        or the employment and training service provider must provide 
        documentation that: be working in unsubsidized employment at 
        least 20 hours per week. 
           (b) Participants seeking approval of a postsecondary 
        education or training plan must provide documentation that: 
           (1) the participant's employment plan identifies specific 
        goals that goal can only be met with the additional education or 
        training; 
           (2) there are suitable employment opportunities that 
        require the specific education or training in the area in which 
        the participant resides or is willing to reside; 
           (3) the education or training will result in significantly 
        higher wages for the participant than the participant could earn 
        without the education or training; 
           (4) the participant can meet the requirements for admission 
        into the program; and 
           (5) there is a reasonable expectation that the participant 
        will complete the training program based on such factors as the 
        participant's MFIP assessment, previous education, training, and 
        work history; current motivation; and changes in previous 
        circumstances. 
           (c) The hourly unsubsidized employment requirement may be 
        reduced for intensive education or training programs lasting 12 
        weeks or less when full-time attendance is required. 
           (d) Participants with an approved employment plan in place 
        on July 1, 2003, which includes more than 12 months of 
        postsecondary education or training shall be allowed to complete 
        that plan provided that hourly requirements in section 256J.55, 
        subdivision 1, and conditions specified in paragraph (b), and 
        subdivisions 3 and 5 are met. 
           Sec. 81.  Minnesota Statutes 2002, section 256J.53, 
        subdivision 5, is amended to read: 
           Subd. 5.  [JOB SEARCH AFTER COMPLETION OF WORK ACTIVITY 
        REQUIREMENTS AFTER POSTSECONDARY EDUCATION OR TRAINING.] If a 
        participant's employment plan includes a post-secondary 
        educational or training program, the plan must include an 
        anticipated completion date for those activities.  At the time 
        the education or training is completed, the participant must 
        participate in job search.  If, after three months of job 
        search, the participant does not find a job that is consistent 
        with the participant's employment goal, the participant must 
        accept any offer of suitable employment.  Upon completion of an 
        approved education or training program, a participant who does 
        not meet the participation requirements in section 256J.55, 
        subdivision 1, through unsubsidized employment must participate 
        in job search.  If, after six weeks of job search, the 
        participant does not find a full-time job consistent with the 
        employment goal, the participant must accept any offer of 
        full-time suitable employment, or meet with the job counselor to 
        revise the employment plan to include additional work activities 
        necessary to meet hourly requirements. 
           Sec. 82.  [256J.531] [BASIC EDUCATION; ENGLISH AS A SECOND 
        LANGUAGE.] 
           Subdivision 1.  [APPROVAL OF ADULT BASIC EDUCATION.] With 
        the exception of classes related to obtaining a general 
        educational development credential (GED), a participant must 
        have reading or mathematics proficiency below a ninth grade 
        level in order for adult basic education classes to be an 
        approved work activity.  The employment plan must also specify 
        that the participant fulfill no more than one-half of the 
        participation requirements in section 256J.55, subdivision 1, 
        through attending adult basic education or general educational 
        development classes. 
           Subd. 2.  [APPROVAL OF ENGLISH AS A SECOND LANGUAGE.] In 
        order for English as a second language (ESL) classes to be an 
        approved work activity in an employment plan, a participant must 
        be below a spoken language proficiency level of SPL6 or its 
        equivalent, as measured by a nationally recognized test.  In 
        approving ESL as a work activity, the job counselor must give 
        preference to enrollment in a functional work literacy program, 
        if one is available, over a regular ESL program.  A participant 
        may not be approved for more than a combined total of 24 months 
        of ESL classes while participating in the diversionary work 
        program and the employment and training services component of 
        MFIP.  The employment plan must also specify that the 
        participant fulfill no more than one-half of the participation 
        requirements in section 256J.55, subdivision 1, through 
        attending ESL classes.  For participants enrolled in functional 
        work literacy classes, no more than two-thirds of the 
        participation requirements in section 256J.55, subdivision 1, 
        may be met through attending functional work literacy classes. 
           Sec. 83.  Minnesota Statutes 2002, section 256J.54, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ASSESSMENT OF EDUCATIONAL PROGRESS AND 
        NEEDS.] (a) The county agency must document the educational 
        level of each MFIP caregiver who is under the age of 20 and 
        determine if the caregiver has obtained a high school diploma or 
        its equivalent.  If the caregiver has not obtained a high school 
        diploma or its equivalent, and is not exempt from the 
        requirement to attend school under subdivision 5, the county 
        agency must complete an individual assessment for the 
        caregiver unless the caregiver is exempt from the requirement to 
        attend school under subdivision 5 or has chosen to have an 
        employment plan under section 256J.521, subdivision 2, as 
        allowed in paragraph (b).  The assessment must be performed as 
        soon as possible but within 30 days of determining MFIP 
        eligibility for the caregiver.  The assessment must provide an 
        initial examination of the caregiver's educational progress and 
        needs, literacy level, child care and supportive service needs, 
        family circumstances, skills, and work experience.  In the case 
        of a caregiver under the age of 18, the assessment must also 
        consider the results of either the caregiver's or the 
        caregiver's minor child's child and teen checkup under Minnesota 
        Rules, parts 9505.0275 and 9505.1693 to 9505.1748, if available, 
        and the effect of a child's development and educational needs on 
        the caregiver's ability to participate in the program.  The 
        county agency must advise the caregiver that the caregiver's 
        first goal must be to complete an appropriate educational 
        education option if one is identified for the caregiver through 
        the assessment and, in consultation with educational agencies, 
        must review the various school completion options with the 
        caregiver and assist in selecting the most appropriate option.  
           (b) The county agency must give a caregiver, who is age 18 
        or 19 and has not obtained a high school diploma or its 
        equivalent, the option to choose an employment plan with an 
        education option under subdivision 3 or an employment plan under 
        section 256J.521, subdivision 2. 
           Sec. 84.  Minnesota Statutes 2002, section 256J.54, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RESPONSIBILITY FOR ASSESSMENT AND EMPLOYMENT 
        PLAN.] For caregivers who are under age 18 without a high school 
        diploma or its equivalent, the assessment under subdivision 1 
        and the employment plan under subdivision 3 must be completed by 
        the social services agency under section 257.33.  For caregivers 
        who are age 18 or 19 without a high school diploma or its 
        equivalent who choose to have an employment plan with an 
        education option under subdivision 3, the assessment under 
        subdivision 1 and the employment plan under subdivision 3 must 
        be completed by the job counselor or, at county option, by the 
        social services agency under section 257.33.  Upon reaching age 
        18 or 19 a caregiver who received social services under section 
        257.33 and is without a high school diploma or its equivalent 
        has the option to choose whether to continue receiving services 
        under the caregiver's plan from the social services agency or to 
        utilize an MFIP employment and training service provider.  The 
        social services agency or the job counselor shall consult with 
        representatives of educational agencies that are required to 
        assist in developing educational plans under section 124D.331. 
           Sec. 85.  Minnesota Statutes 2002, section 256J.54, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EDUCATIONAL EDUCATION OPTION DEVELOPED.] If the 
        job counselor or county social services agency identifies an 
        appropriate educational education option for a minor caregiver 
        under the age of 20 without a high school diploma or its 
        equivalent, or a caregiver age 18 or 19 without a high school 
        diploma or its equivalent who chooses an employment plan with an 
        education option, the job counselor or agency must develop an 
        employment plan which reflects the identified option.  The plan 
        must specify that participation in an educational activity is 
        required, what school or educational program is most 
        appropriate, the services that will be provided, the activities 
        the caregiver will take part in, including child care and 
        supportive services, the consequences to the caregiver for 
        failing to participate or comply with the specified 
        requirements, and the right to appeal any adverse action.  The 
        employment plan must, to the extent possible, reflect the 
        preferences of the caregiver. 
           Sec. 86.  Minnesota Statutes 2002, section 256J.54, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SCHOOL ATTENDANCE REQUIRED.] (a) Notwithstanding 
        the provisions of section 256J.56, minor parents, or 18- or 
        19-year-old parents without a high school diploma or its 
        equivalent who chooses an employment plan with an education 
        option must attend school unless: 
           (1) transportation services needed to enable the caregiver 
        to attend school are not available; 
           (2) appropriate child care services needed to enable the 
        caregiver to attend school are not available; 
           (3) the caregiver is ill or incapacitated seriously enough 
        to prevent attendance at school; or 
           (4) the caregiver is needed in the home because of the 
        illness or incapacity of another member of the household.  This 
        includes a caregiver of a child who is younger than six weeks of 
        age. 
           (b) The caregiver must be enrolled in a secondary school 
        and meeting the school's attendance requirements.  The county, 
        social service agency, or job counselor must verify at least 
        once per quarter that the caregiver is meeting the school's 
        attendance requirements.  An enrolled caregiver is considered to 
        be meeting the attendance requirements when the school is not in 
        regular session, including during holiday and summer breaks.  
           Sec. 87.  [256J.545] [FAMILY VIOLENCE WAIVER CRITERIA.] 
           (a) In order to qualify for a family violence waiver, an 
        individual must provide documentation of past or current family 
        violence which may prevent the individual from participating in 
        certain employment activities.  A claim of family violence must 
        be documented by the applicant or participant providing a sworn 
        statement which is supported by collateral documentation. 
           (b) Collateral documentation may consist of: 
           (1) police, government agency, or court records; 
           (2) a statement from a battered women's shelter staff with 
        knowledge of the circumstances or credible evidence that 
        supports the sworn statement; 
           (3) a statement from a sexual assault or domestic violence 
        advocate with knowledge of the circumstances or credible 
        evidence that supports the sworn statement; 
           (4) a statement from professionals from whom the applicant 
        or recipient has sought assistance for the abuse; or 
           (5) a sworn statement from any other individual with 
        knowledge of circumstances or credible evidence that supports 
        the sworn statement. 
           Sec. 88.  Minnesota Statutes 2002, section 256J.55, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPLIANCE WITH JOB SEARCH OR EMPLOYMENT 
        PLAN; SUITABLE EMPLOYMENT PARTICIPATION REQUIREMENTS.] (a) Each 
        MFIP participant must comply with the terms of the participant's 
        job search support plan or employment plan.  When the 
        participant has completed the steps listed in the employment 
        plan, the participant must comply with section 256J.53, 
        subdivision 5, if applicable, and then the participant must not 
        refuse any offer of suitable employment.  The participant may 
        choose to accept an offer of suitable employment before the 
        participant has completed the steps of the employment plan. 
           (b) For a participant under the age of 20 who is without a 
        high school diploma or general educational development diploma, 
        the requirement to comply with the terms of the employment plan 
        means the participant must meet the requirements of section 
        256J.54. 
           (c) Failure to develop or comply with a job search support 
        plan or an employment plan, or quitting suitable employment 
        without good cause, shall result in the imposition of a sanction 
        as specified in sections 256J.46 and 256J.57. 
           (a) All caregivers must participate in employment services 
        under sections 256J.515 to 256J.57 concurrent with receipt of 
        MFIP assistance. 
           (b) Until July 1, 2004, participants who meet the 
        requirements of section 256J.56 are exempt from participation 
        requirements. 
           (c) Participants under paragraph (a) must develop and 
        comply with an employment plan under section 256J.521, or 
        section 256J.54 in the case of a participant under the age of 20 
        who has not obtained a high school diploma or its equivalent. 
           (d) With the exception of participants under the age of 20 
        who must meet the education requirements of section 256J.54, all 
        participants must meet the hourly participation requirements of 
        TANF or the hourly requirements listed in clauses (1) to (3), 
        whichever is higher. 
           (1) In single-parent families with no children under six 
        years of age, the job counselor and the caregiver must develop 
        an employment plan that includes 30 to 35 hours per week of work 
        activities. 
           (2) In single-parent families with a child under six years 
        of age, the job counselor and the caregiver must develop an 
        employment plan that includes 20 to 35 hours per week of work 
        activities. 
           (3) In two-parent families, the job counselor and the 
        caregivers must develop employment plans which result in a 
        combined total of at least 55 hours per week of work activities. 
           (e) Failure to participate in employment services, 
        including the requirement to develop and comply with an 
        employment plan, including hourly requirements, without good 
        cause under section 256J.57, shall result in the imposition of a 
        sanction under section 256J.46. 
           Sec. 89.  Minnesota Statutes 2002, section 256J.55, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTY TO REPORT.] The participant must inform the 
        job counselor within three ten working days regarding any 
        changes related to the participant's employment status. 
           Sec. 90.  Minnesota Statutes 2002, section 256J.56, is 
        amended to read: 
           256J.56 [EMPLOYMENT AND TRAINING SERVICES COMPONENT; 
        EXEMPTIONS.] 
           (a) An MFIP participant is exempt from the requirements of 
        sections 256J.52 256J.515 to 256J.55 256J.57 if the participant 
        belongs to any of the following groups: 
           (1) participants who are age 60 or older; 
           (2) participants who are suffering from a professionally 
        certified permanent or temporary illness, injury, or incapacity 
        which has been certified by a qualified professional when the 
        illness, injury, or incapacity is expected to continue for more 
        than 30 days and which prevents the person from obtaining or 
        retaining employment.  Persons in this category with a temporary 
        illness, injury, or incapacity must be reevaluated at least 
        quarterly; 
           (3) participants whose presence in the home is required as 
        a caregiver because of a professionally certified the illness, 
        injury, or incapacity of another member in the assistance unit, 
        a relative in the household, or a foster child in the 
        household and when the illness or incapacity and the need for a 
        person to provide assistance in the home has been certified by a 
        qualified professional and is expected to continue for more than 
        30 days; 
           (4) women who are pregnant, if the pregnancy has resulted 
        in a professionally certified an incapacity that prevents the 
        woman from obtaining or retaining employment, and the incapacity 
        has been certified by a qualified professional; 
           (5) caregivers of a child under the age of one year who 
        personally provide full-time care for the child.  This exemption 
        may be used for only 12 months in a lifetime.  In two-parent 
        households, only one parent or other relative may qualify for 
        this exemption; 
           (6) participants experiencing a personal or family crisis 
        that makes them incapable of participating in the program, as 
        determined by the county agency.  If the participant does not 
        agree with the county agency's determination, the participant 
        may seek professional certification from a qualified 
        professional, as defined in section 256J.08, that the 
        participant is incapable of participating in the program. 
           Persons in this exemption category must be reevaluated 
        every 60 days.  A personal or family crisis related to family 
        violence, as determined by the county or a job counselor with 
        the assistance of a person trained in domestic violence, should 
        not result in an exemption, but should be addressed through the 
        development or revision of an alternative employment plan under 
        section 256J.52 256J.521, subdivision 6 3; or 
           (7) caregivers with a child or an adult in the household 
        who meets the disability or medical criteria for home care 
        services under section 256B.0627, subdivision 1, 
        paragraph (c) (f), or a home and community-based waiver services 
        program under chapter 256B, or meets the criteria for severe 
        emotional disturbance under section 245.4871, subdivision 6, or 
        for serious and persistent mental illness under section 245.462, 
        subdivision 20, paragraph (c).  Caregivers in this exemption 
        category are presumed to be prevented from obtaining or 
        retaining employment. 
           A caregiver who is exempt under clause (5) must enroll in 
        and attend an early childhood and family education class, a 
        parenting class, or some similar activity, if available, during 
        the period of time the caregiver is exempt under this section.  
        Notwithstanding section 256J.46, failure to attend the required 
        activity shall not result in the imposition of a sanction. 
           (b) The county agency must provide employment and training 
        services to MFIP participants who are exempt under this section, 
        but who volunteer to participate.  Exempt volunteers may request 
        approval for any work activity under section 256J.49, 
        subdivision 13.  The hourly participation requirements for 
        nonexempt participants under section 256J.50 256J.55, 
        subdivision 5 1, do not apply to exempt participants who 
        volunteer to participate. 
           (c) This section expires on June 30, 2004. 
           Sec. 91.  [256J.561] [UNIVERSAL PARTICIPATION REQUIRED.] 
           Subdivision 1.  [IMPLEMENTATION OF UNIVERSAL PARTICIPATION 
        REQUIREMENTS.] (a) All caregivers whose applications were 
        received July 1, 2004, or after, are immediately subject to the 
        requirements in subdivision 2. 
           (b) For all MFIP participants who were exempt from 
        participating in employment services under section 256J.56 as of 
        June 30, 2004, between July 1, 2004, and June 30, 2005, the 
        county, as part of the participant's recertification under 
        section 256J.32, subdivision 6, shall determine whether a new 
        employment plan is required to meet the requirements in 
        subdivision 2.  Counties shall notify each participant who is in 
        need of an employment plan that the participant must meet with a 
        job counselor within ten days to develop an employment plan.  
        Until a participant's employment plan is developed, the 
        participant shall be considered in compliance with the 
        participation requirements in this section if the participant 
        continues to meet the criteria for an exemption under section 
        256J.56 as in effect on June 30, 2004, and is cooperating in the 
        development of the new plan. 
           Subd. 2.  [PARTICIPATION REQUIREMENTS.] (a) All MFIP 
        caregivers, except caregivers who meet the criteria in 
        subdivision 3, must participate in employment services.  Except 
        as specified in paragraphs (b) to (d), the employment plan must 
        meet the requirements of section 256J.521, subdivision 2, 
        contain allowable work activities, as defined in section 
        256J.49, subdivision 13, and, include at a minimum, the number 
        of participation hours required under section 256J.55, 
        subdivision 1. 
           (b) Minor caregivers and caregivers who are less than age 
        20 who have not completed high school or obtained a GED are 
        required to comply with section 256J.54. 
           (c) A participant who has a family violence waiver shall 
        develop and comply with an employment plan under section 
        256J.521, subdivision 3. 
           (d) As specified in section 256J.521, subdivision 2, 
        paragraph (c), a participant who meets any one of the following 
        criteria may work with the job counselor to develop an 
        employment plan that contains less than the number of 
        participation hours under section 256J.55, subdivision 1.  
        Employment plans for participants covered under this paragraph 
        must be tailored to recognize the special circumstances of 
        caregivers and families including limitations due to illness or 
        disability and caregiving needs: 
           (1) a participant who is age 60 or older; 
           (2) a participant who has been diagnosed by a qualified 
        professional as suffering from an illness or incapacity that is 
        expected to last for 30 days or more, including a pregnant 
        participant who is determined to be unable to obtain or retain 
        employment due to the pregnancy; or 
           (3) a participant who is determined by a qualified 
        professional as being needed in the home to care for an ill or 
        incapacitated family member, including caregivers with a child 
        or an adult in the household who meets the disability or medical 
        criteria for home care services under section 256B.0627, 
        subdivision 1, paragraph (f), or a home and community-based 
        waiver services program under chapter 256B, or meets the 
        criteria for severe emotional disturbance under section 
        245.4871, subdivision 6, or for serious and persistent mental 
        illness under section 245.462, subdivision 20, paragraph (c). 
           (e) For participants covered under paragraphs (c) and (d), 
        the county shall review the participant's employment services 
        status every three months to determine whether conditions have 
        changed.  When it is determined that the participant's status is 
        no longer covered under paragraph (c) or (d), the county shall 
        notify the participant that a new or revised employment plan is 
        needed.  The participant and job counselor shall meet within ten 
        days of the determination to revise the employment plan. 
           Subd. 3.  [CHILD UNDER 12 WEEKS OF AGE.] (a) A participant 
        who has a natural born child who is less than 12 weeks of age 
        who meets the criteria in clauses (1) and (2) is not required to 
        participate in employment services until the child reaches 12 
        weeks of age.  To be eligible for this provision, the following 
        conditions must be met: 
           (1) the child must have been born within ten months of the 
        caregiver's application for the diversionary work program or 
        MFIP; and 
           (2) the assistance unit must not have already used this 
        provision or the previously allowed child under age one 
        exemption.  However, an assistance unit that has an approved 
        child under age one exemption at the time this provision becomes 
        effective may continue to use that exemption until the child 
        reaches one year of age. 
           (b) The provision in paragraph (a) ends the first full 
        month after the child reaches 12 weeks of age.  This provision 
        is available only once in a caregiver's lifetime.  In a 
        two-parent household, only one parent shall be allowed to use 
        this provision.  The participant and job counselor must meet 
        within ten days after the child reaches 12 weeks of age to 
        revise the participant's employment plan. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 92.  Minnesota Statutes 2002, section 256J.57, is 
        amended to read: 
           256J.57 [GOOD CAUSE; FAILURE TO COMPLY; NOTICE; 
        CONCILIATION CONFERENCE.] 
           Subdivision 1.  [GOOD CAUSE FOR FAILURE TO COMPLY.] The 
        county agency shall not impose the sanction under section 
        256J.46 if it determines that the participant has good cause for 
        failing to comply with the requirements of sections 256J.52 
        256J.515 to 256J.55 256J.57.  Good cause exists when: 
           (1) appropriate child care is not available; 
           (2) the job does not meet the definition of suitable 
        employment; 
           (3) the participant is ill or injured; 
           (4) a member of the assistance unit, a relative in the 
        household, or a foster child in the household is ill and needs 
        care by the participant that prevents the participant from 
        complying with the job search support plan or employment plan; 
           (5) the parental caregiver is unable to secure necessary 
        transportation; 
           (6) the parental caregiver is in an emergency situation 
        that prevents compliance with the job search support plan or 
        employment plan; 
           (7) the schedule of compliance with the job search support 
        plan or employment plan conflicts with judicial proceedings; 
           (8) a mandatory MFIP meeting is scheduled during a time 
        that conflicts with a judicial proceeding or a meeting related 
        to a juvenile court matter, or a participant's work schedule; 
           (9) the parental caregiver is already participating in 
        acceptable work activities; 
           (10) the employment plan requires an educational program 
        for a caregiver under age 20, but the educational program is not 
        available; 
           (11) activities identified in the job search support plan 
        or employment plan are not available; 
           (12) the parental caregiver is willing to accept suitable 
        employment, but suitable employment is not available; or 
           (13) the parental caregiver documents other verifiable 
        impediments to compliance with the job search support plan or 
        employment plan beyond the parental caregiver's control. 
           The job counselor shall work with the participant to 
        reschedule mandatory meetings for individuals who fall under 
        clauses (1), (3), (4), (5), (6), (7), and (8). 
           Subd. 2.  [NOTICE OF INTENT TO SANCTION.] (a) When a 
        participant fails without good cause to comply with the 
        requirements of sections 256J.52 256J.515 to 256J.55 256J.57, 
        the job counselor or the county agency must provide a notice of 
        intent to sanction to the participant specifying the program 
        requirements that were not complied with, informing the 
        participant that the county agency will impose the sanctions 
        specified in section 256J.46, and informing the participant of 
        the opportunity to request a conciliation conference as 
        specified in paragraph (b).  The notice must also state that the 
        participant's continuing noncompliance with the specified 
        requirements will result in additional sanctions under section 
        256J.46, without the need for additional notices or conciliation 
        conferences under this subdivision.  The notice, written in 
        English, must include the department of human services language 
        block, and must be sent to every applicable participant.  If the 
        participant does not request a conciliation conference within 
        ten calendar days of the mailing of the notice of intent to 
        sanction, the job counselor must notify the county agency that 
        the assistance payment should be reduced.  The county must then 
        send a notice of adverse action to the participant informing the 
        participant of the sanction that will be imposed, the reasons 
        for the sanction, the effective date of the sanction, and the 
        participant's right to have a fair hearing under section 256J.40.
           (b) The participant may request a conciliation conference 
        by sending a written request, by making a telephone request, or 
        by making an in-person request.  The request must be received 
        within ten calendar days of the date the county agency mailed 
        the ten-day notice of intent to sanction.  If a timely request 
        for a conciliation is received, the county agency's service 
        provider must conduct the conference within five days of the 
        request.  The job counselor's supervisor, or a designee of the 
        supervisor, must review the outcome of the conciliation 
        conference.  If the conciliation conference resolves the 
        noncompliance, the job counselor must promptly inform the county 
        agency and request withdrawal of the sanction notice. 
           (c) Upon receiving a sanction notice, the participant may 
        request a fair hearing under section 256J.40, without exercising 
        the option of a conciliation conference.  In such cases, the 
        county agency shall not require the participant to engage in a 
        conciliation conference prior to the fair hearing. 
           (d) If the participant requests a fair hearing or a 
        conciliation conference, sanctions will not be imposed until 
        there is a determination of noncompliance.  Sanctions must be 
        imposed as provided in section 256J.46. 
           Sec. 93.  Minnesota Statutes 2002, section 256J.62, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CONTINUATION OF CERTAIN SERVICES.] Only if 
        services were approved as part of an employment plan prior to 
        June 30, 2003, at the request of the participant, the county may 
        continue to provide case management, counseling, or other 
        support services to a participant: 
           (a) (1) who has achieved the employment goal; or 
           (b) (2) who under section 256J.42 is no longer eligible to 
        receive MFIP but whose income is below 115 percent of the 
        federal poverty guidelines for a family of the same size. 
           These services may be provided for up to 12 months 
        following termination of the participant's eligibility for MFIP. 
           Sec. 94.  [256J.626] [MFIP CONSOLIDATED FUND.] 
           Subdivision 1.  [CONSOLIDATED FUND.] The consolidated fund 
        is established to support counties and tribes in meeting their 
        duties under this chapter.  Counties and tribes must use funds 
        from the consolidated fund to develop programs and services that 
        are designed to improve participant outcomes as measured in 
        section 256J.751, subdivision 2.  Counties may use the funds for 
        any allowable expenditures under subdivision 2.  Tribes may use 
        the funds for any allowable expenditures under subdivision 2, 
        except those in clauses (1) and (6). 
           Subd. 2.  [ALLOWABLE EXPENDITURES.] (a) The commissioner 
        must restrict expenditures under the consolidated fund to 
        benefits and services allowed under title IV-A of the federal 
        Social Security Act.  Allowable expenditures under the 
        consolidated fund may include, but are not limited to: 
           (1) short-term, nonrecurring shelter and utility needs that 
        are excluded from the definition of assistance under Code of 
        Federal Regulations, title 45, section 260.31, for families who 
        meet the residency requirement in section 256J.12, subdivisions 
        1 and 1a.  Payments under this subdivision are not considered 
        TANF cash assistance and are not counted towards the 60-month 
        time limit; 
           (2) transportation needed to obtain or retain employment or 
        to participate in other approved work activities; 
           (3) direct and administrative costs of staff to deliver 
        employment services for MFIP or the diversionary work program, 
        to administer financial assistance, and to provide specialized 
        services intended to assist hard-to-employ participants to 
        transition to work; 
           (4) costs of education and training including functional 
        work literacy and English as a second language; 
           (5) cost of work supports including tools, clothing, boots, 
        and other work-related expenses; 
           (6) county administrative expenses as defined in Code of 
        Federal Regulations, title 45, section 260(b); 
           (7) services to parenting and pregnant teens; 
           (8) supported work; 
           (9) wage subsidies; 
           (10) child care needed for MFIP or diversionary work 
        program participants to participate in social services; 
           (11) child care to ensure that families leaving MFIP or 
        diversionary work program will continue to receive child care 
        assistance from the time the family no longer qualifies for 
        transition year child care until an opening occurs under the 
        basic sliding fee child care program; and 
           (12) services to help noncustodial parents who live in 
        Minnesota and have minor children receiving MFIP or DWP 
        assistance, but do not live in the same household as the child, 
        obtain or retain employment. 
           (b) Administrative costs that are not matched with county 
        funds as provided in subdivision 8 may not exceed 7.5 percent of 
        a county's or 15 percent of a tribe's reimbursement under this 
        section.  The commissioner shall define administrative costs for 
        purposes of this subdivision. 
           Subd. 3.  [ELIGIBILITY FOR SERVICES.] Families with a minor 
        child, a pregnant woman, or a noncustodial parent of a minor 
        child receiving assistance, with incomes below 200 percent of 
        the federal poverty guideline for a family of the applicable 
        size, are eligible for services funded under the consolidated 
        fund.  Counties and tribes must give priority to families 
        currently receiving MFIP or diversionary work program, and 
        families at risk of receiving MFIP or diversionary work program. 
           Subd. 4.  [COUNTY AND TRIBAL BIENNIAL SERVICE 
        AGREEMENTS.] (a) Effective January 1, 2004, and each two-year 
        period thereafter, each county and tribe must have in place an 
        approved biennial service agreement related to the services and 
        programs in this chapter.  In counties with a city of the first 
        class with a population over 300,000, the county must consider a 
        service agreement that includes a jointly developed plan for the 
        delivery of employment services with the city.  Counties may 
        collaborate to develop multicounty, multitribal, or regional 
        service agreements. 
           (b) The service agreements will be completed in a form 
        prescribed by the commissioner.  The agreement must include: 
           (1) a statement of the needs of the service population and 
        strengths and resources in the community; 
           (2) numerical goals for participant outcomes measures to be 
        accomplished during the biennial period.  The commissioner may 
        identify outcomes from section 256J.751, subdivision 2, as core 
        outcomes for all counties and tribes; 
           (3) strategies the county or tribe will pursue to achieve 
        the outcome targets.  Strategies must include specification of 
        how funds under this section will be used and may include 
        community partnerships that will be established or strengthened; 
        and 
           (4) other items prescribed by the commissioner in 
        consultation with counties and tribes. 
           (c) The commissioner shall provide each county and tribe 
        with information needed to complete an agreement, including:  
        (1) information on MFIP cases in the county or tribe; (2) 
        comparisons with the rest of the state; (3) baseline performance 
        on outcome measures; and (4) promising program practices. 
           (d) The service agreement must be submitted to the 
        commissioner by October 15, 2003, and October 15 of each second 
        year thereafter.  The county or tribe must allow a period of not 
        less than 30 days prior to the submission of the agreement to 
        solicit comments from the public on the contents of the 
        agreement. 
           (e) The commissioner must, within 60 days of receiving each 
        county or tribal service agreement, inform the county or tribe 
        if the service agreement is approved.  If the service agreement 
        is not approved, the commissioner must inform the county or 
        tribe of any revisions needed prior to approval. 
           (f) The service agreement in this subdivision supersedes 
        the plan requirements of section 268.88. 
           Subd. 5.  [INNOVATION PROJECTS.] Beginning January 1, 2005, 
        no more than $3,000,000 of the funds annually appropriated to 
        the commissioner for use in the consolidated fund shall be 
        available to the commissioner for projects testing innovative 
        approaches to improving outcomes for MFIP participants, and 
        persons at risk of receiving MFIP as detailed in subdivision 3.  
        Projects shall be targeted to geographic areas with poor 
        outcomes as specified in section 256J.751, subdivision 5, or to 
        subgroups within the MFIP case load who are experiencing poor 
        outcomes. 
           Subd. 6.  [BASE ALLOCATION TO COUNTIES AND TRIBES.] (a) For 
        purposes of this section, the following terms have the meanings 
        given them: 
           (1) "2002 historic spending base" means the commissioner's 
        determination of the sum of the reimbursement related to fiscal 
        year 2002 of county or tribal agency expenditures for the base 
        programs listed in clause (4), items (i) through (iv), and 
        earnings related to calendar year 2002 in the base program 
        listed in clause (4), item (v), and the amount of spending in 
        fiscal year 2002 in the base program listed in clause (4), item 
        (vi), issued to or on behalf of persons residing in the county 
        or tribal service delivery area. 
           (2) "Initial allocation" means the amount potentially 
        available to each county or tribe based on the formula in 
        paragraphs (b) through (d). 
           (3) "Final allocation" means the amount available to each 
        county or tribe based on the formula in paragraphs (b) through 
        (d), after adjustment by subdivision 7. 
           (4) "Base programs" means the: 
           (i) MFIP employment and training services under section 
        256J.62, subdivision 1, in effect June 30, 2002; 
           (ii) bilingual employment and training services to refugees 
        under section 256J.62, subdivision 6, in effect June 30, 2002; 
           (iii) work literacy language programs under section 
        256J.62, subdivision 7, in effect June 30, 2002; 
           (iv) supported work program authorized in Laws 2001, First 
        Special Session chapter 9, article 17, section 2, in effect June 
        30, 2002; 
           (v) administrative aid program under section 256J.76 in 
        effect December 31, 2002; and 
           (vi) emergency assistance program under section 256J.48 in 
        effect June 30, 2002. 
           (b)(1) Beginning July 1, 2003, the commissioner shall 
        determine the initial allocation of funds available under this 
        section according to clause (2). 
           (2) All of the funds available for the period beginning 
        July 1, 2003, and ending December 31, 2004, shall be allocated 
        to each county or tribe in proportion to the county's or tribe's 
        share of the statewide 2002 historic spending base. 
           (c) For calendar year 2005, the commissioner shall 
        determine the initial allocation of funds to be made available 
        under this section in proportion to the county or tribe's 
        initial allocation for the period of July 1, 2003 to December 
        31, 2004. 
           (d) The formula under this subdivision sunsets December 31, 
        2005. 
           (e) Before November 30, 2003, a county or tribe may ask for 
        a review of the commissioner's determination of the historic 
        base spending when the county or tribe believes the 2002 
        information was inaccurate or incomplete.  By January 1, 2004, 
        the commissioner must adjust that county's or tribe's base when 
        the commissioner has determined that inaccurate or incomplete 
        information was used to develop that base.  The commissioner 
        shall adjust each county's or tribe's initial allocation under 
        paragraph (c) and final allocation under subdivision 7 to 
        reflect the base change. 
           (f) Effective January 1, 2005, counties and tribes will 
        have their final allocations adjusted based on the performance 
        provisions of subdivision 7. 
           Subd. 7.  [PERFORMANCE BASE FUNDS.] (a) Each county and 
        tribe will be allocated 95 percent of their initial calendar 
        year 2005 allocation.  Counties and tribes will be allocated 
        additional funds based on performance as follows: 
           (1) a county or tribe that achieves a 50 percent rate or 
        higher on the MFIP participation rate under section 256J.751, 
        subdivision 2, clause (8), as averaged across the four quarterly 
        measurements for the most recent year for which the measurements 
        are available, will receive an additional allocation equal to 
        2.5 percent of its initial allocation; and 
           (2) a county or tribe that performs above the top of its 
        range of expected performance on the three-year self-support 
        index under section 256J.751, subdivision 2, clause (7), in both 
        measurements in the preceding year will receive an additional 
        allocation equal to five percent of its initial allocation; or 
           (3) a county or tribe that performs within its range of 
        expected performance on the three-year self-support index under 
        section 256J.751, subdivision 2, clause (7), in both 
        measurements in the preceding year, or above the top of its 
        range of expected performance in one measurement and within its 
        expected range of performance in the other measurement, will 
        receive an additional allocation equal to 2.5 percent of its 
        initial allocation. 
           (b) Funds remaining unallocated after the performance-based 
        allocations in paragraph (a) are available to the commissioner 
        for innovation projects under subdivision 5. 
           (c)(1) If available funds are insufficient to meet county 
        and tribal allocations under paragraph (a), the commissioner may 
        make available for allocation funds that are unobligated and 
        available from the innovation projects through the end of the 
        current biennium. 
           (2) If after the application of clause (1) funds remain 
        insufficient to meet county and tribal allocations under 
        paragraph (a), the commissioner must proportionally reduce the 
        allocation of each county and tribe with respect to their 
        maximum allocation available under paragraph (a). 
           Subd. 8.  [REPORTING REQUIREMENT AND REIMBURSEMENT.] (a) 
        The commissioner shall specify requirements for reporting 
        according to section 256.01, subdivision 2, clause (17).  Each 
        county or tribe shall be reimbursed for eligible expenditures up 
        to the limit of its allocation and subject to availability of 
        funds. 
           (b) Reimbursements for county administrative-related 
        expenditures determined through the income maintenance random 
        moment time study shall be reimbursed at a rate of 50 percent of 
        eligible expenditures.  
           (c) The commissioner of human services shall review county 
        and tribal agency expenditures of the MFIP consolidated fund as 
        appropriate and may reallocate unencumbered or unexpended money 
        appropriated under this section to those county and tribal 
        agencies that can demonstrate a need for additional money. 
           Subd. 9.  [REPORT.] The commissioner shall, in consultation 
        with counties and tribes: 
           (1) determine how performance-based allocations under 
        subdivision 7, paragraph (a), clauses (2) and (3), will be 
        allocated to groupings of counties and tribes when groupings are 
        used to measure expected performance ranges for the self-support 
        index under section 256J.751, subdivision 2, clause (7); and 
           (2) determine how performance-based allocations under 
        subdivision 7, paragraph (a), clauses (2) and (3), will be 
        allocated to tribes. 
        The commissioner shall report to the legislature on the formulas 
        developed in clauses (1) and (2) by January 1, 2004. 
           Sec. 95.  Minnesota Statutes 2002, section 256J.645, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FUNDING.] If the commissioner and an Indian 
        tribe are parties to an agreement under this subdivision, the 
        agreement shall annually provide to the Indian tribe the funding 
        allocated in section 256J.62, subdivisions 1 and 2a 256J.626. 
           Sec. 96.  Minnesota Statutes 2002, section 256J.66, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRAINING AND PLACEMENT.] (a) County agencies 
        shall limit the length of training based on the complexity of 
        the job and the caregiver's previous experience and training.  
        Placement in an on-the-job training position with an employer is 
        for the purpose of training and employment with the same 
        employer who has agreed to retain the person upon satisfactory 
        completion of training. 
           (b) Placement of any participant in an on-the-job training 
        position must be compatible with the participant's assessment 
        and employment plan under section 256J.52 256J.521. 
           Sec. 97.  Minnesota Statutes 2002, section 256J.69, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRAINING AND PLACEMENT.] (a) County agencies 
        shall limit the length of training to nine months.  Placement in 
        a grant diversion training position with an employer is for the 
        purpose of training and employment with the same employer who 
        has agreed to retain the person upon satisfactory completion of 
        training. 
           (b) Placement of any participant in a grant diversion 
        subsidized training position must be compatible with the 
        assessment and employment plan or employability development plan 
        established for the recipient under section 256J.52 or 256K.03, 
        subdivision 8 256J.521. 
           Sec. 98.  Minnesota Statutes 2002, section 256J.75, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESPONSIBILITY FOR INCORRECT ASSISTANCE 
        PAYMENTS.] A county of residence, when different from the county 
        of financial responsibility, will be charged by the commissioner 
        for the value of incorrect assistance payments and medical 
        assistance paid to or on behalf of a person who was not eligible 
        to receive that amount.  Incorrect payments include payments to 
        an ineligible person or family resulting from decisions, 
        failures to act, miscalculations, or overdue recertification.  
        However, financial responsibility does not accrue for a county 
        when the recertification is overdue at the time the referral is 
        received by the county of residence or when the county of 
        financial responsibility does not act on the recommendation of 
        the county of residence.  When federal or state law requires 
        that medical assistance continue after assistance ends, this 
        subdivision also governs financial responsibility for the 
        extended medical assistance. 
           Sec. 99.  Minnesota Statutes 2002, section 256J.751, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [QUARTERLY MONTHLY COUNTY CASELOAD REPORT.] 
        The commissioner shall report quarterly monthly to each county 
        on the county's performance on the following measures following 
        caseload information: 
           (1) number of cases receiving only the food portion of 
        assistance; 
           (2) number of child-only cases; 
           (3) number of minor caregivers; 
           (4) number of cases that are exempt from the 60-month time 
        limit by the exemption category under section 256J.42; 
           (5) number of participants who are exempt from employment 
        and training services requirements by the exemption category 
        under section 256J.56; 
           (6) number of assistance units receiving assistance under a 
        hardship extension under section 256J.425; 
           (7) number of participants and number of months spent in 
        each level of sanction under section 256J.46, subdivision 1; 
           (8) number of MFIP cases that have left assistance; 
           (9) federal participation requirements as specified in 
        title 1 of Public Law Number 104-193; 
           (10) median placement wage rate; and 
           (11) of each county's total MFIP caseload less the number 
        of cases in clauses (1) to (6): 
           (i) number of one-parent cases; 
           (ii) number of two-parent cases; 
           (iii) percent of one-parent cases that are working more 
        than 20 hours per week; 
           (iv) percent of two-parent cases that are working more than 
        20 hours per week; and 
           (v) percent of cases that have received more than 36 months 
        of assistance. 
           (1) total number of cases receiving MFIP, and subtotals of 
        cases with one eligible parent, two eligible parents, and an 
        eligible caregiver who is not a parent; 
           (2) total number of child only assistance cases; 
           (3) total number of eligible adults and children receiving 
        an MFIP grant, and subtotals for cases with one eligible parent, 
        two eligible parents, an eligible caregiver who is not a parent, 
        and child only cases; 
           (4) number of cases with an exemption from the 60-month 
        time limit based on a family violence waiver; 
           (5) number of MFIP cases with work hours, and subtotals for 
        cases with one eligible parent, two eligible parents, and an 
        eligible caregiver who is not a parent; 
           (6) number of employed MFIP cases, and subtotals for cases 
        with one eligible parent, two eligible parents, and an eligible 
        caregiver who is not a parent; 
           (7) average monthly gross earnings, and averages for 
        subgroups of cases with one eligible parent, two eligible 
        parents, and an eligible caregiver who is not a parent; 
           (8) number of employed cases receiving only the food 
        portion of assistance; 
           (9) number of parents or caregivers exempt from work 
        activity requirements, with subtotals for each exemption type; 
        and 
           (10) number of cases with a sanction, with subtotals by 
        level of sanction for cases with one eligible parent, two 
        eligible parents, and an eligible caregiver who is not a parent. 
           Sec. 100.  Minnesota Statutes 2002, section 256J.751, 
        subdivision 2, is amended to read: 
           Subd. 2.  [QUARTERLY COMPARISON REPORT.] The commissioner 
        shall report quarterly to all counties on each county's 
        performance on the following measures: 
           (1) percent of MFIP caseload working in paid employment; 
           (2) percent of MFIP caseload receiving only the food 
        portion of assistance; 
           (3) number of MFIP cases that have left assistance; 
           (4) federal participation requirements as specified in 
        Title 1 of Public Law Number 104-193; 
           (5) median placement wage rate; and 
           (6) caseload by months of TANF assistance; 
           (7) percent of MFIP cases off cash assistance or working 30 
        or more hours per week at one-year, two-year, and three-year 
        follow-up points from a base line quarter.  This measure is 
        called the self-support index.  Twice annually, the commissioner 
        shall report an expected range of performance for each county, 
        county grouping, and tribe on the self-support index.  The 
        expected range shall be derived by a statistical methodology 
        developed by the commissioner in consultation with the counties 
        and tribes.  The statistical methodology shall control 
        differences across counties in economic conditions and 
        demographics of the MFIP case load; and 
           (8) the MFIP work participation rate, defined as the 
        participation requirements specified in title 1 of Public Law 
        104-193 applied to all MFIP cases except child only cases and 
        cases exempt under section 256J.56. 
           Sec. 101.  Minnesota Statutes 2002, section 256J.751, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FAILURE TO MEET FEDERAL PERFORMANCE STANDARDS.] 
        (a) If sanctions occur for failure to meet the performance 
        standards specified in title 1 of Public Law Number 104-193 of 
        the Personal Responsibility and Work Opportunity Act of 1996, 
        the state shall pay 88 percent of the sanction.  The remaining 
        12 percent of the sanction will be paid by the counties.  The 
        county portion of the sanction will be distributed across all 
        counties in proportion to each county's percentage of the MFIP 
        average monthly caseload during the period for which the 
        sanction was applied. 
           (b) If a county fails to meet the performance standards 
        specified in title 1 of Public Law Number 104-193 of the 
        Personal Responsibility and Work Opportunity Act of 1996 for any 
        year, the commissioner shall work with counties to organize a 
        joint state-county technical assistance team to work with the 
        county.  The commissioner shall coordinate any technical 
        assistance with other departments and agencies including the 
        departments of economic security and children, families, and 
        learning as necessary to achieve the purpose of this paragraph. 
           (c) For state performance measures, a low-performing county 
        is one that: 
           (1) performs below the bottom of their expected range for 
        the measure in subdivision 2, clause (7), in both measurements 
        during the year; or 
           (2) performs below 40 percent for the measure in 
        subdivision 2, clause (8), as averaged across the four quarterly 
        measurements for the year, or the ten counties with the lowest 
        rates if more than ten are below 40 percent. 
           (d) Low-performing counties under paragraph (c) must engage 
        in corrective action planning as defined by the commissioner.  
        The commissioner may coordinate technical assistance as 
        specified in paragraph (b) for low-performing counties under 
        paragraph (c). 
           Sec. 102.  [256J.95] [DIVERSIONARY WORK PROGRAM.] 
           Subdivision 1.  [ESTABLISHING A DIVERSIONARY WORK PROGRAM 
        (DWP).] (a) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, Public Law 104-193, establishes 
        block grants to states for temporary assistance for needy 
        families (TANF).  TANF provisions allow states to use TANF 
        dollars for nonrecurrent, short-term diversionary benefits.  The 
        diversionary work program established on July 1, 2003, is 
        Minnesota's TANF program to provide short-term diversionary 
        benefits to eligible recipients of the diversionary work program.
           (b) The goal of the diversionary work program is to provide 
        short-term, necessary services and supports to families which 
        will lead to unsubsidized employment, increase economic 
        stability, and reduce the risk of those families needing longer 
        term assistance, under the Minnesota family investment program 
        (MFIP). 
           (c) When a family unit meets the eligibility criteria in 
        this section, the family must receive a diversionary work 
        program grant and is not eligible for MFIP. 
           (d) A family unit is eligible for the diversionary work 
        program for a maximum of four months only once in a 12-month 
        period.  The 12-month period begins at the date of application 
        or the date eligibility is met, whichever is later.  During the 
        four-month period, family maintenance needs as defined in 
        subdivision 2, shall be vendor paid, up to the cash portion of 
        the MFIP standard of need for the same size household.  To the 
        extent there is a balance available between the amount paid for 
        family maintenance needs and the cash portion of the 
        transitional standard, a personal needs allowance of up to $70 
        per DWP recipient in the family unit shall be issued.  The 
        personal needs allowance payment plus the family maintenance 
        needs shall not exceed the cash portion of the MFIP standard of 
        need.  Counties may provide supportive and other allowable 
        services funded by the MFIP consolidated fund under section 
        256J.626 to eligible participants during the four-month 
        diversionary period. 
           Subd. 2.  [DEFINITIONS.] The terms used in this section 
        have the following meanings. 
           (a) "Diversionary Work Program (DWP)" means the program 
        established under this section. 
           (b) "Employment plan" means a plan developed by the job 
        counselor and the participant which identifies the participant's 
        most direct path to unsubsidized employment, lists the specific 
        steps that the caregiver will take on that path, and includes a 
        timetable for the completion of each step.  For participants who 
        request and qualify for a family violence waiver in section 
        256J.521, subdivision 3, an employment plan must be developed by 
        the job counselor, the participant and a person trained in 
        domestic violence and follow the employment plan provisions in 
        section 256J.521, subdivision 3.  Employment plans under this 
        section shall be written for a period of time not to exceed four 
        months. 
           (c) "Employment services" means programs, activities, and 
        services in this section that are designed to assist 
        participants in obtaining and retaining employment. 
           (d) "Family maintenance needs" means current housing costs 
        including rent, manufactured home lot rental costs, or monthly 
        principal, interest, insurance premiums, and property taxes due 
        for mortgages or contracts for deed, association fees required 
        for homeownership, utility costs for current month expenses of 
        gas and electric, garbage, water and sewer, and a flat rate of 
        $35 for telephone services. 
           (e) "Family unit" means a group of people applying for or 
        receiving DWP benefits together.  For the purposes of 
        determining eligibility for this program, the unit includes the 
        relationships in section 256J.24, subdivisions 2 and 4. 
           (f) "Minnesota family investment program (MFIP)" means the 
        assistance program as defined in section 256J.08, subdivision 57.
           (g) "Personal needs allowance" means an allowance of up to 
        $70 per month per DWP unit member to pay for expenses such as 
        household products and personal products. 
           (h) "Work activities" means allowable work activities as 
        defined in section 256J.49, subdivision 13. 
           Subd. 3.  [ELIGIBILITY FOR DIVERSIONARY WORK PROGRAM.] (a) 
        Except for the categories of family units listed below, all 
        family units who apply for cash benefits and who meet MFIP 
        eligibility as required in sections 256J.11 to 256J.15 are 
        eligible and must participate in the diversionary work program.  
        Family units that are not eligible for the diversionary work 
        program include: 
           (1) child only cases; 
           (2) a single-parent family unit that includes a child under 
        12 weeks of age.  A parent is eligible for this exception once 
        in a parent's lifetime and is not eligible if the parent has 
        already used the previously allowed child under age one 
        exemption from MFIP employment services; 
           (3) a minor parent without a high school diploma or its 
        equivalent; 
           (4) a caregiver 18 or 19 years of age without a high school 
        diploma or its equivalent who chooses to have an employment plan 
        with an education option; 
           (5) a caregiver age 60 or over; 
           (6) family units with a parent who received DWP benefits 
        within a 12-month period as defined in subdivision 1, paragraph 
        (d); and 
           (7) family units with a parent who received MFIP within the 
        past 12 months. 
           (b) A two-parent family must participate in DWP unless both 
        parents meet the criteria for an exception under paragraph (a), 
        clauses (1) through (5), or the family unit includes a parent 
        who meets the criteria in paragraph (a), clause (6) or (7). 
           Subd. 4.  [COOPERATION WITH PROGRAM REQUIREMENTS.] (a) To 
        be eligible for DWP, an applicant must comply with the 
        requirements of paragraphs (b) to (d). 
           (b) Applicants and participants must cooperate with the 
        requirements of the child support enforcement program, but will 
        not be charged a fee under section 518.551, subdivision 7. 
           (c) The applicant must provide each member of the family 
        unit's social security number to the county agency.  This 
        requirement is satisfied when each member of the family unit 
        cooperates with the procedures for verification of numbers, 
        issuance of duplicate cards, and issuance of new numbers which 
        have been established jointly between the Social Security 
        Administration and the commissioner. 
           (d) Before DWP benefits can be issued to a family unit, the 
        caregiver must, in conjunction with a job counselor, develop and 
        sign an employment plan.  In two-parent family units, both 
        parents must develop and sign employment plans before benefits 
        can be issued.  Food support and health care benefits are not 
        contingent on the requirement for a signed employment plan. 
           Subd. 5.  [SUBMITTING APPLICATION FORM.] The eligibility 
        date for the diversionary work program begins with the date the 
        signed combined application form (CAF) is received by the county 
        agency or the date diversionary work program eligibility 
        criteria are met, whichever is later.  The county agency must 
        inform the applicant that any delay in submitting the 
        application will reduce the benefits paid for the month of 
        application.  The county agency must inform a person that an 
        application may be submitted before the person has an interview 
        appointment.  Upon receipt of a signed application, the county 
        agency must stamp the date of receipt on the face of the 
        application.  The applicant may withdraw the application at any 
        time prior to approval by giving written or oral notice to the 
        county agency.  The county agency must follow the notice 
        requirements in section 256J.09, subdivision 3, when issuing a 
        notice confirming the withdrawal. 
           Subd. 6.  [INITIAL SCREENING OF APPLICATIONS.] Upon receipt 
        of the application, the county agency must determine if the 
        applicant may be eligible for other benefits as required in 
        sections 256J.09, subdivision 3a, and 256J.28, subdivisions 1 
        and 5.  The county must also follow the provisions in section 
        256J.09, subdivision 3b, clause (2). 
           Subd. 7.  [PROGRAM AND PROCESSING STANDARDS.] (a) The 
        interview to determine financial eligibility for the 
        diversionary work program must be conducted within five working 
        days of the receipt of the cash application form.  During the 
        intake interview the financial worker must discuss: 
           (1) the goals, requirements, and services of the 
        diversionary work program; 
           (2) the availability of child care assistance.  If child 
        care is needed, the worker must obtain a completed application 
        for child care from the applicant before the interview is 
        terminated.  The same day the application for child care is 
        received, the application must be forwarded to the appropriate 
        child care worker.  For purposes of eligibility for child care 
        assistance under chapter 119B, DWP participants shall be 
        eligible for the same benefits as MFIP recipients; and 
           (3) if the applicant has not requested food support and 
        health care assistance on the application, the county agency 
        shall, during the interview process, talk with the applicant 
        about the availability of these benefits. 
           (b) The county shall follow section 256J.74, subdivision 2, 
        paragraph (b), clauses (1) and (2), when an applicant or a 
        recipient of DWP has a person who is a member of more than one 
        assistance unit in a given payment month. 
           (c) If within 30 days the county agency cannot determine 
        eligibility for the diversionary work program, the county must 
        deny the application and inform the applicant of the decision 
        according to the notice provisions in section 256J.31.  A family 
        unit is eligible for a fair hearing under section 256J.40.  
           Subd. 8.  [VERIFICATION REQUIREMENTS.] (a) A county agency 
        must only require verification of information necessary to 
        determine DWP eligibility and the amount of the payment.  The 
        applicant or participant must document the information required 
        or authorize the county agency to verify the information.  The 
        applicant or participant has the burden of providing documentary 
        evidence to verify eligibility.  The county agency shall assist 
        the applicant or participant in obtaining required documents 
        when the applicant or participant is unable to do so. 
           (b) A county agency must not request information about an 
        applicant or participant that is not a matter of public record 
        from a source other than county agencies, the department of 
        human services, or the United States Department of Health and 
        Human Services without the person's prior written consent.  An 
        applicant's signature on an application form constitutes consent 
        for contact with the sources specified on the application.  A 
        county agency may use a single consent form to contact a group 
        of similar sources, but the sources to be contacted must be 
        identified by the county agency prior to requesting an 
        applicant's consent. 
           (c) Factors to be verified shall follow section 256J.32, 
        subdivision 4.  Except for personal needs, family maintenance 
        needs must be verified before the expense can be allowed in the 
        calculation of the DWP grant. 
           Subd. 9.  [PROPERTY AND INCOME LIMITATIONS.] The asset 
        limits and exclusions in section 256J.20, apply to applicants 
        and recipients of DWP.  All payments, unless excluded in section 
        256J.21, must be counted as income to determine eligibility for 
        the diversionary work program.  The county shall treat income as 
        outlined in section 256J.37, except for subdivision 3a.  The 
        initial income test and the disregards in section 256J.21, 
        subdivision 3, shall be followed for determining eligibility for 
        the diversionary work program. 
           Subd. 10.  [DIVERSIONARY WORK PROGRAM GRANT.] (a) The 
        amount of cash benefits that a family unit is eligible for under 
        the diversionary work program is based on the number of persons 
        in the family unit, the family maintenance needs, personal needs 
        allowance, and countable income.  The county agency shall 
        evaluate the income of the family unit that is requesting 
        payments under the diversionary work program.  Countable income 
        means gross earned and unearned income not excluded or 
        disregarded under MFIP.  The same disregards for earned income 
        that are allowed under MFIP are allowed for the diversionary 
        work program. 
           (b) The DWP grant is based on the family maintenance needs 
        for which the DWP family unit is responsible plus a personal 
        needs allowance.  Housing and utilities, except for telephone 
        service, shall be vendor paid.  Unless otherwise stated in this 
        section, actual housing and utility expenses shall be used when 
        determining the amount of the DWP grant. 
           (c) The maximum monthly benefit amount available under the 
        diversionary work program is the difference between the family 
        unit's needs under paragraph (b) and the family unit's countable 
        income not to exceed the cash portion of the MFIP standard of 
        need as defined in section 256J.08, subdivision 55a, for the 
        family unit's size.  
           (d) Once the county has determined a grant amount, the DWP 
        grant amount will not be decreased if the determination is based 
        on the best information available at the time of approval and 
        shall not be decreased because of any additional income to the 
        family unit.  The grant must be increased if a participant later 
        verifies an increase in family maintenance needs or family unit 
        size.  The minimum cash benefit amount, if income and asset 
        tests are met, is $10.  Benefits of $10 shall not be vendor paid.
           (e) When all criteria are met, including the development of 
        an employment plan as described in subdivision 14 and 
        eligibility exists for the month of application, the amount of 
        benefits for the diversionary work program retroactive to the 
        date of application is as specified in section 256J.35, 
        paragraph (a). 
           (f) Any month during the four-month DWP period that a 
        person receives a DWP benefit directly or through a vendor 
        payment made on the person's behalf, that person is ineligible 
        for MFIP or any other TANF cash assistance program except for 
        benefits defined in section 256J.626, subdivision 2, clause (1). 
           If during the four-month period a family unit that receives 
        DWP benefits moves to a county that has not established a 
        diversionary work program, the family unit may be eligible for 
        MFIP the month following the last month of the issuance of the 
        DWP benefit. 
           Subd. 11.  [UNIVERSAL PARTICIPATION REQUIRED.] (a) All DWP 
        caregivers, except caregivers who meet the criteria in paragraph 
        (d), are required to participate in DWP employment services.  
        Except as specified in paragraphs (b) and (c), employment plans 
        under DWP must, at a minimum, meet the requirements in section 
        256J.55, subdivision 1. 
           (b) A caregiver who is a member of a two-parent family that 
        is required to participate in DWP who would otherwise be 
        ineligible for DWP under subdivision 3 may be allowed to develop 
        an employment plan under section 256J.521, subdivision 2, 
        paragraph (c), that may contain alternate activities and reduced 
        hours.  
           (c) A participant who has a family violence waiver shall be 
        allowed to develop an employment plan under section 256J.521, 
        subdivision 3. 
           (d) One parent in a two-parent family unit that has a 
        natural born child under 12 weeks of age is not required to have 
        an employment plan until the child reaches 12 weeks of age 
        unless the family unit has already used the exclusion under 
        section 256J.561, subdivision 2, or the previously allowed child 
        under age one exemption under section 256J.56, paragraph (a), 
        clause (5). 
           (e) The provision in paragraph (d) ends the first full 
        month after the child reaches 12 weeks of age.  This provision 
        is allowable only once in a caregiver's lifetime.  In a 
        two-parent household, only one parent shall be allowed to use 
        this category. 
           (f) The participant and job counselor must meet within ten 
        working days after the child reaches 12 weeks of age to revise 
        the participant's employment plan.  The employment plan for a 
        family unit that has a child under 12 weeks of age that has 
        already used the exclusion in section 256J.561 or the previously 
        allowed child under age one exemption under section 256J.56, 
        paragraph (a), clause (5), must be tailored to recognize the 
        caregiving needs of the parent. 
           Subd. 12.  [CONVERSION OR REFERRAL TO MFIP.] (a) If at any 
        time during the DWP application process or during the four-month 
        DWP eligibility period, it is determined that a participant is 
        unlikely to benefit from the diversionary work program, the 
        county shall convert or refer the participant to MFIP as 
        specified in paragraph (d).  Participants who are determined to 
        be unlikely to benefit from the diversionary work program must 
        develop and sign an employment plan.  Participants who meet any 
        one of the criteria in paragraph (b) shall be considered to be 
        unlikely to benefit from DWP, provided the necessary 
        documentation is available to support the determination. 
           (b) A participant who: 
           (1) has been determined by a qualified professional as 
        being unable to obtain or retain employment due to an illness, 
        injury, or incapacity that is expected to last at least 60 days; 
           (2) is required in the home as a caregiver because of the 
        illness, injury, or incapacity, of a family member, or a 
        relative in the household, or a foster child, and the illness, 
        injury, or incapacity and the need for a person to provide 
        assistance in the home has been certified by a qualified 
        professional and is expected to continue more than 60 days; 
           (3) is determined by a qualified professional as being 
        needed in the home to care for a child meeting the special 
        medical criteria in section 256J.425, subdivision 2, clause (3); 
           (4) is pregnant and is determined by a qualified 
        professional as being unable to obtain or retain employment due 
        to the pregnancy; or 
           (5) has applied for SSI or RSDI. 
           (c) In a two-parent family unit, both parents must be 
        determined to be unlikely to benefit from the diversionary work 
        program before the family unit can be converted or referred to 
        MFIP. 
           (d) A participant who is determined to be unlikely to 
        benefit from the diversionary work program shall be converted to 
        MFIP and, if the determination was made within 30 days of the 
        initial application for benefits, no additional application form 
        is required.  A participant who is determined to be unlikely to 
        benefit from the diversionary work program shall be referred to 
        MFIP and, if the determination is made more than 30 days after 
        the initial application, the participant must submit a program 
        change request form.  The county agency shall process the 
        program change request form by the first of the following month 
        to ensure that no gap in benefits is due to delayed action by 
        the county agency.  In processing the program change request 
        form, the county must follow section 256J.32, subdivision 1, 
        except that the county agency shall not require additional 
        verification of the information in the case file from the DWP 
        application unless the information in the case file is 
        inaccurate, questionable, or no longer current. 
           (e) The county shall not request a combined application 
        form for a participant who has exhausted the four months of the 
        diversionary work program, has continued need for cash and food 
        assistance, and has completed, signed, and submitted a program 
        change request form within 30 days of the fourth month of the 
        diversionary work program.  The county must process the program 
        change request according to section 256J.32, subdivision 1, 
        except that the county agency shall not require additional 
        verification of information in the case file unless the 
        information is inaccurate, questionable, or no longer current.  
        When a participant does not request MFIP within 30 days of the 
        diversionary work program benefits being exhausted, a new 
        combined application form must be completed for any subsequent 
        request for MFIP. 
           Subd. 13.  [IMMEDIATE REFERRAL TO EMPLOYMENT SERVICES.] 
        Within one working day of determination that the applicant is 
        eligible for the diversionary work program, but before benefits 
        are issued to or on behalf of the family unit, the county shall 
        refer all caregivers to employment services.  The referral to 
        the DWP employment services must be in writing and must contain 
        the following information: 
           (1) notification that, as part of the application process, 
        applicants are required to develop an employment plan or the DWP 
        application will be denied; 
           (2) the employment services provider name and phone number; 
           (3) the date, time, and location of the scheduled 
        employment services interview; 
           (4) the immediate availability of supportive services, 
        including, but not limited to, child care, transportation, and 
        other work-related aid; and 
           (5) the rights, responsibilities, and obligations of 
        participants in the program, including, but not limited to, the 
        grounds for good cause, the consequences of refusing or failing 
        to participate fully with program requirements, and the appeal 
        process. 
           Subd. 14.  [EMPLOYMENT PLAN; DWP BENEFITS.] As soon as 
        possible, but no later than ten working days of being notified 
        that a participant is financially eligible for the diversionary 
        work program, the employment services provider shall provide the 
        participant with an opportunity to meet to develop an initial 
        employment plan.  Once the initial employment plan has been 
        developed and signed by the participant and the job counselor, 
        the employment services provider shall notify the county within 
        one working day that the employment plan has been signed.  The 
        county shall issue DWP benefits within one working day after 
        receiving notice that the employment plan has been signed. 
           Subd. 15.  [LIMITATIONS ON CERTAIN WORK ACTIVITIES.] (a) 
        Except as specified in paragraphs (b) to (d), employment 
        activities listed in section 256J.49, subdivision 13, are 
        allowable under the diversionary work program. 
           (b) Work activities under section 256J.49, subdivision 13, 
        clause (5), shall be allowable only when in combination with 
        approved work activities under section 256J.49, subdivision 13, 
        clauses (1) to (4), and shall be limited to no more than 
        one-half of the hours required in the employment plan. 
           (c) In order for an English as a second language (ESL) 
        class to be an approved work activity, a participant must: 
           (1) be below a spoken language proficiency level of SPL6 or 
        its equivalent, as measured by a nationally recognized test; and 
           (2) not have been enrolled in ESL for more than 24 months 
        while previously participating in MFIP or DWP.  A participant 
        who has been enrolled in ESL for 20 or more months may be 
        approved for ESL until the participant has received 24 total 
        months. 
           (d) Work activities under section 256J.49, subdivision 13, 
        clause (6), shall be allowable only when the training or 
        education program will be completed within the four-month DWP 
        period.  Training or education programs that will not be 
        completed within the four-month DWP period shall not be approved.
           Subd. 16.  [FAILURE TO COMPLY WITH REQUIREMENTS.] A family 
        unit that includes a participant who fails to comply with DWP 
        employment service or child support enforcement requirements, 
        without good cause as defined in sections 256.741 and 256J.57, 
        shall be disqualified from the diversionary work program.  The 
        county shall provide written notice as specified in section 
        256J.31 to the participant prior to disqualifying the family 
        unit due to noncompliance with employment service or child 
        support.  The disqualification does not apply to food support or 
        health care benefits. 
           Subd. 17.  [GOOD CAUSE FOR NOT COMPLYING WITH 
        REQUIREMENTS.] A participant who fails to comply with the 
        requirements of the diversionary work program may claim good 
        cause for reasons listed in sections 256.741 and 256J.57, 
        subdivision 1, clauses (1) to (13).  The county shall not impose 
        a disqualification if good cause exists. 
           Subd. 18.  [REINSTATEMENT FOLLOWING DISQUALIFICATION.] A 
        participant who has been disqualified from the diversionary work 
        program due to noncompliance with employment services may regain 
        eligibility for the diversionary work program by complying with 
        program requirements.  A participant who has been disqualified 
        from the diversionary work program due to noncooperation with 
        child support enforcement requirements may regain eligibility by 
        complying with child support requirements under section 
        256.741.  Once a participant has been reinstated, the county 
        shall issue prorated benefits for the remaining portion of the 
        month.  A family unit that has been disqualified from the 
        diversionary work program due to noncompliance shall not be 
        eligible for MFIP or any other TANF cash program during the 
        period of time the participant remains noncompliant.  In a 
        two-parent family, both parents must be in compliance before the 
        family unit can regain eligibility for benefits. 
           Subd. 19.  [RECOVERY OF OVERPAYMENTS.] When an overpayment 
        or an ATM error is determined, the overpayment shall be recouped 
        or recovered as specified in section 256J.38. 
           Subd. 20.  [IMPLEMENTATION OF DWP.] Counties may establish 
        a diversionary work program according to this section any time 
        on or after July 1, 2003.  Prior to establishing a diversionary 
        work program, the county must notify the commissioner.  All 
        counties must implement the provisions of this section no later 
        than July 1, 2004. 
           Sec. 103.  Minnesota Statutes 2002, section 261.063, is 
        amended to read: 
           261.063 [TAX LEVY FOR SOCIAL SERVICES; BOARD DUTY; 
        PENALTY.] 
           (a) The board of county commissioners of each county shall 
        annually levy taxes and fix a rate sufficient to produce the 
        full amount required for poor relief, general assistance, 
        Minnesota family investment program, diversionary work program, 
        county share of county and state supplemental aid to 
        supplemental security income applicants or recipients, and any 
        other social security measures wherein there is now or may 
        hereafter be county participation, sufficient to produce the 
        full amount necessary for each such item, including 
        administrative expenses, for the ensuing year, within the time 
        fixed by law in addition to all other tax levies and tax rates, 
        however fixed or determined, and any commissioner who shall fail 
        to comply herewith shall be guilty of a gross misdemeanor and 
        shall be immediately removed from office by the governor.  For 
        the purposes of this paragraph, "poor relief" means county 
        services provided under sections 261.035, 261.04, and 261.21 to 
        261.231. 
           (b) Nothing within the provisions of this section shall be 
        construed as requiring a county agency to provide income support 
        or cash assistance to needy persons when they are no longer 
        eligible for assistance under general assistance, the Minnesota 
        family investment program chapter 256J, or Minnesota 
        supplemental aid. 
           Sec. 104.  Minnesota Statutes 2002, section 393.07, 
        subdivision 10, is amended to read: 
           Subd. 10.  [FEDERAL FOOD STAMP PROGRAM AND THE MATERNAL AND 
        CHILD NUTRITION ACT.] (a) The local social services agency shall 
        establish and administer the food stamp or support program 
        according to rules of the commissioner of human services, the 
        supervision of the commissioner as specified in section 256.01, 
        and all federal laws and regulations.  The commissioner of human 
        services shall monitor food stamp or support program delivery on 
        an ongoing basis to ensure that each county complies with 
        federal laws and regulations.  Program requirements to be 
        monitored include, but are not limited to, number of 
        applications, number of approvals, number of cases pending, 
        length of time required to process each application and deliver 
        benefits, number of applicants eligible for expedited issuance, 
        length of time required to process and deliver expedited 
        issuance, number of terminations and reasons for terminations, 
        client profiles by age, household composition and income level 
        and sources, and the use of phone certification and home 
        visits.  The commissioner shall determine the county-by-county 
        and statewide participation rate.  
           (b) On July 1 of each year, the commissioner of human 
        services shall determine a statewide and county-by-county food 
        stamp program participation rate.  The commissioner may 
        designate a different agency to administer the food stamp 
        program in a county if the agency administering the program 
        fails to increase the food stamp program participation rate 
        among families or eligible individuals, or comply with all 
        federal laws and regulations governing the food stamp program.  
        The commissioner shall review agency performance annually to 
        determine compliance with this paragraph. 
           (c) A person who commits any of the following acts has 
        violated section 256.98 or 609.821, or both, and is subject to 
        both the criminal and civil penalties provided under those 
        sections: 
           (1) obtains or attempts to obtain, or aids or abets any 
        person to obtain by means of a willful statement or 
        misrepresentation, or intentional concealment of a material 
        fact, food stamps or vouchers issued according to sections 
        145.891 to 145.897 to which the person is not entitled or in an 
        amount greater than that to which that person is entitled or 
        which specify nutritional supplements to which that person is 
        not entitled; or 
           (2) presents or causes to be presented, coupons or vouchers 
        issued according to sections 145.891 to 145.897 for payment or 
        redemption knowing them to have been received, transferred or 
        used in a manner contrary to existing state or federal law; or 
           (3) willfully uses, possesses, or transfers food stamp 
        coupons, authorization to purchase cards or vouchers issued 
        according to sections 145.891 to 145.897 in any manner contrary 
        to existing state or federal law, rules, or regulations; or 
           (4) buys or sells food stamp coupons, authorization to 
        purchase cards, other assistance transaction devices, vouchers 
        issued according to sections 145.891 to 145.897, or any food 
        obtained through the redemption of vouchers issued according to 
        sections 145.891 to 145.897 for cash or consideration other than 
        eligible food. 
           (d) A peace officer or welfare fraud investigator may 
        confiscate food stamps, authorization to purchase cards, or 
        other assistance transaction devices found in the possession of 
        any person who is neither a recipient of the food stamp program 
        nor otherwise authorized to possess and use such materials.  
        Confiscated property shall be disposed of as the commissioner 
        may direct and consistent with state and federal food stamp 
        law.  The confiscated property must be retained for a period of 
        not less than 30 days to allow any affected person to appeal the 
        confiscation under section 256.045. 
           (e) Food stamp overpayment claims which are due in whole or 
        in part to client error shall be established by the county 
        agency for a period of six years from the date of any resultant 
        overpayment.  
           (f) With regard to the federal tax revenue offset program 
        only, recovery incentives authorized by the federal food and 
        consumer service shall be retained at the rate of 50 percent by 
        the state agency and 50 percent by the certifying county agency. 
           (g) A peace officer, welfare fraud investigator, federal 
        law enforcement official, or the commissioner of health may 
        confiscate vouchers found in the possession of any person who is 
        neither issued vouchers under sections 145.891 to 145.897, nor 
        otherwise authorized to possess and use such vouchers.  
        Confiscated property shall be disposed of as the commissioner of 
        health may direct and consistent with state and federal law.  
        The confiscated property must be retained for a period of not 
        less than 30 days. 
           (h) The commissioner of human services may seek a waiver 
        from the United States Department of Agriculture to allow the 
        state to specify foods that may and may not be purchased in 
        Minnesota with benefits funded by the federal Food Stamp 
        Program.  The commissioner shall consult with the members of the 
        house of representatives and senate policy committees having 
        jurisdiction over food support issues in developing the waiver.  
        The commissioner, in consultation with the commissioners of 
        health and education, shall develop a broad public health policy 
        related to improved nutrition and health status.  The 
        commissioner must seek legislative approval prior to 
        implementing the waiver. 
           Sec. 105.  Laws 1997, chapter 203, article 9, section 21, 
        as amended by Laws 1998, chapter 407, article 6, section 111, 
        Laws 2000, chapter 488, article 10, section 28, and Laws 2001, 
        First Special Session chapter 9, article 10, section 62, is 
        amended to read: 
           Sec. 21.  [INELIGIBILITY FOR STATE FUNDED PROGRAMS.] 
           (a) Effective on the date specified, the following 
        persons Beginning July 1, 2007, legal noncitizens ineligible for 
        federally funded cash or food benefits due to 1996 changes in 
        federal law and subsequent relevant enactments, who are eligible 
        for state-funded MFIP cash or food assistance, will be 
        ineligible for general assistance and general assistance medical 
        care under Minnesota Statutes, chapter 256D, group residential 
        housing under Minnesota Statutes, chapter 256I, and state-funded 
        MFIP assistance under Minnesota Statutes, chapter 256J, funded 
        with state money:. 
           (1) Beginning July 1, 2002, persons who are terminated from 
        or denied Supplemental Security Income due to the 1996 changes 
        in the federal law making persons whose alcohol or drug 
        addiction is a material factor contributing to the person's 
        disability ineligible for Supplemental Security Income, and are 
        eligible for general assistance under Minnesota Statutes, 
        section 256D.05, subdivision 1, paragraph (a), clause (15), 
        general assistance medical care under Minnesota Statutes, 
        chapter 256D, or group residential housing under Minnesota 
        Statutes, chapter 256I; and 
           (2) Beginning July 1, 2002, legal noncitizens who are 
        ineligible for Supplemental Security Income due to the 1996 
        changes in federal law making certain noncitizens ineligible for 
        these programs due to their noncitizen status; and 
           (3) beginning July 1, 2003, legal noncitizens who are 
        eligible for MFIP assistance, either the cash assistance portion 
        or the food assistance portion, funded entirely with state money.
           (b) State money that remains unspent due to changes in 
        federal law enacted after May 12, 1997, that reduce state 
        spending for legal noncitizens or for persons whose alcohol or 
        drug addiction is a material factor contributing to the person's 
        disability, or enacted after February 1, 1998, that reduce state 
        spending for food benefits for legal noncitizens shall not 
        cancel and shall be deposited in the TANF reserve account. 
           Sec. 106.  [REVISOR'S INSTRUCTION.] 
           (a) In the next publication of Minnesota Statutes, the 
        revisor of statutes shall codify section 108 of this act. 
           (b) Wherever "food stamp" or "food stamps" appears in 
        Minnesota Statutes and Rules, the revisor of statutes shall 
        insert "food support" or "or food support" except for instances 
        where federal code or federal law is referenced. 
           (c) For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 107.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 256J.02, subdivision 
        3; 256J.08, subdivisions 28 and 70; 256J.24, subdivision 8; 
        256J.30, subdivision 10; 256J.462; 256J.47; 256J.48; 256J.49, 
        subdivisions 1a, 2, 6, and 7; 256J.50, subdivisions 2, 3, 3a, 5, 
        and 7; 256J.52; 256J.55, subdivision 5; 256J.62, subdivisions 1, 
        2a, 4, 6, 7, and 8; 256J.625; 256J.655; 256J.74, subdivision 3; 
        256J.751, subdivisions 3 and 4; 256J.76; and 256K.30, are 
        repealed. 
           (b) Laws 2000, chapter 488, article 10, section 29, is 
        repealed. 

                                   ARTICLE 2 
                                 LONG-TERM CARE 
           Section 1.  Minnesota Statutes 2002, section 61A.072, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ACCELERATED BENEFITS.] (a) "Accelerated 
        benefits" covered under this section are benefits payable under 
        the life insurance contract: 
           (1) to a policyholder or certificate holder, during the 
        lifetime of the insured, in anticipation of death upon the 
        occurrence of a specified life-threatening or catastrophic 
        condition as defined by the policy or rider; 
           (2) that reduce the death benefit otherwise payable under 
        the life insurance contract; and 
           (3) that are payable upon the occurrence of a single 
        qualifying event that results in the payment of a benefit amount 
        fixed at the time of acceleration. 
           (b) "Qualifying event" means one or more of the following: 
           (1) a medical condition that would result in a drastically 
        limited life span as specified in the contract; 
           (2) a medical condition that has required or requires 
        extraordinary medical intervention, such as, but not limited to, 
        major organ transplant or continuous artificial life support 
        without which the insured would die; or 
           (3) a condition that requires continuous confinement in an 
        eligible institution as defined in the contract if the insured 
        is expected to remain there for the rest of the insured's life; 
           (4) a long-term care illness or physical condition that 
        results in cognitive impairment or the inability to perform the 
        activities of daily life or the substantial and material duties 
        of any occupation; or 
           (5) other qualifying events that the commissioner approves 
        for a particular filing. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to policies issued on or 
        after that date. 
           Sec. 2.  Minnesota Statutes 2002, section 62A.315, is 
        amended to read: 
           62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
        COVERAGE.] 
           The extended basic Medicare supplement plan must have a 
        level of coverage so that it will be certified as a qualified 
        plan pursuant to section 62E.07, and will provide: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital deductible and coinsurance amounts, and 100 percent of 
        all Medicare part A eligible expenses for hospitalization not 
        covered by Medicare; 
           (2) coverage for the daily copayment amount of Medicare 
        part A eligible expenses for the calendar year incurred for 
        skilled nursing facility care; 
           (3) coverage for the copayment amount of Medicare eligible 
        expenses under Medicare part B regardless of hospital 
        confinement, and the Medicare part B deductible amount; 
           (4) 80 percent of the usual and customary hospital and 
        medical expenses and supplies described in section 62E.06, 
        subdivision 1, not to exceed any charge limitation established 
        by the Medicare program or state law, the usual and customary 
        hospital and medical expenses and supplies, described in section 
        62E.06, subdivision 1, while in a foreign country, and 
        prescription drug expenses, not covered by Medicare; 
           (5) coverage for the reasonable cost of the first three 
        pints of blood, or equivalent quantities of packed red blood 
        cells as defined under federal regulations under Medicare parts 
        A and B, unless replaced in accordance with federal regulations; 
           (6) 100 percent of the cost of immunizations and routine 
        screening procedures for cancer, including mammograms and pap 
        smears; 
           (7) preventive medical care benefit:  coverage for the 
        following preventive health services: 
           (i) an annual clinical preventive medical history and 
        physical examination that may include tests and services from 
        clause (ii) and patient education to address preventive health 
        care measures; 
           (ii) any one or a combination of the following preventive 
        screening tests or preventive services, the frequency of which 
        is considered medically appropriate: 
           (A) fecal occult blood test and/or digital rectal 
        examination; 
           (B) dipstick urinalysis for hematuria, bacteriuria, and 
        proteinuria; 
           (C) pure tone (air only) hearing screening test 
        administered or ordered by a physician; 
           (D) serum cholesterol screening every five years; 
           (E) thyroid function test; 
           (F) diabetes screening; 
           (iii) any other tests or preventive measures determined 
        appropriate by the attending physician.  
           Reimbursement shall be for the actual charges up to 100 
        percent of the Medicare-approved amount for each service as if 
        Medicare were to cover the service as identified in American 
        Medical Association current procedural terminology (AMA CPT) 
        codes to a maximum of $120 annually under this benefit.  This 
        benefit shall not include payment for any procedure covered by 
        Medicare; 
           (8) at-home recovery benefit:  coverage for services to 
        provide short-term at-home assistance with activities of daily 
        living for those recovering from an illness, injury, or surgery: 
           (i) for purposes of this benefit, the following definitions 
        shall apply: 
           (A) "activities of daily living" include, but are not 
        limited to, bathing, dressing, personal hygiene, transferring, 
        eating, ambulating, assistance with drugs that are normally 
        self-administered, and changing bandages or other dressings; 
           (B) "care provider" means a duly qualified or licensed home 
        health aide/homemaker, personal care aide, or nurse provided 
        through a licensed home health care agency or referred by a 
        licensed referral agency or licensed nurses registry; 
           (C) "home" means a place used by the insured as a place of 
        residence, provided that the place would qualify as a residence 
        for home health care services covered by Medicare.  A hospital 
        or skilled nursing facility shall not be considered the 
        insured's place of residence; 
           (D) "at-home recovery visit" means the period of a visit 
        required to provide at-home recovery care, without limit on the 
        duration of the visit, except each consecutive four hours in a 
        24-hour period of services provided by a care provider is one 
        visit; 
           (ii) coverage requirements and limitations: 
           (A) at-home recovery services provided must be primarily 
        services that assist in activities of daily living; 
           (B) the insured's attending physician must certify that the 
        specific type and frequency of at-home recovery services are 
        necessary because of a condition for which a home care plan of 
        treatment was approved by Medicare; 
           (C) coverage is limited to: 
           (I) no more than the number and type of at-home recovery 
        visits certified as medically necessary by the insured's 
        attending physician.  The total number of at-home recovery 
        visits shall not exceed the number of Medicare-approved home 
        health care visits under a Medicare-approved home care plan of 
        treatment; 
           (II) the actual charges for each visit up to a maximum 
        reimbursement of $40 $100 per visit; 
           (III) $1,600 $4,000 per calendar year; 
           (IV) seven visits in any one week; 
           (V) care furnished on a visiting basis in the insured's 
        home; 
           (VI) services provided by a care provider as defined in 
        this section; 
           (VII) at-home recovery visits while the insured is covered 
        under the policy or certificate and not otherwise excluded; 
           (VIII) at-home recovery visits received during the period 
        the insured is receiving Medicare-approved home care services or 
        no more than eight weeks after the service date of the last 
        Medicare-approved home health care visit; 
           (iii) coverage is excluded for: 
           (A) home care visits paid for by Medicare or other 
        government programs; and 
           (B) care provided by family members, unpaid volunteers, or 
        providers who are not care providers. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2004, and applies to policies issued on or after that date. 
           Sec. 3.  Minnesota Statutes 2002, section 62A.48, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [REGULATORY FLEXIBILITY.] The commissioner may 
        upon written request issue an order to modify or suspend a 
        specific provision or provisions of sections 62A.46 to 62A.56 
        with respect to a specific long-term care insurance policy or 
        certificate upon a written finding that: 
           (1) the modification or suspension is in the best interest 
        of the insureds; 
           (2) the purpose to be achieved could not be effectively or 
        efficiently achieved without the modifications or suspension; 
        and 
           (3)(i) the modification or suspension is necessary to the 
        development of an innovative and reasonable approach for 
        insuring long-term care; 
           (ii) the policy or certificate is to be issued to residents 
        of a life care or continuing care retirement community or some 
        other residential community for the elderly and the modification 
        or suspension is reasonably related to the special needs or 
        nature of such a community; or 
           (iii) the modification or suspension is necessary to permit 
        long-term care insurance to be sold as part of, or in 
        conjunction with, another insurance product. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2004, and applies to policies issued on or after that date. 
           Sec. 4.  Minnesota Statutes 2002, section 62A.49, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [PROHIBITED LIMITATIONS.] A long-term care 
        insurance policy or certificate shall not, if it provides 
        benefits for home health care or community care services, limit 
        or exclude benefits by: 
           (1) requiring that the insured would need care in a skilled 
        nursing facility if home health care services were not provided; 
           (2) requiring that the insured first or simultaneously 
        receive nursing or therapeutic services in a home, community, or 
        institutional setting before home health care services are 
        covered; 
           (3) limiting eligible services to services provided by a 
        registered nurse or licensed practical nurse; 
           (4) requiring that a nurse or therapist provide services 
        covered by the policy that can be provided by a home health aide 
        or other licensed or certified home care worker acting within 
        the scope of licensure or certification; 
           (5) excluding coverage for personal care services provided 
        by a home health aide; 
           (6) requiring that the provision of home health care 
        services be at a level of certification or licensure greater 
        than that required by the eligible service; 
           (7) requiring that the insured have an acute condition 
        before home health care services are covered; 
           (8) limiting benefits to services provided by 
        Medicare-certified agencies or providers; 
           (9) excluding coverage for adult day care services; or 
           (10) excluding coverage based upon location or type of 
        residence in which the home health care services would be 
        provided. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2004, and applies to policies issued on or after that date. 
           Sec. 5.  Minnesota Statutes 2002, section 62S.22, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROHIBITED LIMITATIONS.] A long-term care 
        insurance policy or certificate shall not, if it provides 
        benefits for home health care or community care services, limit 
        or exclude benefits by: 
           (1) requiring that the insured would need care in a skilled 
        nursing facility if home health care services were not provided; 
           (2) requiring that the insured first or simultaneously 
        receive nursing or therapeutic services in a home, community, or 
        institutional setting before home health care services are 
        covered; 
           (3) limiting eligible services to services provided by a 
        registered nurse or licensed practical nurse; 
           (4) requiring that a nurse or therapist provide services 
        covered by the policy that can be provided by a home health aide 
        or other licensed or certified home care worker acting within 
        the scope of licensure or certification; 
           (5) excluding coverage for personal care services provided 
        by a home health aide; 
           (6) requiring that the provision of home health care 
        services be at a level of certification or licensure greater 
        than that required by the eligible service; 
           (7) requiring that the insured have an acute condition 
        before home health care services are covered; 
           (8) limiting benefits to services provided by 
        Medicare-certified agencies or providers; or 
           (9) excluding coverage for adult day care services; or 
           (10) excluding coverage based upon location or type of 
        residence in which the home health care services would be 
        provided. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2004, and applies to policies issued on or after that date. 
           Sec. 6.  [62S.34] [REGULATORY FLEXIBILITY.] 
           The commissioner may upon written request issue an order to 
        modify or suspend a specific provision or provisions of this 
        chapter with respect to a specific long-term care insurance 
        policy or certificate upon a written finding that: 
           (1) the modification or suspension is in the best interest 
        of the insureds; 
           (2) the purpose to be achieved could not be effectively or 
        efficiently achieved without the modifications or suspension; 
        and 
           (3)(i) the modification or suspension is necessary to the 
        development of an innovative and reasonable approach for 
        insuring long-term care; 
           (ii) the policy or certificate is to be issued to residents 
        of a life care or continuing care retirement community or some 
        other residential community for the elderly and the modification 
        or suspension is reasonably related to the special needs or 
        nature of such a community; or 
           (iii) the modification or suspension is necessary to permit 
        long-term care insurance to be sold as part of, or in 
        conjunction with, another insurance product. 
           [EFFECTIVE DATE.] This section is effective January 1, 
        2004, and applies to policies issued on or after that date. 
           Sec. 7.  Minnesota Statutes 2002, section 144A.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STANDARDS.] (a) The facility must meet the 
        minimum health, sanitation, safety and comfort standards 
        prescribed by the rules of the commissioner of health with 
        respect to the construction, equipment, maintenance and 
        operation of a nursing home.  The commissioner of health may 
        temporarily waive compliance with one or more of the standards 
        if the commissioner determines that: 
           (a) (1) temporary noncompliance with the standard will not 
        create an imminent risk of harm to a nursing home resident; and 
           (b) (2) a controlling person on behalf of all other 
        controlling persons: 
           (1) (i) has entered into a contract to obtain the materials 
        or labor necessary to meet the standard set by the commissioner 
        of health, but the supplier or other contractor has failed to 
        perform the terms of the contract and the inability of the 
        nursing home to meet the standard is due solely to that failure; 
        or 
           (2) (ii) is otherwise making a diligent good faith effort 
        to meet the standard. 
           The commissioner shall make available to other nursing 
        homes information on facility-specific waivers related to 
        technology or physical plant that are granted.  The commissioner 
        shall, upon the request of a facility, extend a waiver granted 
        to a specific facility related to technology or physical plant 
        to the facility making the request, if the commissioner 
        determines that the facility also satisfies clauses (1) and (2) 
        and any other terms and conditions of the waiver.  
           The commissioner of health shall allow, by rule, a nursing 
        home to provide fewer hours of nursing care to intermediate care 
        residents of a nursing home than required by the present rules 
        of the commissioner if the commissioner determines that the 
        needs of the residents of the home will be adequately met by a 
        lesser amount of nursing care. 
           (b) A facility is not required to seek a waiver for room 
        furniture or equipment under paragraph (a) when responding to 
        resident-specific requests, if the facility has discussed health 
        and safety concerns with the resident and the resident request 
        and discussion of health and safety concerns are documented in 
        the resident's patient record. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2002, section 144A.04, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [INCONTINENT RESIDENTS.] Notwithstanding 
        Minnesota Rules, part 4658.0520, an incontinent resident must be 
        checked according to a specific time interval written in the 
        resident's care plan.  The resident's attending physician must 
        authorize in writing any interval longer than two hours unless 
        the resident, if competent, or a family member or legally 
        appointed conservator, guardian, or health care agent of a 
        resident who is not competent, agrees in writing to waive 
        physician involvement in determining this interval, and this 
        waiver is documented in the resident's care plan. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 9.  Minnesota Statutes 2002, section 144A.071, 
        subdivision 4c, as added by Laws 2003, chapter 16, section 1, is 
        amended to read: 
           Subd. 4c.  [EXCEPTIONS FOR REPLACEMENT BEDS AFTER JUNE 30, 
        2003.] (a) The commissioner of health, in coordination with the 
        commissioner of human services, may approve the renovation, 
        replacement, upgrading, or relocation of a nursing home or 
        boarding care home, under the following conditions: 
           (1) to license and certify an 80-bed city-owned facility in 
        Nicollet county to be constructed on the site of a new 
        city-owned hospital to replace an existing 85-bed facility 
        attached to a hospital that is also being replaced.  The 
        threshold allowed for this project under section 144A.073 shall 
        be the maximum amount available to pay the additional medical 
        assistance costs of the new facility; and 
           (2) to license and certify 29 beds to be added to an 
        existing 69-bed facility in St. Louis county, provided that the 
        29 beds must be transferred from active or layaway status at an 
        existing facility in St. Louis county that had 235 beds on April 
        1, 2003. 
        The licensed capacity at the 235-bed facility must be reduced to 
        206 beds, but the payment rate at that facility shall not be 
        adjusted as a result of this transfer.  The operating payment 
        rate of the facility adding beds after completion of this 
        project shall be the same as it was on the day prior to the day 
        the beds are licensed and certified.  This project shall not 
        proceed unless it is approved and financed under the provisions 
        of section 144A.073.  
           (b) Projects approved under this subdivision shall be 
        treated in a manner equivalent to projects approved under 
        subdivision 4a. 
           Sec. 10.  Minnesota Statutes 2002, section 144A.10, is 
        amended by adding a subdivision to read: 
           Subd. 16.  [INDEPENDENT INFORMAL DISPUTE RESOLUTION.] (a) 
        Notwithstanding subdivision 15, a facility certified under the 
        federal Medicare or Medicaid programs may request from the 
        commissioner, in writing, an independent informal dispute 
        resolution process regarding any deficiency citation issued to 
        the facility.  The facility must specify in its written request 
        each deficiency citation that it disputes.  The commissioner 
        shall provide a hearing under sections 14.57 to 14.62.  Upon the 
        written request of the facility, the parties must submit the 
        issues raised to arbitration by an administrative law judge. 
           (b) Upon receipt of a written request for an arbitration 
        proceeding, the commissioner shall file with the office of 
        administrative hearings a request for the appointment of an 
        arbitrator and simultaneously serve the facility with notice of 
        the request.  The arbitrator for the dispute shall be an 
        administrative law judge appointed by the office of 
        administrative hearings.  The disclosure provisions of section 
        572.10 and the notice provisions of section 572.12 apply.  The 
        facility and the commissioner have the right to be represented 
        by an attorney. 
           (c) The commissioner and the facility may present written 
        evidence, depositions, and oral statements and arguments at the 
        arbitration proceeding.  Oral statements and arguments may be 
        made by telephone. 
           (d) Within ten working days of the close of the arbitration 
        proceeding, the administrative law judge shall issue findings 
        regarding each of the deficiencies in dispute.  The findings 
        shall be one or more of the following: 
           (1) Supported in full.  The citation is supported in full, 
        with no deletion of findings and no change in the scope or 
        severity assigned to the deficiency citation. 
           (2) Supported in substance.  The citation is supported, but 
        one or more findings are deleted without any change in the scope 
        or severity assigned to the deficiency. 
           (3) Deficient practice cited under wrong requirement of 
        participation.  The citation is amended by moving it to the 
        correct requirement of participation. 
           (4) Scope not supported.  The citation is amended through a 
        change in the scope assigned to the citation. 
           (5) Severity not supported.  The citation is amended 
        through a change in the severity assigned to the citation. 
           (6) No deficient practice.  The citation is deleted because 
        the findings did not support the citation or the negative 
        resident outcome was unavoidable.  The findings of the 
        arbitrator are not binding on the commissioner.  
           (e) The commissioner shall reimburse the office of 
        administrative hearings for the costs incurred by that office 
        for the arbitration proceeding.  The facility shall reimburse 
        the commissioner for the proportion of the costs that represent 
        the sum of deficiency citations supported in full under 
        paragraph (d), clause (1), or in substance under paragraph (d), 
        clause (2), divided by the total number of deficiencies 
        disputed.  A deficiency citation for which the administrative 
        law judge's sole finding is that the deficient practice was 
        cited under the wrong requirements of participation shall not be 
        counted in the numerator or denominator in the calculation of 
        the proportion of costs. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 11.  [144A.351] [BALANCING LONG-TERM CARE:  REPORT 
        REQUIRED.] 
           The commissioners of health and human services, with the 
        cooperation of counties and regional entities, shall prepare a 
        report to the legislature by January 15, 2004, and biennially 
        thereafter, regarding the status of the full range of long-term 
        care services for the elderly in Minnesota.  The report shall 
        address: 
           (1) demographics and need for long-term care in Minnesota; 
           (2) summary of county and regional reports on long-term 
        care gaps, surpluses, imbalances, and corrective action plans; 
           (3) status of long-term care services by county and region 
        including: 
           (i) changes in availability of the range of long-term care 
        services and housing options; 
           (ii) access problems regarding long-term care; and 
           (iii) comparative measures of long-term care availability 
        and progress over time; and 
           (4) recommendations regarding goals for the future of 
        long-term care services, policy changes, and resource needs. 
           Sec. 12.  Minnesota Statutes 2002, section 144A.4605, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LICENSE REQUIRED.] (a) A housing with services 
        establishment registered under chapter 144D that is required to 
        obtain a home care license must obtain an assisted living home 
        care license according to this section or a class A or class E 
        license according to rule.  A housing with services 
        establishment that obtains a class E license under this 
        subdivision remains subject to the payment limitations in 
        sections 256B.0913, subdivision 5 5f, paragraph (h) (b), and 
        256B.0915, subdivision 3, paragraph (g) 3d. 
           (b) A board and lodging establishment registered for 
        special services as of December 31, 1996, and also registered as 
        a housing with services establishment under chapter 144D, must 
        deliver home care services according to sections 144A.43 to 
        144A.47, and may apply for a waiver from requirements under 
        Minnesota Rules, parts 4668.0002 to 4668.0240, to operate a 
        licensed agency under the standards of section 157.17.  Such 
        waivers as may be granted by the department will expire upon 
        promulgation of home care rules implementing section 144A.4605. 
           (c) An adult foster care provider licensed by the 
        department of human services and registered under chapter 144D 
        may continue to provide health-related services under its foster 
        care license until the promulgation of home care rules 
        implementing this section. 
           (d) An assisted living home care provider licensed under 
        this section must comply with the disclosure provisions of 
        section 325F.72 to the extent they are applicable. 
           Sec. 13.  Minnesota Statutes 2002, section 256.9657, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NURSING HOME LICENSE SURCHARGE.] (a) 
        Effective July 1, 1993, each non-state-operated nursing home 
        licensed under chapter 144A shall pay to the commissioner an 
        annual surcharge according to the schedule in subdivision 4.  
        The surcharge shall be calculated as $620 per licensed bed.  If 
        the number of licensed beds is reduced, the surcharge shall be 
        based on the number of remaining licensed beds the second month 
        following the receipt of timely notice by the commissioner of 
        human services that beds have been delicensed.  The nursing home 
        must notify the commissioner of health in writing when beds are 
        delicensed.  The commissioner of health must notify the 
        commissioner of human services within ten working days after 
        receiving written notification.  If the notification is received 
        by the commissioner of human services by the 15th of the month, 
        the invoice for the second following month must be reduced to 
        recognize the delicensing of beds.  Beds on layaway status 
        continue to be subject to the surcharge.  The commissioner of 
        human services must acknowledge a medical care surcharge appeal 
        within 30 days of receipt of the written appeal from the 
        provider. 
           (b) Effective July 1, 1994, the surcharge in paragraph (a) 
        shall be increased to $625. 
           (c) Effective August 15, 2002, the surcharge under 
        paragraph (b) shall be increased to $990. 
           (d) Effective July 15, 2003, the surcharge under paragraph 
        (c) shall be increased to $2,815. 
           (e) The commissioner may reduce, and may subsequently 
        restore, the surcharge under paragraph (d) based on the 
        commissioner's determination of a permissible surcharge. 
           (f) Between April 1, 2002, and August 15, 2003 2004, a 
        facility governed by this subdivision may elect to assume full 
        participation in the medical assistance program by agreeing to 
        comply with all of the requirements of the medical assistance 
        program, including the rate equalization law in section 256B.48, 
        subdivision 1, paragraph (a), and all other requirements 
        established in law or rule, and to begin intake of new medical 
        assistance recipients.  Rates will be determined under Minnesota 
        Rules, parts 9549.0010 to 9549.0080.  Notwithstanding section 
        256B.431, subdivision 27, paragraph (i), rate calculations will 
        be subject to limits as prescribed in rule and law.  Other than 
        the adjustments in sections 256B.431, subdivisions 30 and 32; 
        256B.437, subdivision 3, paragraph (b), Minnesota Rules, part 
        9549.0057, and any other applicable legislation enacted prior to 
        the finalization of rates, facilities assuming full 
        participation in medical assistance under this paragraph are not 
        eligible for any rate adjustments until the July 1 following 
        their settle-up period. 
           [EFFECTIVE DATE.] This section is effective June 30, 2003. 
           Sec. 14.  Minnesota Statutes 2002, section 256.9657, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [ICF/MR LICENSE SURCHARGE.] Effective July 1, 
        2003, each nonstate-operated facility as defined under section 
        256B.501, subdivision 1, shall pay to the commissioner an annual 
        surcharge according to the schedule in subdivision 4, paragraph 
        (d).  The annual surcharge shall be $1,040 per licensed bed.  If 
        the number of licensed beds is reduced, the surcharge shall be 
        based on the number of remaining licensed beds the second month 
        following the receipt of timely notice by the commissioner of 
        human services that beds have been delicensed.  The facility 
        must notify the commissioner of health in writing when beds are 
        delicensed.  The commissioner of health must notify the 
        commissioner of human services within ten working days after 
        receiving written notification.  If the notification is received 
        by the commissioner of human services by the 15th of the month, 
        the invoice for the second following month must be reduced to 
        recognize the delicensing of beds.  The commissioner may reduce, 
        and may subsequently restore, the surcharge under this 
        subdivision based on the commissioner's determination of a 
        permissible surcharge. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  Minnesota Statutes 2002, section 256.9657, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PAYMENTS INTO THE ACCOUNT.] (a) Payments to the 
        commissioner under subdivisions 1 to 3 must be paid in monthly 
        installments due on the 15th of the month beginning October 15, 
        1992.  The monthly payment must be equal to the annual surcharge 
        divided by 12.  Payments to the commissioner under subdivisions 
        2 and 3 for fiscal year 1993 must be based on calendar year 1990 
        revenues.  Effective July 1 of each year, beginning in 1993, 
        payments under subdivisions 2 and 3 must be based on revenues 
        earned in the second previous calendar year. 
           (b) Effective October 1, 1995, and each October 1 
        thereafter, the payments in subdivisions 2 and 3 must be based 
        on revenues earned in the previous calendar year. 
           (c) If the commissioner of health does not provide by 
        August 15 of any year data needed to update the base year for 
        the hospital and health maintenance organization surcharges, the 
        commissioner of human services may estimate base year revenue 
        and use that estimate for the purposes of this section until 
        actual data is provided by the commissioner of health. 
           (d) Payments to the commissioner under subdivision 3a must 
        be paid in monthly installments due on the 15th of the month 
        beginning July 15, 2003.  The monthly payment must be equal to 
        the annual surcharge divided by 12. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 16.  Minnesota Statutes 2002, section 256B.056, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ASSIGNMENT OF BENEFITS.] To be eligible for 
        medical assistance a person must have applied or must agree to 
        apply all proceeds received or receivable by the person or the 
        person's spouse legal representative from any third person party 
        liable for the costs of medical care for the person, the spouse, 
        and children.  The state agency shall require from any applicant 
        or recipient of medical assistance the assignment of any rights 
        to medical support and third party payments.  By accepting or 
        receiving assistance, the person is deemed to have assigned the 
        person's rights to medical support and third party payments as 
        required by Title 19 of the Social Security Act.  Persons must 
        cooperate with the state in establishing paternity and obtaining 
        third party payments.  By signing an application for accepting 
        medical assistance, a person assigns to the department of human 
        services all rights the person may have to medical support or 
        payments for medical expenses from any other person or entity on 
        their own or their dependent's behalf and agrees to cooperate 
        with the state in establishing paternity and obtaining third 
        party payments.  Any rights or amounts so assigned shall be 
        applied against the cost of medical care paid for under this 
        chapter.  Any assignment takes effect upon the determination 
        that the applicant is eligible for medical assistance and up to 
        three months prior to the date of application if the applicant 
        is determined eligible for and receives medical assistance 
        benefits.  The application must contain a statement explaining 
        this assignment.  Any assignment shall not be effective as to 
        benefits paid or provided under automobile accident coverage and 
        private health care coverage prior to notification of the 
        assignment by the person or organization providing the 
        benefits.  For the purposes of this section, "the department of 
        human services or the state" includes prepaid health plans under 
        contract with the commissioner according to sections 256B.031, 
        256B.69, 256D.03, subdivision 4, paragraph (d), and 256L.12; 
        children's mental health collaboratives under section 245.493; 
        demonstration projects for persons with disabilities under 
        section 256B.77; nursing facilities under the alternative 
        payment demonstration project under section 256B.434; and the 
        county-based purchasing entities under section 256B.692.  
           Sec. 17.  Minnesota Statutes 2002, section 256B.064, 
        subdivision 2, is amended to read: 
           Subd. 2.  [IMPOSITION OF MONETARY RECOVERY AND SANCTIONS.] 
        (a) The commissioner shall determine any monetary amounts to be 
        recovered and sanctions to be imposed upon a vendor of medical 
        care under this section.  Except as provided in 
        paragraph paragraphs (b) and (d), neither a monetary recovery 
        nor a sanction will be imposed by the commissioner without prior 
        notice and an opportunity for a hearing, according to chapter 
        14, on the commissioner's proposed action, provided that the 
        commissioner may suspend or reduce payment to a vendor of 
        medical care, except a nursing home or convalescent care 
        facility, after notice and prior to the hearing if in the 
        commissioner's opinion that action is necessary to protect the 
        public welfare and the interests of the program. 
           (b) Except for a nursing home or convalescent care 
        facility, the commissioner may withhold or reduce payments to a 
        vendor of medical care without providing advance notice of such 
        withholding or reduction if either of the following occurs: 
           (1) the vendor is convicted of a crime involving the 
        conduct described in subdivision 1a; or 
           (2) the commissioner receives reliable evidence of fraud or 
        willful misrepresentation by the vendor. 
           (c) The commissioner must send notice of the withholding or 
        reduction of payments under paragraph (b) within five days of 
        taking such action.  The notice must: 
           (1) state that payments are being withheld according to 
        paragraph (b); 
           (2) except in the case of a conviction for conduct 
        described in subdivision 1a, state that the withholding is for a 
        temporary period and cite the circumstances under which 
        withholding will be terminated; 
           (3) identify the types of claims to which the withholding 
        applies; and 
           (4) inform the vendor of the right to submit written 
        evidence for consideration by the commissioner. 
           The withholding or reduction of payments will not continue 
        after the commissioner determines there is insufficient evidence 
        of fraud or willful misrepresentation by the vendor, or after 
        legal proceedings relating to the alleged fraud or willful 
        misrepresentation are completed, unless the commissioner has 
        sent notice of intention to impose monetary recovery or 
        sanctions under paragraph (a). 
           (d) The commissioner may suspend or terminate a vendor's 
        participation in the program without providing advance notice 
        and an opportunity for a hearing when the suspension or 
        termination is required because of the vendor's exclusion from 
        participation in Medicare.  Within five days of taking such 
        action, the commissioner must send notice of the suspension or 
        termination.  The notice must: 
           (1) state that suspension or termination is the result of 
        the vendor's exclusion from Medicare; 
           (2) identify the effective date of the suspension or 
        termination; 
           (3) inform the vendor of the need to be reinstated to 
        Medicare before reapplying for participation in the program; and 
           (4) inform the vendor of the right to submit written 
        evidence for consideration by the commissioner. 
           (e) Upon receipt of a notice under paragraph (a) that a 
        monetary recovery or sanction is to be imposed, a vendor may 
        request a contested case, as defined in section 14.02, 
        subdivision 3, by filing with the commissioner a written request 
        of appeal.  The appeal request must be received by the 
        commissioner no later than 30 days after the date the 
        notification of monetary recovery or sanction was mailed to the 
        vendor.  The appeal request must specify: 
           (1) each disputed item, the reason for the dispute, and an 
        estimate of the dollar amount involved for each disputed item; 
           (2) the computation that the vendor believes is correct; 
           (3) the authority in statute or rule upon which the vendor 
        relies for each disputed item; 
           (4) the name and address of the person or entity with whom 
        contacts may be made regarding the appeal; and 
           (5) other information required by the commissioner. 
           Sec. 18.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY FOR SERVICES.] Alternative care 
        services are available to Minnesotans age 65 or older who are 
        not eligible for medical assistance without a spenddown or 
        waiver obligation but who would be eligible for medical 
        assistance within 180 days of admission to a nursing facility 
        and subject to subdivisions 4 to 13. 
           Sec. 19.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY FOR FUNDING FOR SERVICES FOR 
        NONMEDICAL ASSISTANCE RECIPIENTS.] (a) Funding for services 
        under the alternative care program is available to persons who 
        meet the following criteria: 
           (1) the person has been determined by a community 
        assessment under section 256B.0911 to be a person who would 
        require the level of care provided in a nursing facility, but 
        for the provision of services under the alternative care 
        program; 
           (2) the person is age 65 or older; 
           (3) the person would be eligible for medical assistance 
        within 180 days of admission to a nursing facility; 
           (4) the person is not ineligible for the medical assistance 
        program due to an asset transfer penalty; 
           (5) the person needs services that are not funded through 
        other state or federal funding; and 
           (6) the monthly cost of the alternative care services 
        funded by the program for this person does not exceed 75 percent 
        of the statewide weighted average monthly nursing facility rate 
        of the case mix resident class to which the individual 
        alternative care client would be assigned under Minnesota Rules, 
        parts 9549.0050 to 9549.0059, less the recipient's maintenance 
        needs allowance as described in section 256B.0915, subdivision 
        1d, paragraph (a), until the first day of the state fiscal year 
        in which the resident assessment system, under section 256B.437, 
        for nursing home rate determination is implemented.  Effective 
        on the first day of the state fiscal year in which a resident 
        assessment system, under section 256B.437, for nursing home rate 
        determination is implemented and the first day of each 
        subsequent state fiscal year, the monthly cost of alternative 
        care services for this person shall not exceed the alternative 
        care monthly cap for the case mix resident class to which the 
        alternative care client would be assigned under Minnesota Rules, 
        parts 9549.0050 to 9549.0059, which was in effect on the last 
        day of the previous state fiscal year, and adjusted by the 
        greater of any legislatively adopted home and community-based 
        services cost-of-living percentage increase or any legislatively 
        adopted statewide percent rate increase for nursing 
        facilities monthly limit described under section 256B.0915, 
        subdivision 3a.  This monthly limit does not prohibit the 
        alternative care client from payment for additional services, 
        but in no case may the cost of additional services purchased 
        under this section exceed the difference between the client's 
        monthly service limit defined under section 256B.0915, 
        subdivision 3, and the alternative care program monthly service 
        limit defined in this paragraph.  If medical supplies and 
        equipment or environmental modifications are or will be 
        purchased for an alternative care services recipient, the costs 
        may be prorated on a monthly basis for up to 12 consecutive 
        months beginning with the month of purchase.  If the monthly 
        cost of a recipient's other alternative care services exceeds 
        the monthly limit established in this paragraph, the annual cost 
        of the alternative care services shall be determined.  In this 
        event, the annual cost of alternative care services shall not 
        exceed 12 times the monthly limit described in this paragraph.; 
        and 
           (7) the person is making timely payments of the assessed 
        monthly fee. 
        A person is ineligible if payment of the fee is over 60 days 
        past due, unless the person agrees to: 
           (i) the appointment of a representative payee; 
           (ii) automatic payment from a financial account; 
           (iii) the establishment of greater family involvement in 
        the financial management of payments; or 
           (iv) another method acceptable to the county to ensure 
        prompt fee payments. 
           The county shall extend the client's eligibility as 
        necessary while making arrangements to facilitate payment of 
        past-due amounts and future premium payments.  Following 
        disenrollment due to nonpayment of a monthly fee, eligibility 
        shall not be reinstated for a period of 30 days. 
           (b) Alternative care funding under this subdivision is not 
        available for a person who is a medical assistance recipient or 
        who would be eligible for medical assistance without a spenddown 
        or waiver obligation.  A person whose initial application for 
        medical assistance and the elderly waiver program is being 
        processed may be served under the alternative care program for a 
        period up to 60 days.  If the individual is found to be eligible 
        for medical assistance, medical assistance must be billed for 
        services payable under the federally approved elderly waiver 
        plan and delivered from the date the individual was found 
        eligible for the federally approved elderly waiver plan.  
        Notwithstanding this provision, upon federal approval, 
        alternative care funds may not be used to pay for any service 
        the cost of which:  (i) is payable by medical assistance or 
        which; (ii) is used by a recipient to meet a medical assistance 
        income spenddown or waiver obligation; or (iii) is used to pay a 
        medical assistance income spenddown for a person who is eligible 
        to participate in the federally approved elderly waiver program 
        under the special income standard provision. 
           (c) Alternative care funding is not available for a person 
        who resides in a licensed nursing home, certified boarding care 
        home, hospital, or intermediate care facility, except for case 
        management services which are provided in support of the 
        discharge planning process to for a nursing home resident or 
        certified boarding care home resident to assist with a 
        relocation process to a community-based setting. 
           (d) Alternative care funding is not available for a person 
        whose income is greater than the maintenance needs allowance 
        under section 256B.0915, subdivision 1d, but equal to or less 
        than 120 percent of the federal poverty guideline effective July 
        1, in the year for which alternative care eligibility is 
        determined, who would be eligible for the elderly waiver with a 
        waiver obligation. 
           Sec. 20.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SERVICES COVERED UNDER ALTERNATIVE CARE.] (a) 
        Alternative care funding may be used for payment of costs of: 
           (1) adult foster care; 
           (2) adult day care; 
           (3) home health aide; 
           (4) homemaker services; 
           (5) personal care; 
           (6) case management; 
           (7) respite care; 
           (8) assisted living; 
           (9) residential care services; 
           (10) care-related supplies and equipment; 
           (11) meals delivered to the home; 
           (12) transportation; 
           (13) nursing services; 
           (14) chore services; 
           (15) companion services; 
           (16) nutrition services; 
           (17) training for direct informal caregivers; 
           (18) telehome care devices to monitor recipients provide 
        services in their own homes as an alternative to hospital care, 
        nursing home care, or home in conjunction with in-home visits; 
           (19) other services which includes discretionary funds and 
        direct cash payments to clients, services, for which counties 
        may make payment from their alternative care program allocation 
        or services not otherwise defined in this section or section 
        256B.0625, following approval by the commissioner, subject to 
        the provisions of paragraph (j).  Total annual payments for 
        "other services" for all clients within a county may not exceed 
        25 percent of that county's annual alternative care program base 
        allocation; and 
           (20) environmental modifications.; and 
           (21) direct cash payments for which counties may make 
        payment from their alternative care program allocation to 
        clients for the purpose of purchasing services, following 
        approval by the commissioner, and subject to the provisions of 
        subdivision 5h, until approval and implementation of 
        consumer-directed services through the federally approved 
        elderly waiver plan.  Upon implementation, consumer-directed 
        services under the alternative care program are available 
        statewide and limited to the average monthly expenditures 
        representative of all alternative care program participants for 
        the same case mix resident class assigned in the most recent 
        fiscal year for which complete expenditure data is available. 
           Total annual payments for discretionary services and direct 
        cash payments, until the federally approved consumer-directed 
        service option is implemented statewide, for all clients within 
        a county may not exceed 25 percent of that county's annual 
        alternative care program base allocation.  Thereafter, 
        discretionary services are limited to 25 percent of the county's 
        annual alternative care program base allocation. 
           Subd. 5a.  [SERVICES; SERVICE DEFINITIONS; SERVICE 
        STANDARDS.] (a) Unless specified in statute, the services, 
        service definitions, and standards for alternative care services 
        shall be the same as the services, service definitions, and 
        standards specified in the federally approved elderly waiver 
        plan, except for transitional support services. 
           (b) The county agency must ensure that the funds are not 
        used to supplant services available through other public 
        assistance or services programs. 
           (c) Unless specified in statute, the services, service 
        definitions, and standards for alternative care services shall 
        be the same as the services, service definitions, and standards 
        specified in the federally approved elderly waiver plan.  Except 
        for the county agencies' approval of direct cash payments to 
        clients as described in paragraph (j) or For a provider of 
        supplies and equipment when the monthly cost of the supplies and 
        equipment is less than $250, persons or agencies must be 
        employed by or under a contract with the county agency or the 
        public health nursing agency of the local board of health in 
        order to receive funding under the alternative care program.  
        Supplies and equipment may be purchased from a vendor not 
        certified to participate in the Medicaid program if the cost for 
        the item is less than that of a Medicaid vendor.  
           (c) Personal care services must meet the service standards 
        defined in the federally approved elderly waiver plan, except 
        that a county agency may contract with a client's relative who 
        meets the relative hardship waiver requirements or a relative 
        who meets the criteria and is also the responsible party under 
        an individual service plan that ensures the client's health and 
        safety and supervision of the personal care services by a 
        qualified professional as defined in section 256B.0625, 
        subdivision 19c.  Relative hardship is established by the county 
        when the client's care causes a relative caregiver to do any of 
        the following:  resign from a paying job, reduce work hours 
        resulting in lost wages, obtain a leave of absence resulting in 
        lost wages, incur substantial client-related expenses, provide 
        services to address authorized, unstaffed direct care time, or 
        meet special needs of the client unmet in the formal service 
        plan. 
           (d) Subd. 5b.  [ADULT FOSTER CARE RATE.] The adult foster 
        care rate shall be considered a difficulty of care payment and 
        shall not include room and board.  The adult foster care rate 
        shall be negotiated between the county agency and the foster 
        care provider.  The alternative care payment for the foster care 
        service in combination with the payment for other alternative 
        care services, including case management, must not exceed the 
        limit specified in subdivision 4, paragraph (a), clause (6). 
           (e) Personal care services must meet the service standards 
        defined in the federally approved elderly waiver plan, except 
        that a county agency may contract with a client's relative who 
        meets the relative hardship waiver requirement as defined in 
        section 256B.0627, subdivision 4, paragraph (b), clause (10), to 
        provide personal care services if the county agency ensures 
        supervision of this service by a qualified professional as 
        defined in section 256B.0625, subdivision 19c.  
           (f)  Subd. 5c.  [RESIDENTIAL CARE SERVICES; SUPPORTIVE 
        SERVICES; HEALTH-RELATED SERVICES.] For purposes of this 
        section, residential care services are services which are 
        provided to individuals living in residential care homes.  
        Residential care homes are currently licensed as board and 
        lodging establishments under section 157.16, and are registered 
        with the department of health as providing special services 
        under section 157.17 and are not subject to registration except 
        settings that are currently registered under chapter 144D.  
        Residential care services are defined as "supportive services" 
        and "health-related services."  "Supportive services" means the 
        provision of up to 24-hour supervision and oversight.  
        Supportive services includes:  (1) transportation, when provided 
        by the residential care home only; (2) socialization, when 
        socialization is part of the plan of care, has specific goals 
        and outcomes established, and is not diversional or recreational 
        in nature; (3) assisting clients in setting up meetings and 
        appointments; (4) assisting clients in setting up medical and 
        social services; (5) providing assistance with personal laundry, 
        such as carrying the client's laundry to the laundry room.  
        Assistance with personal laundry does not include any laundry, 
        such as bed linen, that is included in the room and board rate 
        services as defined in section 157.17, subdivision 1, paragraph 
        (a).  "Health-related services" are limited to minimal 
        assistance with dressing, grooming, and bathing and providing 
        reminders to residents to take medications that are 
        self-administered or providing storage for medications, if 
        requested means services covered in section 157.17, subdivision 
        1, paragraph (b).  Individuals receiving residential care 
        services cannot receive homemaking services funded under this 
        section.  
           (g) Subd. 5d.  [ASSISTED LIVING SERVICES.] For the purposes 
        of this section, "assisted living" refers to supportive services 
        provided by a single vendor to clients who reside in the same 
        apartment building of three or more units which are not subject 
        to registration under chapter 144D and are licensed by the 
        department of health as a class A home care provider or a class 
        E home care provider.  Assisted living services are defined as 
        up to 24-hour supervision, and oversight, and supportive 
        services as defined in clause (1) section 157.17, subdivision 1, 
        paragraph (a), individualized home care aide tasks as defined in 
        clause (2) Minnesota Rules, part 4668.0110, and individualized 
        home management tasks as defined in clause (3) Minnesota Rules, 
        part 4668.0120 provided to residents of a residential center 
        living in their units or apartments with a full kitchen and 
        bathroom.  A full kitchen includes a stove, oven, refrigerator, 
        food preparation counter space, and a kitchen utensil storage 
        compartment.  Assisted living services must be provided by the 
        management of the residential center or by providers under 
        contract with the management or with the county. 
           (1) Supportive services include:  
           (i) socialization, when socialization is part of the plan 
        of care, has specific goals and outcomes established, and is not 
        diversional or recreational in nature; 
           (ii) assisting clients in setting up meetings and 
        appointments; and 
           (iii) providing transportation, when provided by the 
        residential center only.  
           (2) Home care aide tasks means:  
           (i) preparing modified diets, such as diabetic or low 
        sodium diets; 
           (ii) reminding residents to take regularly scheduled 
        medications or to perform exercises; 
           (iii) household chores in the presence of technically 
        sophisticated medical equipment or episodes of acute illness or 
        infectious disease; 
           (iv) household chores when the resident's care requires the 
        prevention of exposure to infectious disease or containment of 
        infectious disease; and 
           (v) assisting with dressing, oral hygiene, hair care, 
        grooming, and bathing, if the resident is ambulatory, and if the 
        resident has no serious acute illness or infectious disease.  
        Oral hygiene means care of teeth, gums, and oral prosthetic 
        devices.  
           (3) Home management tasks means:  
           (i) housekeeping; 
           (ii) laundry; 
           (iii) preparation of regular snacks and meals; and 
           (iv) shopping.  
           Subd. 5e.  [FURTHER ASSISTED LIVING REQUIREMENTS.] (a) 
        Individuals receiving assisted living services shall not receive 
        both assisted living services and homemaking services.  
        Individualized means services are chosen and designed 
        specifically for each resident's needs, rather than provided or 
        offered to all residents regardless of their illnesses, 
        disabilities, or physical conditions.  Assisted living services 
        as defined in this section shall not be authorized in boarding 
        and lodging establishments licensed according to sections 
        157.011 and 157.15 to 157.22. 
           (h) (b) For establishments registered under chapter 144D, 
        assisted living services under this section means either the 
        services described in paragraph (g) subdivision 5d and delivered 
        by a class E home care provider licensed by the department of 
        health or the services described under section 144A.4605 and 
        delivered by an assisted living home care provider or a class A 
        home care provider licensed by the commissioner of health. 
           (i) Subd. 5f.  [PAYMENT RATES FOR ASSISTED LIVING SERVICES 
        AND RESIDENTIAL CARE.] (a) Payment for assisted living services 
        and residential care services shall be a monthly rate negotiated 
        and authorized by the county agency based on an individualized 
        service plan for each resident and may not cover direct rent or 
        food costs.  
           (1) (b) The individualized monthly negotiated payment for 
        assisted living services as described in paragraph 
        (g) subdivision 5d or (h) 5e, paragraph (b), and residential 
        care services as described in paragraph (f) subdivision 5c, 
        shall not exceed the nonfederal share in effect on July 1 of the 
        state fiscal year for which the rate limit is being calculated 
        of the greater of either the statewide or any of the geographic 
        groups' weighted average monthly nursing facility payment rate 
        of the case mix resident class to which the alternative care 
        eligible client would be assigned under Minnesota Rules, parts 
        9549.0050 to 9549.0059, less the maintenance needs allowance as 
        described in section 256B.0915, subdivision 1d, paragraph (a), 
        until the first day of the state fiscal year in which a resident 
        assessment system, under section 256B.437, of nursing home rate 
        determination is implemented.  Effective on the first day of the 
        state fiscal year in which a resident assessment system, under 
        section 256B.437, of nursing home rate determination is 
        implemented and the first day of each subsequent state fiscal 
        year, the individualized monthly negotiated payment for the 
        services described in this clause shall not exceed the limit 
        described in this clause which was in effect on the last day of 
        the previous state fiscal year and which has been adjusted by 
        the greater of any legislatively adopted home and 
        community-based services cost-of-living percentage increase or 
        any legislatively adopted statewide percent rate increase for 
        nursing facilities groups according to subdivision 4, paragraph 
        (a), clause (6). 
           (2) (c) The individualized monthly negotiated payment for 
        assisted living services described under section 144A.4605 and 
        delivered by a provider licensed by the department of health as 
        a class A home care provider or an assisted living home care 
        provider and provided in a building that is registered as a 
        housing with services establishment under chapter 144D and that 
        provides 24-hour supervision in combination with the payment for 
        other alternative care services, including case management, must 
        not exceed the limit specified in subdivision 4, paragraph (a), 
        clause (6). 
           (j) Subd. 5g.  [PROVISIONS GOVERNING DIRECT CASH PAYMENTS.] 
        A county agency may make payment from their alternative care 
        program allocation for "other services" which include use of 
        "discretionary funds" for services that are not otherwise 
        defined in this section and direct cash payments to the client 
        for the purpose of purchasing the services.  The following 
        provisions apply to payments under this paragraph subdivision: 
           (1) a cash payment to a client under this provision cannot 
        exceed the monthly payment limit for that client as specified in 
        subdivision 4, paragraph (a), clause (6); and 
           (2) a county may not approve any cash payment for a client 
        who meets either of the following: 
           (i) has been assessed as having a dependency in 
        orientation, unless the client has an authorized 
        representative.  An "authorized representative" means an 
        individual who is at least 18 years of age and is designated by 
        the person or the person's legal representative to act on the 
        person's behalf.  This individual may be a family member, 
        guardian, representative payee, or other individual designated 
        by the person or the person's legal representative, if any, to 
        assist in purchasing and arranging for supports; or 
           (ii) is concurrently receiving adult foster care, 
        residential care, or assisted living services;. 
           (3)  Subd. 5h.  [CASH PAYMENTS TO PERSONS.] (a) Cash 
        payments to a person or a person's family will be provided 
        through a monthly payment and be in the form of cash, voucher, 
        or direct county payment to a vendor.  Fees or premiums assessed 
        to the person for eligibility for health and human services are 
        not reimbursable through this service option.  Services and 
        goods purchased through cash payments must be identified in the 
        person's individualized care plan and must meet all of the 
        following criteria: 
           (i) (1) they must be over and above the normal cost of 
        caring for the person if the person did not have functional 
        limitations; 
           (ii) (2) they must be directly attributable to the person's 
        functional limitations; 
           (iii) (3) they must have the potential to be effective at 
        meeting the goals of the program; and 
           (iv) (4) they must be consistent with the needs identified 
        in the individualized service plan.  The service plan shall 
        specify the needs of the person and family, the form and amount 
        of payment, the items and services to be reimbursed, and the 
        arrangements for management of the individual grant; and. 
           (v) (b) The person, the person's family, or the legal 
        representative shall be provided sufficient information to 
        ensure an informed choice of alternatives.  The local agency 
        shall document this information in the person's care plan, 
        including the type and level of expenditures to be reimbursed;. 
           (c) Persons receiving grants under this section shall have 
        the following responsibilities: 
           (1) spend the grant money in a manner consistent with their 
        individualized service plan with the local agency; 
           (2) notify the local agency of any necessary changes in the 
        grant expenditures; 
           (3) arrange and pay for supports; and 
           (4) inform the local agency of areas where they have 
        experienced difficulty securing or maintaining supports. 
           (d) The county shall report client outcomes, services, and 
        costs under this paragraph in a manner prescribed by the 
        commissioner. 
           (4) Subd. 5i.  [IMMUNITY.] The state of Minnesota, county, 
        lead agency under contract, or tribal government under contract 
        to administer the alternative care program shall not be liable 
        for damages, injuries, or liabilities sustained through the 
        purchase of direct supports or goods by the person, the person's 
        family, or the authorized representative with funds received 
        through the cash payments under this section.  Liabilities 
        include, but are not limited to, workers' compensation, the 
        Federal Insurance Contributions Act (FICA), or the Federal 
        Unemployment Tax Act (FUTA);. 
           (5) persons receiving grants under this section shall have 
        the following responsibilities: 
           (i) spend the grant money in a manner consistent with their 
        individualized service plan with the local agency; 
           (ii) notify the local agency of any necessary changes in 
        the grant expenditures; 
           (iii) arrange and pay for supports; and 
           (iv) inform the local agency of areas where they have 
        experienced difficulty securing or maintaining supports; and 
           (6) the county shall report client outcomes, services, and 
        costs under this paragraph in a manner prescribed by the 
        commissioner. 
           Sec. 21.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ALTERNATIVE CARE PROGRAM ADMINISTRATION.] (a) 
        The alternative care program is administered by the county 
        agency.  This agency is the lead agency responsible for the 
        local administration of the alternative care program as 
        described in this section.  However, it may contract with the 
        public health nursing service to be the lead agency.  The 
        commissioner may contract with federally recognized Indian 
        tribes with a reservation in Minnesota to serve as the lead 
        agency responsible for the local administration of the 
        alternative care program as described in the contract. 
           (b) Alternative care pilot projects operate according to 
        this section and the provisions of Laws 1993, First Special 
        Session chapter 1, article 5, section 133, under agreement with 
        the commissioner.  Each pilot project agreement period shall 
        begin no later than the first payment cycle of the state fiscal 
        year and continue through the last payment cycle of the state 
        fiscal year. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 22.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CASE MANAGEMENT.] Providers of case management 
        services for persons receiving services funded by the 
        alternative care program must meet the qualification 
        requirements and standards specified in section 256B.0915, 
        subdivision 1b.  The case manager must not approve alternative 
        care funding for a client in any setting in which the case 
        manager cannot reasonably ensure the client's health and 
        safety.  The case manager is responsible for the 
        cost-effectiveness of the alternative care individual care plan 
        and must not approve any care plan in which the cost of services 
        funded by alternative care and client contributions exceeds the 
        limit specified in section 256B.0915, subdivision 3, paragraph 
        (b).  The county may allow a case manager employed by the county 
        to delegate certain aspects of the case management activity to 
        another individual employed by the county provided there is 
        oversight of the individual by the case manager.  The case 
        manager may not delegate those aspects which require 
        professional judgment including assessments, reassessments, and 
        care plan development. 
           Sec. 23.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REQUIREMENTS FOR INDIVIDUAL CARE PLAN.] (a) The 
        case manager shall implement the plan of care for each 
        alternative care client and ensure that a client's service needs 
        and eligibility are reassessed at least every 12 months.  The 
        plan shall include any services prescribed by the individual's 
        attending physician as necessary to allow the individual to 
        remain in a community setting.  In developing the individual's 
        care plan, the case manager should include the use of volunteers 
        from families and neighbors, religious organizations, social 
        clubs, and civic and service organizations to support the formal 
        home care services.  The county shall be held harmless for 
        damages or injuries sustained through the use of volunteers 
        under this subdivision including workers' compensation 
        liability.  The lead agency shall provide documentation in each 
        individual's plan of care and, if requested, to the commissioner 
        that the most cost-effective alternatives available have been 
        offered to the individual and that the individual was free to 
        choose among available qualified providers, both public and 
        private, including qualified case management or service 
        coordination providers other than those employed by the lead 
        agency when the lead agency maintains responsibility for prior 
        authorizing services in accordance with statutory and 
        administrative requirements.  The case manager must give the 
        individual a ten-day written notice of any denial, termination, 
        or reduction of alternative care services. 
           (b) If the county administering alternative care services 
        is different than the county of financial responsibility, the 
        care plan may be implemented without the approval of the county 
        of financial responsibility. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 24.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 10, is amended to read: 
           Subd. 10.  [ALLOCATION FORMULA.] (a) The alternative care 
        appropriation for fiscal years 1992 and beyond shall cover only 
        alternative care eligible clients.  By July 1 of each year, the 
        commissioner shall allocate to county agencies the state funds 
        available for alternative care for persons eligible under 
        subdivision 2. 
           (b) The adjusted base for each county is the county's 
        current fiscal year base allocation plus any targeted funds 
        approved during the current fiscal year.  Calculations for 
        paragraphs (c) and (d) are to be made as follows:  for each 
        county, the determination of alternative care program 
        expenditures shall be based on payments for services rendered 
        from April 1 through March 31 in the base year, to the extent 
        that claims have been submitted and paid by June 1 of that year. 
           (c) If the alternative care program expenditures as defined 
        in paragraph (b) are 95 percent or more of the county's adjusted 
        base allocation, the allocation for the next fiscal year is 100 
        percent of the adjusted base, plus inflation to the extent that 
        inflation is included in the state budget. 
           (d) If the alternative care program expenditures as defined 
        in paragraph (b) are less than 95 percent of the county's 
        adjusted base allocation, the allocation for the next fiscal 
        year is the adjusted base allocation less the amount of unspent 
        funds below the 95 percent level. 
           (e) If the annual legislative appropriation for the 
        alternative care program is inadequate to fund the combined 
        county allocations for a biennium, the commissioner shall 
        distribute to each county the entire annual appropriation as 
        that county's percentage of the computed base as calculated in 
        paragraphs (c) and (d). 
           (f) On agreement between the commissioner and the lead 
        agency, the commissioner may have discretion to reallocate 
        alternative care base allocations distributed to lead agencies 
        in which the base amount exceeds program expenditures. 
           Sec. 25.  Minnesota Statutes 2002, section 256B.0913, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CLIENT PREMIUMS FEES.] (a) A premium fee is 
        required for all alternative care eligible clients to help pay 
        for the cost of participating in the program.  The amount of the 
        premium fee for the alternative care client shall be determined 
        as follows: 
           (1) when the alternative care client's income less 
        recurring and predictable medical expenses is greater than the 
        recipient's maintenance needs allowance as defined in section 
        256B.0915, subdivision 1d, paragraph (a), but less than 150 100 
        percent of the federal poverty guideline effective on July 1 of 
        the state fiscal year in which the premium fee is being 
        computed, and total assets are less than $10,000, the fee is 
        zero; 
           (2) when the alternative care client's income less 
        recurring and predictable medical expenses is equal to or 
        greater than 100 percent but less than 150 percent of the 
        federal poverty guideline effective on July 1 of the state 
        fiscal year in which the premium fee is being computed, and 
        total assets are less than $10,000, the fee is 25 five percent 
        of the cost of alternative care services or the difference 
        between 150 percent of the federal poverty guideline effective 
        on July 1 of the state fiscal year in which the premium is being 
        computed and the client's income less recurring and predictable 
        medical expenses, whichever is less; and 
           (3) when the alternative care client's total assets are 
        greater income less recurring and predictable medical expenses 
        is equal to or greater than 150 percent but less than 200 
        percent of the federal poverty guidelines effective on July 1 of 
        the state fiscal year in which the fee is being computed and 
        assets are less than $10,000, the fee is 25 15 percent of the 
        cost of alternative care services; 
           (4) when the alternative care client's income less 
        recurring and predictable medical expenses is equal to or 
        greater than 200 percent of the federal poverty guidelines 
        effective on July 1 of the state fiscal year in which the fee is 
        being computed and assets are less than $10,000, the fee is 30 
        percent of the cost of alternative care services; and 
           (5) when the alternative care client's assets are equal to 
        or greater than $10,000, the fee is 30 percent of the cost of 
        alternative care services.  
           For married persons, total assets are defined as the total 
        marital assets less the estimated community spouse asset 
        allowance, under section 256B.059, if applicable.  For married 
        persons, total income is defined as the client's income less the 
        monthly spousal allotment, under section 256B.058. 
           All alternative care services except case management shall 
        be included in the estimated costs for the purpose of 
        determining 25 percent of the costs fee. 
           Premiums Fees are due and payable each month alternative 
        care services are received unless the actual cost of the 
        services is less than the premium fee, in which case the fee is 
        the lesser amount. 
           (b) The fee shall be waived by the commissioner when: 
           (1) a person who is residing in a nursing facility is 
        receiving case management only; 
           (2) a person is applying for medical assistance; 
           (3) a married couple is requesting an asset assessment 
        under the spousal impoverishment provisions; 
           (4) (3) a person is found eligible for alternative care, 
        but is not yet receiving alternative care services; or 
           (5) a person's fee under paragraph (a) is less than $25 
           (4) a person has chosen to participate in a 
        consumer-directed service plan for which the cost is no greater 
        than the total cost of the person's alternative care service 
        plan less the monthly fee amount that would otherwise be 
        assessed. 
           (c) The county agency must record in the state's receivable 
        system the client's assessed premium fee amount or the reason 
        the premium fee has been waived.  The commissioner will bill and 
        collect the premium fee from the client.  Money collected must 
        be deposited in the general fund and is appropriated to the 
        commissioner for the alternative care program.  The client must 
        supply the county with the client's social security number at 
        the time of application.  The county shall supply the 
        commissioner with the client's social security number and other 
        information the commissioner requires to collect the premium fee 
        from the client.  The commissioner shall collect unpaid premiums 
        fees using the Revenue Recapture Act in chapter 270A and other 
        methods available to the commissioner.  The commissioner may 
        require counties to inform clients of the collection procedures 
        that may be used by the state if a premium fee is not paid.  
        This paragraph does not apply to alternative care pilot projects 
        authorized in Laws 1993, First Special Session chapter 1, 
        article 5, section 133, if a county operating under the pilot 
        project reports the following dollar amounts to the commissioner 
        quarterly: 
           (1) total premiums fees billed to clients; 
           (2) total collections of premiums fees billed; and 
           (3) balance of premiums fees owed by clients. 
        If a county does not adhere to these reporting requirements, the 
        commissioner may terminate the billing, collecting, and 
        remitting portions of the pilot project and require the county 
        involved to operate under the procedures set forth in this 
        paragraph. 
           Sec. 26.  Minnesota Statutes 2002, section 256B.0915, 
        subdivision 3, is amended to read: 
           Subd. 3.  [LIMITS OF CASES, RATES, PAYMENTS, AND 
        FORECASTING.] (a) The number of medical assistance waiver 
        recipients that a county may serve must be allocated according 
        to the number of medical assistance waiver cases open on July 1 
        of each fiscal year.  Additional recipients may be served with 
        the approval of the commissioner. 
           (b) Subd. 3a.  [ELDERLY WAIVER COST LIMITS.] (a) The 
        monthly limit for the cost of waivered services to an individual 
        elderly waiver client shall be the weighted average monthly 
        nursing facility rate of the case mix resident class to which 
        the elderly waiver client would be assigned under Minnesota 
        Rules, parts 9549.0050 to 9549.0059, less the recipient's 
        maintenance needs allowance as described in subdivision 1d, 
        paragraph (a), until the first day of the state fiscal year in 
        which the resident assessment system as described in section 
        256B.437 for nursing home rate determination is implemented.  
        Effective on the first day of the state fiscal year in which the 
        resident assessment system as described in section 256B.437 for 
        nursing home rate determination is implemented and the first day 
        of each subsequent state fiscal year, the monthly limit for the 
        cost of waivered services to an individual elderly waiver client 
        shall be the rate of the case mix resident class to which the 
        waiver client would be assigned under Minnesota Rules, parts 
        9549.0050 to 9549.0059, in effect on the last day of the 
        previous state fiscal year, adjusted by the greater of any 
        legislatively adopted home and community-based services 
        cost-of-living percentage increase or any legislatively adopted 
        statewide percent rate increase for nursing facilities. 
           (c) (b) If extended medical supplies and equipment or 
        environmental modifications are or will be purchased for an 
        elderly waiver client, the costs may be prorated for up to 12 
        consecutive months beginning with the month of purchase.  If the 
        monthly cost of a recipient's waivered services exceeds the 
        monthly limit established in paragraph (b) (a), the annual cost 
        of all waivered services shall be determined.  In this event, 
        the annual cost of all waivered services shall not exceed 12 
        times the monthly limit of waivered services as described in 
        paragraph (b) (a).  
           (d) Subd. 3b.  [COST LIMITS FOR ELDERLY WAIVER APPLICANTS 
        WHO RESIDE IN A NURSING FACILITY.] (a) For a person who is a 
        nursing facility resident at the time of requesting a 
        determination of eligibility for elderly waivered services, a 
        monthly conversion limit for the cost of elderly waivered 
        services may be requested.  The monthly conversion limit for the 
        cost of elderly waiver services shall be the resident class 
        assigned under Minnesota Rules, parts 9549.0050 to 9549.0059, 
        for that resident in the nursing facility where the resident 
        currently resides until July 1 of the state fiscal year in which 
        the resident assessment system as described in section 256B.437 
        for nursing home rate determination is implemented.  Effective 
        on July 1 of the state fiscal year in which the resident 
        assessment system as described in section 256B.437 for nursing 
        home rate determination is implemented, the monthly conversion 
        limit for the cost of elderly waiver services shall be the per 
        diem nursing facility rate as determined by the resident 
        assessment system as described in section 256B.437 for that 
        resident in the nursing facility where the resident currently 
        resides multiplied by 365 and divided by 12, less the 
        recipient's maintenance needs allowance as described in 
        subdivision 1d.  The initially approved conversion rate may be 
        adjusted by the greater of any subsequent legislatively adopted 
        home and community-based services cost-of-living percentage 
        increase or any subsequent legislatively adopted statewide 
        percentage rate increase for nursing facilities.  The limit 
        under this clause subdivision only applies to persons discharged 
        from a nursing facility after a minimum 30-day stay and found 
        eligible for waivered services on or after July 1, 1997.  
           (b) The following costs must be included in determining the 
        total monthly costs for the waiver client: 
           (1) cost of all waivered services, including extended 
        medical supplies and equipment and environmental modifications; 
        and 
           (2) cost of skilled nursing, home health aide, and personal 
        care services reimbursable by medical assistance.  
           (e) Subd. 3c.  [SERVICE APPROVAL AND CONTRACTING 
        PROVISIONS.] (a) Medical assistance funding for skilled nursing 
        services, private duty nursing, home health aide, and personal 
        care services for waiver recipients must be approved by the case 
        manager and included in the individual care plan. 
           (f) (b) A county is not required to contract with a 
        provider of supplies and equipment if the monthly cost of the 
        supplies and equipment is less than $250.  
           (g) Subd. 3d.  [ADULT FOSTER CARE RATE.] The adult foster 
        care rate shall be considered a difficulty of care payment and 
        shall not include room and board.  The adult foster care service 
        rate shall be negotiated between the county agency and the 
        foster care provider.  The elderly waiver payment for the foster 
        care service in combination with the payment for all other 
        elderly waiver services, including case management, must not 
        exceed the limit specified in subdivision 3a, paragraph (b) (a). 
           (h) Subd. 3e.  [ASSISTED LIVING SERVICE RATE.] (a) Payment 
        for assisted living service shall be a monthly rate negotiated 
        and authorized by the county agency based on an individualized 
        service plan for each resident and may not cover direct rent or 
        food costs. 
           (1) (b) The individualized monthly negotiated payment for 
        assisted living services as described in section 256B.0913, 
        subdivision 5, paragraph (g) or (h) subdivisions 5d to 5f, and 
        residential care services as described in section 256B.0913, 
        subdivision 5, paragraph (f) 5c, shall not exceed the nonfederal 
        share, in effect on July 1 of the state fiscal year for which 
        the rate limit is being calculated, of the greater of either the 
        statewide or any of the geographic groups' weighted average 
        monthly nursing facility rate of the case mix resident class to 
        which the elderly waiver eligible client would be assigned under 
        Minnesota Rules, parts 9549.0050 to 9549.0059, less the 
        maintenance needs allowance as described in subdivision 1d, 
        paragraph (a), until the July 1 of the state fiscal year in 
        which the resident assessment system as described in section 
        256B.437 for nursing home rate determination is implemented.  
        Effective on July 1 of the state fiscal year in which the 
        resident assessment system as described in section 256B.437 for 
        nursing home rate determination is implemented and July 1 of 
        each subsequent state fiscal year, the individualized monthly 
        negotiated payment for the services described in this clause 
        shall not exceed the limit described in this clause which was in 
        effect on June 30 of the previous state fiscal year and which 
        has been adjusted by the greater of any legislatively adopted 
        home and community-based services cost-of-living percentage 
        increase or any legislatively adopted statewide percent rate 
        increase for nursing facilities. 
           (2) (c) The individualized monthly negotiated payment for 
        assisted living services described in section 144A.4605 and 
        delivered by a provider licensed by the department of health as 
        a class A home care provider or an assisted living home care 
        provider and provided in a building that is registered as a 
        housing with services establishment under chapter 144D and that 
        provides 24-hour supervision in combination with the payment for 
        other elderly waiver services, including case management, must 
        not exceed the limit specified in paragraph (b) subdivision 3a. 
           (i) Subd. 3f.  [INDIVIDUAL SERVICE RATES; EXPENDITURE 
        FORECASTS.] (a) The county shall negotiate individual service 
        rates with vendors and may authorize payment for actual costs up 
        to the county's current approved rate.  Persons or agencies must 
        be employed by or under a contract with the county agency or the 
        public health nursing agency of the local board of health in 
        order to receive funding under the elderly waiver program, 
        except as a provider of supplies and equipment when the monthly 
        cost of the supplies and equipment is less than $250.  
           (j) (b) Reimbursement for the medical assistance recipients 
        under the approved waiver shall be made from the medical 
        assistance account through the invoice processing procedures of 
        the department's Medicaid Management Information System (MMIS), 
        only with the approval of the client's case manager.  The budget 
        for the state share of the Medicaid expenditures shall be 
        forecasted with the medical assistance budget, and shall be 
        consistent with the approved waiver.  
           (k) Subd. 3g.  [SERVICE RATE LIMITS; STATE ASSUMPTION OF 
        COSTS.] (a) To improve access to community services and 
        eliminate payment disparities between the alternative care 
        program and the elderly waiver, the commissioner shall establish 
        statewide maximum service rate limits and eliminate 
        county-specific service rate limits. 
           (1) (b) Effective July 1, 2001, for service rate limits, 
        except those described or defined in paragraphs (g) and 
        (h) subdivisions 3d and 3e, the rate limit for each service 
        shall be the greater of the alternative care statewide maximum 
        rate or the elderly waiver statewide maximum rate. 
           (2) (c) Counties may negotiate individual service rates 
        with vendors for actual costs up to the statewide maximum 
        service rate limit. 
           Sec. 27.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "medical assistance" includes the medical assistance program 
        under this chapter and the general assistance medical care 
        program under chapter 256D, but does not include the alternative 
        care program for nonmedical assistance recipients under section 
        256B.0913, subdivision 4 and alternative care for nonmedical 
        assistance recipients under section 256B.0913. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for decedents dying on or after that date. 
           Sec. 28.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ESTATES SUBJECT TO CLAIMS.] If a person 
        receives any medical assistance hereunder, on the person's 
        death, if single, or on the death of the survivor of a married 
        couple, either or both of whom received medical assistance, or 
        as otherwise provided for in this section, the total amount paid 
        for medical assistance rendered for the person and spouse shall 
        be filed as a claim against the estate of the person or the 
        estate of the surviving spouse in the court having jurisdiction 
        to probate the estate or to issue a decree of descent according 
        to sections 525.31 to 525.313.  
           A claim shall be filed if medical assistance was rendered 
        for either or both persons under one of the following 
        circumstances: 
           (a) the person was over 55 years of age, and received 
        services under this chapter, excluding alternative care; 
           (b) the person resided in a medical institution for six 
        months or longer, received services under this chapter excluding 
        alternative care, and, at the time of institutionalization or 
        application for medical assistance, whichever is later, the 
        person could not have reasonably been expected to be discharged 
        and returned home, as certified in writing by the person's 
        treating physician.  For purposes of this section only, a 
        "medical institution" means a skilled nursing facility, 
        intermediate care facility, intermediate care facility for 
        persons with mental retardation, nursing facility, or inpatient 
        hospital; or 
           (c) the person received general assistance medical care 
        services under chapter 256D.  
           The claim shall be considered an expense of the last 
        illness of the decedent for the purpose of section 524.3-805.  
        Any statute of limitations that purports to limit any county 
        agency or the state agency, or both, to recover for medical 
        assistance granted hereunder shall not apply to any claim made 
        hereunder for reimbursement for any medical assistance granted 
        hereunder.  Notice of the claim shall be given to all heirs and 
        devisees of the decedent whose identity can be ascertained with 
        reasonable diligence.  The notice must include procedures and 
        instructions for making an application for a hardship waiver 
        under subdivision 5; time frames for submitting an application 
        and determination; and information regarding appeal rights and 
        procedures.  Counties are entitled to one-half of the nonfederal 
        share of medical assistance collections from estates that are 
        directly attributable to county effort.  Counties are entitled 
        to ten percent of the collections for alternative care directly 
        attributable to county effort. 
           [EFFECTIVE DATE.] The amendments in this section relating 
        to the alternative care program are effective July 1, 2003, and 
        apply to the estates of decedents who die on or after that 
        date.  The remaining amendments in this section are effective 
        August 1, 2003, and apply to the estates of decedents who die on 
        and after that date. 
           Sec. 29.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMITATIONS ON CLAIMS.] The claim shall include 
        only the total amount of medical assistance rendered after age 
        55 or during a period of institutionalization described in 
        subdivision 1a, clause (b), and the total amount of general 
        assistance medical care rendered, and shall not include 
        interest.  Claims that have been allowed but not paid shall bear 
        interest according to section 524.3-806, paragraph (d).  A claim 
        against the estate of a surviving spouse who did not receive 
        medical assistance, for medical assistance rendered for the 
        predeceased spouse, is limited to the value of the assets of the 
        estate that were marital property or jointly owned property at 
        any time during the marriage.  Claims for alternative care shall 
        be net of all premiums paid under section 256B.0913, subdivision 
        12, on or after July 1, 2003, and shall be limited to services 
        provided on or after July 1, 2003. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for decedents dying on or after that date. 
           Sec. 30.  Minnesota Statutes 2002, section 256B.431, 
        subdivision 2r, is amended to read: 
           Subd. 2r.  [PAYMENT RESTRICTIONS ON LEAVE DAYS.] Effective 
        July 1, 1993, the commissioner shall limit payment for leave 
        days in a nursing facility to 79 percent of that nursing 
        facility's total payment rate for the involved resident.  For 
        services rendered on or after July 1, 2003, for facilities 
        reimbursed under this section or section 256B.434, the 
        commissioner shall limit payment for leave days in a nursing 
        facility to 60 percent of that nursing facility's total payment 
        rate for the involved resident. 
           Sec. 31.  Minnesota Statutes 2002, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 2t.  [PAYMENT LIMITATION.] For services rendered on 
        or after July 1, 2003, for facilities reimbursed under this 
        section or section 256B.434, the Medicaid program shall only pay 
        a co-payment during a Medicare-covered skilled nursing facility 
        stay if the Medicare rate less the resident's co-payment 
        responsibility is less than the Medicaid RUG-III case-mix 
        payment rate.  The amount that shall be paid by the Medicaid 
        program is equal to the amount by which the Medicaid RUG-III 
        case-mix payment rate exceeds the Medicare rate less the 
        co-payment responsibility.  Health plans paying for nursing home 
        services under section 256B.69, subdivision 6a, may limit 
        payments as allowed under this subdivision. 
           Sec. 32.  Minnesota Statutes 2002, section 256B.431, 
        subdivision 32, is amended to read: 
           Subd. 32.  [PAYMENT DURING FIRST 90 DAYS.] (a) For rate 
        years beginning on or after July 1, 2001, the total payment rate 
        for a facility reimbursed under this section, section 256B.434, 
        or any other section for the first 90 paid days after admission 
        shall be: 
           (1) for the first 30 paid days, the rate shall be 120 
        percent of the facility's medical assistance rate for each case 
        mix class; and 
           (2) for the next 60 paid days after the first 30 paid days, 
        the rate shall be 110 percent of the facility's medical 
        assistance rate for each case mix class.; 
           (b) (3) beginning with the 91st paid day after admission, 
        the payment rate shall be the rate otherwise determined under 
        this section, section 256B.434, or any other section.; and 
           (c) (4) payments under this subdivision applies paragraph 
        apply to admissions occurring on or after July 1, 2001, and 
        before July 1, 2003, and to resident days occurring before July 
        30, 2003. 
           (b) For rate years beginning on or after July 1, 2003, the 
        total payment rate for a facility reimbursed under this section, 
        section 256B.434, or any other section shall be: 
           (1) for the first 30 calendar days after admission, the 
        rate shall be 120 percent of the facility's medical assistance 
        rate for each RUG class; 
           (2) beginning with the 31st calendar day after admission, 
        the payment rate shall be the rate otherwise determined under 
        this section, section 256B.434, or any other section; and 
           (3) payments under this paragraph apply to admissions 
        occurring on or after July 1, 2003. 
           (c) Effective January 1, 2004, the enhanced rates under 
        this subdivision shall not be allowed if a resident has resided 
        during the previous 30 calendar days in: 
           (1) the same nursing facility; 
           (2) a nursing facility owned or operated by a related 
        party; or 
           (3) a nursing facility or part of a facility that closed. 
           Sec. 33.  Minnesota Statutes 2002, section 256B.431, 
        subdivision 36, is amended to read: 
           Subd. 36.  [EMPLOYEE SCHOLARSHIP COSTS AND TRAINING IN 
        ENGLISH AS A SECOND LANGUAGE.] (a) For the period between July 
        1, 2001, and June 30, 2003, the commissioner shall provide to 
        each nursing facility reimbursed under this section, section 
        256B.434, or any other section, a scholarship per diem of 25 
        cents to the total operating payment rate to be used: 
           (1) for employee scholarships that satisfy the following 
        requirements: 
           (i) scholarships are available to all employees who work an 
        average of at least 20 hours per week at the facility except the 
        administrator, department supervisors, and registered nurses; 
        and 
           (ii) the course of study is expected to lead to career 
        advancement with the facility or in long-term care, including 
        medical care interpreter services and social work; and 
           (2) to provide job-related training in English as a second 
        language. 
           (b) A facility receiving a rate adjustment under this 
        subdivision may submit to the commissioner on a schedule 
        determined by the commissioner and on a form supplied by the 
        commissioner a calculation of the scholarship per diem, 
        including:  the amount received from this rate adjustment; the 
        amount used for training in English as a second language; the 
        number of persons receiving the training; the name of the person 
        or entity providing the training; and for each scholarship 
        recipient, the name of the recipient, the amount awarded, the 
        educational institution attended, the nature of the educational 
        program, the program completion date, and a determination of the 
        per diem amount of these costs based on actual resident days. 
           (c) On July 1, 2003, the commissioner shall remove the 25 
        cent scholarship per diem from the total operating payment rate 
        of each facility. 
           (d) For rate years beginning after June 30, 2003, the 
        commissioner shall provide to each facility the scholarship per 
        diem determined in paragraph (b).  In calculating the per diem 
        under paragraph (b), the commissioner shall allow only costs 
        related to tuition and direct educational expenses. 
           Sec. 34.  Minnesota Statutes 2002, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 38.  [NURSING HOME RATE INCREASES EFFECTIVE IN FISCAL 
        YEAR 2003.] Effective June 1, 2003, the commissioner shall 
        provide to each nursing home reimbursed under this section or 
        section 256B.434, an increase in each case mix payment rate 
        equal to the increase in the per-bed surcharge paid under 
        section 256.9657, subdivision 1, paragraph (d), divided by 365 
        and further divided by .90.  The increase shall not be subject 
        to any annual percentage increase.  The 30-day advance notice 
        requirement in section 256B.47, subdivision 2, shall not apply 
        to rate increases resulting from this section.  The commissioner 
        shall not adjust the rate increase under this subdivision unless 
        the adjustment is greater than 1.5 percent of the monthly 
        surcharge payment amount under section 256.9657, subdivision 4. 
           [EFFECTIVE DATE.] This section is effective May 31, 2003. 
           Sec. 35.  Minnesota Statutes 2002, section 256B.431, is 
        amended by adding a subdivision to read: 
           Subd. 39.  [FACILITY RATES BEGINNING ON OR AFTER JULY 1, 
        2003.] For rate years beginning on or after July 1, 2003, 
        nursing facilities reimbursed under this section shall have 
        their July 1 operating payment rate be equal to their operating 
        payment rate in effect on the prior June 30th. 
           Sec. 36.  Minnesota Statutes 2002, section 256B.434, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ALTERNATE RATES FOR NURSING FACILITIES.] (a) For 
        nursing facilities which have their payment rates determined 
        under this section rather than section 256B.431, the 
        commissioner shall establish a rate under this subdivision.  The 
        nursing facility must enter into a written contract with the 
        commissioner. 
           (b) A nursing facility's case mix payment rate for the 
        first rate year of a facility's contract under this section is 
        the payment rate the facility would have received under section 
        256B.431. 
           (c) A nursing facility's case mix payment rates for the 
        second and subsequent years of a facility's contract under this 
        section are the previous rate year's contract payment rates plus 
        an inflation adjustment and, for facilities reimbursed under 
        this section or section 256B.431, an adjustment to include the 
        cost of any increase in health department licensing fees for the 
        facility taking effect on or after July 1, 2001.  The index for 
        the inflation adjustment must be based on the change in the 
        Consumer Price Index-All Items (United States City average) 
        (CPI-U) forecasted by Data Resources, Inc. the commissioner of 
        finance's national economic consultant, as forecasted in the 
        fourth quarter of the calendar year preceding the rate year.  
        The inflation adjustment must be based on the 12-month period 
        from the midpoint of the previous rate year to the midpoint of 
        the rate year for which the rate is being determined.  For the 
        rate years beginning on July 1, 1999, July 1, 2000, July 1, 
        2001, and July 1, 2002, July 1, 2003, and July 1, 2004, this 
        paragraph shall apply only to the property-related payment rate, 
        except that adjustments to include the cost of any increase in 
        health department licensing fees taking effect on or after July 
        1, 2001, shall be provided.  In determining the amount of the 
        property-related payment rate adjustment under this paragraph, 
        the commissioner shall determine the proportion of the 
        facility's rates that are property-related based on the 
        facility's most recent cost report. 
           (d) The commissioner shall develop additional 
        incentive-based payments of up to five percent above the 
        standard contract rate for achieving outcomes specified in each 
        contract.  The specified facility-specific outcomes must be 
        measurable and approved by the commissioner.  The commissioner 
        may establish, for each contract, various levels of achievement 
        within an outcome.  After the outcomes have been specified the 
        commissioner shall assign various levels of payment associated 
        with achieving the outcome.  Any incentive-based payment cancels 
        if there is a termination of the contract.  In establishing the 
        specified outcomes and related criteria the commissioner shall 
        consider the following state policy objectives: 
           (1) improved cost effectiveness and quality of life as 
        measured by improved clinical outcomes; 
           (2) successful diversion or discharge to community 
        alternatives; 
           (3) decreased acute care costs; 
           (4) improved consumer satisfaction; 
           (5) the achievement of quality; or 
           (6) any additional outcomes proposed by a nursing facility 
        that the commissioner finds desirable. 
           Sec. 37.  Minnesota Statutes 2002, section 256B.434, 
        subdivision 10, is amended to read: 
           Subd. 10.  [EXEMPTIONS.] (a) To the extent permitted by 
        federal law, (1) a facility that has entered into a contract 
        under this section is not required to file a cost report, as 
        defined in Minnesota Rules, part 9549.0020, subpart 13, for any 
        year after the base year that is the basis for the calculation 
        of the contract payment rate for the first rate year of the 
        alternative payment demonstration project contract; and (2) a 
        facility under contract is not subject to audits of historical 
        costs or revenues, or paybacks or retroactive adjustments based 
        on these costs or revenues, except audits, paybacks, or 
        adjustments relating to the cost report that is the basis for 
        calculation of the first rate year under the contract. 
           (b) A facility that is under contract with the commissioner 
        under this section is not subject to the moratorium on licensure 
        or certification of new nursing home beds in section 144A.071, 
        unless the project results in a net increase in bed capacity or 
        involves relocation of beds from one site to another.  Contract 
        payment rates must not be adjusted to reflect any additional 
        costs that a nursing facility incurs as a result of a 
        construction project undertaken under this paragraph.  In 
        addition, as a condition of entering into a contract under this 
        section, a nursing facility must agree that any future medical 
        assistance payments for nursing facility services will not 
        reflect any additional costs attributable to the sale of a 
        nursing facility under this section and to construction 
        undertaken under this paragraph that otherwise would not be 
        authorized under the moratorium in section 144A.073.  Nothing in 
        this section prevents a nursing facility participating in the 
        alternative payment demonstration project under this section 
        from seeking approval of an exception to the moratorium through 
        the process established in section 144A.073, and if approved the 
        facility's rates shall be adjusted to reflect the cost of the 
        project.  Nothing in this section prevents a nursing facility 
        participating in the alternative payment demonstration project 
        from seeking legislative approval of an exception to the 
        moratorium under section 144A.071, and, if enacted, the 
        facility's rates shall be adjusted to reflect the cost of the 
        project. 
           (c) Notwithstanding section 256B.48, subdivision 6, 
        paragraphs (c), (d), and (e), and pursuant to any terms and 
        conditions contained in the facility's contract, a nursing 
        facility that is under contract with the commissioner under this 
        section is in compliance with section 256B.48, subdivision 6, 
        paragraph (b), if the facility is Medicare certified. 
           (d) Notwithstanding paragraph (a), if by April 1, 1996, the 
        health care financing administration has not approved a required 
        waiver, or the Centers for Medicare and Medicaid Services 
        otherwise requires cost reports to be filed prior to the 
        waiver's approval, the commissioner shall require a cost report 
        for the rate year. 
           (e) A facility that is under contract with the commissioner 
        under this section shall be allowed to change therapy 
        arrangements from an unrelated vendor to a related vendor during 
        the term of the contract.  The commissioner may develop 
        reasonable requirements designed to prevent an increase in 
        therapy utilization for residents enrolled in the medical 
        assistance program. 
           (f) Nursing facilities participating in the alternative 
        payment system demonstration project must either participate in 
        the alternative payment system quality improvement program 
        established by the commissioner or submit information on their 
        own quality improvement process to the commissioner for 
        approval.  Nursing facilities that have had their own quality 
        improvement process approved by the commissioner must report 
        results for at least one key area of quality improvement 
        annually to the commissioner.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 38.  Minnesota Statutes 2002, section 256B.5012, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [RATE INCREASE EFFECTIVE JUNE 1, 2003.] For rate 
        periods beginning on or after June 1, 2003, the commissioner 
        shall increase the total operating payment rate for each 
        facility reimbursed under this section by $3 per day.  The 
        increase shall not be subject to any annual percentage increase. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 39.  Minnesota Statutes 2002, section 256B.76, is 
        amended to read: 
           256B.76 [PHYSICIAN AND DENTAL REIMBURSEMENT.] 
           (a) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for physician 
        services as follows: 
           (1) payment for level one Centers for Medicare and Medicaid 
        Services' common procedural coding system codes titled "office 
        and other outpatient services," "preventive medicine new and 
        established patient," "delivery, antepartum, and postpartum 
        care," "critical care," cesarean delivery and pharmacologic 
        management provided to psychiatric patients, and level three 
        codes for enhanced services for prenatal high risk, shall be 
        paid at the lower of (i) submitted charges, or (ii) 25 percent 
        above the rate in effect on June 30, 1992.  If the rate on any 
        procedure code within these categories is different than the 
        rate that would have been paid under the methodology in section 
        256B.74, subdivision 2, then the larger rate shall be paid; 
           (2) payments for all other services shall be paid at the 
        lower of (i) submitted charges, or (ii) 15.4 percent above the 
        rate in effect on June 30, 1992; 
           (3) all physician rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases 
        except that payment rates for home health agency services shall 
        be the rates in effect on September 30, 1992; 
           (4) effective for services rendered on or after January 1, 
        2000, payment rates for physician and professional services 
        shall be increased by three percent over the rates in effect on 
        December 31, 1999, except for home health agency and family 
        planning agency services; and 
           (5) the increases in clause (4) shall be implemented 
        January 1, 2000, for managed care. 
           (b) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for dental services 
        as follows: 
           (1) dental services shall be paid at the lower of (i) 
        submitted charges, or (ii) 25 percent above the rate in effect 
        on June 30, 1992; 
           (2) dental rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases; 
           (3) effective for services rendered on or after January 1, 
        2000, payment rates for dental services shall be increased by 
        three percent over the rates in effect on December 31, 1999; 
           (4) the commissioner shall award grants to community 
        clinics or other nonprofit community organizations, political 
        subdivisions, professional associations, or other organizations 
        that demonstrate the ability to provide dental services 
        effectively to public program recipients.  Grants may be used to 
        fund the costs related to coordinating access for recipients, 
        developing and implementing patient care criteria, upgrading or 
        establishing new facilities, acquiring furnishings or equipment, 
        recruiting new providers, or other development costs that will 
        improve access to dental care in a region.  In awarding grants, 
        the commissioner shall give priority to applicants that plan to 
        serve areas of the state in which the number of dental providers 
        is not currently sufficient to meet the needs of recipients of 
        public programs or uninsured individuals.  The commissioner 
        shall consider the following in awarding the grants: 
           (i) potential to successfully increase access to an 
        underserved population; 
           (ii) the ability to raise matching funds; 
           (iii) the long-term viability of the project to improve 
        access beyond the period of initial funding; 
           (iv) the efficiency in the use of the funding; and 
           (v) the experience of the proposers in providing services 
        to the target population. 
           The commissioner shall monitor the grants and may terminate 
        a grant if the grantee does not increase dental access for 
        public program recipients.  The commissioner shall consider 
        grants for the following: 
           (i) implementation of new programs or continued expansion 
        of current access programs that have demonstrated success in 
        providing dental services in underserved areas; 
           (ii) a pilot program for utilizing hygienists outside of a 
        traditional dental office to provide dental hygiene services; 
        and 
           (iii) a program that organizes a network of volunteer 
        dentists, establishes a system to refer eligible individuals to 
        volunteer dentists, and through that network provides donated 
        dental care services to public program recipients or uninsured 
        individuals; 
           (5) beginning October 1, 1999, the payment for tooth 
        sealants and fluoride treatments shall be the lower of (i) 
        submitted charge, or (ii) 80 percent of median 1997 charges; 
           (6) the increases listed in clauses (3) and (5) shall be 
        implemented January 1, 2000, for managed care; and 
           (7) effective for services provided on or after January 1, 
        2002, payment for diagnostic examinations and dental x-rays 
        provided to children under age 21 shall be the lower of (i) the 
        submitted charge, or (ii) 85 percent of median 1999 charges.  
           (c) Effective for dental services rendered on or after 
        January 1, 2002, the commissioner may, within the limits of 
        available appropriation, increase reimbursements to dentists and 
        dental clinics deemed by the commissioner to be critical access 
        dental providers.  Reimbursement to a critical access dental 
        provider may be increased by not more than 50 percent above the 
        reimbursement rate that would otherwise be paid to the 
        provider.  Payments to health plan companies shall be adjusted 
        to reflect increased reimbursements to critical access dental 
        providers as approved by the commissioner.  In determining which 
        dentists and dental clinics shall be deemed critical access 
        dental providers, the commissioner shall review: 
           (1) the utilization rate in the service area in which the 
        dentist or dental clinic operates for dental services to 
        patients covered by medical assistance, general assistance 
        medical care, or MinnesotaCare as their primary source of 
        coverage; 
           (2) the level of services provided by the dentist or dental 
        clinic to patients covered by medical assistance, general 
        assistance medical care, or MinnesotaCare as their primary 
        source of coverage; and 
           (3) whether the level of services provided by the dentist 
        or dental clinic is critical to maintaining adequate levels of 
        patient access within the service area. 
        In the absence of a critical access dental provider in a service 
        area, the commissioner may designate a dentist or dental clinic 
        as a critical access dental provider if the dentist or dental 
        clinic is willing to provide care to patients covered by medical 
        assistance, general assistance medical care, or MinnesotaCare at 
        a level which significantly increases access to dental care in 
        the service area. 
           (d) Effective July 1, 2001, the medical assistance rates 
        for outpatient mental health services provided by an entity that 
        operates: 
           (1) a Medicare-certified comprehensive outpatient 
        rehabilitation facility; and 
           (2) a facility that was certified prior to January 1, 1993, 
        with at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year who are medical 
        assistance recipients, will be increased by 38 percent, when 
        those services are provided within the comprehensive outpatient 
        rehabilitation facility and provided to residents of nursing 
        facilities owned by the entity. 
           (e) An entity that operates both a Medicare certified 
        comprehensive outpatient rehabilitation facility and a facility 
        which was certified prior to January 1, 1993, that is licensed 
        under Minnesota Rules, parts 9570.2000 to 9570.3600, and for 
        whom at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year are medical assistance 
        recipients, shall be reimbursed by the commissioner for 
        rehabilitation services at rates that are 38 percent greater 
        than the maximum reimbursement rate allowed under paragraph (a), 
        clause (2), when those services are (1) provided within the 
        comprehensive outpatient rehabilitation facility and (2) 
        provided to residents of nursing facilities owned by the entity. 
           Sec. 40.  Minnesota Statutes 2002, section 256B.761, is 
        amended to read: 
           256B.761 [REIMBURSEMENT FOR MENTAL HEALTH SERVICES.] 
           (a) Effective for services rendered on or after July 1, 
        2001, payment for medication management provided to psychiatric 
        patients, outpatient mental health services, day treatment 
        services, home-based mental health services, and family 
        community support services shall be paid at the lower of (1) 
        submitted charges, or (2) 75.6 percent of the 50th percentile of 
        1999 charges. 
           (b) Effective July 1, 2001, the medical assistance rates 
        for outpatient mental health services provided by an entity that 
        operates:  (1) a Medicare-certified comprehensive outpatient 
        rehabilitation facility; and (2) a facility that was certified 
        prior to January 1, 1993, with at least 33 percent of the 
        clients receiving rehabilitation services in the most recent 
        calendar year who are medical assistance recipients, will be 
        increased by 38 percent, when those services are provided within 
        the comprehensive outpatient rehabilitation facility and 
        provided to residents of nursing facilities owned by the entity. 
           Sec. 41.  Minnesota Statutes 2002, section 256D.03, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [CLAIMS; ASSIGNMENT OF BENEFITS.] Claims must be 
        filed pursuant to section 256D.16.  General assistance medical 
        care applicants and recipients must apply or agree to apply 
        third party health and accident benefits to the costs of medical 
        care.  They must cooperate with the state in establishing 
        paternity and obtaining third party payments.  By signing an 
        application for accepting general assistance, a person assigns 
        to the department of human services all rights to medical 
        support or payments for medical expenses from another person or 
        entity on their own or their dependent's behalf and agrees to 
        cooperate with the state in establishing paternity and obtaining 
        third party payments.  The application shall contain a statement 
        explaining the assignment.  Any rights or amounts assigned shall 
        be applied against the cost of medical care paid for under this 
        chapter.  An assignment is effective on the date general 
        assistance medical care eligibility takes effect.  The 
        assignment shall not affect benefits paid or provided under 
        automobile accident coverage and private health care coverage 
        until the person or organization providing the benefits has 
        received notice of the assignment.  
           Sec. 42.  Minnesota Statutes 2002, section 256I.02, is 
        amended to read: 
           256I.02 [PURPOSE.] 
           The Group Residential Housing Act establishes a 
        comprehensive system of rates and payments for persons who 
        reside in a group residence the community and who meet the 
        eligibility criteria under section 256I.04, subdivision 1. 
           Sec. 43.  Minnesota Statutes 2002, section 256I.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MORATORIUM ON THE DEVELOPMENT OF GROUP 
        RESIDENTIAL HOUSING BEDS.] (a) County agencies shall not enter 
        into agreements for new group residential housing beds with 
        total rates in excess of the MSA equivalent rate except:  (1) 
        for group residential housing establishments meeting the 
        requirements of subdivision 2a, clause (2) with department 
        approval; (2) for group residential housing establishments 
        licensed under Minnesota Rules, parts 9525.0215 to 9525.0355, 
        provided the facility is needed to meet the census reduction 
        targets for persons with mental retardation or related 
        conditions at regional treatment centers; (3) (2) to ensure 
        compliance with the federal Omnibus Budget Reconciliation Act 
        alternative disposition plan requirements for inappropriately 
        placed persons with mental retardation or related conditions or 
        mental illness; (4) (3) up to 80 beds in a single, specialized 
        facility located in Hennepin county that will provide housing 
        for chronic inebriates who are repetitive users of 
        detoxification centers and are refused placement in emergency 
        shelters because of their state of intoxication, and planning 
        for the specialized facility must have been initiated before 
        July 1, 1991, in anticipation of receiving a grant from the 
        housing finance agency under section 462A.05, subdivision 20a, 
        paragraph (b); (5) (4) notwithstanding the provisions of 
        subdivision 2a, for up to 190 supportive housing units in Anoka, 
        Dakota, Hennepin, or Ramsey county for homeless adults with a 
        mental illness, a history of substance abuse, or human 
        immunodeficiency virus or acquired immunodeficiency syndrome.  
        For purposes of this section, "homeless adult" means a person 
        who is living on the street or in a shelter or discharged from a 
        regional treatment center, community hospital, or residential 
        treatment program and has no appropriate housing available and 
        lacks the resources and support necessary to access appropriate 
        housing.  At least 70 percent of the supportive housing units 
        must serve homeless adults with mental illness, substance abuse 
        problems, or human immunodeficiency virus or acquired 
        immunodeficiency syndrome who are about to be or, within the 
        previous six months, has been discharged from a regional 
        treatment center, or a state-contracted psychiatric bed in a 
        community hospital, or a residential mental health or chemical 
        dependency treatment program.  If a person meets the 
        requirements of subdivision 1, paragraph (a), and receives a 
        federal or state housing subsidy, the group residential housing 
        rate for that person is limited to the supplementary rate under 
        section 256I.05, subdivision 1a, and is determined by 
        subtracting the amount of the person's countable income that 
        exceeds the MSA equivalent rate from the group residential 
        housing supplementary rate.  A resident in a demonstration 
        project site who no longer participates in the demonstration 
        program shall retain eligibility for a group residential housing 
        payment in an amount determined under section 256I.06, 
        subdivision 8, using the MSA equivalent rate.  Service funding 
        under section 256I.05, subdivision 1a, will end June 30, 1997, 
        if federal matching funds are available and the services can be 
        provided through a managed care entity.  If federal matching 
        funds are not available, then service funding will continue 
        under section 256I.05, subdivision 1a; or (6) for group 
        residential housing beds in settings meeting the requirements of 
        subdivision 2a, clauses (1) and (3), which are used exclusively 
        for recipients receiving home and community-based waiver 
        services under sections 256B.0915, 256B.092, subdivision 5, 
        256B.093, and 256B.49, and who resided in a nursing facility for 
        the six months immediately prior to the month of entry into the 
        group residential housing setting.  The group residential 
        housing rate for these beds must be set so that the monthly 
        group residential housing payment for an individual occupying 
        the bed when combined with the nonfederal share of services 
        delivered under the waiver for that person does not exceed the 
        nonfederal share of the monthly medical assistance payment made 
        for the person to the nursing facility in which the person 
        resided prior to entry into the group residential housing 
        establishment.  The rate may not exceed the MSA equivalent rate 
        plus $426.37 for any case. 
           (b) A county agency may enter into a group residential 
        housing agreement for beds with rates in excess of the MSA 
        equivalent rate in addition to those currently covered under a 
        group residential housing agreement if the additional beds are 
        only a replacement of beds with rates in excess of the MSA 
        equivalent rate which have been made available due to closure of 
        a setting, a change of licensure or certification which removes 
        the beds from group residential housing payment, or as a result 
        of the downsizing of a group residential housing setting.  The 
        transfer of available beds from one county to another can only 
        occur by the agreement of both counties. 
           Sec. 44.  Minnesota Statutes 2002, section 256I.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MAXIMUM RATES.] (a) Monthly room and board 
        rates negotiated by a county agency for a recipient living in 
        group residential housing must not exceed the MSA equivalent 
        rate specified under section 256I.03, subdivision 5,. with the 
        exception that a county agency may negotiate a supplementary 
        room and board rate that exceeds the MSA equivalent rate for 
        recipients of waiver services under title XIX of the Social 
        Security Act.  This exception is subject to the following 
        conditions: 
           (1) the setting is licensed by the commissioner of human 
        services under Minnesota Rules, parts 9555.5050 to 9555.6265; 
           (2) the setting is not the primary residence of the license 
        holder and in which the license holder is not the primary 
        caregiver; and 
           (3) the average supplementary room and board rate in a 
        county for a calendar year may not exceed the average 
        supplementary room and board rate for that county in effect on 
        January 1, 2000.  For calendar years beginning on or after 
        January 1, 2002, within the limits of appropriations 
        specifically for this purpose, the commissioner shall increase 
        each county's supplemental room and board rate average on an 
        annual basis by a factor consisting of the percentage change in 
        the Consumer Price Index-All items, United States city average 
        (CPI-U) for that calendar year compared to the preceding 
        calendar year as forecasted by Data Resources, Inc., in the 
        third quarter of the preceding calendar year.  If a county has 
        not negotiated supplementary room and board rates for any 
        facilities located in the county as of January 1, 2000, or has 
        an average supplemental room and board rate under $100 per 
        person as of January 1, 2000, it may submit a supplementary room 
        and board rate request with budget information for a facility to 
        the commissioner for approval. 
        The county agency may at any time negotiate a higher or lower 
        room and board rate than the average supplementary room and 
        board rate. 
           (b) Notwithstanding paragraph (a), clause (3), county 
        agencies may negotiate a supplementary room and board rate that 
        exceeds the MSA equivalent rate by up to $426.37 for up to five 
        facilities, serving not more than 20 individuals in total, that 
        were established to replace an intermediate care facility for 
        persons with mental retardation and related conditions located 
        in the city of Roseau that became uninhabitable due to flood 
        damage in June 2002. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004, 
        or upon receipt of federal approval of waiver amendment, 
        whichever is later. 
           Sec. 45.  Minnesota Statutes 2002, section 256I.05, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [SUPPLEMENTARY SERVICE RATES.] (a) Subject to 
        the provisions of section 256I.04, subdivision 3, in addition to 
        the room and board rate specified in subdivision 1, the county 
        agency may negotiate a payment not to exceed $426.37 for other 
        services necessary to provide room and board provided by the 
        group residence if the residence is licensed by or registered by 
        the department of health, or licensed by the department of human 
        services to provide services in addition to room and board, and 
        if the provider of services is not also concurrently receiving 
        funding for services for a recipient under a home and 
        community-based waiver under title XIX of the Social Security 
        Act; or funding from the medical assistance program under 
        section 256B.0627, subdivision 4, for personal care services for 
        residents in the setting; or residing in a setting which 
        receives funding under Minnesota Rules, parts 9535.2000 to 
        9535.3000.  If funding is available for other necessary services 
        through a home and community-based waiver, or personal care 
        services under section 256B.0627, subdivision 4, then the GRH 
        rate is limited to the rate set in subdivision 1.  Unless 
        otherwise provided in law, in no case may the supplementary 
        service rate plus the supplementary room and board rate exceed 
        $426.37.  The registration and licensure requirement does not 
        apply to establishments which are exempt from state licensure 
        because they are located on Indian reservations and for which 
        the tribe has prescribed health and safety requirements.  
        Service payments under this section may be prohibited under 
        rules to prevent the supplanting of federal funds with state 
        funds.  The commissioner shall pursue the feasibility of 
        obtaining the approval of the Secretary of Health and Human 
        Services to provide home and community-based waiver services 
        under title XIX of the Social Security Act for residents who are 
        not eligible for an existing home and community-based waiver due 
        to a primary diagnosis of mental illness or chemical dependency 
        and shall apply for a waiver if it is determined to be 
        cost-effective.  
           (b) The commissioner is authorized to make cost-neutral 
        transfers from the GRH fund for beds under this section to other 
        funding programs administered by the department after 
        consultation with the county or counties in which the affected 
        beds are located.  The commissioner may also make cost-neutral 
        transfers from the GRH fund to county human service agencies for 
        beds permanently removed from the GRH census under a plan 
        submitted by the county agency and approved by the 
        commissioner.  The commissioner shall report the amount of any 
        transfers under this provision annually to the legislature. 
           (c) The provisions of paragraph (b) do not apply to a 
        facility that has its reimbursement rate established under 
        section 256B.431, subdivision 4, paragraph (c). 
           Sec. 46.  Minnesota Statutes 2002, section 256I.05, 
        subdivision 7c, is amended to read: 
           Subd. 7c.  [DEMONSTRATION PROJECT.] The commissioner is 
        authorized to pursue a demonstration project under federal food 
        stamp regulation for the purpose of gaining federal 
        reimbursement of food and nutritional costs currently paid by 
        the state group residential housing program.  The commissioner 
        shall seek approval no later than January 1, 2004.  Any 
        reimbursement received is nondedicated revenue to the general 
        fund. 
           Sec. 47.  [514.991] [ALTERNATIVE CARE LIENS; DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] The definitions in this 
        section apply to sections 514.991 to 514.995. 
           Subd. 2.  [ALTERNATIVE CARE AGENCY, AGENCY, OR 
        DEPARTMENT.] "Alternative care agency," "agency," or "department"
        means the department of human services when it pays for or 
        provides alternative care benefits for a nonmedical assistance 
        recipient directly or through a county social services agency 
        under chapter 256B according to section 256B.0913. 
           Subd. 3.  [ALTERNATIVE CARE BENEFIT OR 
        BENEFITS.] "Alternative care benefit" or "benefits" means a 
        benefit provided to a nonmedical assistance recipient under 
        chapter 256B according to section 256B.0913. 
           Subd. 4.  [ALTERNATIVE CARE RECIPIENT OR 
        RECIPIENT.] "Alternative care recipient" or "recipient" means a 
        person who receives alternative care grant benefits. 
           Subd. 5.  [ALTERNATIVE CARE LIEN OR LIEN.] "Alternative 
        care lien" or "lien" means a lien filed under sections 514.992 
        to 514.995. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for services for persons first enrolling in the alternative care 
        program on or after that date and on the first day of the first 
        eligibility renewal period for persons enrolled in the 
        alternative care program prior to July 1, 2003. 
           Sec. 48.  [514.992] [ALTERNATIVE CARE LIEN.] 
           Subdivision 1.  [PROPERTY SUBJECT TO LIEN; LIEN AMOUNT.] (a)
        Subject to sections 514.991 to 514.995, payments made by an 
        alternative care agency to provide benefits to a recipient or to 
        the recipient's spouse who owns property in this state 
        constitute a lien in favor of the agency on all real property 
        the recipient owns at and after the time the benefits are first 
        paid. 
           (b) The amount of the lien is limited to benefits paid for 
        services provided to recipients over 55 years of age and 
        provided on and after July 1, 2003. 
           Subd. 2.  [ATTACHMENT.] (a) A lien attaches to and becomes 
        enforceable against specific real property as of the date when 
        all of the following conditions are met: 
           (1) the agency has paid benefits for a recipient; 
           (2) the recipient has been given notice and an opportunity 
        for a hearing under paragraph (b); 
           (3) the lien has been filed as provided for in section 
        514.993 or memorialized on the certificate of title for the 
        property it describes; and 
           (4) all restrictions against enforcement have ceased to 
        apply. 
           (b) An agency may not file a lien until it has sent the 
        recipient, their authorized representative, or their legal 
        representative written notice of its lien rights by certified 
        mail, return receipt requested, or registered mail and there has 
        been an opportunity for a hearing under section 256.045.  No 
        person other than the recipient shall have a right to a hearing 
        under section 256.045 prior to the time the lien is filed.  The 
        hearing shall be limited to whether the agency has met all of 
        the prerequisites for filing the lien and whether any of the 
        exceptions in this section apply. 
           (c) An agency may not file a lien against the recipient's 
        homestead when any of the following exceptions apply: 
           (1) while the recipient's spouse is also physically present 
        and lawfully and continuously residing in the homestead; 
           (2) a child of the recipient who is under age 21 or who is 
        blind or totally and permanently disabled according to 
        supplemental security income criteria is also physically present 
        on the property and lawfully and continuously residing on the 
        property from and after the date the recipient first receives 
        benefits; 
           (3) a child of the recipient who has also lawfully and 
        continuously resided on the property for a period beginning at 
        least two years before the first day of the month in which the 
        recipient began receiving alternative care, and who provided 
        uncompensated care to the recipient which enabled the recipient 
        to live without alternative care services for the two-year 
        period; 
           (4) a sibling of the recipient who has an ownership 
        interest in the property of record in the office of the county 
        recorder or registrar of titles for the county in which the real 
        property is located and who has also continuously occupied the 
        homestead for a period of at least one year immediately prior to 
        the first day of the first month in which the recipient received 
        benefits and continuously since that date. 
           (d) A lien only applies to the real property it describes. 
           Subd. 3.  [CONTINUATION OF LIEN.] A lien remains effective 
        from the time it is filed until it is paid, satisfied, 
        discharged, or becomes unenforceable under sections 514.991 to 
        514.995. 
           Subd. 4.  [PRIORITY OF LIEN.] (a) A lien which attaches to 
        the real property it describes is subject to the rights of 
        anyone else whose interest in the real property is perfected of 
        record before the lien has been recorded or filed under section 
        514.993, including: 
           (1) an owner, other than the recipient or the recipient's 
        spouse; 
           (2) a good faith purchaser for value without notice of the 
        lien; 
           (3) a holder of a mortgage or security interest; or 
           (4) a judgment lien creditor whose judgment lien has 
        attached to the recipient's interest in the real property. 
           (b) The rights of the other person have the same 
        protections against an alternative care lien as are afforded 
        against a judgment lien that arises out of an unsecured 
        obligation and arises as of the time of the filing of an 
        alternative care grant lien under section 514.993.  The lien 
        shall be inferior to a lien for property taxes and special 
        assessments and shall be superior to all other matters first 
        appearing of record after the time and date the lien is filed or 
        recorded. 
           Subd. 5.  [SETTLEMENT, SUBORDINATION, AND RELEASE.] (a) An 
        agency may, with absolute discretion, settle or subordinate the 
        lien to any other lien or encumbrance of record upon the terms 
        and conditions it deems appropriate. 
           (b) The agency filing the lien shall release and discharge 
        the lien: 
           (1) if it has been paid, discharged, or satisfied; 
           (2) if it has received reimbursement for the amounts 
        secured by the lien, has entered into a binding and legally 
        enforceable agreement under which it is reimbursed for the 
        amount of the lien, or receives other collateral sufficient to 
        secure payment of the lien; 
           (3) against some, but not all, of the property it describes 
        upon the terms, conditions, and circumstances the agency deems 
        appropriate; 
           (4) to the extent it cannot be lawfully enforced against 
        the property it describes because of an error, omission, or 
        other material defect in the legal description contained in the 
        lien or a necessary prerequisite to enforcement of the lien; and 
           (5) if, in its discretion, it determines the filing or 
        enforcement of the lien is contrary to the public interest. 
           (c) The agency executing the lien shall execute and file 
        the release as provided for in section 514.993, subdivision 2. 
           Subd. 6.  [LENGTH OF LIEN.] (a) A lien shall be a lien on 
        the real property it describes for a period of ten years from 
        the date it attaches according to subdivision 2, paragraph (a), 
        except as otherwise provided for in sections 514.992 to 
        514.995.  The agency filing the lien may renew the lien for one 
        additional ten-year period from the date it would otherwise 
        expire by recording or filing a certificate of renewal before 
        the lien expires.  The certificate of renewal shall be recorded 
        or filed in the office of the county recorder or registrar of 
        titles for the county in which the lien is recorded or filed.  
        The certificate must refer to the recording or filing data for 
        the lien it renews.  The certificate need not be attested, 
        certified, or acknowledged as a condition for recording or 
        filing.  The recorder or registrar of titles shall record, file, 
        index, and return the certificate of renewal in the same manner 
        provided for liens in section 514.993, subdivision 2. 
           (b) An alternative care lien is not enforceable against the 
        real property of an estate to the extent there is a 
        determination by a court of competent jurisdiction, or by an 
        officer of the court designated for that purpose, that there are 
        insufficient assets in the estate to satisfy the lien in whole 
        or in part because of the homestead exemption under section 
        256B.15, subdivision 4, the rights of a surviving spouse or a 
        minor child under section 524.2-403, paragraphs (a) and (b), or 
        claims with a priority under section 524.3-805, paragraph (a), 
        clauses (1) to (4).  For purposes of this section, the rights of 
        the decedent's adult children to exempt property under section 
        524.2-403, paragraph (b), shall not be considered costs of 
        administration under section 524.3-805, paragraph (a), clause 
        (1). 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for services for persons first enrolling in the alternative care 
        program on or after that date and on the first day of the first 
        eligibility renewal period for persons enrolled in the 
        alternative care program prior to July 1, 2003. 
           Sec. 49.  [514.993] [LIEN; CONTENTS AND FILING.] 
           Subdivision 1.  [CONTENTS.] A lien shall be dated and must 
        contain: 
           (1) the recipient's full name, last known address, and 
        social security number; 
           (2) a statement that benefits have been paid to or for the 
        recipient's benefit; 
           (3) a statement that all of the recipient's interests in 
        the real property described in the lien may be subject to or 
        affected by the agency's right to reimbursement for benefits; 
           (4) a legal description of the real property subject to the 
        lien and whether it is registered or abstract property; and 
           (5) such other contents, if any, as the agency deems 
        appropriate. 
           Subd. 2.  [FILING.] Any lien, release, or other document 
        required or permitted to be filed under sections 514.991 to 
        514.995 must be recorded or filed in the office of the county 
        recorder or registrar of titles, as appropriate, in the county 
        where the real property is located.  Notwithstanding section 
        386.77, the agency shall pay the applicable filing fee for any 
        documents filed under sections 514.991 to 514.995.  An 
        attestation, certification, or acknowledgment is not required as 
        a condition of filing.  If the property described in the lien is 
        registered property, the registrar of titles shall record it on 
        the certificate of title for each parcel of property described 
        in the lien.  If the property described in the lien is abstract 
        property, the recorder shall file the lien in the county's 
        grantor-grantee indexes and any tract indexes the county 
        maintains for each parcel of property described in the lien.  
        The recorder or registrar shall return the recorded or filed 
        lien to the agency at no cost.  If the agency provides a 
        duplicate copy of the lien, the recorder or registrar of titles 
        shall show the recording or filing data on the copy and return 
        it to the agency at no cost.  The agency is responsible for 
        filing any lien, release, or other documents under sections 
        514.991 to 514.995. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for services for persons first enrolling in the alternative care 
        program on or after that date and on the first day of the first 
        eligibility renewal period for persons enrolled in the 
        alternative care program prior to July 1, 2003. 
           Sec. 50.  [514.994] [ENFORCEMENT; OTHER REMEDIES.] 
           Subdivision 1.  [FORECLOSURE OR ENFORCEMENT OF LIEN.] The 
        agency may enforce or foreclose a lien filed under sections 
        514.991 to 514.995 in the manner provided for by law for 
        enforcement of judgment liens against real estate or by a 
        foreclosure by action under chapter 581.  The lien shall remain 
        enforceable as provided for in sections 514.991 to 514.995 
        notwithstanding any laws limiting the enforceability of 
        judgments. 
           Subd. 2.  [HOMESTEAD EXEMPTION.] The lien may not be 
        enforced against the homestead property of the recipient or the 
        spouse while they physically occupy it as their lawful residence.
           Subd. 3.  [AGENCY CLAIM OR REMEDY.] Sections 514.992 to 
        514.995 do not limit the agency's right to file a claim against 
        the recipient's estate or the estate of the recipient's spouse, 
        do not limit any other claims for reimbursement the agency may 
        have, and do not limit the availability of any other remedy to 
        the agency. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for services for persons first enrolling in the alternative care 
        program on or after that date and on the first day of the first 
        eligibility renewal period for persons enrolled in the 
        alternative care program prior to July 1, 2003. 
           Sec. 51.  [514.995] [AMOUNTS RECEIVED TO SATISFY LIEN.] 
           Amounts the agency receives to satisfy the lien must be 
        deposited in the state treasury and credited to the fund from 
        which the benefits were paid. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for services for persons first enrolling in the alternative care 
        program on or after that date and on the first day of the first 
        eligibility renewal period for persons enrolled in the 
        alternative care program prior to July 1, 2003. 
           Sec. 52.  Minnesota Statutes 2002, section 524.3-805, is 
        amended to read: 
           524.3-805 [CLASSIFICATION OF CLAIMS.] 
           (a) If the applicable assets of the estate are insufficient 
        to pay all claims in full, the personal representative shall 
        make payment in the following order: 
           (1) costs and expenses of administration; 
           (2) reasonable funeral expenses; 
           (3) debts and taxes with preference under federal law; 
           (4) reasonable and necessary medical, hospital, or nursing 
        home expenses of the last illness of the decedent, including 
        compensation of persons attending the decedent, a claim filed 
        under section 256B.15 for recovery of expenditures for 
        alternative care for nonmedical assistance recipients under 
        section 256B.0913, and including a claim filed pursuant to 
        section 256B.15; 
           (5) reasonable and necessary medical, hospital, and nursing 
        home expenses for the care of the decedent during the year 
        immediately preceding death; 
           (6) debts with preference under other laws of this state, 
        and state taxes; 
           (7) all other claims. 
           (b) No preference shall be given in the payment of any 
        claim over any other claim of the same class, and a claim due 
        and payable shall not be entitled to a preference over claims 
        not due, except that if claims for expenses of the last illness 
        involve only claims filed under section 256B.15 for recovery of 
        expenditures for alternative care for nonmedical assistance 
        recipients under section 256B.0913, section 246.53 for costs of 
        state hospital care and claims filed under section 256B.15, 
        claims filed to recover expenditures for alternative care for 
        nonmedical assistance recipients under section 256B.0913 shall 
        have preference over claims filed under both sections 246.53 and 
        other claims filed under section 256B.15, and claims filed under 
        section 246.53 have preference over claims filed under section 
        256B.15 for recovery of amounts other than those for 
        expenditures for alternative care for nonmedical assistance 
        recipients under section 256B.0913. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        for decedents dying on or after that date. 
           Sec. 53.  [IMPOSITION OF FEDERAL CERTIFICATION REMEDIES.] 
           The commissioner of health shall seek changes in the 
        federal policy that mandates the imposition of federal sanctions 
        without providing an opportunity for a nursing facility to 
        correct deficiencies, solely as the result of previous 
        deficiencies issued to the nursing facility.  
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 54.  [REPORT ON LONG-TERM CARE.] 
           The report on long-term care services required under 
        Minnesota Statutes, section 144A.351, that is presented to the 
        legislature by January 15, 2004, must also address the 
        feasibility of offering government or private sector loans or 
        lines of credit to individuals age 65 and over, for the purchase 
        of long-term care services. 
           Sec. 55.  [REPORTS; POTENTIAL SAVINGS TO STATE FROM CERTAIN 
        LONG-TERM CARE INSURANCE PURCHASE INCENTIVES.] 
           The commissioner of human services shall report to the 
        legislature by January 15, 2005, on long-term care financing 
        reform.  The report must include a new mix of public and private 
        approaches to the financing of long-term care.  The report shall 
        examine strategies and financing options that will increase the 
        availability and use of nongovernment resources to pay for 
        long-term care, including new ways of using limited government 
        funds for long-term care.  The report shall examine the 
        feasibility of: 
           (1) initiating a long-term care insurance partnership 
        program, similar to those adopted in other states, under which 
        the state would encourage the purchase of private long-term care 
        insurance by permitting the insured to retain assets in excess 
        of those otherwise permitted for medical assistance eligibility, 
        if the insured later exhausts the private long-term care 
        insurance benefits.  The report must include the feasibility of 
        obtaining any necessary federal waiver; 
           (2) using state medical assistance funds to subsidize the 
        purchase of private long-term care insurance by individuals who 
        would be unlikely to purchase it without a subsidy, in order to 
        generate long-term medical assistance savings; and 
           (3) adding a nursing facility benefit to Medicare-related 
        coverage, as defined in Minnesota Statutes, section 62Q.01, 
        subdivision 6.  The report must quantify the costs or savings 
        resulting from adding a nursing facility benefit. 
           The report must comply with Minnesota Statutes, sections 
        3.195 and 3.197. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 56.  [REVISOR'S INSTRUCTION.] 
           For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 57.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 256.973; 256.9772; 
        and 256B.437, subdivision 2, are repealed effective July 1, 2003.
           (b) Minnesota Statutes 2002, sections 62J.66; 62J.68; 
        144A.071, subdivision 5; and 144A.35, are repealed. 
           (c) Laws 1998, chapter 407, article 4, section 63, is 
        repealed. 
           (d) Minnesota Rules, parts 9505.3045; 9505.3050; 9505.3055; 
        9505.3060; 9505.3068; 9505.3070; 9505.3075; 9505.3080; 
        9505.3090; 9505.3095; 9505.3100; 9505.3105; 9505.3107; 
        9505.3110; 9505.3115; 9505.3120; 9505.3125; 9505.3130; 
        9505.3138; 9505.3139; 9505.3140; 9505.3680; 9505.3690; and 
        9505.3700, are repealed effective July 1, 2003. 
           (e) Laws 2003, chapter 55, sections 1 and 4, are repealed 
        effective the day following final enactment. 

                                   ARTICLE 3 
                 CONTINUING CARE FOR PERSONS WITH DISABILITIES 
           Section 1.  Minnesota Statutes 2002, section 174.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICABILITY.] (a) The operating 
        standards for special transportation service adopted under this 
        section do not apply to special transportation provided by:  
           (1) a common carrier operating on fixed routes and 
        schedules; 
           (2) a volunteer driver using a private automobile; 
           (3) a school bus as defined in section 169.01, subdivision 
        6; or 
           (4) an emergency ambulance regulated under chapter 144. 
           (b) The operating standards adopted under this section only 
        apply to providers of special transportation service who receive 
        grants or other financial assistance from either the state or 
        the federal government, or both, to provide or assist in 
        providing that service; except that the operating standards 
        adopted under this section do not apply to any nursing home 
        licensed under section 144A.02, to any board and care facility 
        licensed under section 144.50, or to any day training and 
        habilitation services, day care, or group home facility licensed 
        under sections 245A.01 to 245A.19 unless the facility or program 
        provides transportation to nonresidents on a regular basis and 
        the facility receives reimbursement, other than per diem 
        payments, for that service under rules promulgated by the 
        commissioner of human services.  
           (c) Notwithstanding paragraph (b), the operating standards 
        adopted under this section do not apply to any vendor of 
        services licensed under chapter 245B that provides 
        transportation services to consumers or residents of other 
        vendors licensed under chapter 245B and transports 15 or fewer 
        persons, including consumers or residents and the driver. 
           Sec. 2.  Minnesota Statutes 2002, section 245B.06, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LEAVING THE RESIDENCE.] As specified in each 
        consumer's individual service plan, Each consumer requiring a 
        24-hour plan of care must leave the residence to participate in 
        regular education, employment, or community activities shall 
        receive services during the day outside the residence unless 
        otherwise specified in the individual's service plan.  License 
        holders, providing services to consumers living in a licensed 
        site, shall ensure that they are prepared to care for consumers 
        whenever they are at the residence during the day because of 
        illness, work schedules, or other reasons. 
           Sec. 3.  Minnesota Statutes 2002, section 245B.07, 
        subdivision 11, is amended to read: 
           Subd. 11.  [TRAVEL TIME TO AND FROM A DAY TRAINING AND 
        HABILITATION SITE.] Except in unusual circumstances, the license 
        holder must not transport a consumer receiving services for 
        longer than one hour 90 minutes per one-way trip.  Nothing in 
        this subdivision relieves the provider of the obligation to 
        provide the number of program hours as identified in the 
        individualized service plan. 
           Sec. 4.  Minnesota Statutes 2002, section 246.54, is 
        amended to read: 
           246.54 [LIABILITY OF COUNTY; REIMBURSEMENT.] 
           Subdivision 1.  [COUNTY PORTION FOR COST OF CARE.] Except 
        for chemical dependency services provided under sections 254B.01 
        to 254B.09, the client's county shall pay to the state of 
        Minnesota a portion of the cost of care provided in a regional 
        treatment center or a state nursing facility to a client legally 
        settled in that county.  A county's payment shall be made from 
        the county's own sources of revenue and payments shall be paid 
        as follows:  payments to the state from the county shall 
        equal ten 20 percent of the cost of care, as determined by the 
        commissioner, for each day, or the portion thereof, that the 
        client spends at a regional treatment center or a state nursing 
        facility.  If payments received by the state under sections 
        246.50 to 246.53 exceed 90 80 percent of the cost of care, the 
        county shall be responsible for paying the state only the 
        remaining amount.  The county shall not be entitled to 
        reimbursement from the client, the client's estate, or from the 
        client's relatives, except as provided in section 246.53.  No 
        such payments shall be made for any client who was last 
        committed prior to July 1, 1947. 
           Subd. 2.  [EXCEPTIONS.] Subdivision 1 does not apply to 
        services provided at the Minnesota security hospital, the 
        Minnesota sex offender program, or the Minnesota extended 
        treatment options program.  For services at these facilities, a 
        county's payment shall be made from the county's own sources of 
        revenue and payments shall be paid as follows:  payments to the 
        state from the county shall equal ten percent of the cost of 
        care, as determined by the commissioner, for each day, or the 
        portion thereof, that the client spends at the facility.  If 
        payments received by the state under sections 246.50 to 246.53 
        exceed 90 percent of the cost of care, the county shall be 
        responsible for paying the state only the remaining amount.  The 
        county shall not be entitled to reimbursement from the client, 
        the client's estate, or from the client's relatives, except as 
        provided in section 246.53. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 5.  Minnesota Statutes 2002, section 252.32, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROGRAM ESTABLISHED.] In accordance with 
        state policy established in section 256F.01 that all children 
        are entitled to live in families that offer safe, nurturing, 
        permanent relationships, and that public services be directed 
        toward preventing the unnecessary separation of children from 
        their families, and because many families who have children with 
        mental retardation or related conditions disabilities have 
        special needs and expenses that other families do not have, the 
        commissioner of human services shall establish a program to 
        assist families who have dependents dependent children with 
        mental retardation or related conditions disabilities living in 
        their home.  The program shall make support grants available to 
        the families. 
           Sec. 6.  Minnesota Statutes 2002, section 252.32, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [SUPPORT GRANTS.] (a) Provision of support 
        grants must be limited to families who require support and whose 
        dependents are under the age of 22 and who have mental 
        retardation or who have a related condition 21 and who have been 
        determined by a screening team established certified disabled 
        under section 256B.092 to be at risk of 
        institutionalization 256B.055, subdivision 12, paragraphs (a), 
        (b), (c), (d), and (e).  Families who are receiving home and 
        community-based waivered services for persons with mental 
        retardation or related conditions are not eligible for support 
        grants. 
           Families receiving grants who will be receiving home and 
        community-based waiver services for persons with mental 
        retardation or a related condition for their family member 
        within the grant year, and who have ongoing payments for 
        environmental or vehicle modifications which have been approved 
        by the county as a grant expense and would have qualified for 
        payment under this waiver may receive a onetime grant payment 
        from the commissioner to reduce or eliminate the principal of 
        the remaining debt for the modifications, not to exceed the 
        maximum amount allowable for the remaining years of eligibility 
        for a family support grant.  The commissioner is authorized to 
        use up to $20,000 annually from the grant appropriation for this 
        purpose.  Any amount unexpended at the end of the grant year 
        shall be allocated by the commissioner in accordance with 
        subdivision 3a, paragraph (b), clause (2).  Families whose 
        annual adjusted gross income is $60,000 or more are not eligible 
        for support grants except in cases where extreme hardship is 
        demonstrated.  Beginning in state fiscal year 1994, the 
        commissioner shall adjust the income ceiling annually to reflect 
        the projected change in the average value in the United States 
        Department of Labor Bureau of Labor Statistics consumer price 
        index (all urban) for that year. 
           (b) Support grants may be made available as monthly subsidy 
        grants and lump sum grants. 
           (c) Support grants may be issued in the form of cash, 
        voucher, and direct county payment to a vendor.  
           (d) Applications for the support grant shall be made by the 
        legal guardian to the county social service agency.  The 
        application shall specify the needs of the families, the form of 
        the grant requested by the families, and that the families have 
        agreed to use the support grant for items and services within 
        the designated reimbursable expense categories and 
        recommendations of the county to be reimbursed.  
           (e) Families who were receiving subsidies on the date of 
        implementation of the $60,000 income limit in paragraph (a) 
        continue to be eligible for a family support grant until 
        December 31, 1991, if all other eligibility criteria are met.  
        After December 31, 1991, these families are eligible for a grant 
        in the amount of one-half the grant they would otherwise 
        receive, for as long as they remain eligible under other 
        eligibility criteria.  
           Sec. 7.  Minnesota Statutes 2002, section 252.32, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMOUNT OF SUPPORT GRANT; USE.] Support grant 
        amounts shall be determined by the county social service 
        agency.  Each service Services and item items purchased with a 
        support grant must: 
           (1) be over and above the normal costs of caring for the 
        dependent if the dependent did not have a disability; 
           (2) be directly attributable to the dependent's disabling 
        condition; and 
           (3) enable the family to delay or prevent the out-of-home 
        placement of the dependent. 
           The design and delivery of services and items purchased 
        under this section must suit the dependent's chronological age 
        and be provided in the least restrictive environment possible, 
        consistent with the needs identified in the individual service 
        plan. 
           Items and services purchased with support grants must be 
        those for which there are no other public or private funds 
        available to the family.  Fees assessed to parents for health or 
        human services that are funded by federal, state, or county 
        dollars are not reimbursable through this program. 
           In approving or denying applications, the county shall 
        consider the following factors:  
           (1) the extent and areas of the functional limitations of 
        the disabled child; 
           (2) the degree of need in the home environment for 
        additional support; and 
           (3) the potential effectiveness of the grant to maintain 
        and support the person in the family environment. 
           The maximum monthly grant amount shall be $250 per eligible 
        dependent, or $3,000 per eligible dependent per state fiscal 
        year, within the limits of available funds.  The county social 
        service agency may consider the dependent's supplemental 
        security income in determining the amount of the support grant.  
        The county social service agency may exceed $3,000 per state 
        fiscal year per eligible dependent for emergency circumstances 
        in cases where exceptional resources of the family are required 
        to meet the health, welfare-safety needs of the child.  
           County social service agencies shall continue to provide 
        funds to families receiving state grants on June 30, 1997, if 
        eligibility criteria continue to be met.  Any adjustments to 
        their monthly grant amount must be based on the needs of the 
        family and funding availability. 
           Sec. 8.  Minnesota Statutes 2002, section 252.32, 
        subdivision 3c, is amended to read: 
           Subd. 3c.  [COUNTY BOARD RESPONSIBILITIES.] County boards 
        receiving funds under this section shall:  
           (1) determine the needs of families for services in 
        accordance with section 256B.092 or 256E.08 and any rules 
        adopted under those sections; submit a plan to the department 
        for the management of the family support grant program.  The 
        plan must include the projected number of families the county 
        will serve and policies and procedures for:  
           (i) identifying potential families for the program; 
           (ii) grant distribution; 
           (iii) waiting list procedures; and 
           (iv) prioritization of families to receive grants; 
           (2) determine the eligibility of all persons proposed for 
        program participation; 
           (3) approve a plan for items and services to be reimbursed 
        and inform families of the county's approval decision; 
           (4) issue support grants directly to, or on behalf of, 
        eligible families; 
           (5) inform recipients of their right to appeal under 
        subdivision 3e; 
           (6) submit quarterly financial reports under subdivision 3b 
        and indicate on the screening documents the annual grant level 
        for each family, the families denied grants, and the families 
        eligible but waiting for funding; and 
           (7) coordinate services with other programs offered by the 
        county. 
           Sec. 9.  Minnesota Statutes 2002, section 252.41, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DAY TRAINING AND HABILITATION SERVICES FOR 
        ADULTS WITH MENTAL RETARDATION, RELATED CONDITIONS.] "Day 
        training and habilitation services for adults with mental 
        retardation and related conditions" means services that: 
           (1) include supervision, training, assistance, and 
        supported employment, work-related activities, or other 
        community-integrated activities designed and implemented in 
        accordance with the individual service and individual 
        habilitation plans required under Minnesota Rules, parts 
        9525.0015 to 9525.0165, to help an adult reach and maintain the 
        highest possible level of independence, productivity, and 
        integration into the community; and 
           (2) are provided under contract with the county where the 
        services are delivered by a vendor licensed under sections 
        245A.01 to 245A.16 and 252.28, subdivision 2, to provide day 
        training and habilitation services; and 
           (3) are regularly provided to one or more adults with 
        mental retardation or related conditions in a place other than 
        the adult's own home or residence unless medically 
        contraindicated. 
           Day training and habilitation services reimbursable under 
        this section do not include special education and related 
        services as defined in the Education of the Handicapped Act, 
        United States Code, title 20, chapter 33, section 1401, clauses 
        (6) and (17), or vocational services funded under section 110 of 
        the Rehabilitation Act of 1973, United States Code, title 29, 
        section 720, as amended. 
           Sec. 10.  Minnesota Statutes 2002, section 252.46, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RATES.] (a) Payment rates to vendors, 
        except regional centers, for county-funded day training and 
        habilitation services and transportation provided to persons 
        receiving day training and habilitation services established by 
        a county board are governed by subdivisions 2 to 19.  The 
        commissioner shall approve the following three payment rates for 
        services provided by a vendor: 
           (1) a full-day service rate for persons who receive at 
        least six service hours a day, including the time it takes to 
        transport the person to and from the service site; 
           (2) a partial-day service rate that must not exceed 75 
        percent of the full-day service rate for persons who receive 
        less than a full day of service; and 
           (3) a transportation rate for providing, or arranging and 
        paying for, transportation of a person to and from the person's 
        residence to the service site.  
           (b) The commissioner may also approve an hourly job-coach, 
        follow-along rate for services provided by one employee at or en 
        route to or from community locations to supervise, support, and 
        assist one person receiving the vendor's services to learn 
        job-related skills necessary to obtain or retain employment when 
        and where no other persons receiving services are present and 
        when all the following criteria are met: 
           (1) the vendor requests and the county recommends the 
        optional rate; 
           (2) the service is prior authorized by the county on the 
        Medicaid Management Information System for no more than 414 
        hours in a 12-month period and the daily per person charge to 
        medical assistance does not exceed the vendor's approved full 
        day plus transportation rates; 
           (3) separate full day, partial day, and transportation 
        rates are not billed for the same person on the same day; 
           (4) the approved hourly rate does not exceed the sum of the 
        vendor's current average hourly direct service wage, including 
        fringe benefits and taxes, plus a component equal to the 
        vendor's average hourly nondirect service wage expenses; and 
           (5) the actual revenue received for provision of hourly 
        job-coach, follow-along services is subtracted from the vendor's 
        total expenses for the same time period and those adjusted 
        expenses are used for determining recommended full day and 
        transportation payment rates under subdivision 5 in accordance 
        with the limitations in subdivision 3. 
           (b) Notwithstanding any law or rule to the contrary, the 
        commissioner may authorize county participation in a voluntary 
        individualized payment rate structure for day training and 
        habilitation services to allow a county the flexibility to 
        change, after consulting with providers, from a site-based 
        payment rate structure to an individual payment rate structure 
        for the providers of day training and habilitation services in 
        the county.  The commissioner shall seek input from providers 
        and consumers in establishing procedures for determining the 
        structure of voluntary individualized payment rates to ensure 
        that there is no additional cost to the state or counties and 
        that the rate structure is cost-neutral to providers of day 
        training and habilitation services, on July 1, 2004, or on day 
        one of the individual rate structure, whichever is later. 
           (c) Medical assistance rates for home and community-based 
        service provided under section 256B.501, subdivision 4, by 
        licensed vendors of day training and habilitation services must 
        not be greater than the rates for the same services established 
        by counties under sections 252.40 to 252.46.  For very dependent 
        persons with special needs the commissioner may approve an 
        exception to the approved payment rate under section 256B.501, 
        subdivision 4 or 8. 
           Sec. 11.  Minnesota Statutes 2002, section 256.476, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE AND GOALS.] The commissioner of 
        human services shall establish a consumer support grant program 
        for individuals with functional limitations and their families 
        who wish to purchase and secure their own supports.  The 
        commissioner and local agencies shall jointly develop an 
        implementation plan which must include a way to resolve the 
        issues related to county liability.  The program shall: 
           (1) make support grants or exception grants described in 
        subdivision 11 available to individuals or families as an 
        effective alternative to existing programs and services, such as 
        the developmental disability family support program, personal 
        care attendant services, home health aide services, and private 
        duty nursing services; 
           (2) provide consumers more control, flexibility, and 
        responsibility over their services and supports; 
           (3) promote local program management and decision making; 
        and 
           (4) encourage the use of informal and typical community 
        supports. 
           [EFFECTIVE DATE.] This section is effective January 1, 2004.
           Sec. 12.  Minnesota Statutes 2002, section 256.476, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY TO APPLY FOR GRANTS.] (a) A person 
        is eligible to apply for a consumer support grant if the person 
        meets all of the following criteria: 
           (1) the person is eligible for and has been approved to 
        receive services under medical assistance as determined under 
        sections 256B.055 and 256B.056 or the person has been approved 
        to receive a grant under the developmental disability family 
        support program under section 252.32; 
           (2) the person is able to direct and purchase the person's 
        own care and supports, or the person has a family member, legal 
        representative, or other authorized representative who can 
        purchase and arrange supports on the person's behalf; 
           (3) the person has functional limitations, requires ongoing 
        supports to live in the community, and is at risk of or would 
        continue institutionalization without such supports; and 
           (4) the person will live in a home.  For the purpose of 
        this section, "home" means the person's own home or home of a 
        person's family member.  These homes are natural home settings 
        and are not licensed by the department of health or human 
        services. 
           (b) Persons may not concurrently receive a consumer support 
        grant if they are: 
           (1) receiving home and community-based services under 
        United States Code, title 42, section 1396h(c); personal care 
        attendant and home health aide services, or private duty nursing 
        under section 256B.0625; a developmental disability family 
        support grant; or alternative care services under section 
        256B.0913; or 
           (2) residing in an institutional or congregate care setting.
           (c) A person or person's family receiving a consumer 
        support grant shall not be charged a fee or premium by a local 
        agency for participating in the program.  
           (d) The commissioner may limit the participation of 
        recipients of services from federal waiver programs in the 
        consumer support grant program if the participation of these 
        individuals will result in an increase in the cost to the 
        state.  Individuals receiving home and community-based waivers 
        under United States Code, title 42, section 1396h(c), are not 
        eligible for the consumer support grant, except for individuals 
        receiving consumer support grants before July 1, 2003, as long 
        as other eligibility criteria are met. 
           (e) The commissioner shall establish a budgeted 
        appropriation each fiscal year for the consumer support grant 
        program.  The number of individuals participating in the program 
        will be adjusted so the total amount allocated to counties does 
        not exceed the amount of the budgeted appropriation.  The 
        budgeted appropriation will be adjusted annually to accommodate 
        changes in demand for the consumer support grants. 
           Sec. 13.  Minnesota Statutes 2002, section 256.476, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SUPPORT GRANTS; CRITERIA AND LIMITATIONS.] (a) A 
        county board may choose to participate in the consumer support 
        grant program.  If a county has not chosen to participate by 
        July 1, 2002, the commissioner shall contract with another 
        county or other entity to provide access to residents of the 
        nonparticipating county who choose the consumer support grant 
        option.  The commissioner shall notify the county board in a 
        county that has declined to participate of the commissioner's 
        intent to enter into a contract with another county or other 
        entity at least 30 days in advance of entering into the 
        contract.  The local agency shall establish written procedures 
        and criteria to determine the amount and use of support grants.  
        These procedures must include, at least, the availability of 
        respite care, assistance with daily living, and adaptive aids.  
        The local agency may establish monthly or annual maximum amounts 
        for grants and procedures where exceptional resources may be 
        required to meet the health and safety needs of the person on a 
        time-limited basis, however, the total amount awarded to each 
        individual may not exceed the limits established in subdivision 
        11. 
           (b) Support grants to a person or a person's family will be 
        provided through a monthly subsidy payment and be in the form of 
        cash, voucher, or direct county payment to vendor.  Support 
        grant amounts must be determined by the local agency.  Each 
        service and item purchased with a support grant must meet all of 
        the following criteria:  
           (1) it must be over and above the normal cost of caring for 
        the person if the person did not have functional limitations; 
           (2) it must be directly attributable to the person's 
        functional limitations; 
           (3) it must enable the person or the person's family to 
        delay or prevent out-of-home placement of the person; and 
           (4) it must be consistent with the needs identified in the 
        service plan agreement, when applicable. 
           (c) Items and services purchased with support grants must 
        be those for which there are no other public or private funds 
        available to the person or the person's family.  Fees assessed 
        to the person or the person's family for health and human 
        services are not reimbursable through the grant. 
           (d) In approving or denying applications, the local agency 
        shall consider the following factors:  
           (1) the extent and areas of the person's functional 
        limitations; 
           (2) the degree of need in the home environment for 
        additional support; and 
           (3) the potential effectiveness of the grant to maintain 
        and support the person in the family environment or the person's 
        own home. 
           (e) At the time of application to the program or screening 
        for other services, the person or the person's family shall be 
        provided sufficient information to ensure an informed choice of 
        alternatives by the person, the person's legal representative, 
        if any, or the person's family.  The application shall be made 
        to the local agency and shall specify the needs of the person 
        and family, the form and amount of grant requested, the items 
        and services to be reimbursed, and evidence of eligibility for 
        medical assistance. 
           (f) Upon approval of an application by the local agency and 
        agreement on a support plan for the person or person's family, 
        the local agency shall make grants to the person or the person's 
        family.  The grant shall be in an amount for the direct costs of 
        the services or supports outlined in the service agreement.  
           (g) Reimbursable costs shall not include costs for 
        resources already available, such as special education classes, 
        day training and habilitation, case management, other services 
        to which the person is entitled, medical costs covered by 
        insurance or other health programs, or other resources usually 
        available at no cost to the person or the person's family. 
           (h) The state of Minnesota, the county boards participating 
        in the consumer support grant program, or the agencies acting on 
        behalf of the county boards in the implementation and 
        administration of the consumer support grant program shall not 
        be liable for damages, injuries, or liabilities sustained 
        through the purchase of support by the individual, the 
        individual's family, or the authorized representative under this 
        section with funds received through the consumer support grant 
        program.  Liabilities include but are not limited to:  workers' 
        compensation liability, the Federal Insurance Contributions Act 
        (FICA), or the Federal Unemployment Tax Act (FUTA).  For 
        purposes of this section, participating county boards and 
        agencies acting on behalf of county boards are exempt from the 
        provisions of section 268.04. 
           Sec. 14.  Minnesota Statutes 2002, section 256.476, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REIMBURSEMENT, ALLOCATIONS, AND REPORTING.] (a) 
        For the purpose of transferring persons to the consumer support 
        grant program from specific programs or services, such as the 
        developmental disability family support program and personal 
        care assistant services, home health aide services, or private 
        duty nursing services, the amount of funds transferred by the 
        commissioner between the developmental disability family support 
        program account, the medical assistance account, or the consumer 
        support grant account shall be based on each county's 
        participation in transferring persons to the consumer support 
        grant program from those programs and services. 
           (b) At the beginning of each fiscal year, county 
        allocations for consumer support grants shall be based on: 
           (1) the number of persons to whom the county board expects 
        to provide consumer supports grants; 
           (2) their eligibility for current program and services; 
           (3) the amount of nonfederal dollars allowed under 
        subdivision 11; and 
           (4) projected dates when persons will start receiving 
        grants.  County allocations shall be adjusted periodically by 
        the commissioner based on the actual transfer of persons or 
        service openings, and the nonfederal dollars associated with 
        those persons or service openings, to the consumer support grant 
        program. 
           (c) The amount of funds transferred by the commissioner 
        from the medical assistance account for an individual may be 
        changed if it is determined by the county or its agent that the 
        individual's need for support has changed. 
           (d) The authority to utilize funds transferred to the 
        consumer support grant account for the purposes of implementing 
        and administering the consumer support grant program will not be 
        limited or constrained by the spending authority provided to the 
        program of origination. 
           (e) The commissioner may use up to five percent of each 
        county's allocation, as adjusted, for payments for 
        administrative expenses, to be paid as a proportionate addition 
        to reported direct service expenditures. 
           (f) The county allocation for each individual or 
        individual's family cannot exceed the amount allowed under 
        subdivision 11. 
           (g) The commissioner may recover, suspend, or withhold 
        payments if the county board, local agency, or grantee does not 
        comply with the requirements of this section. 
           (h) Grant funds unexpended by consumers shall return to the 
        state once a year.  The annual return of unexpended grant funds 
        shall occur in the quarter following the end of the state fiscal 
        year. 
           Sec. 15.  Minnesota Statutes 2002, section 256.476, 
        subdivision 11, is amended to read: 
           Subd. 11.  [CONSUMER SUPPORT GRANT PROGRAM AFTER JULY 1, 
        2001.] (a) Effective July 1, 2001, the commissioner shall 
        allocate consumer support grant resources to serve additional 
        individuals based on a review of Medicaid authorization and 
        payment information of persons eligible for a consumer support 
        grant from the most recent fiscal year.  The commissioner shall 
        use the following methodology to calculate maximum allowable 
        monthly consumer support grant levels: 
           (1) For individuals whose program of origination is medical 
        assistance home care under section 256B.0627, the maximum 
        allowable monthly grant levels are calculated by: 
           (i) determining the nonfederal share of the average service 
        authorization for each home care rating; 
           (ii) calculating the overall ratio of actual payments to 
        service authorizations by program; 
           (iii) applying the overall ratio to the average service 
        authorization level of each home care rating; 
           (iv) adjusting the result for any authorized rate increases 
        provided by the legislature; and 
           (v) adjusting the result for the average monthly 
        utilization per recipient; and. 
           (2) for persons with programs of origination other than the 
        program described in clause (1), the maximum grant level for an 
        individual shall not exceed the total of the nonfederal dollars 
        expended on the individual by the program of origination The 
        commissioner may review and evaluate the methodology to reflect 
        changes in the home care programs overall ratio of actual 
        payments to service authorizations. 
           (b) Effective January 1, 2004, persons previously receiving 
        consumer support exception grants prior to July 1, 2001, may 
        continue to receive the grant amount established prior to July 
        1, 2001 will have their grants calculated using the methodology 
        in paragraph (a), clause (1).  If a person currently receiving 
        an exception grant wishes to have their home care rating 
        reevaluated, they may request an assessment as defined in 
        section 256B.0627, subdivision 1, paragraph (b). 
           (c) The commissioner may provide up to 200 exception 
        grants, including grants in use under paragraph (b).  Eligible 
        persons shall be provided an exception grant in priority order 
        based upon the date of the commissioner's receipt of the county 
        request.  The maximum allowable grant level for an exception 
        grant shall be based upon the nonfederal share of the average 
        service authorization from the most recent fiscal year for each 
        home care rating category.  The amount of each exception grant 
        shall be based upon the commissioner's determination of the 
        nonfederal dollars that would have been expended if services had 
        been available for an individual who is unable to obtain the 
        support needed from the program of origination due to the 
        unavailability of qualified service providers at the time or the 
        location where the supports are needed. 
           Sec. 16.  Minnesota Statutes 2002, section 256.482, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SUNSET.] Notwithstanding section 15.059, 
        subdivision 5, the council on disability shall not sunset until 
        June 30, 2003 2007. 
           [EFFECTIVE DATE.] This section is effective May 30, 2003. 
           Sec. 17.  Minnesota Statutes 2002, section 256B.0621, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RELOCATION TARGETED CASE MANAGEMENT PROVIDER 
        QUALIFICATIONS.] The following qualifications and certification 
        standards must be met by providers of relocation targeted case 
        management: 
           (a) The commissioner must certify each provider of 
        relocation targeted case management before enrollment.  The 
        certification process shall examine the provider's ability to 
        meet the requirements in this subdivision and other federal and 
        state requirements of this service.  A certified relocation 
        targeted case management provider may subcontract with another 
        provider to deliver relocation targeted case management 
        services.  Subcontracted providers must demonstrate the ability 
        to provide the services outlined in subdivision 6. 
           (b) (a) A relocation targeted case management provider is 
        an enrolled medical assistance provider who is determined by the 
        commissioner to have all of the following characteristics: 
           (1) the legal authority to provide public welfare under 
        sections 393.01, subdivision 7; and 393.07; or a federally 
        recognized Indian tribe; 
           (2) the demonstrated capacity and experience to provide the 
        components of case management to coordinate and link community 
        resources needed by the eligible population; 
           (3) the administrative capacity and experience to serve the 
        target population for whom it will provide services and ensure 
        quality of services under state and federal requirements; 
           (4) the legal authority to provide complete investigative 
        and protective services under section 626.556, subdivision 10; 
        and child welfare and foster care services under section 393.07, 
        subdivisions 1 and 2; or a federally recognized Indian tribe; 
           (5) a financial management system that provides accurate 
        documentation of services and costs under state and federal 
        requirements; and 
           (6) the capacity to document and maintain individual case 
        records under state and federal requirements. 
           (b) A provider of targeted case management under section 
        256B.0625, subdivision 20, may be deemed a certified provider of 
        relocation targeted case management. 
           (c) A relocation targeted case management provider may 
        subcontract with another provider to deliver relocation targeted 
        case management services.  Subcontracted providers must 
        demonstrate the ability to provide the services outlined in 
        subdivision 6, and have a procedure in place that notifies the 
        recipient and the recipient's legal representative of any 
        conflict of interest if the contracted targeted case management 
        provider also provides, or will provide, the recipient's 
        services and supports.  Contracted providers must provide 
        information on all conflicts of interest and obtain the 
        recipient's informed consent or provide the recipient with 
        alternatives.  
           Sec. 18.  Minnesota Statutes 2002, section 256B.0621, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TIME LINES.] The following time lines must be 
        met for assigning a case manager: 
           (1) (a) For relocation targeted case management, an 
        eligible recipient must be assigned a case manager who visits 
        the person within 20 working days of requesting a case manager 
        from their county of financial responsibility as determined 
        under chapter 256G.  
           (1) If a county agency, its contractor, or federally 
        recognized tribe does not provide case management services as 
        required, the recipient may, after written notice to the county 
        agency, obtain targeted relocation case management services from 
        a home care targeted case management provider, as defined in 
        subdivision 5; and an alternative provider of targeted case 
        management services enrolled by the commissioner. 
           (2) The commissioner may waive the provider requirements in 
        subdivision 4, paragraph (a), clauses (1) and (4), to ensure 
        recipient access to the assistance necessary to move from an 
        institution to the community.  The recipient or the recipient's 
        legal guardian shall provide written notice to the county or 
        tribe of the decision to obtain services from an alternative 
        provider. 
           (3) Providers of relocation targeted case management 
        enrolled under this subdivision shall: 
           (i) meet the provider requirements under subdivision 4 that 
        are not waived by the commissioner; 
           (ii) be qualified to provide the services specified in 
        subdivision 6; 
           (iii) coordinate efforts with local social service agencies 
        and tribes; and 
           (iv) comply with the conflict of interest provisions 
        established under subdivision 4, paragraph (c). 
           (4) Local social service agencies and federally recognized 
        tribes shall cooperate with providers certified by the 
        commissioner under this subdivision to facilitate the 
        recipient's successful relocation from an institution to the 
        community. 
           (b) For home care targeted case management, an eligible 
        recipient must be assigned a case manager within 20 working days 
        of requesting a case manager from a home care targeted case 
        management provider, as defined in subdivision 5. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 19.  [256B.0622] [INTENSIVE REHABILITATIVE MENTAL 
        HEALTH SERVICES.] 
           Subdivision 1.  [SCOPE.] Subject to federal approval, 
        medical assistance covers medically necessary, intensive 
        nonresidential and residential rehabilitative mental health 
        services as defined in subdivision 2, for recipients as defined 
        in subdivision 3, when the services are provided by an entity 
        meeting the standards in this section. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them.  
           (a) "Intensive nonresidential rehabilitative mental health 
        services" means adult rehabilitative mental health services as 
        defined in section 256B.0623, subdivision 2, paragraph (a), 
        except that these services are provided by a multidisciplinary 
        staff using a total team approach consistent with assertive 
        community treatment, the Fairweather Lodge treatment model, and 
        other evidence-based practices, and directed to recipients with 
        a serious mental illness who require intensive services. 
           (b) "Intensive residential rehabilitative mental health 
        services" means short-term, time-limited services provided in a 
        residential setting to recipients who are in need of more 
        restrictive settings and are at risk of significant functional 
        deterioration if they do not receive these services.  Services 
        are designed to develop and enhance psychiatric stability, 
        personal and emotional adjustment, self-sufficiency, and skills 
        to live in a more independent setting.  Services must be 
        directed toward a targeted discharge date with specified client 
        outcomes and must be consistent with evidence-based practices. 
           (c) "Evidence-based practices" are nationally recognized 
        mental health services that are proven by substantial research 
        to be effective in helping individuals with serious mental 
        illness obtain specific treatment goals. 
           (d) "Overnight staff" means a member of the intensive 
        residential rehabilitative mental health treatment team who is 
        responsible during hours when recipients are typically asleep. 
           (e) "Treatment team" means all staff who provide services 
        under this section to recipients.  At a minimum, this includes 
        the clinical supervisor, mental health professionals, mental 
        health practitioners, and mental health rehabilitation workers. 
           Subd. 3.  [ELIGIBILITY.] An eligible recipient is an 
        individual who: 
           (1) is age 18 or older; 
           (2) is eligible for medical assistance; 
           (3) is diagnosed with a mental illness; 
           (4) because of a mental illness, has substantial disability 
        and functional impairment in three or more of the areas listed 
        in section 245.462, subdivision 11a, so that self-sufficiency is 
        markedly reduced; 
           (5) has one or more of the following:  a history of two or 
        more inpatient hospitalizations in the past year, significant 
        independent living instability, homelessness, or very frequent 
        use of mental health and related services yielding poor 
        outcomes; and 
           (6) in the written opinion of a licensed mental health 
        professional, has the need for mental health services that 
        cannot be met with other available community-based services, or 
        is likely to experience a mental health crisis or require a more 
        restrictive setting if intensive rehabilitative mental health 
        services are not provided. 
           Subd. 4.  [PROVIDER CERTIFICATION AND CONTRACT 
        REQUIREMENTS.] (a) The intensive nonresidential rehabilitative 
        mental health services provider must: 
           (1) have a contract with the host county to provide 
        intensive adult rehabilitative mental health services; and 
           (2) be certified by the commissioner as being in compliance 
        with this section and section 256B.0623. 
           (b) The intensive residential rehabilitative mental health 
        services provider must: 
           (1) be licensed under Minnesota Rules, parts 9520.0500 to 
        9520.0670; 
           (2) not exceed 16 beds per site; 
           (3) comply with the additional standards in this section; 
        and 
           (4) have a contract with the host county to provide these 
        services. 
           (c) The commissioner shall develop procedures for counties 
        and providers to submit contracts and other documentation as 
        needed to allow the commissioner to determine whether the 
        standards in this section are met. 
           Subd. 5.  [STANDARDS APPLICABLE TO BOTH NONRESIDENTIAL AND 
        RESIDENTIAL PROVIDERS.] (a) Services must be provided by 
        qualified staff as defined in section 256B.0623, subdivision 5, 
        who are trained and supervised according to section 256B.0623, 
        subdivision 6, except that mental health rehabilitation workers 
        acting as overnight staff are not required to comply with 
        section 256B.0623, subdivision 5, clause (3)(iv). 
           (b) The clinical supervisor must be an active member of the 
        treatment team.  The treatment team must meet with the clinical 
        supervisor at least weekly to discuss recipients' progress and 
        make rapid adjustments to meet recipients' needs.  The team 
        meeting shall include recipient-specific case reviews and 
        general treatment discussions among team members.  
        Recipient-specific case reviews and planning must be documented 
        in the individual recipient's treatment record. 
           (c) Treatment staff must have prompt access in person or by 
        telephone to a mental health practitioner or mental health 
        professional.  The provider must have the capacity to promptly 
        and appropriately respond to emergent needs and make any 
        necessary staffing adjustments to assure the health and safety 
        of recipients. 
           (d) The initial functional assessment must be completed 
        within ten days of intake and updated at least every three 
        months or prior to discharge from the service, whichever comes 
        first. 
           (e) The initial individual treatment plan must be completed 
        within ten days of intake and reviewed and updated at least 
        monthly with the recipient.  
           Subd. 6.  [ADDITIONAL STANDARDS APPLICABLE ONLY TO 
        INTENSIVE RESIDENTIAL REHABILITATIVE MENTAL HEALTH 
        SERVICES.] (a) The provider of intensive residential services 
        must have sufficient staff to provide 24 hour per day coverage 
        to deliver the rehabilitative services described in the 
        treatment plan and to safely supervise and direct the activities 
        of recipients given the recipient's level of behavioral and 
        psychiatric stability, cultural needs, and vulnerability.  The 
        provider must have the capacity within the facility to provide 
        integrated services for chemical dependency, illness management 
        services, and family education when appropriate. 
           (b) At a minimum: 
           (1) staff must be available and provide direction and 
        supervision whenever recipients are present in the facility; 
           (2) staff must remain awake during all work hours; 
           (3) there must be a staffing ratio of at least one to nine 
        recipients for each day and evening shift.  If more than nine 
        recipients are present at the residential site, there must be a 
        minimum of two staff during day and evening shifts, one of whom 
        must be a mental health practitioner or mental health 
        professional; 
           (4) if services are provided to recipients who need the 
        services of a medical professional, the provider shall assure 
        that these services are provided either by the provider's own 
        medical staff or through referral to a medical professional; and 
           (5) the provider must assure the timely availability of a 
        licensed registered nurse, either directly employed or under 
        contract, who is responsible for ensuring the effectiveness and 
        safety of medication administration in the facility and 
        assessing patients for medication side effects and drug 
        interactions. 
           Subd. 7.  [ADDITIONAL STANDARDS FOR NONRESIDENTIAL 
        SERVICES.] The standards in this subdivision apply to intensive 
        nonresidential rehabilitative mental health services. 
           (1) The treatment team must use team treatment, not an 
        individual treatment model. 
           (2) The clinical supervisor must function as a practicing 
        clinician at least on a part-time basis. 
           (3) The staffing ratio must not exceed ten recipients to 
        one full-time equivalent treatment team position. 
           (4) Services must be available at times that meet client 
        needs.  
           (5) The treatment team must actively and assertively engage 
        and reach out to the recipient's family members and significant 
        others, after obtaining the recipient's permission.  
           (6) The treatment team must establish ongoing communication 
        and collaboration between the team, family, and significant 
        others and educate the family and significant others about 
        mental illness, symptom management, and the family's role in 
        treatment. 
           (7) The treatment team must provide interventions to 
        promote positive interpersonal relationships. 
           Subd. 8.  [MEDICAL ASSISTANCE PAYMENT FOR INTENSIVE 
        REHABILITATIVE MENTAL HEALTH SERVICES.] (a) Payment for 
        residential and nonresidential services in this section shall be 
        based on one daily rate per provider inclusive of the following 
        services received by an eligible recipient in a given calendar 
        day:  all rehabilitative services under this section and crisis 
        stabilization services under section 256B.0624. 
           (b) Except as indicated in paragraph (c), payment will not 
        be made to more than one entity for each recipient for services 
        provided under this section on a given day.  If services under 
        this section are provided by a team that includes staff from 
        more than one entity, the team must determine how to distribute 
        the payment among the members. 
           (c) The host county shall recommend to the commissioner one 
        rate for each entity that will bill medical assistance for 
        residential services under this section and two rates for each 
        nonresidential provider.  The first nonresidential rate is for 
        recipients who are not receiving residential services.  The 
        second nonresidential rate is for recipients who are temporarily 
        receiving residential services and need continued contact with 
        the nonresidential team to assure timely discharge from 
        residential services.  In developing these rates, the host 
        county shall consider and document: 
           (1) the cost for similar services in the local trade area; 
           (2) actual costs incurred by entities providing the 
        services; 
           (3) the intensity and frequency of services to be provided 
        to each recipient; 
           (4) the degree to which recipients will receive services 
        other than services under this section; 
           (5) the costs of other services, such as case management, 
        that will be separately reimbursed; and 
           (6) input from the local planning process authorized by the 
        adult mental health initiative under section 245.4661, regarding 
        recipients' service needs. 
           (d) The rate for intensive rehabilitative mental health 
        services must exclude room and board, as defined in section 
        256I.03, subdivision 6, and services not covered under this 
        section, such as case management, partial hospitalization, home 
        care, and inpatient services.  Physician services that are not 
        separately billed may be included in the rate to the extent that 
        a psychiatrist is a member of the treatment team.  The county's 
        recommendation shall specify the period for which the rate will 
        be applicable, not to exceed two years. 
           (e) When services under this section are provided by an 
        assertive community team, case management functions must be an 
        integral part of the team.  The county must allocate costs which 
        are reimbursable under this section versus costs which are 
        reimbursable through case management or other reimbursement, so 
        that payment is not duplicated. 
           (f) The rate for a provider must not exceed the rate 
        charged by that provider for the same service to other payors. 
           (g) The commissioner shall approve or reject the county's 
        rate recommendation, based on the commissioner's own analysis of 
        the criteria in paragraph (c). 
           Subd. 9.  [PROVIDER ENROLLMENT; RATE SETTING FOR 
        COUNTY-OPERATED ENTITIES.] Counties that employ their own staff 
        to provide services under this section shall apply directly to 
        the commissioner for enrollment and rate setting.  In this case, 
        a county contract is not required and the commissioner shall 
        perform the program review and rate setting duties which would 
        otherwise be required of counties under this section. 
           Subd. 10.  [PROVIDER ENROLLMENT; RATE SETTING FOR 
        SPECIALIZED PROGRAM.] A provider proposing to serve a 
        subpopulation of eligible recipients may bypass the county 
        approval procedures in this section and receive approval for 
        provider enrollment and rate setting directly from the 
        commissioner under the following circumstances: 
           (1) the provider demonstrates that the subpopulation to be 
        served requires a specialized program which is not available 
        from county-approved entities; and 
           (2) the subpopulation to be served is of such a low 
        incidence that it is not feasible to develop a program serving a 
        single county or regional group of counties. 
           For providers meeting the criteria in clauses (1) and (2), 
        the commissioner shall perform the program review and rate 
        setting duties which would otherwise be required of counties 
        under this section. 
           Sec. 20.  Minnesota Statutes 2002, section 256B.0623, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them. 
           (a) "Adult rehabilitative mental health services" means 
        mental health services which are rehabilitative and enable the 
        recipient to develop and enhance psychiatric stability, social 
        competencies, personal and emotional adjustment, and independent 
        living and community skills, when these abilities are impaired 
        by the symptoms of mental illness.  Adult rehabilitative mental 
        health services are also appropriate when provided to enable a 
        recipient to retain stability and functioning, if the recipient 
        would be at risk of significant functional decompensation or 
        more restrictive service settings without these services. 
           (1) Adult rehabilitative mental health services instruct, 
        assist, and support the recipient in areas such as:  
        interpersonal communication skills, community resource 
        utilization and integration skills, crisis assistance, relapse 
        prevention skills, health care directives, budgeting and 
        shopping skills, healthy lifestyle skills and practices, cooking 
        and nutrition skills, transportation skills, medication 
        education and monitoring, mental illness symptom management 
        skills, household management skills, employment-related skills, 
        and transition to community living services. 
           (2) These services shall be provided to the recipient on a 
        one-to-one basis in the recipient's home or another community 
        setting or in groups. 
           (b) "Medication education services" means services provided 
        individually or in groups which focus on educating the recipient 
        about mental illness and symptoms; the role and effects of 
        medications in treating symptoms of mental illness; and the side 
        effects of medications.  Medication education is coordinated 
        with medication management services and does not duplicate it.  
        Medication education services are provided by physicians, 
        pharmacists, physician's assistants, or registered nurses. 
           (c) "Transition to community living services" means 
        services which maintain continuity of contact between the 
        rehabilitation services provider and the recipient and which 
        facilitate discharge from a hospital, residential treatment 
        program under Minnesota Rules, chapter 9505, board and lodging 
        facility, or nursing home.  Transition to community living 
        services are not intended to provide other areas of adult 
        rehabilitative mental health services.  
           Sec. 21.  Minnesota Statutes 2002, section 256B.0623, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PROVIDER ENTITY STANDARDS.] (a) The provider 
        entity must be: 
           (1) a county operated entity certified by the state; or 
           (2) a noncounty entity certified by the entity's host 
        county certified by the state following the certification 
        process and procedures developed by the commissioner. 
           (b) The certification process is a determination as to 
        whether the entity meets the standards in this subdivision.  The 
        certification must specify which adult rehabilitative mental 
        health services the entity is qualified to provide. 
           (c) If an entity seeks to provide services outside its host 
        county, it A noncounty provider entity must obtain additional 
        certification from each county in which it will provide 
        services.  The additional certification must be based on the 
        adequacy of the entity's knowledge of that county's local health 
        and human service system, and the ability of the entity to 
        coordinate its services with the other services available in 
        that county.  A county-operated entity must obtain this 
        additional certification from any other county in which it will 
        provide services. 
           (d) Recertification must occur at least every two three 
        years. 
           (e) The commissioner may intervene at any time and 
        decertify providers with cause.  The decertification is subject 
        to appeal to the state.  A county board may recommend that the 
        state decertify a provider for cause. 
           (f) The adult rehabilitative mental health services 
        provider entity must meet the following standards: 
           (1) have capacity to recruit, hire, manage, and train 
        mental health professionals, mental health practitioners, and 
        mental health rehabilitation workers; 
           (2) have adequate administrative ability to ensure 
        availability of services; 
           (3) ensure adequate preservice and inservice and ongoing 
        training for staff; 
           (4) ensure that mental health professionals, mental health 
        practitioners, and mental health rehabilitation workers are 
        skilled in the delivery of the specific adult rehabilitative 
        mental health services provided to the individual eligible 
        recipient; 
           (5) ensure that staff is capable of implementing culturally 
        specific services that are culturally competent and appropriate 
        as determined by the recipient's culture, beliefs, values, and 
        language as identified in the individual treatment plan; 
           (6) ensure enough flexibility in service delivery to 
        respond to the changing and intermittent care needs of a 
        recipient as identified by the recipient and the individual 
        treatment plan; 
           (7) ensure that the mental health professional or mental 
        health practitioner, who is under the clinical supervision of a 
        mental health professional, involved in a recipient's services 
        participates in the development of the individual treatment 
        plan; 
           (8) assist the recipient in arranging needed crisis 
        assessment, intervention, and stabilization services; 
           (9) ensure that services are coordinated with other 
        recipient mental health services providers and the county mental 
        health authority and the federally recognized American Indian 
        authority and necessary others after obtaining the consent of 
        the recipient.  Services must also be coordinated with the 
        recipient's case manager or care coordinator if the recipient is 
        receiving case management or care coordination services; 
           (10) develop and maintain recipient files, individual 
        treatment plans, and contact charting; 
           (11) develop and maintain staff training and personnel 
        files; 
           (12) submit information as required by the state; 
           (13) establish and maintain a quality assurance plan to 
        evaluate the outcome of services provided; 
           (14) keep all necessary records required by law; 
           (15) deliver services as required by section 245.461; 
           (16) comply with all applicable laws; 
           (17) be an enrolled Medicaid provider; 
           (18) maintain a quality assurance plan to determine 
        specific service outcomes and the recipient's satisfaction with 
        services; and 
           (19) develop and maintain written policies and procedures 
        regarding service provision and administration of the provider 
        entity. 
           (g) The commissioner shall develop statewide procedures for 
        provider certification, including timelines for counties to 
        certify qualified providers. 
           Sec. 22.  Minnesota Statutes 2002, section 256B.0623, 
        subdivision 5, is amended to read: 
           Subd. 5.  [QUALIFICATIONS OF PROVIDER STAFF.] Adult 
        rehabilitative mental health services must be provided by 
        qualified individual provider staff of a certified provider 
        entity.  Individual provider staff must be qualified under one 
        of the following criteria: 
           (1) a mental health professional as defined in section 
        245.462, subdivision 18, clauses (1) to (5).  If the recipient 
        has a current diagnostic assessment by a licensed mental health 
        professional as defined in section 245.462, subdivision 18, 
        clauses (1) to (5), recommending receipt of adult mental health 
        rehabilitative services, the definition of mental health 
        professional for purposes of this section includes a person who 
        is qualified under section 245.462, subdivision 18, clause (6), 
        and who holds a current and valid national certification as a 
        certified rehabilitation counselor or certified psychosocial 
        rehabilitation practitioner; 
           (2) a mental health practitioner as defined in section 
        245.462, subdivision 17.  The mental health practitioner must 
        work under the clinical supervision of a mental health 
        professional; or 
           (3) a mental health rehabilitation worker.  A mental health 
        rehabilitation worker means a staff person working under the 
        direction of a mental health practitioner or mental health 
        professional and under the clinical supervision of a mental 
        health professional in the implementation of rehabilitative 
        mental health services as identified in the recipient's 
        individual treatment plan who: 
           (i) is at least 21 years of age; 
           (ii) has a high school diploma or equivalent; 
           (iii) has successfully completed 30 hours of training 
        during the past two years in all of the following areas:  
        recipient rights, recipient-centered individual treatment 
        planning, behavioral terminology, mental illness, co-occurring 
        mental illness and substance abuse, psychotropic medications and 
        side effects, functional assessment, local community resources, 
        adult vulnerability, recipient confidentiality; and 
           (iv) meets the qualifications in subitem (A) or (B): 
           (A) has an associate of arts degree in one of the 
        behavioral sciences or human services, or is a registered nurse 
        without a bachelor's degree, or who within the previous ten 
        years has:  
           (1) three years of personal life experience with serious 
        and persistent mental illness; 
           (2) three years of life experience as a primary caregiver 
        to an adult with a serious mental illness or traumatic brain 
        injury; or 
           (3) 4,000 hours of supervised paid work experience in the 
        delivery of mental health services to adults with a serious 
        mental illness or traumatic brain injury; or 
           (B)(1) is fluent in the non-English language or competent 
        in the culture of the ethnic group to which at least 50 20 
        percent of the mental health rehabilitation worker's clients 
        belong; 
           (2) receives during the first 2,000 hours of work, monthly 
        documented individual clinical supervision by a mental health 
        professional; 
           (3) has 18 hours of documented field supervision by a 
        mental health professional or practitioner during the first 160 
        hours of contact work with recipients, and at least six hours of 
        field supervision quarterly during the following year; 
           (4) has review and cosignature of charting of recipient 
        contacts during field supervision by a mental health 
        professional or practitioner; and 
           (5) has 40 hours of additional continuing education on 
        mental health topics during the first year of employment. 
           Sec. 23.  Minnesota Statutes 2002, section 256B.0623, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REQUIRED TRAINING AND SUPERVISION.] (a) Mental 
        health rehabilitation workers must receive ongoing continuing 
        education training of at least 30 hours every two years in areas 
        of mental illness and mental health services and other areas 
        specific to the population being served.  Mental health 
        rehabilitation workers must also be subject to the ongoing 
        direction and clinical supervision standards in paragraphs (c) 
        and (d). 
           (b) Mental health practitioners must receive ongoing 
        continuing education training as required by their professional 
        license; or if the practitioner is not licensed, the 
        practitioner must receive ongoing continuing education training 
        of at least 30 hours every two years in areas of mental illness 
        and mental health services.  Mental health practitioners must 
        meet the ongoing clinical supervision standards in paragraph (c).
           (c) Clinical supervision may be provided by a full- or 
        part-time qualified professional employed by or under contract 
        with the provider entity.  Clinical supervision may be provided 
        by interactive videoconferencing according to procedures 
        developed by the commissioner.  A mental health professional 
        providing clinical supervision of staff delivering adult 
        rehabilitative mental health services must provide the following 
        guidance: 
           (1) review the information in the recipient's file; 
           (2) review and approve initial and updates of individual 
        treatment plans; 
           (3) meet with mental health rehabilitation workers and 
        practitioners, individually or in small groups, at least monthly 
        to discuss treatment topics of interest to the workers and 
        practitioners; 
           (4) meet with mental health rehabilitation workers and 
        practitioners, individually or in small groups, at least monthly 
        to discuss treatment plans of recipients, and approve by 
        signature and document in the recipient's file any resulting 
        plan updates; 
           (5) meet at least twice a month monthly with the directing 
        mental health practitioner, if there is one, to review needs of 
        the adult rehabilitative mental health services program, review 
        staff on-site observations and evaluate mental health 
        rehabilitation workers, plan staff training, review program 
        evaluation and development, and consult with the directing 
        practitioner; and 
           (6) be available for urgent consultation as the individual 
        recipient needs or the situation necessitates; and 
           (7) provide clinical supervision by full- or part-time 
        mental health professionals employed by or under contract with 
        the provider entity. 
           (d) An adult rehabilitative mental health services provider 
        entity must have a treatment director who is a mental health 
        practitioner or mental health professional.  The treatment 
        director must ensure the following: 
           (1) while delivering direct services to recipients, a newly 
        hired mental health rehabilitation worker must be directly 
        observed delivering services to recipients by the a mental 
        health practitioner or mental health professional for at least 
        six hours per 40 hours worked during the first 160 hours that 
        the mental health rehabilitation worker works; 
           (2) the mental health rehabilitation worker must receive 
        ongoing on-site direct service observation by a mental health 
        professional or mental health practitioner for at least six 
        hours for every six months of employment; 
           (3) progress notes are reviewed from on-site service 
        observation prepared by the mental health rehabilitation worker 
        and mental health practitioner for accuracy and consistency with 
        actual recipient contact and the individual treatment plan and 
        goals; 
           (4) immediate availability by phone or in person for 
        consultation by a mental health professional or a mental health 
        practitioner to the mental health rehabilitation services worker 
        during service provision; 
           (5) oversee the identification of changes in individual 
        recipient treatment strategies, revise the plan, and communicate 
        treatment instructions and methodologies as appropriate to 
        ensure that treatment is implemented correctly; 
           (6) model service practices which:  respect the recipient, 
        include the recipient in planning and implementation of the 
        individual treatment plan, recognize the recipient's strengths, 
        collaborate and coordinate with other involved parties and 
        providers; 
           (7) ensure that mental health practitioners and mental 
        health rehabilitation workers are able to effectively 
        communicate with the recipients, significant others, and 
        providers; and 
           (8) oversee the record of the results of on-site 
        observation and charting evaluation and corrective actions taken 
        to modify the work of the mental health practitioners and mental 
        health rehabilitation workers. 
           (e) A mental health practitioner who is providing treatment 
        direction for a provider entity must receive supervision at 
        least monthly from a mental health professional to: 
           (1) identify and plan for general needs of the recipient 
        population served; 
           (2) identify and plan to address provider entity program 
        needs and effectiveness; 
           (3) identify and plan provider entity staff training and 
        personnel needs and issues; and 
           (4) plan, implement, and evaluate provider entity quality 
        improvement programs.  
           Sec. 24.  Minnesota Statutes 2002, section 256B.0623, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DIAGNOSTIC ASSESSMENT.] Providers of adult 
        rehabilitative mental health services must complete a diagnostic 
        assessment as defined in section 245.462, subdivision 9, within 
        five days after the recipient's second visit or within 30 days 
        after intake, whichever occurs first.  In cases where a 
        diagnostic assessment is available that reflects the recipient's 
        current status, and has been completed within 180 days preceding 
        admission, an update must be completed.  An update shall include 
        a written summary by a mental health professional of the 
        recipient's current mental health status and service needs.  If 
        the recipient's mental health status has changed significantly 
        since the adult's most recent diagnostic assessment, a new 
        diagnostic assessment is required.  For initial implementation 
        of adult rehabilitative mental health services, until June 30, 
        2005, a diagnostic assessment that reflects the recipient's 
        current status and has been completed within the past three 
        years preceding admission is acceptable. 
           Sec. 25.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 19c, is amended to read: 
           Subd. 19c.  [PERSONAL CARE.] Medical assistance covers 
        personal care assistant services provided by an individual who 
        is qualified to provide the services according to subdivision 
        19a and section 256B.0627, where the services are prescribed by 
        a physician in accordance with a plan of treatment and are 
        supervised by the recipient or a qualified professional.  
        "Qualified professional" means a mental health professional as 
        defined in section 245.462, subdivision 18, or 245.4871, 
        subdivision 27; or a registered nurse as defined in sections 
        148.171 to 148.285, or a licensed social worker as defined in 
        section 148B.21.  As part of the assessment, the county public 
        health nurse will assist the recipient or responsible party to 
        identify the most appropriate person to provide supervision of 
        the personal care assistant.  The qualified professional shall 
        perform the duties described in Minnesota Rules, part 9505.0335, 
        subpart 4.  
           Sec. 26.  Minnesota Statutes 2002, section 256B.0627, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) "Activities of daily 
        living" includes eating, toileting, grooming, dressing, bathing, 
        transferring, mobility, and positioning.  
           (b) "Assessment" means a review and evaluation of a 
        recipient's need for home care services conducted in person.  
        Assessments for private duty nursing shall be conducted by a 
        registered private duty nurse.  Assessments for home health 
        agency services shall be conducted by a home health agency 
        nurse.  Assessments for personal care assistant services shall 
        be conducted by the county public health nurse or a certified 
        public health nurse under contract with the county.  A 
        face-to-face assessment must include:  documentation of health 
        status, determination of need, evaluation of service 
        effectiveness, identification of appropriate services, service 
        plan development or modification, coordination of services, 
        referrals and follow-up to appropriate payers and community 
        resources, completion of required reports, recommendation of 
        service authorization, and consumer education.  Once the need 
        for personal care assistant services is determined under this 
        section, the county public health nurse or certified public 
        health nurse under contract with the county is responsible for 
        communicating this recommendation to the commissioner and the 
        recipient.  A face-to-face assessment for personal care 
        assistant services is conducted on those recipients who have 
        never had a county public health nurse assessment.  A 
        face-to-face assessment must occur at least annually or when 
        there is a significant change in the recipient's condition or 
        when there is a change in the need for personal care assistant 
        services.  A service update may substitute for the annual 
        face-to-face assessment when there is not a significant change 
        in recipient condition or a change in the need for personal care 
        assistant service.  A service update or review for temporary 
        increase includes a review of initial baseline data, evaluation 
        of service effectiveness, redetermination of service need, 
        modification of service plan and appropriate referrals, update 
        of initial forms, obtaining service authorization, and on going 
        consumer education.  Assessments for medical assistance home 
        care services for mental retardation or related conditions and 
        alternative care services for developmentally disabled home and 
        community-based waivered recipients may be conducted by the 
        county public health nurse to ensure coordination and avoid 
        duplication.  Assessments must be completed on forms provided by 
        the commissioner within 30 days of a request for home care 
        services by a recipient or responsible party. 
           (c) "Care plan" means a written description of personal 
        care assistant services developed by the qualified professional 
        or the recipient's physician with the recipient or responsible 
        party to be used by the personal care assistant with a copy 
        provided to the recipient or responsible party. 
           (d) "Complex and regular private duty nursing care" means: 
           (1) complex care is private duty nursing provided to 
        recipients who are ventilator dependent or for whom a physician 
        has certified that were it not for private duty nursing the 
        recipient would meet the criteria for inpatient hospital 
        intensive care unit (ICU) level of care; and 
           (2) regular care is private duty nursing provided to all 
        other recipients. 
           (e) "Health-related functions" means functions that can be 
        delegated or assigned by a licensed health care professional 
        under state law to be performed by a personal care attendant. 
           (f) "Home care services" means a health service, determined 
        by the commissioner as medically necessary, that is ordered by a 
        physician and documented in a service plan that is reviewed by 
        the physician at least once every 60 days for the provision of 
        home health services, or private duty nursing, or at least once 
        every 365 days for personal care.  Home care services are 
        provided to the recipient at the recipient's residence that is a 
        place other than a hospital or long-term care facility or as 
        specified in section 256B.0625.  
           (g) "Instrumental activities of daily living" includes meal 
        planning and preparation, managing finances, shopping for food, 
        clothing, and other essential items, performing essential 
        household chores, communication by telephone and other media, 
        and getting around and participating in the community. 
           (h) "Medically necessary" has the meaning given in 
        Minnesota Rules, parts 9505.0170 to 9505.0475.  
           (i) "Personal care assistant" means a person who:  
           (1) is at least 18 years old, except for persons 16 to 18 
        years of age who participated in a related school-based job 
        training program or have completed a certified home health aide 
        competency evaluation; 
           (2) is able to effectively communicate with the recipient 
        and personal care provider organization; 
           (3) effective July 1, 1996, has completed one of the 
        training requirements as specified in Minnesota Rules, part 
        9505.0335, subpart 3, items A to D; 
           (4) has the ability to, and provides covered personal care 
        assistant services according to the recipient's care plan, 
        responds appropriately to recipient needs, and reports changes 
        in the recipient's condition to the supervising qualified 
        professional or physician; 
           (5) is not a consumer of personal care assistant services; 
        and 
           (6) is subject to criminal background checks and procedures 
        specified in section 245A.04.  
           (j) "Personal care provider organization" means an 
        organization enrolled to provide personal care assistant 
        services under the medical assistance program that complies with 
        the following:  (1) owners who have a five percent interest or 
        more, and managerial officials are subject to a background study 
        as provided in section 245A.04.  This applies to currently 
        enrolled personal care provider organizations and those agencies 
        seeking enrollment as a personal care provider organization.  An 
        organization will be barred from enrollment if an owner or 
        managerial official of the organization has been convicted of a 
        crime specified in section 245A.04, or a comparable crime in 
        another jurisdiction, unless the owner or managerial official 
        meets the reconsideration criteria specified in section 245A.04; 
        (2) the organization must maintain a surety bond and liability 
        insurance throughout the duration of enrollment and provides 
        proof thereof.  The insurer must notify the department of human 
        services of the cancellation or lapse of policy; and (3) the 
        organization must maintain documentation of services as 
        specified in Minnesota Rules, part 9505.2175, subpart 7, as well 
        as evidence of compliance with personal care assistant training 
        requirements. 
           (k) "Responsible party" means an individual residing with a 
        recipient of personal care assistant services who is capable of 
        providing the supportive care support necessary to assist the 
        recipient to live in the community, is at least 18 years 
        old, actively participates in planning and directing of personal 
        care assistant services, and is not a the personal care 
        assistant.  The responsible party must be accessible to the 
        recipient and the personal care assistant when personal care 
        services are being provided and monitor the services at least 
        weekly according to the plan of care.  The responsible party 
        must be identified at the time of assessment and listed on the 
        recipient's service agreement and care plan.  Responsible 
        parties who are parents of minors or guardians of minors or 
        incapacitated persons may delegate the responsibility to another 
        adult during a temporary absence of at least 24 hours but not 
        more than six months.  The person delegated as a responsible 
        party must be able to meet the definition of responsible party, 
        except that the delegated responsible party is required to 
        reside with the recipient only while serving as the responsible 
        party who is not the personal care assistant.  The responsible 
        party must assure that the delegate performs the functions of 
        the responsible party, is identified at the time of the 
        assessment, and is listed on the service agreement and the care 
        plan.  Foster care license holders may be designated the 
        responsible party for residents of the foster care home if case 
        management is provided as required in section 256B.0625, 
        subdivision 19a.  For persons who, as of April 1, 1992, are 
        sharing personal care assistant services in order to obtain the 
        availability of 24-hour coverage, an employee of the personal 
        care provider organization may be designated as the responsible 
        party if case management is provided as required in section 
        256B.0625, subdivision 19a. 
           (l) "Service plan" means a written description of the 
        services needed based on the assessment developed by the nurse 
        who conducts the assessment together with the recipient or 
        responsible party.  The service plan shall include a description 
        of the covered home care services, frequency and duration of 
        services, and expected outcomes and goals.  The recipient and 
        the provider chosen by the recipient or responsible party must 
        be given a copy of the completed service plan within 30 calendar 
        days of the request for home care services by the recipient or 
        responsible party. 
           (m) "Skilled nurse visits" are provided in a recipient's 
        residence under a plan of care or service plan that specifies a 
        level of care which the nurse is qualified to provide.  These 
        services are: 
           (1) nursing services according to the written plan of care 
        or service plan and accepted standards of medical and nursing 
        practice in accordance with chapter 148; 
           (2) services which due to the recipient's medical condition 
        may only be safely and effectively provided by a registered 
        nurse or a licensed practical nurse; 
           (3) assessments performed only by a registered nurse; and 
           (4) teaching and training the recipient, the recipient's 
        family, or other caregivers requiring the skills of a registered 
        nurse or licensed practical nurse. 
           (n) "Telehomecare" means the use of telecommunications 
        technology by a home health care professional to deliver home 
        health care services, within the professional's scope of 
        practice, to a patient located at a site other than the site 
        where the practitioner is located. 
           Sec. 27.  Minnesota Statutes 2002, section 256B.0627, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERSONAL CARE ASSISTANT SERVICES.] (a) The 
        personal care assistant services that are eligible for payment 
        are services and supports furnished to an individual, as needed, 
        to assist in accomplishing activities of daily living; 
        instrumental activities of daily living; health-related 
        functions through hands-on assistance, supervision, and cuing; 
        and redirection and intervention for behavior including 
        observation and monitoring.  
           (b) Payment for services will be made within the limits 
        approved using the prior authorized process established in 
        subdivision 5. 
           (c) The amount and type of services authorized shall be 
        based on an assessment of the recipient's needs in these areas: 
           (1) bowel and bladder care; 
           (2) skin care to maintain the health of the skin; 
           (3) repetitive maintenance range of motion, muscle 
        strengthening exercises, and other tasks specific to maintaining 
        a recipient's optimal level of function; 
           (4) respiratory assistance; 
           (5) transfers and ambulation; 
           (6) bathing, grooming, and hairwashing necessary for 
        personal hygiene; 
           (7) turning and positioning; 
           (8) assistance with furnishing medication that is 
        self-administered; 
           (9) application and maintenance of prosthetics and 
        orthotics; 
           (10) cleaning medical equipment; 
           (11) dressing or undressing; 
           (12) assistance with eating and meal preparation and 
        necessary grocery shopping; 
           (13) accompanying a recipient to obtain medical diagnosis 
        or treatment; 
           (14) assisting, monitoring, or prompting the recipient to 
        complete the services in clauses (1) to (13); 
           (15) redirection, monitoring, and observation that are 
        medically necessary and an integral part of completing the 
        personal care assistant services described in clauses (1) to 
        (14); 
           (16) redirection and intervention for behavior, including 
        observation and monitoring; 
           (17) interventions for seizure disorders, including 
        monitoring and observation if the recipient has had a seizure 
        that requires intervention within the past three months; 
           (18) tracheostomy suctioning using a clean procedure if the 
        procedure is properly delegated by a registered nurse.  Before 
        this procedure can be delegated to a personal care assistant, a 
        registered nurse must determine that the tracheostomy suctioning 
        can be accomplished utilizing a clean rather than a sterile 
        procedure and must ensure that the personal care assistant has 
        been taught the proper procedure; and 
           (19) incidental household services that are an integral 
        part of a personal care service described in clauses (1) to (18).
        For purposes of this subdivision, monitoring and observation 
        means watching for outward visible signs that are likely to 
        occur and for which there is a covered personal care service or 
        an appropriate personal care intervention.  For purposes of this 
        subdivision, a clean procedure refers to a procedure that 
        reduces the numbers of microorganisms or prevents or reduces the 
        transmission of microorganisms from one person or place to 
        another.  A clean procedure may be used beginning 14 days after 
        insertion. 
           (d) The personal care assistant services that are not 
        eligible for payment are the following:  
           (1) services not ordered by the physician; 
           (2) assessments by personal care assistant provider 
        organizations or by independently enrolled registered nurses; 
           (3) services that are not in the service plan; 
           (4) services provided by the recipient's spouse, legal 
        guardian for an adult or child recipient, or parent of a 
        recipient under age 18; 
           (5) services provided by a foster care provider of a 
        recipient who cannot direct the recipient's own care, unless 
        monitored by a county or state case manager under section 
        256B.0625, subdivision 19a; 
           (6) services provided by the residential or program license 
        holder in a residence for more than four persons; 
           (7) services that are the responsibility of a residential 
        or program license holder under the terms of a service agreement 
        and administrative rules; 
           (8) sterile procedures; 
           (9) injections of fluids into veins, muscles, or skin; 
           (10) services provided by parents of adult recipients, 
        adult children, or siblings of the recipient, unless these 
        relatives meet one of the following hardship criteria and the 
        commissioner waives this requirement: 
           (i) the relative resigns from a part-time or full-time job 
        to provide personal care for the recipient; 
           (ii) the relative goes from a full-time to a part-time job 
        with less compensation to provide personal care for the 
        recipient; 
           (iii) the relative takes a leave of absence without pay to 
        provide personal care for the recipient; 
           (iv) the relative incurs substantial expenses by providing 
        personal care for the recipient; or 
           (v) because of labor conditions, special language needs, or 
        intermittent hours of care needed, the relative is needed in 
        order to provide an adequate number of qualified personal care 
        assistants to meet the medical needs of the recipient; 
           (11) homemaker services that are not an integral part of a 
        personal care assistant services; 
           (12) (11) home maintenance, or chore services; 
           (13) (12) services not specified under paragraph (a); and 
           (14) (13) services not authorized by the commissioner or 
        the commissioner's designee. 
           (e) The recipient or responsible party may choose to 
        supervise the personal care assistant or to have a qualified 
        professional, as defined in section 256B.0625, subdivision 19c, 
        provide the supervision.  As required under section 256B.0625, 
        subdivision 19c, the county public health nurse, as a part of 
        the assessment, will assist the recipient or responsible party 
        to identify the most appropriate person to provide supervision 
        of the personal care assistant.  Health-related delegated tasks 
        performed by the personal care assistant will be under the 
        supervision of a qualified professional or the direction of the 
        recipient's physician.  If the recipient has a qualified 
        professional, Minnesota Rules, part 9505.0335, subpart 4, 
        applies. 
           Sec. 28.  Minnesota Statutes 2002, section 256B.0627, 
        subdivision 9, is amended to read: 
           Subd. 9.  [FLEXIBLE USE OF PERSONAL CARE ASSISTANT HOURS.] 
        (a) The commissioner may allow for the flexible use of personal 
        care assistant hours.  "Flexible use" means the scheduled use of 
        authorized hours of personal care assistant services, which vary 
        within the length of the service authorization in order to more 
        effectively meet the needs and schedule of the recipient.  
        Recipients may use their approved hours flexibly within the 
        service authorization period for medically necessary covered 
        services specified in the assessment required in subdivision 1.  
        The flexible use of authorized hours does not increase the total 
        amount of authorized hours available to a recipient as 
        determined under subdivision 5.  The commissioner shall not 
        authorize additional personal care assistant services to 
        supplement a service authorization that is exhausted before the 
        end date under a flexible service use plan, unless the county 
        public health nurse determines a change in condition and a need 
        for increased services is established. 
           (b) The recipient or responsible party, together with the 
        county public health nurse, shall determine whether flexible use 
        is an appropriate option based on the needs and preferences of 
        the recipient or responsible party, and, if appropriate, must 
        ensure that the allocation of hours covers the ongoing needs of 
        the recipient over the entire service authorization period.  As 
        part of the assessment and service planning process, the 
        recipient or responsible party must work with the county public 
        health nurse to develop a written month-to-month plan of the 
        projected use of personal care assistant services that is part 
        of the service plan and ensures that the: 
           (1) health and safety needs of the recipient will be met; 
           (2) total annual authorization will not exceed before the 
        end date; and 
           (3) how actual use of hours will be monitored.  
           (c) If the actual use of personal care assistant service 
        varies significantly from the use projected in the plan, the 
        written plan must be promptly updated by the recipient or 
        responsible party and the county public health nurse. 
           (d) The recipient or responsible party, together with the 
        provider, must work to monitor and document the use of 
        authorized hours and ensure that a recipient is able to manage 
        services effectively throughout the authorized period.  The 
        provider must ensure that the month-to-month plan is 
        incorporated into the care plan.  Upon request of the recipient 
        or responsible party, the provider must furnish regular updates 
        to the recipient or responsible party on the amount of personal 
        care assistant services used.  
           (e) The recipient or responsible party may revoke the 
        authorization for flexible use of hours by notifying the 
        provider and county public health nurse in writing. 
           (f) If the requirements in paragraphs (a) to (e) have not 
        substantially been met, the commissioner shall deny, revoke, or 
        suspend the authorization to use authorized hours flexibly.  The 
        recipient or responsible party may appeal the commissioner's 
        action according to section 256.045.  The denial, revocation, or 
        suspension to use the flexible hours option shall not affect the 
        recipient's authorized level of personal care assistant services 
        as determined under subdivision 5. 
           Sec. 29.  Minnesota Statutes 2002, section 256B.0911, 
        subdivision 4d, is amended to read: 
           Subd. 4d.  [PREADMISSION SCREENING OF INDIVIDUALS UNDER 65 
        YEARS OF AGE.] (a) It is the policy of the state of Minnesota to 
        ensure that individuals with disabilities or chronic illness are 
        served in the most integrated setting appropriate to their needs 
        and have the necessary information to make informed choices 
        about home and community-based service options. 
           (b) Individuals under 65 years of age who are admitted to a 
        nursing facility from a hospital must be screened prior to 
        admission as outlined in subdivisions 4a through 4c. 
           (c) Individuals under 65 years of age who are admitted to 
        nursing facilities with only a telephone screening must receive 
        a face-to-face assessment from the long-term care consultation 
        team member of the county in which the facility is located or 
        from the recipient's county case manager within 20 working 40 
        calendar days of admission. 
           (d) Individuals under 65 years of age who are admitted to a 
        nursing facility without preadmission screening according to the 
        exemption described in subdivision 4b, paragraph (a), clause 
        (3), and who remain in the facility longer than 30 days must 
        receive a face-to-face assessment within 40 days of admission.  
           (e) At the face-to-face assessment, the long-term care 
        consultation team member or county case manager must perform the 
        activities required under subdivision 3b. 
           (f) For individuals under 21 years of age, a screening 
        interview which recommends nursing facility admission must be 
        face-to-face and approved by the commissioner before the 
        individual is admitted to the nursing facility. 
           (g) In the event that an individual under 65 years of age 
        is admitted to a nursing facility on an emergency basis, the 
        county must be notified of the admission on the next working 
        day, and a face-to-face assessment as described in paragraph (c) 
        must be conducted within 20 working days 40 calendar days of 
        admission. 
           (h) At the face-to-face assessment, the long-term care 
        consultation team member or the case manager must present 
        information about home and community-based options so the 
        individual can make informed choices.  If the individual chooses 
        home and community-based services, the long-term care 
        consultation team member or case manager must complete a written 
        relocation plan within 20 working days of the visit.  The plan 
        shall describe the services needed to move out of the facility 
        and a time line for the move which is designed to ensure a 
        smooth transition to the individual's home and community. 
           (i) An individual under 65 years of age residing in a 
        nursing facility shall receive a face-to-face assessment at 
        least every 12 months to review the person's service choices and 
        available alternatives unless the individual indicates, in 
        writing, that annual visits are not desired.  In this case, the 
        individual must receive a face-to-face assessment at least once 
        every 36 months for the same purposes. 
           (j) Notwithstanding the provisions of subdivision 6, the 
        commissioner may pay county agencies directly for face-to-face 
        assessments for individuals under 65 years of age who are being 
        considered for placement or residing in a nursing facility. 
           Sec. 30.  Minnesota Statutes 2002, section 256B.0915, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [TRIBAL MANAGEMENT OF ELDERLY WAIVER.] 
        Notwithstanding contrary provisions of this section, or those in 
        other state laws or rules, the commissioner and White Earth 
        reservation may develop a model for tribal management of the 
        elderly waiver program and implement this model through a 
        contract between the state and White Earth reservation.  The 
        model shall include the provision of tribal waiver case 
        management, assessment for personal care assistance, and 
        administrative requirements otherwise carried out by counties 
        but shall not include tribal financial eligibility determination 
        for medical assistance. 
           Sec. 31.  Minnesota Statutes 2002, section 256B.092, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CASE MANAGEMENT ADMINISTRATION AND SERVICES.] 
        (a) The administrative functions of case management provided to 
        or arranged for a person include: 
           (1) intake review of eligibility for services; 
           (2) diagnosis screening; 
           (3) screening intake; 
           (4) service authorization diagnosis; 
           (5) review of eligibility for services the review and 
        authorization of services based upon an individualized service 
        plan; and 
           (6) responding to requests for conciliation conferences and 
        appeals according to section 256.045 made by the person, the 
        person's legal guardian or conservator, or the parent if the 
        person is a minor. 
           (b) Case management service activities provided to or 
        arranged for a person include: 
           (1) development of the individual service plan; 
           (2) informing the individual or the individual's legal 
        guardian or conservator, or parent if the person is a minor, of 
        service options; 
           (3) consulting with relevant medical experts or service 
        providers; 
           (3) (4) assisting the person in the identification of 
        potential providers; 
           (4) (5) assisting the person to access services; 
           (5) (6) coordination of services, if coordination is not 
        provided by another service provider; 
           (6) (7) evaluation and monitoring of the services 
        identified in the plan; and 
           (7) (8) annual reviews of service plans and services 
        provided. 
           (c) Case management administration and service activities 
        that are provided to the person with mental retardation or a 
        related condition shall be provided directly by county agencies 
        or under contract.  
           (d) Case managers are responsible for the administrative 
        duties and service provisions listed in paragraphs (a) and (b).  
        Case managers shall collaborate with consumers, families, legal 
        representatives, and relevant medical experts and service 
        providers in the development and annual review of the 
        individualized service and habilitation plans. 
           (e) The department of human services shall offer ongoing 
        education in case management to case managers.  Case managers 
        shall receive no less than ten hours of case management 
        education and disability-related training each year. 
           Sec. 32.  Minnesota Statutes 2002, section 256B.092, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEDERAL WAIVERS.] (a) The commissioner shall 
        apply for any federal waivers necessary to secure, to the extent 
        allowed by law, federal financial participation under United 
        States Code, title 42, sections 1396 et seq., as amended, for 
        the provision of services to persons who, in the absence of the 
        services, would need the level of care provided in a regional 
        treatment center or a community intermediate care facility for 
        persons with mental retardation or related conditions.  The 
        commissioner may seek amendments to the waivers or apply for 
        additional waivers under United States Code, title 42, sections 
        1396 et seq., as amended, to contain costs.  The commissioner 
        shall ensure that payment for the cost of providing home and 
        community-based alternative services under the federal waiver 
        plan shall not exceed the cost of intermediate care services 
        including day training and habilitation services that would have 
        been provided without the waivered services.  
           (b) The commissioner, in administering home and 
        community-based waivers for persons with mental retardation and 
        related conditions, shall ensure that day services for eligible 
        persons are not provided by the person's residential service 
        provider, unless the person or the person's legal representative 
        is offered a choice of providers and agrees in writing to 
        provision of day services by the residential service provider.  
        The individual service plan for individuals who choose to have 
        their residential service provider provide their day services 
        must describe how health, safety, and protection, and 
        habilitation needs will be met by, including how frequent and 
        regular contact with persons other than the residential service 
        provider will occur.  The individualized service plan must 
        address the provision of services during the day outside the 
        residence on weekdays.  
           (c) When a county is evaluating denials, reductions, or 
        terminations of home and community-based services under section 
        256B.0916 for an individual, the case manager shall offer to 
        meet with the individual or the individual's guardian in order 
        to discuss the prioritization of service needs within the 
        individualized service plan.  The reduction in the authorized 
        services for an individual due to changes in funding for 
        waivered services may not exceed the amount needed to ensure 
        medically necessary services to meet the individual's health, 
        safety, and welfare. 
           Sec. 33.  Minnesota Statutes 2002, section 256B.095, is 
        amended to read: 
           256B.095 [QUALITY ASSURANCE PROJECT SYSTEM ESTABLISHED.] 
           (a) Effective July 1, 1998, an alternative a quality 
        assurance licensing system project for persons with 
        developmental disabilities, which includes an alternative 
        quality assurance licensing system for programs for persons with 
        developmental disabilities, is established in Dodge, Fillmore, 
        Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Steele, 
        Wabasha, and Winona counties for the purpose of improving the 
        quality of services provided to persons with developmental 
        disabilities.  A county, at its option, may choose to have all 
        programs for persons with developmental disabilities located 
        within the county licensed under chapter 245A using standards 
        determined under the alternative quality assurance licensing 
        system project or may continue regulation of these programs 
        under the licensing system operated by the commissioner.  The 
        project expires on June 30, 2005 2007. 
           (b) Effective July 1, 2003, a county not listed in 
        paragraph (a) may apply to participate in the quality assurance 
        system established under paragraph (a).  The commission 
        established under section 256B.0951 may, at its option, allow 
        additional counties to participate in the system. 
           (c) Effective July 1, 2003, any county or group of counties 
        not listed in paragraph (a) may establish a quality assurance 
        system under this section.  A new system established under this 
        section shall have the same rights and duties as the system 
        established under paragraph (a).  A new system shall be governed 
        by a commission under section 256B.0951.  The commissioner shall 
        appoint the initial commission members based on recommendations 
        from advocates, families, service providers, and counties in the 
        geographic area included in the new system.  Counties that 
        choose to participate in a new system shall have the duties 
        assigned under section 256B.0952.  The new system shall 
        establish a quality assurance process under section 256B.0953.  
        The provisions of section 256B.0954 shall apply to a new system 
        established under this paragraph.  The commissioner shall 
        delegate authority to a new system established under this 
        paragraph according to section 256B.0955. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 34.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MEMBERSHIP.] The region 10 quality 
        assurance commission is established.  The commission consists of 
        at least 14 but not more than 21 members as follows:  at least 
        three but not more than five members representing advocacy 
        organizations; at least three but not more than five members 
        representing consumers, families, and their legal 
        representatives; at least three but not more than five members 
        representing service providers; at least three but not more than 
        five members representing counties; and the commissioner of 
        human services or the commissioner's designee.  Initial 
        membership of the commission shall be recruited and approved by 
        the region 10 stakeholders group.  Prior to approving the 
        commission's membership, the stakeholders group shall provide to 
        the commissioner a list of the membership in the stakeholders 
        group, as of February 1, 1997, a brief summary of meetings held 
        by the group since July 1, 1996, and copies of any materials 
        prepared by the group for public distribution.  The first 
        commission shall establish membership guidelines for the 
        transition and recruitment of membership for the commission's 
        ongoing existence.  Members of the commission who do not receive 
        a salary or wages from an employer for time spent on commission 
        duties may receive a per diem payment when performing commission 
        duties and functions.  All members may be reimbursed for 
        expenses related to commission activities.  Notwithstanding the 
        provisions of section 15.059, subdivision 5, the commission 
        expires on June 30, 2005 2007. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 35.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORITY TO HIRE STAFF; CHARGE FEES; PROVIDE 
        TECHNICAL ASSISTANCE.] (a) The commission may hire staff to 
        perform the duties assigned in this section.  
           (b) The commission may charge fees for its services. 
           (c) The commission may provide technical assistance to 
        other counties, families, providers, and advocates interested in 
        participating in a quality assurance system under section 
        256B.095, paragraph (b) or (c). 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 36.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSION DUTIES.] (a) By October 1, 1997, the 
        commission, in cooperation with the commissioners of human 
        services and health, shall do the following:  (1) approve an 
        alternative quality assurance licensing system based on the 
        evaluation of outcomes; (2) approve measurable outcomes in the 
        areas of health and safety, consumer evaluation, education and 
        training, providers, and systems that shall be evaluated during 
        the alternative licensing process; and (3) establish variable 
        licensure periods not to exceed three years based on outcomes 
        achieved.  For purposes of this subdivision, "outcome" means the 
        behavior, action, or status of a person that can be observed or 
        measured and can be reliably and validly determined. 
           (b) By January 15, 1998, the commission shall approve, in 
        cooperation with the commissioner of human services, a training 
        program for members of the quality assurance teams established 
        under section 256B.0952, subdivision 4. 
           (c) The commission and the commissioner shall establish an 
        ongoing review process for the alternative quality assurance 
        licensing system.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  
           (d) The commission shall contract with an independent 
        entity to conduct a financial review of the alternative quality 
        assurance project.  The review shall take into account the 
        comprehensive nature of the alternative system, which is 
        designed to evaluate the broad spectrum of licensed and 
        unlicensed entities that provide services to clients, as 
        compared to the current licensing system.  The review shall 
        include an evaluation of possible budgetary savings within the 
        department of human services as a result of implementation of 
        the alternative quality assurance project.  If a federal waiver 
        is approved under subdivision 7, the financial review shall also 
        evaluate possible savings within the department of health.  This 
        review must be completed by December 15, 2000. 
           (e) The commission shall submit a report to the legislature 
        by January 15, 2001, on the results of the review process for 
        the alternative quality assurance project, a summary of the 
        results of the independent financial review, and a 
        recommendation on whether the project should be extended beyond 
        June 30, 2001. 
           (f) The commissioner commission, in consultation with 
        the commission commissioner, shall examine the feasibility of 
        expanding work cooperatively with other populations to expand 
        the project system to other those populations or geographic 
        areas and identify barriers to expansion.  The commissioner 
        shall report findings and recommendations to the legislature by 
        December 15, 2004. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 37.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 5, is amended to read: 
           Subd. 5.  [VARIANCE OF CERTAIN STANDARDS PROHIBITED.] The 
        safety standards, rights, or procedural protections under 
        sections 245.825; 245.91 to 245.97; 245A.04, subdivisions 3, 3a, 
        3b, and 3c; 245A.09, subdivision 2, paragraph (c), clauses (2) 
        and (5); 245A.12; 245A.13; 252.41, subdivision 9; 256B.092, 
        subdivisions 1b, clause (7), and 10; 626.556; 626.557, and 
        procedures for the monitoring of psychotropic medications shall 
        not be varied under the alternative licensing quality assurance 
        licensing system project.  The commission may make 
        recommendations to the commissioners of human services and 
        health or to the legislature regarding alternatives to or 
        modifications of the rules and procedures referenced in this 
        subdivision. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 38.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 7, is amended to read: 
           Subd. 7.  [WAIVER OF RULES.] If a federal waiver is 
        approved under subdivision 8, the commissioner of health may 
        exempt residents of intermediate care facilities for persons 
        with mental retardation (ICFs/MR) who participate in the 
        alternative quality assurance project system established in 
        section 256B.095 from the requirements of Minnesota Rules, 
        chapter 4665. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 39.  Minnesota Statutes 2002, section 256B.0951, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EVALUATION.] The commission, in consultation 
        with the commissioner of human services, shall conduct an 
        evaluation of the alternative quality assurance system, and 
        present a report to the commissioner by June 30, 2004. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 40.  Minnesota Statutes 2002, section 256B.0952, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION.] For each year of the 
        project, region 10 Counties shall give notice to the commission 
        and commissioners of human services and health by March 15 of 
        intent to join the quality assurance alternative quality 
        assurance licensing system, effective July 1 of that year.  A 
        county choosing to participate in the alternative quality 
        assurance licensing system commits to participate until June 30, 
        2005.  Counties participating in the quality assurance 
        alternative licensing system as of January 1, 2001, shall notify 
        the commission and the commissioners of human services and 
        health by March 15, 2001, of intent to continue participation.  
        Counties that elect to continue participation must participate 
        in the alternative licensing system until June 30, 2005 for 
        three years. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 41.  Minnesota Statutes 2002, section 256B.0953, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSURE PERIODS.] (a) In order to be licensed 
        under the alternative quality assurance process licensing 
        system, a facility, program, or service must satisfy the health 
        and safety outcomes approved for the pilot project alternative 
        quality assurance licensing system. 
           (b) Licensure shall be approved for periods of one to three 
        years for a facility, program, or service that satisfies the 
        requirements of paragraph (a) and achieves the outcome 
        measurements in the categories of consumer evaluation, education 
        and training, providers, and systems. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 42.  Minnesota Statutes 2002, section 256B.0955, is 
        amended to read: 
           256B.0955 [DUTIES OF THE COMMISSIONER OF HUMAN SERVICES.] 
           (a) Effective July 1, 1998, the commissioner of human 
        services shall delegate authority to perform licensing functions 
        and activities, in accordance with section 245A.16, to counties 
        participating in the alternative quality assurance licensing 
        system.  The commissioner shall not license or reimburse a 
        facility, program, or service for persons with developmental 
        disabilities in a county that participates in the 
        alternative quality assurance licensing system if the 
        commissioner has received from the appropriate county 
        notification that the facility, program, or service has been 
        reviewed by a quality assurance team and has failed to qualify 
        for licensure. 
           (b) The commissioner may conduct random licensing 
        inspections based on outcomes adopted under section 256B.0951 at 
        facilities, programs, and services governed by the alternative 
        quality assurance licensing system.  The role of such random 
        inspections shall be to verify that the alternative quality 
        assurance licensing system protects the safety and well-being of 
        consumers and maintains the availability of high-quality 
        services for persons with developmental disabilities.  
           (c) The commissioner shall provide technical assistance and 
        support or training to the alternative licensing system pilot 
        project. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 43.  Minnesota Statutes 2002, section 256B.19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DIVISION OF COST.] The state and county 
        share of medical assistance costs not paid by federal funds 
        shall be as follows:  
           (1) beginning January 1, 1992, 50 percent state funds and 
        50 percent county funds for the cost of placement of severely 
        emotionally disturbed children in regional treatment centers; 
        and 
           (2) beginning January 1, 2003, 80 percent state funds and 
        20 percent county funds for the costs of nursing facility 
        placements of persons with disabilities under the age of 65 that 
        have exceeded 90 days.  This clause shall be subject to chapter 
        256G and shall not apply to placements in facilities not 
        certified to participate in medical assistance.; 
           (3) beginning July 1, 2004, 80 percent state funds and 20 
        percent county funds for the costs of placements that have 
        exceeded 90 days in intermediate care facilities for persons 
        with mental retardation or a related condition that have seven 
        or more beds.  This provision includes pass-through payments 
        made under section 256B.5015; and 
           (4) beginning July 1, 2004, when state funds are used to 
        pay for a nursing facility placement due to the facility's 
        status as an institution for mental diseases (IMD), the county 
        shall pay 20 percent of the nonfederal share of costs that have 
        exceeded 90 days.  This clause is subject to chapter 256G. 
           For counties that participate in a Medicaid demonstration 
        project under sections 256B.69 and 256B.71, the division of the 
        nonfederal share of medical assistance expenses for payments 
        made to prepaid health plans or for payments made to health 
        maintenance organizations in the form of prepaid capitation 
        payments, this division of medical assistance expenses shall be 
        95 percent by the state and five percent by the county of 
        financial responsibility.  
           In counties where prepaid health plans are under contract 
        to the commissioner to provide services to medical assistance 
        recipients, the cost of court ordered treatment ordered without 
        consulting the prepaid health plan that does not include 
        diagnostic evaluation, recommendation, and referral for 
        treatment by the prepaid health plan is the responsibility of 
        the county of financial responsibility. 
           Sec. 44.  Minnesota Statutes 2002, section 256B.47, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE TO RESIDENTS.] (a) No increase in nursing 
        facility rates for private paying residents shall be effective 
        unless the nursing facility notifies the resident or person 
        responsible for payment of the increase in writing 30 days 
        before the increase takes effect.  
           A nursing facility may adjust its rates without giving the 
        notice required by this subdivision when the purpose of the rate 
        adjustment is to reflect a necessary change in the level of care 
        provided to a case-mix classification of the resident.  If the 
        state fails to set rates as required by section 
        256B.431, subdivision 1, the time required for giving notice is 
        decreased by the number of days by which the state was late in 
        setting the rates. 
           (b) If the state does not set rates by the date required in 
        section 256B.431, subdivision 1, nursing facilities shall meet 
        the requirement for advance notice by informing the resident or 
        person responsible for payments, on or before the effective date 
        of the increase, that a rate increase will be effective on that 
        date.  If the exact amount has not yet been determined, the 
        nursing facility may raise the rates by the amount anticipated 
        to be allowed.  Any amounts collected from private pay residents 
        in excess of the allowable rate must be repaid to private pay 
        residents with interest at the rate used by the commissioner of 
        revenue for the late payment of taxes and in effect on the date 
        the rate increase is effective. 
           Sec. 45.  Minnesota Statutes 2002, section 256B.47, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTICE TO RESIDENTS.] (a) No increase in nursing 
        facility rates for private paying residents shall be effective 
        unless the nursing facility notifies the resident or person 
        responsible for payment of the increase in writing 30 days 
        before the increase takes effect.  
           A nursing facility may adjust its rates without giving the 
        notice required by this subdivision when the purpose of the rate 
        adjustment is to reflect a necessary change in the level of care 
        provided to a case-mix classification of the resident.  If the 
        state fails to set rates as required by section 
        256B.431, subdivision 1, the time required for giving notice is 
        decreased by the number of days by which the state was late in 
        setting the rates. 
           (b) If the state does not set rates by the date required in 
        section 256B.431, subdivision 1, nursing facilities shall meet 
        the requirement for advance notice by informing the resident or 
        person responsible for payments, on or before the effective date 
        of the increase, that a rate increase will be effective on that 
        date.  If the exact amount has not yet been determined, the 
        nursing facility may raise the rates by the amount anticipated 
        to be allowed.  Any amounts collected from private pay residents 
        in excess of the allowable rate must be repaid to private pay 
        residents with interest at the rate used by the commissioner of 
        revenue for the late payment of taxes and in effect on the date 
        the rate increase is effective. 
           Sec. 46.  Minnesota Statutes 2002, section 256B.49, 
        subdivision 15, is amended to read: 
           Subd. 15.  [INDIVIDUALIZED SERVICE PLAN.] (a) Each 
        recipient of home and community-based waivered services shall be 
        provided a copy of the written service plan which: 
           (1) is developed and signed by the recipient within ten 
        working days of the completion of the assessment; 
           (2) meets the assessed needs of the recipient; 
           (3) reasonably ensures the health and safety of the 
        recipient; 
           (4) promotes independence; 
           (5) allows for services to be provided in the most 
        integrated settings; and 
           (6) provides for an informed choice, as defined in section 
        256B.77, subdivision 2, paragraph (p), of service and support 
        providers. 
           (b) When a county is evaluating denials, reductions, or 
        terminations of home and community-based services under section 
        256B.49 for an individual, the case manager shall offer to meet 
        with the individual or the individual's guardian in order to 
        discuss the prioritization of service needs within the 
        individualized service plan.  The reduction in the authorized 
        services for an individual due to changes in funding for 
        waivered services may not exceed the amount needed to ensure 
        medically necessary services to meet the individual's health, 
        safety, and welfare. 
           Sec. 47.  Minnesota Statutes 2002, section 256B.501, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the following terms have the meaning given them.  
           (a) "Commissioner" means the commissioner of human services.
           (b) "Facility" means a facility licensed as a mental 
        retardation residential facility under section 252.28, licensed 
        as a supervised living facility under chapter 144, and certified 
        as an intermediate care facility for persons with mental 
        retardation or related conditions.  The term does not include a 
        state regional treatment center. 
           (c) "Habilitation services" means health and social 
        services directed toward increasing and maintaining the 
        physical, intellectual, emotional, and social functioning of 
        persons with mental retardation or related conditions.  
        Habilitation services include therapeutic activities, 
        assistance, training, supervision, and monitoring in the areas 
        of self-care, sensory and motor development, interpersonal 
        skills, communication, socialization, reduction or elimination 
        of maladaptive behavior, community living and mobility, health 
        care, leisure and recreation, money management, and household 
        chores. 
           (d) "Services during the day" means services or supports 
        provided to a person that enables the person to be fully 
        integrated into the community.  Services during the day must 
        include habilitation services, and may include a variety of 
        supports to enable the person to exercise choices for community 
        integration and inclusion activities.  Services during the day 
        may include, but are not limited to:  supported work, support 
        during community activities, community volunteer opportunities, 
        adult day care, recreational activities, and other 
        individualized integrated supports. 
           (e) "Waivered service" means home or community-based 
        service authorized under United States Code, title 42, section 
        1396n(c), as amended through December 31, 1987, and defined in 
        the Minnesota state plan for the provision of medical assistance 
        services.  Waivered services include, at a minimum, case 
        management, family training and support, developmental training 
        homes, supervised living arrangements, semi-independent living 
        services, respite care, and training and habilitation services. 
           Sec. 48.  Minnesota Statutes 2002, section 256B.501, is 
        amended by adding a subdivision to read: 
           Subd. 3m.  [SERVICES DURING THE DAY.] When establishing a 
        rate for services during the day, the commissioner shall ensure 
        that these services comply with active treatment requirements 
        for persons residing in an ICF/MR as defined under federal 
        regulations and shall ensure that services during the day for 
        eligible persons are not provided by the person's residential 
        service provider, unless the person or the person's legal 
        representative is offered a choice of providers and agrees in 
        writing to provision of services during the day by the 
        residential service provider, consistent with the individual 
        service plan.  The individual service plan for individuals who 
        choose to have their residential service provider provide their 
        services during the day must describe how health, safety, 
        protection, and habilitation needs will be met, including how 
        frequent and regular contact with persons other than the 
        residential service provider will occur.  The individualized 
        service plan must address the provision of services during the 
        day outside the residence.  
           Sec. 49.  Minnesota Statutes 2002, section 256B.5013, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [RATE ADJUSTMENTS FOR SHORT-TERM ADMISSIONS FOR 
        CRISIS OR SPECIALIZED MEDICAL CARE.] Beginning July 1, 2003, the 
        commissioner may designate up to 25 beds in ICF/MR facilities 
        statewide for short-term admissions due to crisis care needs or 
        care for medically fragile individuals.  The commissioner shall 
        adjust the monthly facility rate to provide payment for 
        vacancies in designated short-term beds by an amount equal to 
        the rate for each recipient residing in a designated bed for up 
        to 15 days per bed per month.  The commissioner may designate 
        short-term beds in ICF/MR facilities based on the short-term 
        care needs of a region or county as provided in section 252.28.  
        Nothing in this section shall be construed as limiting payments 
        for short-term admissions of eligible recipients to an ICF/MR 
        that is not designated for short-term admissions for crisis or 
        specialized medical care under this subdivision and does not 
        receive a temporary rate adjustment. 
           Sec. 50.  Minnesota Statutes 2002, section 256B.5015, is 
        amended to read: 
           256B.5015 [PASS-THROUGH OF TRAINING AND HABILITATION OTHER 
        SERVICES COSTS.] 
           Subdivision 1.  [DAY TRAINING AND HABILITATION SERVICES.] 
        Day training and habilitation services costs shall be paid as a 
        pass-through payment at the lowest rate paid for the comparable 
        services at that site under sections 252.40 to 252.46.  The 
        pass-through payments for training and habilitation services 
        shall be paid separately by the commissioner and shall not be 
        included in the computation of the ICF/MR facility total payment 
        rate. 
           Subd. 2.  [SERVICES DURING THE DAY.] Services during the 
        day, as defined in section 256B.501, but excluding day training 
        and habilitation services, shall be paid as a pass-through 
        payment no later than January 1, 2004.  The commissioner shall 
        establish rates for these services, other than day training and 
        habilitation services, at levels that do not exceed 75 percent 
        of a recipient's day training and habilitation service costs 
        prior to the service change. 
           When establishing a rate for these services, the 
        commissioner shall also consider an individual recipient's needs 
        as identified in the individualized service plan and the 
        person's need for active treatment as defined under federal 
        regulations.  The pass-through payments for services during the 
        day shall be paid separately by the commissioner and shall not 
        be included in the computation of the ICF/MR facility total 
        payment rate.  
           Sec. 51.  Minnesota Statutes 2002, section 256B.82, is 
        amended to read: 
           256B.82 [PREPAID PLANS AND MENTAL HEALTH REHABILITATIVE 
        SERVICES.] 
           Medical assistance and MinnesotaCare prepaid health plans 
        may include coverage for adult mental health rehabilitative 
        services under section 256B.0623, intensive rehabilitative 
        services under section 256B.0622, and adult mental health crisis 
        response services under section 256B.0624, beginning January 1, 
        2004 2005. 
           By January 15, 2003 2004, the commissioner shall report to 
        the legislature how these services should be included in prepaid 
        plans.  The commissioner shall consult with mental health 
        advocates, health plans, and counties in developing this 
        report.  The report recommendations must include a plan to 
        ensure coordination of these services between health plans and 
        counties, assure recipient access to essential community 
        providers, and monitor the health plans' delivery of services 
        through utilization review and quality standards. 
           Sec. 52.  [256I.08] [COUNTY SHARE FOR CERTAIN NURSING 
        FACILITY STAYS.] 
           Beginning July 1, 2004, if group residential housing is 
        used to pay for a nursing facility placement due to the 
        facility's status as an Institution for Mental Diseases, the 
        county is liable for 20 percent of the nonfederal share of costs 
        for persons under the age of 65 that have exceeded 90 days. 
           Sec. 53.  [CASE MANAGEMENT ACCESS FOR PERSONS SEEKING 
        COMMUNITY-BASED SERVICES.] 
           When a person requests services authorized under Minnesota 
        Statutes, section 256B.0621, 256B.092, or 256B.49, subdivision 
        13, the county must determine whether the person qualifies, 
        begin the screening process, begin individualized service plan 
        development, and provide mandated case management services or 
        relocation service coordination to those eligible within a 
        reasonable time.  If a county is unable to provide case 
        management services within the required time period under 
        Minnesota Statutes, sections 256B.0621, subdivision 7; 256B.49, 
        subdivision 13; and Minnesota Rules, parts 9525.0004 to 
        9525.0036, the county shall contract for case management 
        services to meet the obligation.  
           Sec. 54.  [CASE MANAGEMENT SERVICES REDESIGN.] 
           The commissioner shall report to the legislature on the 
        redesign of case management services.  In preparing the report, 
        the commissioner shall consult with representatives for 
        consumers, consumer advocates, counties, and service providers.  
        The report shall include draft legislation for case management 
        changes that will (1) streamline administration, (2) improve 
        consumer access to case management services, (3) address the use 
        of a comprehensive universal assessment protocol for persons 
        seeking community supports, (4) establish case management 
        performance measures, (5) provide for consumer choice of the 
        case management service vendor, and (6) provide a method of 
        payment for case management services that is cost-effective and 
        best supports the draft legislation in clauses (1) to (5).  The 
        proposed legislation shall be provided to the legislative 
        committees with jurisdiction over health and human services 
        issues by January 15, 2005. 
           Sec. 55.  [VACANCY LISTINGS.] 
           The commissioner of human services shall work with 
        interested stakeholders on how provider and industry specific 
        Web sites can provide useful information to consumers on bed 
        vacancies for group residential housing providers and 
        intermediate care facilities for persons with mental retardation 
        and related conditions.  Providers and industry trade 
        organizations are responsible for all costs related to 
        maintaining Web sites listing bed vacancies. 
           Sec. 56.  [HOMELESS SERVICES; STATE CONTRACTS.] 
           The commissioner of human services may contract directly 
        with nonprofit organizations providing homeless services in two 
        or more counties.  
           Sec. 57.  [GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITY, 
        OMBUDSMAN FOR MENTAL HEALTH AND MENTAL RETARDATION, AND COUNCIL 
        ON DISABILITIES.] 
           The governor's council on developmental disability under 
        Minnesota Statutes, section 16B.053, the ombudsman for mental 
        health and mental retardation under Minnesota Statutes, section 
        245.92, the centers for independent living, and the council on 
        disability under Minnesota Statutes, section 256.482, must study 
        the feasibility of reducing costs and increasing effectiveness 
        through (1) space coordination, (2) shared use of technology, 
        (3) coordination of resource priorities, and (4) consolidation 
        and make recommendations to the house and senate committees with 
        jurisdiction over these entities by January 15, 2004. 
           Sec. 58.  [LICENSING CHANGE.] 
           Notwithstanding Minnesota Statutes, sections 245A.11 and 
        252.291, the commissioner of human services shall allow an 
        existing intermediate care facility for persons with mental 
        retardation or related conditions located in Goodhue county 
        serving 39 children to be converted to four separately licensed 
        or certified cottages serving up to six children each. 
           Sec. 59.  [REVISOR'S INSTRUCTION.] 
           For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 60.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 252.32, subdivision 
        2; and 256B.5013, subdivision 4, are repealed July 1, 2003. 
           (b) Laws 2001, First Special Session chapter 9, article 13, 
        section 24, is repealed July 1, 2003. 

                                   ARTICLE 4 
                              CHILDREN'S SERVICES 
           Section 1.  Minnesota Statutes 2002, section 124D.23, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] (a) In order to qualify as 
        a family services collaborative, a minimum of one school 
        district, one county, one public health entity, one community 
        action agency as defined in section 119A.375, and one Head Start 
        grantee if the community action agency is not the designated 
        federal grantee for the Head Start program must agree in writing 
        to provide coordinated family services and commit resources to 
        an integrated fund.  Collaboratives are expected to have broad 
        community representation, which may include other local 
        providers, including additional school districts, counties, and 
        public health entities, other municipalities, public libraries, 
        existing culturally specific community organizations, tribal 
        entities, local health organizations, private and nonprofit 
        service providers, child care providers, local foundations, 
        community-based service groups, businesses, local transit 
        authorities or other transportation providers, community action 
        agencies under section 119A.375, senior citizen volunteer 
        organizations, parent organizations, parents, and sectarian 
        organizations that provide nonsectarian services. 
           (b) Members of the governing bodies of political 
        subdivisions involved in the establishment of a family services 
        collaborative shall select representatives of the 
        nongovernmental entities listed in paragraph (a) to serve on the 
        governing board of a collaborative.  The governing body members 
        of the political subdivisions shall select one or more 
        representatives of the nongovernmental entities within the 
        family service collaborative. 
           (c) Two or more family services collaboratives or 
        children's mental health collaboratives may consolidate 
        decision-making, pool resources, and collectively act on behalf 
        of the individual collaboratives, based on a written agreement 
        among the participating collaboratives. 
           Sec. 2.  Minnesota Statutes 2002, section 245.4874, is 
        amended to read: 
           245.4874 [DUTIES OF COUNTY BOARD.] 
           The county board in each county shall use its share of 
        mental health and Community Social Services Act funds allocated 
        by the commissioner according to a biennial children's mental 
        health component of the community social services plan required 
        under section 245.4888, and approved by the commissioner.  The 
        county board must: 
           (1) develop a system of affordable and locally available 
        children's mental health services according to sections 245.487 
        to 245.4888; 
           (2) establish a mechanism providing for interagency 
        coordination as specified in section 245.4875, subdivision 6; 
           (3) develop a biennial children's mental health component 
        of the community social services plan required under section 
        256E.09 which considers the assessment of unmet needs in the 
        county as reported by the local children's mental health 
        advisory council under section 245.4875, subdivision 5, 
        paragraph (b), clause (3).  The county shall provide, upon 
        request of the local children's mental health advisory council, 
        readily available data to assist in the determination of unmet 
        needs; 
           (4) assure that parents and providers in the county receive 
        information about how to gain access to services provided 
        according to sections 245.487 to 245.4888; 
           (5) coordinate the delivery of children's mental health 
        services with services provided by social services, education, 
        corrections, health, and vocational agencies to improve the 
        availability of mental health services to children and the 
        cost-effectiveness of their delivery; 
           (6) assure that mental health services delivered according 
        to sections 245.487 to 245.4888 are delivered expeditiously and 
        are appropriate to the child's diagnostic assessment and 
        individual treatment plan; 
           (7) provide the community with information about predictors 
        and symptoms of emotional disturbances and how to access 
        children's mental health services according to sections 245.4877 
        and 245.4878; 
           (8) provide for case management services to each child with 
        severe emotional disturbance according to sections 245.486; 
        245.4871, subdivisions 3 and 4; and 245.4881, subdivisions 1, 3, 
        and 5; 
           (9) provide for screening of each child under section 
        245.4885 upon admission to a residential treatment facility, 
        acute care hospital inpatient treatment, or informal admission 
        to a regional treatment center; 
           (10) prudently administer grants and purchase-of-service 
        contracts that the county board determines are necessary to 
        fulfill its responsibilities under sections 245.487 to 245.4888; 
           (11) assure that mental health professionals, mental health 
        practitioners, and case managers employed by or under contract 
        to the county to provide mental health services are qualified 
        under section 245.4871; 
           (12) assure that children's mental health services are 
        coordinated with adult mental health services specified in 
        sections 245.461 to 245.486 so that a continuum of mental health 
        services is available to serve persons with mental illness, 
        regardless of the person's age; and 
           (13) assure that culturally informed mental health 
        consultants are used as necessary to assist the county board in 
        assessing and providing appropriate treatment for children of 
        cultural or racial minority heritage; and 
           (14) arrange for or provide a children's mental health 
        screening to a child receiving child protective services or a 
        child in out-of-home placement, a child for whom parental rights 
        have been terminated, a child found to be delinquent, and a 
        child found to have committed a juvenile petty offense for the 
        third or subsequent time, unless a screening has been performed 
        within the previous 180 days, or the child is currently under 
        the care of a mental health professional.  The court or county 
        agency must notify a parent or guardian whose parental rights 
        have not been terminated of the potential mental health 
        screening and the option to prevent the screening by notifying 
        the court or county agency in writing.  The screening shall be 
        conducted with a screening instrument approved by the 
        commissioner of human services according to criteria that are 
        updated and issued annually to ensure that approved screening 
        instruments are valid and useful for child welfare and juvenile 
        justice populations, and shall be conducted by a mental health 
        practitioner as defined in section 245.4871, subdivision 26, or 
        a probation officer or local social services agency staff person 
        who is trained in the use of the screening instrument.  Training 
        in the use of the instrument shall include training in the 
        administration of the instrument, the interpretation of its 
        validity given the child's current circumstances, the state and 
        federal data practices laws and confidentiality standards, the 
        parental consent requirement, and providing respect for families 
        and cultural values.  If the screen indicates a need for 
        assessment, the child's family, or if the family lacks mental 
        health insurance, the local social services agency, in 
        consultation with the child's family, shall have conducted a 
        diagnostic assessment, including a functional assessment, as 
        defined in section 245.4871.  The administration of the 
        screening shall safeguard the privacy of children receiving the 
        screening and their families and shall comply with the Minnesota 
        Government Data Practices Act, chapter 13, and the federal 
        Health Insurance Portability and Accountability Act of 1996, 
        Public Law 104-191.  Screening results shall be considered 
        private data and the commissioner shall not collect individual 
        screening results. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 3.  Minnesota Statutes 2002, section 245.493, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [DUTIES OF CERTAIN COORDINATING BODIES.] (a) By 
        mutual agreement of the collaborative and a coordinating body 
        listed in this subdivision, a children's mental health 
        collaborative or a collaborative established by the merger of a 
        children's mental health collaborative and a family services 
        collaborative under section 124D.23, may assume the duties of a 
        community transition interagency committee established under 
        section 125A.22; an interagency early intervention committee 
        established under section 125A.30; a local advisory council 
        established under section 245.4875, subdivision 5; or a local 
        coordinating council established under section 245.4875, 
        subdivision 6. 
           (b) Two or more family services collaboratives or 
        children's mental health collaboratives may consolidate 
        decision-making, pool resources, and collectively act on behalf 
        of the individual collaboratives, based on a written agreement 
        among the participating collaboratives. 
           Sec. 4.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 23, is amended to read: 
           Subd. 23.  [DAY TREATMENT SERVICES.] Medical assistance 
        covers day treatment services as specified in sections 245.462, 
        subdivision 8, and 245.4871, subdivision 10, that are provided 
        under contract with the county board.  Notwithstanding Minnesota 
        Rules, part 9505.0323, subpart 15, the commissioner may set 
        authorization thresholds for day treatment for adults according 
        to section 256B.0625, subdivision 25.  Effective July 1, 2004, 
        medical assistance covers day treatment services for children as 
        specified under section 256B.0943.  
           Sec. 5.  Minnesota Statutes 2002, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 35a.  [CHILDREN'S MENTAL HEALTH CRISIS RESPONSE 
        SERVICES.] Medical assistance covers children's mental health 
        crisis response services according to section 256B.0944. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 6.  Minnesota Statutes 2002, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 35b.  [CHILDREN'S THERAPEUTIC SERVICES AND SUPPORTS.] 
        Medical assistance covers children's therapeutic services and 
        supports according to section 256B.0943. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 7.  Minnesota Statutes 2002, section 256B.0625, is 
        amended by adding a subdivision to read: 
           Subd. 45.  [SUBACUTE PSYCHIATRIC CARE FOR PERSONS UNDER 21 
        YEARS OF AGE.] Medical assistance covers subacute psychiatric 
        care for person under 21 years of age when: 
           (1) the services meet the requirements of Code of Federal 
        Regulations, title 42, section 440.160; 
           (2) the facility is accredited as a psychiatric treatment 
        facility by the joint commission on accreditation of healthcare 
        organizations, the commission on accreditation of rehabilitation 
        facilities, or the council on accreditation; and 
           (3) the facility is licensed by the commissioner of health 
        under section 144.50. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 8.  [256B.0943] [CHILDREN'S THERAPEUTIC SERVICES AND 
        SUPPORTS.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them. 
           (a) "Children's therapeutic services and supports" means 
        the flexible package of mental health services for children who 
        require varying therapeutic and rehabilitative levels of 
        intervention.  The services are time-limited interventions that 
        are delivered using various treatment modalities and 
        combinations of services designed to reach treatment outcomes 
        identified in the individual treatment plan. 
           (b) "Clinical supervision" means the overall responsibility 
        of the mental health professional for the control and direction 
        of individualized treatment planning, service delivery, and 
        treatment review for each client.  A mental health professional 
        who is an enrolled Minnesota health care program provider 
        accepts full professional responsibility for a supervisee's 
        actions and decisions, instructs the supervisee in the 
        supervisee's work, and oversees or directs the supervisee's work.
           (c) "County board" means the county board of commissioners 
        or board established under sections 402.01 to 402.10 or 471.59. 
           (d) "Crisis assistance" has the meaning given in section 
        245.4871, subdivision 9a. 
           (e) "Culturally competent provider" means a provider who 
        understands and can utilize to a client's benefit the client's 
        culture when providing services to the client.  A provider may 
        be culturally competent because the provider is of the same 
        cultural or ethnic group as the client or the provider has 
        developed the knowledge and skills through training and 
        experience to provide services to culturally diverse clients. 
           (f) "Day treatment program" for children means a site-based 
        structured program consisting of group psychotherapy for more 
        than three individuals and other intensive therapeutic services 
        provided by a multidisciplinary team, under the clinical 
        supervision of a mental health professional. 
           (g) "Diagnostic assessment" has the meaning given in 
        section 245.4871, subdivision 11. 
           (h) "Direct service time" means the time that a mental 
        health professional, mental health practitioner, or mental 
        health behavioral aide spends face-to-face with a client and the 
        client's family.  Direct service time includes time in which the 
        provider obtains a client's history or provides service 
        components of children's therapeutic services and supports.  
        Direct service time does not include time doing work before and 
        after providing direct services, including scheduling, 
        maintaining clinical records, consulting with others about the 
        client's mental health status, preparing reports, receiving 
        clinical supervision directly related to the client's 
        psychotherapy session, and revising the client's individual 
        treatment plan. 
           (i) "Direction of mental health behavioral aide" means the 
        activities of a mental health professional or mental health 
        practitioner in guiding the mental health behavioral aide in 
        providing services to a client.  The direction of a mental 
        health behavioral aide must be based on the client's 
        individualized treatment plan and meet the requirements in 
        subdivision 6, paragraph (b), clause (5). 
           (j) "Emotional disturbance" has the meaning given in 
        section 245.4871, subdivision 15.  For persons at least age 18 
        but under age 21, mental illness has the meaning given in 
        section 245.462, subdivision 20, paragraph (a). 
           (k) "Individual behavioral plan" means a plan of 
        intervention, treatment, and services for a child written by a 
        mental health professional or mental health practitioner, under 
        the clinical supervision of a mental health professional, to 
        guide the work of the mental health behavioral aide. 
           (l) "Individual treatment plan" has the meaning given in 
        section 245.4871, subdivision 21. 
           (m) "Mental health professional" means an individual as 
        defined in section 245.4871, subdivision 27, clauses (1) to (5), 
        or tribal vendor as defined in section 256B.02, subdivision 7, 
        paragraph (b). 
           (n) "Preschool program" means a day program licensed under 
        Minnesota Rules, parts 9503.0005 to 9503.0175, and enrolled as a 
        children's therapeutic services and supports provider to provide 
        a structured treatment program to a child who is at least 33 
        months old but who has not yet attended the first day of 
        kindergarten. 
           (o) "Skills training" means individual, family, or group 
        training designed to improve the basic functioning of the child 
        with emotional disturbance and the child's family in the 
        activities of daily living and community living, and to improve 
        the social functioning of the child and the child's family in 
        areas important to the child's maintaining or reestablishing 
        residency in the community.  Individual, family, and group 
        skills training must: 
           (1) consist of activities designed to promote skill 
        development of the child and the child's family in the use of 
        age-appropriate daily living skills, interpersonal and family 
        relationships, and leisure and recreational services; 
           (2) consist of activities that will assist the family's 
        understanding of normal child development and to use parenting 
        skills that will help the child with emotional disturbance 
        achieve the goals outlined in the child's individual treatment 
        plan; and 
           (3) promote family preservation and unification, promote 
        the family's integration with the community, and reduce the use 
        of unnecessary out-of-home placement or institutionalization of 
        children with emotional disturbance. 
           Subd. 2.  [COVERED SERVICE COMPONENTS OF CHILDREN'S 
        THERAPEUTIC SERVICES AND SUPPORTS.] (a) Subject to federal 
        approval, medical assistance covers medically necessary 
        children's therapeutic services and supports as defined in this 
        section that an eligible provider entity under subdivisions 4 
        and 5 provides to a client eligible under subdivision 3. 
           (b) The service components of children's therapeutic 
        services and supports are: 
           (1) individual, family, and group psychotherapy; 
           (2) individual, family, or group skills training provided 
        by a mental health professional or mental health practitioner; 
           (3) crisis assistance; 
           (4) mental health behavioral aide services; and 
           (5) direction of a mental health behavioral aide. 
           (c) Service components may be combined to constitute 
        therapeutic programs, including day treatment programs and 
        preschool programs.  Although day treatment and preschool 
        programs have specific client and provider eligibility 
        requirements, medical assistance only pays for the service 
        components listed in paragraph (b). 
           Subd. 3.  [DETERMINATION OF CLIENT ELIGIBILITY.] A client's 
        eligibility to receive children's therapeutic services and 
        supports under this section shall be determined based on a 
        diagnostic assessment by a mental health professional that is 
        performed within 180 days of the initial start of service.  The 
        diagnostic assessment must: 
           (1) include current diagnoses on all five axes of the 
        client's current mental health status; 
           (2) determine whether a child under age 18 has a diagnosis 
        of emotional disturbance or, if the person is between the ages 
        of 18 and 21, whether the person has a mental illness; 
           (3) document children's therapeutic services and supports 
        as medically necessary to address an identified disability, 
        functional impairment, and the individual client's needs and 
        goals; 
           (4) be used in the development of the individualized 
        treatment plan; and 
           (5) be completed annually until age 18.  For individuals 
        between age 18 and 21, unless a client's mental health condition 
        has changed markedly since the client's most recent diagnostic 
        assessment, annual updating is necessary.  For the purpose of 
        this section, "updating" means a written summary, including 
        current diagnoses on all five axes, by a mental health 
        professional of the client's current mental health status and 
        service needs. 
           Subd. 4.  [PROVIDER ENTITY CERTIFICATION.] (a) Effective 
        July 1, 2003, the commissioner shall establish an initial 
        provider entity application and certification process and 
        recertification process to determine whether a provider entity 
        has an administrative and clinical infrastructure that meets the 
        requirements in subdivisions 5 and 6.  The commissioner shall 
        recertify a provider entity at least every three years.  The 
        commissioner shall establish a process for decertification of a 
        provider entity that no longer meets the requirements in this 
        section.  The county, tribe, and the commissioner shall be 
        mutually responsible and accountable for the county's, tribe's, 
        and state's part of the certification, recertification, and 
        decertification processes. 
           (b) For purposes of this section, a provider entity must be:
           (1) an Indian health services facility or a facility owned 
        and operated by a tribe or tribal organization operating as a 
        638 facility under Public Law 93-368 certified by the state; 
           (2) a county-operated entity certified by the state; or 
           (3) a noncounty entity recommended for certification by the 
        provider's host county and certified by the state. 
           Subd. 5.  [PROVIDER ENTITY ADMINISTRATIVE INFRASTRUCTURE 
        REQUIREMENTS.] (a) To be an eligible provider entity under this 
        section, a provider entity must have an administrative 
        infrastructure that establishes authority and accountability for 
        decision making and oversight of functions, including finance, 
        personnel, system management, clinical practice, and performance 
        measurement.  The provider must have written policies and 
        procedures that it reviews and updates every three years and 
        distributes to staff initially and upon each subsequent update. 
           (b) The administrative infrastructure written policies and 
        procedures must include: 
           (1) personnel procedures, including a process for:  (i) 
        recruiting, hiring, training, and retention of culturally and 
        linguistically competent providers; (ii) conducting a criminal 
        background check on all direct service providers and volunteers; 
        (iii) investigating, reporting, and acting on violations of 
        ethical conduct standards; (iv) investigating, reporting, and 
        acting on violations of data privacy policies that are compliant 
        with federal and state laws; (v) utilizing volunteers, including 
        screening applicants, training and supervising volunteers, and 
        providing liability coverage for volunteers; and (vi) 
        documenting that a mental health professional, mental health 
        practitioner, or mental health behavioral aide meets the 
        applicable provider qualification criteria, training criteria 
        under subdivision 8, and clinical supervision or direction of a 
        mental health behavioral aide requirements under subdivision 6; 
           (2) fiscal procedures, including internal fiscal control 
        practices and a process for collecting revenue that is compliant 
        with federal and state laws; 
           (3) if a client is receiving services from a case manager 
        or other provider entity, a service coordination process that 
        ensures services are provided in the most appropriate manner to 
        achieve maximum benefit to the client.  The provider entity must 
        ensure coordination and nonduplication of services consistent 
        with county board coordination procedures established under 
        section 245.4881, subdivision 5; 
           (4) a performance measurement system, including monitoring 
        to determine cultural appropriateness of services identified in 
        the individual treatment plan, as determined by the client's 
        culture, beliefs, values, and language, and family-driven 
        services; and 
           (5) a process to establish and maintain individual client 
        records.  The client's records must include:  (i) the client's 
        personal information; (ii) forms applicable to data privacy; 
        (iii) the client's diagnostic assessment, updates, tests, 
        individual treatment plan, and individual behavior plan, if 
        necessary; (iv) documentation of service delivery as specified 
        under subdivision 6; (v) telephone contacts; (vi) discharge 
        plan; and (vii) if applicable, insurance information. 
           Subd. 6.  [PROVIDER ENTITY CLINICAL INFRASTRUCTURE 
        REQUIREMENTS.] (a) To be an eligible provider entity under this 
        section, a provider entity must have a clinical infrastructure 
        that utilizes diagnostic assessment, an individualized treatment 
        plan, service delivery, and individual treatment plan review 
        that are culturally competent, child-centered, and family-driven 
        to achieve maximum benefit for the client.  The provider entity 
        must review and update the clinical policies and procedures 
        every three years and must distribute the policies and 
        procedures to staff initially and upon each subsequent update. 
           (b) The clinical infrastructure written policies and 
        procedures must include policies and procedures for: 
           (1) providing or obtaining a client's diagnostic assessment 
        that identifies acute and chronic clinical disorders, 
        co-occurring medical conditions, sources of psychological and 
        environmental problems, and a functional assessment.  The 
        functional assessment must clearly summarize the client's 
        individual strengths and needs; 
           (2) developing an individual treatment plan that is:  (i) 
        based on the information in the client's diagnostic assessment; 
        (ii) developed no later than the end of the first psychotherapy 
        session after the completion of the client's diagnostic 
        assessment by the mental health professional who provides the 
        client's psychotherapy; (iii) developed through a 
        child-centered, family-driven planning process that identifies 
        service needs and individualized, planned, and culturally 
        appropriate interventions that contain specific treatment goals 
        and objectives for the client and the client's family or foster 
        family; (iv) reviewed at least once every 90 days and revised, 
        if necessary; and (v) signed by the client or, if appropriate, 
        by the client's parent or other person authorized by statute to 
        consent to mental health services for the client; 
           (3) developing an individual behavior plan that documents 
        services to be provided by the mental health behavioral aide.  
        The individual behavior plan must include:  (i) detailed 
        instructions on the service to be provided; (ii) time allocated 
        to each service; (iii) methods of documenting the child's 
        behavior; (iv) methods of monitoring the child's progress in 
        reaching objectives; and (v) goals to increase or decrease 
        targeted behavior as identified in the individual treatment 
        plan; 
           (4) clinical supervision of the mental health practitioner 
        and mental health behavioral aide.  A mental health professional 
        must document the clinical supervision the professional provides 
        by cosigning individual treatment plans and making entries in 
        the client's record on supervisory activities.  Clinical 
        supervision does not include the authority to make or terminate 
        court-ordered placements of the child.  A clinical supervisor 
        must be available for urgent consultation as required by the 
        individual client's needs or the situation.  Clinical 
        supervision may occur individually or in a small group to 
        discuss treatment and review progress toward goals.  The focus 
        of clinical supervision must be the client's treatment needs and 
        progress and the mental health practitioner's or behavioral 
        aide's ability to provide services; 
           (5) providing direction to a mental health behavioral 
        aide.  For entities that employ mental health behavioral aides, 
        the clinical supervisor must be employed by the provider entity 
        to ensure necessary and appropriate oversight for the client's 
        treatment and continuity of care.  The mental health 
        professional or mental health practitioner giving direction must 
        begin with the goals on the individualized treatment plan, and 
        instruct the mental health behavioral aide on how to construct 
        therapeutic activities and interventions that will lead to goal 
        attainment.  The professional or practitioner giving direction 
        must also instruct the mental health behavioral aide about the 
        client's diagnosis, functional status, and other characteristics 
        that are likely to affect service delivery.  Direction must also 
        include determining that the mental health behavioral aide has 
        the skills to interact with the client and the client's family 
        in ways that convey personal and cultural respect and that the 
        aide actively solicits information relevant to treatment from 
        the family.  The aide must be able to clearly explain the 
        activities the aide is doing with the client and the activities' 
        relationship to treatment goals.  Direction is more didactic 
        than is supervision and requires the professional or 
        practitioner providing it to continuously evaluate the mental 
        health behavioral aide's ability to carry out the activities of 
        the individualized treatment plan and the individualized 
        behavior plan.  When providing direction, the professional or 
        practitioner must:  (i) review progress notes prepared by the 
        mental health behavioral aide for accuracy and consistency with 
        diagnostic assessment, treatment plan, and behavior goals and 
        the professional or practitioner must approve and sign the 
        progress notes; (ii) identify changes in treatment strategies, 
        revise the individual behavior plan, and communicate treatment 
        instructions and methodologies as appropriate to ensure that 
        treatment is implemented correctly; (iii) demonstrate 
        family-friendly behaviors that support healthy collaboration 
        among the child, the child's family, and providers as treatment 
        is planned and implemented; (iv) ensure that the mental health 
        behavioral aide is able to effectively communicate with the 
        child, the child's family, and the provider; and (v) record the 
        results of any evaluation and corrective actions taken to modify 
        the work of the mental health behavioral aide; 
           (6) providing service delivery that implements the 
        individual treatment plan and meets the requirements under 
        subdivision 9; and 
           (7) individual treatment plan review.  The review must 
        determine the extent to which the services have met the goals 
        and objectives in the previous treatment plan.  The review must 
        assess the client's progress and ensure that services and 
        treatment goals continue to be necessary and appropriate to the 
        client and the client's family or foster family.  Revision of 
        the individual treatment plan does not require a new diagnostic 
        assessment unless the client's mental health status has changed 
        markedly.  The updated treatment plan must be signed by the 
        client, if appropriate, and by the client's parent or other 
        person authorized by statute to give consent to the mental 
        health services for the child. 
           Subd. 7.  [QUALIFICATIONS OF INDIVIDUAL AND TEAM 
        PROVIDERS.] (a) An individual or team provider working within 
        the scope of the provider's practice or qualifications may 
        provide service components of children's therapeutic services 
        and supports that are identified as medically necessary in a 
        client's individual treatment plan. 
           (b) An individual provider and multidisciplinary team 
        include: 
           (1) a mental health professional as defined in subdivision 
        1, paragraph (m); 
           (2) a mental health practitioner as defined in section 
        245.4871, subdivision 26.  The mental health practitioner must 
        work under the clinical supervision of a mental health 
        professional; 
           (3) a mental health behavioral aide working under the 
        direction of a mental health professional to implement the 
        rehabilitative mental health services identified in the client's 
        individual treatment plan.  A level I mental health behavioral 
        aide must:  (i) be at least 18 years old; (ii) have a high 
        school diploma or general equivalency diploma (GED) or two years 
        of experience as a primary caregiver to a child with severe 
        emotional disturbance within the previous ten years; and (iii) 
        meet preservices and continuing education requirements under 
        subdivision 8.  A level II mental health behavioral aide must: 
        (i) be at least 18 years old; (ii) have an associate or 
        bachelor's degree or 4,000 hours of experience in delivering 
        clinical services in the treatment of mental illness concerning 
        children or adolescents; and (iii) meet preservice and 
        continuing education requirements in subdivision 8; 
           (4) a preschool program multidisciplinary team that 
        includes at least one mental health professional and one or more 
        of the following individuals under the clinical supervision of a 
        mental health professional:  (i) a mental health practitioner; 
        or (ii) a program person, including a teacher, assistant 
        teacher, or aide, who meets the qualifications and training 
        standards of a level I mental health behavioral aide; or 
           (5) a day treatment multidisciplinary team that includes at 
        least one mental health professional and one mental health 
        practitioner. 
           Subd. 8.  [REQUIRED PRESERVICE AND CONTINUING 
        EDUCATION.] (a) A provider entity shall establish a plan to 
        provide preservice and continuing education for staff.  The plan 
        must clearly describe the type of training necessary to maintain 
        current skills and obtain new skills, and that relates to the 
        provider entity's goals and objectives for services offered. 
           (b) A provider that employs a mental health behavioral aide 
        under this section must require the mental health behavioral 
        aide to complete 30 hours of preservice training.  The 
        preservice training must include topics specified in Minnesota 
        Rules, part 9535.4068, subparts 1 and 2, and parent team 
        training.  The preservice training must include 15 hours of 
        in-person training of a mental health behavioral aide in mental 
        health services delivery and eight hours of parent team 
        training.  Components of parent team training include:  
           (1) partnering with parents; 
           (2) fundamentals of family support; 
           (3) fundamentals of policy and decision making; 
           (4) defining equal partnership; 
           (5) complexities of the parent and service provider 
        partnership in multiple service delivery systems due to system 
        strengths and weaknesses; 
           (6) sibling impacts; 
           (7) support networks; and 
           (8) community resources. 
           (c) A provider entity that employs a mental health 
        practitioner and a mental health behavioral aide to provide 
        children's therapeutic services and supports under this section 
        must require the mental health practitioner and mental health 
        behavioral aide to complete 20 hours of continuing education 
        every two calendar years.  The continuing education must be 
        related to serving the needs of a child with emotional 
        disturbance in the child's home environment and the child's 
        family.  The topics covered in orientation and training must 
        conform to Minnesota Rules, part 9535.4068. 
           (d) The provider entity must document the mental health 
        practitioner's or mental health behavioral aide's annual 
        completion of the required continuing education.  The 
        documentation must include the date, subject, and number of 
        hours of the continuing education, and attendance records, as 
        verified by the staff member's signature, job title, and the 
        instructor's name.  The provider entity must keep documentation 
        for each employee, including records of attendance at 
        professional workshops and conferences, at a central location 
        and in the employee's personnel file. 
           Subd. 9.  [SERVICE DELIVERY CRITERIA.] (a) In delivering 
        services under this section, a certified provider entity must 
        ensure that: 
           (1) each individual provider's caseload size permits the 
        provider to deliver services to both clients with severe, 
        complex needs and clients with less intensive needs.  The 
        provider's caseload size should reasonably enable the provider 
        to play an active role in service planning, monitoring, and 
        delivering services to meet the client's and client's family's 
        needs, as specified in each client's individual treatment plan; 
           (2) site-based programs, including day treatment and 
        preschool programs, provide staffing and facilities to ensure 
        the client's health, safety, and protection of rights, and that 
        the programs are able to implement each client's individual 
        treatment plan; 
           (3) a day treatment program is provided to a group of 
        clients by a multidisciplinary staff under the clinical 
        supervision of a mental health professional.  The day treatment 
        program must be provided in and by:  (i) an outpatient hospital 
        accredited by the joint commission on accreditation of health 
        organizations and licensed under sections 144.50 to 144.55; (ii) 
        a community mental health center under section 245.62; and (iii) 
        an entity that is under contract with the county board to 
        operate a program that meets the requirements of sections 
        245.4712, subdivision 2, and 245.4884, subdivision 2, and 
        Minnesota Rules, parts 9505.0170 to 9505.0475. The day treatment 
        program must stabilize the client's mental health status while 
        developing and improving the client's independent living and 
        socialization skills.  The goal of the day treatment program 
        must be to reduce or relieve the effects of mental illness and 
        provide training to enable the client to live in the community.  
        The program must be available at least one day a week for a 
        minimum three-hour time block.  The three-hour time block must 
        include at least one hour, but no more than two hours, of 
        individual or group psychotherapy.  The remainder of the 
        three-hour time block may include recreation therapy, 
        socialization therapy, or independent living skills therapy, but 
        only if the therapies are included in the client's individual 
        treatment plan.  Day treatment programs are not part of 
        inpatient or residential treatment services; and 
           (4) a preschool program is a structured treatment program 
        offered to a child who is at least 33 months old, but who has 
        not yet reached the first day of kindergarten, by a preschool 
        multidisciplinary team in a day program licensed under Minnesota 
        Rules, parts 9503.0005 to 9503.0175.  The program must be 
        available at least one day a week for a minimum two-hour time 
        block.  The structured treatment program may include individual 
        or group psychotherapy and recreation therapy, socialization 
        therapy, or independent living skills therapy, if included in 
        the client's individual treatment plan. 
           (b) A provider entity must delivery the service components 
        of children's therapeutic services and supports in compliance 
        with the following requirements: 
           (1) individual, family, and group psychotherapy must be 
        delivered as specified in Minnesota Rules, parts 9505.0523; 
           (2) individual, family, or group skills training must be 
        provided by a mental health professional or a mental health 
        practitioner who has a consulting relationship with a mental 
        health professional who accepts full professional responsibility 
        for the training; 
           (3) crisis assistance must be an intense, time-limited, and 
        designed to resolve or stabilize crisis through arrangements for 
        direct intervention and support services to the child and the 
        child's family.  Crisis assistance must utilize resources 
        designed to address abrupt or substantial changes in the 
        functioning of the child or the child's family as evidenced by a 
        sudden change in behavior with negative consequences for well 
        being, a loss of usual coping mechanisms, or the presentation of 
        danger to self or others; 
           (4) medically necessary services that are provided by a 
        mental health behavioral aide must be designed to improve the 
        functioning of the child and support the family in activities of 
        daily and community living.  A mental health behavioral aide 
        must document the delivery of services in written progress 
        notes.  The mental health behavioral aide must implement goals 
        in the treatment plan for the child's emotional disturbance that 
        allow the child to acquire developmentally and therapeutically 
        appropriate daily living skills, social skills, and leisure and 
        recreational skills through targeted activities.  These 
        activities may include: 
           (i) assisting a child as needed with skills development in 
        dressing, eating, and toileting; 
           (ii) assisting, monitoring, and guiding the child to 
        complete tasks, including facilitating the child's participation 
        in medical appointments; 
           (iii) observing the child and intervening to redirect the 
        child's inappropriate behavior; 
           (iv) assisting the child in using age-appropriate 
        self-management skills as related to the child's emotional 
        disorder or mental illness, including problem solving, decision 
        making, communication, conflict resolution, anger management, 
        social skills, and recreational skills; 
           (v) implementing deescalation techniques as recommended by 
        the mental health professional; 
           (vi) implementing any other mental health service that the 
        mental health professional has approved as being within the 
        scope of the behavioral aide's duties; or 
           (vii) assisting the parents to develop and use parenting 
        skills that help the child achieve the goals outlined in the 
        child's individual treatment plan or individual behavioral 
        plan.  Parenting skills must be directed exclusively to the 
        child's treatment; and 
           (5) direction of a mental health behavioral aide must 
        include the following: 
           (i) a total of one hour of on-site observation by a mental 
        health professional during the first 12 hours of service 
        provided to a child; 
           (ii) ongoing on-site observation by a mental health 
        professional or mental health practitioner for at least a total 
        of one hour during every 40 hours of service provided to a 
        child; and 
           (iii) immediate accessibility of the mental health 
        professional or mental health practitioner to the mental health 
        behavioral aide during service provision. 
           Subd. 10.  [SERVICE AUTHORIZATION.] The commissioner shall 
        publish in the State Register a list of health services that 
        require prior authorization, as well as the criteria and 
        standards used to select health services on the list.  The list 
        and the criteria and standards used to formulate the list are 
        not subject to the requirements of sections 14.001 to 14.69.  
        The commissioner's decision on whether prior authorization is 
        required for a health service is not subject to administrative 
        appeal. 
           Subd. 11.  [DOCUMENTATION AND BILLING.] (a) A provider 
        entity must document the services it provides under this 
        section.  The provider entity must ensure that the entity's 
        documentation standards meet the requirements of federal and 
        state laws.  Services billed under this section that are not 
        documented according to this subdivision shall be subject to 
        monetary recovery by the commissioner. 
           (b) An individual mental health provider must promptly 
        document the following in a client's record after providing 
        services to the client: 
           (1) each occurrence of the client's mental health service, 
        including the date, type, length, and scope of the service; 
           (2) the name of the person who gave the service; 
           (3) contact made with other persons interested in the 
        client, including representatives of the courts, corrections 
        systems, or schools.  The provider must document the name and 
        date of each contact; 
           (4) any contact made with the client's other mental health 
        providers, case manager, family members, primary caregiver, 
        legal representative, or the reason the provider did not contact 
        the client's family members, primary caregiver, or legal 
        representative, if applicable; and 
           (5) required clinical supervision, as appropriate. 
           Subd. 12.  [EXCLUDED SERVICES.] The following services are 
        not eligible for medical assistance payment as children's 
        therapeutic services and supports: 
           (1) service components of children's therapeutic services 
        and supports simultaneously provided by more than one provider 
        entity unless prior authorization is obtained; 
           (2) children's therapeutic services and supports provided 
        in violation of medical assistance policy in Minnesota Rules, 
        part 9505.0220; 
           (3) mental health behavioral aide services provided by a 
        personal care assistant who is not qualified as a mental health 
        behavioral aide and employed by a certified children's 
        therapeutic services and supports provider entity; 
           (4) services that are the responsibility of a residential 
        or program license holder, including foster care providers under 
        the terms of a service agreement or administrative rules 
        governing licensure; 
           (5) up to 15 hours of children's therapeutic services and 
        supports provided within a six-month period to a child with 
        severe emotional disturbance who is residing in a hospital, a 
        group home as defined in Minnesota Rules, part 9560.0520, 
        subpart 4, a residential treatment facility licensed under 
        Minnesota Rules, parts 9545.0900 to 9545.1090, a regional 
        treatment center, or other institutional group setting or who is 
        participating in a program of partial hospitalization are 
        eligible for medical assistance payment if part of the discharge 
        plan; and 
           (6) adjunctive activities that may be offered by a provider 
        entity but are not otherwise covered by medical assistance, 
        including: 
           (i) a service that is primarily recreation oriented or that 
        is provided in a setting that is not medically supervised.  This 
        includes sports activities, exercise groups, activities such as 
        craft hours, leisure time, social hours, meal or snack time, 
        trips to community activities, and tours; 
           (ii) a social or educational service that does not have or 
        cannot reasonably be expected to have a therapeutic outcome 
        related to the client's emotional disturbance; 
           (iii) consultation with other providers or service agency 
        staff about the care or progress of a client; 
           (iv) prevention or education programs provided to the 
        community; and 
           (v) treatment for clients with primary diagnoses of alcohol 
        or other drug abuse. 
           [EFFECTIVE DATE.] Unless otherwise specified, this section 
        is effective July 1, 2004. 
           Sec. 9.  [256B.0944] [COVERED SERVICES; CHILDREN'S MENTAL 
        HEALTH CRISIS RESPONSE SERVICES.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them. 
           (a) "Mental health crisis" means a child's behavioral, 
        emotional, or psychiatric situation that, but for the provision 
        of crisis response services to the child, would likely result in 
        significantly reduced levels of functioning in primary 
        activities of daily living, an emergency situation, or the 
        child's placement in a more restrictive setting, including, but 
        not limited to, inpatient hospitalization. 
           (b) "Mental health emergency" means a child's behavioral, 
        emotional, or psychiatric situation that causes an immediate 
        need for mental health services and is consistent with section 
        62Q.55.  A physician, mental health professional, or crisis 
        mental health practitioner determines a mental health crisis or 
        emergency for medical assistance reimbursement with input from 
        the client and the client's family, if possible. 
           (c) "Mental health crisis assessment" means an immediate 
        face-to-face assessment by a physician, mental health 
        professional, or mental health practitioner under the clinical 
        supervision of a mental health professional, following a 
        screening that suggests the child may be experiencing a mental 
        health crisis or mental health emergency situation. 
           (d) "Mental health mobile crisis intervention services" 
        means face-to-face, short-term intensive mental health services 
        initiated during a mental health crisis or mental health 
        emergency.  Mental health mobile crisis services must help the 
        recipient cope with immediate stressors, identify and utilize 
        available resources and strengths, and begin to return to the 
        recipient's baseline level of functioning.  Mental health mobile 
        services must be provided on-site by a mobile crisis 
        intervention team outside of an emergency room, urgent care, or 
        an inpatient hospital setting. 
           (e) "Mental health crisis stabilization services" means 
        individualized mental health services provided to a recipient 
        following crisis intervention services that are designed to 
        restore the recipient to the recipient's prior functional 
        level.  The individual treatment plan recommending mental health 
        crisis stabilization must be completed by the intervention team 
        or by staff after an inpatient or urgent care visit.  Mental 
        health crisis stabilization services may be provided in the 
        recipient's home, the home of a family member or friend of the 
        recipient, schools, another community setting, or a short-term 
        supervised, licensed residential program if the service is not 
        included in the facility's cost pool or per diem.  Mental health 
        crisis stabilization is not reimbursable when provided as part 
        of a partial hospitalization or day treatment program. 
           Subd. 2.  [MEDICAL ASSISTANCE COVERAGE.] Medical assistance 
        covers medically necessary children's mental health crisis 
        response services, subject to federal approval, if provided to 
        an eligible recipient under subdivision 3, by a qualified 
        provider entity under subdivision 4 or a qualified individual 
        provider working within the provider's scope of practice, and 
        identified in the recipient's individual crisis treatment plan 
        under subdivision 8. 
           Subd. 3.  [ELIGIBILITY.] An eligible recipient is an 
        individual who: 
           (1) is eligible for medical assistance; 
           (2) is under age 18 or between the ages of 18 and 21; 
           (3) is screened as possibly experiencing a mental health 
        crisis or mental health emergency where a mental health crisis 
        assessment is needed; 
           (4) is assessed as experiencing a mental health crisis or 
        mental health emergency, and mental health mobile crisis 
        intervention or mental health crisis stabilization services are 
        determined to be medically necessary; and 
           (5) meets the criteria for emotional disturbance or mental 
        illness. 
           Subd. 4.  [PROVIDER ENTITY STANDARDS.] (a) A crisis 
        intervention and crisis stabilization provider entity must meet 
        the administrative and clinical standards specified in section 
        256B.0943, subdivisions 5 and 6, meet the standards listed in 
        paragraph (b), and be: 
           (1) an Indian health service facility or facility owned and 
        operated by a tribe or a tribal organization operating under 
        Public Law 93-638 as a 638 facility; 
           (2) a county board-operated entity; or 
           (3) a provider entity that is under contract with the 
        county board in the county where the potential crisis or 
        emergency is occurring. 
           (b) The children's mental health crisis response services 
        provider entity must: 
           (1) ensure that mental health crisis assessment and mobile 
        crisis intervention services are available 24 hours a day, seven 
        days a week; 
           (2) directly provide the services or, if services are 
        subcontracted, the provider entity must maintain clinical 
        responsibility for services and billing; 
           (3) ensure that crisis intervention services are provided 
        in a manner consistent with sections 245.487 to 245.4888; and 
           (4) develop and maintain written policies and procedures 
        regarding service provision that include safety of staff and 
        recipients in high-risk situations. 
           Subd. 5.  [MOBILE CRISIS INTERVENTION STAFF 
        QUALIFICATIONS.] (a) To provide children's mental health mobile 
        crisis intervention services, a mobile crisis intervention team 
        must include: 
           (1) at least two mental health professionals as defined in 
        section 256B.0943, subdivision 1, paragraph (m); or 
           (2) a combination of at least one mental health 
        professional and one mental health practitioner as defined in 
        section 245.4871, subdivision 26, with the required mental 
        health crisis training and under the clinical supervision of a 
        mental health professional on the team. 
           (b) The team must have at least two people with at least 
        one member providing on-site crisis intervention services when 
        needed.  Team members must be experienced in mental health 
        assessment, crisis intervention techniques, and clinical 
        decision making under emergency conditions and have knowledge of 
        local services and resources.  The team must recommend and 
        coordinate the team's services with appropriate local resources, 
        including as the county social services agency, mental health 
        service providers, and local law enforcement, if necessary. 
           Subd. 6.  [INITIAL SCREENING, CRISIS ASSESSMENT, AND MOBILE 
        INTERVENTION TREATMENT PLANNING.] (a) Before initiating mobile 
        crisis intervention services, a screening of the potential 
        crisis situation must be conducted.  The screening may use the 
        resources of crisis assistance and emergency services as defined 
        in sections 245.4871, subdivision 14, and 245.4879, subdivisions 
        1 and 2.  The screening must gather information, determine 
        whether a crisis situation exists, identify the parties 
        involved, and determine an appropriate response. 
           (b) If a crisis exists, a crisis assessment must be 
        completed.  A crisis assessment must evaluate any immediate 
        needs for which emergency services are needed and, as time 
        permits, the recipient's current life situation, sources of 
        stress, mental health problems and symptoms, strengths, cultural 
        considerations, support network, vulnerabilities, and current 
        functioning. 
           (c) If the crisis assessment determines mobile crisis 
        intervention services are needed, the intervention services must 
        be provided promptly.  As the opportunity presents itself during 
        the intervention, at least two members of the mobile crisis 
        intervention team must confer directly or by telephone about the 
        assessment, treatment plan, and actions taken and needed.  At 
        least one of the team members must be on site providing crisis 
        intervention services.  If providing on-site crisis intervention 
        services, a mental health practitioner must seek clinical 
        supervision as required under subdivision 9. 
           (d) The mobile crisis intervention team must develop an 
        initial, brief crisis treatment plan as soon as appropriate but 
        no later than 24 hours after the initial face-to-face 
        intervention.  The plan must address the needs and problems 
        noted in the crisis assessment and include measurable short-term 
        goals, cultural considerations, and frequency and type of 
        services to be provided to achieve the goals and reduce or 
        eliminate the crisis.  The crisis treatment plan must be updated 
        as needed to reflect current goals and services.  The team must 
        involve the client and the client's family in developing and 
        implementing the plan. 
           (e) The team must document in progress notes which 
        short-term goals have been met and when no further crisis 
        intervention services are required. 
           (f) If the client's crisis is stabilized, but the client 
        needs a referral for mental health crisis stabilization services 
        or to other services, the team must provide a referral to these 
        services.  If the recipient has a case manager, planning for 
        other services must be coordinated with the case manager. 
           Subd. 7.  [CRISIS STABILIZATION SERVICES.] (a) Crisis 
        stabilization services must be provided by a mental health 
        professional or a mental health practitioner who works under the 
        clinical supervision of a mental health professional and for a 
        crisis stabilization services provider entity, and must meet the 
        following standards: 
           (1) a crisis stabilization treatment plan must be developed 
        which meets the criteria in subdivision 8; 
           (2) services must be delivered according to the treatment 
        plan and include face-to-face contact with the recipient by 
        qualified staff for further assessment, help with referrals, 
        updating the crisis stabilization treatment plan, supportive 
        counseling, skills training, and collaboration with other 
        service providers in the community; and 
           (3) mental health practitioners must have completed at 
        least 30 hours of training in crisis intervention and 
        stabilization during the past two years. 
           Subd. 8.  [TREATMENT PLAN.] (a) The individual crisis 
        stabilization treatment plan must include, at a minimum: 
           (1) a list of problems identified in the assessment; 
           (2) a list of the recipient's strengths and resources; 
           (3) concrete, measurable short-term goals and tasks to be 
        achieved, including time frames for achievement of the goals; 
           (4) specific objectives directed toward the achievement of 
        each goal; 
           (5) documentation of the participants involved in the 
        service planning; 
           (6) planned frequency and type of services initiated; 
           (7) a crisis response action plan if a crisis should occur; 
        and 
           (8) clear progress notes on the outcome of goals. 
           (b) The client, if clinically appropriate, must be a 
        participant in the development of the crisis stabilization 
        treatment plan.  The client or the client's legal guardian must 
        sign the service plan or documentation must be provided why this 
        was not possible.  A copy of the plan must be given to the 
        client and the client's legal guardian.  The plan should include 
        services arranged, including specific providers where applicable.
           (c) A treatment plan must be developed by a mental health 
        professional or mental health practitioner under the clinical 
        supervision of a mental health professional.  A written plan 
        must be completed within 24 hours of beginning services with the 
        client. 
           Subd. 9.  [SUPERVISION.] (a) A mental health practitioner 
        may provide crisis assessment and mobile crisis intervention 
        services if the following clinical supervision requirements are 
        met: 
           (1) the mental health provider entity must accept full 
        responsibility for the services provided; 
           (2) the mental health professional of the provider entity, 
        who is an employee or under contract with the provider entity, 
        must be immediately available by telephone or in person for 
        clinical supervision; 
           (3) the mental health professional is consulted, in person 
        or by telephone, during the first three hours when a mental 
        health practitioner provides on-site service; and 
           (4) the mental health professional must review and approve 
        the tentative crisis assessment and crisis treatment plan, 
        document the consultation, and sign the crisis assessment and 
        treatment plan within the next business day. 
           (b) If the mobile crisis intervention services continue 
        into a second calendar day, a mental health professional must 
        contact the client face-to-face on the second day to provide 
        services and update the crisis treatment plan.  The on-site 
        observation must be documented in the client's record and signed 
        by the mental health professional. 
           Subd. 10.  [CLIENT RECORD.] The provider must maintain a 
        file for each client that complies with the requirements under 
        section 256B.0943, subdivision 11, and contains the following 
        information: 
           (1) individual crisis treatment plans signed by the 
        recipient, mental health professional, and mental health 
        practitioner who developed the crisis treatment plan, or if the 
        recipient refused to sign the plan, the date and reason stated 
        by the recipient for not signing the plan; 
           (2) signed release of information forms; 
           (3) recipient health information and current medications; 
           (4) emergency contacts for the recipient; 
           (5) case records that document the date of service, place 
        of service delivery, signature of the person providing the 
        service, and the nature, extent, and units of service.  Direct 
        or telephone contact with the recipient's family or others 
        should be documented; 
           (6) required clinical supervision by mental health 
        professionals; 
           (7) summary of the recipient's case reviews by staff; and 
           (8) any written information by the recipient that the 
        recipient wants in the file. 
           Subd. 11.  [EXCLUDED SERVICES.] The following services are 
        excluded from reimbursement under this section: 
           (1) room and board services; 
           (2) services delivered to a recipient while admitted to an 
        inpatient hospital; 
           (3) transportation services under children's mental health 
        crisis response service; 
           (4) services provided and billed by a provider who is not 
        enrolled under medical assistance to provide children's mental 
        health crisis response services; 
           (5) crisis response services provided by a residential 
        treatment center to clients in their facility; 
           (6) services performed by volunteers; 
           (7) direct billing of time spent "on call" when not 
        delivering services to a recipient; 
           (8) provider service time included in case management 
        reimbursement; 
           (9) outreach services to potential recipients; and 
           (10) a mental health service that is not medically 
        necessary. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 10.  Minnesota Statutes 2002, section 256B.0945, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COVERED SERVICES.] All services must be included 
        in a child's individualized treatment or multiagency plan of 
        care as defined in chapter 245.  
           (a) For facilities that are institutions for mental 
        diseases according to statute and regulation or are not 
        institutions for mental diseases but are approved by the 
        commissioner to provide services under this paragraph, medical 
        assistance covers the full contract rate, including room and 
        board if the services meet the requirements of Code of Federal 
        Regulations, title 42, section 440.160.  
           (b) For facilities that are not institutions for mental 
        diseases according to federal statute and regulation and are not 
        providing services under paragraph (a), medical assistance 
        covers mental health related services that are required to be 
        provided by a residential facility under section 245.4882 and 
        administrative rules promulgated thereunder, except for room and 
        board. 
           Sec. 11.  Minnesota Statutes 2002, section 256B.0945, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PAYMENT RATES.] (a) Notwithstanding sections 
        256B.19 and 256B.041, payments to counties for residential 
        services provided by a residential facility shall only be made 
        of federal earnings for services provided under this section, 
        and the nonfederal share of costs for services provided under 
        this section shall be paid by the county from sources other than 
        federal funds or funds used to match other federal funds.  
        Payment to counties for services provided according to 
        subdivision 2, paragraph (a), shall be the federal share of the 
        contract rate.  Payment to counties for services provided 
        according to subdivision 2, paragraph (b), this section shall be 
        a proportion of the per day contract rate that relates to 
        rehabilitative mental health services and shall not include 
        payment for costs or services that are billed to the IV-E 
        program as room and board.  
           (b) The commissioner shall set aside a portion not to 
        exceed five percent of the federal funds earned under this 
        section to cover the state costs of administering this section.  
        Any unexpended funds from the set-aside shall be distributed to 
        the counties in proportion to their earnings under this section. 
           Sec. 12.  Minnesota Statutes 2002, section 257.05, is 
        amended to read: 
           257.05 [IMPORTATION.] 
           Subdivision 1.  [NOTIFICATION AND DUTIES OF COMMISSIONER.] 
        No person, except as provided by subdivision subdivisions 2 and 
        3, shall bring or send into the state any child for the purpose 
        of placing the child out or procuring the child's adoption 
        without first obtaining the consent of the commissioner of human 
        services, and such person shall conform to all rules of the 
        commissioner of human services and laws of the state of 
        Minnesota relating to protection of children in foster care.  
        Before any child shall be brought or sent into the state for the 
        purpose of being placed in foster care, the person bringing or 
        sending the child into the state shall first notify the 
        commissioner of human services of the person's intention, and 
        shall obtain from the commissioner of human services a 
        certificate stating that the home in which the child is to be 
        placed is, in the opinion of the commissioner of human services, 
        a suitable adoptive home for the child if legal adoption is 
        contemplated or that the home meets the commissioner's 
        requirements for licensing of foster homes if legal adoption is 
        not contemplated.  The commissioner is responsible for 
        protecting the child's interests so long as the child remains 
        within the state and until the child reaches the age of 18 or is 
        legally adopted.  Notice to the commissioner shall state the 
        name, age, and personal description of the child, and the name 
        and address of the person with whom the child is to be placed, 
        and such other information about the child and the foster home 
        as may be required by the commissioner. 
           Subd. 2.  [EXEMPT RELATIVES.] A parent, stepparent, 
        grandparent, brother, sister and aunt or uncle in the first 
        degree of the minor child who bring a child into the state for 
        placement within their own home shall be exempt from the 
        provisions of subdivision 1.  This relationship may be by blood 
        or marriage.  
           Subd. 3.  [INTERNATIONAL ADOPTIONS.] Subject to state and 
        federal laws and rules, adoption agencies licensed under chapter 
        245A and Minnesota Rules, parts 9545.0755 to 9545.0845, and 
        county social services agencies are authorized to certify that 
        the prospective adoptive home of a child brought into the state 
        from another country for the purpose of adoption is a suitable 
        home, or that the home meets the commissioner's requirements for 
        licensing of foster homes if legal adoption is not contemplated. 
           Sec. 13.  Minnesota Statutes 2002, section 259.67, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBILITY CONDITIONS.] (a) The placing agency 
        shall use the AFDC requirements as specified in federal law as 
        of July 16, 1996, when determining the child's eligibility for 
        adoption assistance under title IV-E of the Social Security 
        Act.  If the child does not qualify, the placing agency shall 
        certify a child as eligible for state funded adoption assistance 
        only if the following criteria are met:  
           (1) Due to the child's characteristics or circumstances it 
        would be difficult to provide the child an adoptive home without 
        adoption assistance.  
           (2)(i) A placement agency has made reasonable efforts to 
        place the child for adoption without adoption assistance, but 
        has been unsuccessful; or 
           (ii) the child's licensed foster parents desire to adopt 
        the child and it is determined by the placing agency that the 
        adoption is in the best interest of the child. 
           (3) The child has been a ward of the commissioner or, a 
        Minnesota-licensed child-placing agency, or a tribal social 
        service agency of Minnesota recognized by the Secretary of the 
        Interior.  
           (b) For purposes of this subdivision, the characteristics 
        or circumstances that may be considered in determining whether a 
        child is a child with special needs under United States Code, 
        title 42, chapter 7, subchapter IV, part E, or meets the 
        requirements of paragraph (a), clause (1), are the following: 
           (1) The child is a member of a sibling group to be placed 
        as one unit in which at least one sibling is older than 15 
        months of age or is described in clause (2) or (3). 
           (2) The child has documented physical, mental, emotional, 
        or behavioral disabilities. 
           (3) The child has a high risk of developing physical, 
        mental, emotional, or behavioral disabilities. 
           (4) The child is adopted according to tribal law without a 
        termination of parental rights or relinquishment, provided that 
        the tribe has documented the valid reason why the child cannot 
        or should not be returned to the home of the child's parent. 
           (c) When a child's eligibility for adoption assistance is 
        based upon the high risk of developing physical, mental, 
        emotional, or behavioral disabilities, payments shall not be 
        made under the adoption assistance agreement unless and until 
        the potential disability manifests itself as documented by an 
        appropriate health care professional. 
           Sec. 14.  Minnesota Statutes 2002, section 260B.157, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INVESTIGATION.] Upon request of the court 
        the local social services agency or probation officer shall 
        investigate the personal and family history and environment of 
        any minor coming within the jurisdiction of the court under 
        section 260B.101 and shall report its findings to the court.  
        The court may order any minor coming within its jurisdiction to 
        be examined by a duly qualified physician, psychiatrist, or 
        psychologist appointed by the court.  
           The court shall have a chemical use assessment conducted 
        when a child is (1) found to be delinquent for violating a 
        provision of chapter 152, or for committing a felony-level 
        violation of a provision of chapter 609 if the probation officer 
        determines that alcohol or drug use was a contributing factor in 
        the commission of the offense, or (2) alleged to be delinquent 
        for violating a provision of chapter 152, if the child is being 
        held in custody under a detention order.  The assessor's 
        qualifications and the assessment criteria shall comply with 
        Minnesota Rules, parts 9530.6600 to 9530.6655.  If funds under 
        chapter 254B are to be used to pay for the recommended 
        treatment, the assessment and placement must comply with all 
        provisions of Minnesota Rules, parts 9530.6600 to 9530.6655 and 
        9530.7000 to 9530.7030.  The commissioner of human services 
        shall reimburse the court for the cost of the chemical use 
        assessment, up to a maximum of $100. 
           The court shall have a children's mental health screening 
        conducted when a child is found to be delinquent.  The screening 
        shall be conducted with a screening instrument approved by the 
        commissioner of human services and shall be conducted by a 
        mental health practitioner as defined in section 245.4871, 
        subdivision 26, or a probation officer who is trained in the use 
        of the screening instrument.  If the screening indicates a need 
        for assessment, the local social services agency, in 
        consultation with the child's family, shall have a diagnostic 
        assessment conducted, including a functional assessment, as 
        defined in section 245.4871. 
           With the consent of the commissioner of corrections and 
        agreement of the county to pay the costs thereof, the court may, 
        by order, place a minor coming within its jurisdiction in an 
        institution maintained by the commissioner for the detention, 
        diagnosis, custody and treatment of persons adjudicated to be 
        delinquent, in order that the condition of the minor be given 
        due consideration in the disposition of the case.  Any funds 
        received under the provisions of this subdivision shall not 
        cancel until the end of the fiscal year immediately following 
        the fiscal year in which the funds were received.  The funds are 
        available for use by the commissioner of corrections during that 
        period and are hereby appropriated annually to the commissioner 
        of corrections as reimbursement of the costs of providing these 
        services to the juvenile courts.  
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 15.  Minnesota Statutes 2002, section 260B.176, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REASONS FOR DETENTION.] (a) If the child is not 
        released as provided in subdivision 1, the person taking the 
        child into custody shall notify the court as soon as possible of 
        the detention of the child and the reasons for detention.  
           (b) No child may be detained in a juvenile secure detention 
        facility or shelter care facility longer than 36 hours, 
        excluding Saturdays, Sundays, and holidays, after being taken 
        into custody for a delinquent act as defined in section 
        260B.007, subdivision 6, unless a petition has been filed and 
        the judge or referee determines pursuant to section 260B.178 
        that the child shall remain in detention.  
           (c) No child may be detained in an adult jail or municipal 
        lockup longer than 24 hours, excluding Saturdays, Sundays, and 
        holidays, or longer than six hours in an adult jail or municipal 
        lockup in a standard metropolitan statistical area, after being 
        taken into custody for a delinquent act as defined in section 
        260B.007, subdivision 6, unless: 
           (1) a petition has been filed under section 260B.141; and 
           (2) a judge or referee has determined under section 
        260B.178 that the child shall remain in detention. 
           After August 1, 1991, no child described in this paragraph 
        may be detained in an adult jail or municipal lockup longer than 
        24 hours, excluding Saturdays, Sundays, and holidays, or longer 
        than six hours in an adult jail or municipal lockup in a 
        standard metropolitan statistical area, unless the requirements 
        of this paragraph have been met and, in addition, a motion to 
        refer the child for adult prosecution has been made under 
        section 260B.125.  Notwithstanding this paragraph, continued 
        detention of a child in an adult detention facility outside of a 
        standard metropolitan statistical area county is permissible if: 
           (i) the facility in which the child is detained is located 
        where conditions of distance to be traveled or other ground 
        transportation do not allow for court appearances within 24 
        hours.  A delay not to exceed 48 hours may be made under this 
        clause; or 
           (ii) the facility is located where conditions of safety 
        exist.  Time for an appearance may be delayed until 24 hours 
        after the time that conditions allow for reasonably safe 
        travel.  "Conditions of safety" include adverse life-threatening 
        weather conditions that do not allow for reasonably safe travel. 
           The continued detention of a child under clause (i) or (ii) 
        must be reported to the commissioner of corrections. 
           (d) If a child described in paragraph (c) is to be detained 
        in a jail beyond 24 hours, excluding Saturdays, Sundays, and 
        holidays, the judge or referee, in accordance with rules and 
        procedures established by the commissioner of corrections, shall 
        notify the commissioner of the place of the detention and the 
        reasons therefor.  The commissioner shall thereupon assist the 
        court in the relocation of the child in an appropriate juvenile 
        secure detention facility or approved jail within the county or 
        elsewhere in the state, or in determining suitable 
        alternatives.  The commissioner shall direct that a child 
        detained in a jail be detained after eight days from and 
        including the date of the original detention order in an 
        approved juvenile secure detention facility with the approval of 
        the administrative authority of the facility.  If the court 
        refers the matter to the prosecuting authority pursuant to 
        section 260B.125, notice to the commissioner shall not be 
        required.  
           (e) When a child is detained for an alleged delinquent act 
        in a state licensed juvenile facility or program, or when a 
        child is detained in an adult jail or municipal lockup as 
        provided in paragraph (c), the supervisor of the facility shall, 
        if the child's parent or legal guardian consents, have a 
        children's mental health screening conducted with a screening 
        instrument approved by the commissioner of human services, 
        unless a screening has been performed within the previous 180 
        days or the child is currently under the care of a mental health 
        professional.  The screening shall be conducted by a mental 
        health practitioner as defined in section 245.4871, subdivision 
        26, or a probation officer who is trained in the use of the 
        screening instrument.  The screening shall be conducted after 
        the initial detention hearing has been held and the court has 
        ordered the child continued in detention.  The results of the 
        screening may only be presented to the court at the 
        dispositional phase of the court proceedings on the matter 
        unless the parent or legal guardian consents to presentation at 
        a different time.  If the screening indicates a need for 
        assessment, the local social services agency or probation 
        officer, with the approval of the child's parent or legal 
        guardian, shall have a diagnostic assessment conducted, 
        including a functional assessment, as defined in section 
        245.4871. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 16.  Minnesota Statutes 2002, section 260B.178, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEARING AND RELEASE REQUIREMENTS.] (a) The 
        court shall hold a detention hearing: 
           (1) within 36 hours of the time the child was taken into 
        custody, excluding Saturdays, Sundays, and holidays, if the 
        child is being held at a juvenile secure detention facility or 
        shelter care facility; or 
           (2) within 24 hours of the time the child was taken into 
        custody, excluding Saturdays, Sundays, and holidays, if the 
        child is being held at an adult jail or municipal lockup.  
           (b) Unless there is reason to believe that the child would 
        endanger self or others, not return for a court hearing, run 
        away from the child's parent, guardian, or custodian or 
        otherwise not remain in the care or control of the person to 
        whose lawful custody the child is released, or that the child's 
        health or welfare would be immediately endangered, the child 
        shall be released to the custody of a parent, guardian, 
        custodian, or other suitable person, subject to reasonable 
        conditions of release including, but not limited to, a 
        requirement that the child undergo a chemical use assessment as 
        provided in section 260B.157, subdivision 1, and a children's 
        mental health screening as provided in section 260B.176, 
        subdivision 2, paragraph (e).  In determining whether the 
        child's health or welfare would be immediately endangered, the 
        court shall consider whether the child would reside with a 
        perpetrator of domestic child abuse.  
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 17.  Minnesota Statutes 2002, section 260B.193, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONSIDERATION OF REPORTS.] Before making a 
        disposition in a case, or appointing a guardian for a child, the 
        court may consider any report or recommendation made by the 
        local social services agency, probation officer, licensed 
        child-placing agency, foster parent, guardian ad litem, tribal 
        representative, or other authorized advocate for the child or 
        child's family, a school district concerning the effect on 
        student transportation of placing a child in a school district 
        in which the child is not a resident, or any other information 
        deemed material by the court.  In addition, the court may 
        consider the results of the children's mental health screening 
        provided in section 260B.157, subdivision 1. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 18.  Minnesota Statutes 2002, section 260B.235, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ALTERNATIVE DISPOSITION.] In addition to 
        dispositional alternatives authorized by subdivision 3 4, in the 
        case of a third or subsequent finding by the court pursuant to 
        an admission in court or after trial that a child has committed 
        a juvenile alcohol or controlled substance offense, the juvenile 
        court shall order a chemical dependency evaluation of the child 
        and if warranted by the evaluation, the court may order 
        participation by the child in an inpatient or outpatient 
        chemical dependency treatment program, or any other treatment 
        deemed appropriate by the court.  In the case of a third or 
        subsequent finding that a child has committed any juvenile petty 
        offense, the court shall order a children's mental health 
        screening be conducted as provided in section 260B.157, 
        subdivision 1, and if indicated by the screening, to undergo a 
        diagnostic assessment, including a functional assessment, as 
        defined in section 245.4871. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 19.  Minnesota Statutes 2002, section 260C.141, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REVIEW OF FOSTER CARE STATUS.] The social 
        services agency responsible for the placement of a child in a 
        residential facility, as defined in section 260C.212, 
        subdivision 1, pursuant to a voluntary release by the child's 
        parent or parents must proceed in juvenile court to review the 
        foster care status of the child in the manner provided in this 
        section.  
           (a) Except for a child in placement due solely to the 
        child's developmental disability or emotional disturbance, when 
        a child continues in voluntary placement according to section 
        260C.212, subdivision 8, a petition shall be filed alleging the 
        child to be in need of protection or services or seeking 
        termination of parental rights or other permanent placement of 
        the child away from the parent within 90 days of the date of the 
        voluntary placement agreement.  The petition shall state the 
        reasons why the child is in placement, the progress on the 
        out-of-home placement plan required under section 260C.212, 
        subdivision 1, and the statutory basis for the petition under 
        section 260C.007, subdivision 6, 260C.201, subdivision 11, or 
        260C.301. 
           (1) In the case of a petition alleging the child to be in 
        need of protection or services filed under this paragraph, if 
        all parties agree and the court finds it is in the best 
        interests of the child, the court may find the petition states a 
        prima facie case that: 
           (i) the child's needs are being met; 
           (ii) the placement of the child in foster care is in the 
        best interests of the child; 
           (iii) reasonable efforts to reunify the child and the 
        parent or guardian are being made; and 
           (iv) the child will be returned home in the next three 
        months. 
           (2) If the court makes findings under paragraph (1), the 
        court shall approve the voluntary arrangement and continue the 
        matter for up to three more months to ensure the child returns 
        to the parents' home.  The responsible social services agency 
        shall: 
           (i) report to the court when the child returns home and the 
        progress made by the parent on the out-of-home placement plan 
        required under section 260C.212, in which case the court shall 
        dismiss jurisdiction; 
           (ii) report to the court that the child has not returned 
        home, in which case the matter shall be returned to the court 
        for further proceedings under section 260C.163; or 
           (iii) if any party does not agree to continue the matter 
        under paragraph (1) and this paragraph, the matter shall proceed 
        under section 260C.163. 
           (b) In the case of a child in voluntary placement due 
        solely to the child's developmental disability or emotional 
        disturbance according to section 260C.212, subdivision 9, the 
        following procedures apply: 
           (1)  [REPORT TO COURT.] (i) Unless the county attorney 
        determines that a petition under subdivision 1 is appropriate, 
        without filing a petition, a written report shall be forwarded 
        to the court within 165 days of the date of the voluntary 
        placement agreement.  The written report shall contain necessary 
        identifying information for the court to proceed, a copy of the 
        out-of-home placement plan required under section 260C.212, 
        subdivision 1, a written summary of the proceedings of any 
        administrative review required under section 260C.212, 
        subdivision 7, and any other information the responsible social 
        services agency, parent or guardian, the child or the foster 
        parent or other residential facility wants the court to consider.
           (ii) The responsible social services agency, where 
        appropriate, must advise the child, parent or guardian, the 
        foster parent, or representative of the residential facility of 
        the requirements of this section and of their right to submit 
        information to the court.  If the child, parent or guardian, 
        foster parent, or representative of the residential facility 
        wants to send information to the court, the responsible social 
        services agency shall advise those persons of the reporting date 
        and the identifying information necessary for the court 
        administrator to accept the information and submit it to a judge 
        with the agency's report.  The responsible social services 
        agency must also notify those persons that they have the right 
        to be heard in person by the court and how to exercise that 
        right.  The responsible social services agency must also provide 
        notice that an in-court hearing will not be held unless 
        requested by a parent or guardian, foster parent, or the child. 
           (iii) After receiving the required report, the court has 
        jurisdiction to make the following determinations and must do so 
        within ten days of receiving the forwarded report:  (A) whether 
        or not the placement of the child is in the child's best 
        interests; and (B) whether the parent and agency are 
        appropriately planning for the child.  Unless requested by a 
        parent or guardian, foster parent, or child, no in-court hearing 
        need be held in order for the court to make findings and issue 
        an order under this paragraph. 
           (iv) If the court finds the placement is in the child's 
        best interests and that the agency and parent are appropriately 
        planning for the child, the court shall issue an order 
        containing explicit, individualized findings to support its 
        determination.  The court shall send a copy of the order to the 
        county attorney, the responsible social services agency, the 
        parent or guardian, the child, and the foster parents.  The 
        court shall also send the parent or guardian, the child, and the 
        foster parent notice of the required review under clause (2).  
           (v) If the court finds continuing the placement not to be 
        in the child's best interests or that the agency or the parent 
        or guardian is not appropriately planning for the child, the 
        court shall notify the county attorney, the responsible social 
        services agency, the parent or guardian, the foster parent, the 
        child, and the county attorney of the court's determinations and 
        the basis for the court's determinations. 
           (2)  [PERMANENCY REVIEW BY PETITION.] If a child with a 
        developmental disability or an emotional disturbance continues 
        in out-of-home placement for 13 months from the date of a 
        voluntary placement, a petition alleging the child to be in need 
        of protection or services, for termination of parental rights, 
        or for permanent placement of the child away from the parent 
        under section 260C.201 shall be filed.  The court shall conduct 
        a permanency hearing on the petition no later than 14 months 
        after the date of the voluntary placement.  At the permanency 
        hearing, the court shall determine the need for an order 
        permanently placing the child away from the parent or determine 
        whether there are compelling reasons that continued voluntary 
        placement is in the child's best interests.  A petition alleging 
        the child to be in need of protection or services shall state 
        the date of the voluntary placement agreement, the nature of the 
        child's developmental disability or emotional disturbance, the 
        plan for the ongoing care of the child, the parents' 
        participation in the plan, the responsible social services 
        agency's efforts to finalize a plan for the permanent placement 
        of the child, and the statutory basis for the petition. 
           (i) If a petition alleging the child to be in need of 
        protection or services is filed under this paragraph, the court 
        may find, based on the contents of the sworn petition, and the 
        agreement of all parties, including the child, where 
        appropriate, that there are compelling reasons that the 
        voluntary arrangement is in the best interests of the child and 
        that the responsible social services agency has made reasonable 
        efforts to finalize a plan for the permanent placement of the 
        child, approve the continued voluntary placement, and continue 
        the matter under the court's jurisdiction for the purpose of 
        reviewing the child's placement as a continued voluntary 
        arrangement every 12 months as long as the child continues in 
        out-of-home placement.  The matter must be returned to the court 
        for further review every 12 months as long as the child remains 
        in placement.  The court shall give notice to the parent or 
        guardian of the continued review requirements under this 
        section.  Nothing in this paragraph shall be construed to mean 
        the court must order permanent placement for the child under 
        section 260C.201, subdivision 11, as long as the court finds 
        compelling reasons at the first review required under this 
        section. 
           (ii) If a petition for termination of parental rights, for 
        transfer of permanent legal and physical custody to a relative, 
        for long-term foster care, or for foster care for a specified 
        period of time is filed, the court must proceed under section 
        260C.201, subdivision 11. 
           (3) If any party, including the child, disagrees with the 
        voluntary arrangement, the court shall proceed under section 
        260C.163. 
           Sec. 20.  Minnesota Statutes 2002, section 626.559, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REVENUE.] The commissioner of human services 
        shall add the following funds to the funds appropriated under 
        section 626.5591, subdivision 2, to develop and support training:
           (a) The commissioner of human services shall submit claims 
        for federal reimbursement earned through the activities and 
        services supported through department of human services child 
        protection or child welfare training funds.  Federal revenue 
        earned must be used to improve and expand training services by 
        the department.  The department expenditures eligible for 
        federal reimbursement under this section must not be made from 
        federal funds or funds used to match other federal funds. 
           (b) Each year, the commissioner of human services shall 
        withhold from funds distributed to each county under Minnesota 
        Rules, parts 9550.0300 to 9550.0370, an amount equivalent to 1.5 
        percent of each county's annual title XX allocation under 
        section 256E.07 256M.50.  The commissioner must use these funds 
        to ensure decentralization of training. 
           (c) The federal revenue under this subdivision is available 
        for these purposes until the funds are expended. 
           Sec. 21.  [MEDICAL ASSISTANCE FOR MENTAL HEALTH SERVICES 
        PROVIDED IN OUT-OF-HOME PLACEMENT SETTINGS.] 
           The commissioner of human services shall develop a plan in 
        conjunction with the commissioner of corrections and 
        representatives from counties, provider groups, and other 
        stakeholders, to secure medical assistance funding for mental 
        health-related services provided in out-of-home placement 
        settings, including treatment foster care, group homes, and 
        residential programs licensed under Minnesota Statutes, chapters 
        241 and 245A.  The plan must include proposed legislation, 
        fiscal implications, and other pertinent information. 
           Treatment foster care services must be provided by a child 
        placing agency licensed under Minnesota Rules, parts 9543.0010 
        to 9543.0150 or 9545.0755 to 9545.0845.  
           The commissioner shall report to the legislature by January 
        15, 2004. 
           Sec. 22.  [TRANSITION TO CHILDREN'S THERAPEUTIC SERVICES 
        AND SUPPORTS.] 
           Beginning July 1, 2003, the commissioner shall use the 
        provider certification process under Minnesota Statutes, section 
        256B.0943, instead of the provider certification process 
        required in Minnesota Rules, parts 9505.0324; 9505.0326; and 
        9505.0327. 
           Sec. 23.  [REVISOR'S INSTRUCTION.] 
           For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 24.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 256B.0945, 
        subdivision 10, is repealed. 
           (b) Minnesota Statutes 2002, section 256B.0625, 
        subdivisions 35 and 36, are repealed effective July 1, 2004. 
           (c) Minnesota Rules, parts 9505.0324; 9505.0326; and 
        9505.0327, are repealed effective July 1, 2004. 

                                   ARTICLE 5 
                             OCCUPATIONAL LICENSES
           Section 1.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [ACCREDITING ASSOCIATION.] "Accrediting 
        association" means an organization recognized by the 
        commissioner that evaluates schools and education programs of 
        alcohol and drug counseling or is listed in Nationally 
        Recognized Accrediting Agencies and Associations, Criteria and 
        Procedures for Listing by the U.S. Secretary of Education and 
        Current List (1996), which is incorporated by reference.  
           Sec. 2.  Minnesota Statutes 2002, section 148C.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ALCOHOL AND DRUG COUNSELOR.] "Alcohol and drug 
        counselor" or "counselor" means a person who: 
           (1) uses, as a representation to the public, any title, 
        initials, or description of services incorporating the words 
        "alcohol and drug counselor"; 
           (2) offers to render professional alcohol and drug 
        counseling services relative to the abuse of or the dependency 
        on alcohol or other drugs to the general public or groups, 
        organizations, corporations, institutions, or government 
        agencies for compensation, implying that the person is licensed 
        and trained, experienced or expert in alcohol and drug 
        counseling; 
           (3) holds a valid license issued under sections 148C.01 to 
        148C.11 this chapter to engage in the practice of alcohol and 
        drug counseling; or 
           (4) is an applicant for an alcohol and drug counseling 
        license.  
           Sec. 3.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [ALCOHOL AND DRUG COUNSELOR ACADEMIC COURSE 
        WORK.] "Alcohol and drug counselor academic course work" means 
        classroom education, which is directly related to alcohol and 
        drug counseling and meets the requirements of section 148C.04, 
        subdivision 5a, and is taken through an accredited school or 
        educational program.  
           Sec. 4.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [ALCOHOL AND DRUG COUNSELOR CONTINUING EDUCATION 
        ACTIVITY.] "Alcohol and drug counselor continuing education 
        activity" means clock hours that meet the requirements of 
        section 148C.075 and Minnesota Rules, part 4747.1100, and are 
        obtained by a licensee at educational programs of annual 
        conferences, lectures, panel discussions, workshops, seminars, 
        symposiums, employer-sponsored inservices, or courses taken 
        through accredited schools or education programs, including home 
        study courses.  A home study course need not be provided by an 
        accredited school or education program to meet continuing 
        education requirements.  
           Sec. 5.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2c.  [ALCOHOL AND DRUG COUNSELOR 
        TECHNICIAN.] "Alcohol and drug counselor technician" means a 
        person not licensed as an alcohol and drug counselor who is 
        performing acts authorized under section 148C.045.  
           Sec. 6.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2d.  [ALCOHOL AND DRUG COUNSELOR TRAINING.] "Alcohol 
        and drug counselor training" means clock hours obtained by an 
        applicant at educational programs of annual conferences, 
        lectures, panel discussions, workshops, seminars, symposiums, 
        employer-sponsored inservices, or courses taken through 
        accredited schools or education programs, including home study 
        courses.  Clock hours obtained from accredited schools or 
        education programs must be measured under Minnesota Rules, part 
        4747.1100, subpart 5.  
           Sec. 7.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2f.  [CLOCK HOUR.] "Clock hour" means an 
        instructional session of 50 consecutive minutes, excluding 
        coffee breaks, registration, meals without a speaker, and social 
        activities.  
           Sec. 8.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 2g.  [CREDENTIAL.] "Credential" means a license, 
        permit, certification, registration, or other evidence of 
        qualification or authorization to engage in the practice of an 
        occupation.  
           Sec. 9.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [LICENSEE.] "Licensee" means a person who holds 
        a valid license under this chapter.  
           Sec. 10.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 11a.  [STUDENT.] "Student" means a person enrolled in 
        an alcohol and drug counselor education program at an accredited 
        school or educational program and earning a minimum of nine 
        semester credits per calendar year towards completion of an 
        associate's, bachelor's, master's, or doctorate degree 
        requirements that include an additional 18 semester credits or 
        270 clock hours of alcohol and drug counseling specific course 
        work and 440 clock hours of practicum.  
           Sec. 11.  Minnesota Statutes 2002, section 148C.01, 
        subdivision 12, is amended to read: 
           Subd. 12.  [SUPERVISED ALCOHOL AND DRUG COUNSELING 
        EXPERIENCE COUNSELOR.] Except during the transition period, 
        "Supervised alcohol and drug counseling experience counselor" 
        means practical experience gained by a student, volunteer, or 
        either before, during, or after the student completes a program 
        from an accredited school or educational program of alcohol and 
        drug counseling, an intern, and or a person issued a temporary 
        permit under section 148C.04, subdivision 4, and who is 
        supervised by a person either licensed under this chapter or 
        exempt under its provisions; either before, during, or after the 
        student completes a program from an accredited school or 
        educational program of alcohol and drug counseling. 
           Sec. 12.  Minnesota Statutes 2002, section 148C.01, is 
        amended by adding a subdivision to read: 
           Subd. 12a.  [SUPERVISOR.] "Supervisor" means a licensed 
        alcohol and drug counselor licensed under this chapter or other 
        licensed professional practicing alcohol and drug counseling 
        under section 148C.11 who monitors activities of and accepts 
        legal liability for the person practicing under supervision.  A 
        supervisor shall supervise no more than three trainees 
        practicing under section 148C.04, subdivision 6.  
           Sec. 13.  Minnesota Statutes 2002, section 148C.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL.] The commissioner shall, after 
        consultation with the advisory council or a committee 
        established by rule: 
           (a) adopt and enforce rules for licensure of alcohol and 
        drug counselors, including establishing standards and methods of 
        determining whether applicants and licensees are qualified under 
        section 148C.04.  The rules must provide for examinations and 
        establish standards for the regulation of professional conduct.  
        The rules must be designed to protect the public; 
           (b) develop and, at least twice a year, administer an 
        examination to assess applicants' knowledge and skills.  The 
        commissioner may contract for the administration of an 
        examination with an entity designated by the commissioner.  The 
        examinations must be psychometrically valid and reliable; must 
        be written and oral, with the oral examination based on a 
        written case presentation; must minimize cultural bias; and must 
        be balanced in various theories relative to the practice of 
        alcohol and drug counseling; 
           (c) issue licenses to individuals qualified under sections 
        148C.01 to 148C.11; 
           (d) issue copies of the rules for licensure to all 
        applicants; 
           (e) adopt rules to establish and implement procedures, 
        including a standard disciplinary process and rules of 
        professional conduct; 
           (f) carry out disciplinary actions against licensees; 
           (g) establish, with the advice and recommendations of the 
        advisory council, written internal operating procedures for 
        receiving and investigating complaints and for taking 
        disciplinary actions as appropriate; 
           (h) educate the public about the existence and content of 
        the rules for alcohol and drug counselor licensing to enable 
        consumers to file complaints against licensees who may have 
        violated the rules; 
           (i) evaluate the rules in order to refine and improve the 
        methods used to enforce the commissioner's standards; and 
           (j) set, collect, and adjust license fees for alcohol and 
        drug counselors so that the total fees collected will as closely 
        as possible equal anticipated expenditures during the biennium, 
        as provided in section 16A.1285; fees for initial and renewal 
        application and examinations; late fees for counselors who 
        submit license renewal applications after the renewal deadline; 
        and a surcharge fee.  The surcharge fee must include an amount 
        necessary to recover, over a five-year period, the 
        commissioner's direct expenditures for the adoption of the rules 
        providing for the licensure of alcohol and drug counselors.  All 
        fees received shall be deposited in the state treasury and 
        credited to the special revenue fund. 
           Sec. 14.  Minnesota Statutes 2002, section 148C.0351, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION FORMS.] Unless exempted under 
        section 148C.11, a person who practices alcohol and drug 
        counseling in Minnesota must: 
           (1) apply to the commissioner for a license to practice 
        alcohol and drug counseling on forms provided by the 
        commissioner; 
           (2) include with the application a statement that the 
        statements in the application are true and correct to the best 
        of the applicant's knowledge and belief; 
           (3) include with the application a nonrefundable 
        application fee specified by the commissioner in section 
        148C.12; 
           (4) include with the application information describing the 
        applicant's experience, including the number of years and months 
        the applicant has practiced alcohol and drug counseling as 
        defined in section 148C.01; 
           (5) include with the application the applicant's business 
        address and telephone number, or home address and telephone 
        number if the applicant conducts business out of the home, and 
        if applicable, the name of the applicant's supervisor, manager, 
        and employer; 
           (6) include with the application a written and signed 
        authorization for the commissioner to make inquiries to 
        appropriate state regulatory agencies and private credentialing 
        organizations in this or any other state where the applicant has 
        practiced alcohol and drug counseling; and 
           (7) complete the application in sufficient detail for the 
        commissioner to determine whether the applicant meets the 
        requirements for filing.  The commissioner may ask the applicant 
        to provide additional information necessary to clarify 
        incomplete or ambiguous information submitted in the application.
           Sec. 15.  Minnesota Statutes 2002, section 148C.0351, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [INITIAL LICENSE; TERM.] (a) An initial license 
        is effective on the date the commissioner indicates on the 
        license certificate, with the license number, sent to the 
        applicant upon approval of the application.  
           (b) An initial license is valid for a period beginning with 
        the effective date in paragraph (a) and ending on the date 
        specified by the commissioner on the license certificate placing 
        the applicant in an existing two-year renewal cycle, as 
        established under section 148C.05, subdivision 1.  
           Sec. 16.  [148C.0355] [COMMISSIONER ACTION ON APPLICATIONS 
        FOR LICENSURE.] 
           The commissioner shall act on each application for 
        licensure within 90 days from the date the completed application 
        and all required information is received by the commissioner.  
        The commissioner shall determine if the applicant meets the 
        requirements for licensure and whether there are grounds for 
        denial of licensure under this chapter.  If the commissioner 
        denies an application on grounds other than the applicant's 
        failure of an examination, the commissioner shall:  
           (1) notify the applicant, in writing, of the denial and the 
        reason for the denial and provide the applicant 30 days from the 
        date of the letter informing the applicant of the denial in 
        which the applicant may provide additional information to 
        address the reasons for the denial.  If the applicant does not 
        respond in writing to the commissioner within the 30-day period, 
        the denial is final.  If the commissioner receives additional 
        information, the commissioner shall review it and make a final 
        determination thereafter; 
           (2) notify the applicant that an application submitted 
        following denial is a new application and must be accompanied by 
        the appropriate fee as specified in section 148C.12; and 
           (3) notify the applicant of the right to request a hearing 
        under chapter 14.  
           Sec. 17.  Minnesota Statutes 2002, section 148C.04, is 
        amended to read: 
           148C.04 [REQUIREMENTS FOR LICENSURE.] 
           Subdivision 1.  [GENERAL REQUIREMENTS.] The commissioner 
        shall issue licenses to the individuals qualified under sections 
        148C.01 to 148C.11 this chapter to practice alcohol and drug 
        counseling. 
           Subd. 2.  [FEE.] Each applicant shall pay a nonrefundable 
        fee set by the commissioner pursuant to section 148C.03 as 
        specified in section 148C.12.  Fees paid to the commissioner 
        shall be deposited in the special revenue fund. 
           Subd. 3.  [LICENSING REQUIREMENTS FOR THE FIRST FIVE 
        YEARS LICENSURE BEFORE JULY 1, 2008.] For five years after the 
        effective date of the rules authorized in section 148C.03, 
        the An applicant, unless qualified under section 148C.06 during 
        the 25-month period authorized therein, under section 148C.07, 
        or under subdivision 4, for a license must furnish evidence 
        satisfactory to the commissioner that the applicant has met all 
        the requirements in clauses (1) to (3). The applicant must have: 
           (1) received an associate degree, or an equivalent number 
        of credit hours, and a certificate in alcohol and drug 
        counseling, including 18 semester credits or 270 clock hours of 
        alcohol and drug counseling classroom education academic course 
        work in accordance with subdivision 5a, paragraph (a), from an 
        accredited school or educational program and 880 clock hours of 
        supervised alcohol and drug counseling practicum; 
           (2) completed a written case presentation and 
        satisfactorily passed an oral examination established by the 
        commissioner that demonstrates competence in the core functions; 
        and 
           (3) satisfactorily passed a written examination as 
        established by the commissioner. 
           Subd. 4.  [LICENSING REQUIREMENTS AFTER FIVE YEARS FOR 
        LICENSURE AFTER JULY 1, 2008.] Beginning five years after the 
        effective date of the rules authorized in section 148C.03, 
        subdivision 1 , An applicant for licensure a license must submit 
        evidence to the commissioner that the applicant has met one of 
        the following requirements: 
           (1) the applicant must have: 
           (i) received a bachelor's degree from an accredited school 
        or educational program, including 480 18 semester credits or 270 
        clock hours of alcohol and drug counseling education academic 
        course work in accordance with subdivision 5a, paragraph (a), 
        from an accredited school or educational program and 880 clock 
        hours of supervised alcohol and drug counseling practicum; 
           (ii) completed a written case presentation and 
        satisfactorily passed an oral examination established by the 
        commissioner that demonstrates competence in the core functions; 
        and 
           (iii) satisfactorily passed a written examination as 
        established by the commissioner; or 
           (2) the applicant must meet the requirements of section 
        148C.07. 
           Subd. 5a.  [ACADEMIC COURSE WORK.] (a) Minimum academic 
        course work requirements for licensure as referred to under 
        subdivision 3, clause (1), and subdivision 4, clause (1), item 
        (i), must be in the following areas: 
           (1) overview of alcohol and drug counseling focusing on the 
        transdisciplinary foundations of alcohol and drug counseling and 
        providing an understanding of theories of chemical dependency, 
        the continuum of care, and the process of change; 
           (2) pharmacology of substance abuse disorders and the 
        dynamics of addiction; 
           (3) screening, intake, assessment, and treatment planning; 
           (4) counseling theory and practice, crisis intervention, 
        orientation, and client education; 
           (5) case management, consultation, referral, treatment 
        planning, reporting, record keeping, and professional and 
        ethical responsibilities; and 
           (6) multicultural aspects of chemical dependency to include 
        awareness of learning outcomes described in Minnesota Rules, 
        part 4747.1100, subpart 2, and the ability to know when 
        consultation is needed.  
           (b) Advanced academic course work includes, at a minimum, 
        the course work required in paragraph (a) and additional course 
        work in the following areas:  
           (1) advanced study in the areas listed in paragraph (a); 
           (2) chemical dependency and the family; 
           (3) treating substance abuse disorders in culturally 
        diverse and identified populations; 
           (4) dual diagnoses/co-occurring disorders with substance 
        abuse disorders; and 
           (5) ethics and chemical dependency. 
           Subd. 6.  [TEMPORARY PRACTICE PERMIT REQUIREMENTS.] (a) A 
        person may temporarily The commissioner shall issue a temporary 
        permit to practice alcohol and drug counseling prior to being 
        licensed under this chapter if the person: 
           (1) either: 
           (i) meets the associate degree education and practicum 
        requirements of subdivision 3, clause (1); 
           (ii) meets the bachelor's degree education and practicum 
        requirements of subdivision 4, clause (1), item (i); or 
           (iii) submits verification of a current and unrestricted 
        credential for the practice of alcohol and drug counseling from 
        a national certification body or a certification or licensing 
        body from another state, United States territory, or federally 
        recognized tribal authority; 
           (ii) submits verification of the completion of at least 64 
        semester credits, including 270 clock hours or 18 semester 
        credits of formal classroom education in alcohol and drug 
        counseling and at least 880 clock hours of alcohol and drug 
        counseling practicum from an accredited school or educational 
        program; or 
           (iii) meets the requirements of section 148C.11, 
        subdivision 6, clauses (1), (2), and (5); 
           (2) requests applies, in writing, temporary practice status 
        with the commissioner on an application form according to 
        section 148C.0351 provided by the commissioner, which includes 
        the nonrefundable license temporary permit fee as specified in 
        section 148C.12 and an affirmation by the person's supervisor, 
        as defined in paragraph (b) (c), clause (1), and which is signed 
        and dated by the person and the person's supervisor; and 
           (3) has not been disqualified to practice temporarily on 
        the basis of a background investigation under section 148C.09, 
        subdivision 1a; and.  
           (4) has been notified (b) The commissioner must notify the 
        person in writing within 90 days from the date the completed 
        application and all required information is received by the 
        commissioner that whether the person is qualified to practice 
        under this subdivision. 
           (b) (c) A person practicing under this subdivision: 
           (1) may practice only in a program licensed by the 
        department of human services and under tribal jurisdiction or 
        under the direct, on-site supervision of a person who is 
        licensed under this chapter and employed in that licensed 
        program; 
           (2) is subject to the rules of professional conduct set by 
        rule; and 
           (3) is not subject to the continuing education requirements 
        of section 148C.05 148C.075. 
           (c) (d) A person practicing under this subdivision may not 
        must use with the public any the title or description stating or 
        implying that the person is licensed to engage a trainee engaged 
        in the practice of alcohol and drug counseling. 
           (d) (e) The temporary status of A person applying for 
        temporary practice practicing under this subdivision expires on 
        the date the commissioner grants or denies licensing must 
        annually submit a renewal application on forms provided by the 
        commissioner with the renewal fee required in section 148C.12, 
        subdivision 3, and the commissioner may renew the temporary 
        permit if the trainee meets the requirements of this 
        subdivision.  A trainee may renew a practice permit no more than 
        five times. 
           (e) (f) A temporary permit expires if not renewed, upon a 
        change of employment of the trainee or upon a change in 
        supervision, or upon the granting or denial by the commissioner 
        of a license.  
           Subd. 7.  [EFFECT AND SUSPENSION OF TEMPORARY PRACTICE 
        PERMIT.] Approval of a person's application for 
        temporary practice permit creates no rights to or expectation of 
        approval from the commissioner for licensure as an alcohol and 
        drug counselor.  The commissioner may suspend or restrict a 
        person's temporary practice permit status according to section 
        148C.09. 
           [EFFECTIVE DATE.] Subdivisions 1, 2, 3, 4, and 5a are 
        effective January 28, 2003.  Subdivision 6 is effective July 1, 
        2003.  
           Sec. 18.  [148C.045] [ALCOHOL AND DRUG COUNSELOR 
        TECHNICIAN.] 
           An alcohol and drug counselor technician may perform the 
        services described in section 148C.01, subdivision 9, paragraphs 
        (1), (2), and (3), while under the direct supervision of a 
        licensed alcohol and drug counselor.  
           Sec. 19.  Minnesota Statutes 2002, section 148C.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BIENNIAL RENEWAL REQUIREMENTS.] To renew a 
        license, an applicant must: 
           (1) complete a renewal application every two years on a 
        form provided by the commissioner and submit the biennial 
        renewal fee by the deadline; and 
           (2) submit additional information if requested by the 
        commissioner to clarify information presented in the renewal 
        application.  This information must be submitted within 30 days 
        of the commissioner's request.  A license must be renewed every 
        two years.  
           Sec. 20.  Minnesota Statutes 2002, section 148C.05, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [RENEWAL REQUIREMENTS.] To renew a license, an 
        applicant must submit to the commissioner: 
           (1) a completed and signed application for license renewal, 
        including a signed consent authorizing the commissioner to 
        obtain information about the applicant from third parties, 
        including, but not limited to, employers, former employers, and 
        law enforcement agencies; 
           (2) the renewal fee required under section 148C.12; and 
           (3) additional information as requested by the commissioner 
        to clarify information presented in the renewal application.  
        The licensee must submit information within 30 days of the date 
        of the commissioner's request.  
           Sec. 21.  Minnesota Statutes 2002, section 148C.05, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [LICENSE RENEWAL NOTICE.] At least 60 calendar 
        days before the renewal deadline date in subdivision 6, the 
        commissioner shall mail a renewal notice to the licensee's last 
        known address on file with the commissioner.  The notice must 
        include an application for license renewal, the renewal 
        deadline, and notice of fees required for renewal.  The 
        licensee's failure to receive notice does not relieve the 
        licensee of the obligation to meet the renewal deadline and 
        other requirements for license renewal.  
           Sec. 22.  Minnesota Statutes 2002, section 148C.05, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [RENEWAL DEADLINE AND LAPSE OF LICENSURE.] (a) 
        Licensees must comply with paragraphs (b) to (d).  
           (b) Each license certificate must state an expiration 
        date.  An application for license renewal must be received by 
        the commissioner or postmarked at least 30 calendar days before 
        the expiration date.  If the postmark is illegible, the 
        application must be considered timely if received at least 21 
        calendar days before the expiration date.  
           (c) An application for license renewal not received within 
        the time required under paragraph (b) must be accompanied by a 
        late fee in addition to the renewal fee required in section 
        148C.12.  
           (d) A licensee's license lapses if the licensee fails to 
        submit to the commissioner a license renewal application by the 
        licensure expiration date.  A licensee shall not engage in the 
        practice of alcohol and drug counseling while the license is 
        lapsed.  A licensee whose license has lapsed may renew the 
        license by complying with section 148C.055.  
           Sec. 23.  [148C.055] [INACTIVE OR LAPSED LICENSE.] 
           Subdivision 1.  [INACTIVE LICENSE STATUS.] Unless a 
        complaint is pending against the licensee, a licensee whose 
        license is in good standing may request, in writing, that the 
        license be placed on the inactive list.  If a complaint is 
        pending against a licensee, a license may not be placed on the 
        inactive list until action relating to the complaint is 
        concluded.  The commissioner must receive the request for 
        inactive status before expiration of the license.  A request for 
        inactive status received after the license expiration date must 
        be denied.  A licensee may renew a license that is inactive 
        under this subdivision by meeting the renewal requirements of 
        subdivision 2, except that payment of a late renewal fee is not 
        required.  A licensee must not practice alcohol and drug 
        counseling while the license is inactive.  
           Subd. 2.  [RENEWAL OF INACTIVE LICENSE.] A licensee whose 
        license is inactive shall renew the inactive status by the 
        inactive status expiration date determined by the commissioner 
        or the license will lapse.  An application for renewal of 
        inactive status must include evidence satisfactory to the 
        commissioner that the licensee has completed 40 clock hours of 
        continuing professional education required in section 148C.075, 
        and be received by the commissioner at least 30 calendar days 
        before the expiration date.  If the postmark is illegible, the 
        application must be considered timely if received at least 21 
        calendar days before the expiration date.  Late renewal of 
        inactive status must be accompanied by a late fee as required in 
        section 148C.12.  
           Subd. 3.  [RENEWAL OF LAPSED LICENSE.] An individual whose 
        license has lapsed for less than two years may renew the license 
        by submitting:  
           (1) a completed and signed license renewal application; 
           (2) the inactive license renewal fee or the renewal fee and 
        the late fee as required under section 148C.12; and 
           (3) proof of having met the continuing education 
        requirements in section 148C.075 since the individual's initial 
        licensure or last license renewal.  The license issued is then 
        effective for the remainder of the next two-year license cycle.  
           Subd. 4.  [LICENSE RENEWAL FOR TWO YEARS OR MORE AFTER 
        LICENSE EXPIRATION DATE.] An individual who submitted a license 
        renewal two years or more after the license expiration date must 
        submit the following:  
           (1) a completed and signed application for licensure, as 
        required by section 148C.0351; 
           (2) the initial license fee as required in section 148C.12; 
        and 
           (3) verified documentation of having achieved a passing 
        score within the past year on an examination required by the 
        commissioner.  
           Sec. 24.  Minnesota Statutes 2002, section 148C.07, is 
        amended to read: 
           148C.07 [RECIPROCITY.] 
           The commissioner shall issue an appropriate license to (a) 
        An individual who holds a current license or other credential to 
        engage in alcohol and drug counseling national certification as 
        an alcohol and drug counselor from another jurisdiction if the 
        commissioner finds that the requirements for that credential are 
        substantially similar to the requirements in sections 148C.01 to 
        148C.11 must file with the commissioner a completed application 
        for licensure by reciprocity containing the information required 
        under this section.  
           (b) The applicant must request the credentialing authority 
        of the jurisdiction in which the credential is held to send 
        directly to the commissioner a statement that the credential is 
        current and in good standing, the applicant's qualifications 
        that entitled the applicant to the credential, and a copy of the 
        jurisdiction's credentialing laws and rules that were in effect 
        at the time the applicant obtained the credential.  
           (c) The commissioner shall issue a license if the 
        commissioner finds that the requirements, which the applicant 
        had to meet to obtain the credential from the other jurisdiction 
        were substantially similar to the current requirements for 
        licensure in this chapter, and the applicant is not otherwise 
        disqualified under section 148C.09.  
           Sec. 25.  [148C.075] [CONTINUING EDUCATION REQUIREMENTS.] 
           Subdivision 1.  [GENERAL REQUIREMENTS.] The commissioner 
        shall establish a two-year continuing education reporting 
        schedule requiring licensees to report completion of the 
        requirements of this section.  Licensees must document 
        completion of a minimum of 40 clock hours of continuing 
        education activities each reporting period.  A licensee may be 
        given credit only for activities that directly relate to the 
        practice of alcohol and drug counseling, the core functions, or 
        the rules of professional conduct in Minnesota Rules, part 
        4747.1400.  The continuing education reporting form must require 
        reporting of the following information:  
           (1) the continuing education activity title; 
           (2) a brief description of the continuing education 
        activity; 
           (3) the sponsor, presenter, or author; 
           (4) the location and attendance dates; 
           (5) the number of clock hours; and 
           (6) a statement that the information is true and correct to 
        the best knowledge of the licensee.  
           Only continuing education obtained during the previous 
        two-year reporting period may be considered at the time of 
        reporting.  Clock hours must be earned and reported in 
        increments of one-half clock hour with a minimum of one clock 
        hour for each continuing education activity.  
           Subd. 2.  [CONTINUING EDUCATION REQUIREMENTS FOR LICENSEE'S 
        FIRST FOUR YEARS.] A licensee must, as part of meeting the clock 
        hour requirement of this section, obtain and document 18 hours 
        of cultural diversity training within the first four years after 
        the licensee's initial license effective date according to the 
        commissioner's reporting schedule.  
           Subd. 3.  [CONTINUING EDUCATION REQUIREMENTS AFTER 
        LICENSEE'S INITIAL FOUR YEARS.] Beginning four years following a 
        licensee's initial license effective date and according to the 
        board's reporting schedule, a licensee must document completion 
        of a minimum of six clock hours each reporting period of 
        cultural diversity training.  Licensees must also document 
        completion of six clock hours in courses directly related to the 
        rules of professional conduct in Minnesota Rules, part 4747.1400.
           Subd. 4.  [STANDARDS FOR APPROVAL.] In order to obtain 
        clock hour credit for a continuing education activity, the 
        activity must: 
           (1) constitute an organized program of learning; 
           (2) reasonably be expected to advance the knowledge and 
        skills of the alcohol and drug counselor; 
           (3) pertain to subjects that directly relate to the 
        practice of alcohol and drug counseling and the core functions 
        of an alcohol and drug counselor, or the rules of professional 
        conduct in Minnesota Rules, part 4747.1400; 
           (4) be conducted by individuals who have education, 
        training, and experience and are knowledgeable about the subject 
        matter; and 
           (5) be presented by a sponsor who has a system to verify 
        participation and maintains attendance records for three years, 
        unless the sponsor provides dated evidence to each participant 
        with the number of clock hours awarded.  
           Sec. 26.  Minnesota Statutes 2002, section 148C.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PRACTICE.] After the commissioner adopts 
        rules, No individual person, other than those individuals 
        exempted under section 148C.11, or 148C.045, shall engage in 
        alcohol and drug counseling practice unless that individual 
        holds a valid license without first being licensed under this 
        chapter as an alcohol and drug counselor.  For purposes of this 
        chapter, an individual engages in the practice of alcohol and 
        drug counseling if the individual performs or offers to perform 
        alcohol and drug counseling services as defined in section 
        148C.01, subdivision 10, or if the individual is held out as 
        able to perform those services.  
           Sec. 27.  Minnesota Statutes 2002, section 148C.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [USE OF TITLES.] After the commissioner adopts 
        rules, No individual person shall present themselves or any 
        other individual to the public by any title incorporating the 
        words "licensed alcohol and drug counselor" or otherwise hold 
        themselves out to the public by any title or description stating 
        or implying that they are licensed or otherwise qualified to 
        practice alcohol and drug counseling unless that individual 
        holds a valid license.  City, county, and state agency alcohol 
        and drug counselors who are not licensed under sections 148C.01 
        to 148C.11 may use the title "city agency alcohol and drug 
        counselor," "county agency alcohol and drug counselor," or 
        "state agency alcohol and drug counselor."  Hospital alcohol and 
        drug counselors who are not licensed under sections 148C.01 to 
        148C.11 may use the title "hospital alcohol and drug counselor" 
        while acting within the scope of their employment Persons issued 
        a temporary permit must use titles consistent with section 
        148C.04, subdivision 6, paragraph (c). 
           Sec. 28.  Minnesota Statutes 2002, section 148C.11, is 
        amended to read: 
           148C.11 [EXCEPTIONS TO LICENSE REQUIREMENT.] 
           Subdivision 1.  [OTHER PROFESSIONALS.] (a) Nothing in 
        sections 148C.01 to 148C.10 shall prevent this chapter prevents 
        members of other professions or occupations from performing 
        functions for which they are qualified or licensed.  This 
        exception includes, but is not limited to, licensed physicians, 
        registered nurses, licensed practical nurses, licensed 
        psychological practitioners, members of the clergy, American 
        Indian medicine men and women, licensed attorneys, probation 
        officers, licensed marriage and family therapists, licensed 
        social workers, licensed professional counselors, licensed 
        school counselors, and registered occupational therapists or 
        occupational therapy assistants. 
           (b) Nothing in this chapter prohibits technicians and 
        resident managers in programs licensed by the department of 
        human services from discharging their duties as provided in 
        Minnesota Rules, chapter 9530.  
           (c) Any person who is exempt under this section but who 
        elects to obtain a license under this chapter is subject to this 
        chapter to the same extent as other licensees.  
           (d) These persons must not, however, use a title 
        incorporating the words "alcohol and drug counselor" or 
        "licensed alcohol and drug counselor" or otherwise hold 
        themselves out to the public by any title or description stating 
        or implying that they are engaged in the practice of alcohol and 
        drug counseling, or that they are licensed to engage in the 
        practice of alcohol and drug counseling.  Persons engaged in the 
        practice of alcohol and drug counseling are not exempt from the 
        commissioner's jurisdiction solely by the use of one of the 
        above titles. 
           Subd. 2.  [STUDENTS.] Nothing in sections 148C.01 to 
        148C.10 shall prevent students enrolled in an accredited school 
        of alcohol and drug counseling from engaging in the practice of 
        alcohol and drug counseling while under qualified supervision in 
        an accredited school of alcohol and drug counseling.  
           Subd. 3.  [FEDERALLY RECOGNIZED TRIBES; ETHNIC MINORITIES.] 
        (a) Alcohol and drug counselors licensed to practice practicing 
        alcohol and drug counseling according to standards established 
        by federally recognized tribes, while practicing under tribal 
        jurisdiction, are exempt from the requirements of this chapter.  
        In practicing alcohol and drug counseling under tribal 
        jurisdiction, individuals licensed practicing under that 
        authority shall be afforded the same rights, responsibilities, 
        and recognition as persons licensed pursuant to this chapter. 
           (b) The commissioner shall develop special licensing 
        criteria for issuance of a license to alcohol and drug 
        counselors who:  (1) practice alcohol and drug counseling with a 
        member of an ethnic minority population or with a person with a 
        disability as defined by rule; or (2) are employed by agencies 
        whose primary agency service focus addresses ethnic minority 
        populations or persons with a disability as defined by rule.  
        These licensing criteria may differ from the licensing 
        criteria requirements specified in section 148C.04.  To develop, 
        implement, and evaluate the effect of these criteria, the 
        commissioner shall establish a committee comprised of, but not 
        limited to, representatives from the Minnesota commission 
        serving deaf and hard-of-hearing people, the council on affairs 
        of Chicano/Latino people, the council on Asian-Pacific 
        Minnesotans, the council on Black Minnesotans, the council on 
        disability, and the Indian affairs council.  The committee does 
        not expire. 
           (c) The commissioner shall issue a license to an applicant 
        who (1) is an alcohol and drug counselor who is exempt under 
        paragraph (a) from the requirements of this chapter; (2) has at 
        least 2,000 hours of alcohol and drug counselor experience as 
        defined by the core functions; and (3) meets the licensing 
        requirements that are in effect on the date of application under 
        section 148C.04, subdivision 3 or 4, except the written case 
        presentation and oral examination component under section 
        148C.04, subdivision 3, clause (2), or 4, clause (1), item 
        (ii).  When applying for a license under this paragraph, an 
        applicant must follow the procedures for admission to licensure 
        specified under section 148C.0351.  A person who receives a 
        license under this paragraph must complete the written case 
        presentation and satisfactorily pass the oral examination 
        component under section 148C.04, subdivision 3, clause (2), or 
        4, clause (1), item (ii), at the earliest available opportunity 
        after the commissioner begins administering oral examinations.  
        The commissioner may suspend or restrict a person's license 
        according to section 148C.09 if the person fails to complete the 
        written case presentation and satisfactorily pass the oral 
        examination.  This paragraph expires July 1, 2004. 
           Subd. 4.  [HOSPITAL ALCOHOL AND DRUG COUNSELORS.] The 
        licensing of hospital alcohol and drug counselors shall be 
        voluntary, while the counselor is employed by the hospital.  
        Effective January 1, 2006, hospitals employing alcohol and drug 
        counselors shall not be required to employ licensed alcohol and 
        drug counselors, nor shall they require their alcohol and drug 
        counselors to be licensed, however, nothing in this chapter will 
        prohibit hospitals from requiring their counselors to be 
        eligible for licensure.  An alcohol or drug counselor employed 
        by a hospital must be licensed as an alcohol and drug counselor 
        in accordance with this chapter.  
           Subd. 5.  [CITY, COUNTY, AND STATE AGENCY ALCOHOL AND DRUG 
        COUNSELORS.] The licensing of city, county, and state agency 
        alcohol and drug counselors shall be voluntary, while the 
        counselor is employed by the city, county, or state agency.  
        Effective January 1, 2006, city, county, and state agencies 
        employing alcohol and drug counselors shall not be required to 
        employ licensed alcohol and drug counselors, nor shall they 
        require their drug and alcohol counselors to be licensed.  An 
        alcohol and drug counselor employed by a city, county, or state 
        agency must be licensed as an alcohol and drug counselor in 
        accordance with this chapter.  
           Subd. 6.  [TRANSITION PERIOD FOR HOSPITAL AND CITY, COUNTY, 
        AND STATE AGENCY ALCOHOL AND DRUG COUNSELORS.] For the period 
        between July 1, 2003, and January 1, 2006, the commissioner 
        shall grant a license to an individual who is employed as an 
        alcohol and drug counselor at a Minnesota hospital or a city, 
        county, or state agency in Minnesota if the individual:  
           (1) was employed as an alcohol and drug counselor at a 
        hospital or a city, county, or state agency before August 1, 
        2002; 
           (2) has 8,000 hours of alcohol and drug counselor work 
        experience; 
           (3) has completed a written case presentation and 
        satisfactorily passed an oral examination established by the 
        commissioner; 
           (4) has satisfactorily passed a written examination as 
        established by the commissioner; and 
           (5) meets the requirements in section 148C.0351. 
           Sec. 29.  [148C.12] [FEES.] 
           Subdivision 1.  [APPLICATION FEE.] The application fee is 
        $295.  
           Subd. 2.  [BIENNIAL RENEWAL FEE.] The license renewal fee 
        is $295.  If the commissioner changes the renewal schedule and 
        the expiration date is less than two years, the fee must be 
        prorated.  
           Subd. 3.  [TEMPORARY PERMIT FEE.] The initial fee for 
        applicants under section 148C.04, subdivision 6, paragraph (a), 
        is $100.  The fee for annual renewal of a temporary permit is 
        $100.  
           Subd. 4.  [EXAMINATION FEE.] The examination fee for the 
        written examination is $95 and for the oral examination is $200. 
           Subd. 5.  [INACTIVE RENEWAL FEE.] The inactive renewal fee 
        is $150.  
           Subd. 6.  [LATE FEE.] The late fee is 25 percent of the 
        biennial renewal fee, the inactive renewal fee, or the annual 
        fee for renewal of temporary practice status.  
           Subd. 7.  [FEE TO RENEW AFTER EXPIRATION OF LICENSE.] The 
        fee for renewal of a license that has expired for less than two 
        years is the total of the biennial renewal fee, the late fee, 
        and a fee of $100 for review and approval of the continuing 
        education report.  
           Subd. 8.  [FEE FOR LICENSE VERIFICATIONS.] The fee for 
        license verification to institutions and other jurisdictions is 
        $25.  
           Subd. 9.  [SURCHARGE FEE.] Notwithstanding section 
        16A.1285, subdivision 2, a surcharge of $99 shall be paid at the 
        time of initial application for or renewal of an alcohol and 
        drug counselor license until June 30, 2013.  
           Subd. 10.  [NONREFUNDABLE FEES.] All fees are nonrefundable.
           Sec. 30.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 148C.0351, 
        subdivision 2; 148C.05, subdivisions 2, 3, and 4; 148C.06; and 
        148C.10, subdivision 1a, are repealed.  
           (b) Minnesota Rules, parts 4747.0030, subparts 25, 28, and 
        30; 4747.0040, subpart 3, item A; 4747.0060, subpart 1, items A, 
        B, and D; 4747.0070, subparts 4 and 5; 4747.0080; 4747.0090; 
        4747.0100; 4747.0300; 4747.0400, subparts 2 and 3; 4747.0500; 
        4747.0600; 4747.1000; 4747.1100, subpart 3; and 4747.1600, are 
        repealed. 

                                   ARTICLE 6 
                 HUMAN SERVICES LICENSING, COUNTY INITIATIVES, 
                                AND MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2002, section 69.021, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 
        The excess police state-aid holding account is established in 
        the general fund.  The excess police state-aid holding account 
        must be administered by the commissioner. 
           (b) Excess police state aid determined according to 
        subdivision 10, must be deposited in the excess police state-aid 
        holding account. 
           (c) From the balance in the excess police state-aid holding 
        account, $1,000,000 $900,000 is appropriated to and must be 
        transferred annually to the ambulance service personnel 
        longevity award and incentive suspense account established by 
        section 144E.42, subdivision 2. 
           (d) If a police officer stress reduction program is created 
        by law and money is appropriated for that program, an amount 
        equal to that appropriation must be transferred from the balance 
        in the excess police state-aid holding account. 
           (e) On October 1, 1997, and annually on each subsequent 
        October 1, one-half of the balance of the excess police 
        state-aid holding account remaining after the deductions under 
        paragraphs (c) and (d) is appropriated for additional 
        amortization aid under section 423A.02, subdivision 1b. 
           (f) Annually, the remaining balance in the excess police 
        state-aid holding account, after the deductions under paragraphs 
        (c), (d), and (e), cancels to the general fund. 
           Sec. 2.  Minnesota Statutes 2002, section 245.0312, is 
        amended to read: 
           245.0312 [DESIGNATING SPECIAL UNITS AND REGIONAL CENTERS.] 
           Notwithstanding any provision of law to the contrary, 
        during the biennium, the commissioner of human services, upon 
        the approval of the governor after consulting with the 
        legislative advisory commission, may designate portions of 
        hospitals for the mentally ill state-operated services 
        facilities under the commissioner's control as special care 
        units for mentally retarded or inebriate persons, or as nursing 
        homes for persons over the age of 65, and may designate portions 
        of the hospitals designated in Minnesota Statutes 1969, section 
        252.025, subdivision 1, as special care units for mentally ill 
        or inebriate persons, and may plan to develop all hospitals for 
        mentally ill, mentally retarded, or inebriate persons under the 
        commissioner's control as multipurpose regional centers for 
        programs related to all of the said problems.  
           If approved by the governor, the commissioner may rename 
        the state hospital as a state regional center and appoint the 
        hospital administrator as administrator of the center, in 
        accordance with section 246.0251.  
           The directors of the separate program units of regional 
        centers shall be responsible directly to the commissioner at the 
        discretion of the commissioner. 
           Sec. 3.  [245.945] [REIMBURSEMENT TO OMBUDSMAN FOR MENTAL 
        HEALTH AND MENTAL RETARDATION.] 
           The commissioner shall obtain federal financial 
        participation for eligible activity by the ombudsman for mental 
        health and mental retardation.  The ombudsman shall maintain and 
        transmit to the department of human services documentation that 
        is necessary in order to obtain federal funds. 
           Sec. 4.  Minnesota Statutes 2002, section 245A.035, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REQUIREMENTS FOR EMERGENCY LICENSE.] Before an 
        emergency license may be issued, the following requirements must 
        be met: 
           (1) the county agency must conduct an initial inspection of 
        the premises where the foster care is to be provided to ensure 
        the health and safety of any child placed in the home.  The 
        county agency shall conduct the inspection using a form 
        developed by the commissioner; 
           (2) at the time of the inspection or placement, whichever 
        is earlier, the relative being considered for an emergency 
        license shall receive an application form for a child foster 
        care license; 
           (3) whenever possible, prior to placing the child in the 
        relative's home, the relative being considered for an emergency 
        license shall provide the information required by section 
        245A.04, subdivision 3, paragraph (b) (k); and 
           (4) if the county determines, prior to the issuance of an 
        emergency license, that anyone requiring a background study may 
        be disqualified under section 245A.04, and the disqualification 
        is one which the commissioner cannot set aside, an emergency 
        license shall not be issued. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2002, section 245A.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BACKGROUND STUDY OF THE APPLICANT; DEFINITIONS.] 
        (a) Individuals and organizations that are required in statute 
        to initiate background studies under this section shall comply 
        with the following requirements: 
           (1) Applicants for licensure, license holders, and other 
        entities as provided in this section must submit completed 
        background study forms to the commissioner before individuals 
        specified in paragraph (c), clauses (1) to (4), (6), and (7), 
        begin positions allowing direct contact in any licensed program. 
           (2) Applicants and license holders under the jurisdiction 
        of other state agencies who are required in other statutory 
        sections to initiate background studies under this section must 
        submit completed background study forms to the commissioner 
        prior to the background study subject beginning in a position 
        allowing direct contact in the licensed program, or where 
        applicable, prior to being employed. 
           (3) Organizations required to initiate background studies 
        under section 256B.0627 for individuals described in paragraph 
        (c), clause (5), must submit a completed background study form 
        to the commissioner before those individuals begin a position 
        allowing direct contact with persons served by the 
        organization.  The commissioner shall recover the cost of these 
        background studies through a fee of no more than $12 per study 
        charged to the organization responsible for submitting the 
        background study form.  The fees collected under this paragraph 
        are appropriated to the commissioner for the purpose of 
        conducting background studies.  
           Upon receipt of the background study forms from the 
        entities in clauses (1) to (3), the commissioner shall complete 
        the background study as specified under this section and provide 
        notices required in subdivision 3a.  Unless otherwise specified, 
        the subject of a background study may have direct contact with 
        persons served by a program after the background study form is 
        mailed or submitted to the commissioner pending notification of 
        the study results under subdivision 3a.  A county agency may 
        accept a background study completed by the commissioner under 
        this section in place of the background study required under 
        section 245A.16, subdivision 3, in programs with joint licensure 
        as home and community-based services and adult foster care for 
        people with developmental disabilities when the license holder 
        does not reside in the foster care residence and the subject of 
        the study has been continuously affiliated with the license 
        holder since the date of the commissioner's study. 
           (b) The definitions in this paragraph apply only to 
        subdivisions 3 to 3e. 
           (1) "Background study" means the review of records 
        conducted by the commissioner to determine whether a subject is 
        disqualified from direct contact with persons served by a 
        program, and where specifically provided in statutes, whether a 
        subject is disqualified from having access to persons served by 
        a program. 
           (2) "Continuous, direct supervision" means an individual is 
        within sight or hearing of the supervising person to the extent 
        that supervising person is capable at all times of intervening 
        to protect the health and safety of the persons served by the 
        program. 
           (3) "Contractor" means any person, regardless of employer, 
        who is providing program services for hire under the control of 
        the provider. 
           (4) "Direct contact" means providing face-to-face care, 
        training, supervision, counseling, consultation, or medication 
        assistance to persons served by the program. 
           (5) "Reasonable cause" means information or circumstances 
        exist which provide the commissioner with articulable suspicion 
        that further pertinent information may exist concerning a 
        subject.  The commissioner has reasonable cause when, but not 
        limited to, the commissioner has received a report from the 
        subject, the license holder, or a third party indicating that 
        the subject has a history that would disqualify the person or 
        that may pose a risk to the health or safety of persons 
        receiving services. 
           (6) "Subject of a background study" means an individual on 
        whom a background study is required or completed. 
           (c) The applicant, license holder, registrant under section 
        144A.71, subdivision 1, bureau of criminal apprehension, 
        commissioner of health, and county agencies, after written 
        notice to the individual who is the subject of the study, shall 
        help with the study by giving the commissioner criminal 
        conviction data and reports about the maltreatment of adults 
        substantiated under section 626.557 and the maltreatment of 
        minors in licensed programs substantiated under section 
        626.556.  If a background study is initiated by an applicant or 
        license holder and the applicant or license holder receives 
        information about the possible criminal or maltreatment history 
        of an individual who is the subject of the background study, the 
        applicant or license holder must immediately provide the 
        information to the commissioner.  The individuals to be studied 
        shall include: 
           (1) the applicant; 
           (2) persons age 13 and over living in the household where 
        the licensed program will be provided; 
           (3) current employees or contractors of the applicant who 
        will have direct contact with persons served by the facility, 
        agency, or program; 
           (4) volunteers or student volunteers who have direct 
        contact with persons served by the program to provide program 
        services, if the contact is not under the continuous, direct 
        supervision by an individual listed in clause (1) or (3); 
           (5) any person required under section 256B.0627 to have a 
        background study completed under this section; 
           (6) persons ages 10 to 12 living in the household where the 
        licensed services will be provided when the commissioner has 
        reasonable cause; and 
           (7) persons who, without providing direct contact services 
        at a licensed program, may have unsupervised access to children 
        or vulnerable adults receiving services from the program 
        licensed to provide family child care for children, foster care 
        for children in the provider's own home, or foster care or day 
        care services for adults in the provider's own home when the 
        commissioner has reasonable cause. 
           (d) According to paragraph (c), clauses (2) and (6), the 
        commissioner shall review records from the juvenile courts.  For 
        persons under paragraph (c), clauses (1), (3), (4), (5), and 
        (7), who are ages 13 to 17, the commissioner shall review 
        records from the juvenile courts when the commissioner has 
        reasonable cause.  The juvenile courts shall help with the study 
        by giving the commissioner existing juvenile court records on 
        individuals described in paragraph (c), clauses (2), (6), and 
        (7), relating to delinquency proceedings held within either the 
        five years immediately preceding the background study or the 
        five years immediately preceding the individual's 18th birthday, 
        whichever time period is longer.  The commissioner shall destroy 
        juvenile records obtained pursuant to this subdivision when the 
        subject of the records reaches age 23. 
           (e) Beginning August 1, 2001, the commissioner shall 
        conduct all background studies required under this chapter and 
        initiated by supplemental nursing services agencies registered 
        under section 144A.71, subdivision 1.  Studies for the agencies 
        must be initiated annually by each agency.  The commissioner 
        shall conduct the background studies according to this chapter.  
        The commissioner shall recover the cost of the background 
        studies through a fee of no more than $8 per study, charged to 
        the supplemental nursing services agency.  The fees collected 
        under this paragraph are appropriated to the commissioner for 
        the purpose of conducting background studies. 
           (f) For purposes of this section, a finding that a 
        delinquency petition is proven in juvenile court shall be 
        considered a conviction in state district court. 
           (g) A study of an individual in paragraph (c), clauses (1) 
        to (7), shall be conducted at least upon application for initial 
        license for all license types or registration under section 
        144A.71, subdivision 1, and at reapplication for a license for 
        family child care, child foster care, and adult foster care.  
        The commissioner is not required to conduct a study of an 
        individual at the time of reapplication for a license or if the 
        individual has been continuously affiliated with a foster care 
        provider licensed by the commissioner of human services and 
        registered under chapter 144D, other than a family day care or 
        foster care license, if:  (i) a study of the individual was 
        conducted either at the time of initial licensure or when the 
        individual became affiliated with the license holder; (ii) the 
        individual has been continuously affiliated with the license 
        holder since the last study was conducted; and (iii) the 
        procedure described in paragraph (j) has been implemented and 
        was in effect continuously since the last study was conducted.  
        For the purposes of this section, a physician licensed under 
        chapter 147 is considered to be continuously affiliated upon the 
        license holder's receipt from the commissioner of health or 
        human services of the physician's background study results.  For 
        individuals who are required to have background studies under 
        paragraph (c) and who have been continuously affiliated with a 
        foster care provider that is licensed in more than one county, 
        criminal conviction data may be shared among those counties in 
        which the foster care programs are licensed.  A county agency's 
        receipt of criminal conviction data from another county agency 
        shall meet the criminal data background study requirements of 
        this section. 
           (h) The commissioner may also conduct studies on 
        individuals specified in paragraph (c), clauses (3) and (4), 
        when the studies are initiated by: 
           (i) personnel pool agencies; 
           (ii) temporary personnel agencies; 
           (iii) educational programs that train persons by providing 
        direct contact services in licensed programs; and 
           (iv) professional services agencies that are not licensed 
        and which contract with licensed programs to provide direct 
        contact services or individuals who provide direct contact 
        services. 
           (i) Studies on individuals in paragraph (h), items (i) to 
        (iv), must be initiated annually by these agencies, programs, 
        and individuals.  Except as provided in paragraph (a), clause 
        (3), no applicant, license holder, or individual who is the 
        subject of the study shall pay any fees required to conduct the 
        study. 
           (1) At the option of the licensed facility, rather than 
        initiating another background study on an individual required to 
        be studied who has indicated to the licensed facility that a 
        background study by the commissioner was previously completed, 
        the facility may make a request to the commissioner for 
        documentation of the individual's background study status, 
        provided that: 
           (i) the facility makes this request using a form provided 
        by the commissioner; 
           (ii) in making the request the facility informs the 
        commissioner that either: 
           (A) the individual has been continuously affiliated with a 
        licensed facility since the individual's previous background 
        study was completed, or since October 1, 1995, whichever is 
        shorter; or 
           (B) the individual is affiliated only with a personnel pool 
        agency, a temporary personnel agency, an educational program 
        that trains persons by providing direct contact services in 
        licensed programs, or a professional services agency that is not 
        licensed and which contracts with licensed programs to provide 
        direct contact services or individuals who provide direct 
        contact services; and 
           (iii) the facility provides notices to the individual as 
        required in paragraphs (a) to (j), and that the facility is 
        requesting written notification of the individual's background 
        study status from the commissioner.  
           (2) The commissioner shall respond to each request under 
        paragraph (1) with a written or electronic notice to the 
        facility and the study subject.  If the commissioner determines 
        that a background study is necessary, the study shall be 
        completed without further request from a licensed agency or 
        notifications to the study subject.  
           (3) When a background study is being initiated by a 
        licensed facility or a foster care provider that is also 
        registered under chapter 144D, a study subject affiliated with 
        multiple licensed facilities may attach to the background study 
        form a cover letter indicating the additional facilities' names, 
        addresses, and background study identification numbers.  When 
        the commissioner receives such notices, each facility identified 
        by the background study subject shall be notified of the study 
        results.  The background study notice sent to the subsequent 
        agencies shall satisfy those facilities' responsibilities for 
        initiating a background study on that individual. 
           (j) If an individual who is affiliated with a program or 
        facility regulated by the department of human services or 
        department of health, a facility serving children or youth 
        licensed by the department of corrections, or who is affiliated 
        with any type of home care agency or provider of personal care 
        assistance services, is convicted of a crime constituting a 
        disqualification under subdivision 3d, the probation officer or 
        corrections agent shall notify the commissioner of the 
        conviction.  For the purpose of this paragraph, "conviction" has 
        the meaning given it in section 609.02, subdivision 5.  The 
        commissioner, in consultation with the commissioner of 
        corrections, shall develop forms and information necessary to 
        implement this paragraph and shall provide the forms and 
        information to the commissioner of corrections for distribution 
        to local probation officers and corrections agents.  The 
        commissioner shall inform individuals subject to a background 
        study that criminal convictions for disqualifying crimes will be 
        reported to the commissioner by the corrections system.  A 
        probation officer, corrections agent, or corrections agency is 
        not civilly or criminally liable for disclosing or failing to 
        disclose the information required by this paragraph.  Upon 
        receipt of disqualifying information, the commissioner shall 
        provide the notifications required in subdivision 3a, as 
        appropriate to agencies on record as having initiated a 
        background study or making a request for documentation of the 
        background study status of the individual.  This paragraph does 
        not apply to family day care and child foster care programs. 
           (k) The individual who is the subject of the study must 
        provide the applicant or license holder with sufficient 
        information to ensure an accurate study including the 
        individual's first, middle, and last name and all other names by 
        which the individual has been known; home address, city, county, 
        and state of residence for the past five years; zip code; sex; 
        date of birth; and driver's license number or state 
        identification number.  The applicant or license holder shall 
        provide this information about an individual in paragraph (c), 
        clauses (1) to (7), on forms prescribed by the commissioner.  By 
        January 1, 2000, for background studies conducted by the 
        department of human services, the commissioner shall implement a 
        system for the electronic transmission of:  (1) background study 
        information to the commissioner; and (2) background study 
        results to the license holder.  The commissioner may request 
        additional information of the individual, which shall be 
        optional for the individual to provide, such as the individual's 
        social security number or race. 
           (l) For programs directly licensed by the commissioner, a 
        study must include information related to names of substantiated 
        perpetrators of maltreatment of vulnerable adults that has been 
        received by the commissioner as required under section 626.557, 
        subdivision 9c, paragraph (i), and the commissioner's records 
        relating to the maltreatment of minors in licensed programs, 
        information from juvenile courts as required in paragraph (c) 
        for persons listed in paragraph (c), clauses (2), (6), and (7), 
        and information from the bureau of criminal apprehension.  For 
        child foster care, adult foster care, and family day care homes, 
        the study must include information from the county agency's 
        record of substantiated maltreatment of adults, and the 
        maltreatment of minors, information from juvenile courts as 
        required in paragraph (c) for persons listed in paragraph (c), 
        clauses (2), (6), and (7), and information from the bureau of 
        criminal apprehension.  For any background study completed under 
        this section, the commissioner may also review arrest and 
        investigative information from the bureau of criminal 
        apprehension, the commissioner of health, a county attorney, 
        county sheriff, county agency, local chief of police, other 
        states, the courts, or the Federal Bureau of Investigation if 
        the commissioner has reasonable cause to believe the information 
        is pertinent to the disqualification of an individual listed in 
        paragraph (c), clauses (1) to (7).  The commissioner is not 
        required to conduct more than one review of a subject's records 
        from the Federal Bureau of Investigation if a review of the 
        subject's criminal history with the Federal Bureau of 
        Investigation has already been completed by the commissioner and 
        there has been no break in the subject's affiliation with the 
        license holder who initiated the background study. 
           (m) For any background study completed under this section, 
        when the commissioner has reasonable cause to believe that 
        further pertinent information may exist on the subject, the 
        subject shall provide a set of classifiable fingerprints 
        obtained from an authorized law enforcement agency.  For 
        purposes of requiring fingerprints, the commissioner shall be 
        considered to have reasonable cause under, but not limited to, 
        the following circumstances: 
           (1) information from the bureau of criminal apprehension 
        indicates that the subject is a multistate offender; 
           (2) information from the bureau of criminal apprehension 
        indicates that multistate offender status is undetermined; or 
           (3) the commissioner has received a report from the subject 
        or a third party indicating that the subject has a criminal 
        history in a jurisdiction other than Minnesota. 
           (n) The failure or refusal of an applicant, license holder, 
        or registrant under section 144A.71, subdivision 1, to cooperate 
        with the commissioner is reasonable cause to disqualify a 
        subject, deny a license application or immediately suspend, 
        suspend, or revoke a license or registration.  Failure or 
        refusal of an individual to cooperate with the study is just 
        cause for denying or terminating employment of the individual if 
        the individual's failure or refusal to cooperate could cause the 
        applicant's application to be denied or the license holder's 
        license to be immediately suspended, suspended, or revoked. 
           (o) The commissioner shall not consider an application to 
        be complete until all of the information required to be provided 
        under this subdivision has been received.  
           (p) No person in paragraph (c), clauses (1) to (7), who is 
        disqualified as a result of this section may be retained by the 
        agency in a position involving direct contact with persons 
        served by the program and no person in paragraph (c), clauses 
        (2), (6), and (7), or as provided elsewhere in statute who is 
        disqualified as a result of this section may be allowed access 
        to persons served by the program, unless the commissioner has 
        provided written notice to the agency stating that: 
           (1) the individual may remain in direct contact during the 
        period in which the individual may request reconsideration as 
        provided in subdivision 3a, paragraph (b), clause (2) or (3); 
           (2) the individual's disqualification has been set aside 
        for that agency as provided in subdivision 3b, paragraph (b); or 
           (3) the license holder has been granted a variance for the 
        disqualified individual under subdivision 3e. 
           (q) Termination of affiliation with persons in paragraph 
        (c), clauses (1) to (7), made in good faith reliance on a notice 
        of disqualification provided by the commissioner shall not 
        subject the applicant or license holder to civil liability. 
           (r) The commissioner may establish records to fulfill the 
        requirements of this section. 
           (s) The commissioner may not disqualify an individual 
        subject to a study under this section because that person has, 
        or has had, a mental illness as defined in section 245.462, 
        subdivision 20. 
           (t) An individual subject to disqualification under this 
        subdivision has the applicable rights in subdivision 3a, 3b, or 
        3c. 
           (u) For the purposes of background studies completed by 
        tribal organizations performing licensing activities otherwise 
        required of the commissioner under this chapter, after obtaining 
        consent from the background study subject, tribal licensing 
        agencies shall have access to criminal history data in the same 
        manner as county licensing agencies and private licensing 
        agencies under this chapter. 
           (v) County agencies shall have access to the criminal 
        history data in the same manner as county licensing agencies 
        under this chapter for purposes of background studies completed 
        by county agencies on legal nonlicensed child care providers to 
        determine eligibility for child care funds under chapter 119B. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2002, section 245A.04, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [RECONSIDERATION OF DISQUALIFICATION.] (a) The 
        individual who is the subject of the disqualification may 
        request a reconsideration of the disqualification.  
           The individual must submit the request for reconsideration 
        to the commissioner in writing.  A request for reconsideration 
        for an individual who has been sent a notice of disqualification 
        under subdivision 3a, paragraph (b), clause (1) or (2), must be 
        submitted within 30 calendar days of the disqualified 
        individual's receipt of the notice of disqualification.  Upon 
        showing that the information in clause (1) or (2) cannot be 
        obtained within 30 days, the disqualified individual may request 
        additional time, not to exceed 30 days, to obtain that 
        information.  A request for reconsideration for an individual 
        who has been sent a notice of disqualification under subdivision 
        3a, paragraph (b), clause (3), must be submitted within 15 
        calendar days of the disqualified individual's receipt of the 
        notice of disqualification.  An individual who was determined to 
        have maltreated a child under section 626.556 or a vulnerable 
        adult under section 626.557, and who was disqualified under this 
        section on the basis of serious or recurring maltreatment, may 
        request reconsideration of both the maltreatment and the 
        disqualification determinations.  The request for 
        reconsideration of the maltreatment determination and the 
        disqualification must be submitted within 30 calendar days of 
        the individual's receipt of the notice of disqualification.  
        Removal of a disqualified individual from direct contact shall 
        be ordered if the individual does not request reconsideration 
        within the prescribed time, and for an individual who submits a 
        timely request for reconsideration, if the disqualification is 
        not set aside.  The individual must present information showing 
        that: 
           (1) the information the commissioner relied upon in 
        determining that the underlying conduct giving rise to the 
        disqualification occurred, and for maltreatment, that the 
        maltreatment was serious or recurring, is incorrect; or 
           (2) the subject of the study does not pose a risk of harm 
        to any person served by the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1. 
           (b) The commissioner shall rescind the disqualification if 
        the commissioner finds that the information relied on to 
        disqualify the subject is incorrect.  The commissioner may set 
        aside the disqualification under this section if the 
        commissioner finds that the individual does not pose a risk of 
        harm to any person served by the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1.  In determining 
        that an individual does not pose a risk of harm, the 
        commissioner shall consider the nature, severity, and 
        consequences of the event or events that lead to 
        disqualification, whether there is more than one disqualifying 
        event, the age and vulnerability of the victim at the time of 
        the event, the harm suffered by the victim, the similarity 
        between the victim and persons served by the program, the time 
        elapsed without a repeat of the same or similar event, 
        documentation of successful completion by the individual studied 
        of training or rehabilitation pertinent to the event, and any 
        other information relevant to reconsideration.  In reviewing a 
        disqualification under this section, the commissioner shall give 
        preeminent weight to the safety of each person to be served by 
        the license holder, applicant, or registrant under section 
        144A.71, subdivision 1, over the interests of the license 
        holder, applicant, or registrant under section 144A.71, 
        subdivision 1.  If the commissioner sets aside a 
        disqualification under this section, the disqualified individual 
        remains disqualified, but may hold a license and have direct 
        contact with or access to persons receiving services.  The 
        commissioner's set aside of a disqualification is limited solely 
        to the licensed program, applicant, or agency specified in the 
        set aside notice, unless otherwise specified in the notice.  The 
        commissioner may rescind a previous set aside of a 
        disqualification under this section based on new information 
        that indicates the individual may pose a risk of harm to persons 
        served by the applicant, license holder, or registrant.  If the 
        commissioner rescinds a set aside of a disqualification under 
        this paragraph, the appeal rights under paragraphs (a) and (e) 
        shall apply. 
           (c) Unless the information the commissioner relied on in 
        disqualifying an individual is incorrect, the commissioner may 
        not set aside the disqualification of an individual in 
        connection with a license to provide family day care for 
        children, foster care for children in the provider's own home, 
        or foster care or day care services for adults in the provider's 
        own home if: 
           (1) less than ten years have passed since the discharge of 
        the sentence imposed for the offense; and the individual has 
        been convicted of a violation of any offense listed in sections 
        609.165 (felon ineligible to possess firearm), criminal 
        vehicular homicide under 609.21 (criminal vehicular homicide and 
        injury), 609.215 (aiding suicide or aiding attempted suicide), 
        felony violations under 609.223 or 609.2231 (assault in the 
        third or fourth degree), 609.713 (terroristic threats), 609.235 
        (use of drugs to injure or to facilitate crime), 609.24 (simple 
        robbery), 609.255 (false imprisonment), 609.562 (arson in the 
        second degree), 609.71 (riot), 609.498, subdivision 1 or 1a 1b 
        (aggravated first degree or first degree tampering with a 
        witness), burglary in the first or second degree under 609.582 
        (burglary), 609.66 (dangerous weapon), 609.665 (spring guns), 
        609.67 (machine guns and short-barreled shotguns), 609.749, 
        subdivision 2 (gross misdemeanor harassment; stalking), 152.021 
        or 152.022 (controlled substance crime in the first or second 
        degree), 152.023, subdivision 1, clause (3) or (4), or 
        subdivision 2, clause (4) (controlled substance crime in the 
        third degree), 152.024, subdivision 1, clause (2), (3), or (4) 
        (controlled substance crime in the fourth degree), 609.224, 
        subdivision 2, paragraph (c) (fifth-degree assault by a 
        caregiver against a vulnerable adult), 609.23 (mistreatment of 
        persons confined), 609.231 (mistreatment of residents or 
        patients), 609.2325 (criminal abuse of a vulnerable adult), 
        609.233 (criminal neglect of a vulnerable adult), 609.2335 
        (financial exploitation of a vulnerable adult), 609.234 (failure 
        to report), 609.265 (abduction), 609.2664 to 609.2665 
        (manslaughter of an unborn child in the first or second degree), 
        609.267 to 609.2672 (assault of an unborn child in the first, 
        second, or third degree), 609.268 (injury or death of an unborn 
        child in the commission of a crime), 617.293 (disseminating or 
        displaying harmful material to minors), a felony level 
        conviction involving alcohol or drug use, a gross misdemeanor 
        offense under 609.324, subdivision 1 (other prohibited acts), a 
        gross misdemeanor offense under 609.378 (neglect or endangerment 
        of a child), a gross misdemeanor offense under 609.377 
        (malicious punishment of a child), 609.72, subdivision 3 
        (disorderly conduct against a vulnerable adult); or an attempt 
        or conspiracy to commit any of these offenses, as each of these 
        offenses is defined in Minnesota Statutes; or an offense in any 
        other state, the elements of which are substantially similar to 
        the elements of any of the foregoing offenses; 
           (2) regardless of how much time has passed since the 
        involuntary termination of parental rights under section 
        260C.301 or the discharge of the sentence imposed for the 
        offense, the individual was convicted of a violation of any 
        offense listed in sections 609.185 to 609.195 (murder in the 
        first, second, or third degree), 609.20 (manslaughter in the 
        first degree), 609.205 (manslaughter in the second degree), 
        609.245 (aggravated robbery), 609.25 (kidnapping), 609.561 
        (arson in the first degree), 609.749, subdivision 3, 4, or 5 
        (felony-level harassment; stalking), 609.228 (great bodily harm 
        caused by distribution of drugs), 609.221 or 609.222 (assault in 
        the first or second degree), 609.66, subdivision 1e (drive-by 
        shooting), 609.855, subdivision 5 (shooting in or at a public 
        transit vehicle or facility), 609.2661 to 609.2663 (murder of an 
        unborn child in the first, second, or third degree), a felony 
        offense under 609.377 (malicious punishment of a child), a 
        felony offense under 609.324, subdivision 1 (other prohibited 
        acts), a felony offense under 609.378 (neglect or endangerment 
        of a child), 609.322 (solicitation, inducement, and promotion of 
        prostitution), 609.342 to 609.345 (criminal sexual conduct in 
        the first, second, third, or fourth degree), 609.352 
        (solicitation of children to engage in sexual conduct), 617.246 
        (use of minors in a sexual performance), 617.247 (possession of 
        pictorial representations of a minor), 609.365 (incest), a 
        felony offense under sections 609.2242 and 609.2243 (domestic 
        assault), a felony offense of spousal abuse, a felony offense of 
        child abuse or neglect, a felony offense of a crime against 
        children, or an attempt or conspiracy to commit any of these 
        offenses as defined in Minnesota Statutes, or an offense in any 
        other state, the elements of which are substantially similar to 
        any of the foregoing offenses; 
           (3) within the seven years preceding the study, the 
        individual committed an act that constitutes maltreatment of a 
        child under section 626.556, subdivision 10e, and that resulted 
        in substantial bodily harm as defined in section 609.02, 
        subdivision 7a, or substantial mental or emotional harm as 
        supported by competent psychological or psychiatric evidence; or 
           (4) within the seven years preceding the study, the 
        individual was determined under section 626.557 to be the 
        perpetrator of a substantiated incident of maltreatment of a 
        vulnerable adult that resulted in substantial bodily harm as 
        defined in section 609.02, subdivision 7a, or substantial mental 
        or emotional harm as supported by competent psychological or 
        psychiatric evidence. 
           In the case of any ground for disqualification under 
        clauses (1) to (4), if the act was committed by an individual 
        other than the applicant, license holder, or registrant under 
        section 144A.71, subdivision 1, residing in the applicant's or 
        license holder's home, or the home of a registrant under section 
        144A.71, subdivision 1, the applicant, license holder, or 
        registrant under section 144A.71, subdivision 1, may seek 
        reconsideration when the individual who committed the act no 
        longer resides in the home.  
           The disqualification periods provided under clauses (1), 
        (3), and (4) are the minimum applicable disqualification 
        periods.  The commissioner may determine that an individual 
        should continue to be disqualified from licensure or 
        registration under section 144A.71, subdivision 1, because the 
        license holder, applicant, or registrant under section 144A.71, 
        subdivision 1, poses a risk of harm to a person served by that 
        individual after the minimum disqualification period has passed. 
           (d) The commissioner shall respond in writing or by 
        electronic transmission to all reconsideration requests for 
        which the basis for the request is that the information relied 
        upon by the commissioner to disqualify is incorrect or 
        inaccurate within 30 working days of receipt of a request and 
        all relevant information.  If the basis for the request is that 
        the individual does not pose a risk of harm, the commissioner 
        shall respond to the request within 15 working days after 
        receiving the request for reconsideration and all relevant 
        information.  If the request is based on both the correctness or 
        accuracy of the information relied on to disqualify the 
        individual and the risk of harm, the commissioner shall respond 
        to the request within 45 working days after receiving the 
        request for reconsideration and all relevant information.  If 
        the disqualification is set aside, the commissioner shall notify 
        the applicant or license holder in writing or by electronic 
        transmission of the decision. 
           (e) Except as provided in subdivision 3c, if a 
        disqualification for which reconsideration was requested is not 
        set aside or is not rescinded, an individual who was 
        disqualified on the basis of a preponderance of evidence that 
        the individual committed an act or acts that meet the definition 
        of any of the crimes listed in subdivision 3d, paragraph (a), 
        clauses (1) to (4); for a determination under section 626.556 or 
        626.557 of substantiated maltreatment that was serious or 
        recurring under subdivision 3d, paragraph (a), clause (4); or 
        for failure to make required reports under section 626.556, 
        subdivision 3, or 626.557, subdivision 3, pursuant to 
        subdivision 3d, paragraph (a), clause (4), may request a fair 
        hearing under section 256.045.  Except as provided under 
        subdivision 3c, the fair hearing is the only administrative 
        appeal of the final agency determination for purposes of appeal 
        by the disqualified individual, specifically, including a 
        challenge to the accuracy and completeness of data under section 
        13.04.  If the individual was disqualified based on a conviction 
        or admission to any crimes listed in subdivision 3d, paragraph 
        (a), clauses (1) to (4), the reconsideration decision under this 
        subdivision is the final agency determination for purposes of 
        appeal by the disqualified individual and is not subject to a 
        hearing under section 256.045. 
           (f) Except as provided under subdivision 3c, if an 
        individual was disqualified on the basis of a determination of 
        maltreatment under section 626.556 or 626.557, which was serious 
        or recurring, and the individual has requested reconsideration 
        of the maltreatment determination under section 626.556, 
        subdivision 10i, or 626.557, subdivision 9d, and also requested 
        reconsideration of the disqualification under this subdivision, 
        reconsideration of the maltreatment determination and 
        reconsideration of the disqualification shall be consolidated 
        into a single reconsideration.  For maltreatment and 
        disqualification determinations made by county agencies, the 
        consolidated reconsideration shall be conducted by the county 
        agency.  If the county agency has disqualified an individual on 
        multiple bases, one of which is a county maltreatment 
        determination for which the individual has a right to request 
        reconsideration, the county shall conduct the reconsideration of 
        all disqualifications.  Except as provided under subdivision 3c, 
        if an individual who was disqualified on the basis of serious or 
        recurring maltreatment requests a fair hearing on the 
        maltreatment determination under section 626.556, subdivision 
        10i, or 626.557, subdivision 9d, and requests a fair hearing on 
        the disqualification, which has not been set aside or rescinded 
        under this subdivision, the scope of the fair hearing under 
        section 256.045 shall include the maltreatment determination and 
        the disqualification.  Except as provided under subdivision 3c, 
        a fair hearing is the only administrative appeal of the final 
        agency determination, specifically, including a challenge to the 
        accuracy and completeness of data under section 13.04. 
           (g) In the notice from the commissioner that a 
        disqualification has been set aside, the license holder must be 
        informed that information about the nature of the 
        disqualification and which factors under paragraph (b) were the 
        bases of the decision to set aside the disqualification is 
        available to the license holder upon request without consent of 
        the background study subject.  With the written consent of a 
        background study subject, the commissioner may release to the 
        license holder copies of all information related to the 
        background study subject's disqualification and the 
        commissioner's decision to set aside the disqualification as 
        specified in the written consent. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2002, section 245A.04, 
        subdivision 3d, is amended to read: 
           Subd. 3d.  [DISQUALIFICATION.] (a) Upon receipt of 
        information showing, or when a background study completed under 
        subdivision 3 shows any of the following:  a conviction of one 
        or more crimes listed in clauses (1) to (4); the individual has 
        admitted to or a preponderance of the evidence indicates the 
        individual has committed an act or acts that meet the definition 
        of any of the crimes listed in clauses (1) to (4); or an 
        investigation results in an administrative determination listed 
        under clause (4), the individual shall be disqualified from any 
        position allowing direct contact with persons receiving services 
        from the license holder, entity identified in subdivision 3, 
        paragraph (a), or registrant under section 144A.71, subdivision 
        1, and for individuals studied under section 245A.04, 
        subdivision 3, paragraph (c), clauses (2), (6), and (7), the 
        individual shall also be disqualified from access to a person 
        receiving services from the license holder: 
           (1) regardless of how much time has passed since the 
        involuntary termination of parental rights under section 
        260C.301 or the discharge of the sentence imposed for the 
        offense, and unless otherwise specified, regardless of the level 
        of the conviction, the individual was convicted of any of the 
        following offenses:  sections 609.185 (murder in the first 
        degree); 609.19 (murder in the second degree); 609.195 (murder 
        in the third degree); 609.2661 (murder of an unborn child in the 
        first degree); 609.2662 (murder of an unborn child in the second 
        degree); 609.2663 (murder of an unborn child in the third 
        degree); 609.20 (manslaughter in the first degree); 609.205 
        (manslaughter in the second degree); 609.221 or 609.222 (assault 
        in the first or second degree); 609.228 (great bodily harm 
        caused by distribution of drugs); 609.245 (aggravated robbery); 
        609.25 (kidnapping); 609.561 (arson in the first degree); 
        609.749, subdivision 3, 4, or 5 (felony-level harassment; 
        stalking); 609.66, subdivision 1e (drive-by shooting); 609.855, 
        subdivision 5 (shooting at or in a public transit vehicle or 
        facility); 609.322 (solicitation, inducement, and promotion of 
        prostitution); 609.342 (criminal sexual conduct in the first 
        degree); 609.343 (criminal sexual conduct in the second degree); 
        609.344 (criminal sexual conduct in the third degree); 609.345 
        (criminal sexual conduct in the fourth degree); 609.352 
        (solicitation of children to engage in sexual conduct); 609.365 
        (incest); felony offense under 609.377 (malicious punishment of 
        a child); a felony offense under 609.378 (neglect or 
        endangerment of a child); a felony offense under 609.324, 
        subdivision 1 (other prohibited acts); 617.246 (use of minors in 
        sexual performance prohibited); 617.247 (possession of pictorial 
        representations of minors); a felony offense under sections 
        609.2242 and 609.2243 (domestic assault), a felony offense of 
        spousal abuse, a felony offense of child abuse or neglect, a 
        felony offense of a crime against children; or attempt or 
        conspiracy to commit any of these offenses as defined in 
        Minnesota Statutes, or an offense in any other state or country, 
        where the elements are substantially similar to any of the 
        offenses listed in this clause; 
           (2) if less than 15 years have passed since the discharge 
        of the sentence imposed for the offense; and the individual has 
        received a felony conviction for a violation of any of these 
        offenses:  sections 609.21 (criminal vehicular homicide and 
        injury); 609.165 (felon ineligible to possess firearm); 609.215 
        (suicide); 609.223 or 609.2231 (assault in the third or fourth 
        degree); repeat offenses under 609.224 (assault in the fifth 
        degree); repeat offenses under 609.3451 (criminal sexual conduct 
        in the fifth degree); 609.498, subdivision 1 or 1a 
        1b (aggravated first degree or first degree tampering with a 
        witness); 609.713 (terroristic threats); 609.235 (use of drugs 
        to injure or facilitate crime); 609.24 (simple robbery); 609.255 
        (false imprisonment); 609.562 (arson in the second degree); 
        609.563 (arson in the third degree); repeat offenses under 
        617.23 (indecent exposure; penalties); repeat offenses under 
        617.241 (obscene materials and performances; distribution and 
        exhibition prohibited; penalty); 609.71 (riot); 609.66 
        (dangerous weapons); 609.67 (machine guns and short-barreled 
        shotguns); 609.2325 (criminal abuse of a vulnerable adult); 
        609.2664 (manslaughter of an unborn child in the first degree); 
        609.2665 (manslaughter of an unborn child in the second degree); 
        609.267 (assault of an unborn child in the first degree); 
        609.2671 (assault of an unborn child in the second degree); 
        609.268 (injury or death of an unborn child in the commission of 
        a crime); 609.52 (theft); 609.2335 (financial exploitation of a 
        vulnerable adult); 609.521 (possession of shoplifting gear); 
        609.582 (burglary); 609.625 (aggravated forgery); 609.63 
        (forgery); 609.631 (check forgery; offering a forged check); 
        609.635 (obtaining signature by false pretense); 609.27 
        (coercion); 609.275 (attempt to coerce); 609.687 (adulteration); 
        260C.301 (grounds for termination of parental rights); chapter 
        152 (drugs; controlled substance); and a felony level conviction 
        involving alcohol or drug use.  An attempt or conspiracy to 
        commit any of these offenses, as each of these offenses is 
        defined in Minnesota Statutes; or an offense in any other state 
        or country, the elements of which are substantially similar to 
        the elements of the offenses in this clause.  If the individual 
        studied is convicted of one of the felonies listed in this 
        clause, but the sentence is a gross misdemeanor or misdemeanor 
        disposition, the lookback period for the conviction is the 
        period applicable to the disposition, that is the period for 
        gross misdemeanors or misdemeanors; 
           (3) if less than ten years have passed since the discharge 
        of the sentence imposed for the offense; and the individual has 
        received a gross misdemeanor conviction for a violation of any 
        of the following offenses:  sections 609.224 (assault in the 
        fifth degree); 609.2242 and 609.2243 (domestic assault); 
        violation of an order for protection under 518B.01, subdivision 
        14; 609.3451 (criminal sexual conduct in the fifth degree); 
        repeat offenses under 609.746 (interference with privacy); 
        repeat offenses under 617.23 (indecent exposure); 617.241 
        (obscene materials and performances); 617.243 (indecent 
        literature, distribution); 617.293 (harmful materials; 
        dissemination and display to minors prohibited); 609.71 (riot); 
        609.66 (dangerous weapons); 609.749, subdivision 2 (harassment; 
        stalking); 609.224, subdivision 2, paragraph (c) (assault in the 
        fifth degree by a caregiver against a vulnerable adult); 609.23 
        (mistreatment of persons confined); 609.231 (mistreatment of 
        residents or patients); 609.2325 (criminal abuse of a vulnerable 
        adult); 609.233 (criminal neglect of a vulnerable adult); 
        609.2335 (financial exploitation of a vulnerable adult); 609.234 
        (failure to report maltreatment of a vulnerable adult); 609.72, 
        subdivision 3 (disorderly conduct against a vulnerable adult); 
        609.265 (abduction); 609.378 (neglect or endangerment of a 
        child); 609.377 (malicious punishment of a child); 609.324, 
        subdivision 1a (other prohibited acts; minor engaged in 
        prostitution); 609.33 (disorderly house); 609.52 (theft); 
        609.582 (burglary); 609.631 (check forgery; offering a forged 
        check); 609.275 (attempt to coerce); or an attempt or conspiracy 
        to commit any of these offenses, as each of these offenses is 
        defined in Minnesota Statutes; or an offense in any other state 
        or country, the elements of which are substantially similar to 
        the elements of any of the offenses listed in this clause.  If 
        the defendant is convicted of one of the gross misdemeanors 
        listed in this clause, but the sentence is a misdemeanor 
        disposition, the lookback period for the conviction is the 
        period applicable to misdemeanors; or 
           (4) if less than seven years have passed since the 
        discharge of the sentence imposed for the offense; and the 
        individual has received a misdemeanor conviction for a violation 
        of any of the following offenses:  sections 609.224 (assault in 
        the fifth degree); 609.2242 (domestic assault); violation of an 
        order for protection under 518B.01 (Domestic Abuse Act); 
        violation of an order for protection under 609.3232 (protective 
        order authorized; procedures; penalties); 609.746 (interference 
        with privacy); 609.79 (obscene or harassing phone calls); 
        609.795 (letter, telegram, or package; opening; harassment); 
        617.23 (indecent exposure; penalties); 609.2672 (assault of an 
        unborn child in the third degree); 617.293 (harmful materials; 
        dissemination and display to minors prohibited); 609.66 
        (dangerous weapons); 609.665 (spring guns); 609.2335 (financial 
        exploitation of a vulnerable adult); 609.234 (failure to report 
        maltreatment of a vulnerable adult); 609.52 (theft); 609.27 
        (coercion); or an attempt or conspiracy to commit any of these 
        offenses, as each of these offenses is defined in Minnesota 
        Statutes; or an offense in any other state or country, the 
        elements of which are substantially similar to the elements of 
        any of the offenses listed in this clause; a determination or 
        disposition of failure to make required reports under section 
        626.556, subdivision 3, or 626.557, subdivision 3, for incidents 
        in which:  (i) the final disposition under section 626.556 or 
        626.557 was substantiated maltreatment, and (ii) the 
        maltreatment was recurring or serious; or a determination or 
        disposition of substantiated serious or recurring maltreatment 
        of a minor under section 626.556 or of a vulnerable adult under 
        section 626.557 for which there is a preponderance of evidence 
        that the maltreatment occurred, and that the subject was 
        responsible for the maltreatment. 
           For the purposes of this section, "serious maltreatment" 
        means sexual abuse; maltreatment resulting in death; or 
        maltreatment resulting in serious injury which reasonably 
        requires the care of a physician whether or not the care of a 
        physician was sought; or abuse resulting in serious injury.  For 
        purposes of this section, "abuse resulting in serious injury" 
        means:  bruises, bites, skin laceration or tissue damage; 
        fractures; dislocations; evidence of internal injuries; head 
        injuries with loss of consciousness; extensive second-degree or 
        third-degree burns and other burns for which complications are 
        present; extensive second-degree or third-degree frostbite, and 
        others for which complications are present; irreversible 
        mobility or avulsion of teeth; injuries to the eyeball; 
        ingestion of foreign substances and objects that are harmful; 
        near drowning; and heat exhaustion or sunstroke.  For purposes 
        of this section, "care of a physician" is treatment received or 
        ordered by a physician, but does not include diagnostic testing, 
        assessment, or observation.  For the purposes of this section, 
        "recurring maltreatment" means more than one incident of 
        maltreatment for which there is a preponderance of evidence that 
        the maltreatment occurred, and that the subject was responsible 
        for the maltreatment.  For purposes of this section, "access" 
        means physical access to an individual receiving services or the 
        individual's personal property without continuous, direct 
        supervision as defined in section 245A.04, subdivision 3.  
           (b) Except for background studies related to child foster 
        care, adult foster care, or family child care licensure, when 
        the subject of a background study is regulated by a 
        health-related licensing board as defined in chapter 214, and 
        the regulated person has been determined to have been 
        responsible for substantiated maltreatment under section 626.556 
        or 626.557, instead of the commissioner making a decision 
        regarding disqualification, the board shall make a determination 
        whether to impose disciplinary or corrective action under 
        chapter 214. 
           (1) The commissioner shall notify the health-related 
        licensing board: 
           (i) upon completion of a background study that produces a 
        record showing that the individual was determined to have been 
        responsible for substantiated maltreatment; 
           (ii) upon the commissioner's completion of an investigation 
        that determined the individual was responsible for substantiated 
        maltreatment; or 
           (iii) upon receipt from another agency of a finding of 
        substantiated maltreatment for which the individual was 
        responsible. 
           (2) The commissioner's notice shall indicate whether the 
        individual would have been disqualified by the commissioner for 
        the substantiated maltreatment if the individual were not 
        regulated by the board.  The commissioner shall concurrently 
        send this notice to the individual. 
           (3) Notwithstanding the exclusion from this subdivision for 
        individuals who provide child foster care, adult foster care, or 
        family child care, when the commissioner or a local agency has 
        reason to believe that the direct contact services provided by 
        the individual may fall within the jurisdiction of a 
        health-related licensing board, a referral shall be made to the 
        board as provided in this section. 
           (4) If, upon review of the information provided by the 
        commissioner, a health-related licensing board informs the 
        commissioner that the board does not have jurisdiction to take 
        disciplinary or corrective action, the commissioner shall make 
        the appropriate disqualification decision regarding the 
        individual as otherwise provided in this chapter. 
           (5) The commissioner has the authority to monitor the 
        facility's compliance with any requirements that the 
        health-related licensing board places on regulated persons 
        practicing in a facility either during the period pending a 
        final decision on a disciplinary or corrective action or as a 
        result of a disciplinary or corrective action.  The commissioner 
        has the authority to order the immediate removal of a regulated 
        person from direct contact or access when a board issues an 
        order of temporary suspension based on a determination that the 
        regulated person poses an immediate risk of harm to persons 
        receiving services in a licensed facility. 
           (6) A facility that allows a regulated person to provide 
        direct contact services while not complying with the 
        requirements imposed by the health-related licensing board is 
        subject to action by the commissioner as specified under 
        sections 245A.06 and 245A.07. 
           (7) The commissioner shall notify a health-related 
        licensing board immediately upon receipt of knowledge of 
        noncompliance with requirements placed on a facility or upon a 
        person regulated by the board. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2002, section 245A.09, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REGULATORY METHODS.] (a) Where appropriate and 
        feasible the commissioner shall identify and implement 
        alternative methods of regulation and enforcement to the extent 
        authorized in this subdivision.  These methods shall include: 
           (1) expansion of the types and categories of licenses that 
        may be granted; 
           (2) when the standards of another state or federal 
        governmental agency or an independent accreditation body have 
        been shown to predict compliance with the rules require the same 
        standards, methods, or alternative methods to achieve 
        substantially the same intended outcomes as the licensing 
        standards, the commissioner shall consider compliance with the 
        governmental or accreditation standards to be equivalent to 
        partial compliance with the rules licensing standards; and 
           (3) use of an abbreviated inspection that employs key 
        standards that have been shown to predict full compliance with 
        the rules. 
           (b) If the commissioner accepts accreditation as 
        documentation of compliance with a licensing standard under 
        paragraph (a), the commissioner shall continue to investigate 
        complaints related to noncompliance with all licensing standards.
        The commissioner may take a licensing action for noncompliance 
        under this chapter and shall recognize all existing appeal 
        rights regarding any licensing actions taken under this chapter. 
           (c) The commissioner shall work with the commissioners of 
        health, public safety, administration, and children, families, 
        and learning in consolidating duplicative licensing and 
        certification rules and standards if the commissioner determines 
        that consolidation is administratively feasible, would 
        significantly reduce the cost of licensing, and would not reduce 
        the protection given to persons receiving services in licensed 
        programs.  Where administratively feasible and appropriate, the 
        commissioner shall work with the commissioners of health, public 
        safety, administration, and children, families, and learning in 
        conducting joint agency inspections of programs. 
           (c) (d) The commissioner shall work with the commissioners 
        of health, public safety, administration, and children, 
        families, and learning in establishing a single point of 
        application for applicants who are required to obtain concurrent 
        licensure from more than one of the commissioners listed in this 
        clause. 
           (d) (e) Unless otherwise specified in statute, the 
        commissioner may specify in rule periods of licensure up to two 
        years conduct routine inspections biennially. 
           Sec. 9.  Minnesota Statutes 2002, section 245A.10, is 
        amended to read: 
           245A.10 [FEES.] 
           Subdivision 1.  [APPLICATION OR LICENSE FEE REQUIRED, 
        PROGRAMS EXEMPT FROM FEE.] (a) Unless exempt under paragraph 
        (b), the commissioner shall charge a fee for evaluation of 
        applications and inspection of programs, other than family day 
        care and foster care, which are licensed under this chapter.  
        The commissioner may charge a fee for the licensing of school 
        age child care programs, in an amount sufficient to cover the 
        cost to the state agency of processing the license. 
           (b) Except as provided under subdivision 2, no application 
        or license fee shall be charged for child foster care, adult 
        foster care, family and group family child care or 
        state-operated programs, unless the state-operated program is an 
        intermediate care facility for persons with mental retardation 
        or related conditions (ICF/MR). 
           Subd. 2.  [COUNTY FEES FOR BACKGROUND STUDIES AND LICENSING 
        INSPECTIONS IN FAMILY AND GROUP FAMILY CHILD CARE.] (a) For 
        purposes of family and group family child care licensing under 
        this chapter, a county agency may charge a fee to an applicant 
        or license holder to recover the actual cost of background 
        studies, but in any case not to exceed $100 annually.  A county 
        agency may also charge a fee to an applicant or license holder 
        to recover the actual cost of licensing inspections, but in any 
        case not to exceed $150 annually. 
           (b) A county agency may charge a fee to a legal nonlicensed 
        child care provider or applicant for authorization to recover 
        the actual cost of background studies completed under section 
        119B.125, but in any case not to exceed $100 annually. 
           (c) Counties may elect to reduce or waive the fees in 
        paragraph (a) or (b):  
           (1) in cases of financial hardship; 
           (2) if the county has a shortage of providers in the 
        county's area; 
           (3) for new providers; or 
           (4) for providers who have attained at least 16 hours of 
        training before seeking initial licensure. 
           (d) Counties may allow providers to pay the applicant fees 
        in paragraph (a) or (b) on an installment basis for up to one 
        year.  If the provider is receiving child care assistance 
        payments from the state, the provider may have the fees under 
        paragraph (a) or (b) deducted from the child care assistance 
        payments for up to one year and the state shall reimburse the 
        county for the county fees collected in this manner. 
           Subd. 3.  [APPLICATION FEE FOR INITIAL LICENSE OR 
        CERTIFICATION.] (a) For fees required under subdivision 1, an 
        applicant for an initial license or certification issued by the 
        commissioner shall submit a $500 application fee with each new 
        application required under this subdivision.  The application 
        fee shall not be prorated, is nonrefundable, and is in lieu of 
        the annual license or certification fee that expires on December 
        31.  The commissioner shall not process an application until the 
        application fee is paid.  
           (b) Except as provided in clauses (1) to (3), an applicant 
        shall apply for a license to provide services at a specific 
        location.  
           (1) For a license to provide waivered services to persons 
        with developmental disabilities or related conditions, an 
        applicant shall submit an application for each county in which 
        the waivered services will be provided.  
           (2) For a license to provide semi-independent living 
        services to persons with developmental disabilities or related 
        conditions, an applicant shall submit a single application to 
        provide services statewide. 
           (3) For a license to provide independent living assistance 
        for youth under section 245A.22, an applicant shall submit a 
        single application to provide services statewide.  
           Subd. 4.  [ANNUAL LICENSE OR CERTIFICATION FEE FOR PROGRAMS 
        WITH LICENSED CAPACITY.] (a) Child care centers and programs 
        with a licensed capacity shall pay an annual nonrefundable 
        license or certification fee based on the following schedule: 
            Licensed Capacity          Child Care         Other
                                       Center             Program
                                       License Fee        License Fee
             1 to 24 persons               $300               $400
             25 to 49 persons              $450               $600
             50 to 74 persons              $600               $800
             75 to 99 persons              $750             $1,000
             100 to 124 persons            $900             $1,200
             125 to 149 persons          $1,200             $1,400
             150 to 174 persons          $1,400             $1,600
             175 to 199 persons          $1,600             $1,800
             200 to 224 persons          $1,800             $2,000
             225 or more persons         $2,000             $2,500
           (b) A day training and habilitation program serving persons 
        with developmental disabilities or related conditions shall be 
        assessed a license fee based on the schedule in paragraph (a) 
        unless the license holder serves more than 50 percent of the 
        same persons at two or more locations in the community.  When a 
        day training and habilitation program serves more than 50 
        percent of the same persons in two or more locations in a 
        community, the day training and habilitation program shall pay a 
        license fee based on the licensed capacity of the largest 
        facility and the other facility or facilities shall be charged a 
        license fee based on a licensed capacity of a residential 
        program serving one to 24 persons. 
           Subd. 5.  [ANNUAL LICENSE OR CERTIFICATION FEE FOR PROGRAMS 
        WITHOUT A LICENSED CAPACITY.] (a) Except as provided in 
        paragraph (b), a program without a stated licensed capacity 
        shall pay a license or certification fee of $400.  
           (b) A mental health center or mental health clinic 
        requesting certification for purposes of insurance and 
        subscriber contract reimbursement under Minnesota Rules, parts 
        9520.0750 to 9520.0870 shall pay a certification fee of $1,000 
        per year.  If the mental health center or mental health clinic 
        provides services at a primary location with satellite 
        facilities, the satellite facilities shall be certified with the 
        primary location without an additional charge. 
           Subd. 6.  [LICENSE NOT ISSUED UNTIL LICENSE OR 
        CERTIFICATION FEE IS PAID.] The commissioner shall not issue a 
        license or certification until the license or certification fee 
        is paid.  The commissioner shall send a bill for the license or 
        certification fee to the billing address identified by the 
        license holder.  If the license holder does not submit the 
        license or certification fee payment by the due date, the 
        commissioner shall send the license holder a past due notice.  
        If the license holder fails to pay the license or certification 
        fee by the due date on the past due notice, the commissioner 
        shall send a final notice to the license holder informing the 
        license holder that the program license will expire on December 
        31 unless the license fee is paid before December 31.  If a 
        license expires, the program is no longer licensed and, unless 
        exempt from licensure under section 245A.03, subdivision 2, must 
        not operate after the expiration date.  After a license expires, 
        if the former license holder wishes to provide licensed 
        services, the former license holder must submit a new license 
        application and application fee under subdivision 3. 
           Sec. 10.  Minnesota Statutes 2002, section 245A.11, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ADULT FOSTER CARE LICENSE CAPACITY.] (a) An 
        adult foster care license holder may have a maximum license 
        capacity of five if all persons in care are age 55 or over and 
        do not have a serious and persistent mental illness or a 
        developmental disability.  
           (b) The commissioner may grant variances to paragraph (a) 
        to allow a foster care provider with a licensed capacity of five 
        persons to admit an individual under the age of 55 if the 
        variance complies with section 245A.04, subdivision 9, and 
        approval of the variance is recommended by the county in which 
        the licensed foster care provider is located. 
           (c) The commissioner may grant variances to paragraph (a) 
        to allow the use of a fifth bed for emergency crisis services 
        for a person with serious and persistent mental illness or a 
        developmental disability, regardless of age, if the variance 
        complies with section 245A.04, subdivision 9, and approval of 
        the variance is recommended by the county in which the licensed 
        foster care provider is located. 
           (d) Notwithstanding paragraph (a), the commissioner may 
        issue an adult foster care license with a capacity of five 
        adults when the capacity is recommended by the county licensing 
        agency of the county in which the facility is located and if the 
        recommendation verifies that: 
           (1) the facility meets the physical environment 
        requirements in the adult foster care licensing rule; 
           (2) the five-bed living arrangement is specified for each 
        resident in the resident's: 
           (i) individualized plan of care; 
           (ii) individual service plan under section 256B.092, 
        subdivision 1b, if required; or 
           (iii) individual resident placement agreement under 
        Minnesota Rules, part 9555.5105, subpart 19, if required; 
           (3) the license holder obtains written and signed informed 
        consent from each resident or resident's legal representative 
        documenting the resident's informed choice to living in the home 
        and that the resident's refusal to consent would not have 
        resulted in service termination; and 
           (4) the facility was licensed for adult foster care before 
        March 1, 2003. 
           (e) The commissioner shall not issue a new adult foster 
        care license under paragraph (d) after June 30, 2005.  The 
        commissioner shall allow a facility with an adult foster care 
        license issued under paragraph (d) before June 30, 2005, to 
        continue with a capacity of five or six adults if the license 
        holder continues to comply with the requirements in paragraph 
        (d). 
           Sec. 11.  Minnesota Statutes 2002, section 245A.11, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [ADULT FOSTER CARE; FAMILY ADULT DAY CARE.] An 
        adult foster care license holder licensed under the conditions 
        in subdivision 2a may also provide family adult day care for 
        adults age 55 or over if no persons in the adult foster or adult 
        family day care program have a serious and persistent mental 
        illness or a developmental disability.  The maximum combined 
        capacity for adult foster care and family adult day care is five 
        adults, except that the commissioner may grant a variance for a 
        family adult day care provider to admit up to seven individuals 
        for day care services and one individual for respite care 
        services, if all of the following requirements are met:  (1) the 
        variance complies with section 245A.04, subdivision 9; (2) a 
        second caregiver is present whenever six or more clients are 
        being served; and (3) the variance is recommended by the county 
        social service agency in the county where the provider is 
        located.  A separate license is not required to provide family 
        adult day care under this subdivision.  Adult foster care homes 
        providing services to five adults under this section shall not 
        be subject to licensure by the commissioner of health under the 
        provisions of chapter 144, 144A, 157, or any other law requiring 
        facility licensure by the commissioner of health. 
           Sec. 12.  Minnesota Statutes 2002, section 245A.11, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [ADULT FOSTER CARE; VARIANCE FOR ALTERNATE 
        OVERNIGHT SUPERVISION.] (a) The commissioner may grant a 
        variance under section 245A.04, subdivision 9, to rule parts 
        requiring a caregiver to be present in an adult foster care home 
        during normal sleeping hours to allow for alternative methods of 
        overnight supervision.  The commissioner may grant the variance 
        if the local county licensing agency recommends the variance and 
        the county recommendation includes documentation verifying that: 
           (1) the county has approved the license holder's plan for 
        alternative methods of providing overnight supervision and 
        determined the plan protects the residents' health, safety, and 
        rights; 
           (2) the license holder has obtained written and signed 
        informed consent from each resident or each resident's legal 
        representative documenting the resident's or legal 
        representative's agreement with the alternative method of 
        overnight supervision; and 
           (3) the alternative method of providing overnight 
        supervision is specified for each resident in the resident's: 
        (i) individualized plan of care; (ii) individual service plan 
        under section 256B.092, subdivision 1b, if required; or (iii) 
        individual resident placement agreement under Minnesota Rules, 
        part 9555.5105, subpart 19, if required. 
           (b) To be eligible for a variance under paragraph (a), the 
        adult foster care license holder must not have had a licensing 
        action under section 245A.06 or 245A.07 during the prior 24 
        months based on failure to provide adequate supervision, health 
        care services, or resident safety in the adult foster care home. 
           Sec. 13.  Minnesota Statutes 2002, section 245B.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RELATIONSHIP TO OTHER STANDARDS GOVERNING 
        SERVICES FOR PERSONS WITH MENTAL RETARDATION OR RELATED 
        CONDITIONS.] (a) ICFs/MR are exempt from: 
           (1) section 245B.04; 
           (2) section 245B.06, subdivisions 4 and 6; and 
           (3) section 245B.07, subdivisions 4, paragraphs (b) and 
        (c); 7; and 8, paragraphs (1), clause (iv), and (2). 
           (b) License holders also licensed under chapter 144 as a 
        supervised living facility are exempt from section 245B.04. 
           (c) Residential service sites controlled by license holders 
        licensed under chapter 245B for home and community-based 
        waivered services for four or fewer adults are exempt from 
        compliance with Minnesota Rules, parts 9543.0040, subpart 2, 
        item C; 9555.5505; 9555.5515, items B and G; 9555.5605; 
        9555.5705; 9555.6125, subparts 3, item C, subitem (2), and 4 to 
        6; 9555.6185; 9555.6225, subpart 8; 9555.6245; 9555.6255; and 
        9555.6265; and as provided under section 245B.06, subdivision 2, 
        the license holder is exempt from the program abuse prevention 
        plans and individual abuse prevention plans otherwise required 
        under sections 245A.65, subdivision 2, and 626.557, subdivision 
        14.  The commissioner may approve alternative methods of 
        providing overnight supervision using the process and criteria 
        for granting a variance in section 245A.04, subdivision 9.  This 
        chapter does not apply to foster care homes that do not provide 
        residential habilitation services funded under the home and 
        community-based waiver programs defined in section 256B.092. 
           (d) Residential service sites controlled by license holders 
        licensed under this chapter for home and community-based 
        waivered services for four or fewer children are exempt from 
        compliance with Minnesota Rules, parts 9545.0130; 9545.0140; 
        9545.0150; 9545.0170; 9545.0220, subparts 1, items C, F, and I, 
        and 3; and 9545.0230. 
           (e) The commissioner may exempt license holders from 
        applicable standards of this chapter when the license holder 
        meets the standards under section 245A.09, subdivision 7.  
        License holders that are accredited by an independent 
        accreditation body shall continue to be licensed under this 
        chapter. 
           (e) (f) License holders governed by sections 245B.02 to 
        245B.07 must also meet the licensure requirements in chapter 
        245A.  
           (f) (g) Nothing in this chapter prohibits license holders 
        from concurrently serving consumers with and without mental 
        retardation or related conditions provided this chapter's 
        standards are met as well as other relevant standards. 
           (g) (h) The documentation that sections 245B.02 to 245B.07 
        require of the license holder meets the individual program plan 
        required in section 256B.092 or successor provisions.  
           Sec. 14.  Minnesota Statutes 2002, section 245B.03, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [CONTINUITY OF CARE.] (a) When a consumer changes 
        service to the same type of service provided under a different 
        license held by the same license holder and the policies and 
        procedures under section 245B.07, subdivision 8, are 
        substantially similar, the license holder is exempt from the 
        requirements in sections 245B.06, subdivisions 2, paragraphs (e) 
        and (f), and 4; and 245B.07, subdivision 9, clause (2). 
           (b) When a direct service staff person begins providing 
        direct service under one or more licenses other than the license 
        for which the staff person initially received the staff 
        orientation requirements under section 245B.07, subdivision 5, 
        the license holder is exempt from all staff orientation 
        requirements under section 245B.07, subdivision 5, except that: 
           (1) if the service provision location changes, the staff 
        person must receive orientation regarding any policies or 
        procedures under section 245B.07, subdivision 8, that are 
        specific to the service provision location; and 
           (2) if the staff person provides direct service to one or 
        more consumers for whom the staff person has not previously 
        provided direct service, the staff person must review each 
        consumer's:  (i) service plans and risk management plan in 
        accordance with section 245B.07, subdivision 5, paragraph (b), 
        clause (1); and (ii) medication administration in accordance 
        with section 245B.07, subdivision 5, paragraph (b), clause (6). 
           Sec. 15.  Minnesota Statutes 2002, section 245B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SERVICE-RELATED RIGHTS.] A consumer's 
        service-related rights include the right to: 
           (1) refuse or terminate services and be informed of the 
        consequences of refusing or terminating services; 
           (2) know, in advance, limits to the services available from 
        the license holder; 
           (3) know conditions and terms governing the provision of 
        services, including those related to initiation and termination; 
           (4) know what the charges are for services, regardless of 
        who will be paying for the services, and be notified upon 
        request of changes in those charges; 
           (5) know, in advance, whether services are covered by 
        insurance, government funding, or other sources, and be told of 
        any charges the consumer or other private party may have to pay; 
        and 
           (6) receive licensed services from individuals who are 
        competent and trained, who have professional certification or 
        licensure, as required, and who meet additional qualifications 
        identified in the individual service plan. 
           Sec. 16.  Minnesota Statutes 2002, section 245B.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RISK MANAGEMENT PLAN.] (a) The license holder 
        must develop and, document in writing, and implement a risk 
        management plan that incorporates the individual abuse 
        prevention plan as required in section 245A.65 meets the 
        requirements of this subdivision.  License holders licensed 
        under this chapter are exempt from sections 245A.65, subdivision 
        2, and 626.557, subdivision 14, if the requirements of this 
        subdivision are met.  
           (b) The risk management plan must identify areas in which 
        the consumer is vulnerable, based on an assessment, at a 
        minimum, of the following areas: 
           (1) an adult consumer's susceptibility to physical, 
        emotional, and sexual abuse as defined in section 626.5572, 
        subdivision 2, and financial exploitation as defined in section 
        626.5572, subdivision 9; a minor consumer's susceptibility to 
        sexual and physical abuse as defined in section 626.556, 
        subdivision 2; and a consumer's susceptibility to self-abuse, 
        regardless of age; 
           (2) the consumer's health needs, considering the consumer's 
        physical disabilities; allergies; sensory impairments; seizures; 
        diet; need for medications; and ability to obtain medical 
        treatment; 
           (3) the consumer's safety needs, considering the consumer's 
        ability to take reasonable safety precautions; community 
        survival skills; water survival skills; ability to seek 
        assistance or provide medical care; and access to toxic 
        substances or dangerous items; 
           (4) environmental issues, considering the program's 
        location in a particular neighborhood or community; the type of 
        grounds and terrain surrounding the building; and the consumer's 
        ability to respond to weather-related conditions, open locked 
        doors, and remain alone in any environment; and 
           (5) the consumer's behavior, including behaviors that may 
        increase the likelihood of physical aggression between consumers 
        or sexual activity between consumers involving force or 
        coercion, as defined under section 245B.02, subdivision 10, 
        clauses (6) and (7). 
           (c) When assessing a consumer's vulnerability, the license 
        holder must consider only the consumer's skills and abilities, 
        independent of staffing patterns, supervision plans, the 
        environment, or other situational elements.  
           (d) License holders jointly providing services to a 
        consumer shall coordinate and use the resulting assessment of 
        risk areas for the development of this each license holder's 
        risk management or the shared risk management plan.  Upon 
        initiation of services, the license holder will have in place an 
        initial risk management plan that identifies areas in which the 
        consumer is vulnerable, including health, safety, and 
        environmental issues and the supports the provider will have in 
        place to protect the consumer and to minimize these risks.  The 
        plan must be changed based on the needs of the individual 
        consumer and reviewed at least annually.  The license holder's 
        plan must include the specific actions a staff person will take 
        to protect the consumer and minimize risks for the identified 
        vulnerability areas.  The specific actions must include the 
        proactive measures being taken, training being provided, or a 
        detailed description of actions a staff person will take when 
        intervention is needed. 
           (e) Prior to or upon initiating services, a license holder 
        must develop an initial risk management plan that is, at a 
        minimum, verbally approved by the consumer or consumer's legal 
        representative and case manager.  The license holder must 
        document the date the license holder receives the consumer's or 
        consumer's legal representative's and case manager's verbal 
        approval of the initial plan. 
           (f) As part of the meeting held within 45 days of 
        initiating service, as required under section 245B.06, 
        subdivision 4, the license holder must review the initial risk 
        management plan for accuracy and revise the plan if necessary.  
        The license holder must give the consumer or consumer's legal 
        representative and case manager an opportunity to participate in 
        this plan review.  If the license holder revises the plan, or if 
        the consumer or consumer's legal representative and case manager 
        have not previously signed and dated the plan, the license 
        holder must obtain dated signatures to document the plan's 
        approval. 
           (g) After plan approval, the license holder must review the 
        plan at least annually and update the plan based on the 
        individual consumer's needs and changes to the environment.  The 
        license holder must give the consumer or consumer's legal 
        representative and case manager an opportunity to participate in 
        the ongoing plan development.  The license holder shall obtain 
        dated signatures from the consumer or consumer's legal 
        representative and case manager to document completion of the 
        annual review and approval of plan changes. 
           Sec. 17.  Minnesota Statutes 2002, section 245B.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PROGRESS REVIEWS.] The license holder must 
        participate in progress review meetings following stated time 
        lines established in the consumer's individual service plan or 
        as requested in writing by the consumer, the consumer's legal 
        representative, or the case manager, at a minimum of once a 
        year.  The license holder must summarize the progress toward 
        achieving the desired outcomes and make recommendations in a 
        written report sent to the consumer or the consumer's legal 
        representative and case manager prior to the review meeting.  
        For consumers under public guardianship, the license holder is 
        required to provide quarterly written progress review reports to 
        the consumer, designated family member, and case manager.  
           Sec. 18.  Minnesota Statutes 2002, section 245B.07, 
        subdivision 6, is amended to read: 
           Subd. 6.  [STAFF TRAINING.] (a) The A license holder 
        providing semi-independent living services shall ensure that 
        direct service staff annually complete hours of training equal 
        to two one percent of the number of hours the staff person 
        worked or one percent for license holders providing 
        semi-independent living services.  All other license holders 
        shall ensure that direct service staff annually complete hours 
        of training as follows: 
           (1) if the direct services staff have been employed for one 
        to 24 months and: 
           (i) the average number of work hours scheduled per week is 
        30 to 40 hours, the staff must annually complete 40 training 
        hours; 
           (ii) the average number of work hours scheduled per week is 
        20 to 29 hours, the staff must annually complete 30 training 
        hours; and 
           (iii) the average number of work hours scheduled per week 
        is one to 19 hours, the staff must annually complete 20 training 
        hours; or 
           (2) if the direct services staff have been employed for 
        more than 24 months and: 
           (i) the average number of work hours scheduled per week is 
        30 to 40 hours, the staff must annually complete 20 training 
        hours; 
           (ii) the average number of work hours scheduled per week is 
        20 to 29 hours, the staff must annually complete 15 training 
        hours; and 
           (iii) the average number of work hours scheduled per week 
        is one to 19 hours, the staff must annually complete 12 training 
        hours. 
           If direct service staff has received training from a 
        license holder licensed under a program rule identified in this 
        chapter or completed course work regarding disability-related 
        issues from a post-secondary educational institute, that 
        training may also count toward training requirements for other 
        services and for other license holders. 
           (b) The license holder must document the training completed 
        by each employee. 
           (c) Training shall address staff competencies necessary to 
        address the consumer needs as identified in the consumer's 
        individual service plan and ensure consumer health, safety, and 
        protection of rights.  Training may also include other areas 
        identified by the license holder. 
           (d) For consumers requiring a 24-hour plan of care, the 
        license holder shall provide training in cardiopulmonary 
        resuscitation, from a qualified source determined by the 
        commissioner, if the consumer's health needs as determined by 
        the consumer's physician indicate trained staff would be 
        necessary to the consumer. 
           Sec. 19.  Minnesota Statutes 2002, section 245B.07, 
        subdivision 9, is amended to read: 
           Subd. 9.  [AVAILABILITY OF CURRENT WRITTEN POLICIES AND 
        PROCEDURES.] The license holder shall: 
           (1) review and update, as needed, the written policies and 
        procedures in this chapter and inform all consumers or the 
        consumer's legal representatives, case managers, and employees 
        of the revised policies and procedures when they affect the 
        service provision; 
           (2) inform consumers or the consumer's legal 
        representatives of the written policies and procedures in this 
        chapter upon service initiation.  Copies must be available to 
        consumers or the consumer's legal representatives, case 
        managers, the county where services are located, and the 
        commissioner upon request; and 
           (3) provide all consumers or the consumers' legal 
        representatives and case managers a copy and explanation of 
        revisions to policies and procedures that affect consumers' 
        service-related or protection-related rights under section 
        245B.04.  Unless there is reasonable cause, the license holder 
        must provide this notice at least 30 days before implementing 
        the revised policy and procedure.  The license holder must 
        document the reason for not providing the notice at least 30 
        days before implementing the revisions; 
           (4) annually notify all consumers or the consumers' legal 
        representatives and case managers of any revised policies and 
        procedures under this chapter, other than those in clause (3).  
        Upon request, the license holder must provide the consumer or 
        consumer's legal representative and case manager copies of the 
        revised policies and procedures; 
           (5) before implementing revisions to policies and 
        procedures under this chapter, inform all employees of the 
        revised policies and procedures; and 
           (6) document and maintain relevant information related to 
        the policies and procedures in this chapter. 
           Sec. 20.  Minnesota Statutes 2002, section 245B.08, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ALTERNATIVE METHODS OF DETERMINING 
        COMPLIANCE.] (a) In addition to methods specified in chapter 
        245A, the commissioner may use alternative methods and new 
        regulatory strategies to determine compliance with this 
        section.  The commissioner may use sampling techniques to ensure 
        compliance with this section.  Notwithstanding section 245A.09, 
        subdivision 7, paragraph (d) (e), the commissioner may also 
        extend periods of licensure, not to exceed five years, for 
        license holders who have demonstrated substantial and consistent 
        compliance with sections 245B.02 to 245B.07 and have 
        consistently maintained the health and safety of consumers and 
        have demonstrated by alternative methods in paragraph (b) that 
        they meet or exceed the requirements of this section.  For 
        purposes of this section, "substantial and consistent 
        compliance" means that during the current licensing period: 
           (1) the license holder's license has not been made 
        conditional, suspended, or revoked; 
           (2) there have been no substantiated allegations of 
        maltreatment against the license holder; 
           (3) there have been no program deficiencies that have been 
        identified that would jeopardize the health or safety of 
        consumers being served; and 
           (4) the license holder is in substantial compliance with 
        the other requirements of chapter 245A and other applicable laws 
        and rules. 
           (b) To determine the length of a license, the commissioner 
        shall consider: 
           (1) information from affected consumers, and the license 
        holder's responsiveness to consumers' concerns and 
        recommendations; 
           (2) self assessments and peer reviews of the standards of 
        this section, corrective actions taken by the license holder, 
        and sharing the results of the inspections with consumers, the 
        consumers' families, and others, as requested; 
           (3) length of accreditation by an independent accreditation 
        body, if applicable; 
           (4) information from the county where the license holder is 
        located; and 
           (5) information from the license holder demonstrating 
        performance that meets or exceeds the minimum standards of this 
        chapter. 
           (c) The commissioner may reduce the length of the license 
        if the license holder fails to meet the criteria in paragraph 
        (a) and the conditions specified in paragraph (b). 
           Sec. 21.  Minnesota Statutes 2002, section 246.014, is 
        amended to read: 
           246.014 [SERVICES.] 
           The measure of services established and prescribed by 
        section 246.012, are: 
           (a) The commissioner of human services shall develop and 
        maintain state-operated services in a manner consistent with 
        sections 245.461, 245.487, and 253.28, and chapters 252A, 254A, 
        and 254B.  State-operated services shall be provided in 
        coordination with counties and other vendors.  State-operated 
        services shall include regional treatment centers, specialized 
        inpatient or outpatient treatment programs, enterprise services, 
        community-based services and programs, community preparation 
        services, consultative services, and other services consistent 
        with the mission of the department of human services.  These 
        services shall include crisis beds, waivered homes, intermediate 
        care facilities, and day training and habilitation facilities.  
        The administrative structure of state-operated services must be 
        statewide in character.  The state-operated services staff may 
        deliver services at any location throughout the state. 
           (b) The commissioner of human services shall create and 
        maintain forensic services programs.  Forensic services shall be 
        provided in coordination with counties and other vendors.  
        Forensic services shall include specialized inpatient programs 
        at secure treatment facilities as defined in section 253B.02, 
        subdivision 18a, consultative services, aftercare services, 
        community-based services and programs, transition services, or 
        other services consistent with the mission of the department of 
        human services. 
           (c) Community preparation services as identified in 
        paragraphs (a) and (b) are defined as specialized inpatient or 
        outpatient services or programs operated outside of a secure 
        environment but are administered by a secured treatment facility.
           (d) The commissioner of human services may establish 
        policies and procedures which govern the operation of the 
        services and programs under the direct administrative authority 
        of the commissioner. 
           (1) There shall be served in state hospitals a single 
        standard of food for patients and employees alike, which is 
        nutritious and palatable together with special diets as 
        prescribed by the medical staff thereof.  There shall be a chief 
        dietitian in the department of human services and at least one 
        dietitian at each state hospital.  There shall be adequate staff 
        and equipment for processing, preparation, distribution and 
        serving of food. 
           (2) There shall be a staff of persons, professional and 
        lay, sufficient in number, trained in the diagnosis, care and 
        treatment of persons with mental illness, physical illness, and 
        including religious and spiritual counsel through qualified 
        chaplains (who shall be in the unclassified service) adequate to 
        take advantage of and put into practice modern methods of 
        psychiatry, medicine and related field. 
           (3) There shall be a staff and facilities to provide 
        occupational and recreational therapy, entertainment and other 
        creative activities as are consistent with modern methods of 
        treatment and well being. 
           (4) There shall be in each state hospital for the care and 
        treatment of persons with mental illness facilities for the 
        segregation and treatment of patients and residents who have 
        communicable disease. 
           (5) The commissioner of human services shall provide modern 
        and adequate psychiatric social case work service. 
           (6) The commissioner of human services shall make every 
        effort to improve the accommodations for patients and residents 
        so that the same shall be comfortable and attractive with 
        adequate furnishings, clothing, and supplies. 
           (7) The commissioner of human services shall establish 
        training programs for the training of personnel and may require 
        the participation of personnel in such programs.  Within the 
        limits of the appropriations available the commissioner may 
        establish professional training programs in the forms of 
        educational stipends for positions for which there is a scarcity 
        of applicants. 
           (8) The standards herein established shall be adapted and 
        applied to the diagnosis, care and treatment of persons with 
        chemical dependency or mental retardation who come within those 
        terms as defined in the laws relating to the hospitalization and 
        commitment of such persons, and of persons who have sexual 
        psychopathic personalities or are sexually dangerous persons as 
        defined in chapter 253B.  
           (9) The commissioner of human services shall establish a 
        program of detection, diagnosis and treatment of persons with 
        mental illness and persons described in clause (8), and within 
        the limits of appropriations may establish clinics and staff the 
        same with persons specially trained in psychiatry and related 
        fields. 
           (10) The commissioner of employee relations may reclassify 
        employees of the state hospitals from time to time, and assign 
        classifications to such salary brackets as will adequately 
        compensate personnel and reasonably assure a continuity of 
        adequate staff. 
           (11) In addition to the chaplaincy services, provided in 
        clause (2), the commissioner of human services shall open said 
        state hospitals to members of the clergy and other spiritual 
        leaders to the end that religious and spiritual counsel and 
        services are made available to the patients and residents 
        therein, and shall cooperate with all members of the clergy and 
        other spiritual leaders in making said patients and residents 
        available for religious and spiritual counsel, and shall provide 
        such members of the clergy and other spiritual leaders with 
        meals and accommodations. 
           (12) Within the limits of the appropriations therefor, the 
        commissioner of human services shall establish and provide 
        facilities and equipment for research and study in the field of 
        modern hospital management, the causes of mental and related 
        illness and the treatment, diagnosis and care of persons with 
        mental illness and funds provided therefor may be used to make 
        available services, abilities and advice of leaders in these and 
        related fields, and may provide them with meals and 
        accommodations and compensate them for traveling expenses and 
        services. 
           Sec. 22.  Minnesota Statutes 2002, section 246.015, 
        subdivision 3, is amended to read: 
           Subd. 3.  Within the limits of the appropriations 
        available, The commissioner of human services may authorize 
        state-operated services to provide consultative services for 
        courts, and state welfare agencies, and supervise the placement 
        and aftercare of patients, on a fee-for-service basis as defined 
        in section 246.50, provisionally or otherwise discharged from 
        a state hospital or institution, state-operated services 
        facility.  State-operated services may also promote and conduct 
        programs of education for the people of the state relating to 
        the problem of mental health and mental hygiene.  The 
        commissioner shall administer, expend, and distribute federal 
        funds which may be made available to the state and other funds 
        other than those not appropriated by the legislature, which may 
        be made available to the state for mental health and mental 
        hygiene purposes. 
           Sec. 23.  Minnesota Statutes 2002, section 246.018, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEDICAL DIRECTOR.] The commissioner of human 
        services shall appoint a medical director, and unless otherwise 
        established by law, set the salary of a licensed physician to 
        serve as medical director to assist in establishing and 
        maintaining the medical policies of the department of human 
        services.  The commissioner may place the medical director's 
        position in the unclassified service if the position meets the 
        criteria of section 43A.08, subdivision 1a.  The medical 
        director must be a psychiatrist certified by the board of 
        psychiatry. 
           Sec. 24.  Minnesota Statutes 2002, section 246.018, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DUTIES.] The medical director shall: 
           (1) oversee the clinical provision of inpatient mental 
        health services provided in the state's regional treatment 
        centers; 
           (2) recruit and retain psychiatrists to serve on the state 
        medical staff established in subdivision 4; 
           (3) consult with the commissioner of human services, the 
        assistant commissioner of mental health, community mental health 
        center directors, and the regional treatment center governing 
        bodies state-operated services governing body to develop 
        standards for treatment and care of patients in regional 
        treatment centers and outpatient state-operated service 
        programs; 
           (4) develop and oversee a continuing education program for 
        members of the regional treatment center medical staff; and 
           (5) consult with the commissioner on the appointment of the 
        chief executive officers for regional treatment centers; and 
           (6) participate and cooperate in the development and 
        maintenance of a quality assurance program for regional 
        treatment centers state-operated services that assures that 
        residents receive quality inpatient care and continuous quality 
        care once they are discharged or transferred to an outpatient 
        setting. 
           Sec. 25.  Minnesota Statutes 2002, section 246.018, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REGIONAL TREATMENT CENTER STATE-OPERATED 
        SERVICES MEDICAL STAFF.] (a) The commissioner of human services 
        medical director shall establish a regional treatment center 
        state-operated service medical staff which shall be under the 
        clinical direction of the office of medical director. 
           (b) The medical director, in conjunction with the regional 
        treatment center medical staff, shall: 
           (1) establish standards and define qualifications for 
        physicians who care for residents in regional treatment 
        centers state-operated services; 
           (2) monitor the performance of physicians who care for 
        residents in regional treatment centers state-operated services; 
        and 
           (3) recommend to the commissioner changes in procedures for 
        operating regional treatment centers state-operated service 
        facilities that are needed to improve the provision of medical 
        care in those facilities. 
           Sec. 26.  Minnesota Statutes 2002, section 246.13, is 
        amended to read: 
           246.13 [RECORD OF PATIENTS AND RESIDENTS; DEPARTMENT OF 
        HUMAN IN STATE-OPERATED SERVICES.] 
           The commissioner of human services' office shall have, 
        accessible only by consent of the commissioner or on the order 
        of a judge or court of record, a record showing the residence, 
        sex, age, nativity, occupation, civil condition, and date of 
        entrance or commitment of every person, in the state hospitals 
        state-operated services facilities as defined under section 
        246.014 under exclusive control of the commissioner,; the date 
        of discharge and whether such discharge was final,; the 
        condition of such the person when the person left the state 
        hospital, state-operated services facility; and the date and 
        cause of all deaths.  The record shall state every transfer from 
        one state hospital state-operated services facility to another, 
        naming each state-operated services facility.  This information 
        shall be furnished to the commissioner of human services by each 
        public and private agency, along with such other obtainable 
        facts as the commissioner may from time to time require.  The 
        chief executive officer of each such state hospital, within ten 
        days after the commitment or entrance thereto of a patient or 
        resident, shall cause a true copy of an entrance record to be 
        forwarded to the commissioner of human services.  When a patient 
        or resident leaves, in a state-operated services facility is 
        discharged or, transferred, or dies in any state hospital, 
        the chief executive officer, or other person in charge head of 
        the state-operated services facility or designee shall inform 
        the commissioner of human services of these events within ten 
        days thereafter on forms furnished by the commissioner.  
           The commissioner of human services may authorize the chief 
        executive officer of any state hospital for persons with mental 
        illness or mental retardation, to release to public or private 
        medical personnel, hospitals, clinics, local social services 
        agencies or other specifically designated interested persons or 
        agencies any information regarding any patient or resident 
        thereat, if, in the opinion of the commissioner, it will be for 
        the benefit of the patient or resident.  
           Sec. 27.  Minnesota Statutes 2002, section 246.15, is 
        amended to read: 
           246.15 [MONEY OF INMATES OF PUBLIC WELFARE INSTITUTIONS 
        PATIENTS OR RESIDENTS.] 
           Subdivision 1.  [RECORD KEEPING OF MONEY.] The chief 
        executive officer of each institution head of the state-operated 
        services facility or designee under the jurisdiction of the 
        commissioner of human services shall may have the care and 
        custody of all money belonging to inmates thereof patients or 
        residents which may come into the chief executive officer's head 
        of the state-operated services facility or designee's hands,.  
        The head of the state-operated services facility or designee 
        shall keep accurate accounts thereof of the money, and pay them 
        out under rules prescribed by law or by the commissioner of 
        human services, taking vouchers therefor for the money.  
        All such money received by any officer or employee shall be paid 
        to the chief executive officer forthwith head of the 
        state-operated services facility or designee immediately.  Every 
        such executive officer head of the state-operated services 
        facility or designee, at the close of each month, or oftener 
        earlier if required by the commissioner, shall forward to the 
        commissioner a statement of the amount of all money so received 
        and the names of the inmates patients or residents from whom 
        received, accompanied by a check for the amount, payable to the 
        state treasurer.  On receipt of such the statement, the 
        commissioner shall transmit the same statement along with a 
        check to the commissioner of finance, together with such check, 
        who shall deliver the same statement and check to the state 
        treasurer.  Upon the payment of such the check, the amount shall 
        be credited to a fund to be known as "Inmates Client Fund," for 
        the institution from which the same check was received.  All 
        such funds shall be paid out by the state treasurer upon 
        vouchers duly approved by the commissioner of human services as 
        in other cases.  The commissioner may permit a contingent fund 
        to remain in the hands of the executive officer head of the 
        state-operated services facility or designee of any such the 
        institution from which necessary expenditure expenditures may 
        from time to time be made.  
           Subd. 2.  [CORRECTIONAL INMATES FUND.] Any money in the 
        inmates fund provided for in this section, belonging to inmates 
        of state institutions under the jurisdiction of the commissioner 
        of corrections shall forthwith be immediately transferred by the 
        commissioner of human services to the correctional inmates 
        inmates' fund created by section 241.08.  
           Sec. 28.  Minnesota Statutes 2002, section 246.16, is 
        amended to read: 
           246.16 [UNCLAIMED MONEY OR PERSONAL PROPERTY OF 
        INMATES PATIENTS OR RESIDENTS.] 
           Subdivision 1.  [UNCLAIMED MONEY.] When there money has 
        heretofore accumulated or shall hereafter accumulate in the 
        hands of the superintendent of any state institution head of the 
        state-operated services facility or designee under the 
        jurisdiction of the commissioner of human services money 
        belonging to inmates patients or residents of such the 
        institution who have died therein there, or 
        disappeared therefrom from there, and for which money there is 
        no claimant or person entitled thereto to the money known to the 
        superintendent, such head of the state-operated services 
        facility or designee the money may, at the discretion of such 
        superintendent the head of the state-operated services facility 
        or designee, to be expended under the direction of the 
        superintendent head of the state-operated services facility or 
        designee for the amusement, entertainment, and general benefit 
        of the inmates patients or residents of such the institution.  
        No money shall be so used until it shall have has remained 
        unclaimed for at least five years.  If, at any time after the 
        expiration of the five years, the legal heirs of the inmate 
        shall patients or residents appear and make proper proof of such 
        heirship, they shall be entitled to receive from the state 
        treasurer such the sum of money as shall have been expended by 
        the superintendent head of the state-operated services facility 
        or designee belonging to the inmate patient or resident. 
           Subd. 2.  [UNCLAIMED PERSONAL PROPERTY.] When any 
        inmate patient or resident of a state institution state-operated 
        services facility under the jurisdiction of the commissioner of 
        human services has died or disappeared therefrom, or hereafter 
        shall die or disappear therefrom dies or disappears from the 
        state-operated services facility, leaving personal property 
        exclusive of money in the custody of the superintendent thereof 
        personal property, exclusive of money, which head of the 
        state-operated services facility or designee and the property 
        remains unclaimed for a period of two years, and there is with 
        no person entitled thereto to the property known to the 
        superintendent head of the state-operated services or designee, 
        the superintendent or an agent head of the state-operated 
        services facility or designee may sell such the property at 
        public auction.  Notice of such the sale shall be published for 
        two consecutive weeks in a legal newspaper in the county wherein 
        where the institution state-operated services facility is 
        located and shall state the time and place of such the sale.  
        The proceeds of the sale, after deduction of the costs of 
        publication and auction, may be expended, at the discretion of 
        the superintendent head of the state-operated services facility 
        or designee, for the entertainment and benefit of the inmates 
        patients or residents of such institution the state-operated 
        services facility.  Any inmate patient or resident, or heir or 
        representative of the inmate patient or resident, may file with, 
        and make proof of ownership to, the superintendent head of the 
        state-operated services facility or designee of the institution 
        state-operated services facility disposing of such the personal 
        property within four years after such the sale, and, upon proof 
        satisfactory proof to such superintendent the head of the 
        state-operated services or designee, shall certify for payment 
        to the state treasurer the amount received by the sale of such 
        the property.  No suit shall be brought for damages consequent 
        to the disposal of personal property or use of money in 
        accordance with this section against the state or any official, 
        employee, or agent thereof.  
           Sec. 29.  Minnesota Statutes 2002, section 246.57, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZED.] The commissioner of human 
        services may authorize any state state-operated services 
        facility operated under the authority of the commissioner to 
        enter into agreement with other governmental entities and both 
        nonprofit and for-profit organizations for participation in 
        shared service agreements that would be of mutual benefit to the 
        state, other governmental entities and organizations involved, 
        and the public.  Notwithstanding section 16C.05, subdivision 2, 
        the commissioner of human services may delegate the execution of 
        shared services contracts to the chief executive officers of the 
        regional centers or state operated nursing homes.  No additional 
        employees shall be added to the legislatively approved 
        complement for any regional center or state nursing home as a 
        result of entering into any shared service agreement.  However, 
        Positions funded by a shared service agreement may be are 
        authorized by the commissioner of finance for the duration of 
        the shared service agreement.  The charges for the services 
        shall be on an actual cost basis.  All receipts for shared 
        services may be retained by the regional treatment center or 
        state-operated nursing home service that provided the services, 
        in addition to other funding the regional treatment center or 
        state-operated nursing home receives. 
           Sec. 30.  Minnesota Statutes 2002, section 246.57, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SHARED STAFF OR SERVICES.] The commissioner of 
        human services may authorize a regional treatment center 
        state-operated services to provide staff or services to Camp 
        Confidence in return for services to, or use of the camp's 
        facilities by, residents of the treatment center facility who 
        have mental retardation or a related condition. 
           Sec. 31.  Minnesota Statutes 2002, section 246.57, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DENTAL SERVICES.] The commissioner of human 
        services shall authorize any regional treatment center or 
        state-operated nursing home services facility under the 
        commissioner's authority to provide dental services to disabled 
        persons who are eligible for medical assistance and are not 
        residing at the regional treatment center or state-operated 
        nursing home, provided that the reimbursement received for these 
        services is sufficient to cover actual costs.  To provide these 
        services, regional treatment centers and state-operated nursing 
        homes may participate under contract with health networks in 
        their service area.  Notwithstanding section 16C.05, subdivision 
        2, the commissioner of human services may delegate the execution 
        of these dental services contracts to the chief executive 
        officers of the regional centers or state-operated nursing 
        homes.  All receipts for these dental services shall be retained 
        by the regional treatment center or state-operated nursing home 
        that provides the services and shall be in addition to other 
        funding the regional treatment center or state-operated nursing 
        home receives. 
           Sec. 32.  Minnesota Statutes 2002, section 246.71, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYEE OF A SECURE TREATMENT FACILITY OR 
        EMPLOYEE.] "Employee of a secure treatment facility" or 
        "employee" means an employee of the Minnesota security hospital 
        or a secure treatment facility operated by the Minnesota sexual 
        psychopathic personality treatment center sex offender program. 
           Sec. 33.  Minnesota Statutes 2002, section 246.71, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SECURE TREATMENT FACILITY.] "Secure treatment 
        facility" means the Minnesota security hospital or the Minnesota 
        sexual psychopathic personality treatment center and the 
        Minnesota sex offender program facility in Moose Lake and any 
        portion of the Minnesota sex offender program operated by the 
        Minnesota sex offender program at the Minnesota security 
        hospital.  
           Sec. 34.  Minnesota Statutes 2002, section 246B.02, is 
        amended to read: 
           246B.02 [ESTABLISHMENT OF MINNESOTA SEXUAL PSYCHOPATHIC 
        PERSONALITY TREATMENT CENTER SEX OFFENDER PROGRAM.] 
           The commissioner of human services shall establish and 
        maintain a secure facility located in Moose Lake.  The facility 
        shall be known as shall be operated by the Minnesota Sexual 
        Psychopathic Personality Treatment Center sex offender program.  
        The facility program shall provide care and treatment in secure 
        treatment facilities to 100 persons committed by the courts as 
        sexual psychopathic personalities or sexually dangerous persons, 
        or persons admitted there with the consent of the commissioner 
        of human services. 
           Sec. 35.  Minnesota Statutes 2002, section 246B.03, is 
        amended to read: 
           246B.03 [LICENSURE.] 
           The commissioner of human services shall apply to the 
        commissioner of health to license the secure treatment 
        facilities operated by the Minnesota Sexual Psychopathic 
        Personality Treatment Center sex offender program as a 
        supervised living facility facilities with applicable program 
        licensing standards. 
           Sec. 36.  Minnesota Statutes 2002, section 246B.04, is 
        amended to read: 
           246B.04 [RULES; EVALUATION.] 
           The commissioner of human services shall adopt rules to 
        govern the operation, maintenance, and licensure of the secure 
        treatment facilities operated by the Minnesota sex offender 
        program established at the Minnesota Sexual Psychopathic 
        Personality Treatment Center, or at any other facility operated 
        by the commissioner, for persons committed as a sexual 
        psychopathic personality or sexually dangerous person.  The 
        commissioner shall establish an evaluation process to measure 
        outcomes and behavioral changes as a result of treatment 
        compared with incarceration without treatment, to determine the 
        value, if any, of treatment in protecting the public. 
           Sec. 37.  Minnesota Statutes 2002, section 252.025, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MINNESOTA EXTENDED TREATMENT OPTIONS.] The 
        commissioner shall develop by July 1, 1997, the Minnesota 
        extended treatment options to serve Minnesotans who have mental 
        retardation and exhibit severe behaviors which present a risk to 
        public safety.  This program must provide specialized 
        residential services on the Cambridge campus in Cambridge and an 
        array of community support services statewide. 
           Sec. 38.  Minnesota Statutes 2002, section 252.06, is 
        amended to read: 
           252.06 [SHERIFF TO TRANSPORT PERSONS WITH MENTAL 
        RETARDATION.] 
           It shall be the duty of the sheriff of any county, upon the 
        request of the commissioner of human services, to take charge of 
        and, transport, and deliver any person with mental retardation 
        who has been committed by the district court of any county to 
        the care and custody of the commissioner of human services 
        to such state hospital a state-operated services facility as may 
        be designated by the commissioner of human services and there 
        deliver such person to the chief executive officer of the state 
        hospital. 
           Sec. 39.  Minnesota Statutes 2002, section 252.27, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [CONTRIBUTION AMOUNT.] (a) The natural or 
        adoptive parents of a minor child, including a child determined 
        eligible for medical assistance without consideration of 
        parental income, must contribute monthly to the cost of 
        services, unless the child is married or has been married, 
        parental rights have been terminated, or the child's adoption is 
        subsidized according to section 259.67 or through title IV-E of 
        the Social Security Act. 
           (b) For households with adjusted gross income equal to or 
        greater than 100 percent of federal poverty guidelines, the 
        parental contribution shall be the greater of a minimum monthly 
        fee of $25 for households with adjusted gross income of $30,000 
        and over, or an amount to be computed by applying the following 
        schedule of rates to the adjusted gross income of the natural or 
        adoptive parents that exceeds 150 percent of the federal poverty 
        guidelines for the applicable household size, the following 
        schedule of rates: 
           (1) on the amount of adjusted gross income over 150 percent 
        of poverty, but not over $50,000, ten percent if the adjusted 
        gross income is equal to or greater than 100 percent of federal 
        poverty guidelines and less than 175 percent of federal poverty 
        guidelines, the parental contribution is $4 per month; 
           (2) on if the amount of adjusted gross income over 150 
        percent of poverty and over $50,000 but not over $60,000, 12 
        percent is equal to or greater than 175 percent of federal 
        poverty guidelines and less than or equal to 375 percent of 
        federal poverty guidelines, the parental contribution shall be 
        determined using a sliding fee scale established by the 
        commissioner of human services which begins at one percent of 
        adjusted gross income at 175 percent of federal poverty 
        guidelines and increases to 7.5 percent of adjusted gross income 
        for those with adjusted gross income up to 375 percent of 
        federal poverty guidelines; 
           (3) on if the amount of adjusted gross income over 150 is 
        greater than 375 percent of federal poverty, and over $60,000 
        but not over $75,000, 14 percent guidelines and less than 675 
        percent of federal poverty guidelines, the parental contribution 
        shall be 7.5 percent of adjusted gross income; and 
           (4) on all if the adjusted gross income amounts over 150 is 
        equal to or greater than 675 percent of federal poverty, and 
        over $75,000, 15 percent guidelines and less than 975 percent of 
        federal poverty guidelines, the parental contribution shall be 
        ten percent of adjusted gross income; and 
           (5) if the adjusted gross income is equal to or greater 
        than 975 percent of federal poverty guidelines, the parental 
        contribution shall be 12.5 percent of adjusted gross income. 
           If the child lives with the parent, the parental 
        contribution annual adjusted gross income is reduced by $200, 
        except that the parent must pay the minimum monthly $25 fee 
        under this paragraph $2,400 prior to calculating the parental 
        contribution.  If the child resides in an institution specified 
        in section 256B.35, the parent is responsible for the personal 
        needs allowance specified under that section in addition to the 
        parental contribution determined under this section.  The 
        parental contribution is reduced by any amount required to be 
        paid directly to the child pursuant to a court order, but only 
        if actually paid. 
           (c) The household size to be used in determining the amount 
        of contribution under paragraph (b) includes natural and 
        adoptive parents and their dependents under age 21, including 
        the child receiving services.  Adjustments in the contribution 
        amount due to annual changes in the federal poverty guidelines 
        shall be implemented on the first day of July following 
        publication of the changes. 
           (d) For purposes of paragraph (b), "income" means the 
        adjusted gross income of the natural or adoptive parents 
        determined according to the previous year's federal tax form. 
           (e) The contribution shall be explained in writing to the 
        parents at the time eligibility for services is being 
        determined.  The contribution shall be made on a monthly basis 
        effective with the first month in which the child receives 
        services.  Annually upon redetermination or at termination of 
        eligibility, if the contribution exceeded the cost of services 
        provided, the local agency or the state shall reimburse that 
        excess amount to the parents, either by direct reimbursement if 
        the parent is no longer required to pay a contribution, or by a 
        reduction in or waiver of parental fees until the excess amount 
        is exhausted. 
           (f) The monthly contribution amount must be reviewed at 
        least every 12 months; when there is a change in household size; 
        and when there is a loss of or gain in income from one month to 
        another in excess of ten percent.  The local agency shall mail a 
        written notice 30 days in advance of the effective date of a 
        change in the contribution amount.  A decrease in the 
        contribution amount is effective in the month that the parent 
        verifies a reduction in income or change in household size. 
           (g) Parents of a minor child who do not live with each 
        other shall each pay the contribution required under paragraph 
        (a), except that a.  An amount equal to the annual court-ordered 
        child support payment actually paid on behalf of the child 
        receiving services shall be deducted from the contribution 
        adjusted gross income of the parent making the payment prior to 
        calculating the parental contribution under paragraph (b). 
           (h) The contribution under paragraph (b) shall be increased 
        by an additional five percent if the local agency determines 
        that insurance coverage is available but not obtained for the 
        child.  For purposes of this section, "available" means the 
        insurance is a benefit of employment for a family member at an 
        annual cost of no more than five percent of the family's annual 
        income.  For purposes of this section, "insurance" means health 
        and accident insurance coverage, enrollment in a nonprofit 
        health service plan, health maintenance organization, 
        self-insured plan, or preferred provider organization. 
           Parents who have more than one child receiving services 
        shall not be required to pay more than the amount for the child 
        with the highest expenditures.  There shall be no resource 
        contribution from the parents.  The parent shall not be required 
        to pay a contribution in excess of the cost of the services 
        provided to the child, not counting payments made to school 
        districts for education-related services.  Notice of an increase 
        in fee payment must be given at least 30 days before the 
        increased fee is due.  
           (i) The contribution under paragraph (b) shall be reduced 
        by $300 per fiscal year if, in the 12 months prior to July 1: 
           (1) the parent applied for insurance for the child; 
           (2) the insurer denied insurance; 
           (3) the parents submitted a complaint or appeal, in writing 
        to the insurer, submitted a complaint or appeal, in writing, to 
        the commissioner of health or the commissioner of commerce, or 
        litigated the complaint or appeal; and 
           (4) as a result of the dispute, the insurer reversed its 
        decision and granted insurance. 
           For purposes of this section, "insurance" has the meaning 
        given in paragraph (h). 
           A parent who has requested a reduction in the contribution 
        amount under this paragraph shall submit proof in the form and 
        manner prescribed by the commissioner or county agency, 
        including, but not limited to, the insurer's denial of 
        insurance, the written letter or complaint of the parents, court 
        documents, and the written response of the insurer approving 
        insurance.  The determinations of the commissioner or county 
        agency under this paragraph are not rules subject to chapter 14. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 40.  Minnesota Statutes 2002, section 253.015, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATE HOSPITALS STATE-OPERATED SERVICES 
        FOR PERSONS WITH MENTAL ILLNESS.] The state hospitals 
        state-operated services facilities located at Anoka, Brainerd, 
        Fergus Falls, St. Peter, and Willmar, and Moose Lake until June 
        30, 1995, shall constitute the state hospitals state-operated 
        services facilities for persons with mental illness, and shall 
        be maintained under the general management of the commissioner 
        of human services.  The commissioner of human services shall 
        determine to what state hospital state-operated services 
        facility persons with mental illness shall be committed from 
        each county and notify the judge exercising probate jurisdiction 
        thereof, and of changes made from time to time.  The chief 
        executive officer of each hospital for persons with mental 
        illness shall be known as the chief executive officer.  
           Sec. 41.  Minnesota Statutes 2002, section 253.017, is 
        amended to read: 
           253.017 [TREATMENT PROVIDED BY REGIONAL TREATMENT CENTERS 
        STATE-OPERATED SERVICES.] 
           Subdivision 1.  [ACTIVE PSYCHIATRIC TREATMENT.] The 
        regional treatment centers state-operated services shall provide 
        active psychiatric treatment according to contemporary 
        professional standards.  Treatment must be designed to: 
           (1) stabilize the individual and the symptoms that required 
        hospital admission; 
           (2) restore individual functioning to a level permitting 
        return to the community; 
           (3) strengthen family and community support; and 
           (4) facilitate discharge, after care, and follow-up as 
        patients return to the community. 
           Subd. 2.  [NEED FOR SERVICES.] The commissioner shall 
        determine the need for the psychiatric services provided by the 
        department based upon individual needs assessments of persons in 
        the regional treatment centers state-operated services as 
        required by section 245.474, subdivision 2, and an evaluation 
        of:  (1) regional treatment center state-operated service 
        programs, (2) programs needed in the region for persons who 
        require hospitalization, and (3) available epidemiologic data.  
        Throughout its planning and implementation, the assessment 
        process must be discussed with the state advisory council on 
        mental health in accordance with its duties under section 
        245.697.  Continuing assessment of this information must be 
        considered in planning for and implementing changes in 
        state-operated programs and facilities for persons with mental 
        illness.  By January 31, 1990, the commissioner shall submit a 
        proposal for renovation or new construction of the facilities at 
        Anoka, Brainerd, Moose Lake, and Fergus Falls.  Expansion may be 
        considered only after a thorough analysis of need and in 
        conjunction with a comprehensive mental health plan. 
           Subd. 3.  [DISSEMINATION OF ADMISSION AND STAY CRITERIA.] 
        The commissioner shall periodically disseminate criteria for 
        admission and continued stay in a regional treatment center and 
        security hospital state-operated services facility.  The 
        commissioner shall disseminate the criteria to the courts of the 
        state and counties. 
           Sec. 42.  Minnesota Statutes 2002, section 253.20, is 
        amended to read: 
           253.20 [MINNESOTA SECURITY HOSPITAL.] 
           The commissioner of human services is hereby authorized and 
        directed to shall erect, equip, and maintain in connection with 
        a state hospital at St. Peter a suitable building to be known as 
        the Minnesota Security Hospital, for the purpose of holding in 
        custody and caring for such persons with mental illness or 
        mental retardation as providing a secure treatment facility as 
        defined in section 253B.02, subdivision 18a, for persons who may 
        be committed thereto there by courts of criminal jurisdiction, 
        or otherwise, or transferred thereto there by the commissioner 
        of human services, and for such persons as may be declared 
        insane who are found to be mentally ill while confined in any 
        penal institution correctional facility, or who may be found to 
        be mentally ill and dangerous, and the commissioner shall 
        supervise and manage the same as in the case of other state 
        hospitals. 
           Sec. 43.  Minnesota Statutes 2002, section 253.26, is 
        amended to read: 
           253.26 [TRANSFERS OF PATIENTS OR RESIDENTS.] 
           When any person of the state hospital for patients with 
        mental illness or residents with mental retardation is found by 
        the commissioner of human services to have homicidal tendencies 
        or to be under sentence or indictment or information the person 
        may be transferred by the commissioner to the Minnesota Security 
        Hospital for safekeeping and treatment The commissioner of human 
        services may transfer a committed patient to the Minnesota 
        Security Hospital following a determination that the patient's 
        behavior presents a danger to others and treatment in a secure 
        treatment facility is necessary.  The commissioner shall 
        establish a written policy creating the transfer criteria. 
           Sec. 44.  Minnesota Statutes 2002, section 253B.02, 
        subdivision 18a, is amended to read: 
           Subd. 18a.  [SECURE TREATMENT FACILITY.] "Secure treatment 
        facility" means the Minnesota security hospital or the Minnesota 
        sexual psychopathic personality treatment center and the 
        Minnesota sex offender program facility in Moose Lake and any 
        portion of the Minnesota sex offender program operated by the 
        Minnesota sex offender program at the Minnesota security 
        hospital, but does not include services or programs administered 
        by the secure treatment facility outside a secure environment. 
           Sec. 45.  Minnesota Statutes 2002, section 253B.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [VOLUNTARY ADMISSION AND TREATMENT.] (a) 
        Voluntary admission is preferred over involuntary commitment and 
        treatment.  Any person 16 years of age or older may request to 
        be admitted to a treatment facility as a voluntary patient for 
        observation, evaluation, diagnosis, care and treatment without 
        making formal written application.  Any person under the age of 
        16 years may be admitted as a patient with the consent of a 
        parent or legal guardian if it is determined by independent 
        examination that there is reasonable evidence that (1) the 
        proposed patient has a mental illness, or is mentally retarded 
        or chemically dependent; and (2) the proposed patient is 
        suitable for treatment.  The head of the treatment facility 
        shall not arbitrarily refuse any person seeking admission as a 
        voluntary patient.  In making decisions regarding admissions, 
        the facility shall use clinical admission criteria consistent 
        with the current applicable inpatient admission standards 
        established by the American Psychiatric Association or the 
        American Academy of Child and Adolescent Psychiatry.  These 
        criteria must be no more restrictive than, and must be 
        consistent with, the requirements of section 62Q.53.  The 
        facility may not refuse to admit a person voluntarily solely 
        because the person does not meet the criteria for involuntary 
        holds under section 253B.05 or the definition of mental illness 
        under section 253B.02, subdivision 13.  
           (b) In addition to the consent provisions of paragraph (a), 
        a person who is 16 or 17 years of age who refuses to consent 
        personally to admission may be admitted as a patient for mental 
        illness or chemical dependency treatment with the consent of a 
        parent or legal guardian if it is determined by an independent 
        examination that there is reasonable evidence that the proposed 
        patient is chemically dependent or has a mental illness and is 
        suitable for treatment.  The person conducting the examination 
        shall notify the proposed patient and the parent or legal 
        guardian of this determination. 
           (c) A person who is voluntarily participating in treatment 
        for a mental illness is not subject to civil commitment under 
        this chapter if the person: 
           (1) has given informed consent or, if lacking capacity, is 
        a person for whom legally valid substitute consent has been 
        given; and 
           (2) is participating in a medically appropriate course of 
        treatment, including clinically appropriate and lawful use of 
        neuroleptic medication and electroconvulsive therapy.  The 
        limitation on commitment in this paragraph does not apply if, 
        based on clinical assessment, the court finds that it is 
        unlikely that the person will remain in and cooperate with a 
        medically appropriate course of treatment absent commitment and 
        the standards for commitment are otherwise met.  This paragraph 
        does not apply to a person for whom commitment proceedings are 
        initiated pursuant to rule 20.01 or 20.02 of the Rules of 
        Criminal Procedure, or a person found by the court to meet the 
        requirements under section 253B.02, subdivision 17. 
           Legally valid substitute consent may be provided by a proxy 
        under a health care directive, a guardian or conservator with 
        authority to consent to mental health treatment, or consent to 
        admission under subdivision 1a or 1b.  
           Sec. 46.  Minnesota Statutes 2002, section 253B.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DURATION OF HOLD.] (a) Any person held pursuant 
        to this section may be held up to 72 hours, exclusive of 
        Saturdays, Sundays, and legal holidays after admission.  If a 
        petition for the commitment of the person is filed in the 
        district court in the county of the person's residence or of the 
        county in which the treatment facility is located, the court may 
        issue a judicial hold order pursuant to section 253B.07, 
        subdivision 2b. 
           (b) During the 72-hour hold period, a court may not release 
        a person held under this section unless the court has received a 
        written petition for release and held a summary hearing 
        regarding the release.  The petition must include the name of 
        the person being held, the basis for and location of the hold, 
        and a statement as to why the hold is improper.  The petition 
        also must include copies of any written documentation under 
        subdivision 1 or 2 in support of the hold, unless the person 
        holding the petitioner refuses to supply the documentation.  The 
        hearing must be held as soon as practicable and may be conducted 
        by means of a telephone conference call or similar method by 
        which the participants are able to simultaneously hear each 
        other.  If the court decides to release the person, the court 
        shall direct the release and shall issue written findings 
        supporting the decision.  The release may not be delayed pending 
        the written order.  Before deciding to release the person, the 
        court shall make every reasonable effort to provide notice of 
        the proposed release to: 
           (1) any specific individuals identified in a statement 
        under subdivision 1 or 2 or individuals identified in the record 
        who might be endangered if the person was not held; 
           (2) the examiner whose written statement was a basis for a 
        hold under subdivision 1; and 
           (3) the peace or health officer who applied for a hold 
        under subdivision 2. 
           (c) If a person is intoxicated in public and held under 
        this section for detoxification, a treatment facility may 
        release the person without providing notice under paragraph (d) 
        as soon as the treatment facility determines the person is no 
        longer a danger to themselves or others.  Notice must be 
        provided to the peace officer or health officer who transported 
        the person, or the appropriate law enforcement agency, if the 
        officer or agency requests notification. 
           (c) (d) If a treatment facility releases a person during 
        the 72-hour hold period, the head of the treatment facility 
        shall immediately notify the agency which employs the peace or 
        health officer who transported the person to the treatment 
        facility under this section. 
           (e) A person held under a 72-hour emergency hold must be 
        released by the facility within 72 hours unless a court order to 
        hold the person is obtained.  A consecutive emergency hold order 
        under this section may not be issued. 
           Sec. 47.  Minnesota Statutes 2002, section 253B.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STANDARD OF PROOF.] (a) If the court finds 
        by clear and convincing evidence that the proposed patient is a 
        person who is mentally ill, mentally retarded, or chemically 
        dependent and after careful consideration of reasonable 
        alternative dispositions, including but not limited to, 
        dismissal of petition, voluntary outpatient care, voluntary 
        admission to a treatment facility, appointment of a guardian or 
        conservator, or release before commitment as provided for in 
        subdivision 4, it finds that there is no suitable alternative to 
        judicial commitment, the court shall commit the patient to the 
        least restrictive treatment program or alternative programs 
        which can meet the patient's treatment needs consistent with 
        section 253B.03, subdivision 7.  
           (b) In deciding on the least restrictive program, the court 
        shall consider a range of treatment alternatives including, but 
        not limited to, community-based nonresidential treatment, 
        community residential treatment, partial hospitalization, acute 
        care hospital, and regional treatment center services.  The 
        court shall also consider the proposed patient's treatment 
        preferences and willingness to participate voluntarily in the 
        treatment ordered.  The court may not commit a patient to a 
        facility or program that is not capable of meeting the patient's 
        needs.  
           (c) If the commitment as mentally ill, chemically 
        dependent, or mentally retarded is to a service facility 
        provided by the commissioner of human services, the court shall 
        order the commitment to the commissioner.  The commissioner 
        shall designate the placement of the person to the court. 
           (d) If the court finds a proposed patient to be a person 
        who is mentally ill under section 253B.02, subdivision 13, 
        paragraph (a), clause (2) or (4), the court shall commit to a 
        community-based program that meets the proposed patient's 
        needs.  For purposes of this paragraph, a community-based 
        program may include inpatient mental health services at a 
        community hospital. 
           Sec. 48.  Minnesota Statutes 2002, section 256.012, is 
        amended to read: 
           256.012 [MINNESOTA MERIT SYSTEM.] 
           Subdivision 1.  [MINNESOTA MERIT SYSTEM.] The commissioner 
        of human services shall promulgate by rule personnel standards 
        on a merit basis in accordance with federal standards for a 
        merit system of personnel administration for all employees of 
        county boards engaged in the administration of community social 
        services or income maintenance programs, all employees of human 
        services boards that have adopted the rules of the Minnesota 
        merit system, and all employees of local social services 
        agencies.  
           Excluded from the rules are employees of institutions and 
        hospitals under the jurisdiction of the aforementioned boards 
        and agencies; employees of county personnel systems otherwise 
        provided for by law that meet federal merit system requirements; 
        duly appointed or elected members of the aforementioned boards 
        and agencies; and the director of community social services and 
        employees in positions that, upon the request of the appointing 
        authority, the commissioner chooses to exempt, provided the 
        exemption accords with the federal standards for a merit system 
        of personnel administration.  
           Subd. 2.  [PAYMENT FOR SERVICES PROVIDED.] (a) The cost of 
        merit system operations shall be paid by counties and other 
        entities that utilize merit system services.  Total costs shall 
        be determined by the commissioner annually and must be set at a 
        level that neither significantly overrecovers nor underrecovers 
        the costs of providing the service.  The costs of merit system 
        services shall be prorated among participating counties in 
        accordance with an agreement between the commissioner and these 
        counties.  Participating counties will be billed quarterly in 
        advance and shall pay their share of the costs upon receipt of 
        the billing. 
           (b) This subdivision does not apply to counties with 
        personnel systems otherwise provided by law that meet federal 
        merit system requirements.  A county that applies to withdraw 
        from the merit system must notify the commissioner of the 
        county's intent to develop its own personnel system.  This 
        notice must be provided in writing by December 31 of the year 
        preceding the year of final participation in the merit system.  
        The county may withdraw after the commissioner has certified 
        that its personnel system meets federal merit system 
        requirements. 
           (c) A county merit system operations account is established 
        in the special revenue fund.  Payments received by the 
        commissioner for merit system costs must be deposited in the 
        merit system operations account and must be used for the purpose 
        of providing the services and administering the merit system. 
           (d) County payment of merit system costs is effective July 
        1, 2003, however payment for the period from July 1, 2003 
        through December 31, 2003, shall be made no later than January 
        31, 2004. 
           Subd. 3.  [PARTICIPATING COUNTY CONSULTATION.] The 
        commissioner shall ensure that participating counties are 
        consulted regularly and offered the opportunity to provide input 
        on the management of the merit system to ensure effective use of 
        resources and to monitor system performance. 
           Sec. 49.  [256.0451] [HEARING PROCEDURES.] 
           Subdivision 1.  [SCOPE.] The requirements in this section 
        apply to all fair hearings and appeals under section 256.045, 
        subdivision 3, paragraph (a), clauses (1), (2), (3), (5), (6), 
        and (7).  Except as provided in subdivisions 3 and 19, the 
        requirements under this section apply to fair hearings and 
        appeals under section 256.045, subdivision 3, paragraph (a), 
        clauses (4), (8), and (9). 
           The term "person" is used in this section to mean an 
        individual who, on behalf of themselves or their household, is 
        appealing or disputing or challenging an action, a decision, or 
        a failure to act, by an agency in the human services system.  
        When a person involved in a proceeding under this section is 
        represented by an attorney or by an authorized representative, 
        the term "person" also refers to the person's attorney or 
        authorized representative.  Any notice sent to the person 
        involved in the hearing must also be sent to the person's 
        attorney or authorized representative. 
           The term "agency" includes the county human services 
        agency, the state human services agency, and, where applicable, 
        any entity involved under a contract, subcontract, grant, or 
        subgrant with the state agency or with a county agency, that 
        provides or operates programs or services in which appeals are 
        governed by section 256.045. 
           Subd. 2.  [ACCESS TO FILES.] A person involved in a fair 
        hearing appeal has the right of access to the person's complete 
        case files and to examine all private welfare data on the person 
        which has been generated, collected, stored, or disseminated by 
        the agency.  A person involved in a fair hearing appeal has the 
        right to a free copy of all documents in the case file involved 
        in a fair hearing appeal.  "Case file" means the information, 
        documents, and data, in whatever form, which have been 
        generated, collected, stored, or disseminated by the agency in 
        connection with the person and the program or service involved. 
           Subd. 3.  [AGENCY APPEAL SUMMARY.] (a) Except in fair 
        hearings and appeals under section 256.045, subdivision 3, 
        paragraph (a), clauses (4), (8), and (9), the agency involved in 
        an appeal must prepare a state agency appeal summary for each 
        fair hearing appeal.  The state agency appeal summary shall be 
        mailed or otherwise delivered to the person who is involved in 
        the appeal at least three working days before the date of the 
        hearing.  The state agency appeal summary must also be mailed or 
        otherwise delivered to the department's appeals office at least 
        three working days before the date of the fair hearing appeal. 
           (b) In addition, the appeals referee shall confirm that the 
        state agency appeal summary is mailed or otherwise delivered to 
        the person involved in the appeal as required under paragraph 
        (a).  The person involved in the fair hearing should be 
        provided, through the state agency appeal summary or other 
        reasonable methods, appropriate information about the procedures 
        for the fair hearing and an adequate opportunity to prepare.  
        These requirements apply equally to the state agency or an 
        entity under contract when involved in the appeal. 
           (c) The contents of the state agency appeal summary must be 
        adequate to inform the person involved in the appeal of the 
        evidence on which the agency relies and the legal basis for the 
        agency's action or determination. 
           Subd. 4.  [ENFORCING ACCESS TO FILES.] A person involved in 
        a fair hearing appeal may enforce the right of access to data 
        and copies of the case file by making a request to the appeals 
        referee.  The appeals referee will make an appropriate order 
        enforcing the person's rights under the Minnesota Government 
        Data Practices Act, including but not limited to, ordering 
        access to files, data, and documents; continuing a hearing to 
        allow adequate time for access to data; or prohibiting use by 
        the agency of files, data, or documents which have been 
        generated, collected, stored, or disseminated without compliance 
        with the Minnesota Government Data Practices Act and which have 
        not been provided to the person involved in the appeal. 
           Subd. 5.  [PREHEARING CONFERENCES.] (a) The appeals referee 
        prior to a fair hearing appeal may hold a prehearing conference 
        to further the interests of justice or efficiency and must 
        include the person involved in the appeal.  A person involved in 
        a fair hearing appeal or the agency may request a prehearing 
        conference.  The prehearing conference may be conducted by 
        telephone, in person, or in writing.  The prehearing conference 
        may address the following: 
           (1) disputes regarding access to files, evidence, 
        subpoenas, or testimony; 
           (2) the time required for the hearing or any need for 
        expedited procedures or decision; 
           (3) identification or clarification of legal or other 
        issues that may arise at the hearing; 
           (4) identification of and possible agreement to factual 
        issues; and 
           (5) scheduling and any other matter which will aid in the 
        proper and fair functioning of the hearing. 
           (b) The appeals referee shall make a record or otherwise 
        contemporaneously summarize the prehearing conference in 
        writing, which shall be sent to both the person involved in the 
        hearing, the person's attorney or authorized representative, and 
        the agency. 
           Subd. 6.  [APPEAL REQUEST FOR EMERGENCY ASSISTANCE OR 
        URGENT MATTER.] (a) When an appeal involves an application for 
        emergency assistance, the agency involved shall mail or 
        otherwise deliver the state agency appeal summary to the 
        department's appeals office within two working days of receiving 
        the request for an appeal.  A person may also request that a 
        fair hearing be held on an emergency basis when the issue 
        requires an immediate resolution.  The appeals referee shall 
        schedule the fair hearing on the earliest available date 
        according to the urgency of the issue involved.  Issuance of the 
        recommended decision after an emergency hearing shall be 
        expedited. 
           (b) The commissioner shall issue a written decision within 
        five working days of receiving the recommended decision, shall 
        immediately inform the parties of the outcome by telephone, and 
        shall mail the decision no later than two working days following 
        the date of the decision. 
           Subd. 7.  [CONTINUANCE, RESCHEDULING, OR ADJOURNING A 
        HEARING.] (a) A person involved in a fair hearing, or the 
        agency, may request a continuance, a rescheduling, or an 
        adjournment of a hearing for a reasonable period of time.  The 
        grounds for granting a request for a continuance, a 
        rescheduling, or adjournment of a hearing include, but are not 
        limited to, the following: 
           (1) to reasonably accommodate the appearance of a witness; 
           (2) to ensure that the person has adequate opportunity for 
        preparation and for presentation of evidence and argument; 
           (3) to ensure that the person or the agency has adequate 
        opportunity to review, evaluate, and respond to new evidence, or 
        where appropriate, to require that the person or agency review, 
        evaluate, and respond to new evidence; 
           (4) to permit the person involved and the agency to 
        negotiate toward resolution of some or all of the issues where 
        both agree that additional time is needed; 
           (5) to permit the agency to reconsider a previous action or 
        determination; 
           (6) to permit or to require the performance of actions not 
        previously taken; and 
           (7) to provide additional time or to permit or require 
        additional activity by the person or agency as the interests of 
        fairness may require. 
           (b) Requests for continuances or for rescheduling may be 
        made orally or in writing.  The person or agency requesting the 
        continuance or rescheduling must first make reasonable efforts 
        to contact the other participants in the hearing or their 
        representatives, and seek to obtain an agreement on the 
        request.  Requests for continuance or rescheduling should be 
        made no later than three working days before the scheduled date 
        of the hearing, unless there is a good cause as specified in 
        subdivision 13.  Granting a continuance or rescheduling may be 
        conditioned upon a waiver by the requester of applicable time 
        limits, but should not cause unreasonable delay. 
           Subd. 8.  [SUBPOENAS.] A person involved in a fair hearing 
        or the agency may request a subpoena for a witness, for 
        evidence, or for both.  A reasonable number of subpoenas shall 
        be issued to require the attendance and the testimony of 
        witnesses, and the production of evidence relating to any issue 
        of fact in the appeal hearing.  The request for a subpoena must 
        show a need for the subpoena and the general relevance to the 
        issues involved.  The subpoena shall be issued in the name of 
        the department and shall be served and enforced as provided in 
        section 357.22 and the Minnesota Rules of Civil Procedure. 
           An individual or entity served with a subpoena may petition 
        the appeals referee in writing to vacate or modify a subpoena.  
        The appeals referee shall resolve such a petition in a 
        prehearing conference involving all parties and shall make a 
        written decision.  A subpoena may be vacated or modified if the 
        appeals referee determines that the testimony or evidence sought 
        does not relate with reasonable directness to the issues of the 
        fair hearing appeal; that the subpoena is unreasonable, over 
        broad, or oppressive; that the evidence sought is repetitious or 
        cumulative; or that the subpoena has not been served reasonably 
        in advance of the time when the appeal hearing will be held. 
           Subd. 9.  [NO EX PARTE CONTACT.] The appeals referee shall 
        not have ex parte contact on substantive issues with the agency 
        or with any person or witness in a fair hearing appeal.  No 
        employee of the department or agency shall review, interfere 
        with, change, or attempt to influence the recommended decision 
        of the appeals referee in any fair hearing appeal, except 
        through the procedure allowed in subdivision 18.  The 
        limitations in this subdivision do not affect the commissioner's 
        authority to review or reconsider decisions or make final 
        decisions. 
           Subd. 10.  [TELEPHONE OR FACE-TO-FACE HEARING.] A fair 
        hearing appeal may be conducted by telephone, by other 
        electronic media, or by an in-person, face-to-face hearing.  At 
        the request of the person involved in a fair hearing appeal or 
        their representative, a face-to-face hearing shall be conducted 
        with all participants personally present before the appeals 
        referee. 
           Subd. 11.  [HEARING FACILITIES AND EQUIPMENT.] The appeals 
        referee shall conduct the hearing in the county where the person 
        involved resides, unless an alternate location is mutually 
        agreed upon before the hearing, or unless the person has agreed 
        to a hearing by telephone.  Hearings under section 256.045, 
        subdivision 3, paragraph (a), clauses (4), (8), and (9), must be 
        conducted in the county where the determination was made, unless 
        an alternate location is mutually agreed upon before the 
        hearing.  The hearing room shall be of sufficient size and 
        layout to adequately accommodate both the number of individuals 
        participating in the hearing and any identified special needs of 
        any individual participating in the hearing.  The appeals 
        referee shall ensure that all communication and recording 
        equipment that is necessary to conduct the hearing and to create 
        an adequate record is present and functioning properly.  If any 
        necessary communication or recording equipment fails or ceases 
        to operate effectively, the appeals referee shall take any steps 
        necessary, including stopping or adjourning the hearing, until 
        the necessary equipment is present and functioning properly.  
        All reasonable efforts shall be undertaken to prevent and avoid 
        any delay in the hearing process caused by defective 
        communication or recording equipment. 
           Subd. 12.  [INTERPRETER AND TRANSLATION SERVICES.] The 
        appeals referee has a duty to inquire and to determine whether 
        any participant in the hearing needs the services of an 
        interpreter or translator in order to participate in or to 
        understand the hearing process.  Necessary interpreter or 
        translation services must be provided at no charge to the person 
        involved in the hearing.  If it appears that interpreter or 
        translation services are needed but are not available for the 
        scheduled hearing, the appeals referee shall continue or 
        postpone the hearing until appropriate services can be provided. 
           Subd. 13.  [FAILURE TO APPEAR; GOOD CAUSE.] If a person 
        involved in a fair hearing appeal fails to appear at the 
        hearing, the appeals referee may dismiss the appeal.  The person 
        may reopen the appeal if within ten working days the person 
        submits information to the appeals referee to show good cause 
        for not appearing.  Good cause can be shown when there is: 
           (1) a death or serious illness in the person's family; 
           (2) a personal injury or illness which reasonably prevents 
        the person from attending the hearing; 
           (3) an emergency, crisis, or unforeseen event which 
        reasonably prevents the person from attending the hearing; 
           (4) an obligation or responsibility of the person which a 
        reasonable person, in the conduct of one's affairs, could 
        reasonably determine takes precedence over attending the 
        hearing; 
           (5) lack of or failure to receive timely notice of the 
        hearing in the preferred language of the person involved in the 
        hearing; and 
           (6) excusable neglect, excusable inadvertence, excusable 
        mistake, or other good cause as determined by the appeals 
        referee. 
           Subd. 14.  [COMMENCEMENT OF HEARING.] The appeals referee 
        shall begin each hearing by describing the process to be 
        followed in the hearing, including the swearing-in of witnesses, 
        how testimony and evidence are presented, the order of examining 
        and cross-examining witnesses, and the opportunity for an 
        opening statement and a closing statement.  The appeals referee 
        shall identify for the participants the issues to be addressed 
        at the hearing and shall explain to the participants the burden 
        of proof which applies to the person involved and the agency.  
        The appeals referee shall confirm, prior to proceeding with the 
        hearing, that the state agency appeal summary, if required under 
        subdivision 3, has been properly completed and provided to the 
        person involved in the hearing, and that the person has been 
        provided documents and an opportunity to review the case file, 
        as provided in this section. 
           Subd. 15.  [CONDUCT OF THE HEARING.] The appeals referee 
        shall act in a fair and impartial manner at all times.  At the 
        beginning of the hearing the agency must designate one person as 
        their representative who shall be responsible for presenting the 
        agency's evidence and questioning any witnesses.  The appeals 
        referee shall make sure that the person and the agency are 
        provided sufficient time to present testimony and evidence, to 
        confront and cross-examine all adverse witnesses, and to make 
        any relevant statement at the hearing.  The appeals referee 
        shall make reasonable efforts to explain the hearing process to 
        persons who are not represented, and shall ensure that the 
        hearing is conducted fairly and efficiently.  Upon the 
        reasonable request of the person or the agency involved, the 
        appeals referee may direct witnesses to remain outside the 
        hearing room, except during their individual testimony.  The 
        appeals referee shall not terminate the hearing before affording 
        the person and the agency a complete opportunity to submit all 
        admissible evidence, and reasonable opportunity for oral or 
        written statement.  When a hearing extends beyond the time which 
        was anticipated, the hearing shall be rescheduled or continued 
        from day-to-day until completion.  Hearings that have been 
        continued shall be timely scheduled to minimize delay in the 
        disposition of the appeal. 
           Subd. 16.  [SCOPE OF ISSUES ADDRESSED AT THE HEARING.] The 
        hearing shall address the correctness and legality of the 
        agency's action and shall not be limited simply to a review of 
        the propriety of the agency's action.  The person involved may 
        raise and present evidence on all legal claims or defenses 
        arising under state or federal law as a basis for appealing or 
        disputing an agency action, but not constitutional claims beyond 
        the jurisdiction of the fair hearing.  The appeals referee may 
        take official notice of adjudicative facts. 
           Subd. 17.  [BURDEN OF PERSUASION.] The burden of persuasion 
        is governed by specific state or federal law and regulations 
        that apply to the subject of the hearing.  If there is no 
        specific law, then the participant in the hearing who asserts 
        the truth of a claim is under the burden to persuade the appeals 
        referee that the claim is true. 
           Subd. 18.  [INVITING COMMENT BY DEPARTMENT.] The appeals 
        referee or the commissioner may determine that a written comment 
        by the department about the policy implications of a specific 
        legal issue could help resolve a pending appeal.  Such a written 
        policy comment from the department shall be obtained only by a 
        written request that is also sent to the person involved and to 
        the agency or its representative.  When such a written comment 
        is received, both the person involved in the hearing and the 
        agency shall have adequate opportunity to review, evaluate, and 
        respond to the written comment, including submission of 
        additional testimony or evidence, and cross-examination 
        concerning the written comment. 
           Subd. 19.  [DEVELOPING THE RECORD.] The appeals referee 
        shall accept all evidence, except evidence privileged by law, 
        that is commonly accepted by reasonable people in the conduct of 
        their affairs as having probative value on the issues to be 
        addressed at the hearing.  Except in fair hearings and appeals 
        under section 256.045, subdivision 3, paragraph (a), clauses 
        (4), (8), and (9), in cases involving medical issues such as a 
        diagnosis, a physician's report, or a review team's decision, 
        the appeals referee shall consider whether it is necessary to 
        have a medical assessment other than that of the individual 
        making the original decision.  When necessary, the appeals 
        referee shall require an additional assessment be obtained at 
        agency expense and made part of the hearing record.  The appeals 
        referee shall ensure for all cases that the record is 
        sufficiently complete to make a fair and accurate decision.  
           Subd. 20.  [UNREPRESENTED PERSONS.] In cases involving 
        unrepresented persons, the appeals referee shall take 
        appropriate steps to identify and develop in the hearing 
        relevant facts necessary for making an informed and fair 
        decision.  These steps may include, but are not limited to, 
        asking questions of witnesses, and referring the person to a 
        legal services office.  An unrepresented person shall be 
        provided an adequate opportunity to respond to testimony or 
        other evidence presented by the agency at the hearing.  The 
        appeals referee shall ensure that an unrepresented person has a 
        full and reasonable opportunity at the hearing to establish a 
        record for appeal. 
           Subd. 21.  [CLOSING OF THE RECORD.] The agency must present 
        its evidence prior to or at the hearing.  The agency shall not 
        be permitted to submit evidence after the hearing except by 
        agreement at the hearing between the person involved, the 
        agency, and the appeals referee.  If evidence is submitted after 
        the hearing, based on such an agreement, the person involved and 
        the agency must be allowed sufficient opportunity to respond to 
        the evidence.  When necessary, the record shall remain open to 
        permit a person to submit additional evidence on the issues 
        presented at the hearing. 
           Subd. 22.  [DECISIONS.] A timely, written decision must be 
        issued in every appeal.  Each decision must contain a clear 
        ruling on the issues presented in the appeal hearing, and should 
        contain a ruling only on questions directly presented by the 
        appeal and the arguments raised in the appeal. 
           (a) [TIMELINESS.] A written decision must be issued within 
        90 days of the date the person involved requested the appeal 
        unless a shorter time is required by law.  An additional 30 days 
        is provided in those cases where the commissioner refuses to 
        accept the recommended decision. 
           (b) [CONTENTS OF HEARING DECISION.] The decision must 
        contain both findings of fact and conclusions of law, clearly 
        separated and identified.  The findings of fact must be based on 
        the entire record.  Each finding of fact made by the appeals 
        referee shall be supported by a preponderance of the evidence 
        unless a different standard is required under the regulations of 
        a particular program.  The "preponderance of the evidence" 
        means, in light of the record as a whole, the evidence leads the 
        appeals referee to believe that the finding of fact is more 
        likely to be true than not true.  The legal claims or arguments 
        of a participant do not constitute either a finding of fact or a 
        conclusion of law, except to the extent the appeals referee 
        adopts an argument as a finding of fact or conclusion of law. 
           The decision shall contain at least the following: 
           (1) a listing of the date and place of the hearing and the 
        participants at the hearing; 
           (2) a clear and precise statement of the issues, including 
        the dispute under consideration and the specific points which 
        must be resolved in order to decide the case; 
           (3) a listing of the material, including exhibits, records, 
        reports, placed into evidence at the hearing, and upon which the 
        hearing decision is based; 
           (4) the findings of fact based upon the entire hearing 
        record.  The findings of fact must be adequate to inform the 
        participants and any interested person in the public of the 
        basis of the decision.  If the evidence is in conflict on an 
        issue which must be resolved, the findings of fact must state 
        the reasoning used in resolving the conflict; 
           (5) conclusions of law that address the legal authority for 
        the hearing and the ruling, and which give appropriate attention 
        to the claims of the participants to the hearing; 
           (6) a clear and precise statement of the decision made 
        resolving the dispute under consideration in the hearing; and 
           (7) written notice of the right to appeal to district court 
        or to request reconsideration, and of the actions required and 
        the time limits for taking appropriate action to appeal to 
        district court or to request a reconsideration. 
           (c) [NO INDEPENDENT INVESTIGATION.] The appeals referee 
        shall not independently investigate facts or otherwise rely on 
        information not presented at the hearing.  The appeals referee 
        may not contact other agency personnel, except as provided in 
        subdivision 18.  The appeals referee's recommended decision must 
        be based exclusively on the testimony and evidence presented at 
        the hearing, and legal arguments presented, and the appeals 
        referee's research and knowledge of the law. 
           (d) [RECOMMENDED DECISION.] The commissioner will review 
        the recommended decision and accept or refuse to accept the 
        decision according to section 256.045, subdivision 5. 
           Subd. 23.  [REFUSAL TO ACCEPT RECOMMENDED ORDERS.] (a) If 
        the commissioner refuses to accept the recommended order from 
        the appeals referee, the person involved, the person's attorney 
        or authorized representative, and the agency shall be sent a 
        copy of the recommended order, a detailed explanation of the 
        basis for refusing to accept the recommended order, and the 
        proposed modified order. 
           (b) The person involved and the agency shall have at least 
        ten business days to respond to the proposed modification of the 
        recommended order.  The person involved and the agency may 
        submit a legal argument concerning the proposed modification, 
        and may propose to submit additional evidence that relates to 
        the proposed modified order. 
           Subd. 24.  [RECONSIDERATION.] Reconsideration may be 
        requested within 30 days of the date of the commissioner's final 
        order.  If reconsideration is requested, the other participants 
        in the appeal shall be informed of the request.  The person 
        seeking reconsideration has the burden to demonstrate why the 
        matter should be reconsidered.  The request for reconsideration 
        may include legal argument and may include proposed additional 
        evidence supporting the request.  The other participants shall 
        be sent a copy of all material submitted in support of the 
        request for reconsideration and must be given ten days to 
        respond. 
           (a) [FINDINGS OF FACT.] When the requesting party raises a 
        question as to the appropriateness of the findings of fact, the 
        commissioner shall review the entire record. 
           (b) [CONCLUSIONS OF LAW.] When the requesting party 
        questions the appropriateness of a conclusion of law, the 
        commissioner shall consider the recommended decision, the 
        decision under reconsideration, and the material submitted in 
        connection with the reconsideration.  The commissioner shall 
        review the remaining record as necessary to issue a reconsidered 
        decision. 
           (c) [WRITTEN DECISION.] The commissioner shall issue a 
        written decision on reconsideration in a timely fashion.  The 
        decision must clearly inform the parties that this constitutes 
        the final administrative decision, advise the participants of 
        the right to seek judicial review, and the deadline for doing so.
           Subd. 25.  [ACCESS TO APPEAL DECISIONS.] Appeal decisions 
        must be maintained in a manner so that the public has ready 
        access to previous decisions on particular topics, subject to 
        appropriate procedures for safeguarding names, personal 
        identifying information, and other private data on the 
        individual persons involved in the appeal. 
           Sec. 50.  Minnesota Statutes 2002, section 256B.092, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEDERAL WAIVERS.] (a) The commissioner shall 
        apply for any federal waivers necessary to secure, to the extent 
        allowed by law, federal financial participation under United 
        States Code, title 42, sections 1396 et seq., as amended, for 
        the provision of services to persons who, in the absence of the 
        services, would need the level of care provided in a regional 
        treatment center or a community intermediate care facility for 
        persons with mental retardation or related conditions.  The 
        commissioner may seek amendments to the waivers or apply for 
        additional waivers under United States Code, title 42, sections 
        1396 et seq., as amended, to contain costs.  The commissioner 
        shall ensure that payment for the cost of providing home and 
        community-based alternative services under the federal waiver 
        plan shall not exceed the cost of intermediate care services 
        including day training and habilitation services that would have 
        been provided without the waivered services.  
           The commissioner shall seek an amendment to the 1915c home 
        and community-based waiver to allow properly licensed adult 
        foster care homes to provide residential services to up to five 
        individuals with mental retardation or a related condition.  If 
        the amendment to the waiver is approved, adult foster care 
        providers that can accommodate five individuals shall increase 
        their capacity to five beds, provided the providers continue to 
        meet all applicable licensing requirements. 
           (b) The commissioner, in administering home and 
        community-based waivers for persons with mental retardation and 
        related conditions, shall ensure that day services for eligible 
        persons are not provided by the person's residential service 
        provider, unless the person or the person's legal representative 
        is offered a choice of providers and agrees in writing to 
        provision of day services by the residential service provider.  
        The individual service plan for individuals who choose to have 
        their residential service provider provide their day services 
        must describe how health, safety, and protection needs will be 
        met by frequent and regular contact with persons other than the 
        residential service provider. 
           Sec. 51.  Minnesota Statutes 2002, section 256B.092, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [INCREASING ADULT FOSTER CARE CAPACITY TO SERVE 
        FIVE PERSONS.] (a) When an adult foster care provider increases 
        the capacity of an existing home licensed to serve four persons 
        to serve a fifth person under this section, the county agency 
        shall reduce the contracted per diem cost for room and board and 
        the mental retardation or a related condition waiver services of 
        the existing foster care home by an average of 14 percent for 
        all individuals living in that home.  A county agency may 
        average the required per diem rate reductions across several 
        adult foster care homes that expand capacity under this section, 
        to achieve the necessary overall per diem reduction. 
           (b) Following the contract changes in paragraph (a), the 
        commissioner shall adjust: 
           (1) individual county allocations for mental retardation or 
        a related condition waivered services by the amount of savings 
        that results from the changes made for mental retardation or a 
        related condition waiver recipients for whom the county is 
        financially responsible; and 
           (2) group residential housing rate payments to the adult 
        foster home by the amount of savings that results from the 
        changes made. 
           (c) Effective July 1, 2003, when a new five-person adult 
        foster care home is licensed under this section, county agencies 
        shall not establish group residential housing room and board 
        rates and mental retardation or a related condition waiver 
        service rates for the new home that exceed 86 percent of the 
        average per diem room and board and mental retardation or a 
        related condition waiver services costs of four-person homes 
        serving persons with comparable needs and in the same geographic 
        area.  A county agency developing more than one new five-person 
        adult foster care home may average the required per diem rates 
        across the homes to achieve the necessary overall per diem 
        reductions. 
           (d) The commissioner shall reduce the individual county 
        allocations for mental retardation or a related condition 
        waivered services by the savings resulting from the per diem 
        limits on adult foster care recipients for whom the county is 
        financially responsible, and shall limit the group residential 
        housing rate for a new five-person adult foster care home. 
           Sec. 52.  Minnesota Statutes 2002, section 257.0769, is 
        amended to read: 
           257.0769 [FUNDING FOR THE OMBUDSPERSON PROGRAM.] 
           Subdivision 1.  [APPROPRIATIONS.] (a) Money is appropriated 
        from the special fund authorized by section 256.01, subdivision 
        2, clause (15), to the Indian affairs council for the purposes 
        of sections 257.0755 to 257.0768. 
           (b) Money is appropriated from the special fund authorized 
        by section 256.01, subdivision 2, clause (15), to the council on 
        affairs of Chicano/Latino people for the purposes of sections 
        257.0755 to 257.0768. 
           (c) Money is appropriated from the special fund authorized 
        by section 256.01, subdivision 2, clause (15), to the Council of 
        Black Minnesotans for the purposes of sections 257.0755 to 
        257.0768. 
           (d) Money is appropriated from the special fund authorized 
        by section 256.01, subdivision 2, clause (15), to the Council on 
        Asian-Pacific Minnesotans for the purposes of sections 257.0755 
        to 257.0768. 
           Subd. 2.  [TITLE IV-E REIMBURSEMENT.] The commissioner 
        shall obtain federal title IV-E financial participation for 
        eligible activity by the ombudsperson for families under section 
        257.0755.  The ombudsperson for families shall maintain and 
        transmit to the department of human services documentation that 
        is necessary in order to obtain federal funds. 
           Sec. 53.  Minnesota Statutes 2002, section 259.21, 
        subdivision 6, is amended to read: 
           Subd. 6.  [AGENCY.] "Agency" means an organization or 
        department of government designated or authorized by law to 
        place children for adoption or any person, group of persons, 
        organization, association or society licensed or certified by 
        the commissioner of human services to place children for 
        adoption, including a Minnesota federally recognized tribe.  
           Sec. 54.  Minnesota Statutes 2002, section 259.67, 
        subdivision 7, is amended to read: 
           Subd. 7.  [REIMBURSEMENT OF COSTS.] (a) Subject to rules of 
        the commissioner, and the provisions of this subdivision a 
        child-placing agency licensed in Minnesota or any other state, 
        or local or tribal social services agency shall receive a 
        reimbursement from the commissioner equal to 100 percent of the 
        reasonable and appropriate cost of providing adoption services 
        for a child certified as eligible for adoption assistance under 
        subdivision 4.  Such assistance may include adoptive family 
        recruitment, counseling, and special training when needed.  A 
        child-placing agency licensed in Minnesota or any other state 
        shall receive reimbursement for adoption services it purchases 
        for or directly provides to an eligible child.  A local or 
        tribal social services agency shall receive such reimbursement 
        only for adoption services it purchases for an eligible child. 
           (b) A child-placing agency licensed in Minnesota or any 
        other state or local or tribal social services agency seeking 
        reimbursement under this subdivision shall enter into a 
        reimbursement agreement with the commissioner before providing 
        adoption services for which reimbursement is sought.  No 
        reimbursement under this subdivision shall be made to an agency 
        for services provided prior to entering a reimbursement 
        agreement.  Separate reimbursement agreements shall be made for 
        each child and separate records shall be kept on each child for 
        whom a reimbursement agreement is made.  Funds encumbered and 
        obligated under such an agreement for the child remain available 
        until the terms of the agreement are fulfilled or the agreement 
        is terminated. 
           (c) When a local or tribal social services agency uses a 
        purchase of service agreement to provide services reimbursable 
        under a reimbursement agreement, the commissioner may make 
        reimbursement payments directly to the agency providing the 
        service if direct reimbursement is specified by the purchase of 
        service agreement, and if the request for reimbursement is 
        submitted by the local or tribal social services agency along 
        with a verification that the service was provided.  
           Sec. 55.  Minnesota Statutes 2002, section 393.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PUBLIC CHILD WELFARE PROGRAM.] (a) To 
        assist in carrying out the child protection, delinquency 
        prevention and family assistance responsibilities of the state, 
        the local social services agency shall administer a program of 
        social services and financial assistance to be known as the 
        public child welfare program.  The public child welfare program 
        shall be supervised by the commissioner of human services and 
        administered by the local social services agency in accordance 
        with law and with rules of the commissioner. 
           (b) The purpose of the public child welfare program is to 
        assure protection for and financial assistance to children who 
        are confronted with social, physical, or emotional problems 
        requiring protection and assistance.  These problems include, 
        but are not limited to the following: 
           (1) mental, emotional, or physical handicap; 
           (2) birth of a child to a mother who was not married to the 
        child's father when the child was conceived nor when the child 
        was born, including but not limited to costs of prenatal care, 
        confinement and other care necessary for the protection of a 
        child born to a mother who was not married to the child's father 
        at the time of the child's conception nor at the birth; 
           (3) dependency, neglect; 
           (4) delinquency; 
           (5) abuse or rejection of a child by its parents; 
           (6) absence of a parent or guardian able and willing to 
        provide needed care and supervision; 
           (7) need of parents for assistance with child rearing 
        problems, or in placing the child in foster care. 
           (c) A local social services agency shall make the services 
        of its public child welfare program available as required by 
        law, by the commissioner, or by the courts and shall cooperate 
        with other agencies, public or private, dealing with the 
        problems of children and their parents as provided in this 
        subdivision. 
           The public child welfare program shall be available in 
        divorce cases for investigations of children and home conditions 
        and for supervision of children when directed by the court 
        hearing the divorce. 
           (d) A local social services agency may rent, lease, or 
        purchase property, or in any other way approved by the 
        commissioner, contract with individuals or agencies to provide 
        needed facilities for foster care of children.  It may purchase 
        services or child care from duly authorized individuals, 
        agencies or institutions when in its judgment the needs of a 
        child or the child's family can best be met in this way. 
           Sec. 56.  Minnesota Statutes 2002, section 393.07, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMPLIANCE WITH FEDERAL SOCIAL SECURITY ACT; 
        MERIT SYSTEM.] The commissioner of human services shall have 
        authority to require such methods of administration as are 
        necessary for compliance with requirements of the federal Social 
        Security Act, as amended, and for the proper and efficient 
        operation of all welfare programs.  This authority to require 
        methods of administration includes methods relating to the 
        establishment and maintenance of personnel standards on a merit 
        basis as concerns all employees of local social services 
        agencies except those employed in an institution, sanitarium, or 
        hospital.  The commissioner of human services shall exercise no 
        authority with respect to the selection, tenure of office, and 
        compensation of any individual employed in accordance with such 
        methods.  The adoption of methods relating to the establishment 
        and maintenance of personnel standards on a merit basis of all 
        such employees of the local social services agencies and the 
        examination thereof, and the administration thereof shall be 
        directed and controlled exclusively by the commissioner of human 
        services. 
           Notwithstanding the provisions of any other law to the 
        contrary, every employee of every local social services agency 
        who occupies a position which requires as prerequisite to 
        eligibility therefor graduation from an accredited four year 
        college or a certificate of registration as a registered nurse 
        under section 148.231, must be employed in such position under 
        the merit system established under authority of this 
        subdivision.  Every such employee now employed by a local social 
        services agency and who is not under said merit system is 
        transferred, as of January 1, 1962, to a position of comparable 
        classification in the merit system with the same status therein 
        as the employee had in the county of employment prior thereto 
        and every such employee shall be subject to and have the benefit 
        of the merit system, including seniority within the local social 
        services agency, as though the employee had served thereunder 
        from the date of entry into the service of the local social 
        services agency. 
           By March 1, 1996, the commissioner of human services shall 
        report to the chair of the senate health care and family 
        services finance division and the chair of the house health and 
        human services finance division on options for the delivery of 
        merit-based employment services by entities other than the 
        department of human services in order to reduce the 
        administrative costs to the state while maintaining compliance 
        with applicable federal regulations. 
           Sec. 57.  Minnesota Statutes 2002, section 518.167, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COURT ORDER.] In contested custody 
        proceedings, and in other custody proceedings if a parent or the 
        child's custodian requests, the court may order an investigation 
        and report concerning custodial arrangements for the child.  If 
        the county elects to conduct an investigation, the county may 
        charge a fee.  The investigation and report may be made by the 
        county welfare agency or department of court services. 
           Sec. 58.  Minnesota Statutes 2002, section 518.551, 
        subdivision 7, is amended to read: 
           Subd. 7.  [SERVICE FEE FEES AND COST RECOVERY FEES FOR IV-D 
        SERVICES.] When the public agency responsible for child support 
        enforcement provides child support collection services either to 
        a public assistance recipient or to a party who does not receive 
        public assistance, the public agency may upon written notice to 
        the obligor charge a monthly collection fee equivalent to the 
        full monthly cost to the county of providing collection 
        services, in addition to the amount of the child support which 
        was ordered by the court.  The fee shall be deposited in the 
        county general fund.  The service fee assessed is limited to ten 
        percent of the monthly court ordered child support and shall not 
        be assessed to obligors who are current in payment of the 
        monthly court ordered child support. (a) When a recipient of 
        IV-D services is no longer receiving assistance under the 
        state's title IV-A, IV-E foster care, medical assistance, or 
        MinnesotaCare programs, the public authority responsible for 
        child support enforcement must notify the recipient, within five 
        working days of the notification of ineligibility, that IV-D 
        services will be continued unless the public authority is 
        notified to the contrary by the recipient.  The notice must 
        include the implications of continuing to receive IV-D services, 
        including the available services and fees, cost recovery fees, 
        and distribution policies relating to fees. 
           (b) An application fee of $25 shall be paid by the person 
        who applies for child support and maintenance collection 
        services, except persons who are receiving public assistance as 
        defined in section 256.741 and, if enacted, the diversionary 
        work program under section 256J.95, persons who transfer from 
        public assistance to nonpublic assistance status, and minor 
        parents and parents enrolled in a public secondary school, area 
        learning center, or alternative learning program approved by the 
        commissioner of children, families, and learning.  
           (c) When the public authority provides full IV-D services 
        to an obligee who has applied for those services, upon written 
        notice to the obligee, the public authority must charge a cost 
        recovery fee of one percent of the amount collected.  This fee 
        must be deducted from the amount of the child support and 
        maintenance collected and not assigned under section 256.741, 
        before disbursement to the obligee.  This fee does not apply to 
        an obligee who: 
           (1) is currently receiving assistance under the state's 
        title IV-A, IV-E foster care, medical assistance, or 
        MinnesotaCare programs; or 
           (2) has received assistance under the state's title IV-A or 
        IV-E foster care programs, until the person has not received 
        this assistance for 24 consecutive months.  
           (d) When the public authority provides full IV-D services 
        to an obligor who has applied for such services, upon written 
        notice to the obligor, the public authority must charge a cost 
        recovery fee of one percent of the monthly court ordered child 
        support and maintenance obligation.  The fee may be collected 
        through income withholding, as well as by any other enforcement 
        remedy available to the public authority responsible for child 
        support enforcement. 
           (e) Fees assessed by state and federal tax agencies for 
        collection of overdue support owed to or on behalf of a person 
        not receiving public assistance must be imposed on the person 
        for whom these services are provided.  The public authority upon 
        written notice to the obligee shall assess a fee of $25 to the 
        person not receiving public assistance for each successful 
        federal tax interception.  The fee must be withheld prior to the 
        release of the funds received from each interception and 
        deposited in the general fund. 
           (f) Cost recovery fees collected under paragraphs (c) and 
        (d) shall be considered child support program income according 
        to Code of Federal Regulations, title 45, section 304.50, and 
        shall be deposited in the cost recovery fee account established 
        under paragraph (h).  The commissioner of human services must 
        elect to recover costs based on either actual or standardized 
        costs. 
           However, (g) The limitations of this subdivision on the 
        assessment of fees shall not apply to the extent inconsistent 
        with the requirements of federal law for receiving funds for the 
        programs under Title IV-A and Title IV-D of the Social Security 
        Act, United States Code, title 42, sections 601 to 613 and 
        United States Code, title 42, sections 651 to 662.  
           (h) The commissioner of human services is authorized to 
        establish a special revenue fund account to receive child 
        support cost recovery fees.  A portion of the nonfederal share 
        of these fees may be retained for expenditures necessary to 
        administer the fee, and must be transferred to the child support 
        system special revenue account.  The remaining nonfederal share 
        of the cost recovery fee must be retained by the commissioner 
        and dedicated to the child support general fund county 
        performance based grant account authorized under sections 
        256.979 and 256.9791. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004, 
        except paragraph (d) is effective July 1, 2005. 
           Sec. 59.  Minnesota Statutes 2002, section 518.6111, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] This section applies to all 
        support orders issued by a court or an administrative tribunal 
        and orders for or notices of withholding issued by the public 
        authority according to section 518.5513, subdivision 5, 
        paragraph (a), clause (5). 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 60.  Minnesota Statutes 2002, section 518.6111, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ORDER.] Every support order must address income 
        withholding.  Whenever a support order is initially entered or 
        modified, the full amount of the support order must be 
        withheld subject to income withholding from the income of the 
        obligor.  If the obligee or obligor applies for either full IV-D 
        services or for income withholding only services from the public 
        authority responsible for child support enforcement, the full 
        amount of the support order must be withheld from the income of 
        the obligor and forwarded to the public authority.  Every order 
        for support or maintenance shall provide for a conspicuous 
        notice of the provisions of this section that complies with 
        section 518.68, subdivision 2.  An order without this notice 
        remains subject to this section.  This section applies 
        regardless of the source of income of the person obligated to 
        pay the support or maintenance. 
           A payor of funds shall implement income withholding 
        according to this section upon receipt of an order for or notice 
        of withholding.  The notice of withholding shall be on a form 
        provided by the commissioner of human services. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 61.  Minnesota Statutes 2002, section 518.6111, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COLLECTION SERVICES.] (a) The commissioner of 
        human services shall prepare and make available to the courts a 
        notice of services that explains child support and maintenance 
        collection services available through the public authority, 
        including income withholding, and the fees for such services.  
        Upon receiving a petition for dissolution of marriage or legal 
        separation, the court administrator shall promptly send the 
        notice of services to the petitioner and respondent at the 
        addresses stated in the petition. 
           (b) Either the obligee or obligor may at any time apply to 
        the public authority for either full IV-D services or for income 
        withholding only services. 
           Upon receipt of a support order requiring income 
        withholding, a petitioner or respondent, who is not a recipient 
        of public assistance and does not receive child support services 
        from the public authority, shall apply to the public authority 
        for either full child support collection services or for income 
        withholding only services. 
           (c) For those persons applying for income withholding only 
        services, a monthly service fee of $15 must be charged to the 
        obligor.  This fee is in addition to the amount of the support 
        order and shall be withheld through income withholding.  The 
        public authority shall explain the service options in this 
        section to the affected parties and encourage the application 
        for full child support collection services. 
           (d) If the obligee is not a current recipient of public 
        assistance as defined in section 256.741, the person who applied 
        for services may at any time choose to terminate either full 
        IV-D services or income withholding only services regardless of 
        whether income withholding is currently in place.  The obligee 
        or obligor may reapply for either full IV-D services or income 
        withholding only services at any time.  Unless the applicant is 
        a recipient of public assistance as defined in section 256.741, 
        a $25 application fee shall be charged at the time of each 
        application.  
           (e) When a person terminates IV-D services, if an arrearage 
        for public assistance as defined in section 256.741 exists, the 
        public authority may continue income withholding, as well as use 
        any other enforcement remedy for the collection of child 
        support, until all public assistance arrears are paid in full.  
        Income withholding shall be in an amount equal to 20 percent of 
        the support order in effect at the time the services terminated. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 62.  Minnesota Statutes 2002, section 518.6111, 
        subdivision 16, is amended to read: 
           Subd. 16.  [WAIVER.] (a) If the public authority is 
        providing child support and maintenance enforcement services and 
        child support or maintenance is not assigned under section 
        256.741, the court may waive the requirements of this section if 
        the court finds there is no arrearage in child support and 
        maintenance as of the date of the hearing and: 
           (1) one party demonstrates and the court finds determines 
        there is good cause to waive the requirements of this section or 
        to terminate an order for or notice of income withholding 
        previously entered under this section.  The court must make 
        written findings to include the reasons income withholding would 
        not be in the best interests of the child.  In cases involving a 
        modification of support, the court must also make a finding that 
        support payments have been timely made; or 
           (2) all parties reach an the obligee and obligor sign a 
        written agreement and the agreement providing for an alternative 
        payment arrangement which is approved reviewed and entered in 
        the record by the court after a finding that the agreement is 
        likely to result in regular and timely payments.  The court's 
        findings waiving the requirements of this paragraph shall 
        include a written explanation of the reasons why income 
        withholding would not be in the best interests of the child. 
           In addition to the other requirements in this subdivision, 
        if the case involves a modification of support, the court shall 
        make a finding that support has been timely made. 
           (b) If the public authority is not providing child support 
        and maintenance enforcement services and child support or 
        maintenance is not assigned under section 256.741, the court may 
        waive the requirements of this section if the parties sign a 
        written agreement.  
           (c) If the court waives income withholding, the obligee or 
        obligor may at any time request income withholding under 
        subdivision 7. 
           [EFFECTIVE DATE.] This section is effective July 1, 2004. 
           Sec. 63.  [STATE-OPERATED SERVICES STUDY.] 
           The commissioner of human services shall study the services 
        provided to persons with developmental disabilities who have 
        complex care needs.  The commissioner shall analyze: 
           (1) the needs of the target population; 
           (2) the methods of providing services to the target 
        population; 
           (3) the costs and cost-effectiveness of providing services 
        to the target population; 
           (4) factors that encourage and inhibit vendors, including 
        state-operated community services (SOCS), to provide services to 
        the target population; 
           (5) alternative populations that could be served by 
        state-operated residential facilities; and 
           (6) the population served by Minnesota extended treatment 
        options and the cost-effectiveness of these services.  
           The commissioner shall report on the results of the study 
        under this section to the chairs of the house and senate 
        committees with jurisdiction over state-operated services by 
        January 15, 2004. 
           Sec. 64.  [STATE-OPERATED SERVICES REFINANCING STRATEGY.] 
           Subdivision 1.  [REDESIGN OF MENTAL HEALTH SAFETY NET.] (a) 
        Pursuant to Minnesota Statutes, sections 246.0135, 251.011, and 
        251.013, the commissioner of human services must seek specific 
        legislative authorization to close any regional treatment center 
        or state-operated nursing home or any program at a regional 
        treatment center or state-operated nursing home. 
           (b) In developing and seeking legislative authorization for 
        any proposals to restructure state-operated services under this 
        subdivision, the commissioner must consider: 
           (1) the needs and preferences of the individuals served by 
        affected state-operated services programs and their families; 
           (2) the location of necessary support services, as 
        identified in the service or treatment plans of individuals 
        served by affected state-operated services programs; 
           (3) the appropriate grouping of individuals served by a 
        community-based state-operated services program; 
           (4) the availability of qualified staff to provide services 
        in community-based state-operated services programs; 
           (5) the need for state-operated services programs in 
        certain geographical regions in the state; and 
           (6) whether commuting distance to the program for staff and 
        families is reasonable. 
           (c) The commissioner's proposals to close a regional 
        treatment center, state-operated nursing home or program 
        operated by a regional treatment center or state-operated 
        nursing home under this subdivision must not result in a net 
        reduction in the total number of services in any catchment area 
        in the state and must ensure that any new community-based 
        programs are located in areas that are convenient to the 
        individuals receiving services and their families. 
           (d) Legislative authorization as required by Minnesota 
        Statutes, sections 246.0135, 251.011, and 251.013, shall mean 
        language specifically authorizing the commissioner's proposals, 
        the authorization to transfer land on which a regional treatment 
        center is located to a nonstate entity, or the authorization to 
        demolish buildings in which programs are or were housed. 
           Subd. 2.  [REDEVELOPMENT PLAN.] (a) In closing any regional 
        treatment center or state-operated nursing home, the 
        commissioner shall develop or aid in the development of a 
        comprehensive redevelopment plan for any facilities or land 
        vacated as a result of the proposal in consultation with the 
        local governmental entity in the jurisdiction in which the 
        facility is located.  If a local government entity cannot be 
        secured for facility redevelopment, then the commissioner shall 
        develop the plan in collaboration with affected communities.  
        The plan must include specific information on the redevelopment 
        of the affected facilities or land, specific information about 
        the implementation schedule for the plan, proposed legislation, 
        and letters of commitment regarding the reuse and redevelopment 
        of the facilities or land vacated as a result of the proposal. 
           (b) The commissioner shall not implement a redevelopment 
        plan under this subdivision until a local governmental entity in 
        which any regional treatment center is located that is affected 
        by the commissioner's redevelopment plan approves the plan. 
           Subd. 3.  [STAFFING.] When closing or restructuring a 
        regional treatment center or state-operated nursing home or a 
        program at a regional treatment center or state-operated nursing 
        home, the commissioner shall comply with the provisions of the 
        applicable collective bargaining agreements or future negotiated 
        agreements, and the agreement authorized under Minnesota 
        Statutes, section 252.50, subdivision 11. 
           Subd. 4.  [STATE-OPERATED SERVICES COSTS.] (a) Programs 
        that remain at a regional treatment center campus during and 
        after the restructuring of state-operated services shall not be 
        assessed any disproportional increase in fees, charges, or other 
        costs associated with operating and maintaining the campus.  
        Increased costs associated with inflation are permissible. 
           (b) There shall be no increase in the county share of the 
        cost of care provided in state-operated services without 
        legislative authority. 
           Subd. 5.  [REQUEST FOR FEDERAL WAIVER.] By January 1, 2004, 
        the commissioner of human services shall apply to the federal 
        government for a waiver from Medicaid requirements to permit 
        medical assistance coverage for: 
           (1) mental health treatment services provided by an 
        existing program located at a regional treatment center with a 
        capacity of more than 15 beds; and 
           (2) mental health treatment services provided by a new 
        program at a facility with a capacity of more than 15 beds. 
           Sec. 65.  [FEDERAL GRANTS TO MAINTAIN INDEPENDENCE AND 
        EMPLOYMENT.] 
           (a) The commissioner of human services shall seek federal 
        funding to participate in grant activities authorized under 
        Public Law 106-170, the Ticket to Work and Work Incentives 
        Improvement Act of 1999.  The purpose of the federal grant funds 
        are to establish: 
           (1) a demonstration project to improve the availability of 
        health care services and benefits to workers with potentially 
        severe physical or mental impairments that are likely to lead to 
        disability without access to Medicaid services; and 
           (2) a comprehensive initiative to remove employment 
        barriers that includes linkages with non-Medicaid programs, 
        including those administered by the Social Security 
        Administration and the Department of Labor. 
           (b) The state's proposal for a demonstration project in 
        paragraph (a), clause (1), shall focus on assisting workers with:
           (1) a serious mental illness as defined by the federal 
        Center for Mental Health Services; 
           (2) concurrent mental health and chemical dependency 
        conditions; and 
           (3) young adults up to the age of 24 who have a physical or 
        mental impairment that is severe and will potentially lead to a 
        determination of disability by the Social Security 
        Administration or state medical review team. 
           (c) The commissioner is authorized to take the actions 
        necessary to design and implement the demonstration project in 
        paragraph (a), clause (1), that include: 
           (1) establishing work-related requirements for 
        participation in the demonstration project; 
           (2) working with stakeholders to establish methods that 
        identify the population that will be served in the demonstration 
        project; 
           (3) seeking funding for activities to design, implement, 
        and evaluate the demonstration project; 
           (4) taking necessary administrative actions to implement 
        the demonstration project by July 1, 2004, or within 180 days of 
        receiving formal notice from the Centers for Medicare and 
        Medicaid Services that a grant has been awarded; 
           (5) establishing limits on income and resources; 
           (6) establishing a method to coordinate health care 
        benefits and payments with other coverage that is available to 
        the participants; 
           (7) establishing premiums based on guidelines that are 
        consistent with those found in Minnesota Statutes, section 
        256B.057, subdivision 9, for employed persons with disabilities; 
           (8) notifying local agencies of potentially eligible 
        individuals in accordance with Minnesota Statutes, section 
        256B.19, subdivision 2c; and 
           (9) limiting the caseload of qualifying individuals 
        participating in the demonstration project. 
           (d) The state's proposal for the comprehensive employment 
        initiative in paragraph (a), clause (2), shall focus on: 
           (1) infrastructure development that creates incentives for 
        greater work effort and participation by people with 
        disabilities or workers with severe physical or mental 
        impairments; 
           (2) consumer access to information and benefit assistance 
        that enables the person to maximize employment and career 
        advancement potential; 
           (3) improved consumer access to essential assistance and 
        support; 
           (4) enhanced linkages between state and federal agencies to 
        decrease the barriers to employment experienced by persons with 
        disabilities or workers with severe physical or mental 
        impairments; and 
           (5) research efforts to provide useful information to guide 
        future policy development on both the state and federal levels. 
           (e) Funds awarded by the federal government for the 
        purposes of this section are appropriated to the commissioner of 
        human services. 
           (f) The commissioner shall report to the chairs of the 
        senate and house of representatives finance divisions having 
        jurisdiction over health care issues on the federal approval of 
        the waiver under this section and the projected savings in the 
        November and February forecasts. 
           The commissioner must consider using the savings to 
        increase GAMC hospital rates to the July 1, 2003, levels as a 
        supplemental budget proposal in the 2004 legislative session. 
           Sec. 66.  [CONVEYANCE OF SURPLUS STATE LAND; CASS COUNTY.] 
           (a) Notwithstanding Minnesota Statutes, chapter 94, or 
        other law, administrative rule, or commissioner's order to the 
        contrary, the commissioner of administration may convey to Cass 
        county or a regional jail authority for no consideration all the 
        buildings and land that are described in paragraph (c), except 
        the land described in paragraph (d). 
           (b) The conveyance shall be in a form approved by the 
        attorney general and subject to Minnesota Statutes, section 
        16A.695.  The commissioner of administration shall have a 
        registered land surveyor prepare a legal description of the 
        property to be conveyed.  The attorney general may make 
        necessary changes in the legal description to correct errors and 
        ensure accuracy. 
           (c) The land and buildings of the Ah-Gwah-Ching property 
        that may be conveyed to Cass county or a regional jail authority 
        are located in that part of the South Half, Section 35, Township 
        142 North, Range 31 West and that part of Government Lot 6, 
        Section 2, Township 141 North, Range 31 West, in Cass county, 
        depicted on the certificate of survey prepared by Landecker and 
        Associates, Inc. dated April 25, 2002.  The land described in 
        paragraph (d) is excepted from the conveyance. 
           (d) That portion of the Ah-Gwah-Ching property to be 
        excepted from the conveyance to Cass county or a regional jail 
        authority is the land located between the shoreline and the top 
        of the bluff line and is approximately described as follows: 
           (1) all that part of the Southeast Quarter of Southwest 
        Quarter, Section 35, Township 142 North, Range 31 West, lying 
        southeasterly of a line that lies 450 feet southeasterly of and 
        parallel with Minnesota Highway No. 290; 
           (2) Government Lot 4, Section 35, Township 142 North, Range 
        31 West; 
           (3) that part of Government Lot 3, Section 35, Township 142 
        North, Range 31 West, lying southerly of Minnesota Highway No. 
        290 and westerly of Minnesota Highway No. 371; and 
           (4) that part of Government Lot 6, Section 2, Township 141 
        North, Range 31 West, lying southeasterly of the 1,410 foot 
        contour. 
        The commissioner of administration shall determine the exact 
        legal description upon further site analysis and the preparation 
        of the surveyor's legal description described in paragraph (b). 
           (e) Notwithstanding anything herein to the contrary, a 
        conveyance under this section to Cass county or a regional jail 
        authority may include a conveyance by a bill of sale of the 
        water treatment facilities located within the land described in 
        paragraph (d) and a nonexclusive appurtenant easement for such 
        facilities over the land upon which such facilities are located, 
        including ingress and egress as determined by the commissioner.  
        The easement shall be in a form approved by the attorney general.
           (f) At the option of the state, Cass county or the regional 
        jail authority must, for a period of at least two years, allow 
        the state to lease the space necessary to operate its programs 
        for the cost of utilities for the leased space.  During the term 
        of the lease, the state shall be responsible for any and all 
        maintenance and repairs the state determines are necessary for 
        its use of the leased space. 
           Sec. 67.  [REVISOR'S INSTRUCTION.] 
           For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 68.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 246.017, subdivision 
        2; 246.022; 246.06; 246.07; 246.08; 246.11; 246.19; 246.42; 
        252.025, subdivisions 1, 2, 4, 5, and 6; 252.032; 252.10; 
        253.015, subdivisions 2 and 3; 253.10; 253.19; 253.201; 253.202; 
        253.25; 253.27; 256.05; 256.06; 256.08; 256.09; 256.10; and 
        268A.08, are repealed. 
           (b) Minnesota Rules, parts 9545.2000; 9545.2010; 9545.2020; 
        9545.2030; and 9545.2040, are repealed. 

                                   ARTICLE 7 
                              HEALTH MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2002, section 41A.09, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DEFINITIONS.] For the purposes of this section, 
        the terms defined in this subdivision have the meanings given 
        them. 
           (a) "Ethanol" means fermentation ethyl alcohol derived from 
        agricultural products, including potatoes, cereal, grains, 
        cheese whey, and sugar beets; forest products; or other 
        renewable resources, including residue and waste generated from 
        the production, processing, and marketing of agricultural 
        products, forest products, and other renewable resources, that: 
           (1) meets all of the specifications in ASTM specification D 
        4806-88 D4806-01; and 
           (2) is denatured as specified in Code of Federal 
        Regulations, title 27, parts 20 and 21. 
           (b) "Wet alcohol" means agriculturally derived fermentation 
        ethyl alcohol having a purity of at least 50 percent but less 
        than 99 percent. 
           (c) "Anhydrous alcohol" means fermentation ethyl alcohol 
        derived from agricultural products as described in paragraph 
        (a), but that does not meet ASTM specifications or is not 
        denatured and is shipped in bond for further processing. 
           (d) "Ethanol plant" means a plant at which ethanol, 
        anhydrous alcohol, or wet alcohol is produced. 
           Sec. 2.  Minnesota Statutes 2002, section 62A.31, 
        subdivision 1f, is amended to read: 
           Subd. 1f.  [SUSPENSION BASED ON ENTITLEMENT TO MEDICAL 
        ASSISTANCE.] (a) The policy or certificate must provide that 
        benefits and premiums under the policy or certificate shall be 
        suspended for any period that may be provided by federal 
        regulation at the request of the policyholder or certificate 
        holder for the period, not to exceed 24 months, in which the 
        policyholder or certificate holder has applied for and is 
        determined to be entitled to medical assistance under title XIX 
        of the Social Security Act, but only if the policyholder or 
        certificate holder notifies the issuer of the policy or 
        certificate within 90 days after the date the individual becomes 
        entitled to this assistance. 
           (b) If suspension occurs and if the policyholder or 
        certificate holder loses entitlement to this medical assistance, 
        the policy or certificate shall be automatically reinstated, 
        effective as of the date of termination of this entitlement, if 
        the policyholder or certificate holder provides notice of loss 
        of the entitlement within 90 days after the date of the loss and 
        pays the premium attributable to the period, effective as of the 
        date of termination of entitlement. 
           (c) The policy must provide that upon reinstatement (1) 
        there is no additional waiting period with respect to treatment 
        of preexisting conditions, (2) coverage is provided which is 
        substantially equivalent to coverage in effect before the date 
        of the suspension, and (3) premiums are classified on terms that 
        are at least as favorable to the policyholder or certificate 
        holder as the premium classification terms that would have 
        applied to the policyholder or certificate holder had coverage 
        not been suspended. 
           Sec. 3.  Minnesota Statutes 2002, section 62A.31, 
        subdivision 1u, is amended to read: 
           Subd. 1u.  [GUARANTEED ISSUE FOR ELIGIBLE PERSONS.] (a)(1) 
        Eligible persons are those individuals described in paragraph 
        (b) who apply to enroll under the Medicare supplement policy not 
        later than 63 days after the date of the termination of 
        enrollment described in paragraph (b), seek to enroll under the 
        policy during the period specified in paragraph (c), and who 
        submit evidence of the date of termination or disenrollment with 
        the application for a Medicare supplement policy. 
           (2) With respect to eligible persons, an issuer shall not:  
        deny or condition the issuance or effectiveness of a Medicare 
        supplement policy described in paragraph (c) that is offered and 
        is available for issuance to new enrollees by the issuer; 
        discriminate in the pricing of such a Medicare supplement policy 
        because of health status, claims experience, receipt of health 
        care, medical condition, or age; or impose an exclusion of 
        benefits based upon a preexisting condition under such a 
        Medicare supplement policy. 
           (b) An eligible person is an individual described in any of 
        the following: 
           (1) the individual is enrolled under an employee welfare 
        benefit plan that provides health benefits that supplement the 
        benefits under Medicare; and the plan terminates, or the plan 
        ceases to provide all such supplemental health benefits to the 
        individual; 
           (2) the individual is enrolled with a Medicare+Choice 
        organization under a Medicare+Choice plan under Medicare part C, 
        and any of the following circumstances apply, or the individual 
        is 65 years of age or older and is enrolled with a Program of 
        All-Inclusive Care for the Elderly (PACE) provider under section 
        1894 of the federal Social Security Act, and there are 
        circumstances similar to those described in this clause that 
        would permit discontinuance of the individual's enrollment with 
        the provider if the individual were enrolled in a 
        Medicare+Choice plan: 
           (i) the organization's or plan's certification under 
        Medicare part C has been terminated or the organization has 
        terminated or otherwise discontinued providing the plan in the 
        area in which the individual resides; 
           (ii) the individual is no longer eligible to elect the plan 
        because of a change in the individual's place of residence or 
        other change in circumstances specified by the secretary, but 
        not including termination of the individual's enrollment on the 
        basis described in section 1851(g)(3)(B) of the federal Social 
        Security Act, United States Code, title 42, section 
        1395w-21(g)(3)(b) (where the individual has not paid premiums on 
        a timely basis or has engaged in disruptive behavior as 
        specified in standards under section 1856 of the federal Social 
        Security Act, United States Code, title 42, section 1395w-26), 
        or the plan is terminated for all individuals within a residence 
        area; 
           (iii) the individual demonstrates, in accordance with 
        guidelines established by the Secretary, that: 
           (A) the organization offering the plan substantially 
        violated a material provision of the organization's contract in 
        relation to the individual, including the failure to provide an 
        enrollee on a timely basis medically necessary care for which 
        benefits are available under the plan or the failure to provide 
        such covered care in accordance with applicable quality 
        standards; or 
           (B) the organization, or agent or other entity acting on 
        the organization's behalf, materially misrepresented the plan's 
        provisions in marketing the plan to the individual; or 
           (iv) the individual meets such other exceptional conditions 
        as the secretary may provide; 
           (3)(i) the individual is enrolled with: 
           (A) an eligible organization under a contract under section 
        1876 of the federal Social Security Act, United States Code, 
        title 42, section 1395mm (Medicare risk or cost); 
           (B) a similar organization operating under demonstration 
        project authority, effective for periods before April 1, 1999; 
           (C) an organization under an agreement under section 
        1833(a)(1)(A) of the federal Social Security Act, United States 
        Code, title 42, section 1395l(a)(1)(A) (health care prepayment 
        plan); or 
           (D) an organization under a Medicare Select policy under 
        section 62A.318 or the similar law of another state; and 
           (ii) the enrollment ceases under the same circumstances 
        that would permit discontinuance of an individual's election of 
        coverage under clause (2); 
           (4) the individual is enrolled under a Medicare supplement 
        policy, and the enrollment ceases because: 
           (i)(A) of the insolvency of the issuer or bankruptcy of the 
        nonissuer organization; or 
           (B) of other involuntary termination of coverage or 
        enrollment under the policy; 
           (ii) the issuer of the policy substantially violated a 
        material provision of the policy; or 
           (iii) the issuer, or an agent or other entity acting on the 
        issuer's behalf, materially misrepresented the policy's 
        provisions in marketing the policy to the individual; 
           (5)(i) the individual was enrolled under a Medicare 
        supplement policy and terminates that enrollment and 
        subsequently enrolls, for the first time, with any 
        Medicare+Choice organization under a Medicare+Choice plan under 
        Medicare part C; any eligible organization under a contract 
        under section 1876 of the federal Social Security Act, United 
        States Code, title 42, section 1395mm (Medicare risk or cost); 
        any similar organization operating under demonstration project 
        authority; an organization under an agreement under section 
        1833(a)(1)(A) of the federal Social Security Act, United States 
        Code, title 42, section 1395l(a)(1)(A) (health care prepayment 
        plan); any PACE provider under section 1894 of the federal 
        Social Security Act, or a Medicare Select policy under section 
        62A.318 or the similar law of another state; and 
           (ii) the subsequent enrollment under paragraph (a) item (i) 
        is terminated by the enrollee during any period within the first 
        12 months of such the subsequent enrollment during which the 
        enrollee is permitted to terminate the subsequent enrollment 
        under section 1851(e) of the federal Social Security Act; or 
           (6) the individual, upon first enrolling for benefits under 
        Medicare part B, enrolls in a Medicare+Choice plan under 
        Medicare part C, or with a PACE provider under section 1894 of 
        the federal Social Security Act, and disenrolls from the plan by 
        not later than 12 months after the effective date of enrollment. 
           (c)(1) In the case of an individual described in paragraph 
        (b), clause (1), the guaranteed issue period begins on the date 
        the individual receives a notice of termination or cessation of 
        all supplemental health benefits or, if a notice is not 
        received, notice that a claim has been denied because of a 
        termination or cessation, and ends 63 days after the date of the 
        applicable notice. 
           (2) In the case of an individual described in paragraph 
        (b), clause (2), (3), (5), or (6), whose enrollment is 
        terminated involuntarily, the guaranteed issue period begins on 
        the date that the individual receives a notice of termination 
        and ends 63 days after the date the applicable coverage is 
        terminated. 
           (3) In the case of an individual described in paragraph 
        (b), clause (4), item (i), the guaranteed issue period begins on 
        the earlier of:  (i) the date that the individual receives a 
        notice of termination, a notice of the issuer's bankruptcy or 
        insolvency, or other such similar notice if any; and (ii) the 
        date that the applicable coverage is terminated, and ends on the 
        date that is 63 days after the date the coverage is terminated. 
           (4) In the case of an individual described in paragraph 
        (b), clause (2), (4), (5), or (6), who disenrolls voluntarily, 
        the guaranteed issue period begins on the date that is 60 days 
        before the effective date of the disenrollment and ends on the 
        date that is 63 days after the effective date. 
           (5) In the case of an individual described in paragraph (b) 
        but not described in this paragraph, the guaranteed issue period 
        begins on the effective date of disenrollment and ends on the 
        date that is 63 days after the effective date. 
           (d)(1) In the case of an individual described in paragraph 
        (b), clause (5), or deemed to be so described, pursuant to this 
        paragraph, whose enrollment with an organization or provider 
        described in paragraph (b), clause (5), item (i), is 
        involuntarily terminated within the first 12 months of 
        enrollment, and who, without an intervening enrollment, enrolls 
        with another such organization or provider, the subsequent 
        enrollment is deemed to be an initial enrollment described in 
        paragraph (b), clause (5). 
           (2) In the case of an individual described in paragraph 
        (b), clause (6), or deemed to be so described, pursuant to this 
        paragraph, whose enrollment with a plan or in a program 
        described in paragraph (b), clause (6), is involuntarily 
        terminated within the first 12 months of enrollment, and who, 
        without an intervening enrollment, enrolls in another such plan 
        or program, the subsequent enrollment is deemed to be an initial 
        enrollment described in paragraph (b), clause (6). 
           (3) For purposes of paragraph (b), clauses (5) and (6), no 
        enrollment of an individual with an organization or provider 
        described in paragraph (b), clause (5), item (i), or with a plan 
        or in a program described in paragraph (b), clause (6), may be 
        deemed to be an initial enrollment under this paragraph after 
        the two-year period beginning on the date on which the 
        individual first enrolled with the organization, provider, plan, 
        or program. 
           (e) The Medicare supplement policy to which eligible 
        persons are entitled under: 
           (1) paragraph (b), clauses (1) to (4), is any Medicare 
        supplement policy that has a benefit package consisting of the 
        basic Medicare supplement plan described in section 62A.316, 
        paragraph (a), plus any combination of the three optional riders 
        described in section 62A.316, paragraph (b), clauses (1) to (3), 
        offered by any issuer; 
           (2) paragraph (b), clause (5), is the same Medicare 
        supplement policy in which the individual was most recently 
        previously enrolled, if available from the same issuer, or, if 
        not so available, any policy described in clause (1) offered by 
        any issuer; 
           (3) paragraph (b), clause (6), shall include any Medicare 
        supplement policy offered by any issuer. 
           (d) (f)(1) At the time of an event described in paragraph 
        (b), because of which an individual loses coverage or benefits 
        due to the termination of a contract or agreement, policy, or 
        plan, the organization that terminates the contract or 
        agreement, the issuer terminating the policy, or the 
        administrator of the plan being terminated, respectively, shall 
        notify the individual of the individual's rights under this 
        subdivision, and of the obligations of issuers of Medicare 
        supplement policies under paragraph (a).  The notice must be 
        communicated contemporaneously with the notification of 
        termination. 
           (2) At the time of an event described in paragraph (b), 
        because of which an individual ceases enrollment under a 
        contract or agreement, policy, or plan, the organization that 
        offers the contract or agreement, regardless of the basis for 
        the cessation of enrollment, the issuer offering the policy, or 
        the administrator of the plan, respectively, shall notify the 
        individual of the individual's rights under this subdivision, 
        and of the obligations of issuers of Medicare supplement 
        policies under paragraph (a).  The notice must be communicated 
        within ten working days of the issuer receiving notification of 
        disenrollment.  
           (e) (g) Reference in this subdivision to a situation in 
        which, or to a basis upon which, an individual's coverage has 
        been terminated does not provide authority under the laws of 
        this state for the termination in that situation or upon that 
        basis. 
           (f) (h) An individual's rights under this subdivision are 
        in addition to, and do not modify or limit, the individual's 
        rights under subdivision 1h. 
           Sec. 4.  Minnesota Statutes 2002, section 62A.31, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [MEDICARE PRESCRIPTION DRUG BENEFIT.] If Congress 
        enacts legislation creating a prescription drug benefit in the 
        Medicare program, nothing in this section or any other section 
        shall prohibit an issuer of a Medicare supplement policy from 
        offering this prescription drug benefit consistent with the 
        applicable federal law or regulations.  If an issuer offers the 
        federal benefit, such an offer shall be deemed to meet the 
        issuer's mandatory offer obligations under this section and may, 
        at the discretion of the issuer, constitute replacement coverage 
        as defined in subdivision 1i for any existing policy containing 
        a prescription drug benefit. 
           Sec. 5.  Minnesota Statutes 2002, section 62A.315, is 
        amended to read: 
           62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
        COVERAGE.] 
           The extended basic Medicare supplement plan must have a 
        level of coverage so that it will be certified as a qualified 
        plan pursuant to section 62E.07, and will provide: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital deductible and coinsurance amounts, and 100 percent of 
        all Medicare part A eligible expenses for hospitalization not 
        covered by Medicare; 
           (2) coverage for the daily copayment amount of Medicare 
        part A eligible expenses for the calendar year incurred for 
        skilled nursing facility care; 
           (3) coverage for the copayment coinsurance amount or in the 
        case of hospital outpatient department services paid under a 
        prospective payment system, the co-payment amount, of Medicare 
        eligible expenses under Medicare part B regardless of hospital 
        confinement, and the Medicare part B deductible amount; 
           (4) 80 percent of the usual and customary hospital and 
        medical expenses and supplies described in section 62E.06, 
        subdivision 1, not to exceed any charge limitation established 
        by the Medicare program or state law, the usual and customary 
        hospital and medical expenses and supplies, described in section 
        62E.06, subdivision 1, while in a foreign country, and 
        prescription drug expenses, not covered by Medicare; 
           (5) coverage for the reasonable cost of the first three 
        pints of blood, or equivalent quantities of packed red blood 
        cells as defined under federal regulations under Medicare parts 
        A and B, unless replaced in accordance with federal regulations; 
           (6) 100 percent of the cost of immunizations and routine 
        screening procedures for cancer, including mammograms and pap 
        smears; 
           (7) preventive medical care benefit:  coverage for the 
        following preventive health services: 
           (i) an annual clinical preventive medical history and 
        physical examination that may include tests and services from 
        clause (ii) and patient education to address preventive health 
        care measures; 
           (ii) any one or a combination of the following preventive 
        screening tests or preventive services, the frequency of which 
        is considered medically appropriate: 
           (A) fecal occult blood test and/or digital rectal 
        examination; 
           (B) dipstick urinalysis for hematuria, bacteriuria, and 
        proteinuria; 
           (C) pure tone (air only) hearing screening test 
        administered or ordered by a physician; 
           (D) serum cholesterol screening every five years; 
           (E) thyroid function test; 
           (F) diabetes screening; 
           (iii) any other tests or preventive measures determined 
        appropriate by the attending physician.  
           Reimbursement shall be for the actual charges up to 100 
        percent of the Medicare-approved amount for each service as if 
        Medicare were to cover the service as identified in American 
        Medical Association current procedural terminology (AMA CPT) 
        codes to a maximum of $120 annually under this benefit.  This 
        benefit shall not include payment for any procedure covered by 
        Medicare; 
           (8) at-home recovery benefit:  coverage for services to 
        provide short-term at-home assistance with activities of daily 
        living for those recovering from an illness, injury, or surgery: 
           (i) for purposes of this benefit, the following definitions 
        shall apply: 
           (A) "activities of daily living" include, but are not 
        limited to, bathing, dressing, personal hygiene, transferring, 
        eating, ambulating, assistance with drugs that are normally 
        self-administered, and changing bandages or other dressings; 
           (B) "care provider" means a duly qualified or licensed home 
        health aide/homemaker, personal care aide, or nurse provided 
        through a licensed home health care agency or referred by a 
        licensed referral agency or licensed nurses registry; 
           (C) "home" means a place used by the insured as a place of 
        residence, provided that the place would qualify as a residence 
        for home health care services covered by Medicare.  A hospital 
        or skilled nursing facility shall not be considered the 
        insured's place of residence; 
           (D) "at-home recovery visit" means the period of a visit 
        required to provide at-home recovery care, without limit on the 
        duration of the visit, except each consecutive four hours in a 
        24-hour period of services provided by a care provider is one 
        visit; 
           (ii) coverage requirements and limitations: 
           (A) at-home recovery services provided must be primarily 
        services that assist in activities of daily living; 
           (B) the insured's attending physician must certify that the 
        specific type and frequency of at-home recovery services are 
        necessary because of a condition for which a home care plan of 
        treatment was approved by Medicare; 
           (C) coverage is limited to: 
           (I) no more than the number and type of at-home recovery 
        visits certified as medically necessary by the insured's 
        attending physician.  The total number of at-home recovery 
        visits shall not exceed the number of Medicare-approved home 
        health care visits under a Medicare-approved home care plan of 
        treatment; 
           (II) the actual charges for each visit up to a maximum 
        reimbursement of $40 per visit; 
           (III) $1,600 per calendar year; 
           (IV) seven visits in any one week; 
           (V) care furnished on a visiting basis in the insured's 
        home; 
           (VI) services provided by a care provider as defined in 
        this section; 
           (VII) at-home recovery visits while the insured is covered 
        under the policy or certificate and not otherwise excluded; 
           (VIII) at-home recovery visits received during the period 
        the insured is receiving Medicare-approved home care services or 
        no more than eight weeks after the service date of the last 
        Medicare-approved home health care visit; 
           (iii) coverage is excluded for: 
           (A) home care visits paid for by Medicare or other 
        government programs; and 
           (B) care provided by family members, unpaid volunteers, or 
        providers who are not care providers. 
           Sec. 6.  Minnesota Statutes 2002, section 62A.316, is 
        amended to read: 
           62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
           (a) The basic Medicare supplement plan must have a level of 
        coverage that will provide: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital coinsurance amounts, and 100 percent of all Medicare 
        part A eligible expenses for hospitalization not covered by 
        Medicare, after satisfying the Medicare part A deductible; 
           (2) coverage for the daily copayment amount of Medicare 
        part A eligible expenses for the calendar year incurred for 
        skilled nursing facility care; 
           (3) coverage for the copayment coinsurance amount, or in 
        the case of outpatient department services paid under a 
        prospective payment system, the co-payment amount, of Medicare 
        eligible expenses under Medicare part B regardless of hospital 
        confinement, subject to the Medicare part B deductible amount; 
           (4) 80 percent of the hospital and medical expenses and 
        supplies incurred during travel outside the United States as a 
        result of a medical emergency; 
           (5) coverage for the reasonable cost of the first three 
        pints of blood, or equivalent quantities of packed red blood 
        cells as defined under federal regulations under Medicare parts 
        A and B, unless replaced in accordance with federal regulations; 
           (6) 100 percent of the cost of immunizations and routine 
        screening procedures for cancer screening including mammograms 
        and pap smears; and 
           (7) 80 percent of coverage for all physician prescribed 
        medically appropriate and necessary equipment and supplies used 
        in the management and treatment of diabetes.  Coverage must 
        include persons with gestational, type I, or type II diabetes. 
           (b) Only the following optional benefit riders may be added 
        to this plan: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital deductible amount; 
           (2) a minimum of 80 percent of eligible medical expenses 
        and supplies not covered by Medicare part B, not to exceed any 
        charge limitation established by the Medicare program or state 
        law; 
           (3) coverage for all of the Medicare part B annual 
        deductible; 
           (4) coverage for at least 50 percent, or the equivalent of 
        50 percent, of usual and customary prescription drug expenses; 
           (5) coverage for the following preventive health services: 
           (i) an annual clinical preventive medical history and 
        physical examination that may include tests and services from 
        clause (ii) and patient education to address preventive health 
        care measures; 
           (ii) any one or a combination of the following preventive 
        screening tests or preventive services, the frequency of which 
        is considered medically appropriate: 
           (A) fecal occult blood test and/or digital rectal 
        examination; 
           (B) dipstick urinalysis for hematuria, bacteriuria, and 
        proteinuria; 
           (C) pure tone (air only) hearing screening test, 
        administered or ordered by a physician; 
           (D) serum cholesterol screening every five years; 
           (E) thyroid function test; 
           (F) diabetes screening; 
           (iii) any other tests or preventive measures determined 
        appropriate by the attending physician. 
           Reimbursement shall be for the actual charges up to 100 
        percent of the Medicare-approved amount for each service, as if 
        Medicare were to cover the service as identified in American 
        Medical Association current procedural terminology (AMA CPT) 
        codes, to a maximum of $120 annually under this benefit.  This 
        benefit shall not include payment for a procedure covered by 
        Medicare; 
           (6) coverage for services to provide short-term at-home 
        assistance with activities of daily living for those recovering 
        from an illness, injury, or surgery: 
           (i) For purposes of this benefit, the following definitions 
        apply: 
           (A) "activities of daily living" include, but are not 
        limited to, bathing, dressing, personal hygiene, transferring, 
        eating, ambulating, assistance with drugs that are normally 
        self-administered, and changing bandages or other dressings; 
           (B) "care provider" means a duly qualified or licensed home 
        health aide/homemaker, personal care aid, or nurse provided 
        through a licensed home health care agency or referred by a 
        licensed referral agency or licensed nurses registry; 
           (C) "home" means a place used by the insured as a place of 
        residence, provided that the place would qualify as a residence 
        for home health care services covered by Medicare.  A hospital 
        or skilled nursing facility shall not be considered the 
        insured's place of residence; 
           (D) "at-home recovery visit" means the period of a visit 
        required to provide at-home recovery care, without limit on the 
        duration of the visit, except each consecutive four hours in a 
        24-hour period of services provided by a care provider is one 
        visit; 
           (ii) Coverage requirements and limitations: 
           (A) at-home recovery services provided must be primarily 
        services that assist in activities of daily living; 
           (B) the insured's attending physician must certify that the 
        specific type and frequency of at-home recovery services are 
        necessary because of a condition for which a home care plan of 
        treatment was approved by Medicare; 
           (C) coverage is limited to: 
           (I) no more than the number and type of at-home recovery 
        visits certified as necessary by the insured's attending 
        physician.  The total number of at-home recovery visits shall 
        not exceed the number of Medicare-approved home care visits 
        under a Medicare-approved home care plan of treatment; 
           (II) the actual charges for each visit up to a maximum 
        reimbursement of $40 per visit; 
           (III) $1,600 per calendar year; 
           (IV) seven visits in any one week; 
           (V) care furnished on a visiting basis in the insured's 
        home; 
           (VI) services provided by a care provider as defined in 
        this section; 
           (VII) at-home recovery visits while the insured is covered 
        under the policy or certificate and not otherwise excluded; 
           (VIII) at-home recovery visits received during the period 
        the insured is receiving Medicare-approved home care services or 
        no more than eight weeks after the service date of the last 
        Medicare-approved home health care visit; 
           (iii) Coverage is excluded for: 
           (A) home care visits paid for by Medicare or other 
        government programs; and 
           (B) care provided by family members, unpaid volunteers, or 
        providers who are not care providers; 
           (7) coverage for at least 50 percent, or the equivalent of 
        50 percent, of usual and customary prescription drug expenses to 
        a maximum of $1,200 paid by the issuer annually under this 
        benefit.  An issuer of Medicare supplement insurance policies 
        that elects to offer this benefit rider shall also make 
        available coverage that contains the rider specified in clause 
        (4). 
           Sec. 7.  Minnesota Statutes 2002, section 62A.65, 
        subdivision 7, is amended to read: 
           Subd. 7.  [SHORT-TERM COVERAGE.] (a) For purposes of this 
        section, "short-term coverage" means an individual health plan 
        that: 
           (1) is issued to provide coverage for a period of 185 days 
        or less, except that the health plan may permit coverage to 
        continue until the end of a period of hospitalization for a 
        condition for which the covered person was hospitalized on the 
        day that coverage would otherwise have ended; 
           (2) is nonrenewable, provided that the health carrier may 
        provide coverage for one or more subsequent periods that satisfy 
        clause (1), if the total of the periods of coverage do not 
        exceed a total of 185 365 days out of any 365-day 555-day 
        period, plus any additional days covered as a result of 
        hospitalization on the day that a period of coverage would 
        otherwise have ended; 
           (3) does not cover any preexisting conditions, including 
        ones that originated during a previous identical policy or 
        contract with the same health carrier where coverage was 
        continuous between the previous and the current policy or 
        contract; and 
           (4) is available with an immediate effective date without 
        underwriting upon receipt of a completed application indicating 
        eligibility under the health carrier's eligibility requirements, 
        provided that coverage that includes optional benefits may be 
        offered on a basis that does not meet this requirement. 
           (b) Short-term coverage is not subject to subdivisions 2 
        and 5.  Short-term coverage may exclude as a preexisting 
        condition any injury, illness, or condition for which the 
        covered person had medical treatment, symptoms, or any 
        manifestations before the effective date of the coverage, but 
        dependent children born or placed for adoption during the policy 
        period must not be subject to this provision.  
           (c) Notwithstanding subdivision 3, and section 62A.021, a 
        health carrier may combine short-term coverage with its most 
        commonly sold individual qualified plan, as defined in section 
        62E.02, other than short-term coverage, for purposes of 
        complying with the loss ratio requirement. 
           (d) The 185 365 day coverage limitation provided in 
        paragraph (a) applies to the total number of days of short-term 
        coverage that covers a person, regardless of the number of 
        policies, contracts, or health carriers that provide the 
        coverage.  A written application for short-term coverage must 
        ask the applicant whether the applicant has been covered by 
        short-term coverage by any health carrier within the 365 555 
        days immediately preceding the effective date of the coverage 
        being applied for.  Short-term coverage issued in violation of 
        the 185-day 365-day limitation is valid until the end of its 
        term and does not lose its status as short-term coverage, in 
        spite of the violation.  A health carrier that knowingly issues 
        short-term coverage in violation of the 185-day 365-day 
        limitation is subject to the administrative penalties otherwise 
        available to the commissioner of commerce or the commissioner of 
        health, as appropriate. 
           (e) Time spent under short-term coverage counts as time 
        spent under a preexisting condition limitation for purposes of 
        group or individual health plans, other than short-term 
        coverage, subsequently issued to that person, or to cover that 
        person, by any health carrier, if the person maintains 
        continuous coverage as defined in section 62L.02.  Short-term 
        coverage is a health plan and is qualifying coverage as defined 
        in section 62L.02.  Notwithstanding any other law to the 
        contrary, a health carrier is not required under any 
        circumstances to provide a person covered by short-term coverage 
        the right to obtain coverage on a guaranteed issue basis under 
        another health plan offered by the health carrier, as a result 
        of the person's enrollment in short-term coverage. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to policies issued on or 
        after that date. 
           Sec. 8.  Minnesota Statutes 2002, section 62D.095, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CO-PAYMENTS.] (a) A health maintenance contract 
        may impose a co-payment as authorized under Minnesota Rules, 
        part 4685.0801, or under this section.  
           (b) A health maintenance organization may impose a flat fee 
        co-payment on outpatient office visits not to exceed 40 percent 
        of the median provider's charges for similar services or goods 
        received by the enrollees as calculated under Minnesota Rules, 
        part 4685.0801.  A health maintenance organization may impose a 
        flat fee co-payment on outpatient prescription drugs not to 
        exceed 50 percent of the median provider's charges for similar 
        services or goods received by the enrollees as calculated under 
        Minnesota Rules, part 4685.0801.  
           (c) If a health maintenance contract is permitted to impose 
        a co-payment for preexisting health status under sections 62D.01 
        to 62D.30, these provisions may vary with respect to length of 
        enrollment in the health plan.  
           Sec. 9.  Minnesota Statutes 2002, section 62D.095, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [PUBLIC PROGRAMS.] This section does not apply to 
        the prepaid medical assistance program, the MinnesotaCare 
        program, the prepaid general assistance program, the federal 
        Medicare program, or the health plans provided through any of 
        those programs. 
           Sec. 10.  Minnesota Statutes 2002, section 62E.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NUMBER THREE PLAN.] A plan of health 
        coverage shall be certified as a number three qualified plan if 
        it otherwise meets the requirements established by chapters 62A, 
        62C, and 62Q, and the other laws of this state, whether or not 
        the policy is issued in Minnesota, and meets or exceeds the 
        following minimum standards: 
           (a) The minimum benefits for a covered individual shall, 
        subject to the other provisions of this subdivision, be equal to 
        at least 80 percent of the cost of covered services in excess of 
        an annual deductible which does not exceed $150 per person.  The 
        coverage shall include a limitation of $3,000 per person on 
        total annual out-of-pocket expenses for services covered under 
        this subdivision.  The coverage shall be subject to a maximum 
        lifetime benefit of not less than $1,000,000. 
           The $3,000 limitation on total annual out-of-pocket 
        expenses and the $1,000,000 maximum lifetime benefit shall not 
        be subject to change or substitution by use of an actuarially 
        equivalent benefit. 
           (b) Covered expenses shall be the usual and customary 
        charges for the following services and articles when prescribed 
        by a physician: 
           (1) hospital services; 
           (2) professional services for the diagnosis or treatment of 
        injuries, illnesses, or conditions, other than dental, which are 
        rendered by a physician or at the physician's direction; 
           (3) drugs requiring a physician's prescription; 
           (4) services of a nursing home for not more than 120 days 
        in a year if the services would qualify as reimbursable services 
        under Medicare; 
           (5) services of a home health agency if the services would 
        qualify as reimbursable services under Medicare; 
           (6) use of radium or other radioactive materials; 
           (7) oxygen; 
           (8) anesthetics; 
           (9) prostheses other than dental but including scalp hair 
        prostheses worn for hair loss suffered as a result of alopecia 
        areata; 
           (10) rental or purchase, as appropriate, of durable medical 
        equipment other than eyeglasses and hearing aids, unless 
        coverage is required under section 62Q.675; 
           (11) diagnostic x-rays and laboratory tests; 
           (12) oral surgery for partially or completely unerupted 
        impacted teeth, a tooth root without the extraction of the 
        entire tooth, or the gums and tissues of the mouth when not 
        performed in connection with the extraction or repair of teeth; 
           (13) services of a physical therapist; 
           (14) transportation provided by licensed ambulance service 
        to the nearest facility qualified to treat the condition; or a 
        reasonable mileage rate for transportation to a kidney dialysis 
        center for treatment; and 
           (15) services of an occupational therapist. 
           (c) Covered expenses for the services and articles 
        specified in this subdivision do not include the following: 
           (1) any charge for care for injury or disease either (i) 
        arising out of an injury in the course of employment and subject 
        to a workers' compensation or similar law, (ii) for which 
        benefits are payable without regard to fault under coverage 
        statutorily required to be contained in any motor vehicle, or 
        other liability insurance policy or equivalent self-insurance, 
        or (iii) for which benefits are payable under another policy of 
        accident and health insurance, Medicare, or any other 
        governmental program except as otherwise provided by section 
        62A.04, subdivision 3, clause (4); 
           (2) any charge for treatment for cosmetic purposes other 
        than for reconstructive surgery when such service is incidental 
        to or follows surgery resulting from injury, sickness, or other 
        diseases of the involved part or when such service is performed 
        on a covered dependent child because of congenital disease or 
        anomaly which has resulted in a functional defect as determined 
        by the attending physician; 
           (3) care which is primarily for custodial or domiciliary 
        purposes which would not qualify as eligible services under 
        Medicare; 
           (4) any charge for confinement in a private room to the 
        extent it is in excess of the institution's charge for its most 
        common semiprivate room, unless a private room is prescribed as 
        medically necessary by a physician, provided, however, that if 
        the institution does not have semiprivate rooms, its most common 
        semiprivate room charge shall be considered to be 90 percent of 
        its lowest private room charge; 
           (5) that part of any charge for services or articles 
        rendered or prescribed by a physician, dentist, or other health 
        care personnel which exceeds the prevailing charge in the 
        locality where the service is provided; and 
           (6) any charge for services or articles the provision of 
        which is not within the scope of authorized practice of the 
        institution or individual rendering the services or articles. 
           (d) The minimum benefits for a qualified plan shall 
        include, in addition to those benefits specified in clauses (a) 
        and (e), benefits for well baby care, effective July 1, 1980, 
        subject to applicable deductibles, coinsurance provisions, and 
        maximum lifetime benefit limitations. 
           (e) Effective July 1, 1979, the minimum benefits of a 
        qualified plan shall include, in addition to those benefits 
        specified in clause (a), a second opinion from a physician on 
        all surgical procedures expected to cost a total of $500 or more 
        in physician, laboratory, and hospital fees, provided that the 
        coverage need not include the repetition of any diagnostic tests.
           (f) Effective August 1, 1985, the minimum benefits of a 
        qualified plan must include, in addition to the benefits 
        specified in clauses (a), (d), and (e), coverage for special 
        dietary treatment for phenylketonuria when recommended by a 
        physician. 
           (g) Outpatient mental health coverage is subject to section 
        62A.152, subdivision 2.  
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to policies, contracts, and certificates issued or 
        renewed on or after that date. 
           Sec. 11.  Minnesota Statutes 2002, section 62J.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        terms defined in this subdivision have the meanings given. 
           (a) "Access" means the financial, temporal, and geographic 
        availability of health care to individuals who need it. 
           (b) "Capital expenditure" means an expenditure which, under 
        generally accepted accounting principles, is not properly 
        chargeable as an expense of operation and maintenance. 
           (c) "Cost" means the amount paid by consumers or third 
        party payers for health care services or products. 
           (d) "Date of the major spending commitment" means the date 
        the provider formally obligated itself to the major spending 
        commitment.  The obligation may be incurred by entering into a 
        contract, making a down payment, issuing bonds or entering a 
        loan agreement to provide financing for the major spending 
        commitment, or taking some other formal, tangible action 
        evidencing the provider's intention to make the major spending 
        commitment.  
           (e) "Health care service" means: 
           (1) a service or item that would be covered by the medical 
        assistance program under chapter 256B if provided in accordance 
        with medical assistance requirements to an eligible medical 
        assistance recipient; and 
           (2) a service or item that would be covered by medical 
        assistance except that it is characterized as experimental, 
        cosmetic, or voluntary. 
           "Health care service" does not include retail, 
        over-the-counter sales of nonprescription drugs and other retail 
        sales of health-related products that are not generally paid for 
        by medical assistance and other third-party coverage. 
           (f) "Major spending commitment" means an expenditure in 
        excess of $500,000 $1,000,000 for: 
           (1) acquisition of a unit of medical equipment; 
           (2) a capital expenditure for a single project for the 
        purposes of providing health care services, other than for the 
        acquisition of medical equipment; 
           (3) offering a new specialized service not offered before; 
           (4) planning for an activity that would qualify as a major 
        spending commitment under this paragraph; or 
           (5) a project involving a combination of two or more of the 
        activities in clauses (1) to (4). 
           The cost of acquisition of medical equipment, and the 
        amount of a capital expenditure, is the total cost to the 
        provider regardless of whether the cost is distributed over time 
        through a lease arrangement or other financing or payment 
        mechanism.  
           (g) "Medical equipment" means fixed and movable equipment 
        that is used by a provider in the provision of a health care 
        service.  "Medical equipment" includes, but is not limited to, 
        the following: 
           (1) an extracorporeal shock wave lithotripter; 
           (2) a computerized axial tomography (CAT) scanner; 
           (3) a magnetic resonance imaging (MRI) unit; 
           (4) a positron emission tomography (PET) scanner; and 
           (5) emergency and nonemergency medical transportation 
        equipment and vehicles. 
           (h) "New specialized service" means a specialized health 
        care procedure or treatment regimen offered by a provider that 
        was not previously offered by the provider, including, but not 
        limited to:  
           (1) cardiac catheterization services involving high-risk 
        patients as defined in the Guidelines for Coronary Angiography 
        established by the American Heart Association and the American 
        College of Cardiology; 
           (2) heart, heart-lung, liver, kidney, bowel, or pancreas 
        transplantation service, or any other service for 
        transplantation of any other organ; 
           (3) megavoltage radiation therapy; 
           (4) open heart surgery; 
           (5) neonatal intensive care services; and 
           (6) any new medical technology for which premarket approval 
        has been granted by the United States Food and Drug 
        Administration, excluding implantable and wearable devices. 
           Sec. 12.  Minnesota Statutes 2002, section 62J.23, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [AUDITS OF EXEMPT PROVIDERS.] The commissioner 
        may audit the referral patterns of providers that qualify for 
        exceptions under the federal Stark Law, United States Code, 
        title 42, section 1395nn.  The commissioner has access to 
        provider records according to section 144.99, subdivision 2.  
        The commissioner shall report to the legislature any audit 
        results that reveal a pattern of referrals by a provider for the 
        furnishing of health services to an entity with which the 
        provider has a direct or indirect financial relationship. 
           Sec. 13.  [62J.26] [EVALUATION OF PROPOSED HEALTH COVERAGE 
        MANDATES.] 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given unless the 
        context otherwise requires:  
           (1) "commissioner" means the commissioner of commerce; 
           (2) "health plan" means a health plan as defined in section 
        62A.011, subdivision 3, but includes coverage listed in clauses 
        (7) and (10) of that definition; 
           (3) "mandated health benefit proposal" means a proposal 
        that would statutorily require a health plan to do the following:
           (i) provide coverage or increase the amount of coverage for 
        the treatment of a particular disease, condition, or other 
        health care need; 
           (ii) provide coverage or increase the amount of coverage of 
        a particular type of health care treatment or service or of 
        equipment, supplies, or drugs used in connection with a health 
        care treatment or service; or 
           (iii) provide coverage for care delivered by a specific 
        type of provider. 
           "Mandated health benefit proposal" does not include health 
        benefit proposals amending the scope of practice of a licensed 
        health care professional. 
           Subd. 2.  [EVALUATION PROCESS AND CONTENT.] (a) The 
        commissioner, in consultation with the commissioners of health 
        and employee relations, must evaluate mandated health benefit 
        proposals as provided under subdivision 3.  
           (b) The purpose of the evaluation is to provide the 
        legislature with a complete and timely analysis of all 
        ramifications of any mandated health benefit proposal.  The 
        evaluation must include, in addition to other relevant 
        information, the following: 
           (1) scientific and medical information on the proposed 
        health benefit, on the potential for harm or benefit to the 
        patient, and on the comparative benefit or harm from alternative 
        forms of treatment; 
           (2) public health, economic, and fiscal impacts of the 
        proposed mandate on persons receiving health services in 
        Minnesota, on the relative cost-effectiveness of the benefit, 
        and on the health care system in general; 
           (3) the extent to which the service is generally utilized 
        by a significant portion of the population; 
           (4) the extent to which insurance coverage for the proposed 
        mandated benefit is already generally available; 
           (5) the extent to which the mandated coverage will increase 
        or decrease the cost of the service; and 
           (6) the commissioner may consider actuarial analysis done 
        by health insurers in determining the cost of the proposed 
        mandated benefit. 
           (c) The commissioner must summarize the nature and quality 
        of available information on these issues, and, if possible, must 
        provide preliminary information to the public.  The commissioner 
        may conduct research on these issues or may determine that 
        existing research is sufficient to meet the informational needs 
        of the legislature.  The commissioner may seek the assistance 
        and advice of researchers, community leaders, or other persons 
        or organizations with relevant expertise.  
           Subd. 3.  [REQUESTS FOR EVALUATION.] (a) Whenever a 
        legislative measure containing a mandated health benefit 
        proposal is introduced as a bill or offered as an amendment to a 
        bill, or is likely to be introduced as a bill or offered as an 
        amendment, a chair of any standing legislative committee that 
        has jurisdiction over the subject matter of the proposal may 
        request that the commissioner complete an evaluation of the 
        proposal under this section, to inform any committee of floor 
        action by either house of the legislature.  
           (b) The commissioner must conduct an evaluation described 
        in subdivision 2 of each mandated health benefit proposal for 
        which an evaluation is requested under paragraph (a), unless the 
        commissioner determines under paragraph (c) or subdivision 4 
        that priorities and resources do not permit its evaluation. 
           (c) If requests for evaluation of multiple proposals are 
        received, the commissioner must consult with the chairs of the 
        standing legislative committees having jurisdiction over the 
        subject matter of the mandated health benefit proposals to 
        prioritize the requests and establish a reporting date for each 
        proposal to be evaluated.  The commissioner is not required to 
        direct an unreasonable quantity of the commissioner's resources 
        to these evaluations.  
           Subd. 4.  [SOURCES OF FUNDING.] (a) The commissioner need 
        not use any funds for purposes of this section other than as 
        provided in this subdivision or as specified in an appropriation.
           (b) The commissioner may seek and accept funding from 
        sources other than the state to pay for evaluations under this 
        section to supplement or replace state appropriations.  Any 
        money received under this paragraph must be deposited in the 
        state treasury, credited to a separate account for this purpose 
        in the special revenue fund, and is appropriated to the 
        commissioner for purposes of this section. 
           (c) If a request for an evaluation under this section has 
        been made, the commissioner may use for purposes of the 
        evaluation: 
           (1) any funds appropriated to the commissioner specifically 
        for purposes of this section; or 
           (2) funds available under paragraph (b), if use of the 
        funds for evaluation of that mandated health benefit proposal is 
        consistent with any restrictions imposed by the source of the 
        funds. 
           (d) The commissioner must ensure that the source of the 
        funding has no influence on the process or outcome of the 
        evaluation. 
           Subd. 5.  [REPORT TO LEGISLATURE.] The commissioner must 
        submit a written report on the evaluation to the legislature no 
        later than 180 days after the request.  The report must be 
        submitted in compliance with sections 3.195 and 3.197. 
           [EFFECTIVE DATE.] This section is effective January 1, 2004.
           Sec. 14.  Minnesota Statutes 2002, section 62J.52, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [UNIFORM BILLING FORM HCFA 1450.] (a) On 
        and after January 1, 1996, all institutional inpatient hospital 
        services, ancillary services, institutionally owned or operated 
        outpatient services rendered by providers in Minnesota, and 
        institutional or noninstitutional home health services that are 
        not being billed using an equivalent electronic billing format, 
        must be billed using the uniform billing form HCFA 1450, except 
        as provided in subdivision 5. 
           (b) The instructions and definitions for the use of the 
        uniform billing form HCFA 1450 shall be in accordance with the 
        uniform billing form manual specified by the commissioner.  In 
        promulgating these instructions, the commissioner may utilize 
        the manual developed by the National Uniform Billing Committee, 
        as adopted and finalized by the Minnesota uniform billing 
        committee.  
           (c) Services to be billed using the uniform billing form 
        HCFA 1450 include:  institutional inpatient hospital services 
        and distinct units in the hospital such as psychiatric unit 
        services, physical therapy unit services, swing bed (SNF)  
        services, inpatient state psychiatric hospital services, 
        inpatient skilled nursing facility services, home health 
        services (Medicare part A), and hospice services; ancillary 
        services, where benefits are exhausted or patient has no 
        Medicare part A, from hospitals, state psychiatric hospitals, 
        skilled nursing facilities, and home health (Medicare part B); 
        institutional owned or operated outpatient services such as 
        waivered services, hospital outpatient services, including 
        ambulatory surgical center services, hospital referred 
        laboratory services, hospital-based ambulance services, and 
        other hospital outpatient services, skilled nursing facilities, 
        home health, including infusion therapy, freestanding renal 
        dialysis centers, comprehensive outpatient rehabilitation 
        facilities (CORF), outpatient rehabilitation facilities (ORF), 
        rural health clinics, and community mental health centers; home 
        health services such as home health intravenous therapy 
        providers, waivered services, personal care attendants, and 
        hospice; and any other health care provider certified by the 
        Medicare program to use this form. 
           (d) On and after January 1, 1996, a mother and newborn 
        child must be billed separately, and must not be combined on one 
        claim form. 
           Sec. 15.  Minnesota Statutes 2002, section 62J.52, 
        subdivision 2, is amended to read: 
           Subd. 2.  [UNIFORM BILLING FORM HCFA 1500.] (a) On and 
        after January 1, 1996, all noninstitutional health care services 
        rendered by providers in Minnesota except dental or pharmacy 
        providers, that are not currently being billed using an 
        equivalent electronic billing format, must be billed using the 
        health insurance claim form HCFA 1500, except as provided in 
        subdivision 5. 
           (b) The instructions and definitions for the use of the 
        uniform billing form HCFA 1500 shall be in accordance with the 
        manual developed by the administrative uniformity committee 
        entitled standards for the use of the HCFA 1500 form, dated 
        February 1994, as further defined by the commissioner. 
           (c) Services to be billed using the uniform billing form 
        HCFA 1500 include physician services and supplies, durable 
        medical equipment, noninstitutional ambulance services, 
        independent ancillary services including occupational therapy, 
        physical therapy, speech therapy and audiology, home infusion 
        therapy, podiatry services, optometry services, mental health 
        licensed professional services, substance abuse licensed 
        professional services, nursing practitioner professional 
        services, certified registered nurse anesthetists, 
        chiropractors, physician assistants, laboratories, medical 
        suppliers, and other health care providers such as day activity 
        centers and freestanding ambulatory surgical centers. 
           Sec. 16.  Minnesota Statutes 2002, section 62J.692, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATION PROCESS.] (a) A clinical medical 
        education program conducted in Minnesota by a teaching 
        institution to train physicians, doctor of pharmacy 
        practitioners, dentists, chiropractors, or physician assistants 
        is eligible for funds under subdivision 4 if the program: 
           (1) is funded, in part, by patient care revenues; 
           (2) occurs in patient care settings that face increased 
        financial pressure as a result of competition with nonteaching 
        patient care entities; and 
           (3) emphasizes primary care or specialties that are in 
        undersupply in Minnesota. 
           (b) A clinical medical education program for advanced 
        practice nursing is eligible for funds under subdivision 4 if 
        the program meets the eligibility requirements in paragraph (a), 
        clauses (1) to (3), and is sponsored by the University of 
        Minnesota Academic Health Center, the Mayo Foundation, or 
        institutions that are part of the Minnesota state colleges and 
        universities system or members of the Minnesota private college 
        council.  
           (c) Applications must be submitted to the commissioner by a 
        sponsoring institution on behalf of an eligible clinical medical 
        education program and must be received by October 31 of each 
        year for distribution in the following year.  An application for 
        funds must contain the following information: 
           (1) the official name and address of the sponsoring 
        institution and the official name and site address of the 
        clinical medical education programs on whose behalf the 
        sponsoring institution is applying; 
           (2) the name, title, and business address of those persons 
        responsible for administering the funds; 
           (3) for each clinical medical education program for which 
        funds are being sought; the type and specialty orientation of 
        trainees in the program; the name, site address, and medical 
        assistance provider number of each training site used in the 
        program; the total number of trainees at each training site; and 
        the total number of eligible trainee FTEs at each site.  Only 
        those training sites that host 0.5 FTE or more eligible trainees 
        for a program may be included in the program's application; and 
           (4) other supporting information the commissioner deems 
        necessary to determine program eligibility based on the criteria 
        in paragraph paragraphs (a) and (b) and to ensure the equitable 
        distribution of funds.  
           (c) (d) An application must include the information 
        specified in clauses (1) to (3) for each clinical medical 
        education program on an annual basis for three consecutive 
        years.  After that time, an application must include the 
        information specified in clauses (1) to (3) in the first year of 
        each biennium:  
           (1) audited clinical training costs per trainee for each 
        clinical medical education program when available or estimates 
        of clinical training costs based on audited financial data; 
           (2) a description of current sources of funding for 
        clinical medical education costs, including a description and 
        dollar amount of all state and federal financial support, 
        including Medicare direct and indirect payments; and 
           (3) other revenue received for the purposes of clinical 
        training.  
           (d) (e) An applicant that does not provide information 
        requested by the commissioner shall not be eligible for funds 
        for the current funding cycle. 
           Sec. 17.  Minnesota Statutes 2002, section 62J.692, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
        shall annually distribute 90 percent of available medical 
        education funds to all qualifying applicants based on the 
        following criteria a distribution formula that reflects a 
        summation of two factors:  
           (1) total medical education funds available for 
        distribution; an education factor, which is determined by the 
        total number of eligible trainee FTEs and the total statewide 
        average costs per trainee, by type of trainee, in each clinical 
        medical education program; and 
           (2) total number of eligible trainee FTEs in each clinical 
        medical education program; and 
           (3) the statewide average cost per trainee as determined by 
        the application information provided in the first year of the 
        biennium, by type of trainee, in each clinical medical education 
        program. a public program volume factor, which is determined by 
        the total volume of public program revenue received by each 
        training site as a percentage of all public program revenue 
        received by all training sites in the fund pool.  
           In this formula, the education factor is weighted at 67 
        percent and the public program volume factor is weighted at 33 
        percent. 
           Public program revenue for the distribution formula 
        includes revenue from medical assistance, prepaid medical 
        assistance, general assistance medical care, and prepaid general 
        assistance medical care.  Training sites that receive no public 
        program revenue are ineligible for funds available under this 
        paragraph.  Total statewide average costs per trainee for 
        medical residents is based on audited clinical training costs 
        per trainee in primary care clinical medical education programs 
        for medical residents.  Total statewide average costs per 
        trainee for dental residents is based on audited clinical 
        training costs per trainee in clinical medical education 
        programs for dental students.  Total statewide average costs per 
        trainee for pharmacy residents is based on audited clinical 
        training costs per trainee in clinical medical education 
        programs for pharmacy students. 
           (b) The commissioner shall annually distribute ten percent 
        of total available medical education funds to all qualifying 
        applicants based on the percentage received by each applicant 
        under paragraph (a).  These funds are to be used to offset 
        clinical education costs at eligible clinical training sites 
        based on criteria developed by the clinical medical education 
        program.  Applicants may choose to distribute funds allocated 
        under this paragraph based on the distribution formula described 
        in paragraph (a).  Applicants may also choose to distribute 
        funds to clinical training sites with a valid Minnesota medical 
        assistance identification number that host fewer than 0.5 
        eligible trainee FTE's for a clinical medical education program. 
           (c) Funds distributed shall not be used to displace current 
        funding appropriations from federal or state sources.  
           (c) (d) Funds shall be distributed to the sponsoring 
        institutions indicating the amount to be distributed to each of 
        the sponsor's clinical medical education programs based on the 
        criteria in this subdivision and in accordance with the 
        commissioner's approval letter.  Each clinical medical education 
        program must distribute funds allocated under paragraph (a) to 
        the training sites as specified in the commissioner's approval 
        letter.  Sponsoring institutions, which are accredited through 
        an organization recognized by the department of education or the 
        Centers for Medicare and Medicaid Services, may contract 
        directly with training sites to provide clinical training.  To 
        ensure the quality of clinical training, those accredited 
        sponsoring institutions must: 
           (1) develop contracts specifying the terms, expectations, 
        and outcomes of the clinical training conducted at sites; and 
           (2) take necessary action if the contract requirements are 
        not met.  Action may include the withholding of payments under 
        this section or the removal of students from the site.  
           (d) (e) Any funds not distributed in accordance with the 
        commissioner's approval letter must be returned to the medical 
        education and research fund within 30 days of receiving notice 
        from the commissioner.  The commissioner shall distribute 
        returned funds to the appropriate training sites in accordance 
        with the commissioner's approval letter. 
           (e) The commissioner shall distribute by June 30 of each 
        year an amount equal to the funds transferred under section 
        62J.694, subdivision 2a, paragraph (b), plus five percent 
        interest to the University of Minnesota board of regents for the 
        costs of the academic health center as specified under section 
        62J.694, subdivision 2a, paragraph (a). 
           Sec. 18.  Minnesota Statutes 2002, section 62J.692, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPORT.] (a) Sponsoring institutions receiving 
        funds under this section must sign and submit a medical 
        education grant verification report (GVR) to verify that the 
        correct grant amount was forwarded to each eligible training 
        site.  If the sponsoring institution fails to submit the GVR by 
        the stated deadline, or to request and meet the deadline for an 
        extension, the sponsoring institution is required to return the 
        full amount of funds received to the commissioner within 30 days 
        of receiving notice from the commissioner.  The commissioner 
        shall distribute returned funds to the appropriate training 
        sites in accordance with the commissioner's approval letter.  
           (b) The reports must provide verification of the 
        distribution of the funds and must include:  
           (1) the total number of eligible trainee FTEs in each 
        clinical medical education program; 
           (2) the name of each funded program and, for each program, 
        the dollar amount distributed to each training site; 
           (3) documentation of any discrepancies between the initial 
        grant distribution notice included in the commissioner's 
        approval letter and the actual distribution; 
           (4) a statement by the sponsoring institution describing 
        the distribution of funds allocated under subdivision 4, 
        paragraph (b), including information on which clinical training 
        sites received funding and the rationale used for determining 
        funding priorities; 
           (5) a statement by the sponsoring institution stating that 
        the completed grant verification report is valid and accurate; 
        and 
           (5) (6) other information the commissioner, with advice 
        from the advisory committee, deems appropriate to evaluate the 
        effectiveness of the use of funds for medical education.  
           (c) By February 15 of each year, the commissioner, with 
        advice from the advisory committee, shall provide an annual 
        summary report to the legislature on the implementation of this 
        section. 
           Sec. 19.  Minnesota Statutes 2002, section 62J.692, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TRANSFERS FROM THE COMMISSIONER OF HUMAN 
        SERVICES.] (a) The amount transferred according to section 
        256B.69, subdivision 5c, paragraph (a), clause (1), shall be 
        distributed by the commissioner annually to clinical medical 
        education programs that meet the qualifications of subdivision 3 
        based on a distribution formula that reflects a summation of two 
        factors: the formula in subdivision 4, paragraph (a). 
           (1) an education factor, which is determined by the total 
        number of eligible trainee FTEs and the total statewide average 
        costs per trainee, by type of trainee, in each clinical medical 
        education program; and 
           (2) a public program volume factor, which is determined by 
        the total volume of public program revenue received by each 
        training site as a percentage of all public program revenue 
        received by all training sites in the fund pool created under 
        this subdivision.  
           In this formula, the education factor shall be weighted at 
        50 percent and the public program volume factor shall be 
        weighted at 50 percent. 
           Public program revenue for the distribution formula shall 
        include revenue from medical assistance, prepaid medical 
        assistance, general assistance medical care, and prepaid general 
        assistance medical care.  Training sites that receive no public 
        program revenue shall be ineligible for funds available under 
        this paragraph. 
           (b) Fifty percent of the amount transferred according to 
        section 256B.69, subdivision 5c, paragraph (a), clause (2), 
        shall be distributed by the commissioner to the University of 
        Minnesota board of regents for the purposes described in 
        sections 137.38 to 137.40.  Of the remaining amount transferred 
        according to section 256B.69, subdivision 5c, paragraph (a), 
        clause (2), 24 percent of the amount shall be distributed by the 
        commissioner to the Hennepin County Medical Center for clinical 
        medical education.  The remaining 26 percent of the amount 
        transferred shall be distributed by the commissioner in 
        accordance with subdivision 7a.  If the federal approval is not 
        obtained for the matching funds under section 256B.69, 
        subdivision 5c, paragraph (a), clause (2), 100 percent of the 
        amount transferred under this paragraph shall be distributed by 
        the commissioner to the University of Minnesota board of regents 
        for the purposes described in sections 137.38 to 137.40.  
           (c) The amount transferred according to section 256B.69, 
        subdivision 5c, paragraph (a), clause (3), shall be distributed 
        by the commissioner upon receipt to the University of Minnesota 
        board of regents for the purposes of clinical graduate medical 
        education. 
           Sec. 20.  Minnesota Statutes 2002, section 62J.694, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [EFFECTIVE DATE.] This section is only in effect 
        if there are funds available in the medical education endowment 
        fund.  
           Sec. 21.  Minnesota Statutes 2002, section 62L.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BENEFITS.] The medical services and supplies 
        listed in this subdivision are the benefits that must be covered 
        by the small employer plans described in subdivisions 2 and 3.  
        Benefits under this subdivision may be provided through the 
        managed care procedures practiced by health carriers:  
           (1) inpatient and outpatient hospital services, excluding 
        services provided for the diagnosis, care, or treatment of 
        chemical dependency or a mental illness or condition, other than 
        those conditions specified in clauses (10), (11), and (12).  The 
        health care services required to be covered under this clause 
        must also be covered if rendered in a nonhospital environment, 
        on the same basis as coverage provided for those same treatments 
        or services if rendered in a hospital, provided, however, that 
        this sentence must not be interpreted as expanding the types or 
        extent of services covered; 
           (2) physician, chiropractor, and nurse practitioner 
        services for the diagnosis or treatment of illnesses, injuries, 
        or conditions; 
           (3) diagnostic x-rays and laboratory tests; 
           (4) ground transportation provided by a licensed ambulance 
        service to the nearest facility qualified to treat the 
        condition, or as otherwise required by the health carrier; 
           (5) services of a home health agency if the services 
        qualify as reimbursable services under Medicare; 
           (6) services of a private duty registered nurse if 
        medically necessary, as determined by the health carrier; 
           (7) the rental or purchase, as appropriate, of durable 
        medical equipment, other than eyeglasses and hearing aids, 
        unless coverage is required under section 62Q.675; 
           (8) child health supervision services up to age 18, as 
        defined in section 62A.047; 
           (9) maternity and prenatal care services, as defined in 
        sections 62A.041 and 62A.047; 
           (10) inpatient hospital and outpatient services for the 
        diagnosis and treatment of certain mental illnesses or 
        conditions, as defined by the International Classification of 
        Diseases-Clinical Modification (ICD-9-CM), seventh edition 
        (1990) and as classified as ICD-9 codes 295 to 299; 
           (11) ten hours per year of outpatient mental health 
        diagnosis or treatment for illnesses or conditions not described 
        in clause (10); 
           (12) 60 hours per year of outpatient treatment of chemical 
        dependency; and 
           (13) 50 percent of eligible charges for prescription drugs, 
        up to a separate annual maximum out-of-pocket expense of $1,000 
        per individual for prescription drugs, and 100 percent of 
        eligible charges thereafter.  
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to policies, contracts, and certificates issued or 
        renewed on or after that date. 
           Sec. 22.  Minnesota Statutes 2002, section 62Q.19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DESIGNATION.] (a) The commissioner shall 
        designate essential community providers.  The criteria for 
        essential community provider designation shall be the following: 
           (1) a demonstrated ability to integrate applicable 
        supportive and stabilizing services with medical care for 
        uninsured persons and high-risk and special needs populations, 
        underserved, and other special needs populations; and 
           (2) a commitment to serve low-income and underserved 
        populations by meeting the following requirements: 
           (i) has nonprofit status in accordance with chapter 317A; 
           (ii) has tax exempt status in accordance with the Internal 
        Revenue Service Code, section 501(c)(3); 
           (iii) charges for services on a sliding fee schedule based 
        on current poverty income guidelines; and 
           (iv) does not restrict access or services because of a 
        client's financial limitation; 
           (3) status as a local government unit as defined in section 
        62D.02, subdivision 11, a hospital district created or 
        reorganized under sections 447.31 to 447.37, an Indian tribal 
        government, an Indian health service unit, or a community health 
        board as defined in chapter 145A; 
           (4) a former state hospital that specializes in the 
        treatment of cerebral palsy, spina bifida, epilepsy, closed head 
        injuries, specialized orthopedic problems, and other disabling 
        conditions; or 
           (5) a rural hospital that has qualified for a sole 
        community hospital financial assistance grant in the past three 
        years under section 144.1484, subdivision 1.  For these rural 
        hospitals, the essential community provider designation applies 
        to all health services provided, including both inpatient and 
        outpatient services.  For purposes of this section, "sole 
        community hospital" means a rural hospital that: 
           (i) is eligible to be classified as a sole community 
        hospital according to Code of Federal Regulations, title 42, 
        section 412.92, or is located in a community with a population 
        of less than 5,000 and located more than 25 miles from a like 
        hospital currently providing acute short-term services; 
           (ii) has experienced net operating income losses in two of 
        the previous three most recent consecutive hospital fiscal years 
        for which audited financial information is available; and 
           (iii) consists of 40 or fewer licensed beds. 
           (b) Prior to designation, the commissioner shall publish 
        the names of all applicants in the State Register.  The public 
        shall have 30 days from the date of publication to submit 
        written comments to the commissioner on the application.  No 
        designation shall be made by the commissioner until the 30-day 
        period has expired. 
           (c) The commissioner may designate an eligible provider as 
        an essential community provider for all the services offered by 
        that provider or for specific services designated by the 
        commissioner. 
           (d) For the purpose of this subdivision, supportive and 
        stabilizing services include at a minimum, transportation, child 
        care, cultural, and linguistic services where appropriate. 
           Sec. 23.  Minnesota Statutes 2002, section 62Q.19, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] (a) Any provider may apply to the 
        commissioner for designation as an essential community provider 
        by submitting an application form developed by the 
        commissioner.  Except as provided in paragraph 
        paragraphs (d) and (e), applications must be accepted within two 
        years after the effective date of the rules adopted by the 
        commissioner to implement this section. 
           (b) Each application submitted must be accompanied by an 
        application fee in an amount determined by the commissioner.  
        The fee shall be no more than what is needed to cover the 
        administrative costs of processing the application. 
           (c) The name, address, contact person, and the date by 
        which the commissioner's decision is expected to be made shall 
        be classified as public data under section 13.41.  All other 
        information contained in the application form shall be 
        classified as private data under section 13.41 until the 
        application has been approved, approved as modified, or denied 
        by the commissioner.  Once the decision has been made, all 
        information shall be classified as public data unless the 
        applicant designates and the commissioner determines that the 
        information contains trade secret information. 
           (d) The commissioner shall accept an application for 
        designation as an essential community provider until June 30, 
        2001, from: 
           (1) one applicant that is a nonprofit community health care 
        facility, certified as a medical assistance provider effective 
        April 1, 1998, that provides culturally competent health care to 
        an underserved Southeast Asian immigrant and refugee population 
        residing in the immediate neighborhood of the facility; 
           (2) one applicant that is a nonprofit home health care 
        provider, certified as a Medicare and a medical assistance 
        provider that provides culturally competent home health care 
        services to a low-income culturally diverse population; 
           (3) up to five applicants that are nonprofit community 
        mental health centers certified as medical assistance providers 
        that provide mental health services to children with serious 
        emotional disturbance and their families or to adults with 
        serious and persistent mental illness; and 
           (4) one applicant that is a nonprofit provider certified as 
        a medical assistance provider that provides mental health, child 
        development, and family services to children with physical and 
        mental health disorders and their families. 
           (e) The commissioner shall accept an application for 
        designation as an essential community provider until June 30, 
        2003, from one applicant that is a nonprofit community clinic 
        located in Hennepin county that provides health care to an 
        underserved American Indian population and that is collaborating 
        with other neighboring organizations on a community diabetes 
        project and an immunization project. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 24.  [62Q.675] [HEARING AIDS; PERSONS 18 OR YOUNGER.] 
           A health plan must cover hearing aids for individuals 18 
        years of age or younger for hearing loss due to functional 
        congenital malformation of the ears that is not correctable by 
        other covered procedures.  Coverage required under this section 
        is limited to one hearing aid in each ear every three years.  No 
        special deductible, coinsurance, co-payment, or other limitation 
        on the coverage under this section that is not generally 
        applicable to other coverages under the plan may be imposed. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to policies, contracts, and certificates issued or 
        renewed on or after that date. 
           Sec. 25.  Minnesota Statutes 2002, section 144.1222, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [FEES.] All plans and specifications for public 
        swimming pool and spa construction, installation, or alteration 
        or requests for a variance that are submitted to the 
        commissioner according to Minnesota Rules, part 4717.3975, shall 
        be accompanied by the appropriate fees.  If the commissioner 
        determines, upon review of the plans, that inadequate fees were 
        paid, the necessary additional fees shall be paid before plan 
        approval.  For purposes of determining fees, a project is 
        defined as a proposal to construct or install a public pool, 
        spa, special purpose pool, or wading pool and all associated 
        water treatment equipment and drains, gutters, decks, water 
        recreation features, spray pads, and those design and safety 
        features that are within five feet of any pool or spa.  The 
        commissioner shall charge the following fees for plan review and 
        inspection of public pools and spas and for requests for 
        variance from the public pool and spa rules:  
           (1) each spa pool, $500; 
           (2) projects valued at $250,000 or less, a minimum of $800 
        per pool plus:  
           (i) for each slide, an additional $400; and 
           (ii) for each spa pool, an additional $500; 
           (3) projects valued at $250,000 or more, 0.5 percent of 
        documented estimated project cost to a maximum fee of $10,000; 
           (4) alterations to an existing pool without changing the 
        size or configuration of the pool, $400; 
           (5) removal or replacement of pool disinfection equipment 
        only, $75; and 
           (6) request for variance from the public pool and spa 
        rules, $500. 
           Sec. 26.  Minnesota Statutes 2002, section 144.125, is 
        amended to read: 
           144.125 [TESTS OF INFANTS FOR INBORN METABOLIC ERRORS 
        HERITABLE AND CONGENITAL DISORDERS.] 
           Subdivision 1.  [DUTY TO PERFORM TESTING.] It is the duty 
        of (1) the administrative officer or other person in charge of 
        each institution caring for infants 28 days or less of age, (2) 
        the person required in pursuance of the provisions of section 
        144.215, to register the birth of a child, or (3) the nurse 
        midwife or midwife in attendance at the birth, to arrange to 
        have administered to every infant or child in its care tests for 
        inborn errors of metabolism in accordance with heritable and 
        congenital disorders according to subdivision 2 and rules 
        prescribed by the state commissioner of health.  In determining 
        which tests must be administered, the commissioner shall take 
        into consideration the adequacy of laboratory methods to detect 
        the inborn metabolic error, the ability to treat or prevent 
        medical conditions caused by the inborn metabolic error, and the 
        severity of the medical conditions caused by the inborn 
        metabolic error.  Testing and the recording and reporting of 
        test results shall be performed at the times and in the manner 
        prescribed by the commissioner of health.  The commissioner 
        shall charge laboratory service fees so that the total of fees 
        collected will approximate the costs of conducting the tests and 
        implementing and maintaining a system to follow-up infants with 
        inborn metabolic errors heritable or congenital disorders.  The 
        laboratory service fee is $61 per specimen.  Costs associated 
        with capital expenditures and the development of new procedures 
        may be prorated over a three-year period when calculating the 
        amount of the fees. 
           Subd. 2.  [DETERMINATION OF TESTS TO BE ADMINISTERED.] The 
        commissioner shall periodically revise the list of tests to be 
        administered for determining the presence of a heritable or 
        congenital disorder.  Revisions to the list shall reflect 
        advances in medical science, new and improved testing methods, 
        or other factors that will improve the public health.  In 
        determining whether a test must be administered, the 
        commissioner shall take into consideration the adequacy of 
        laboratory methods to detect the heritable or congenital 
        disorder, the ability to treat or prevent medical conditions 
        caused by the heritable or congenital disorder, and the severity 
        of the medical conditions caused by the heritable or congenital 
        disorder.  The list of tests to be performed may be revised if 
        the changes are recommended by the advisory committee 
        established under section 144.1255, approved by the 
        commissioner, and published in the State Register.  The revision 
        is exempt from the rulemaking requirements in chapter 14 and 
        sections 14.385 and 14.386 do not apply.  
           Subd. 3.  [OBJECTION OF PARENTS TO TEST.] Persons with a 
        duty to perform testing under subdivision 1 shall advise parents 
        of infants (1) that the blood or tissue samples used to perform 
        testing thereunder as well as the results of such testing may be 
        retained by the department of health, (2) the benefit of 
        retaining the blood or tissue sample, and (3) that the following 
        options are available to them with respect to the testing: 
           (i) to decline to have the tests, or 
           (ii) to elect to have the tests but to require that all 
        blood samples and records of test results be destroyed within 24 
        months of the testing.  If the parents of an infant object in 
        writing to testing for heritable and congenital disorders or 
        elect to require that blood samples and test results be 
        destroyed, the objection or election shall be recorded on a form 
        that is signed by a parent or legal guardian and made part of 
        the infant's medical record.  A written objection exempts an 
        infant from the requirements of this section and section 144.128.
           Sec. 27.  [144.1255] [ADVISORY COMMITTEE ON HERITABLE AND 
        CONGENITAL DISORDERS.] 
           Subdivision 1.  [CREATION AND MEMBERSHIP.] (a) By July 1, 
        2003, the commissioner of health shall appoint an advisory 
        committee to provide advice and recommendations to the 
        commissioner concerning tests and treatments for heritable and 
        congenital disorders found in newborn children.  Membership of 
        the committee shall include, but not be limited to, at least one 
        member from each of the following representative groups:  
           (1) parents and other consumers; 
           (2) primary care providers; 
           (3) clinicians and researchers specializing in newborn 
        diseases and disorders; 
           (4) genetic counselors; 
           (5) birth hospital representatives; 
           (6) newborn screening laboratory professionals; 
           (7) nutritionists; and 
           (8) other experts as needed representing related fields 
        such as emerging technologies and health insurance. 
           (b) The terms and removal of members are governed by 
        section 15.059.  Members shall not receive per diems but shall 
        be compensated for expenses.  Notwithstanding section 15.059, 
        subdivision 5, the advisory committee does not expire. 
           Subd. 2.  [FUNCTION AND OBJECTIVES.] The committee's 
        activities include, but are not limited to:  
           (1) collection of information on the efficacy and 
        reliability of various tests for heritable and congenital 
        disorders; 
           (2) collection of information on the availability and 
        efficacy of treatments for heritable and congenital disorders; 
           (3) collection of information on the severity of medical 
        conditions caused by heritable and congenital disorders; 
           (4) discussion and assessment of the benefits of performing 
        tests for heritable or congenital disorders as compared to the 
        costs, treatment limitations, or other potential disadvantages 
        of requiring the tests; 
           (5) discussion and assessment of ethical considerations 
        surrounding the testing, treatment, and handling of data and 
        specimens generated by the testing requirements of sections 
        144.125 to 144.128; and 
           (6) providing advice and recommendations to the 
        commissioner concerning tests and treatments for heritable and 
        congenital disorders found in newborn children. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 28.  Minnesota Statutes 2002, section 144.128, is 
        amended to read: 
           144.128 [TREATMENT FOR POSITIVE DIAGNOSIS, REGISTRY OF 
        CASES COMMISSIONER'S DUTIES.] 
           The commissioner shall: 
           (1) notify the physicians of newborns tested of the results 
        of the tests performed; 
           (1) (2) make arrangements referrals for the necessary 
        treatment of diagnosed cases of hemoglobinopathy, 
        phenylketonuria, and other inborn errors of metabolism heritable 
        or congenital disorders when treatment is indicated and the 
        family is uninsured and, because of a lack of available income, 
        is unable to pay the cost of the treatment; 
           (2) (3) maintain a registry of the cases of 
        hemoglobinopathy, phenylketonuria, and other inborn errors of 
        metabolism heritable and congenital disorders detected by the 
        screening program for the purpose of follow-up services; and 
           (3) (4) adopt rules to carry out section 144.126 and this 
        section sections 144.125 to 144.128. 
           Sec. 29.  Minnesota Statutes 2002, section 144.1481, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT; MEMBERSHIP.] The 
        commissioner of health shall establish a 15-member rural health 
        advisory committee.  The committee shall consist of the 
        following members, all of whom must reside outside the 
        seven-county metropolitan area, as defined in section 473.121, 
        subdivision 2: 
           (1) two members from the house of representatives of the 
        state of Minnesota, one from the majority party and one from the 
        minority party; 
           (2) two members from the senate of the state of Minnesota, 
        one from the majority party and one from the minority party; 
           (3) a volunteer member of an ambulance service based 
        outside the seven-county metropolitan area; 
           (4) a representative of a hospital located outside the 
        seven-county metropolitan area; 
           (5) a representative of a nursing home located outside the 
        seven-county metropolitan area; 
           (6) a medical doctor or doctor of osteopathy licensed under 
        chapter 147; 
           (7) a midlevel practitioner; 
           (8) a registered nurse or licensed practical nurse; 
           (9) a licensed health care professional from an occupation 
        not otherwise represented on the committee; 
           (10) a representative of an institution of higher education 
        located outside the seven-county metropolitan area that provides 
        training for rural health care providers; and 
           (11) three consumers, at least one of whom must be an 
        advocate for persons who are mentally ill or developmentally 
        disabled. 
           The commissioner will make recommendations for committee 
        membership.  Committee members will be appointed by the 
        governor.  In making appointments, the governor shall ensure 
        that appointments provide geographic balance among those areas 
        of the state outside the seven-county metropolitan area.  The 
        chair of the committee shall be elected by the members.  The 
        advisory committee is governed by section 15.059, except that 
        the members do not receive per diem 
        compensation.  Notwithstanding section 15.059, the advisory 
        committee does not expire. 
           Sec. 30.  Minnesota Statutes 2002, section 144.1483, is 
        amended to read: 
           144.1483 [RURAL HEALTH INITIATIVES.] 
           The commissioner of health, through the office of rural 
        health, and consulting as necessary with the commissioner of 
        human services, the commissioner of commerce, the higher 
        education services office, and other state agencies, shall: 
           (1) develop a detailed plan regarding the feasibility of 
        coordinating rural health care services by organizing individual 
        medical providers and smaller hospitals and clinics into 
        referral networks with larger rural hospitals and clinics that 
        provide a broader array of services; 
           (2) develop and implement a program to assist rural 
        communities in establishing community health centers, as 
        required by section 144.1486; 
           (3) administer the program of financial assistance 
        established under section 144.1484 for rural hospitals in 
        isolated areas of the state that are in danger of closing 
        without financial assistance, and that have exhausted local 
        sources of support; 
           (4) develop recommendations regarding health education and 
        training programs in rural areas, including but not limited to a 
        physician assistants' training program, continuing education 
        programs for rural health care providers, and rural outreach 
        programs for nurse practitioners within existing training 
        programs; 
           (5) (4) develop a statewide, coordinated recruitment 
        strategy for health care personnel and maintain a database on 
        health care personnel as required under section 144.1485; 
           (6) (5) develop and administer technical assistance 
        programs to assist rural communities in:  (i) planning and 
        coordinating the delivery of local health care services; and 
        (ii) hiring physicians, nurse practitioners, public health 
        nurses, physician assistants, and other health personnel; 
           (7) (6) study and recommend changes in the regulation of 
        health care personnel, such as nurse practitioners and physician 
        assistants, related to scope of practice, the amount of on-site 
        physician supervision, and dispensing of medication, to address 
        rural health personnel shortages; 
           (8) (7) support efforts to ensure continued funding for 
        medical and nursing education programs that will increase the 
        number of health professionals serving in rural areas; 
           (9) (8) support efforts to secure higher reimbursement for 
        rural health care providers from the Medicare and medical 
        assistance programs; 
           (10) (9) coordinate the development of a statewide plan for 
        emergency medical services, in cooperation with the emergency 
        medical services advisory council; 
           (11) (10) establish a Medicare rural hospital flexibility 
        program pursuant to section 1820 of the federal Social Security 
        Act, United States Code, title 42, section 1395i-4, by 
        developing a state rural health plan and designating, consistent 
        with the rural health plan, rural nonprofit or public hospitals 
        in the state as critical access hospitals.  Critical access 
        hospitals shall include facilities that are certified by the 
        state as necessary providers of health care services to 
        residents in the area.  Necessary providers of health care 
        services are designated as critical access hospitals on the 
        basis of being more than 20 miles, defined as official mileage 
        as reported by the Minnesota department of transportation, from 
        the next nearest hospital, being the sole hospital in the 
        county, being a hospital located in a county with a designated 
        medically underserved area or health professional shortage area, 
        or being a hospital located in a county contiguous to a county 
        with a medically underserved area or health professional 
        shortage area.  A critical access hospital located in a county 
        with a designated medically underserved area or a health 
        professional shortage area or in a county contiguous to a county 
        with a medically underserved area or health professional 
        shortage area shall continue to be recognized as a critical 
        access hospital in the event the medically underserved area or 
        health professional shortage area designation is subsequently 
        withdrawn; and 
           (12) (11) carry out other activities necessary to address 
        rural health problems. 
           Sec. 31.  Minnesota Statutes 2002, section 144.1488, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ELIGIBLE HEALTH PROFESSIONALS.] (a) To be 
        eligible to apply to the commissioner for the loan repayment 
        program, health professionals must be citizens or nationals of 
        the United States, must not have any unserved obligations for 
        service to a federal, state, or local government, or other 
        entity, must have a current and unrestricted Minnesota license 
        to practice, and must be ready to begin full-time clinical 
        practice upon signing a contract for obligated service. 
           (b) Eligible providers are those specified by the federal 
        Bureau of Primary Health Care Health Professions in the policy 
        information notice for the state's current federal grant 
        application.  A health professional selected for participation 
        is not eligible for loan repayment until the health professional 
        has an employment agreement or contract with an eligible loan 
        repayment site and has signed a contract for obligated service 
        with the commissioner. 
           Sec. 32.  Minnesota Statutes 2002, section 144.1491, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PENALTIES FOR BREACH OF CONTRACT.] A 
        program participant who fails to complete two the required years 
        of obligated service shall repay the amount paid, as well as a 
        financial penalty based upon the length of the service 
        obligation not fulfilled.  If the participant has served at 
        least one year, the financial penalty is the number of unserved 
        months multiplied by $1,000.  If the participant has served less 
        than one year, the financial penalty is the total number of 
        obligated months multiplied by $1,000 specified by the federal 
        Bureau of Health Professions in the policy information notice 
        for the state's current federal grant application.  The 
        commissioner shall report to the appropriate health-related 
        licensing board a participant who fails to complete the service 
        obligation and fails to repay the amount paid or fails to pay 
        any financial penalty owed under this subdivision. 
           Sec. 33.  [144.1501] [HEALTH PROFESSIONAL EDUCATION LOAN 
        FORGIVENESS PROGRAM.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the following definitions apply.  
           (b) "Designated rural area" means:  
           (1) an area in Minnesota outside the counties of Anoka, 
        Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, 
        excluding the cities of Duluth, Mankato, Moorhead, Rochester, 
        and St. Cloud; or 
           (2) a municipal corporation, as defined under section 
        471.634, that is physically located, in whole or in part, in an 
        area defined as a designated rural area under clause (1).  
           (c) "Emergency circumstances" means those conditions that 
        make it impossible for the participant to fulfill the service 
        commitment, including death, total and permanent disability, or 
        temporary disability lasting more than two years. 
           (d) "Medical resident" means an individual participating in 
        a medical residency in family practice, internal medicine, 
        obstetrics and gynecology, pediatrics, or psychiatry.  
           (e) "Midlevel practitioner" means a nurse practitioner, 
        nurse-midwife, nurse anesthetist, advanced clinical nurse 
        specialist, or physician assistant.  
           (f) "Nurse" means an individual who has completed training 
        and received all licensing or certification necessary to perform 
        duties as a licensed practical nurse or registered nurse.  
           (g) "Nurse-midwife" means a registered nurse who has 
        graduated from a program of study designed to prepare registered 
        nurses for advanced practice as nurse-midwives.  
           (h) "Nurse practitioner" means a registered nurse who has 
        graduated from a program of study designed to prepare registered 
        nurses for advanced practice as nurse practitioners.  
           (i) "Physician" means an individual who is licensed to 
        practice medicine in the areas of family practice, internal 
        medicine, obstetrics and gynecology, pediatrics, or psychiatry.  
           (j) "Physician assistant" means a person registered under 
        chapter 147A.  
           (k) "Qualified educational loan" means a government, 
        commercial, or foundation loan for actual costs paid for 
        tuition, reasonable education expenses, and reasonable living 
        expenses related to the graduate or undergraduate education of a 
        health care professional.  
           (l) "Underserved urban community" means a Minnesota urban 
        area or population included in the list of designated primary 
        medical care health professional shortage areas (HPSAs), 
        medically underserved areas (MUAs), or medically underserved 
        populations (MUPs) maintained and updated by the United States 
        Department of Health and Human Services.  
           Subd. 2.  [CREATION OF ACCOUNT.] A health professional 
        education loan forgiveness program account is established.  The 
        commissioner of health shall use money from the account to 
        establish a loan forgiveness program for medical residents 
        agreeing to practice in designated rural areas or underserved 
        urban communities, for midlevel practitioners agreeing to 
        practice in designated rural areas, and for nurses who agree to 
        practice in a Minnesota nursing home or intermediate care 
        facility for persons with mental retardation or related 
        conditions.  Appropriations made to the account do not cancel 
        and are available until expended, except that at the end of each 
        biennium, any remaining balance in the account that is not 
        committed by contract and not needed to fulfill existing 
        commitments shall cancel to the fund. 
           Subd. 3.  [ELIGIBILITY.] (a) To be eligible to participate 
        in the loan forgiveness program, an individual must: 
           (1) be a medical resident or be enrolled in a midlevel 
        practitioner, registered nurse, or a licensed practical nurse 
        training program; and 
           (2) submit an application to the commissioner of health.  
           (b) An applicant selected to participate must sign a 
        contract to agree to serve a minimum three-year full-time 
        service obligation according to subdivision 2, which shall begin 
        no later than March 31 following completion of required training.
           Subd. 4.  [LOAN FORGIVENESS.] The commissioner of health 
        may select applicants each year for participation in the loan 
        forgiveness program, within the limits of available funding.  
        The commissioner shall distribute available funds for loan 
        forgiveness proportionally among the eligible professions 
        according to the vacancy rate for each profession in the 
        required geographic area or facility type specified in 
        subdivision 2.  The commissioner shall allocate funds for 
        physician loan forgiveness so that 75 percent of the funds 
        available are used for rural physician loan forgiveness and 25 
        percent of the funds available are used for underserved urban 
        communities loan forgiveness.  If the commissioner does not 
        receive enough qualified applicants each year to use the entire 
        allocation of funds for urban underserved communities, the 
        remaining funds may be allocated for rural physician loan 
        forgiveness.  Applicants are responsible for securing their own 
        qualified educational loans.  The commissioner shall select 
        participants based on their suitability for practice serving the 
        required geographic area or facility type specified in 
        subdivision 2, as indicated by experience or training.  The 
        commissioner shall give preference to applicants closest to 
        completing their training.  For each year that a participant 
        meets the service obligation required under subdivision 3, up to 
        a maximum of four years, the commissioner shall make annual 
        disbursements directly to the participant equivalent to 15 
        percent of the average educational debt for indebted graduates 
        in their profession in the year closest to the applicant's 
        selection for which information is available, not to exceed the 
        balance of the participant's qualifying educational loans.  
        Before receiving loan repayment disbursements and as requested, 
        the participant must complete and return to the commissioner an 
        affidavit of practice form provided by the commissioner 
        verifying that the participant is practicing as required under 
        subdivisions 2 and 3.  The participant must provide the 
        commissioner with verification that the full amount of loan 
        repayment disbursement received by the participant has been 
        applied toward the designated loans.  After each disbursement, 
        verification must be received by the commissioner and approved 
        before the next loan repayment disbursement is made.  
        Participants who move their practice remain eligible for loan 
        repayment as long as they practice as required under subdivision 
        2.  
           Subd. 5.  [PENALTY FOR NONFULFILLMENT.] If a participant 
        does not fulfill the required minimum commitment of service 
        according to subdivision 3, the commissioner of health shall 
        collect from the participant the total amount paid to the 
        participant under the loan forgiveness program plus interest at 
        a rate established according to section 270.75.  The 
        commissioner shall deposit the money collected in the health 
        care access fund to be credited to the health professional 
        education loan forgiveness program account established in 
        subdivision 2.  The commissioner shall allow waivers of all or 
        part of the money owed the commissioner as a result of a 
        nonfulfillment penalty if emergency circumstances prevented 
        fulfillment of the minimum service commitment.  
           Subd. 6.  [RULES.] The commissioner may adopt rules to 
        implement this section.  
           Sec. 34.  Minnesota Statutes 2002, section 144.1502, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LOAN FORGIVENESS.] The commissioner of health 
        may accept up to 14 applicants per each year for participation 
        in the loan forgiveness program, within the limits of available 
        funding.  Applicants are responsible for securing their own 
        loans.  The commissioner shall select participants based on 
        their suitability for practice serving public program patients, 
        as indicated by experience or training.  The commissioner shall 
        give preference to applicants who have attended a Minnesota 
        dentistry educational institution and to applicants closest to 
        completing their training.  For each year that a participant 
        meets the service obligation required under subdivision 3, up to 
        a maximum of four years, the commissioner shall make annual 
        disbursements directly to the participant equivalent to $10,000 
        per year of service, not to exceed $40,000 15 percent of the 
        average educational debt for indebted dental school graduates in 
        the year closest to the applicant's selection for which 
        information is available or the balance of the qualifying 
        educational loans, whichever is less.  Before receiving loan 
        repayment disbursements and as requested, the participant must 
        complete and return to the commissioner an affidavit of practice 
        form provided by the commissioner verifying that the participant 
        is practicing as required under subdivision 3.  The participant 
        must provide the commissioner with verification that the full 
        amount of loan repayment disbursement received by the 
        participant has been applied toward the designated loans.  After 
        each disbursement, verification must be received by the 
        commissioner and approved before the next loan repayment 
        disbursement is made.  Participants who move their practice 
        remain eligible for loan repayment as long as they practice as 
        required under subdivision 3. 
           Sec. 35.  Minnesota Statutes 2002, section 144.396, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE.] The legislature finds that it is 
        important to reduce the prevalence of tobacco use among the 
        youth of this state.  It is a goal of the state to reduce 
        tobacco use among youth by 30 25 percent by the year 2005, and 
        to promote statewide and local tobacco use prevention activities 
        to achieve this goal.  
           Sec. 36.  Minnesota Statutes 2002, section 144.396, 
        subdivision 5, is amended to read: 
           Subd. 5.  [STATEWIDE TOBACCO PREVENTION GRANTS.] (a) To the 
        extent funds are appropriated for the purposes of this 
        subdivision, the commissioner of health shall award competitive 
        grants to eligible applicants for projects and initiatives 
        directed at the prevention of tobacco use.  The project areas 
        for grants include: 
           (1) statewide public education and information campaigns 
        which include implementation at the local level; and 
           (2) coordinated special projects, including training and 
        technical assistance, a resource clearinghouse, and contracts 
        with ethnic and minority communities. 
           (b) Eligible applicants may include, but are not limited 
        to, nonprofit organizations, colleges and universities, 
        professional health associations, community health boards, and 
        other health care organizations.  Applicants must submit 
        proposals to the commissioner.  The proposals must specify the 
        strategies to be implemented to target tobacco use among youth, 
        and must take into account the need for a coordinated statewide 
        tobacco prevention effort. 
           (c) The commissioner must give priority to applicants who 
        demonstrate that the proposed project: 
           (1) is research based or based on proven effective 
        strategies; 
           (2) is designed to coordinate with other activities and 
        education messages related to other health initiatives; 
           (3) utilizes and enhances existing prevention activities 
        and resources; or 
           (4) involves innovative approaches preventing tobacco use 
        among youth.  
           Sec. 37.  Minnesota Statutes 2002, section 144.396, 
        subdivision 7, is amended to read: 
           Subd. 7.  [LOCAL PUBLIC HEALTH PROMOTION AND PROTECTION.] 
        The commissioner shall distribute the funds available under 
        section 144.395, subdivision 2, paragraph (c), clause 
        (3) appropriated for the purpose of local health promotion and 
        protection activities to community health boards for local 
        health promotion and protection activities for local health 
        initiatives other than tobacco prevention aimed at high risk 
        health behaviors among youth.  The commissioner shall distribute 
        these funds to the community health boards based on demographics 
        and other need-based factors relating to health. 
           Sec. 38.  Minnesota Statutes 2002, section 144.396, 
        subdivision 10, is amended to read: 
           Subd. 10.  [REPORT.] The commissioner of health shall 
        submit an annual a biennial report to the chairs and members of 
        the house health and human services finance committee and the 
        senate health and family security budget division on the 
        statewide and local projects and community health board 
        prevention activities funded under this section.  These reports 
        must include information on grant recipients, activities that 
        were conducted using grant funds, and evaluation data and 
        outcome measures, if available.  These reports are due by 
        January 15 of each year the odd-numbered years, beginning in 
        2001. 
           Sec. 39.  Minnesota Statutes 2002, section 144.396, 
        subdivision 11, is amended to read: 
           Subd. 11.  [AUDITS.] The legislative auditor shall may 
        audit tobacco use prevention and local public health endowment 
        fund expenditures to ensure that the money is spent for tobacco 
        use prevention measures and public health initiatives.  
           Sec. 40.  Minnesota Statutes 2002, section 144.396, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ENDOWMENT FUND FUNDS NOT TO SUPPLANT EXISTING 
        FUNDING.] Appropriations from the tobacco use prevention and 
        local public health endowment fund Funds appropriated to the 
        statewide tobacco prevention grants, local tobacco prevention 
        grants, or the local public health promotion and prevention must 
        not be used as a substitute for traditional sources of funding 
        tobacco use prevention activities or public health initiatives.  
        Any local unit of government receiving money under this section 
        must ensure that existing local financial efforts remain in 
        place. 
           Sec. 41.  Minnesota Statutes 2002, section 144.414, 
        subdivision 3, is amended to read: 
           Subd. 3.  [HEALTH CARE FACILITIES AND CLINICS.] (a) Smoking 
        is prohibited in any area of a hospital, health care clinic, 
        doctor's office, or other health care-related facility, other 
        than a nursing home, boarding care facility, or licensed 
        residential facility, except as allowed in this subdivision.  
           (b) Smoking by patients in a chemical dependency treatment 
        program or mental health program may be allowed in a separated 
        well-ventilated area pursuant to a policy established by the 
        administrator of the program that identifies circumstances in 
        which prohibiting smoking would interfere with the treatment of 
        persons recovering from chemical dependency or mental illness.  
           (c) Smoking by participants in peer reviewed scientific 
        studies related to the health effects of smoking may be allowed 
        in a separated room ventilated at a rate of 60 cubic feet per 
        minute per person pursuant to a policy that is approved by the 
        commissioner and is established by the administrator of the 
        program to minimize exposure of nonsmokers to smoke.  
           [EFFECTIVE DATE.] This section is effective January 1, 2004.
           Sec. 42.  [144.5509] [RADIATION THERAPY FACILITY 
        CONSTRUCTION.] 
           (a) A radiation therapy facility may be constructed only by 
        an entity owned, operated, or controlled by a hospital licensed 
        according to sections 144.50 to 144.56 either alone or in 
        cooperation with another entity. 
           (b) This section expires August 1, 2008. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and applies to construction commenced 
        on or after that date. 
           Sec. 43.  Minnesota Statutes 2002, section 144.551, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESTRICTED CONSTRUCTION OR MODIFICATION.] 
        (a) The following construction or modification may not be 
        commenced:  
           (1) any erection, building, alteration, reconstruction, 
        modernization, improvement, extension, lease, or other 
        acquisition by or on behalf of a hospital that increases the bed 
        capacity of a hospital, relocates hospital beds from one 
        physical facility, complex, or site to another, or otherwise 
        results in an increase or redistribution of hospital beds within 
        the state; and 
           (2) the establishment of a new hospital.  
           (b) This section does not apply to:  
           (1) construction or relocation within a county by a 
        hospital, clinic, or other health care facility that is a 
        national referral center engaged in substantial programs of 
        patient care, medical research, and medical education meeting 
        state and national needs that receives more than 40 percent of 
        its patients from outside the state of Minnesota; 
           (2) a project for construction or modification for which a 
        health care facility held an approved certificate of need on May 
        1, 1984, regardless of the date of expiration of the 
        certificate; 
           (3) a project for which a certificate of need was denied 
        before July 1, 1990, if a timely appeal results in an order 
        reversing the denial; 
           (4) a project exempted from certificate of need 
        requirements by Laws 1981, chapter 200, section 2; 
           (5) a project involving consolidation of pediatric 
        specialty hospital services within the Minneapolis-St. Paul 
        metropolitan area that would not result in a net increase in the 
        number of pediatric specialty hospital beds among the hospitals 
        being consolidated; 
           (6) a project involving the temporary relocation of 
        pediatric-orthopedic hospital beds to an existing licensed 
        hospital that will allow for the reconstruction of a new 
        philanthropic, pediatric-orthopedic hospital on an existing site 
        and that will not result in a net increase in the number of 
        hospital beds.  Upon completion of the reconstruction, the 
        licenses of both hospitals must be reinstated at the capacity 
        that existed on each site before the relocation; 
           (7) the relocation or redistribution of hospital beds 
        within a hospital building or identifiable complex of buildings 
        provided the relocation or redistribution does not result in: 
        (i) an increase in the overall bed capacity at that site; (ii) 
        relocation of hospital beds from one physical site or complex to 
        another; or (iii) redistribution of hospital beds within the 
        state or a region of the state; 
           (8) relocation or redistribution of hospital beds within a 
        hospital corporate system that involves the transfer of beds 
        from a closed facility site or complex to an existing site or 
        complex provided that:  (i) no more than 50 percent of the 
        capacity of the closed facility is transferred; (ii) the 
        capacity of the site or complex to which the beds are 
        transferred does not increase by more than 50 percent; (iii) the 
        beds are not transferred outside of a federal health systems 
        agency boundary in place on July 1, 1983; and (iv) the 
        relocation or redistribution does not involve the construction 
        of a new hospital building; 
           (9) a construction project involving up to 35 new beds in a 
        psychiatric hospital in Rice county that primarily serves 
        adolescents and that receives more than 70 percent of its 
        patients from outside the state of Minnesota; 
           (10) a project to replace a hospital or hospitals with a 
        combined licensed capacity of 130 beds or less if:  (i) the new 
        hospital site is located within five miles of the current site; 
        and (ii) the total licensed capacity of the replacement 
        hospital, either at the time of construction of the initial 
        building or as the result of future expansion, will not exceed 
        70 licensed hospital beds, or the combined licensed capacity of 
        the hospitals, whichever is less; 
           (11) the relocation of licensed hospital beds from an 
        existing state facility operated by the commissioner of human 
        services to a new or existing facility, building, or complex 
        operated by the commissioner of human services; from one 
        regional treatment center site to another; or from one building 
        or site to a new or existing building or site on the same 
        campus; 
           (12) the construction or relocation of hospital beds 
        operated by a hospital having a statutory obligation to provide 
        hospital and medical services for the indigent that does not 
        result in a net increase in the number of hospital beds; 
           (13) a construction project involving the addition of up to 
        31 new beds in an existing nonfederal hospital in Beltrami 
        county; or 
           (14) a construction project involving the addition of up to 
        eight new beds in an existing nonfederal hospital in Otter Tail 
        county with 100 licensed acute care beds; 
           (15) a construction project involving the addition of 20 
        new hospital beds used for rehabilitation services in an 
        existing hospital in Carver county serving the southwest 
        suburban metropolitan area.  Beds constructed under this clause 
        shall not be eligible for reimbursement under medical 
        assistance, general assistance medical care, or MinnesotaCare; 
        or 
           (16) a project for the construction or relocation of up to 
        20 hospital beds for the operation of up to two psychiatric 
        facilities or units for children provided that the operation of 
        the facilities or units have received the approval of the 
        commissioner of human services. 
           Sec. 44.  Minnesota Statutes 2002, section 144E.50, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISTRIBUTION.] Money from the fund shall be 
        distributed according to this subdivision.  Ninety-three and 
        one-third Ninety-five percent of the fund shall be distributed 
        annually on a contract for services basis with each of the eight 
        regional emergency medical services systems designated by the 
        board.  The systems shall be governed by a body consisting of 
        appointed representatives from each of the counties in that 
        region and shall also include representatives from emergency 
        medical services organizations.  The board shall contract with a 
        regional entity only if the contract proposal satisfactorily 
        addresses proposed emergency medical services activities in the 
        following areas:  personnel training, transportation 
        coordination, public safety agency cooperation, communications 
        systems maintenance and development, public involvement, health 
        care facilities involvement, and system management.  If each of 
        the regional emergency medical services systems submits a 
        satisfactory contract proposal, then this part of the fund shall 
        be distributed evenly among the regions.  If one or more of the 
        regions does not contract for the full amount of its even share 
        or if its proposal is unsatisfactory, then the board may 
        reallocate the unused funds to the remaining regions on a pro 
        rata basis.  Six and two-thirds Five percent of the fund shall 
        be used by the board to support regionwide reporting systems and 
        to provide other regional administration and technical 
        assistance. 
           Sec. 45.  Minnesota Statutes 2002, section 145.881, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COMPOSITION OF TASK FORCE.] The 
        commissioner shall establish and appoint a maternal and child 
        health advisory task force consisting of 15 members who will 
        provide equal representation from: 
           (1) professionals with expertise in maternal and child 
        health services; 
           (2) representatives of community health boards as defined 
        in section 145A.02, subdivision 5; and 
           (3) consumer representatives interested in the health of 
        mothers and children. 
           No members shall be employees of the state department of 
        health.  Section 15.059 governs the maternal and child health 
        advisory task force.  Notwithstanding section 15.059, the 
        maternal and child health advisory task force expires June 30, 
        2007. 
           Sec. 46.  Minnesota Statutes 2002, section 145A.10, 
        subdivision 10, is amended to read: 
           Subd. 10.  [STATE AND LOCAL ADVISORY COMMITTEES.] (a) A 
        state community health advisory committee is established to 
        advise, consult with, and make recommendations to the 
        commissioner on the development, maintenance, funding, and 
        evaluation of community health services.  Each community health 
        board may appoint a member to serve on the committee.  The 
        committee must meet at least quarterly, and special meetings may 
        be called by the committee chair or a majority of the members.  
        Members or their alternates may receive a per diem and must be 
        reimbursed for travel and other necessary expenses while engaged 
        in their official duties.  Notwithstanding section 15.059, the 
        state community health advisory committee does not expire. 
           (b) The city councils or county boards that have 
        established or are members of a community health board must 
        appoint a community health advisory committee to advise, consult 
        with, and make recommendations to the community health board on 
        matters relating to the development, maintenance, funding, and 
        evaluation of community health services.  The committee must 
        consist of at least five members and must be generally 
        representative of the population and health care providers of 
        the community health service area.  The committee must meet at 
        least three times a year and at the call of the chair or a 
        majority of the members.  Members may receive a per diem and 
        reimbursement for travel and other necessary expenses while 
        engaged in their official duties. 
           (c) State and local advisory committees must adopt bylaws 
        or operating procedures that specify the length of terms of 
        membership, procedures for assuring that no more than half of 
        these terms expire during the same year, and other matters 
        relating to the conduct of committee business.  Bylaws or 
        operating procedures may allow one alternate to be appointed for 
        each member of a state or local advisory committee.  Alternates 
        may be given full or partial powers and duties of members. 
           Sec. 47.  Minnesota Statutes 2002, section 147A.08, is 
        amended to read: 
           147A.08 [EXEMPTIONS.] 
           (a) This chapter does not apply to, control, prevent, or 
        restrict the practice, service, or activities of persons listed 
        in section 147.09, clauses (1) to (6) and (8) to (13), persons 
        regulated under section 214.01, subdivision 2, or persons 
        defined in section 144.1495 144.1501, subdivision 1, 
        paragraphs (a) to (d) (e), (g), and (h). 
           (b) Nothing in this chapter shall be construed to require 
        registration of: 
           (1) a physician assistant student enrolled in a physician 
        assistant or surgeon assistant educational program accredited by 
        the Committee on Allied Health Education and Accreditation or by 
        its successor agency approved by the board; 
           (2) a physician assistant employed in the service of the 
        federal government while performing duties incident to that 
        employment; or 
           (3) technicians, other assistants, or employees of 
        physicians who perform delegated tasks in the office of a 
        physician but who do not identify themselves as a physician 
        assistant. 
           Sec. 48.  Minnesota Statutes 2002, section 148.5194, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEE PRORATION.] The commissioner shall 
        prorate the registration fee for clinical fellowship, temporary, 
        and first time registrants according to the number of months 
        that have elapsed between the date registration is issued and 
        the date registration expires or must be renewed under section 
        148.5191, subdivision 4.  
           Sec. 49.  Minnesota Statutes 2002, section 148.5194, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BIENNIAL REGISTRATION FEE.] The fee for initial 
        registration and biennial registration, clinical fellowship 
        registration, temporary registration, or renewal is $200.  
           Sec. 50.  Minnesota Statutes 2002, section 148.5194, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BIENNIAL REGISTRATION FEE FOR DUAL 
        REGISTRATION.] The fee for initial registration and biennial 
        registration, clinical fellowship registration, temporary 
        registration, or renewal is $200.  
           Sec. 51.  Minnesota Statutes 2002, section 148.5194, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [VERIFICATION OF CREDENTIAL.] The fee for written 
        verification of credentialed status is $25. 
           Sec. 52.  Minnesota Statutes 2002, section 148.6445, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CERTIFICATION VERIFICATION TO OTHER STATES.] The 
        fee for certification verification of licensure to other states 
        is $25. 
           Sec. 53.  [148C.12] [FEES.] 
           Subdivision 1.  [APPLICATION FEE.] The application fee is 
        $295.  
           Subd. 2.  [BIENNIAL RENEWAL FEE.] The license renewal fee 
        is $295.  If the commissioner changes the renewal schedule and 
        the expiration date is less than two years, the fee must be 
        prorated.  
           Subd. 3.  [TEMPORARY PERMIT FEE.] The initial fee for 
        applicants under section 148C.04, subdivision 6, paragraph (a), 
        is $100.  The fee for annual renewal of a temporary permit is 
        $100.  
           Subd. 4.  [EXAMINATION FEE.] The examination fee for the 
        written examination is $95 and for the oral examination is $200. 
           Subd. 5.  [INACTIVE RENEWAL FEE.] The inactive renewal fee 
        is $150.  
           Subd. 6.  [LATE FEE.] The late fee is 25 percent of the 
        biennial renewal fee, the inactive renewal fee, or the annual 
        fee for renewal of temporary practice status.  
           Subd. 7.  [FEE TO RENEW AFTER EXPIRATION OF LICENSE.] The 
        fee for renewal of a license that has expired for less than two 
        years is the total of the biennial renewal fee, the late fee, 
        and a fee of $100 for review and approval of the continuing 
        education report.  
           Subd. 8.  [FEE FOR LICENSE VERIFICATIONS.] The fee for 
        license verification to institutions and other jurisdictions is 
        $25.  
           Subd. 9.  [SURCHARGE FEE.] Notwithstanding section 
        16A.1285, subdivision 2, a surcharge of $99 shall be paid at the 
        time of initial application for or renewal of an alcohol and 
        drug counselor license until June 30, 2013.  
           Subd. 10.  [NONREFUNDABLE FEES.] All fees are nonrefundable.
           Sec. 54.  Minnesota Statutes 2002, section 153A.17, is 
        amended to read: 
           153A.17 [EXPENSES; FEES.] 
           The expenses for administering the certification 
        requirements including the complaint handling system for hearing 
        aid dispensers in sections 153A.14 and 153A.15 and the consumer 
        information center under section 153A.18 must be paid from 
        initial application and examination fees, renewal fees, 
        penalties, and fines.  All fees are nonrefundable.  The 
        certificate application fee is $165 for audiologists registered 
        under section 148.511 and $490 for all others $350, the 
        examination fee is $200 $250 for the written portion and 
        $200 $250 for the practical portion each time one or the other 
        is taken, and the trainee application fee 
        is $100 $200.  Notwithstanding the policy set forth in section 
        16A.1285, subdivision 2, a surcharge of $165 for audiologists 
        registered under section 148.511 and $330 for all others shall 
        be paid at the time of application or renewal until June 30, 
        2003, to recover the commissioner's accumulated direct 
        expenditures for administering the requirements of this 
        chapter.  The penalty fee for late submission of a renewal 
        application is $200.  The fee for verification of certification 
        to other jurisdictions or entities is $25.  All fees, penalties, 
        and fines received must be deposited in the state government 
        special revenue fund.  The commissioner may prorate the 
        certification fee for new applicants based on the number of 
        quarters remaining in the annual certification period. 
           Sec. 55.  Minnesota Statutes 2002, section 239.761, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GASOLINE.] (a) Gasoline that is not blended with 
        ethanol must not be contaminated with water or other impurities 
        and must comply with ASTM specification D 4814-96 D4814-01.  
        Gasoline that is not blended with ethanol must also comply with 
        the volatility requirements in Code of Federal Regulations, 
        title 40, part 80.  
           (b) After gasoline is sold, transferred, or otherwise 
        removed from a refinery or terminal, a person responsible for 
        the product: 
           (1) may blend the gasoline with agriculturally derived 
        ethanol as provided in subdivision 4; 
           (2) shall not blend the gasoline with any oxygenate other 
        than denatured, agriculturally derived ethanol; 
           (3) shall not blend the gasoline with other petroleum 
        products that are not gasoline or denatured, agriculturally 
        derived ethanol; 
           (4) shall not blend the gasoline with products commonly and 
        commercially known as casinghead gasoline, absorption gasoline, 
        condensation gasoline, drip gasoline, or natural gasoline; and 
           (5) may blend the gasoline with a detergent additive, an 
        antiknock additive, or an additive designed to replace 
        tetra-ethyl lead, that is registered by the EPA. 
           Sec. 56.  Minnesota Statutes 2002, section 239.761, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GASOLINE BLENDED WITH ETHANOL.] (a) Gasoline may 
        be blended with up to ten percent, by volume, agriculturally 
        derived, denatured ethanol that complies with the requirements 
        of subdivision 5.  
           (b) A gasoline-ethanol blend must: 
           (1) comply with the volatility requirements in Code of 
        Federal Regulations, title 40, part 80; 
           (2) comply with ASTM specification D 4814-96 D4814-01, or 
        the gasoline base stock from which a gasoline-ethanol blend was 
        produced must comply with ASTM specification D 4814-96 D4814-01; 
        and 
           (3) not be blended with casinghead gasoline, absorption 
        gasoline, condensation gasoline, drip gasoline, or natural 
        gasoline after the gasoline-ethanol blend has been sold, 
        transferred, or otherwise removed from a refinery or terminal. 
           Sec. 57.  Minnesota Statutes 2002, section 239.761, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DENATURED ETHANOL.] Denatured ethanol that is to 
        be blended with gasoline must be agriculturally derived and must 
        comply with ASTM specification D 4806-95b D4806-01.  This 
        includes the requirement that ethanol may be denatured only as 
        specified in Code of Federal Regulations, title 27, parts 20 and 
        21. 
           Sec. 58.  Minnesota Statutes 2002, section 239.761, 
        subdivision 6, is amended to read: 
           Subd. 6.  [GASOLINE BLENDED WITH NONETHANOL OXYGENATE.] (a) 
        A person responsible for the product shall comply with the 
        following requirements: 
           (1) after July 1, 2000, gasoline containing in excess of 
        one-third of one percent, in total, of the nonethanol oxygenates 
        listed in paragraph (b) may must not be sold or offered for sale 
        at any time in this state; and 
           (2) after July 1, 2005, gasoline containing any of the 
        nonethanol oxygenates listed in paragraph (b) may must not be 
        sold or offered for sale in this state. 
           (b) The oxygenates prohibited under paragraph (a) are: 
           (1) methyl tertiary butyl ether, as defined in section 
        296A.01, subdivision 34; 
           (2) ethyl tertiary butyl ether, as defined in section 
        296A.01, subdivision 18; or 
           (3) tertiary amyl methyl ether. 
           (c) Gasoline that is blended with an a nonethanol oxygenate 
        , other than denatured ethanol, must comply with ASTM 
        specification D 4814-96 D4814-01.  Nonethanol oxygenates, other 
        than denatured ethanol, must not be blended into gasoline after 
        the gasoline has been sold, transferred, or otherwise removed 
        from a refinery or terminal. 
           Sec. 59.  Minnesota Statutes 2002, section 239.761, 
        subdivision 7, is amended to read: 
           Subd. 7.  [HEATING FUEL OIL.] Heating fuel oil must comply 
        with ASTM specification D 396-96 D396-01. 
           Sec. 60.  Minnesota Statutes 2002, section 239.761, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DIESEL FUEL OIL.] Diesel fuel oil must comply 
        with ASTM specification D 975-96a D975-01a. 
           Sec. 61.  Minnesota Statutes 2002, section 239.761, 
        subdivision 9, is amended to read: 
           Subd. 9.  [KEROSENE.] Kerosene must comply with ASTM 
        specification D 3699-96a D3699-01. 
           Sec. 62.  Minnesota Statutes 2002, section 239.761, 
        subdivision 10, is amended to read: 
           Subd. 10.  [AVIATION GASOLINE.] Aviation gasoline must 
        comply with ASTM specification D 910-96 D910-00. 
           Sec. 63.  Minnesota Statutes 2002, section 239.761, 
        subdivision 11, is amended to read: 
           Subd. 11.  [AVIATION TURBINE FUEL, JET FUEL.] Aviation 
        turbine fuel and jet fuel must comply with ASTM specification D 
        1655-96c D1655-01. 
           Sec. 64.  Minnesota Statutes 2002, section 239.761, 
        subdivision 12, is amended to read: 
           Subd. 12.  [GAS TURBINE FUEL OIL.] Fuel oil for use in 
        nonaviation gas turbine engines must comply with ASTM 
        specification D 2880-96a D2880-00. 
           Sec. 65.  Minnesota Statutes 2002, section 239.761, 
        subdivision 13, is amended to read: 
           Subd. 13.  [E85.] A blend of ethanol and gasoline, 
        containing at least 60 percent ethanol and not more than 85 
        percent ethanol, produced for use as a motor fuel in alternative 
        fuel vehicles as defined in section 296A.01, subdivision 5, must 
        comply with ASTM specification D 5798-96 D5798-99. 
           Sec. 66.  Minnesota Statutes 2002, section 239.792, is 
        amended to read: 
           239.792 [GASOLINE OCTANE.] 
           Subdivision 1.  [DISCLOSURE.] A manufacturer, hauler, 
        blender, agent, jobber, consignment agent, importer, or 
        distributor who sells, delivers, or distributes gasoline or 
        gasoline-oxygenate blends, shall provide, at the time of 
        delivery, a bill of lading or shipping manifest to the person 
        who receives the gasoline.  The bill or manifest must state the 
        minimum octane of the gasoline delivered.  The stated octane 
        number must be the average of the "motor method" octane number 
        and the "research method" octane number as determined by the 
        test methods in ASTM specification D 4814-96 D4814-01, or by a 
        test method adopted by department rule. 
           Subd. 2.  [DISPENSER LABELING.] A person responsible for 
        the product shall clearly, conspicuously, and permanently label 
        each gasoline dispenser that is used to sell gasoline or 
        gasoline-oxygenate blends at retail or to dispense gasoline or 
        gasoline-oxygenate blends into the fuel supply tanks of motor 
        vehicles, with the minimum octane of the gasoline dispensed.  
        The label must meet the following requirements: 
           (a) The octane number displayed on the label must represent 
        the average of the "motor method" octane number and the 
        "research method" octane number as determined by the test 
        methods in ASTM specification D 4814-96 D4814-01, or by a test 
        method adopted by department rule. 
           (b) The label must be at least 2-1/2 inches high and three 
        inches wide, with a yellow background, black border, and black 
        figures and letters. 
           (c) The number representing the octane of the gasoline must 
        be at least one inch high. 
           (d) The label must include the words "minimum octane" and 
        the term "(R+M)/2" or "(RON+MON)/2." 
           Sec. 67.  [246.0141] [TOBACCO USE PROHIBITED.] 
           No patient, staff, guest, or visitor on the grounds or in a 
        state regional treatment center, the Minnesota security 
        hospital, the Minnesota sex offender program, or the Minnesota 
        extended treatment options program may possess or use tobacco or 
        a tobacco related device.  For the purposes of this section, 
        "tobacco" and "tobacco related device" have the meanings given 
        in section 609.685, subdivision 1.  This section does not 
        prohibit the possession or use of tobacco or a tobacco related 
        device by an adult as part of a traditional Indian spiritual or 
        cultural ceremony.  For purposes of this section, an Indian is a 
        person who is a member of an Indian tribe as defined in section 
        260.755, subdivision 12.  
           [EFFECTIVE DATE.] This section is effective January 1, 2004.
           Sec. 68.  Minnesota Statutes 2002, section 295.55, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
        Each hospital or surgical center must make estimated payments of 
        the taxes for the calendar year in monthly installments to the 
        commissioner within 15 days after the end of the month. 
           (b) Estimated tax payments are not required of hospitals or 
        surgical centers if:  (1) the tax for the current calendar year 
        is less than $500; or (2) the tax for the previous calendar year 
        is less than $500, if the taxpayer had a tax liability and was 
        doing business the entire year; or (3) if a hospital has been 
        allowed a grant under section 144.1484, subdivision 2, for the 
        year. 
           (c) Underpayment of estimated installments bear interest at 
        the rate specified in section 270.75, from the due date of the 
        payment until paid or until the due date of the annual return 
        whichever comes first.  An underpayment of an estimated 
        installment is the difference between the amount paid and the 
        lesser of (1) 90 percent of one-twelfth of the tax for the 
        calendar year or (2) one-twelfth of the total tax for the 
        previous calendar year if the taxpayer had a tax liability and 
        was doing business the entire year. 
           Sec. 69.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGRICULTURAL ALCOHOL GASOLINE.] "Agricultural 
        alcohol gasoline" means a gasoline-ethanol blend of up to ten 
        percent agriculturally derived fermentation ethanol derived from 
        agricultural products, such as potatoes, cereal, grains, cheese 
        whey, sugar beets, forest products, or other renewable 
        resources, that: 
           (1) meets the specifications in ASTM specification D 
        4806-95b D4806-01; and 
           (2) is denatured as specified in Code of Federal 
        Regulations, title 27, parts 20 and 21. 
           Sec. 70.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 7, is amended to read:  
           Subd. 7.  [AVIATION GASOLINE.] "Aviation gasoline" means 
        any gasoline that is capable of use for the purpose of producing 
        or generating power for propelling internal combustion engine 
        aircraft, that meets the specifications in ASTM specification D 
        910-96 D910-00, and that either: 
           (1) is invoiced and billed by a producer, manufacturer, 
        refiner, or blender to a distributor or dealer, by a distributor 
        to a dealer or consumer, or by a dealer to consumer, as 
        "aviation gasoline"; or 
           (2) whether or not invoiced and billed as provided in 
        clause (1), is received, sold, stored, or withdrawn from storage 
        by any person, to be used for the purpose of producing or 
        generating power for propelling internal combustion engine 
        aircraft. 
           Sec. 71.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 8, is amended to read: 
           Subd. 8.  [AVIATION TURBINE FUEL AND JET FUEL.] "Aviation 
        turbine fuel" and "jet fuel" mean blends of hydrocarbons derived 
        from crude petroleum, natural gasoline, and synthetic 
        hydrocarbons, intended for use in aviation turbine engines, and 
        that meet the specifications in ASTM specification D 
        1655-96c D1655-01. 
           Sec. 72.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 14, is amended to read: 
           Subd. 14.  [DIESEL FUEL OIL.] "Diesel fuel oil" means a 
        petroleum distillate or blend of petroleum distillate and 
        residual fuels, intended for use as a motor fuel in internal 
        combustion diesel engines, that meets the specifications in ASTM 
        specification D 975-96a D975-01A.  Diesel fuel includes number 1 
        and number 2 fuel oils.  K-1 kerosene is not diesel fuel unless 
        it is blended with diesel fuel for use in motor vehicles.  
           Sec. 73.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 19, is amended to read: 
           Subd. 19.  [E85.] "E85" means a petroleum product that is a 
        blend of agriculturally derived denatured ethanol and gasoline 
        or natural gasoline that typically contains 85 percent ethanol 
        by volume, but at a minimum must contain 60 percent ethanol by 
        volume.  For the purposes of this chapter, the energy content of 
        E85 will be considered to be 82,000 BTUs per gallon.  E85 
        produced for use as a motor fuel in alternative fuel vehicles as 
        defined in subdivision 5 must comply with ASTM specification D 
        5798-96 D5798-99. 
           Sec. 74.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 20, is amended to read:  
           Subd. 20.  [ETHANOL, DENATURED.] "Ethanol, denatured" means 
        ethanol that is to be blended with gasoline, has been 
        agriculturally derived, and complies with ASTM specification D 
        4806-95b D4806-01.  This includes the requirement that ethanol 
        may be denatured only as specified in Code of Federal 
        Regulations, title 27, parts 20 and 21. 
           Sec. 75.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 22, is amended to read:  
           Subd. 22.  [GAS TURBINE FUEL OIL.] "Gas turbine fuel oil" 
        means fuel that contains mixtures of hydrocarbon oils free of 
        inorganic acid and excessive amounts of solid or fibrous foreign 
        matter, intended for use in nonaviation gas turbine engines, and 
        that meets the specifications in ASTM specification D 2880-96a 
        D2880-00. 
           Sec. 76.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 23, is amended to read: 
           Subd. 23.  [GASOLINE.] (a) "Gasoline" means: 
           (1) all products commonly or commercially known or sold as 
        gasoline regardless of their classification or uses, except 
        casinghead gasoline, absorption gasoline, condensation gasoline, 
        drip gasoline, or natural gasoline that under the requirements 
        of section 239.761, subdivision 3, must not be blended with 
        gasoline that has been sold, transferred, or otherwise removed 
        from a refinery or terminal; and 
           (2) any liquid prepared, advertised, offered for sale or 
        sold for use as, or commonly and commercially used as, a fuel in 
        spark-ignition, internal combustion engines, and that when 
        tested by the weights and measures division meets the 
        specifications in ASTM specification D 4814-96 D4814-01. 
           (b) Gasoline that is not blended with ethanol must not be 
        contaminated with water or other impurities and must comply with 
        both ASTM specification D 4814-96 D4814-01 and the volatility 
        requirements in Code of Federal Regulations, title 40, part 80. 
           (c) After gasoline is sold, transferred, or otherwise 
        removed from a refinery or terminal, a person responsible for 
        the product: 
           (1) may blend the gasoline with agriculturally derived 
        ethanol, as provided in subdivision 24; 
           (2) must not blend the gasoline with any oxygenate other 
        than denatured, agriculturally derived ethanol; 
           (3) must not blend the gasoline with other petroleum 
        products that are not gasoline or denatured, agriculturally 
        derived ethanol; 
           (4) must not blend the gasoline with products commonly and 
        commercially known as casinghead gasoline, absorption gasoline, 
        condensation gasoline, drip gasoline, or natural gasoline; and 
           (5) may blend the gasoline with a detergent additive, an 
        antiknock additive, or an additive designed to replace 
        tetra-ethyl lead, that is registered by the EPA. 
           Sec. 77.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 24, is amended to read:  
           Subd. 24.  [GASOLINE BLENDED WITH NONETHANOL OXYGENATE.] 
        "Gasoline blended with nonethanol oxygenate" means gasoline 
        blended with ETBE, MTBE, or other alcohol or ether, except 
        denatured ethanol, that is approved as an oxygenate by the EPA, 
        and that complies with ASTM specification D 4814-96 D4814-01.  
        Oxygenates, other than denatured ethanol, must not be blended 
        into gasoline after the gasoline has been sold, transferred, or 
        otherwise removed from a refinery or terminal. 
           Sec. 78.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 25, is amended to read:  
           Subd. 25.  [GASOLINE BLENDED WITH ETHANOL.] "Gasoline 
        blended with ethanol" means gasoline blended with up to ten 
        percent, by volume, agriculturally derived, denatured ethanol.  
        The blend must comply with the volatility requirements in Code 
        of Federal Regulations, title 40, part 80.  The blend must also 
        comply with ASTM specification D 4814-96 D4814-01, or the 
        gasoline base stock from which a gasoline-ethanol blend was 
        produced must comply with ASTM specification D 4814-96 D4814-01; 
        and the gasoline-ethanol blend must not be blended with 
        casinghead gasoline, absorption gasoline, condensation gasoline, 
        drip gasoline, or natural gasoline after the gasoline-ethanol 
        blend has been sold, transferred, or otherwise removed from a 
        refinery or terminal.  The blend need not comply with ASTM 
        specification D 4814-96 D4814-01 if it is subjected to a 
        standard distillation test.  For a distillation test, a 
        gasoline-ethanol blend is not required to comply with the 
        temperature specification at the 50 percent liquid recovery 
        point, if the gasoline from which the gasoline-ethanol blend was 
        produced complies with all of the distillation specifications. 
           Sec. 79.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 26, is amended to read: 
           Subd. 26.  [HEATING FUEL OIL.] "Heating fuel oil" means a 
        petroleum distillate, blend of petroleum distillates and 
        residuals, or petroleum residual heating fuel that meets the 
        specifications in ASTM specification D 396-96 D396-01. 
           Sec. 80.  Minnesota Statutes 2002, section 296A.01, 
        subdivision 28, is amended to read: 
           Subd. 28.  [KEROSENE.] "Kerosene" means a refined petroleum 
        distillate consisting of a homogeneous mixture of hydrocarbons 
        essentially free of water, inorganic acidic and basic compounds, 
        and excessive amounts of particulate contaminants and that meets 
        the specifications in ASTM specification D 3699-96a D3699-01. 
           Sec. 81.  Minnesota Statutes 2002, section 296A.01, is 
        amended by adding a subdivision to read:  
           Subd. 38a.  [NONETHANOL OXYGENATE.] "Nonethanol oxygenate" 
        means ETBE or MTBE, as defined in this section, or other alcohol 
        or ether, except denatured ethanol, that is approved as an 
        oxygenate by the EPA. 
           Sec. 82.  Minnesota Statutes 2002, section 326.42, is 
        amended to read: 
           326.42 [APPLICATIONS, FEES.] 
           Subdivision 1.  [APPLICATION.] Applications for plumber's 
        license shall be made to the state commissioner of health, with 
        fee.  Unless the applicant is entitled to a renewal, the 
        applicant shall be licensed by the state commissioner of health 
        only after passing a satisfactory examination by the examiners 
        showing fitness.  Examination fees for both journeyman and 
        master plumbers shall be in an amount prescribed by the state 
        commissioner of health pursuant to section 144.122.  Upon being 
        notified that of having successfully passed the examination for 
        original license the applicant shall submit an application, with 
        the license fee herein provided.  License fees shall be in an 
        amount prescribed by the state commissioner of health pursuant 
        to section 144.122.  Licenses shall expire and be renewed as 
        prescribed by the commissioner pursuant to section 144.122. 
           Subd. 2.  [FEES.] Plumbing system plans and specifications 
        that are submitted to the commissioner for review shall be 
        accompanied by the appropriate plan examination fees.  If the 
        commissioner determines, upon review of the plans, that 
        inadequate fees were paid, the necessary additional fees shall 
        be paid prior to plan approval.  The commissioner shall charge 
        the following fees for plan reviews and audits of plumbing 
        installations for public, commercial, and industrial buildings:  
           (1) systems with both water distribution and drain, waste, 
        and vent systems and having:  
           (i) 25 or fewer drainage fixture units, $150; 
           (ii) 26 to 50 drainage fixture units, $250; 
           (iii) 51 to 150 drainage fixture units, $350; 
           (iv) 151 to 249 drainage fixture units, $500; 
           (v) 250 or more drainage fixture units, $3 per drainage 
        fixture unit to a maximum of $4,000; and 
           (vi) interceptors, separators, or catch basins, $70 per 
        interceptor, separator, or catch basin; 
           (2) building sewer service only, $150; 
           (3) building water service only, $150; 
           (4) building water distribution system only, no drainage 
        system, $5 per supply fixture unit or $150, whichever is 
        greater; 
           (5) storm drainage system, a minimum fee of $150 or: 
           (i) $50 per drain opening, up to a maximum of $500; and 
           (ii) $70 per interceptor, separator, or catch basin; 
           (6) manufactured home park or campground, 1 to 25 sites, 
        $300; 
           (7) manufactured home park or campground, 26 to 50 sites, 
        $350; 
           (8) manufactured home park or campground, 51 to 125 sites, 
        $400; 
           (9) manufactured home park or campground, more than 125 
        sites, $500; 
           (10) accelerated review, double the regular fee, one-half 
        to be refunded if no response from the commissioner within 15 
        business days; and 
           (11) revision to previously reviewed or incomplete plans: 
           (i) review of plans for which commissioner has issued two 
        or more requests for additional information, per review, $100 or 
        ten percent of the original fee, whichever is greater; 
           (ii) proposer-requested revision with no increase in 
        project scope, $50 or ten percent of original fee, whichever is 
        greater; and 
           (iii) proposer-requested revision with an increase in 
        project scope, $50 plus the difference between the original 
        project fee and the revised project fee. 
           Sec. 83.  Minnesota Statutes 2002, section 471.59, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AGREEMENT.] Two or more governmental 
        units, by agreement entered into through action of their 
        governing bodies, may jointly or cooperatively exercise any 
        power common to the contracting parties or any similar powers, 
        including those which are the same except for the territorial 
        limits within which they may be exercised.  The agreement may 
        provide for the exercise of such powers by one or more of the 
        participating governmental units on behalf of the other 
        participating units.  The term "governmental unit" as used in 
        this section includes every city, county, town, school district, 
        other political subdivision of this or another state, another 
        state, the University of Minnesota, nonprofit hospitals licensed 
        under sections 144.50 to 144.56, and any agency of the state of 
        Minnesota or the United States, and includes any instrumentality 
        of a governmental unit.  For the purpose of this section, an 
        instrumentality of a governmental unit means an instrumentality 
        having independent policy making and appropriating authority. 
           Sec. 84.  2003 S.F. No. 1019, section 2, if enacted, is 
        amended to read: 
           Sec. 2.  [144.7063] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] Unless the context clearly 
        indicates otherwise, for the purposes of sections 144.706 to 
        144.7069, the terms defined in this section have the meanings 
        given them. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of health. 
           Subd. 3.  [FACILITY.] "Facility" means a hospital licensed 
        under sections 144.50 to 144.58. 
           Subd. 4.  [SERIOUS DISABILITY.] "Serious disability" means 
        (1) a physical or mental impairment that substantially limits 
        one or more of the major life activities of an individual, 
        (2) or a loss of bodily function, if the impairment or loss 
        lasts more than seven days or is still present at the time of 
        discharge from an inpatient health care facility, or (3) (2) 
        loss of a body part. 
           Subd. 5.  [SURGERY.] "Surgery" means the treatment of 
        disease, injury, or deformity by manual or operative methods.  
        Surgery includes endoscopies and other invasive procedures. 
           Sec. 85.  2003 S.F. No. 1019, section 3, if enacted, is 
        amended to read: 
           Sec. 3.  [144.7065] [FACILITY REQUIREMENTS TO REPORT, 
        ANALYZE, AND CORRECT.] 
           Subdivision 1.  [REPORTS OF ADVERSE HEALTH CARE EVENTS 
        REQUIRED.] Each facility shall report to the commissioner the 
        occurrence of any of the adverse health care events described in 
        subdivisions 2 to 7 as soon as is reasonably and practically 
        possible, but no later than 15 working days after discovery of 
        the event.  The report shall be filed in a format specified by 
        the commissioner and shall identify the facility but shall not 
        include any identifying information for any of the health care 
        professionals, facility employees, or patients involved.  The 
        commissioner may consult with experts and organizations familiar 
        with patient safety when developing the format for reporting and 
        in further defining events in order to be consistent with 
        industry standards. 
           Subd. 2.  [SURGICAL EVENTS.] Events reportable under this 
        subdivision are: 
           (1) surgery performed on a wrong body part that is not 
        consistent with the documented informed consent for that 
        patient.  Reportable events under this clause do not include 
        situations requiring prompt action that occur in the course of 
        surgery or situations whose urgency precludes obtaining informed 
        consent; 
           (2) surgery performed on the wrong patient; 
           (3) the wrong surgical procedure performed on a patient 
        that is not consistent with the documented informed consent for 
        that patient.  Reportable events under this clause do not 
        include situations requiring prompt action that occur in the 
        course of surgery or situations whose urgency precludes 
        obtaining informed consent; 
           (4) retention of a foreign object in a patient after 
        surgery or other procedure, excluding objects intentionally 
        implanted as part of a planned intervention and objects present 
        prior to surgery that are intentionally retained; and 
           (5) death during or immediately after surgery of a normal, 
        healthy patient who has no organic, physiologic, biochemical, or 
        psychiatric disturbance and for whom the pathologic processes 
        for which the operation is to be performed are localized and do 
        not entail a systemic disturbance. 
           Subd. 3.  [PRODUCT OR DEVICE EVENTS.] Events reportable 
        under this subdivision are: 
           (1) patient death or serious disability associated with the 
        use of contaminated drugs, devices, or biologics provided by the 
        facility when the contamination is the result of generally 
        detectable contaminants in drugs, devices, or biologics 
        regardless of the source of the contamination or the product; 
           (2) patient death or serious disability associated with the 
        use or function of a device in patient care in which the device 
        is used or functions other than as intended.  "Device" includes, 
        but is not limited to, catheters, drains, and other specialized 
        tubes, infusion pumps, and ventilators; and 
           (3) patient death or serious disability associated with 
        intravascular air embolism that occurs while being cared for in 
        a facility, excluding deaths associated with neurosurgical 
        procedures known to present a high risk of intravascular air 
        embolism. 
           Subd. 4.  [PATIENT PROTECTION EVENTS.] Events reportable 
        under this subdivision are: 
           (1) an infant discharged to the wrong person; 
           (2) patient death or serious disability associated with 
        patient disappearance for more than four hours, excluding events 
        involving adults who have decision-making capacity; and 
           (3) patient suicide or attempted suicide resulting in 
        serious disability while being cared for in a facility due to 
        patient actions after admission to the facility, excluding 
        deaths resulting from self-inflicted injuries that were the 
        reason for admission to the facility. 
           Subd. 5.  [CARE MANAGEMENT EVENTS.] Events reportable under 
        this subdivision are: 
           (1) patient death or serious disability associated with a 
        medication error, including, but not limited to, errors 
        involving the wrong drug, the wrong dose, the wrong patient, the 
        wrong time, the wrong rate, the wrong preparation, or the wrong 
        route of administration, excluding reasonable differences in 
        clinical judgment on drug selection and dose; 
           (2) patient death or serious disability associated with a 
        hemolytic reaction due to the administration of ABO-incompatible 
        blood or blood products; 
           (3) maternal death or serious disability associated with 
        labor or delivery in a low-risk pregnancy while being cared for 
        in a facility, including events that occur within 42 days 
        postdelivery and excluding deaths from pulmonary or amniotic 
        fluid embolism, acute fatty liver of pregnancy, or 
        cardiomyopathy; 
           (4) patient death or serious disability directly related to 
        hypoglycemia, the onset of which occurs while the patient is 
        being cared for in a facility; 
           (5) death or serious disability, including kernicterus, 
        associated with failure to identify and treat hyperbilirubinemia 
        in neonates during the first 28 days of life.  
        "Hyperbilirubinemia" means bilirubin levels greater than 30 
        milligrams per deciliter; 
           (6) stage 3 or 4 ulcers acquired after admission to a 
        facility, excluding progression from stage 2 to stage 3 if stage 
        2 was recognized upon admission; and 
           (7) patient death or serious disability due to spinal 
        manipulative therapy. 
           Subd. 6.  [ENVIRONMENTAL EVENTS.] Events reportable under 
        this subdivision are: 
           (1) patient death or serious disability associated with an 
        electric shock while being cared for in a facility, excluding 
        events involving planned treatments such as electric 
        countershock; 
           (2) any incident in which a line designated for oxygen or 
        other gas to be delivered to a patient contains the wrong gas or 
        is contaminated by toxic substances; 
           (3) patient death or serious disability associated with a 
        burn incurred from any source while being cared for in a 
        facility; 
           (4) patient death associated with a fall while being cared 
        for in a facility; and 
           (5) patient death or serious disability associated with the 
        use or lack of restraints or bedrails while being cared for in a 
        facility. 
           Subd. 7.  [CRIMINAL EVENTS.] Events reportable under this 
        subdivision are: 
           (1) any instance of care ordered by or provided by someone 
        impersonating a physician, nurse, pharmacist, or other licensed 
        health care provider; 
           (2) abduction of a patient of any age; 
           (3) sexual assault on a patient within or on the grounds of 
        a facility; and 
           (4) death or significant injury of a patient or staff 
        member resulting from a physical assault that occurs within or 
        on the grounds of a facility. 
           Subd. 8.  [ROOT CAUSE ANALYSIS; CORRECTIVE ACTION PLAN.] 
        Following the occurrence of an adverse health care event, the 
        facility must conduct a root cause analysis of the event.  
        Following the analysis, the facility must:  (1) implement a 
        corrective action plan to implement the findings of the analysis 
        or (2) report to the commissioner any reasons for not taking 
        corrective action.  If the root cause analysis and the 
        implementation of a corrective action plan are complete at the 
        time an event must be reported, the findings of the analysis and 
        the corrective action plan must be included in the report of the 
        event.  The findings of the root cause analysis and a copy of 
        the corrective action plan must otherwise be filed with the 
        commissioner within 60 days of the event. 
           Subd. 9.  [ELECTRONIC REPORTING.] The commissioner must 
        design the reporting system so that a facility may file by 
        electronic means the reports required under this section.  The 
        commissioner shall encourage a facility to use the electronic 
        filing option when that option is feasible for the facility. 
           Subd. 10.  [RELATION TO OTHER LAW.] (a) Adverse health 
        events described in subdivisions 2 to 6 do not constitute 
        "maltreatment" or "a physical injury that is not reasonably 
        explained" under section 626.557 and are excluded from the 
        reporting requirements of section 626.557, provided the facility 
        makes a determination within 24 hours of the discovery of the 
        event that this section is applicable and the facility files the 
        reports required under this section in a timely fashion. 
           (b) A facility that has determined that an event described 
        in subdivisions 2 to 6 has occurred must inform persons who are 
        mandated reporters under section 626.5572, subdivision 16, of 
        that determination.  A mandated reporter otherwise required to 
        report under section 626.557, subdivision 3, paragraph (e), is 
        relieved of the duty to report an event that the facility 
        determines under paragraph (a) to be reportable under 
        subdivisions 2 to 6. 
           (c) The protections and immunities applicable to voluntary 
        reports under section 626.557 are not affected by this section. 
           (d) Notwithstanding section 626.557, a lead agency under 
        section 626.5572, subdivision 13, is not required to conduct an 
        investigation of an event described in subdivisions 2 to 6. 
           Sec. 86.  2003 S.F. No. 1019, section 7, if enacted, is 
        amended to read: 
           Sec. 7.  [ADVERSE HEALTH CARE EVENTS REPORTING SYSTEM 
        TRANSITION PERIOD.] 
           (a) Effective July 1, 2003, limited implementation of the 
        Adverse Health Care Events Reporting Act shall begin, provided 
        the commissioner of health has secured sufficient nonstate funds 
        for this purpose.  During this period, the commissioner must: 
           (1) solicit additional nonstate funds to support full 
        implementation of the system; 
           (2) work with organizations and experts familiar with 
        patient safety to review reporting categories in Minnesota 
        Statutes, section 144.7065, make necessary clarifications, and 
        develop educational materials; and 
           (3) monitor activities of the National Quality Forum and 
        other patient safety organizations, other states, and the 
        federal government in the area of patient safety. 
           (b) Effective July 1, 2003, facilities defined in Minnesota 
        Statutes, section 144.7063, subdivision 3, shall report any 
        adverse health care events, as defined in Minnesota Statutes, 
        section 144.7065, to the incident reporting system maintained by 
        the Minnesota Hospital Association.  The association shall 
        provide a summary report to the commissioner that identifies the 
        types of events by category.  The association shall consult with 
        the commissioner regarding the data to be reported to the 
        commissioner, storage of data received by the association but 
        not reported to the commissioner, and eventual retrieval by the 
        commissioner of stored data. 
           (c) The commissioner shall report to the legislature by 
        January 15 of 2004 and 2005, with a list of the number of 
        reported events by type and recommendations, if any, for 
        reporting system modifications, including additional categories 
        of events that should be reported. 
           (d) From July 1, 2003, until full implementation of the 
        reporting system, the commissioner of health shall not make a 
        final disposition as defined in Minnesota Statutes, section 
        626.5572, subdivision 8, for investigations conducted in 
        licensed hospitals under the provisions of Minnesota Statutes, 
        section 626.557.  The commissioner's findings in these cases 
        shall identify noncompliance with federal certification or state 
        licensure rules or laws. 
           (e) Effective July 1, 2004, the reporting system shall be 
        fully implemented, provided (1) the commissioner has secured 
        sufficient funds from nonstate sources to operate the system 
        during fiscal year 2005, and (2) the commissioner has notified 
        facilities by April 1, 2004, of their duty to report. 
           (f) Effective July 1, 2005, the reporting system shall be 
        operated with state appropriations. 
           Sec. 87.  [AUTHORITY TO COLLECT CERTAIN FEES SUSPENDED.] 
           (a) The commissioner's authority to collect the certificate 
        application fee from hearing instrument dispensers under 
        Minnesota Statutes, section 153A.17, is suspended for certified 
        hearing instrument dispensers renewing certification in fiscal 
        year 2004. 
           (b) The commissioner's authority to collect the license 
        renewal fee from occupational therapy practitioners under 
        Minnesota Statutes, section 148.6445, subdivision 2, is 
        suspended for fiscal years 2004 and 2005. 
           Sec. 88.  [REVISOR'S INSTRUCTION.] 
           (a) The revisor of statutes shall delete the reference to 
        "144.1495" in Minnesota Statutes, section 62Q.145, and insert 
        "144.1501." 
           (b) For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 89.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 62J.15; 62J.152; 
        62J.451; 62J.452; 144.126; 144.1484; 144.1494; 144.1495; 
        144.1496; 144.1497; 144A.36; 144A.38; 148.5194, subdivision 3a; 
        and 148.6445, subdivision 9, are repealed.  
           (b) Minnesota Rules, parts 4763.0100; 4763.0110; 4763.0125; 
        4763.0135; 4763.0140; 4763.0150; 4763.0160; 4763.0170; 
        4763.0180; 4763.0190; 4763.0205; 4763.0215; 4763.0220; 
        4763.0230; 4763.0240; 4763.0250; 4763.0260; 4763.0270; 
        4763.0285; 4763.0295; and 4763.0300, are repealed. 

                                   ARTICLE 8 
                           LOCAL PUBLIC HEALTH GRANTS
           Section 1.  Minnesota Statutes 2002, section 144E.11, 
        subdivision 6, is amended to read: 
           Subd. 6.  [REVIEW CRITERIA.] When reviewing an application 
        for licensure, the board and administrative law judge shall 
        consider the following factors: 
           (1) the relationship of the proposed service or expansion 
        in primary service area to the current community health plan as 
        approved by the commissioner of health under section 145A.12, 
        subdivision 4; 
           (2) the recommendations or comments of the governing bodies 
        of the counties, municipalities, community health boards as 
        defined under section 145A.09, subdivision 2, and regional 
        emergency medical services system designated under section 
        144E.50 in which the service would be provided; 
           (3) (2) the deleterious effects on the public health from 
        duplication, if any, of ambulance services that would result 
        from granting the license; 
           (4) (3) the estimated effect of the proposed service or 
        expansion in primary service area on the public health; and 
           (5) (4) whether any benefit accruing to the public health 
        would outweigh the costs associated with the proposed service or 
        expansion in primary service area.  The administrative law judge 
        shall recommend that the board either grant or deny a license or 
        recommend that a modified license be granted.  The reasons for 
        the recommendation shall be set forth in detail.  The 
        administrative law judge shall make the recommendations and 
        reasons available to any individual requesting them.  
           Sec. 2.  Minnesota Statutes 2002, section 145.88, is 
        amended to read: 
           145.88 [PURPOSE.] 
           The legislature finds that it is in the public interest to 
        assure:  
           (a) statewide planning and coordination of maternal and 
        child health services through the acquisition and analysis of 
        population-based health data, provision of technical support and 
        training, and coordination of the various public and private 
        maternal and child health efforts; and 
           (b) support for targeted maternal and child health services 
        in communities with significant populations of high risk, low 
        income families through a grants process.  
           Federal money received by the Minnesota department of 
        health, pursuant to United States Code, title 42, sections 701 
        to 709, shall be expended to:  
           (1) assure access to quality maternal and child health 
        services for mothers and children, especially those of low 
        income and with limited availability to health services and 
        those children at risk of physical, neurological, emotional, and 
        developmental problems arising from chemical abuse by a mother 
        during pregnancy; 
           (2) reduce infant mortality and the incidence of 
        preventable diseases and handicapping conditions among children; 
           (3) reduce the need for inpatient and long-term care 
        services and to otherwise promote the health of mothers and 
        children, especially by providing preventive and primary care 
        services for low-income mothers and children and prenatal, 
        delivery and postpartum care for low-income mothers; 
           (4) provide rehabilitative services for blind and disabled 
        children under age 16 receiving benefits under title XVI of the 
        Social Security Act; and 
           (5) provide and locate medical, surgical, corrective and 
        other service for children who are crippled or who are suffering 
        from conditions that lead to crippling.  
           Sec. 3.  Minnesota Statutes 2002, section 145.881, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DUTIES.] The advisory task force shall meet on a 
        regular basis to perform the following duties:  
           (a) review and report on the health care needs of mothers 
        and children throughout the state of Minnesota; 
           (b) review and report on the type, frequency and impact of 
        maternal and child health care services provided to mothers and 
        children under existing maternal and child health care programs, 
        including programs administered by the commissioner of health; 
           (c) establish, review, and report to the commissioner a 
        list of program guidelines and criteria which the advisory task 
        force considers essential to providing an effective maternal and 
        child health care program to low income populations and high 
        risk persons and fulfilling the purposes defined in section 
        145.88; 
           (d) review staff recommendations of the department of 
        health regarding maternal and child health grant awards before 
        the awards are made; 
           (e) make recommendations to the commissioner for the use of 
        other federal and state funds available to meet maternal and 
        child health needs; 
           (f) (e) make recommendations to the commissioner of health 
        on priorities for funding the following maternal and child 
        health services:  (1) prenatal, delivery and postpartum care, (2)
        comprehensive health care for children, especially from birth 
        through five years of age, (3) adolescent health services, (4) 
        family planning services, (5) preventive dental care, (6) 
        special services for chronically ill and handicapped children 
        and (7) any other services which promote the health of mothers 
        and children; and 
           (g) make recommendations to the commissioner of health on 
        the process to distribute, award and administer the maternal and 
        child health block grant funds; and 
           (h) review the measures that are used to define the 
        variables of the funding distribution formula in section 
        145.882, subdivision 4, every two years and make recommendations 
        to the commissioner of health for changes based upon principles 
        established by the advisory task force for this purpose.  
           (f) establish, in consultation with the commissioner and 
        the state community health advisory committee established under 
        section 145A.10, subdivision 10, paragraph (a), statewide 
        outcomes that will improve the health status of mothers and 
        children as required in section 145A.12, subdivision 7. 
           Sec. 4.  Minnesota Statutes 2002, section 145.882, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FUNDING LEVELS AND ADVISORY TASK FORCE 
        REVIEW.] Any decrease in the amount of federal funding to the 
        state for the maternal and child health block grant must be 
        apportioned to reflect a proportional decrease for each 
        recipient.  Any increase in the amount of federal funding to the 
        state must be distributed under subdivisions 2, and 3, and 4. 
           The advisory task force shall review and recommend the 
        proportion of maternal and child health block grant funds to be 
        expended for indirect costs, direct services and special 
        projects.  
           Sec. 5.  Minnesota Statutes 2002, section 145.882, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ALLOCATION TO THE COMMISSIONER OF HEALTH.] 
        Beginning January 1, 1986, up to one-third of the total maternal 
        and child health block grant money may be retained by the 
        commissioner of health for administrative and technical 
        assistance services, projects of regional or statewide 
        significance, direct services to children with handicaps, and 
        other activities of the commissioner. to: 
           (1) meet federal maternal and child block grant 
        requirements of a statewide needs assessment every five years 
        and prepare the annual federal block grant application and 
        report; 
           (2) collect and disseminate statewide data on the health 
        status of mothers and children within one year of the end of the 
        year; 
           (3) provide technical assistance to community health boards 
        in meeting statewide outcomes under section 145A.12, subdivision 
        7; 
           (4) evaluate the impact of maternal and child health 
        activities on the health status of mothers and children; 
           (5) provide services to children under age 16 receiving 
        benefits under title XVI of the Social Security Act; and 
           (6) perform other maternal and child health activities 
        listed in section 145.88 and as deemed necessary by the 
        commissioner. 
           Sec. 6.  Minnesota Statutes 2002, section 145.882, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ALLOCATION TO COMMUNITY HEALTH SERVICES 
        AREAS BOARDS.] (a) The maternal and child health block grant 
        money remaining after distributions made under subdivision 2 
        must be allocated according to the formula in subdivision 4 to 
        community health services areas section 145A.131, subdivision 2, 
        for distribution by to community health boards. as defined in 
        section 145A.02, subdivision 5, to qualified programs that 
        provide essential services within the community health services 
        area as long as:  
           (1) the Minneapolis community health service area is 
        allocated at least $1,626,215 per year; 
           (2) the St. Paul community health service area is allocated 
        at least $822,931 per year; and 
           (3) all other community health service areas are allocated 
        at least $30,000 per county per year or their 1988-1989 funding 
        cycle award, whichever is less. 
           (b) Notwithstanding paragraph (a), if the total amount of 
        maternal and child health block grant funding decreases, the 
        decrease must be apportioned to reflect a proportional decrease 
        for each recipient, including recipients who would otherwise 
        receive a guaranteed minimum allocation under paragraph (a).  A 
        community health board that receives funding under this section 
        shall provide at least a 50 percent match for funds received 
        under United States Code, title 42, sections 701 to 709.  
        Eligible funds must be used to meet match requirements.  
        Eligible funds include funds from local property taxes, 
        reimbursements from third parties, fees, other funds, donations, 
        nonfederal grants, or state funds received under the local 
        public health grant defined in section 145A.131, that are used 
        for maternal and child health activities as described in section 
        145.882, subdivision 7. 
           Sec. 7.  Minnesota Statutes 2002, section 145.882, is 
        amended by adding a subdivision to read:  
           Subd. 5a.  [NONPARTICIPATING COMMUNITY HEALTH BOARDS.] If a 
        community health board decides not to participate in maternal 
        and child health block grant activities under subdivision 3 or 
        the commissioner determines under section 145A.131, subdivision 
        7, not to fund the community health board, the commissioner is 
        responsible for directing maternal and child health block grant 
        activities in that community health board's geographic area.  
        The commissioner may elect to directly provide public health 
        activities to meet the statewide outcomes or to contract with 
        other governmental units or nonprofit organizations. 
           Sec. 8.  Minnesota Statutes 2002, section 145.882, 
        subdivision 7, is amended to read: 
           Subd. 7.  [USE OF BLOCK GRANT MONEY.] (a) Maternal and 
        child health block grant money allocated to a community health 
        board or community health services area under this section must 
        be used for qualified programs for high risk and low-income 
        individuals.  Block grant money must be used for programs that: 
           (1) specifically address the highest risk populations, 
        particularly low-income and minority groups with a high rate of 
        infant mortality and children with low birth weight, by 
        providing services, including prepregnancy family planning 
        services, calculated to produce measurable decreases in infant 
        mortality rates, instances of children with low birth weight, 
        and medical complications associated with pregnancy and 
        childbirth, including infant mortality, low birth rates, and 
        medical complications arising from chemical abuse by a mother 
        during pregnancy; 
           (2) specifically target pregnant women whose age, medical 
        condition, maternal history, or chemical abuse substantially 
        increases the likelihood of complications associated with 
        pregnancy and childbirth or the birth of a child with an 
        illness, disability, or special medical needs; 
           (3) specifically address the health needs of young children 
        who have or are likely to have a chronic disease or disability 
        or special medical needs, including physical, neurological, 
        emotional, and developmental problems that arise from chemical 
        abuse by a mother during pregnancy; 
           (4) provide family planning and preventive medical care for 
        specifically identified target populations, such as minority and 
        low-income teenagers, in a manner calculated to decrease the 
        occurrence of inappropriate pregnancy and minimize the risk of 
        complications associated with pregnancy and childbirth; or 
           (5) specifically address the frequency and severity of 
        childhood and adolescent health issues, including injuries in 
        high risk target populations by providing services calculated to 
        produce measurable decreases in mortality and morbidity.; 
        However, money may be used for this purpose only if the 
        community health board's application includes program components 
        for the purposes in clauses (1) to (4) in the proposed 
        geographic service area and the total expenditure for 
        injury-related programs under this clause does not exceed ten 
        percent of the total allocation under subdivision 3. 
           (b) Maternal and child health block grant money may be used 
        for purposes other than the purposes listed in this subdivision 
        only under the following conditions:  
           (1) the community health board or community health services 
        area can demonstrate that existing programs fully address the 
        needs of the highest risk target populations described in this 
        subdivision; or 
           (2) the money is used to continue projects that received 
        funding before creation of the maternal and child health block 
        grant in 1981. 
           (c) Projects that received funding before creation of the 
        maternal and child health block grant in 1981, must be allocated 
        at least the amount of maternal and child health special project 
        grant funds received in 1989, unless (1) the local board of 
        health provides equivalent alternative funding for the project 
        from another source; or (2) the local board of health 
        demonstrates that the need for the specific services provided by 
        the project has significantly decreased as a result of changes 
        in the demographic characteristics of the population, or other 
        factors that have a major impact on the demand for services.  If 
        the amount of federal funding to the state for the maternal and 
        child health block grant is decreased, these projects must 
        receive a proportional decrease as required in subdivision 1.  
        Increases in allocation amounts to local boards of health under 
        subdivision 4 may be used to increase funding levels for these 
        projects. 
           (6) specifically address preventing child abuse and 
        neglect, reducing juvenile delinquency, promoting positive 
        parenting and resiliency in children, and promoting family 
        health and economic sufficiency through public health nurse home 
        visits under section 145A.17; or 
           (7) specifically address nutritional issues of women, 
        infants, and young children through WIC clinic services. 
           Sec. 9.  [145.8821] [ACCOUNTABILITY.] 
           (a) Coordinating with the statewide outcomes established 
        under section 145A.12, subdivision 7, and with accountability 
        measures outlined in section 145A.131, subdivision 7, each 
        community health board that receives money under section 
        145.882, subdivision 3, shall select by February 1, 2005, and 
        every five years thereafter, up to two statewide maternal and 
        child health outcomes. 
           (b) For the period January 1, 2004, to December 31, 2005, 
        each community health board must work toward the Healthy People 
        2010 goal to reduce the state's percentage of low birth weight 
        infants.  
           (c) The commissioner shall monitor and evaluate whether 
        each community health board has made sufficient progress toward 
        the selected outcomes established in paragraph (b) and under 
        section 145A.12, subdivision 7. 
           (d) Community health boards shall provide the commissioner 
        with annual information necessary to evaluate progress toward 
        selected statewide outcomes and to meet federal reporting 
        requirements. 
           Sec. 10.  Minnesota Statutes 2002, section 145.883, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] For purposes of sections 145.881 
        to 145.888 145.883, the terms defined in this section shall have 
        the meanings given them.  
           Sec. 11.  Minnesota Statutes 2002, section 145.883, 
        subdivision 9, is amended to read: 
           Subd. 9.  [COMMUNITY HEALTH SERVICES AREA BOARD.] 
        "Community health services area board" means a city, county, or 
        multicounty area that is organized as a community health board 
        under section 145A.09 and for which a state subsidy is received 
        under sections 145A.09 to 145A.13 a board of health established, 
        operating, and eligible for a local public health grant under 
        sections 145A.09 to 145A.131. 
           Sec. 12.  Minnesota Statutes 2002, section 145A.02, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMMUNITY HEALTH BOARD.] "Community health 
        board" means a board of health established, operating, and 
        eligible for a subsidy local public health grant under sections 
        145A.09 to 145A.13 145A.131. 
           Sec. 13.  Minnesota Statutes 2002, section 145A.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COMMUNITY HEALTH SERVICES.] "Community health 
        services" means activities designed to protect and promote the 
        health of the general population within a community health 
        service area by emphasizing the prevention of disease, injury, 
        disability, and preventable death through the promotion of 
        effective coordination and use of community resources, and by 
        extending health services into the community.  Program 
        categories of community health services include disease 
        prevention and control, emergency medical care, environmental 
        health, family health, health promotion, and home health care. 
           Sec. 14.  Minnesota Statutes 2002, section 145A.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COMMUNITY HEALTH SERVICE AREA.] "Community 
        health service area" means a city, county, or multicounty area 
        that is organized as a community health board under section 
        145A.09 and for which a subsidy local public health grant is 
        received under sections 145A.09 to 145A.13 145A.131. 
           Sec. 15.  Minnesota Statutes 2002, section 145A.06, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] In addition to other powers 
        and duties provided by law, the commissioner has the powers 
        listed in subdivisions 2 to 4 5. 
           Sec. 16.  Minnesota Statutes 2002, section 145A.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMMUNITY HEALTH BOARD; ELIGIBILITY.] A board of 
        health that meets the requirements of sections 145A.09 
        to 145A.13 145A.131 is a community health board and is eligible 
        for a community health subsidy local public health grant under 
        section 145A.13 145A.131. 
           Sec. 17.  Minnesota Statutes 2002, section 145A.09, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CITIES.] A city that received a subsidy under 
        section 145A.13 and that meets the requirements of sections 
        145A.09 to 145A.13 145A.131 is eligible for a community health 
        subsidy local public health grant under section 
        145A.13 145A.131. 
           Sec. 18.  Minnesota Statutes 2002, section 145A.09, 
        subdivision 7, is amended to read: 
           Subd. 7.  [WITHDRAWAL.] (a) A county or city that has 
        established or joined a community health board may withdraw from 
        the subsidy local public health grant program authorized by 
        sections 145A.09 to 145A.13 145A.131 by resolution of its 
        governing body in accordance with section 145A.03, subdivision 
        3, and this subdivision. 
           (b) A county or city may not withdraw from a joint powers 
        community health board during the first two calendar years 
        following that county's or city's initial adoption of the joint 
        powers agreement.  
           (c) The withdrawal of a county or city from a community 
        health board does not affect the eligibility for the community 
        health subsidy local public health grant of any remaining county 
        or city for one calendar year following the effective date of 
        withdrawal. 
           (d) The amount of additional annual payment for calendar 
        year 1985 made pursuant to Minnesota Statutes 1984, section 
        145.921, subdivision 4, must be subtracted from the subsidy for 
        a county that, due to withdrawal from a community health board, 
        ceases to meet the terms and conditions under which that 
        additional annual payment was made The local public health grant 
        for a county that chooses to withdraw from a multicounty 
        community health board shall be reduced by the amount of the 
        local partnership incentive under section 145A.131, subdivision 
        2, paragraph (c). 
           Sec. 19.  Minnesota Statutes 2002, section 145A.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PREEMPTION.] (a) Not later than 365 days after 
        the approval of a community health plan by the 
        commissioner formation of a community health board, any other 
        board of health within the community health service area for 
        which the plan has been prepared must cease operation, except as 
        authorized in a joint powers agreement under section 145A.03, 
        subdivision 2, or delegation agreement under section 145A.07, 
        subdivision 2, or as otherwise allowed by this subdivision. 
           (b) This subdivision does not preempt or otherwise change 
        the powers and duties of any city or county eligible for subsidy 
        a local public health grant under section 145A.09. 
           (c) This subdivision does not preempt the authority to 
        operate a community health services program of any city of the 
        first or second class operating an existing program of community 
        health services located within a county with a population of 
        300,000 or more persons until the city council takes action to 
        allow the county to preempt the city's powers and duties. 
           Sec. 20.  Minnesota Statutes 2002, section 145A.10, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [DUTIES.] (a) Consistent with the guidelines and 
        standards established under section 145A.12, and with input from 
        the community, the community health board shall: 
           (1) establish local public health priorities based on an 
        assessment of community health needs and assets; and 
           (2) determine the mechanisms by which the community health 
        board will address the local public health priorities 
        established under clause (1) and achieve the statewide outcomes 
        established under sections 145.8821 and 145A.12, subdivision 7, 
        within the limits of available funding.  In determining the 
        mechanisms to address local public health priorities and achieve 
        statewide outcomes, the community health board shall seek public 
        input or consider the recommendations of the community health 
        advisory committee and the following essential public health 
        services: 
           (i) monitor health status to identify community health 
        problems; 
           (ii) diagnose and investigate problems and health hazards 
        in the community; 
           (iii) inform, educate, and empower people about health 
        issues; 
           (iv) mobilize community partnerships to identify and solve 
        health problems; 
           (v) develop policies and plans that support individual and 
        community health efforts; 
           (vi) enforce laws and regulations that protect health and 
        ensure safety; 
           (vii) link people to needed personal health care services; 
           (viii) ensure a competent public health and personal health 
        care workforce; 
           (ix) evaluate effectiveness, accessibility, and quality of 
        personal and population-based health services; and 
           (x) research for new insights and innovative solutions to 
        health problems. 
           (b) By February 1, 2005, and every five years thereafter, 
        each community health board that receives a local public health 
        grant under section 145A.131 shall notify the commissioner in 
        writing of the statewide outcomes established under sections 
        145.8821 and 145A.12, subdivision 7, that the board will address 
        and the local priorities established under paragraph (a) that 
        the board will address. 
           (c) Each community health board receiving a local public 
        health grant under section 145A.131 must submit an annual report 
        to the commissioner documenting progress toward the achievement 
        of statewide outcomes established under sections 145.8821 and 
        145A.12, subdivision 7, and the local public health priorities 
        established under paragraph (a), using reporting standards and 
        procedures established by the commissioner and in compliance 
        with all applicable federal requirements.  If a community health 
        board has identified additional local priorities for use of the 
        local public health grant since the last notification of 
        outcomes and priorities under paragraph (b), the community 
        health board shall notify the commissioner of the additional 
        local public health priorities in the annual report. 
           Sec. 21.  Minnesota Statutes 2002, section 145A.10, 
        subdivision 10, is amended to read: 
           Subd. 10.  [STATE AND LOCAL ADVISORY COMMITTEES.] (a) A 
        state community health advisory committee is established to 
        advise, consult with, and make recommendations to the 
        commissioner on the development, maintenance, funding, and 
        evaluation of community health services.  Each community health 
        board may appoint a member to serve on the committee.  The 
        committee must meet at least quarterly, and special meetings may 
        be called by the committee chair or a majority of the members.  
        Members or their alternates may receive a per diem and must be 
        reimbursed for travel and other necessary expenses while engaged 
        in their official duties.  
           (b) The city councils or county boards that have 
        established or are members of a community health board must may 
        appoint a community health advisory committee to advise, consult 
        with, and make recommendations to the community health board on 
        matters relating to the development, maintenance, funding, and 
        evaluation of community health services.  The committee must 
        consist of at least five members and must be generally 
        representative of the population and health care providers of 
        the community health service area.  The committee must meet at 
        least three times a year and at the call of the chair or a 
        majority of the members.  Members may receive a per diem and 
        reimbursement for travel and other necessary expenses while 
        engaged in their official duties. 
           (c) State and local advisory committees must adopt bylaws 
        or operating procedures that specify the length of terms of 
        membership, procedures for assuring that no more than half of 
        these terms expire during the same year, and other matters 
        relating to the conduct of committee business.  Bylaws or 
        operating procedures may allow one alternate to be appointed for 
        each member of a state or local advisory committee.  Alternates 
        may be given full or partial powers and duties of members the 
        duties under subdivision 5a. 
           Sec. 22.  Minnesota Statutes 2002, section 145A.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONSIDERATION OF COMMUNITY HEALTH PLAN LOCAL 
        PUBLIC HEALTH PRIORITIES AND STATEWIDE OUTCOMES IN TAX LEVY.] In 
        levying taxes authorized under section 145A.08, subdivision 3, a 
        city council or county board that has formed or is a member of a 
        community health board must consider the income and expenditures 
        required to meet the objectives of the community health plan for 
        its area local public health priorities established under 
        section 145A.10, subdivision 5a, and statewide outcomes 
        established under section 145A.12, subdivision 7. 
           Sec. 23.  Minnesota Statutes 2002, section 145A.11, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ORDINANCES RELATING TO COMMUNITY HEALTH 
        SERVICES.] A city council or county board that has established 
        or is a member of a community health board may by ordinance 
        adopt and enforce minimum standards for services provided 
        according to sections 145A.02 and 145A.10, subdivision 5.  An 
        ordinance must not conflict with state law or with more 
        stringent standards established either by rule of an agency of 
        state government or by the provisions of the charter or 
        ordinances of any city organized under section 145A.09, 
        subdivision 4. 
           Sec. 24.  Minnesota Statutes 2002, section 145A.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ADMINISTRATIVE AND PROGRAM SUPPORT.] The 
        commissioner must assist community health boards in the 
        development, administration, and implementation of community 
        health services.  This assistance may consist of but is not 
        limited to: 
           (1) informational resources, consultation, and training to 
        help community health boards plan, develop, integrate, provide 
        and evaluate community health services; and 
           (2) administrative and program guidelines and standards, 
        developed with the advice of the state community health advisory 
        committee.  Adoption of these guidelines by a community health 
        board is not a prerequisite for plan approval as prescribed in 
        subdivision 4. 
           Sec. 25.  Minnesota Statutes 2002, section 145A.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PERSONNEL STANDARDS.] In accordance with chapter 
        14, and in consultation with the state community health advisory 
        committee, the commissioner may adopt rules to set standards for 
        administrative and program personnel to ensure competence in 
        administration and planning and in each program area defined in 
        section 145A.02. 
           Sec. 26.  Minnesota Statutes 2002, section 145A.12, is 
        amended by adding a subdivision to read:  
           Subd. 7.  [STATEWIDE OUTCOMES.] (a) The commissioner, in 
        consultation with the state community health advisory committee 
        established under section 145A.10, subdivision 10, paragraph 
        (a), shall establish statewide outcomes for local public health 
        grant funds allocated to community health boards between January 
        1, 2004, and December 31, 2005. 
           (b) At least one statewide outcome must be established in 
        each of the following public health areas: 
           (1) preventing diseases; 
           (2) protecting against environmental hazards; 
           (3) preventing injuries; 
           (4) promoting healthy behavior; 
           (5) responding to disasters; and 
           (6) ensuring access to health services. 
           (c) The commissioner shall use Minnesota's public health 
        goals established under section 62J.212 and the essential public 
        health services under section 145A.10, subdivision 5a, as a 
        basis for the development of statewide outcomes. 
           (d) The statewide maternal and child health outcomes 
        established under section 145.8821 shall be included as 
        statewide outcomes under this section. 
           (e) By December 31, 2004, and every five years thereafter, 
        the commissioner, in consultation with the state community 
        health advisory committee established under section 145A.10, 
        subdivision 10, paragraph (a), and the maternal and child health 
        advisory task force established under section 145.881, shall 
        develop statewide outcomes for the local public health grant 
        established under section 145A.131, based on state and local 
        assessment data regarding the health of Minnesota residents, the 
        essential public health services under section 145A.10, and 
        current Minnesota public health goals established under section 
        62J.212. 
           Sec. 27.  Minnesota Statutes 2002, section 145A.13, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [EXPIRATION.] This section expires January 1, 
        2004. 
           Sec. 28.  [145A.131] [LOCAL PUBLIC HEALTH GRANT.] 
           Subdivision 1.  [FUNDING FORMULA FOR COMMUNITY HEALTH 
        BOARDS.] (a) Base funding for each community health board 
        eligible for a local public health grant under section 145A.09, 
        subdivision 2, shall be determined by each community health 
        board's fiscal year 2003 allocations, prior to unallotment, for 
        the following grant programs:  community health services 
        subsidy; state and federal maternal and child health special 
        projects grants; family home visiting grants, TANF MN ENABL 
        grants, TANF youth risk behavior grants, and available women, 
        infants, and children grant funds in fiscal year 2003, prior to 
        unallotment, distributed based on the proportion of WIC 
        participants served in fiscal year 2003 within the CHS service 
        area. 
           (b) Base funding for a community health board eligible for 
        a local public health grant under section 145A.09, subdivision 
        2, as determined in paragraph (a), shall be adjusted by the 
        percentage difference between the base, as calculated in 
        paragraph (a), and the funding available for the local public 
        health grant. 
           (c) Multicounty community health boards shall receive a 
        local partnership base of up to $5,000 per year for each county 
        included in the community health board. 
           (d) The state community health advisory committee may 
        recommend a formula to the commissioner to use in distributing 
        state and federal funds to community health boards organized and 
        operating under sections 145A.09 to 145A.131 to achieve locally 
        identified priorities under section 145A.12, subdivision 7, by 
        July 1, 2004, for use in distributing funds to community health 
        boards beginning January 1, 2006, and thereafter. 
           Subd. 2.  [LOCAL MATCH.] (a) A community health board that 
        receives a local public health grant shall provide at least a 75 
        percent match for the state funds received through the local 
        public health grant described in subdivision 1, and subject to 
        paragraphs (b) to (d). 
           (b) Eligible funds must be used to meet match requirements. 
        Eligible funds include funds from local property taxes, 
        reimbursements from third parties, fees, other local funds, and 
        donations or nonfederal grants that are used for community 
        health services described in section 145A.02, subdivision 6. 
           (c) When the amount of local matching funds for a community 
        health board is less than the amount required under paragraph 
        (a), the local public health grant provided for that community 
        health board under this section shall be reduced proportionally. 
           (d) A city organized under the provision of sections 
        145A.09 to 145A.131 that levies a tax for provision of community 
        health services is exempt from any county levy for the same 
        services to the extent of the levy imposed by the city.  
           Subd. 3.  [ACCOUNTABILITY.] (a) Community health boards 
        accepting local public health grants must document progress 
        toward the statewide outcomes established in section 145A.12, 
        subdivision 7, to maintain eligibility to receive the local 
        public health grant. 
           (b) In determining whether or not the community health 
        board is documenting progress toward statewide outcomes, the 
        commissioner shall consider the following factors: 
           (1) whether the community health board has documented 
        progress to meeting essential local activities related to the 
        statewide outcomes, as specified in the grant agreement; 
           (2) the effort put forth by the community health board 
        toward the selected statewide outcomes; 
           (3) whether the community health board has previously 
        failed to document progress toward selected statewide outcomes 
        under this section; 
           (4) the amount of funding received by the community health 
        board to address the statewide outcomes; and 
           (5) other factors as the commissioner may require, if the 
        commissioner specifically identifies the additional factors in 
        the commissioner's written notice of determination. 
           (c) If the commissioner determines that a community health 
        board has not by the applicable deadline documented progress 
        toward the selected statewide outcomes established under section 
        145.8821 or 145A.12, subdivision 7, the commissioner shall 
        notify the community health board in writing and recommend 
        specific actions that the community health board should take 
        over the following 12 months to maintain eligibility for the 
        local public health grant. 
           (d) During the 12 months following the written 
        notification, the commissioner shall provide administrative and 
        program support to assist the community health board in taking 
        the actions recommended in the written notification. 
           (e) If the community health board has not taken the 
        specific actions recommended by the commissioner within 12 
        months following written notification, the commissioner may 
        determine not to distribute funds to the community health board 
        under section 145A.12, subdivision 2, for the next fiscal year. 
           (f) If the commissioner determines not to distribute funds 
        for the next fiscal year, the commissioner must give the 
        community health board written notice of this determination and 
        allow the community health board to appeal the determination in 
        writing. 
           (g) If the commissioner determines not to distribute funds 
        for the next fiscal year to a community health board that has 
        not documented progress toward the statewide outcomes and not 
        taken the actions recommended by the commissioner, the 
        commissioner may retain local public health grant funds that the 
        community health board would have otherwise received and 
        directly carry out essential local activities to meet the 
        statewide outcomes, or contract with other units of government 
        or community-based organizations to carry out essential local 
        activities related to the statewide outcomes. 
           (h) If the community health board that does not document 
        progress toward the statewide outcomes is a city, the 
        commissioner shall distribute the local public health funds that 
        would have been allocated to that city to the county in which 
        the city is located, if that county is part of a community 
        health board. 
           (i) The commissioner shall establish a reporting system by 
        which community health boards will document their progress 
        toward statewide outcomes.  This system will be developed in 
        consultation with the state community health services advisory 
        committee established in section 145A.10, subdivision 10, 
        paragraph (a), and the maternal and the child health advisory 
        committee established in section 145.881.  
           Subd. 4.  [RESPONSIBILITY OF COMMISSIONER TO ENSURE A 
        STATEWIDE PUBLIC HEALTH SYSTEM.] If a county withdraws from a 
        community health board and operates as a board of health or if a 
        community health board elects not to accept the local public 
        health grant, the commissioner may retain the amount of funding 
        that would have been allocated to the community health board 
        using the formula described in subdivision 1 and assume 
        responsibility for public health activities to meet the 
        statewide outcomes in the geographic area served by the board of 
        health or community health board.  The commissioner may elect to 
        directly provide public health activities to meet the statewide 
        outcomes or contract with other units of government or with 
        community-based organizations.  If a city that is currently a 
        community health board withdraws from a community health board 
        or elects not to accept the local public health grant, the local 
        public health grant funds that would have been allocated to that 
        city shall be distributed to the county in which the city is 
        located, if the county is part of a community health board.  
           Subd. 5.  [LOCAL PUBLIC HEALTH PRIORITIES.] Community 
        health boards may use their local public health grant to address 
        local public health priorities identified under section 145A.10, 
        subdivision 5a. 
           Sec. 29.  Minnesota Statutes 2002, section 145A.14, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INDIAN HEALTH GRANTS.] (a) The commissioner may 
        make special grants to community health boards to establish, 
        operate, or subsidize clinic facilities and services to furnish 
        health services for American Indians who reside off reservations.
           (b) To qualify for a grant under this subdivision the 
        community health plan submitted by the community health board 
        must contain a proposal for the delivery of the services and 
        documentation that representatives of the Indian community 
        affected by the plan were involved in its development. 
           (c) Applicants must submit for approval a plan and budget 
        for the use of the funds in the form and detail specified by the 
        commissioner. 
           (d) (c) Applicants must keep records, including records of 
        expenditures to be audited, as the commissioner specifies. 
           Sec. 30.  Minnesota Statutes 2002, section 145A.14, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [TRIBAL GOVERNMENTS.] (a) Of the funding 
        available for local public health grants, $1,500,000 per year is 
        available to tribal governments for: 
           (1) maternal and child health activities under section 
        145.882, subdivision 7; 
           (2) activities to reduce health disparities under section 
        145.928, subdivision 10; and 
           (3) emergency preparedness. 
           (b) The commissioner, in consultation with tribal 
        governments, shall establish a formula for distributing the 
        funds and developing the outcomes to be measured. 
           Sec. 31.  [REVISOR'S INSTRUCTION.] 
           (a) The revisor of statutes shall delete "145A.13" and 
        insert "145A.131" in Minnesota Statutes, sections 145A.03, 
        subdivision 1; 145A.04, subdivision 4; 145A.10, subdivision 1; 
        256E.03, subdivision 2; 383B.221, subdivision 2; and 402.02, 
        subdivision 2. 
           (b) For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 32.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 144.401; 145.882, 
        subdivisions 4, 5, 6, and 8; 145.883, subdivisions 4 and 7; 
        145.884; 145.885; 145.886; 145.888; 145.889; 145.890; 145A.02, 
        subdivisions 9, 10, 11, 12, 13, and 14; 145A.09, subdivision 6; 
        145A.10, subdivisions 5, 6, and 8; 145A.11, subdivision 3; 
        145A.12, subdivisions 3, 4, and 5; 145A.14, subdivisions 3 and 
        4; and 145A.17, subdivision 2, are repealed. 
           (b) Minnesota Rules, parts 4736.0010; 4736.0020; 4736.0030; 
        4736.0040; 4736.0050; 4736.0060; 4736.0070; 4736.0080; 
        4736.0090; 4736.0120; and 4736.0130, are repealed effective 
        January 1, 2004. 
           (c) Minnesota Rules, parts 4705.0100; 4705.0200; 4705.0300; 
        4705.0400; 4705.0500; 4705.0600; 4705.0700; 4705.0800; 
        4705.0900; 4705.1000; 4705.1100; 4705.1200; 4705.1300; 
        4705.1400; 4705.1500; and 4705.1600, are repealed effective June 
        30, 2004. 

                                   ARTICLE 9 
                    CHILD CARE AND MISCELLANEOUS PROVISIONS 
           Section 1.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CHILD CARE.] "Child care" means the care of a 
        child by someone other than a parent or, stepparent, legal 
        guardian, eligible relative caregiver, or the spouses of any of 
        the foregoing in or outside the child's own home for gain or 
        otherwise, on a regular basis, for any part of a 24-hour day. 
           Sec. 2.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 6, is amended to read: 
           Subd. 6.  [CHILD CARE FUND.] "Child care fund" means a 
        program under this chapter providing:  
           (1) financial assistance for child care to parents engaged 
        in employment, job search, or education and training leading to 
        employment, or an at-home infant care subsidy; and 
           (2) grants to develop, expand, and improve the access and 
        availability of child care services statewide. 
           Sec. 3.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 15, is amended to read: 
           Subd. 15.  [INCOME.] "Income" means earned or unearned 
        income received by all family members, including public 
        assistance cash benefits and at-home infant care subsidy 
        payments, unless specifically excluded and child support and 
        maintenance distributed to the family under section 256.741, 
        subdivision 15.  The following are excluded from income:  funds 
        used to pay for health insurance premiums for family members, 
        Supplemental Security Income, scholarships, work-study income, 
        and grants that cover costs or reimbursement for tuition, fees, 
        books, and educational supplies; student loans for tuition, 
        fees, books, supplies, and living expenses; state and federal 
        earned income tax credits; assistance specifically excluded as 
        income by law; in-kind income such as food stamps, energy 
        assistance, foster care assistance, medical assistance, child 
        care assistance, and housing subsidies; earned income of 
        full-time or part-time students up to the age of 19, who have 
        not earned a high school diploma or GED high school equivalency 
        diploma including earnings from summer employment; grant awards 
        under the family subsidy program; nonrecurring lump sum income 
        only to the extent that it is earmarked and used for the purpose 
        for which it is paid; and any income assigned to the public 
        authority according to section 256.741. 
           Sec. 4.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 19, is amended to read: 
           Subd. 19.  [PROVIDER.] "Provider" means:  (1) an individual 
        or child care center or facility, either licensed or unlicensed, 
        providing legal child care services as defined under section 
        245A.03; or (2) an individual or child care center or facility 
        holding a valid child care license issued by another state or a 
        tribe and providing child care services in the licensing state 
        or in the area under the licensing tribe's jurisdiction.  A 
        legally unlicensed registered family child care provider must be 
        at least 18 years of age, and not a member of the MFIP 
        assistance unit or a member of the family receiving child care 
        assistance to be authorized under this chapter.  
           Sec. 5.  Minnesota Statutes 2002, section 119B.011, is 
        amended by adding a subdivision to read: 
           Subd. 19a.  [REGISTRATION.] "Registration" means the 
        process used by a county to determine whether the provider 
        selected by a family applying for or receiving child care 
        assistance to care for that family's children meets the 
        requirements necessary for payment of child care assistance for 
        care provided by that provider. 
           Sec. 6.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 20, is amended to read: 
           Subd. 20.  [TRANSITION YEAR FAMILIES.] (a) "Transition year 
        families" means families who have received MFIP assistance, or 
        who were eligible to receive MFIP assistance after choosing to 
        discontinue receipt of the cash portion of MFIP assistance under 
        section 256J.31, subdivision 12, for at least three of the last 
        six months before losing eligibility for MFIP or families 
        participating in work first under chapter 256K who meet the 
        requirements of section 256K.07.  Transition year child care may 
        be used to support employment or job search.  Transition year 
        child care is not available to families who have been 
        disqualified from MFIP due to fraud.  
           (b) "Transition year extension year families" means 
        families who have completed their transition year of child care 
        assistance under this subdivision and who are eligible for, but 
        on a waiting list for, services under section 119B.03.  For 
        purposes of sections 119B.03, subdivision 3, and 119B.05, 
        subdivision 1, clause (2), families participating in extended 
        transition year shall not be considered transition year 
        families.  Transition year extension child care may be used to 
        support employment or a job search that meets the requirements 
        of section 119B.10 for the length of time necessary for families 
        to be moved from the basic sliding fee waiting list into the 
        basic sliding fee program.  
           Sec. 7.  Minnesota Statutes 2002, section 119B.011, 
        subdivision 21, is amended to read: 
           Subd. 21.  [RECOUPMENT OF OVERPAYMENTS.] "Recoupment of 
        overpayments" means the reduction of child care assistance 
        payments to an eligible family or a child care provider in order 
        to correct an overpayment to the family even when the 
        overpayment is due to agency error or other circumstances 
        outside the responsibility or control of the family of child 
        care assistance. 
           Sec. 8.  Minnesota Statutes 2002, section 119B.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CHILD CARE SERVICES.] The commissioner 
        shall develop standards for county and human services boards to 
        provide child care services to enable eligible families to 
        participate in employment, training, or education programs.  
        Within the limits of available appropriations, the commissioner 
        shall distribute money to counties to reduce the costs of child 
        care for eligible families.  The commissioner shall adopt rules 
        to govern the program in accordance with this section.  The 
        rules must establish a sliding schedule of fees for parents 
        receiving child care services.  The rules shall provide that 
        funds received as a lump sum payment of child support arrearages 
        shall not be counted as income to a family in the month received 
        but shall be prorated over the 12 months following receipt and 
        added to the family income during those months.  In the rules 
        adopted under this section, county and human services boards 
        shall be authorized to establish policies for payment of child 
        care spaces for absent children, when the payment is required by 
        the child's regular provider.  The rules shall not set a maximum 
        number of days for which absence payments can be made, but 
        instead shall direct the county agency to set limits and pay for 
        absences according to the prevailing market practice in the 
        county.  County policies for payment of absences shall be 
        subject to the approval of the commissioner.  The commissioner 
        shall maximize the use of federal money under title I and title 
        IV of Public Law Number 104-193, the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996, and other programs 
        that provide federal or state reimbursement for child care 
        services for low-income families who are in education, training, 
        job search, or other activities allowed under those programs.  
        Money appropriated under this section must be coordinated with 
        the programs that provide federal reimbursement for child care 
        services to accomplish this purpose.  Federal reimbursement 
        obtained must be allocated to the county that spent money for 
        child care that is federally reimbursable under programs that 
        provide federal reimbursement for child care services.  The 
        counties shall use the federal money to expand child care 
        services.  The commissioner may adopt rules under chapter 14 to 
        implement and coordinate federal program requirements. 
           Sec. 9.  [119B.025] [DUTIES OF COUNTIES.] 
           Subdivision 1.  [FACTORS WHICH MUST BE VERIFIED.] (a) The 
        county shall verify the following at all initial child care 
        applications using the universal application: 
           (1) identity of adults; 
           (2) presence of the minor child in the home, if 
        questionable; 
           (3) relationship of minor child to the parent, stepparent, 
        legal guardian, eligible relative caretaker, or the spouses of 
        any of the foregoing; 
           (4) age; 
           (5) immigration status, if related to eligibility; 
           (6) social security number, if given; 
           (7) income; 
           (8) spousal support and child support payments made to 
        persons outside the household; 
           (9) residence; and 
           (10) inconsistent information, if related to eligibility. 
           (b) If a family did not use the universal application to 
        apply for child care assistance, the family must complete the 
        universal application at its next eligibility redetermination 
        and the county must verify the factors listed in paragraph (a) 
        as part of that redetermination.  Once a family has completed a 
        universal application, the county shall use the redetermination 
        form described in paragraph (c) for that family's subsequent 
        redeterminations.  
           (c) The commissioner shall develop a recertification form 
        to redetermine eligibility that minimizes paperwork for the 
        county and the participant. 
           Subd. 2.  [SOCIAL SECURITY NUMBERS.] The county must 
        request social security numbers from all applicants for child 
        care assistance under this chapter.  A county may not deny child 
        care assistance solely on the basis of failure of an applicant 
        to report a social security number. 
           Sec. 10.  Minnesota Statutes 2002, section 119B.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FUNDING PRIORITY.] (a) First priority for child 
        care assistance under the basic sliding fee program must be 
        given to eligible non-MFIP families who do not have a high 
        school or general equivalency diploma or who need remedial and 
        basic skill courses in order to pursue employment or to pursue 
        education leading to employment and who need child care 
        assistance to participate in the education program.  Within this 
        priority, the following subpriorities must be used: 
           (1) child care needs of minor parents; 
           (2) child care needs of parents under 21 years of age; and 
           (3) child care needs of other parents within the priority 
        group described in this paragraph. 
           (b) Second priority must be given to parents who have 
        completed their MFIP or work first transition year. 
           (c) Third priority must be given to families who are 
        eligible for portable basic sliding fee assistance through the 
        portability pool under subdivision 9. 
           (d) Families under paragraph (b) must be added to the basic 
        sliding fee waiting list on the date they begin transition year 
        under section 119B.011, subdivision 20, and must be moved into 
        basic sliding fee as soon as possible after they complete their 
        transition year.  
           Sec. 11.  Minnesota Statutes 2002, section 119B.03, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PORTABILITY POOL.] (a) The commissioner shall 
        establish a pool of up to five percent of the annual 
        appropriation for the basic sliding fee program to provide 
        continuous child care assistance for eligible families who move 
        between Minnesota counties.  At the end of each allocation 
        period, any unspent funds in the portability pool must be used 
        for assistance under the basic sliding fee program.  If 
        expenditures from the portability pool exceed the amount of 
        money available, the reallocation pool must be reduced to cover 
        these shortages. 
           (b) To be eligible for portable basic sliding fee 
        assistance, a family that has moved from a county in which it 
        was receiving basic sliding fee assistance to a county with a 
        waiting list for the basic sliding fee program must: 
           (1) meet the income and eligibility guidelines for the 
        basic sliding fee program; and 
           (2) notify the new county of residence within 30 60 days of 
        moving and apply for basic sliding fee assistance in submit 
        information to the new county of residence to verify eligibility 
        for the basic sliding fee program. 
           (c) The receiving county must: 
           (1) accept administrative responsibility for applicants for 
        portable basic sliding fee assistance at the end of the two 
        months of assistance under the Unitary Residency Act; 
           (2) continue basic sliding fee assistance for the lesser of 
        six months or until the family is able to receive assistance 
        under the county's regular basic sliding program; and 
           (3) notify the commissioner through the quarterly reporting 
        process of any family that meets the criteria of the portable 
        basic sliding fee assistance pool. 
           Sec. 12.  Minnesota Statutes 2002, section 119B.05, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBLE PARTICIPANTS.] Families eligible 
        for child care assistance under the MFIP child care program are: 
           (1) MFIP participants who are employed or in job search and 
        meet the requirements of section 119B.10; 
           (2) persons who are members of transition year families 
        under section 119B.011, subdivision 20, and meet the 
        requirements of section 119B.10; 
           (3) families who are participating in employment 
        orientation or job search, or other employment or training 
        activities that are included in an approved employability 
        development plan under chapter 256K; 
           (4) MFIP families who are participating in work job search, 
        job support, employment, or training activities as required in 
        their job search support or employment plan, or in appeals, 
        hearings, assessments, or orientations according to chapter 
        256J; 
           (5) MFIP families who are participating in social services 
        activities under chapter 256J or 256K as required in their 
        employment plan approved according to chapter 256J or 256K; and 
           (6) families who are participating in programs as required 
        in tribal contracts under section 119B.02, subdivision 2, or 
        256.01, subdivision 2; and 
           (7) families who are participating in the transition year 
        extension under section 119B.011, subdivision 20, paragraph (a).
           Sec. 13.  Minnesota Statutes 2002, section 119B.08, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CHILD CARE FUND PLAN.] The county and designated 
        administering agency shall submit a biennial child care fund 
        plan to the commissioner an annual child care fund plan in its 
        biennial community social services plan.  The commissioner shall 
        establish the dates by which the county must submit the plans.  
        The plan shall include: 
           (1) a narrative of the total program for child care 
        services, including all policies and procedures that affect 
        eligible families and are used to administer the child care 
        funds; 
           (2) the methods used by the county to inform eligible 
        families of the availability of child care assistance and 
        related services; 
           (3) the provider rates paid for all children with special 
        needs by provider type; 
           (4) the county prioritization policy for all eligible 
        families under the basic sliding fee program; and 
           (5) other a description of strategies to coordinate and 
        maximize public and private community resources, including 
        school districts, health care facilities, government agencies, 
        neighborhood organizations, and other resources knowledgeable in 
        early childhood development, in particular to coordinate child 
        care assistance with existing community-based programs and 
        service providers including child care resource and referral 
        programs, early childhood family education, school readiness, 
        Head Start, local interagency early intervention committees, 
        special education services, early childhood screening, and other 
        early childhood care and education services and programs to the 
        extent possible, to foster collaboration among agencies and 
        other community-based programs that provide flexible, 
        family-focused services to families with young children and to 
        facilitate transition into kindergarten.  The county must 
        describe a method by which to share information, responsibility, 
        and accountability among service and program providers; 
           (2) a description of procedures and methods to be used to 
        make copies of the proposed state plan reasonably available to 
        the public, including members of the public particularly 
        interested in child care policies such as parents, child care 
        providers, culturally specific service organizations, child care 
        resource and referral programs, interagency early intervention 
        committees, potential collaborative partners and agencies 
        involved in the provision of care and education to young 
        children, and allowing sufficient time for public review and 
        comment; and 
           (3) information as requested by the department to ensure 
        compliance with the child care fund statutes and rules 
        promulgated by the commissioner. 
           The commissioner shall notify counties within 60 90 days of 
        the date the plan is submitted whether the plan is approved or 
        the corrections or information needed to approve the plan.  The 
        commissioner shall withhold a county's allocation until it has 
        an approved plan.  Plans not approved by the end of the second 
        quarter after the plan is due may result in a 25 percent 
        reduction in allocation.  Plans not approved by the end of the 
        third quarter after the plan is due may result in a 100 percent 
        reduction in the allocation to the county.  Counties are to 
        maintain services despite any reduction in their allocation due 
        to plans not being approved. 
           Sec. 14.  Minnesota Statutes 2002, section 119B.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL ELIGIBILITY REQUIREMENTS FOR ALL 
        APPLICANTS FOR CHILD CARE ASSISTANCE.] (a) Child care services 
        must be available to families who need child care to find or 
        keep employment or to obtain the training or education necessary 
        to find employment and who: 
           (1) meet the requirements of section 119B.05; receive MFIP 
        assistance; and are participating in employment and training 
        services under chapter 256J or 256K; 
           (2) have household income below the eligibility levels for 
        MFIP; or 
           (3) have household income within a range established by the 
        commissioner less than or equal to 175 percent of the federal 
        poverty guidelines, adjusted for family size, at program entry 
        and less than 250 percent of the federal poverty guidelines, 
        adjusted for family size, at program exit. 
           (b) Child care services must be made available as in-kind 
        services.  
           (c) All applicants for child care assistance and families 
        currently receiving child care assistance must be assisted and 
        required to cooperate in establishment of paternity and 
        enforcement of child support obligations for all children in the 
        family as a condition of program eligibility.  For purposes of 
        this section, a family is considered to meet the requirement for 
        cooperation when the family complies with the requirements of 
        section 256.741. 
           Sec. 15.  Minnesota Statutes 2002, section 119B.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SLIDING FEE.] Child care services to 
        families with incomes in the commissioner's established range 
        must be made available on a sliding fee basis.  The upper limit 
        of the range must be neither less than 70 percent nor more than 
        90 percent of the state median income for a family of four, 
        adjusted for family size.  
           Sec. 16.  Minnesota Statutes 2002, section 119B.09, 
        subdivision 7, is amended to read: 
           Subd. 7.  [DATE OF ELIGIBILITY FOR ASSISTANCE.] (a) The 
        date of eligibility for child care assistance under this chapter 
        is the later of the date the application was signed; the 
        beginning date of employment, education, or training; or the 
        date a determination has been made that the applicant is a 
        participant in employment and training services under Minnesota 
        Rules, part 3400.0080, subpart 2a, or chapter 256J or 256K.  The 
        date of eligibility for the basic sliding fee at-home infant 
        child care program is the later of the date the infant is born 
        or, in a county with a basic sliding fee waiting list, the date 
        the family applies for at-home infant child care.  
           (b) Payment ceases for a family under the at-home infant 
        child care program when a family has used a total of 12 months 
        of assistance as specified under section 119B.061.  Payment of 
        child care assistance for employed persons on MFIP is effective 
        the date of employment or the date of MFIP eligibility, 
        whichever is later.  Payment of child care assistance for MFIP 
        or work first participants in employment and training services 
        is effective the date of commencement of the services or the 
        date of MFIP or work first eligibility, whichever is later.  
        Payment of child care assistance for transition year child care 
        must be made retroactive to the date of eligibility for 
        transition year child care. 
           Sec. 17.  Minnesota Statutes 2002, section 119B.09, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [LICENSED AND LEGAL NONLICENSED FAMILY CHILD CARE 
        PROVIDERS; ASSISTANCE.] Licensed and legal nonlicensed family 
        child care providers are not eligible to receive child care 
        assistance subsidies under this chapter for their own children 
        or children in their custody. 
           Sec. 18.  Minnesota Statutes 2002, section 119B.09, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [PAYMENT OF FUNDS.] All federal, state, and 
        local child care funds must be paid directly to the parent when 
        a provider cares for children in the children's own home.  In 
        all other cases, all federal, state, and local child care funds 
        must be paid directly to the child care provider, either 
        licensed or legal nonlicensed, on behalf of the eligible family. 
           Sec. 19.  Minnesota Statutes 2002, section 119B.11, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [RECOVERY OF OVERPAYMENTS.] (a) An amount of 
        child care assistance paid to a recipient in excess of the 
        payment due is recoverable by the county agency under paragraphs 
        (b) and (c), even when the overpayment was caused by agency 
        error or circumstances outside the responsibility and control of 
        the family or provider.  
           (b) An overpayment must be recouped or recovered from the 
        family if the overpayment benefited the family by causing the 
        family to pay less for child care expenses than the family 
        otherwise would have been required to pay under child care 
        assistance program requirements.  If the family remains eligible 
        for child care assistance, the overpayment must be recovered 
        through recoupment as identified in Minnesota Rules, 
        part 3400.0140, subpart 19 3400.0187, except that the 
        overpayments must be calculated and collected on a service 
        period basis.  If the family no longer remains eligible for 
        child care assistance, the county may choose to initiate efforts 
        to recover overpayments from the family for overpayment less 
        than $50.  If the overpayment is greater than or equal to $50, 
        the county shall seek voluntary repayment of the overpayment 
        from the family.  If the county is unable to recoup the 
        overpayment through voluntary repayment, the county shall 
        initiate civil court proceedings to recover the overpayment 
        unless the county's costs to recover the overpayment will exceed 
        the amount of the overpayment.  A family with an outstanding 
        debt under this subdivision is not eligible for child care 
        assistance until:  (1) the debt is paid in full; or (2) 
        satisfactory arrangements are made with the county to retire the 
        debt consistent with the requirements of this chapter and 
        Minnesota Rules, chapter 3400, and the family is in compliance 
        with the arrangements. 
           (c) The county must recover an overpayment from a provider 
        if the overpayment did not benefit the family by causing it to 
        receive more child care assistance or to pay less for child care 
        expenses than the family otherwise would have been eligible to 
        receive or required to pay under child care assistance program 
        requirements, and benefited the provider by causing the provider 
        to receive more child care assistance than otherwise would have 
        been paid on the family's behalf under child care assistance 
        program requirements.  If the provider continues to care for 
        children receiving child care assistance, the overpayment must 
        be recovered through reductions in child care assistance 
        payments for services as described in an agreement with the 
        county.  The provider may not charge families using that 
        provider more to cover the cost of recouping the overpayment.  
        If the provider no longer cares for children receiving child 
        care assistance, the county may choose to initiate efforts to 
        recover overpayments of less than $50 from the provider.  If the 
        overpayment is greater than or equal to $50, the county shall 
        seek voluntary repayment of the overpayment from the provider.  
        If the county is unable to recoup the overpayment through 
        voluntary repayment, the county shall initiate civil court 
        proceedings to recover the overpayment unless the county's costs 
        to recover the overpayment will exceed the amount of the 
        overpayment.  A provider with an outstanding debt under this 
        subdivision is not eligible to care for children receiving child 
        care assistance until:  (1) the debt is paid in full; or (2) 
        satisfactory arrangements are made with the county to retire the 
        debt consistent with the requirements of this chapter and 
        Minnesota Rules, chapter 3400, and the provider is in compliance 
        with the arrangements. 
           (d) When both the family and the provider acted together to 
        intentionally cause the overpayment, both the family and the 
        provider are jointly liable for the overpayment regardless of 
        who benefited from the overpayment.  The county must recover the 
        overpayment as provided in paragraphs (b) and (c).  When the 
        family or the provider is in compliance with a repayment 
        agreement, the party in compliance is eligible to receive child 
        care assistance or to care for children receiving child care 
        assistance despite the other party's noncompliance with 
        repayment arrangements. 
           Sec. 20.  Minnesota Statutes 2002, section 119B.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PARENT FEE.] A family must be assessed a parent 
        fee for each service period.  A family's monthly parent fee must 
        be a fixed percentage of its annual gross income.  Parent fees 
        must apply to families eligible for child care assistance under 
        sections 119B.03 and 119B.05.  Income must be as defined in 
        section 119B.011, subdivision 15.  The fixed percent is based on 
        the relationship of the family's annual gross income to 100 
        percent of state median income the annual federal poverty 
        guidelines.  Beginning January 1, 1998, parent fees must begin 
        at 75 percent of the poverty level.  The minimum parent fees for 
        families between 75 percent and 100 percent of poverty level 
        must be $5 per month.  Parent fees must be established in rule 
        and must provide for graduated movement to full payment. 
           Sec. 21.  [119B.125] [PROVIDER REQUIREMENTS.] 
           Subdivision 1.  [AUTHORIZATION.] Except as provided in 
        subdivision 5, a county must authorize the provider chosen by an 
        applicant or a participant before the county can authorize 
        payment for care provided by that provider.  The commissioner 
        must establish the requirements necessary for authorization of 
        providers. 
           Subd. 2.  [PERSONS WHO CANNOT BE AUTHORIZED.] (a) A person 
        who meets any of the conditions under paragraphs (b) to (n) must 
        not be authorized as a legal nonlicensed family child care 
        provider.  For purposes of this subdivision, a finding that a 
        delinquency petition is proven in juvenile court must be 
        considered a conviction in state district court. 
           (b) The person has been convicted of one of the following 
        offenses or has admitted to committing or a preponderance of the 
        evidence indicates that the person has committed an act that 
        meets the definition of one of the following offenses:  sections 
        609.185 to 609.195, murder in the first, second, or third 
        degree; 609.2661 to 609.2663, murder of an unborn child in the 
        first, second, or third degree; 609.322, solicitation, 
        inducement, or promotion of prostitution; 609.323, receiving 
        profit from prostitution; 609.342 to 609.345, criminal sexual 
        conduct in the first, second, third, or fourth degree; 609.352, 
        solicitation of children to engage in sexual conduct; 609.365, 
        incest; 609.377, felony malicious punishment of a child; 
        617.246, use of minors in sexual performance; 617.247, 
        possession of pictorial representation of a minor; 609.2242 to 
        609.2243, felony domestic assault; a felony offense of spousal 
        abuse; a felony offense of child abuse or neglect; a felony 
        offense of a crime against children; or an attempt or conspiracy 
        to commit any of these offenses as defined in Minnesota 
        Statutes; or an offense in any other state or country where the 
        elements are substantially similar to any of the offenses listed 
        in this paragraph. 
           (c) Less than 15 years have passed since the discharge of 
        the sentence imposed for the offense and the person has received 
        a felony conviction for one of the following offenses, or the 
        person has admitted to committing or a preponderance of the 
        evidence indicates that the person has committed an act that 
        meets the definition of a felony conviction for one of the 
        following offenses:  sections 609.20 to 609.205, manslaughter in 
        the first or second degree; 609.21, criminal vehicular homicide; 
        609.215, aiding suicide or aiding attempted suicide; 609.221 to 
        609.2231, assault in the first, second, third, or fourth degree; 
        609.224, repeat offenses of fifth degree assault; 609.228, great 
        bodily harm caused by distribution of drugs; 609.2325, criminal 
        abuse of a vulnerable adult; 609.2335, financial exploitation of 
        a vulnerable adult; 609.235, use of drugs to injure or 
        facilitate a crime; 609.24, simple robbery; 617.241, repeat 
        offenses of obscene materials and performances; 609.245, 
        aggravated robbery; 609.25, kidnapping; 609.255, false 
        imprisonment; 609.2664 to 609.2665, manslaughter of an unborn 
        child in the first or second degree; 609.267 to 609.2672, 
        assault of an unborn child in the first, second, or third 
        degree; 609.268, injury or death of an unborn child in the 
        commission of a crime; 609.27, coercion; 609.275, attempt to 
        coerce; 609.324, subdivision 1, other prohibited acts, minor 
        engaged in prostitution; 609.3451, repeat offenses of criminal 
        sexual conduct in the fifth degree; 609.378, neglect or 
        endangerment of a child; 609.52, theft; 609.521, possession of 
        shoplifting gear; 609.561 to 609.563, arson in the first, 
        second, or third degree; 609.582, burglary in the first, second, 
        third, or fourth degree; 609.625, aggravated forgery; 609.63, 
        forgery; 609.631, check forgery, offering a forged check; 
        609.635, obtaining signature by false pretenses; 609.66, 
        dangerous weapon; 609.665, setting a spring gun; 609.67, 
        unlawfully owning, possessing, or operating a machine gun; 
        609.687, adulteration; 609.71, riot; 609.713, terrorist threats; 
        609.749, harassment, stalking; 260.221, grounds for termination 
        of parental rights; 152.021 to 152.022, controlled substance 
        crime in the first or second degree; 152.023, subdivision 1, 
        clause (3) or (4), or 152.023, subdivision 2, clause (4), 
        controlled substance crime in third degree; 152.024, subdivision 
        1, clause (2), (3), or (4), controlled substance crime in fourth 
        degree; 617.23, repeat offenses of indecent exposure; an attempt 
        or conspiracy to commit any of these offenses as defined in 
        Minnesota Statutes; or an offense in any other state or country 
        where the elements are substantially similar to any of the 
        offenses listed in this paragraph. 
           (d) Less than ten years have passed since the discharge of 
        the sentence imposed for the offense and the person has received 
        a gross misdemeanor conviction for one of the following offenses 
        or the person has admitted to committing or a preponderance of 
        the evidence indicates that the person has committed an act that 
        meets the definition of a gross misdemeanor conviction for one 
        of the following offenses:  sections 609.224, fifth degree 
        assault; 609.2242 to 609.2243, domestic assault; 518B.01, 
        subdivision 14, violation of an order for protection; 609.3451, 
        fifth degree criminal sexual conduct; 609.746, repeat offenses 
        of interference with privacy; 617.23, repeat offenses of 
        indecent exposure; 617.241, obscene materials and performances; 
        617.243, indecent literature, distribution; 617.293, 
        disseminating or displaying harmful material to minors; 609.71, 
        riot; 609.66, dangerous weapons; 609.749, harassment, stalking; 
        609.224, subdivision 2, paragraph (c), fifth degree assault 
        against a vulnerable adult by a caregiver; 609.23, mistreatment 
        of persons confined; 609.231, mistreatment of residents or 
        patients; 609.2325, criminal abuse of a vulnerable adult; 
        609.2335, financial exploitation of a vulnerable adult; 609.233, 
        criminal neglect of a vulnerable adult; 609.234, failure to 
        report maltreatment of a vulnerable adult; 609.72, subdivision 
        3, disorderly conduct against a vulnerable adult; 609.265, 
        abduction; 609.378, neglect or endangerment of a child; 609.377, 
        malicious punishment of a child; 609.324, subdivision 1a, other 
        prohibited acts, minor engaged in prostitution; 609.33, 
        disorderly house; 609.52, theft; 609.582, burglary in the first, 
        second, third, or fourth degree; 609.631, check forgery, 
        offering a forged check; 609.275, attempt to coerce; an attempt 
        or conspiracy to commit any of these offenses as defined in 
        Minnesota Statutes; or an offense in any other state or country 
        where the elements are substantially similar to any of the 
        offenses listed in this paragraph. 
           (e) Less than seven years have passed since the discharge 
        of the sentence imposed for the offense and the person has 
        received a misdemeanor conviction for one of the following 
        offenses or the person has admitted to committing or a 
        preponderance of the evidence indicates that the person has 
        committed an act that meets the definition of a misdemeanor 
        conviction for one of the following offenses:  sections 609.224, 
        fifth degree assault; 609.2242, domestic assault; 518B.01, 
        violation of an order for protection; 609.3232, violation of an 
        order for protection; 609.746, interference with privacy; 
        609.79, obscene or harassing telephone calls; 609.795, letter, 
        telegram, or package, opening, harassment; 617.23, indecent 
        exposure; 609.2672, assault of an unborn child, third degree; 
        617.293, dissemination and display of harmful materials to 
        minors; 609.66, dangerous weapons; 609.665, spring guns; an 
        attempt or conspiracy to commit any of these offenses as defined 
        in Minnesota Statutes; or an offense in any other state or 
        country where the elements are substantially similar to any of 
        the offenses listed in this paragraph. 
           (f) The person has been identified by the county's child 
        protection agency or by the statewide child protection database 
        as the person allegedly responsible for physical or sexual abuse 
        of a child within the last seven years. 
           (g) The person has been identified by the county's adult 
        protection agency or by the statewide adult protection database 
        as the person responsible for abuse or neglect of a vulnerable 
        adult within the last seven years. 
           (h) The person has refused to give written consent for 
        disclosure of criminal history records. 
           (i) The person has been denied a family child care license 
        or has received a fine or a sanction as a licensed child care 
        provider that has not been reversed on appeal. 
           (j) The person has a family child care licensing 
        disqualification that has not been set aside. 
           (k) The person has admitted or a county has found that 
        there is a preponderance of evidence that fraudulent information 
        was given to the county for application purposes or was used in 
        submitting bills for payment. 
           (l) The person has been convicted or there is a 
        preponderance of evidence of the crime of theft by wrongfully 
        obtaining public assistance. 
           (m) The person has a household member age 13 or older who 
        has access to children during the hours that care is provided 
        and who meets one of the conditions listed in paragraphs (b) to 
        (l). 
           (n) The person has a household member ages ten to 12 who 
        has access to children during the hours that care is provided; 
        information or circumstances exist which provide the county with 
        articulable suspicion that further pertinent information may 
        exist showing the household member meets one of the conditions 
        listed in paragraphs (b) to (l); and the household member 
        actually meets one of the conditions listed in paragraphs (b) to 
        (l). 
           Subd. 3.  [AUTHORIZATION EXCEPTION.] When a county denies a 
        person authorization as a legal nonlicensed family child care 
        provider under subdivision 2, the county later may authorize 
        that person as a provider if the following conditions are met: 
           (1) after receiving notice of the denial of the 
        authorization, the person applies for and obtains a valid child 
        care license issued under chapter 245A, issued by a tribe, or 
        issued by another state; 
           (2) the person maintains the valid child care license; and 
           (3) the person is providing child care in the state of 
        licensure or in the area under the jurisdiction of the licensing 
        tribe. 
           Subd. 4.  [UNSAFE CARE.] A county may deny authorization as 
        a child care provider to any applicant or rescind authorization 
        of any provider when the county knows or has reason to believe 
        that the provider is unsafe or that the circumstances of the 
        chosen child care arrangement are unsafe.  The county must 
        include the conditions under which a provider or care 
        arrangement will be determined to be unsafe in the county's 
        child care fund plan under section 119B.08, subdivision 3. 
           Subd. 5.  [PROVISIONAL PAYMENT.] After a county receives a 
        completed application from a provider, the county may issue 
        provisional authorization and payment to the provider during the 
        time needed to determine whether to give final authorization to 
        the provider. 
           Subd. 6.  [RECORD KEEPING REQUIREMENT.] All providers must 
        keep daily attendance records for children receiving child care 
        assistance and must make those records available immediately to 
        the county upon request.  The daily attendance records must be 
        retained for six years after the date of service.  A county may 
        deny authorization as a child care provider to any applicant or 
        rescind authorization of any provider when the county knows or 
        has reason to believe that the provider has not complied with 
        the record keeping requirement in this subdivision. 
           Sec. 22.  Minnesota Statutes 2002, section 119B.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SUBSIDY RESTRICTIONS.] The maximum rate 
        paid for child care assistance under the child care fund may not 
        exceed the 75th percentile rate for like-care arrangements in 
        the county as surveyed by the commissioner.  A rate which 
        includes a provider bonus paid under subdivision 2 or a special 
        needs rate paid under subdivision 3 may be in excess of the 
        maximum rate allowed under this subdivision.  The department 
        shall monitor the effect of this paragraph on provider rates.  
        The county shall pay the provider's full charges for every child 
        in care up to the maximum established.  The commissioner shall 
        determine the maximum rate for each type of care on an hourly, 
        full-day, and weekly basis, including special needs and 
        handicapped care.  Not less than once every two years, the 
        commissioner shall evaluate market practices for payment of 
        absences and shall establish policies for payment of absent days 
        that reflect current market practice. 
           When the provider charge is greater than the maximum 
        provider rate allowed, the parent is responsible for payment of 
        the difference in the rates in addition to any family copayment 
        fee. 
           Sec. 23.  Minnesota Statutes 2002, section 119B.13, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [LEGAL NONLICENSED FAMILY CHILD CARE PROVIDER 
        RATES.] (a) Legal nonlicensed family child care providers 
        receiving reimbursement under this chapter must be paid on an 
        hourly basis for care provided to families receiving assistance. 
           (b) The maximum rate paid to legal nonlicensed family child 
        care providers must be 80 percent of the county maximum hourly 
        rate for licensed family child care providers.  In counties 
        where the maximum hourly rate for licensed family child care 
        providers is higher than the maximum weekly rate for those 
        providers divided by 50, the maximum hourly rate that may be 
        paid to legal nonlicensed family child care providers is the 
        rate equal to the maximum weekly rate for licensed family child 
        care providers divided by 50 and then multiplied by 0.80. 
           (c) A rate which includes a provider bonus paid under 
        subdivision 2 or a special needs rate paid under subdivision 3 
        may be in excess of the maximum rate allowed under this 
        subdivision. 
           (d) Legal nonlicensed family child care providers receiving 
        reimbursement under this chapter may not be paid registration 
        fees for families receiving assistance. 
           Sec. 24.  Minnesota Statutes 2002, section 119B.13, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PROVIDER PAYMENTS.] (a) Counties or the state 
        shall make vendor payments to the child care provider or pay the 
        parent directly for eligible child care expenses.  
           (b) If payments for child care assistance are made to 
        providers, the provider shall bill the county for services 
        provided within ten days of the end of the month of service 
        period.  If bills are submitted in accordance with the 
        provisions of this subdivision within ten days of the end of the 
        service period, a county or the state shall issue payment to the 
        provider of child care under the child care fund within 30 days 
        of receiving an invoice a bill from the provider.  Counties or 
        the state may establish policies that make payments on a more 
        frequent basis.  
           (c) All bills must be submitted within 60 days of the last 
        date of service on the bill.  A county may pay a bill submitted 
        more than 60 days after the last date of service if the provider 
        shows good cause why the bill was not submitted within 60 days.  
        Good cause must be defined in the county's child care fund plan 
        under section 119B.08, subdivision 3, and the definition of good 
        cause must include county error.  A county may not pay any bill 
        submitted more than a year after the last date of service on the 
        bill. 
           (d) A county may stop payment issued to a provider or may 
        refuse to pay a bill submitted by a provider if: 
           (1) the provider admits to intentionally giving the county 
        materially false information on the provider's billing forms; or 
           (2) a county finds by a preponderance of the evidence that 
        the provider intentionally gave the county materially false 
        information on the provider's billing forms. 
           (e) A county's payment policies must be included in the 
        county's child care plan under section 119B.08, subdivision 3.  
        If payments are made by the state, in addition to being in 
        compliance with this subdivision, the payments must be made in 
        compliance with section 16A.124. 
           Sec. 25.  Minnesota Statutes 2002, section 119B.16, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [FAIR HEARING ALLOWED FOR PROVIDERS.] (a) This 
        subdivision applies to providers caring for children receiving 
        child care assistance. 
           (b) A provider to whom a county agency has assigned 
        responsibility for an overpayment may request a fair hearing in 
        accordance with section 256.045 for the limited purpose of 
        challenging the assignment of responsibility for the overpayment 
        and the amount of the overpayment.  The scope of the fair 
        hearing does not include the issues of whether the provider 
        wrongfully obtained public assistance in violation of section 
        256.98 or was properly disqualified under section 256.98, 
        subdivision 8, paragraph (c), unless the fair hearing has been 
        combined with an administrative disqualification hearing brought 
        against the provider under section 256.046. 
           Sec. 26.  Minnesota Statutes 2002, section 119B.16, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [JOINT FAIR HEARINGS.] When a provider requests 
        a fair hearing under subdivision 1a, the family in whose case 
        the overpayment was created must be made a party to the fair 
        hearing.  All other issues raised by the family must be resolved 
        in the same proceeding.  When a family requests a fair hearing 
        and claims that the county should have assigned responsibility 
        for an overpayment to a provider, the provider must be made a 
        party to the fair hearing.  The referee assigned to a fair 
        hearing may join a family or a provider as a party to the fair 
        hearing whenever joinder of that party is necessary to fully and 
        fairly resolve overpayment issues raised in the appeal. 
           Sec. 27.  Minnesota Statutes 2002, section 119B.16, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INFORMAL CONFERENCE.] The county agency shall 
        offer an informal conference to applicants and recipients 
        adversely affected by an agency action to attempt to resolve the 
        dispute.  The county agency shall offer an informal conference 
        to providers to whom the county agency has assigned 
        responsibility for an overpayment in an attempt to resolve the 
        dispute.  The county agency or the provider may ask the family 
        in whose case the overpayment arose to participate in the 
        informal conference, but the family may refuse to do so.  The 
        county agency shall advise adversely affected applicants and, 
        recipients, and providers that a request for a conference with 
        the agency is optional and does not delay or replace the right 
        to a fair hearing. 
           Sec. 28.  Minnesota Statutes 2002, section 119B.19, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CHILD CARE RESOURCE AND REFERRAL PROGRAMS.] 
        Within each region, a child care resource and referral program 
        must: 
           (1) maintain one database of all existing child care 
        resources and services and one database of family referrals; 
           (2) provide a child care referral service for families; 
           (3) develop resources to meet the child care service needs 
        of families; 
           (4) increase the capacity to provide culturally responsive 
        child care services; 
           (5) coordinate professional development opportunities for 
        child care and school-age care providers; 
           (6) administer and award child care services grants; 
           (7) administer and provide loans for child development 
        education and training; and 
           (8) cooperate with the Minnesota Child Care Resource and 
        Referral Network and its member programs to develop effective 
        child care services and child care resources; and 
           (9) assist in fostering coordination, collaboration, and 
        planning among child care programs and community programs such 
        as school readiness, Head Start, early childhood family 
        education, local interagency early intervention committees, 
        early childhood screening, special education services, and other 
        early childhood care and education services and programs that 
        provide flexible, family-focused services to families with young 
        children to the extent possible. 
           Sec. 29.  Minnesota Statutes 2002, section 119B.21, 
        subdivision 11, is amended to read: 
           Subd. 11.  [STATEWIDE ADVISORY TASK FORCE.] The 
        commissioner may convene a statewide advisory task force to 
        advise the commissioner on statewide grants or other child care 
        issues.  The following groups must be represented:  family child 
        care providers, child care center programs, school-age care 
        providers, parents who use child care services, health services, 
        social services, Head Start, public schools, school-based early 
        childhood programs, special education programs, employers, and 
        other citizens with demonstrated interest in child care issues.  
        Additional members may be appointed by the commissioner.  The 
        commissioner may compensate members for their travel, child 
        care, and child care provider substitute expenses for attending 
        task force meetings.  The commissioner may also pay a stipend to 
        parent representatives for participating in task force meetings. 
           Sec. 30.  Minnesota Statutes 2002, section 119B.23, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BIENNIAL PLAN.] The county board shall 
        biennially develop a plan for the distribution of money for 
        child care services as part of the community social services 
        plan described in section 256E.09 child care fund plan under 
        section 119B.08.  All licensed child care programs shall be 
        given written notice concerning the availability of money and 
        the application process. 
           Sec. 31.  Minnesota Statutes 2002, section 256.046, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEARING AUTHORITY.] A local agency must 
        initiate an administrative fraud disqualification hearing for 
        individuals, including child care providers caring for children 
        receiving child care assistance, accused of wrongfully obtaining 
        assistance or intentional program violations, in lieu of a 
        criminal action when it has not been pursued, in the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, MFIP, child care assistance programs, 
        general assistance, family general assistance program formerly 
        codified in section 256D.05, subdivision 1, clause (15), 
        Minnesota supplemental aid, medical care, or food stamp 
        programs.  The hearing is subject to the requirements of section 
        256.045 and the requirements in Code of Federal Regulations, 
        title 7, section 273.16, for the food stamp program and title 
        45, section 235.112, as of September 30, 1995, for the cash 
        grant and, medical care programs, and child care assistance 
        under chapter 119B. 
           Sec. 32.  Minnesota Statutes 2002, section 256.0471, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [QUALIFYING OVERPAYMENT.] Any overpayment 
        for assistance granted under section 119B.05 chapter 119B, the 
        MFIP program formerly codified under sections 256.031 to 
        256.0361, and the AFDC program formerly codified under sections 
        256.72 to 256.871; chapters 256B, 256D, 256I, 256J, and 256K; 
        and the food stamp program, except agency error claims, become a 
        judgment by operation of law 90 days after the notice of 
        overpayment is personally served upon the recipient in a manner 
        that is sufficient under rule 4.03(a) of the Rules of Civil 
        Procedure for district courts, or by certified mail, return 
        receipt requested.  This judgment shall be entitled to full 
        faith and credit in this and any other state. 
           Sec. 33.  Minnesota Statutes 2002, section 256.98, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] (a) Any person 
        found to be guilty of wrongfully obtaining assistance by a 
        federal or state court or by an administrative hearing 
        determination, or waiver thereof, through a disqualification 
        consent agreement, or as part of any approved diversion plan 
        under section 401.065, or any court-ordered stay which carries 
        with it any probationary or other conditions, in the Minnesota 
        family investment program, the food stamp program, the general 
        assistance program, the group residential housing program, or 
        the Minnesota supplemental aid program shall be disqualified 
        from that program.  In addition, any person disqualified from 
        the Minnesota family investment program shall also be 
        disqualified from the food stamp program.  The needs of that 
        individual shall not be taken into consideration in determining 
        the grant level for that assistance unit:  
           (1) for one year after the first offense; 
           (2) for two years after the second offense; and 
           (3) permanently after the third or subsequent offense.  
           The period of program disqualification shall begin on the 
        date stipulated on the advance notice of disqualification 
        without possibility of postponement for administrative stay or 
        administrative hearing and shall continue through completion 
        unless and until the findings upon which the sanctions were 
        imposed are reversed by a court of competent jurisdiction.  The 
        period for which sanctions are imposed is not subject to 
        review.  The sanctions provided under this subdivision are in 
        addition to, and not in substitution for, any other sanctions 
        that may be provided for by law for the offense involved.  A 
        disqualification established through hearing or waiver shall 
        result in the disqualification period beginning immediately 
        unless the person has become otherwise ineligible for 
        assistance.  If the person is ineligible for assistance, the 
        disqualification period begins when the person again meets the 
        eligibility criteria of the program from which they were 
        disqualified and makes application for that program. 
           (b) A family receiving assistance through child care 
        assistance programs under chapter 119B with a family member who 
        is found to be guilty of wrongfully obtaining child care 
        assistance by a federal court, state court, or an administrative 
        hearing determination or waiver, through a disqualification 
        consent agreement, as part of an approved diversion plan under 
        section 401.065, or a court-ordered stay with probationary or 
        other conditions, is disqualified from child care assistance 
        programs.  The disqualifications must be for periods of three 
        months, six months, and two years for the first, second, and 
        third offenses respectively.  Subsequent violations must result 
        in permanent disqualification.  During the disqualification 
        period, disqualification from any child care program must extend 
        to all child care programs and must be immediately applied. 
           (c) A provider caring for children receiving assistance 
        through child care assistance programs under chapter 119B is 
        disqualified from receiving payment for child care services from 
        the child care assistance program under chapter 119B when the 
        provider is found to have wrongfully obtained child care 
        assistance by a federal court, state court, or an administrative 
        hearing determination or waiver under section 256.046, through a 
        disqualification consent agreement, as part of an approved 
        diversion plan under section 401.065, or a court-ordered stay 
        with probationary or other conditions.  The disqualification 
        must be for a period of one year for the first offense and two 
        years for the second offense.  Any subsequent violation must 
        result in permanent disqualification.  The disqualification 
        period must be imposed immediately after a determination is made 
        under this paragraph.  During the disqualification period, the 
        provider is disqualified from receiving payment from any child 
        care program under chapter 119B.  
           Sec. 34.  [DIRECTION TO COMMISSIONER; PROVIDER RATES.] 
           The provider rates determined under Minnesota Statutes, 
        section 119B.13, for fiscal year 2003 and implemented on July 1, 
        2002, are to be continued in effect through June 30, 2005.  The 
        commissioner of human services is directed to evaluate the costs 
        of child care in Minnesota, to examine the differences in the 
        cost of child care in rural and metropolitan areas, and to make 
        recommendations to the legislature for containing future cost 
        increases in the child care program under Minnesota Statutes, 
        chapter 119B, in a manner that complies with federal child care 
        and development block grant requirements for promoting parental 
        choice and permits the department to track the effect of rate 
        changes on child care assistance program costs, the availability 
        of different types of care throughout the state, the length of 
        waiting lists, and the care options available to program 
        participants.  The commissioner shall also examine the 
        allocation formula under Minnesota Statutes, section 119B.03, 
        and make recommendations to the legislature in order to create a 
        more equitable formula.  The commissioner shall consider the 
        impact any recommendations might have on work incentives for low 
        and middle income families and possible changes to MFIP child 
        care, basic sliding fee child care, and the dependent care tax 
        credit.  The commissioner shall make recommendations to the 
        legislature by January 15, 2005. 
           The commissioner shall also study the relationship between 
        child care assistance subsidies and tax credits or tax 
        incentives related to child care expenses, and include this 
        information in the January 15, 2005, report to the legislature 
        under this section. 
           Sec. 35.  [CHILD CARE WAITING LIST.] 
           Notwithstanding Minnesota Statutes, section 119B.03, 
        subdivision 6, the commissioner may manage the child care 
        assistance waiting list under Minnesota Statutes, section 
        119B.03, subdivision 2, on a regional or statewide basis in 
        order to ensure that families listed under higher priority 
        categories, as determined by Minnesota Statutes, section 
        119B.03, subdivision 4, are served before families listed under 
        lower priority categories. 
           Sec. 36.  [CHILD CARE ASSISTANCE PARENT FEE SCHEDULE.] 
           Notwithstanding Minnesota Rules, part 3400.0100, subpart 4, 
        the parent fee schedule is as follows: 
             Income Range                  Co-payment (as a percentage of
             (as a percentage of the       adjusted gross income)
             federal poverty guidelines)
             0-74.99%                      $ 0/month
             75.00-99.99%                  $10/month
             100.00-104.99%                3.85%
             105.00-109.99%                3.85%
             110.00-114.99%                3.85%
             115.00-119.99%                3.85%
             120.00-124.99%                4.29%
             125.00-139.99%                4.29%
             140.00-144.99%                4.73%
             145.00-149.99%                4.73%
             150.00-154.99%                4.73%
             155.00-159.99%                5.65%
             160.00-164.99%                5.65%
             165.00-169.99%                6.56%
             170.00-174.99%                7.00%
             175.00-179.99%                7.44%
             180.00-184.99%                8.31%
             185.00-189.99%                8.75%
             190.00-194.99%                9.19%
             195.00-199.99%                10.06%
             200.00-209.99%                12.25%
             210.00-224.99%                16.10%
             225.00-229.99%                17.15%
             230.00-234.99%                19.25%
             235.00-239.99%                19.78%
             240.00-244.99%                21.35%
             245.00-249.99%                22.00%
             250%                          ineligible
           A family's monthly co-payment fee is the fixed percentage 
        established for the income range multiplied by the highest 
        possible income within that income range. 
           Sec. 37.  [ELIGIBILITY FOR FAMILIES WITH HOUSEHOLD INCOME 
        GREATER THAN 250 PERCENT OF THE FEDERAL POVERTY GUIDELINES.] 
           Families receiving child care assistance on July 1, 2003, 
        who have household income greater than 250 percent of the 
        federal poverty guidelines, adjusted for family size, are 
        eligible to continue receiving child care assistance until the 
        family's next eligibility redetermination.  
           Sec. 38.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 119B.061 and 119B.13, 
        subdivision 2, are repealed. 
           (b) Laws 2000, chapter 489, article 1, section 36, and Laws 
        2001, First Special Session chapter 3, article 1, section 16, 
        are repealed. 

                                   ARTICLE 10 
                        CHILD SUPPORT FEDERAL COMPLIANCE 
           Section 1.  Minnesota Statutes 2002, section 13.69, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CLASSIFICATIONS.] (a) The following 
        government data of the department of public safety are private 
        data:  
           (1) medical data on driving instructors, licensed drivers, 
        and applicants for parking certificates and special license 
        plates issued to physically handicapped persons; 
           (2) other data on holders of a disability certificate under 
        section 169.345, except that data that are not medical data may 
        be released to law enforcement agencies; 
           (3) social security numbers in driver's license and motor 
        vehicle registration records, except that social security 
        numbers must be provided to the department of revenue for 
        purposes of tax administration and, the department of labor and 
        industry for purposes of workers' compensation administration 
        and enforcement, and the department of natural resources for 
        purposes of license application administration; and 
           (4) data on persons listed as standby or temporary 
        custodians under section 171.07, subdivision 11, except that the 
        data must be released to: 
           (i) law enforcement agencies for the purpose of verifying 
        that an individual is a designated caregiver; or 
           (ii) law enforcement agencies who state that the license 
        holder is unable to communicate at that time and that the 
        information is necessary for notifying the designated caregiver 
        of the need to care for a child of the license holder.  
           The department may release the social security number only 
        as provided in clause (3) and must not sell or otherwise provide 
        individual social security numbers or lists of social security 
        numbers for any other purpose.  
           (b) The following government data of the department of 
        public safety are confidential data:  data concerning an 
        individual's driving ability when that data is received from a 
        member of the individual's family. 
           Sec. 2.  [97A.482] [LICENSE APPLICATIONS; COLLECTION OF 
        SOCIAL SECURITY NUMBERS.] 
           (a) All applicants for individual noncommercial game and 
        fish licenses under this chapter and chapters 97B and 97C must 
        include the applicant's social security number on the license 
        application.  If an applicant does not have a social security 
        number, the applicant must certify that the applicant does not 
        have a social security number. 
           (b) The social security numbers collected by the 
        commissioner on game and fish license applications are private 
        data under section 13.49, subdivision 1, and must be provided by 
        the commissioner to the commissioner of human services for child 
        support enforcement purposes.  Title IV-D of the Social Security 
        Act, United States Code, title 42, section 666(a)(13), requires 
        the collection of social security numbers on game and fish 
        license applications for child support enforcement purposes. 
           Sec. 3.  Minnesota Statutes 2002, section 171.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CONTENTS OF APPLICATION; OTHER INFORMATION.] (a) 
        An application must: 
           (1) state the full name, date of birth, sex, and residence 
        address of the applicant; 
           (2) as may be required by the commissioner, contain a 
        description of the applicant and any other facts pertaining to 
        the applicant, the applicant's driving privileges, and the 
        applicant's ability to operate a motor vehicle with safety; 
           (3) for a class C, class B, or class A driver's license, 
        state: 
           (i) the applicant's social security number or, for a class 
        D driver's license, have a space for the applicant's social 
        security number and state that providing the number is optional, 
        or otherwise convey that the applicant is not required to enter 
        the social security number; or 
           (ii) if the applicant does not have a social security 
        number and is applying for a Minnesota identification card, 
        instruction permit, or class D provisional or driver's license, 
        that the applicant certifies that the applicant does not have a 
        social security number; 
           (4) contain a space where the applicant may indicate a 
        desire to make an anatomical gift according to paragraph (b); 
        and 
           (5) contain a notification to the applicant of the 
        availability of a living will/health care directive designation 
        on the license under section 171.07, subdivision 7.  
           (b) If the applicant does not indicate a desire to make an 
        anatomical gift when the application is made, the applicant must 
        be offered a donor document in accordance with section 171.07, 
        subdivision 5.  The application must contain statements 
        sufficient to comply with the requirements of the Uniform 
        Anatomical Gift Act (1987), sections 525.921 to 525.9224, so 
        that execution of the application or donor document will make 
        the anatomical gift as provided in section 171.07, subdivision 
        5, for those indicating a desire to make an anatomical gift.  
        The application must be accompanied by information describing 
        Minnesota laws regarding anatomical gifts and the need for and 
        benefits of anatomical gifts, and the legal implications of 
        making an anatomical gift, including the law governing 
        revocation of anatomical gifts.  The commissioner shall 
        distribute a notice that must accompany all applications for and 
        renewals of a driver's license or Minnesota identification 
        card.  The notice must be prepared in conjunction with a 
        Minnesota organ procurement organization that is certified by 
        the federal Department of Health and Human Services and must 
        include: 
           (1) a statement that provides a fair and reasonable 
        description of the organ donation process, the care of the donor 
        body after death, and the importance of informing family members 
        of the donation decision; and 
           (2) a telephone number in a certified Minnesota organ 
        procurement organization that may be called with respect to 
        questions regarding anatomical gifts. 
           (c) The application must be accompanied also by information 
        containing relevant facts relating to:  
           (1) the effect of alcohol on driving ability; 
           (2) the effect of mixing alcohol with drugs; 
           (3) the laws of Minnesota relating to operation of a motor 
        vehicle while under the influence of alcohol or a controlled 
        substance; and 
           (4) the levels of alcohol-related fatalities and accidents 
        in Minnesota and of arrests for alcohol-related violations. 
           Sec. 4.  Minnesota Statutes 2002, section 171.07, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [USE OF SOCIAL SECURITY NUMBER.] An applicant's 
        social security number must not be displayed, encrypted, or 
        encoded on the driver's license or Minnesota identification card 
        or included in a magnetic strip or bar code used to store data 
        on the license or Minnesota identification card.  The social 
        security number must not be used as a Minnesota driver's license 
        or identification number. 
           Sec. 5.  Minnesota Statutes 2002, section 518.551, 
        subdivision 12, is amended to read: 
           Subd. 12.  [OCCUPATIONAL LICENSE SUSPENSION.] (a) Upon 
        motion of an obligee, if the court finds that the obligor is or 
        may be licensed by a licensing board listed in section 214.01 or 
        other state, county, or municipal agency or board that issues an 
        occupational license and the obligor is in arrears in 
        court-ordered child support or maintenance payments or both in 
        an amount equal to or greater than three times the obligor's 
        total monthly support and maintenance payments and is not in 
        compliance with a written payment agreement pursuant to section 
        518.553 that is approved by the court, a child support 
        magistrate, or the public authority, the court shall direct the 
        licensing board or other licensing agency to suspend the license 
        under section 214.101.  The court's order must be stayed for 90 
        days in order to allow the obligor to execute a written payment 
        agreement pursuant to section 518.553.  The payment agreement 
        must be approved by either the court or the public authority 
        responsible for child support enforcement.  If the obligor has 
        not executed or is not in compliance with a written payment 
        agreement pursuant to section 518.553 after the 90 days expires, 
        the court's order becomes effective.  If the obligor is a 
        licensed attorney, the court shall report the matter to the 
        lawyers professional responsibility board for appropriate action 
        in accordance with the rules of professional conduct.  The 
        remedy under this subdivision is in addition to any other 
        enforcement remedy available to the court. 
           (b) If a public authority responsible for child support 
        enforcement finds that the obligor is or may be licensed by a 
        licensing board listed in section 214.01 or other state, county, 
        or municipal agency or board that issues an occupational license 
        and the obligor is in arrears in court-ordered child support or 
        maintenance payments or both in an amount equal to or greater 
        than three times the obligor's total monthly support and 
        maintenance payments and is not in compliance with a written 
        payment agreement pursuant to section 518.553 that is approved 
        by the court, a child support magistrate, or the public 
        authority, the court or the public authority shall direct the 
        licensing board or other licensing agency to suspend the license 
        under section 214.101.  If the obligor is a licensed attorney, 
        the public authority may report the matter to the lawyers 
        professional responsibility board for appropriate action in 
        accordance with the rules of professional conduct.  The remedy 
        under this subdivision is in addition to any other enforcement 
        remedy available to the public authority. 
           (c) At least 90 days before notifying a licensing authority 
        or the lawyers professional responsibility board under paragraph 
        (b), the public authority shall mail a written notice to the 
        license holder addressed to the license holder's last known 
        address that the public authority intends to seek license 
        suspension under this subdivision and that the license holder 
        must request a hearing within 30 days in order to contest the 
        suspension.  If the license holder makes a written request for a 
        hearing within 30 days of the date of the notice, a court 
        hearing or a hearing under section 484.702 must be held.  
        Notwithstanding any law to the contrary, the license holder must 
        be served with 14 days' notice in writing specifying the time 
        and place of the hearing and the allegations against the license 
        holder.  The notice may be served personally or by mail.  If the 
        public authority does not receive a request for a hearing within 
        30 days of the date of the notice, and the obligor does not 
        execute a written payment agreement pursuant to section 518.553 
        that is approved by the public authority within 90 days of the 
        date of the notice, the public authority shall direct the 
        licensing board or other licensing agency to suspend the 
        obligor's license under paragraph (b), or shall report the 
        matter to the lawyers professional responsibility board. 
           (d) The public authority or the court shall notify the 
        lawyers professional responsibility board for appropriate action 
        in accordance with the rules of professional responsibility 
        conduct or order the licensing board or licensing agency to 
        suspend the license if the judge finds that: 
           (1) the person is licensed by a licensing board or other 
        state agency that issues an occupational license; 
           (2) the person has not made full payment of arrearages 
        found to be due by the public authority; and 
           (3) the person has not executed or is not in compliance 
        with a payment plan approved by the court, a child support 
        magistrate, or the public authority. 
           (e) Within 15 days of the date on which the obligor either 
        makes full payment of arrearages found to be due by the court or 
        public authority or executes and initiates good faith compliance 
        with a written payment plan approved by the court, a child 
        support magistrate, or the public authority, the court, a child 
        support magistrate, or the public authority responsible for 
        child support enforcement shall notify the licensing board or 
        licensing agency or the lawyers professional responsibility 
        board that the obligor is no longer ineligible for license 
        issuance, reinstatement, or renewal under this subdivision. 
           (f) In addition to the criteria established under this 
        section for the suspension of an obligor's occupational license, 
        a court, a child support magistrate, or the public authority may 
        direct the licensing board or other licensing agency to suspend 
        the license of a party who has failed, after receiving notice, 
        to comply with a subpoena relating to a paternity or child 
        support proceeding.  Notice to an obligor of intent to suspend 
        must be served by first class mail at the obligor's last known 
        address.  The notice must inform the obligor of the right to 
        request a hearing.  If the obligor makes a written request 
        within ten days of the date of the hearing, a hearing must be 
        held.  At the hearing, the only issues to be considered are 
        mistake of fact and whether the obligor received the subpoena. 
           (g) The license of an obligor who fails to remain in 
        compliance with an approved written payment agreement may be 
        suspended.  Notice to the obligor of an intent to suspend under 
        this paragraph must be served by first class mail at the 
        obligor's last known address and must include a notice of 
        hearing.  The notice must be served upon the obligor not less 
        than ten days before the date of the hearing.  Prior to 
        suspending a license for noncompliance with an approved written 
        payment agreement, the public authority must mail to the 
        obligor's last known address a written notice that (1) the 
        public authority intends to seek suspension of the obligor's 
        occupational license under this paragraph, and (2) the obligor 
        must request a hearing, within 30 days of the date of the 
        notice, to contest the suspension.  If, within 30 days of the 
        date of the notice, the public authority does not receive a 
        written request for a hearing and the obligor does not comply 
        with an approved written payment agreement, the public authority 
        must direct the licensing board or other licensing agency to 
        suspend the obligor's license under paragraph (b), and, if the 
        obligor is a licensed attorney, must report the matter to the 
        lawyers professional responsibility board.  If the obligor makes 
        a written request for a hearing within 30 days of the date of 
        the notice, a court hearing must be held.  Notwithstanding any 
        law to the contrary, the obligor must be served with 14 days' 
        notice in writing specifying the time and place of the hearing 
        and the allegations against the obligor.  The notice may be 
        served personally or by mail to the obligor's last known 
        address.  If the obligor appears at the hearing and the judge 
        court determines that the obligor has failed to comply with an 
        approved written payment agreement, the judge shall court or 
        public authority must notify the occupational licensing board or 
        other licensing agency to suspend the obligor's license under 
        paragraph (c) (b) and, if the obligor is a licensed attorney, 
        must report the matter to the lawyers professional 
        responsibility board.  If the obligor fails to appear at the 
        hearing, the public authority may court or public authority must 
        notify the occupational or licensing board or other licensing 
        agency to suspend the obligor's license under paragraph (c) (b), 
        and if the obligor is a licensed attorney, must report the 
        matter to the lawyers professional responsibility board. 
           Sec. 6.  Minnesota Statutes 2002, section 518.551, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DRIVER'S LICENSE SUSPENSION.] (a) Upon motion 
        of an obligee, which has been properly served on the obligor and 
        upon which there has been an opportunity for hearing, if a court 
        finds that the obligor has been or may be issued a driver's 
        license by the commissioner of public safety and the obligor is 
        in arrears in court-ordered child support or maintenance 
        payments, or both, in an amount equal to or greater than three 
        times the obligor's total monthly support and maintenance 
        payments and is not in compliance with a written payment 
        agreement pursuant to section 518.553 that is approved by the 
        court, a child support magistrate, or the public authority, the 
        court shall order the commissioner of public safety to suspend 
        the obligor's driver's license.  The court's order must be 
        stayed for 90 days in order to allow the obligor to execute a 
        written payment agreement pursuant to section 518.553.  The 
        payment agreement must be approved by either the court or the 
        public authority responsible for child support enforcement.  If 
        the obligor has not executed or is not in compliance with a 
        written payment agreement pursuant to section 518.553 after the 
        90 days expires, the court's order becomes effective and the 
        commissioner of public safety shall suspend the obligor's 
        driver's license.  The remedy under this subdivision is in 
        addition to any other enforcement remedy available to the 
        court.  An obligee may not bring a motion under this paragraph 
        within 12 months of a denial of a previous motion under this 
        paragraph. 
           (b) If a public authority responsible for child support 
        enforcement determines that the obligor has been or may be 
        issued a driver's license by the commissioner of public safety 
        and the obligor is in arrears in court-ordered child support or 
        maintenance payments or both in an amount equal to or greater 
        than three times the obligor's total monthly support and 
        maintenance payments and not in compliance with a written 
        payment agreement pursuant to section 518.553 that is approved 
        by the court, a child support magistrate, or the public 
        authority, the public authority shall direct the commissioner of 
        public safety to suspend the obligor's driver's license.  The 
        remedy under this subdivision is in addition to any other 
        enforcement remedy available to the public authority. 
           (c) At least 90 days prior to notifying the commissioner of 
        public safety according to paragraph (b), the public authority 
        must mail a written notice to the obligor at the obligor's last 
        known address, that it intends to seek suspension of the 
        obligor's driver's license and that the obligor must request a 
        hearing within 30 days in order to contest the suspension.  If 
        the obligor makes a written request for a hearing within 30 days 
        of the date of the notice, a court hearing must be held.  
        Notwithstanding any law to the contrary, the obligor must be 
        served with 14 days' notice in writing specifying the time and 
        place of the hearing and the allegations against the obligor.  
        The notice must include information that apprises the obligor of 
        the requirement to develop a written payment agreement that is 
        approved by a court, a child support magistrate, or the public 
        authority responsible for child support enforcement regarding 
        child support, maintenance, and any arrearages in order to avoid 
        license suspension.  The notice may be served personally or by 
        mail.  If the public authority does not receive a request for a 
        hearing within 30 days of the date of the notice, and the 
        obligor does not execute a written payment agreement pursuant to 
        section 518.553 that is approved by the public authority within 
        90 days of the date of the notice, the public authority shall 
        direct the commissioner of public safety to suspend the 
        obligor's driver's license under paragraph (b). 
           (d) At a hearing requested by the obligor under paragraph 
        (c), and on finding that the obligor is in arrears in 
        court-ordered child support or maintenance payments or both in 
        an amount equal to or greater than three times the obligor's 
        total monthly support and maintenance payments, the district 
        court or child support magistrate shall order the commissioner 
        of public safety to suspend the obligor's driver's license or 
        operating privileges unless the court or child support 
        magistrate determines that the obligor has executed and is in 
        compliance with a written payment agreement pursuant to section 
        518.553 that is approved by the court, a child support 
        magistrate, or the public authority. 
           (e) An obligor whose driver's license or operating 
        privileges are suspended may: 
           (1) provide proof to the public authority responsible for 
        child support enforcement that the obligor is in compliance with 
        all written payment agreements pursuant to section 518.553; 
           (2) bring a motion for reinstatement of the driver's 
        license.  At the hearing, if the court or child support 
        magistrate orders reinstatement of the driver's license, the 
        court or child support magistrate must establish a written 
        payment agreement pursuant to section 518.553; or 
           (3) seek a limited license under section 171.30.  A limited 
        license issued to an obligor under section 171.30 expires 90 
        days after the date it is issued.  
           Within 15 days of the receipt of that proof or a court 
        order, the public authority shall inform the commissioner of 
        public safety that the obligor's driver's license or operating 
        privileges should no longer be suspended. 
           (f) On January 15, 1997, and every two years after that, 
        the commissioner of human services shall submit a report to the 
        legislature that identifies the following information relevant 
        to the implementation of this section: 
           (1) the number of child support obligors notified of an 
        intent to suspend a driver's license; 
           (2) the amount collected in payments from the child support 
        obligors notified of an intent to suspend a driver's license; 
           (3) the number of cases paid in full and payment agreements 
        executed in response to notification of an intent to suspend a 
        driver's license; 
           (4) the number of cases in which there has been 
        notification and no payments or payment agreements; 
           (5) the number of driver's licenses suspended; 
           (6) the cost of implementation and operation of the 
        requirements of this section; and 
           (7) the number of limited licenses issued and number of 
        cases in which payment agreements are executed and cases are 
        paid in full following issuance of a limited license. 
           (g) In addition to the criteria established under this 
        section for the suspension of an obligor's driver's license, a 
        court, a child support magistrate, or the public authority may 
        direct the commissioner of public safety to suspend the license 
        of a party who has failed, after receiving notice, to comply 
        with a subpoena relating to a paternity or child support 
        proceeding.  Notice to an obligor of intent to suspend must be 
        served by first class mail at the obligor's last known address.  
        The notice must inform the obligor of the right to request a 
        hearing.  If the obligor makes a written request within ten days 
        of the date of the hearing, a hearing must be held.  At the 
        hearing, the only issues to be considered are mistake of fact 
        and whether the obligor received the subpoena. 
           (h) The license of an obligor who fails to remain in 
        compliance with an approved written payment agreement may be 
        suspended.  Notice to the obligor of an intent to suspend under 
        this paragraph must be served by first class mail at the 
        obligor's last known address and must include a notice of 
        hearing.  The notice must be served upon the obligor not less 
        than ten days before the date of the hearing.  Prior to 
        suspending a license for noncompliance with an approved written 
        payment agreement, the public authority must mail to the 
        obligor's last known address a written notice that (1) the 
        public authority intends to seek suspension of the obligor's 
        driver's license under this paragraph, and (2) the obligor must 
        request a hearing, within 30 days of the date of the notice, to 
        contest the suspension.  If, within 30 days of the date of the 
        notice, the public authority does not receive a written request 
        for a hearing and the obligor does not comply with an approved 
        written payment agreement, the public authority must direct the 
        department of public safety to suspend the obligor's license 
        under paragraph (b).  If the obligor makes a written request for 
        a hearing within 30 days of the date of the notice, a court 
        hearing must be held.  Notwithstanding any law to the contrary, 
        the obligor must be served with 14 days' notice in writing 
        specifying the time and place of the hearing and the allegations 
        against the obligor.  The notice may be served personally or by 
        mail at the obligor's last known address.  If the obligor 
        appears at the hearing and the judge court determines that the 
        obligor has failed to comply with an approved written payment 
        agreement, the judge court or public authority shall notify the 
        department of public safety to suspend the obligor's license 
        under paragraph (c) (b).  If the obligor fails to appear at the 
        hearing, the public authority may court or public authority must 
        notify the department of public safety to suspend the obligor's 
        license under paragraph (c) (b). 
           Sec. 7.  Laws 1997, chapter 245, article 2, section 11, is 
        amended to read: 
           Sec. 11.  [FEDERAL FUNDS FOR VISITATION AND ACCESS.] 
           The commissioner of human services may accept on behalf of 
        the state any federal funding received under Public Law Number 
        104-193 for access and visitation programs, and shall transfer 
        these funds to the state court administrator for the cooperation 
        for the children pilot project and the parent education program 
        under Minnesota Statutes, section 518.571 must administer the 
        funds for the activities allowed under federal law.  The 
        commissioner may distribute the funds on a competitive basis and 
        must monitor, evaluate, and report on the access and visitation 
        programs in accordance with any applicable regulations. 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective August 1, 2003. 

                                   ARTICLE 11 
                             COMMUNITY SERVICES ACT 
           Section 1.  [256M.01] [CITATION.] 
           Sections 256M.01 to 256M.80 may be cited as the "Children 
        and Community Services Act."  This act establishes a fund to 
        address the needs of children, adolescents, and adults within 
        each county in accordance with a service plan entered into by 
        the board of county commissioners of each county and the 
        commissioner.  The service plan shall specify the outcomes to be 
        achieved, the general strategies to be employed, and the 
        respective state and county roles.  The service plan shall be 
        reviewed and updated every two years, or sooner if both the 
        state and the county deem it necessary.  
           Sec. 2.  [256M.10] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For the purposes of sections 
        256M.01 to 256M.80, the terms defined in this section have the 
        meanings given them. 
           Subd. 2.  [CHILDREN AND COMMUNITY SERVICES.] (a) "Children 
        and community services" means services provided or arranged for 
        by county boards for children, adolescents and other individuals 
        in transition from childhood to adulthood, and adults who 
        experience dependency, abuse, neglect, poverty, disability, 
        chronic health conditions, or other factors, including ethnicity 
        and race, that may result in poor outcomes or disparities, as 
        well as services for family members to support those individuals.
        These services may be provided by professionals or 
        nonprofessionals, including the person's natural supports in the 
        community.  
           (b) Children and community services do not include services 
        under the public assistance programs known as the Minnesota 
        family investment program, Minnesota supplemental aid, medical 
        assistance, general assistance, general assistance medical care, 
        MinnesotaCare, or community health services. 
           Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of human services. 
           Subd. 4.  [COUNTY BOARD.] "County board" means the board of 
        county commissioners in each county. 
           Subd. 5.  [FORMER CHILDREN'S SERVICES AND COMMUNITY SERVICE 
        GRANTS.] "Former children's services and community service 
        grants" means allocations for the following grants: 
           (1) community social service grants under sections 252.24, 
        256E.06, and 256E.14; 
           (2) family preservation grants under section 256F.05, 
        subdivision 3; 
           (3) concurrent permanency planning grants under section 
        260C.213, subdivision 5; 
           (4) social service block grants (Title XX) under section 
        256E.07; and 
           (5) children's mental health grants under sections 245.4886 
        and 260.152. 
           Subd. 6.  [HUMAN SERVICES BOARD.] "Human services board" 
        means a board established under section 402.02; Laws 1974, 
        chapter 293; or Laws 1976, chapter 340.  
           Sec. 3.  [256M.20] [DUTIES OF COMMISSIONER OF HUMAN 
        SERVICES.] 
           Subdivision 1.  [GENERAL SUPERVISION.] Each year the 
        commissioner shall allocate funds to each county with an 
        approved service plan according to section 256M.40 and service 
        plans under section 256M.30.  The funds shall be used to address 
        the needs of children, adolescents, and adults.  The 
        commissioner, in consultation with counties, shall provide 
        technical assistance and evaluate county performance in 
        achieving outcomes. 
           Subd. 2.  [ADDITIONAL DUTIES.] The commissioner shall: 
           (1) provide necessary information and assistance to each 
        county for establishing baselines and desired improvements on 
        mental health, safety, permanency, and well-being for children 
        and adolescents; 
           (2) provide training, technical assistance, and other 
        supports to each county board to assist in needs assessment, 
        planning, implementation, and monitoring of outcomes and service 
        quality; 
           (3) use data collection, evaluation of service outcomes, 
        and the review and approval of county service plans to supervise 
        county performance in the delivery of children and community 
        services; 
           (4) specify requirements for reports, including fiscal 
        reports to account for funds distributed; 
           (5) request waivers from federal programs as necessary to 
        implement this act; and 
           (6) have authority under sections 14.055 and 14.056 to 
        grant a variance to existing state rules as needed to eliminate 
        barriers to achieving desired outcomes. 
           Subd. 3.  [SANCTIONS.] The commissioner shall establish and 
        maintain a monitoring program designed to reduce the possibility 
        of noncompliance with federal laws and federal regulations that 
        may result in federal fiscal sanctions.  If a county is not 
        complying with federal law or federal regulation and the 
        noncompliance may result in federal fiscal sanctions, the 
        commissioner may withhold a portion of the county's share of 
        state and federal funds for that program.  The amount withheld 
        must be equal to the percentage difference between the level of 
        compliance maintained by the county and the level of compliance 
        required by the federal regulations, multiplied by the county's 
        share of state and federal funds for the program.  The state and 
        federal funds may be withheld until the county is found to be in 
        compliance with all federal laws or federal regulations 
        applicable to the program.  If a county remains out of 
        compliance for more than six consecutive months, the 
        commissioner may reallocate the withheld funds to counties that 
        are in compliance with the federal regulations. 
           Subd. 4.  [CORRECTIVE ACTION PROCEDURE.] The commissioner 
        must comply with the following procedures when reducing county 
        funds under subdivision 3. 
           (a) The commissioner shall notify the county, by certified 
        mail, of the statute, rule, federal law, or federal regulation 
        with which the county has not complied. 
           (b) The commissioner shall give the county 30 days to 
        demonstrate to the commissioner that the county is in compliance 
        with the statute, rule, federal law, or federal regulation cited 
        in the notice or to develop a corrective action plan to address 
        the problem.  Upon request from the county, the commissioner 
        shall provide technical assistance to the county in developing a 
        corrective action plan.  The county shall have 30 days from the 
        date the technical assistance is provided to develop the 
        corrective action plan. 
           (c) The commissioner shall take no further action if the 
        county demonstrates compliance with the statute, rule, federal 
        law, or federal regulation cited in the notice. 
           (d) The commissioner shall review and approve or disapprove 
        the corrective action plan within 30 days after the commissioner 
        receives the corrective action plan. 
           (e) If the commissioner approves the corrective action plan 
        submitted by the county, the county has 90 days after the date 
        of approval to implement the corrective action plan. 
           (f) If the county fails to demonstrate compliance or fails 
        to implement the corrective action plan approved by the 
        commissioner, the commissioner may reduce the county's share of 
        state or federal funds according to subdivision 3. 
           Sec. 4.  [256M.30] [SERVICE PLAN.] 
           Subdivision 1.  [SERVICE PLAN SUBMITTED TO COMMISSIONER.] 
        Effective January 1, 2004, and each two-year period thereafter, 
        each county must have a biennial service plan approved by the 
        commissioner in order to receive funds.  Counties may submit 
        multicounty or regional service plans. 
           Subd. 2.  [CONTENTS.] The service plan shall be completed 
        in a form prescribed by the commissioner.  The plan must include:
           (1) a statement of the needs of the children, adolescents, 
        and adults who experience the conditions defined in section 
        256M.10, subdivision 2, paragraph (a), and strengths and 
        resources available in the community to address those needs; 
           (2) strategies the county will pursue to achieve the 
        performance targets.  Strategies must include specification of 
        how funds under this section and other community resources will 
        be used to achieve desired performance targets; 
           (3) a description of the county's process to solicit public 
        input and a summary of that input; 
           (4) beginning with the service plans submitted for the 
        period from January 1, 2006, through December 21, 2007, 
        performance targets on statewide indicators for each county to 
        measure outcomes of children's mental health, and child safety, 
        permanency, and well-being.  The commissioner shall consult with 
        counties and other stakeholders to develop these indicators and 
        collect baseline data to inform the establishment of individual 
        county performance targets for the 2006-2007 biennium and 
        subsequent plans; and 
           (5) a budget for services to be provided with funds under 
        this section.  The county must budget at least 40 percent of 
        funds appropriated under sections 256M.01 to 256M.80 for 
        services to ensure the mental health, safety, permanency, and 
        well-being of children from low-income families.  The 
        commissioner may reduce the portion of child and community 
        services funds that must be budgeted by a county for services to 
        children in low-income families if: 
           (i) the incidence of children in low-income families within 
        the county's population is significantly below the statewide 
        median; or 
           (ii) the county has successfully achieved past performance 
        targets for children's mental health, and child safety, 
        permanency, and well-being and its proposed service plan is 
        judged by the commissioner to provide an adequate level of 
        service to the population with less funding. 
           Subd. 3.  [CONTINUITY OF SERVICES.] In developing the plan 
        required under this section, a county shall endeavor, within the 
        limits of funds available, to consider the continuing need for 
        services and programs for children and persons with disabilities 
        that were funded by the former children's services and community 
        service grants. 
           Subd. 4.  [INFORMATION.] The commissioner shall provide 
        each county with information and technical assistance needed to 
        complete the service plan, including:  information on children's 
        mental health, and child safety, permanency, and well-being in 
        the county; comparisons with other counties; baseline 
        performance on outcome measures; and promising program practices.
           Subd. 5.  [TIMELINES.] The preliminary service plan must be 
        submitted to the commissioner by October 15, 2003, and October 
        15 of every two years thereafter.  
           Subd. 6.  [PUBLIC COMMENT.] The county board must determine 
        how citizens in the county will participate in the development 
        of the service plan and provide opportunities for such 
        participation.  The county must allow a period of no less than 
        30 days prior to the submission of the plan to the commissioner 
        to solicit comments from the public on the contents of the plan. 
           Subd. 7.  [COMMISSIONER'S RESPONSIBILITIES.] The 
        commissioner must, within 60 days of receiving each county 
        service plan, inform the county if the service plan has been 
        approved.  If the service plan is not approved, the commissioner 
        must inform the county of any revisions needed for approval. 
           Sec. 5.  [256M.40] [STATE CHILDREN AND COMMUNITY SERVICES 
        GRANT ALLOCATION.] 
           Subdivision 1.  [FORMULA.] The commissioner shall allocate 
        state funds appropriated for children and community services 
        grants to each county board on a calendar year basis in an 
        amount determined according to the formula in paragraphs (a) to 
        (c). 
           (a) For July 1, 2003, through December 31, 2003, the 
        commissioner shall allocate funds to each county equal to that 
        county's allocation for the grants under section 256M.10, 
        subdivision 5, for calendar year 2003 less payments made on or 
        before June 30, 2003. 
           (b) For calendar year 2004 and 2005, the commissioner shall 
        allocate available funds to each county in proportion to that 
        county's share of the calendar year 2003 allocations for the 
        grants under section 256M.10, subdivision 5. 
           (c) For calendar year 2006 and each calendar year 
        thereafter, the commissioner shall allocate available funds to 
        each county in proportion to that county's share in the 
        preceding calendar year. 
           Subd. 2.  [PROJECT OF REGIONAL SIGNIFICANCE; STUDY.] The 
        commissioner shall study whether and how to dedicate a portion 
        of the allocated funds for projects of regional significance.  
        The study shall include an analysis of the amount of annual 
        funding to be dedicated for projects of regional significance 
        and what efforts these projects must support.  The commissioner 
        shall submit a report to the chairs of the house and senate 
        committees with jurisdiction over children and community 
        services grants by January 15, 2005.  The commissioner of 
        finance, in preparing the proposed biennial budget for fiscal 
        years 2006 and 2007, is instructed to include $25 million each 
        year in funding for projects of regional significance under this 
        chapter. 
           Subd. 3.  [PAYMENTS.] Calendar year allocations under 
        subdivision 1 shall be paid to counties on or before July 10 of 
        each year. 
           Sec. 6.  [256M.50] [FEDERAL CHILDREN AND COMMUNITY SERVICES 
        GRANT ALLOCATION.] 
           In federal fiscal year 2004 and subsequent years, money for 
        social services received from the federal government to 
        reimburse counties for social service expenditures according to 
        Title XX of the Social Security Act shall be allocated to each 
        county according to section 256M.40, except for funds allocated 
        for administrative purposes and migrant day care. 
           Sec. 7.  [256M.60] [DUTIES OF COUNTY BOARDS.] 
           Subdivision 1.  [RESPONSIBILITIES.] The county board of 
        each county shall be responsible for administration and funding 
        of children and community services as defined in section 
        256M.10, subdivision 1.  Each county board shall singly or in 
        combination with other county boards use funds available to the 
        county under this act to carry out these responsibilities. The 
        county board shall coordinate and facilitate the effective use 
        of formal and informal helping systems to best support and 
        nurture children, adolescents, and adults within the county who 
        experience dependency, abuse, neglect, poverty, disability, 
        chronic health conditions, or other factors, including ethnicity 
        and race, that may result in poor outcomes or disparities, as 
        well as services for family members to support such 
        individuals.  This includes assisting individuals to function at 
        the highest level of ability while maintaining family and 
        community relationships to the greatest extent possible.  
           Subd. 2.  [DAY TRAINING AND HABILITATION SERVICES; 
        ALTERNATIVE HABILITATION SERVICES.] To the extent provided in 
        the county service plan under section 256M.30, the county board 
        of each county shall be responsible for providing day training 
        and habilitation services or alternative habilitation services 
        during the day for persons with developmental disabilities to 
        the extent this is required by the person's individualized 
        service plan. 
           Subd. 3.  [REPORTS.] The county board shall provide 
        necessary reports and data as required by the commissioner. 
           Subd. 4.  [CONTRACTS FOR SERVICES.] The county board may 
        contract with a human services board, a multicounty board 
        established by a joint powers agreement, other political 
        subdivisions, a children's mental health collaborative, a family 
        services collaborative, or private organizations in discharging 
        its duties. 
           Subd. 5.  [EXEMPTION FROM LIABILITY.] The state of 
        Minnesota, the county boards, or the agencies acting on behalf 
        of the county boards in the implementation and administration of 
        children and community services shall not be liable for damages, 
        injuries, or liabilities sustained through the purchase of 
        services by the individual, the individual's family, or the 
        authorized representative under this section. 
           Subd. 6.  [FEES FOR SERVICES.] The county board may 
        establish a schedule of fees based upon clients' ability to pay 
        to be charged to recipients of children and community services. 
        Payment, in whole or in part, for services may be accepted from 
        any person except that no fee may be charged to persons or 
        families whose adjusted gross household income is below the 
        federal poverty level.  When services are provided to any 
        person, including a recipient of aids administered by the 
        federal, state, or county government, payment of any charges due 
        may be billed to and accepted from a public assistance agency or 
        from any public or private corporation. 
           Sec. 8.  [256M.70] [FISCAL LIMITATIONS.] 
           Subdivision 1.  [DEMONSTRATION OF REASONABLE EFFORT.] The 
        county shall make reasonable efforts to comply with all children 
        and community services requirements.  For the purposes of this 
        section, a county is making reasonable efforts if the county has 
        made efforts to comply with requirements within the limits of 
        available funding, including efforts to identify and apply for 
        commonly available state and federal funding for services. 
           Subd. 2.  [IDENTIFICATION OF SERVICES TO BE PROVIDED.] If a 
        county has made reasonable efforts to provide services according 
        to the service plan under section 256M.30, but funds 
        appropriated for purposes of sections 256M.01 to 256M.80 are 
        insufficient, then the county may limit services that do not 
        meet the following criteria while giving the highest funding 
        priority to clauses (1), (2), and (3):  
           (1) services needed to protect individuals from 
        maltreatment, abuse, and neglect; 
           (2) emergency and crisis services needed to protect clients 
        from physical, emotional, or psychological harm; 
           (3) services that maintain a person in the person's home or 
        least restrictive setting; 
           (4) assessment of persons applying for services and 
        referral to appropriate services when necessary; 
           (5) public guardianship services; 
           (6) case management for persons with developmental 
        disabilities, children with serious emotional disturbances, and 
        adults with serious and persistent mental illness; and 
           (7) fulfilling licensing responsibilities delegated to the 
        county by the commissioner under section 245A.16. 
           Subd. 3.  [DENIAL, REDUCTION, OR TERMINATION OF SERVICES 
        DUE TO FISCAL LIMITATIONS.] Before a county denies, reduces, or 
        terminates services to an individual due to fiscal limitations, 
        the county must meet the requirements in this section.  The 
        county must notify the individual and the individual's guardian 
        in writing of the reason for the denial, reduction, or 
        termination of services and must inform the individual and the 
        individual's guardian in writing that the county will, upon 
        request, meet to discuss alternatives before services are 
        terminated or reduced.  
           Sec. 9.  [256M.80] [PROGRAM EVALUATION.] 
           Subdivision 1.  [COUNTY EVALUATION.] Each county shall 
        submit to the commissioner data from the past calendar year on 
        the outcomes and performance indicators in the service plan.  
        The commissioner shall prescribe standard methods to be used by 
        the counties in providing the data.  The data shall be submitted 
        no later than March 1 of each year, beginning with March 1, 2005.
           Subd. 2.  [STATEWIDE EVALUATION.] Six months after the end 
        of the first full calendar year and annually thereafter, the 
        commissioner shall prepare a report on the counties' progress in 
        improving the outcomes of children, adolescents, and adults 
        related to mental health, safety, permanency, and well-being.  
        This report shall be disseminated throughout the state.  
           Sec. 10.  [256M.90] [GRANTS AND PURCHASE OF SERVICE 
        CONTRACTS.] 
           Subdivision 1.  [AUTHORITY.] The local agency may purchase 
        community social services by grant or purchase of service 
        contract from agencies or individuals approved as vendors. 
           Subd. 2.  [DUTIES OF LOCAL AGENCY.] The local agency must: 
           (1) use a written grant or purchase of service contract 
        when purchasing community social services.  Every grant and 
        purchase of service contract must be completed, signed, and 
        approved by all parties to the agreement, including the county 
        board, unless the county board has designated the local agency 
        to sign on its behalf.  No service shall be provided before the 
        effective date of the grant or purchase of service contract; 
           (2) determine a client's eligibility for purchased 
        services, or delegate the responsibility for making the 
        preliminary determination to the approved vendor under the terms 
        of the grant or purchase of service contract; 
           (3) ensure the development of an individual social service 
        plan based on the client's needs; 
           (4) monitor purchased services and evaluate grants and 
        contracts on the basis of client outcomes; and 
           (5) purchase only from approved vendors. 
           Subd. 3.  [LOCAL AGENCY CRITERIA.] When the local agency 
        chooses to purchase community social services from a vendor that 
        is not subject to state licensing laws or department rules, the 
        local agency must establish written criteria for vendor approval 
        to ensure the health, safety, and well being of clients. 
           Subd. 4.  [CASE RECORDS AND REPORTING REQUIREMENTS.] Case 
        records and data reporting requirements for grants and purchased 
        services are the same as case record and data reporting 
        requirements for direct services. 
           Subd. 5.  [FILES.] The local agency must keep an 
        administrative file for each grant and contract. 
           Subd. 6.  [CONTRACTING WITHIN AND ACROSS COUNTY LINES; LEAD 
        COUNTY CONTRACTS.] Paragraphs (a) to (e) govern contracting 
        within and across county lines and lead county contracts. 
           (a) Once a local agency and an approved vendor execute a 
        contract that meets the requirements of this subdivision, the 
        contract governs all other purchases of service from the vendor 
        by all other local agencies for the term of the contract.  The 
        local agency that negotiated and entered into the contract 
        becomes the lead county for the contract. 
           (b) When the local agency in the county where a vendor is 
        located wants to purchase services from that vendor and the 
        vendor has no contract with the local agency or any other 
        county, the local agency must negotiate and execute a contract 
        with the vendor. 
           (c) When a local agency in one county wants to purchase 
        services from a vendor located in another county, it must notify 
        the local agency in the county where the vendor is located.  
        Within 30 days of being notified, the local agency in the 
        vendor's county must: 
           (1) if it has a contract with the vendor, send a copy to 
        the inquiring agency; 
           (2) if there is a contract with the vendor for which 
        another local agency is the lead county, identify the lead 
        county to the inquiring agency; or 
           (3) if no local agency has a contract with the vendor, 
        inform the inquiring agency whether it will negotiate a contract 
        and become the lead county.  If the agency where the vendor is 
        located will not negotiate a contract with the vendor because of 
        concerns related to clients' health and safety, the agency must 
        share those concerns with the inquiring agency. 
           (d) If the local agency in the county where the vendor is 
        located declines to negotiate a contract with the vendor or 
        fails to respond within 30 days of receiving the notification 
        under paragraph (c), the inquiring agency is authorized to 
        negotiate a contract and must notify the local agency that 
        declined or failed to respond. 
           (e) When the inquiring county under paragraph (d) becomes 
        the lead county for a contract and the contract expires and 
        needs to be renegotiated, that county must again follow the 
        requirements under paragraph (c) and notify the local agency 
        where the vendor is located.  The local agency where the vendor 
        is located has the option of becoming the lead county for the 
        new contract.  If the local agency does not exercise the option, 
        paragraph (d) applies. 
           (f) This subdivision does not affect the requirement to 
        seek county concurrence under section 256B.092, subdivision 8a, 
        when the services are to be purchased for a person with mental 
        retardation or a related condition or under section 245.4711, 
        subdivision 3, when the services to be purchased are for an 
        adult with serious and persistent mental illness. 
           Subd. 7.  [CONTRACTS WITH COMMUNITY MENTAL HEALTH 
        BOARDS.] A local agency within the geographic area served by a 
        community mental health board authorized by sections 245.61 to 
        245.69, may contract directly with the community mental health 
        board.  However, if a local agency outside of the geographic 
        area served by a community mental health board wishes to 
        purchase services from the board, the local agency must follow 
        the requirements under subdivision 6. 
           Subd. 8.  [PLACEMENT AGREEMENTS.] A placement agreement 
        must be used for residential services.  Placement agreements are 
        valid when signed by authorized representatives of the facility 
        and the county of financial responsibility.  If the county of 
        financial responsibility and the county where the approved 
        vendor is located are not the same, the county of financial 
        responsibility must, if requested, mail a copy of the placement 
        agreement to the county where the approved vendor is providing 
        the service and to the lead county within ten calendar days 
        after the date on which the placement agreement is signed.  The 
        placement agreement must specify that the service will be 
        provided in accordance with the individual service plan as 
        required and must specify the unit cost, the date of placement, 
        and the date for the review of the placement.  A placement 
        agreement may also be used for nonresidential services. 
           Sec. 11.  [REVISOR'S INSTRUCTION.] 
           For sections in Minnesota Statutes and Minnesota Rules 
        affected by the repealed sections in this article, the revisor 
        shall delete internal cross-references where appropriate and 
        make changes necessary to correct the punctuation, grammar, or 
        structure of the remaining text and preserve its meaning. 
           Sec. 12.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 245.478; 245.4886; 
        245.4888; 245.496; 254A.17; 256E.01; 256E.02; 256E.03; 256E.04; 
        256E.05; 256E.06; 256E.07; 256E.08; 256E.081; 256E.09; 256E.10; 
        256E.11; 256E.115; 256E.13; 256E.14; 256E.15; 256F.01; 256F.02; 
        256F.03; 256F.04; 256F.05; 256F.06; 256F.07; 256F.08; 256F.11; 
        256F.12; 256F.14; 257.075; 257.81; 260.152; and 626.562, are 
        repealed. 
           (b) Minnesota Rules, parts 9550.0010; 9550.0020; 9550.0030; 
        9550.0040; 9550.0050; 9550.0060; 9550.0070; 9550.0080; 
        9550.0090; 9550.0091; 9550.0092; and 9550.0093, are repealed. 

                                   ARTICLE 12 
                                  HEALTH CARE 
           Section 1.  Minnesota Statutes 2002, section 62J.692, 
        subdivision 8, is amended to read: 
           Subd. 8.  [FEDERAL FINANCIAL PARTICIPATION.] (a) The 
        commissioner of human services shall seek to maximize federal 
        financial participation in payments for medical education and 
        research costs.  If the commissioner of human services 
        determines that federal financial participation is available for 
        the medical education and research, the commissioner of health 
        shall transfer to the commissioner of human services the amount 
        of state funds necessary to maximize the federal funds 
        available.  The amount transferred to the commissioner of human 
        services, plus the amount of federal financial participation, 
        shall be distributed to medical assistance providers in 
        accordance with the distribution methodology described in 
        subdivision 4. 
           (b) For the purposes of paragraph (a), the commissioner 
        shall use physician clinic rates where possible to maximize 
        federal financial participation. 
           Sec. 2.  Minnesota Statutes 2002, section 256.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
        section 241.021, subdivision 2, the commissioner of human 
        services shall: 
           (1) Administer and supervise all forms of public assistance 
        provided for by state law and other welfare activities or 
        services as are vested in the commissioner.  Administration and 
        supervision of human services activities or services includes, 
        but is not limited to, assuring timely and accurate distribution 
        of benefits, completeness of service, and quality program 
        management.  In addition to administering and supervising human 
        services activities vested by law in the department, the 
        commissioner shall have the authority to: 
           (a) require county agency participation in training and 
        technical assistance programs to promote compliance with 
        statutes, rules, federal laws, regulations, and policies 
        governing human services; 
           (b) monitor, on an ongoing basis, the performance of county 
        agencies in the operation and administration of human services, 
        enforce compliance with statutes, rules, federal laws, 
        regulations, and policies governing welfare services and promote 
        excellence of administration and program operation; 
           (c) develop a quality control program or other monitoring 
        program to review county performance and accuracy of benefit 
        determinations; 
           (d) require county agencies to make an adjustment to the 
        public assistance benefits issued to any individual consistent 
        with federal law and regulation and state law and rule and to 
        issue or recover benefits as appropriate; 
           (e) delay or deny payment of all or part of the state and 
        federal share of benefits and administrative reimbursement 
        according to the procedures set forth in section 256.017; 
           (f) make contracts with and grants to public and private 
        agencies and organizations, both profit and nonprofit, and 
        individuals, using appropriated funds; and 
           (g) enter into contractual agreements with federally 
        recognized Indian tribes with a reservation in Minnesota to the 
        extent necessary for the tribe to operate a federally approved 
        family assistance program or any other program under the 
        supervision of the commissioner.  The commissioner shall consult 
        with the affected county or counties in the contractual 
        agreement negotiations, if the county or counties wish to be 
        included, in order to avoid the duplication of county and tribal 
        assistance program services.  The commissioner may establish 
        necessary accounts for the purposes of receiving and disbursing 
        funds as necessary for the operation of the programs. 
           (2) Inform county agencies, on a timely basis, of changes 
        in statute, rule, federal law, regulation, and policy necessary 
        to county agency administration of the programs. 
           (3) Administer and supervise all child welfare activities; 
        promote the enforcement of laws protecting handicapped, 
        dependent, neglected and delinquent children, and children born 
        to mothers who were not married to the children's fathers at the 
        times of the conception nor at the births of the children; 
        license and supervise child-caring and child-placing agencies 
        and institutions; supervise the care of children in boarding and 
        foster homes or in private institutions; and generally perform 
        all functions relating to the field of child welfare now vested 
        in the state board of control. 
           (4) Administer and supervise all noninstitutional service 
        to handicapped persons, including those who are visually 
        impaired, hearing impaired, or physically impaired or otherwise 
        handicapped.  The commissioner may provide and contract for the 
        care and treatment of qualified indigent children in facilities 
        other than those located and available at state hospitals when 
        it is not feasible to provide the service in state hospitals. 
           (5) Assist and actively cooperate with other departments, 
        agencies and institutions, local, state, and federal, by 
        performing services in conformity with the purposes of Laws 
        1939, chapter 431. 
           (6) Act as the agent of and cooperate with the federal 
        government in matters of mutual concern relative to and in 
        conformity with the provisions of Laws 1939, chapter 431, 
        including the administration of any federal funds granted to the 
        state to aid in the performance of any functions of the 
        commissioner as specified in Laws 1939, chapter 431, and 
        including the promulgation of rules making uniformly available 
        medical care benefits to all recipients of public assistance, at 
        such times as the federal government increases its participation 
        in assistance expenditures for medical care to recipients of 
        public assistance, the cost thereof to be borne in the same 
        proportion as are grants of aid to said recipients. 
           (7) Establish and maintain any administrative units 
        reasonably necessary for the performance of administrative 
        functions common to all divisions of the department. 
           (8) Act as designated guardian of both the estate and the 
        person of all the wards of the state of Minnesota, whether by 
        operation of law or by an order of court, without any further 
        act or proceeding whatever, except as to persons committed as 
        mentally retarded.  For children under the guardianship of the 
        commissioner whose interests would be best served by adoptive 
        placement, the commissioner may contract with a licensed 
        child-placing agency or a Minnesota tribal social services 
        agency to provide adoption services.  A contract with a licensed 
        child-placing agency must be designed to supplement existing 
        county efforts and may not replace existing county programs, 
        unless the replacement is agreed to by the county board and the 
        appropriate exclusive bargaining representative or the 
        commissioner has evidence that child placements of the county 
        continue to be substantially below that of other counties.  
        Funds encumbered and obligated under an agreement for a specific 
        child shall remain available until the terms of the agreement 
        are fulfilled or the agreement is terminated. 
           (9) Act as coordinating referral and informational center 
        on requests for service for newly arrived immigrants coming to 
        Minnesota. 
           (10) The specific enumeration of powers and duties as 
        hereinabove set forth shall in no way be construed to be a 
        limitation upon the general transfer of powers herein contained. 
           (11) Establish county, regional, or statewide schedules of 
        maximum fees and charges which may be paid by county agencies 
        for medical, dental, surgical, hospital, nursing and nursing 
        home care and medicine and medical supplies under all programs 
        of medical care provided by the state and for congregate living 
        care under the income maintenance programs. 
           (12) Have the authority to conduct and administer 
        experimental projects to test methods and procedures of 
        administering assistance and services to recipients or potential 
        recipients of public welfare.  To carry out such experimental 
        projects, it is further provided that the commissioner of human 
        services is authorized to waive the enforcement of existing 
        specific statutory program requirements, rules, and standards in 
        one or more counties.  The order establishing the waiver shall 
        provide alternative methods and procedures of administration, 
        shall not be in conflict with the basic purposes, coverage, or 
        benefits provided by law, and in no event shall the duration of 
        a project exceed four years.  It is further provided that no 
        order establishing an experimental project as authorized by the 
        provisions of this section shall become effective until the 
        following conditions have been met: 
           (a) The secretary of health and human services of the 
        United States has agreed, for the same project, to waive state 
        plan requirements relative to statewide uniformity. 
           (b) A comprehensive plan, including estimated project 
        costs, shall be approved by the legislative advisory commission 
        and filed with the commissioner of administration.  
           (13) According to federal requirements, establish 
        procedures to be followed by local welfare boards in creating 
        citizen advisory committees, including procedures for selection 
        of committee members. 
           (14) Allocate federal fiscal disallowances or sanctions 
        which are based on quality control error rates for the aid to 
        families with dependent children program formerly codified in 
        sections 256.72 to 256.87, medical assistance, or food stamp 
        program in the following manner:  
           (a) One-half of the total amount of the disallowance shall 
        be borne by the county boards responsible for administering the 
        programs.  For the medical assistance and the AFDC program 
        formerly codified in sections 256.72 to 256.87, disallowances 
        shall be shared by each county board in the same proportion as 
        that county's expenditures for the sanctioned program are to the 
        total of all counties' expenditures for the AFDC program 
        formerly codified in sections 256.72 to 256.87, and medical 
        assistance programs.  For the food stamp program, sanctions 
        shall be shared by each county board, with 50 percent of the 
        sanction being distributed to each county in the same proportion 
        as that county's administrative costs for food stamps are to the 
        total of all food stamp administrative costs for all counties, 
        and 50 percent of the sanctions being distributed to each county 
        in the same proportion as that county's value of food stamp 
        benefits issued are to the total of all benefits issued for all 
        counties.  Each county shall pay its share of the disallowance 
        to the state of Minnesota.  When a county fails to pay the 
        amount due hereunder, the commissioner may deduct the amount 
        from reimbursement otherwise due the county, or the attorney 
        general, upon the request of the commissioner, may institute 
        civil action to recover the amount due. 
           (b) Notwithstanding the provisions of paragraph (a), if the 
        disallowance results from knowing noncompliance by one or more 
        counties with a specific program instruction, and that knowing 
        noncompliance is a matter of official county board record, the 
        commissioner may require payment or recover from the county or 
        counties, in the manner prescribed in paragraph (a), an amount 
        equal to the portion of the total disallowance which resulted 
        from the noncompliance, and may distribute the balance of the 
        disallowance according to paragraph (a).  
           (15) Develop and implement special projects that maximize 
        reimbursements and result in the recovery of money to the 
        state.  For the purpose of recovering state money, the 
        commissioner may enter into contracts with third parties.  Any 
        recoveries that result from projects or contracts entered into 
        under this paragraph shall be deposited in the state treasury 
        and credited to a special account until the balance in the 
        account reaches $1,000,000.  When the balance in the account 
        exceeds $1,000,000, the excess shall be transferred and credited 
        to the general fund.  All money in the account is appropriated 
        to the commissioner for the purposes of this paragraph. 
           (16) Have the authority to make direct payments to 
        facilities providing shelter to women and their children 
        according to section 256D.05, subdivision 3.  Upon the written 
        request of a shelter facility that has been denied payments 
        under section 256D.05, subdivision 3, the commissioner shall 
        review all relevant evidence and make a determination within 30 
        days of the request for review regarding issuance of direct 
        payments to the shelter facility.  Failure to act within 30 days 
        shall be considered a determination not to issue direct payments.
           (17) Have the authority to establish and enforce the 
        following county reporting requirements:  
           (a) The commissioner shall establish fiscal and statistical 
        reporting requirements necessary to account for the expenditure 
        of funds allocated to counties for human services programs.  
        When establishing financial and statistical reporting 
        requirements, the commissioner shall evaluate all reports, in 
        consultation with the counties, to determine if the reports can 
        be simplified or the number of reports can be reduced. 
           (b) The county board shall submit monthly or quarterly 
        reports to the department as required by the commissioner.  
        Monthly reports are due no later than 15 working days after the 
        end of the month.  Quarterly reports are due no later than 30 
        calendar days after the end of the quarter, unless the 
        commissioner determines that the deadline must be shortened to 
        20 calendar days to avoid jeopardizing compliance with federal 
        deadlines or risking a loss of federal funding.  Only reports 
        that are complete, legible, and in the required format shall be 
        accepted by the commissioner.  
           (c) If the required reports are not received by the 
        deadlines established in clause (b), the commissioner may delay 
        payments and withhold funds from the county board until the next 
        reporting period.  When the report is needed to account for the 
        use of federal funds and the late report results in a reduction 
        in federal funding, the commissioner shall withhold from the 
        county boards with late reports an amount equal to the reduction 
        in federal funding until full federal funding is received.  
           (d) A county board that submits reports that are late, 
        illegible, incomplete, or not in the required format for two out 
        of three consecutive reporting periods is considered 
        noncompliant.  When a county board is found to be noncompliant, 
        the commissioner shall notify the county board of the reason the 
        county board is considered noncompliant and request that the 
        county board develop a corrective action plan stating how the 
        county board plans to correct the problem.  The corrective 
        action plan must be submitted to the commissioner within 45 days 
        after the date the county board received notice of noncompliance.
           (e) The final deadline for fiscal reports or amendments to 
        fiscal reports is one year after the date the report was 
        originally due.  If the commissioner does not receive a report 
        by the final deadline, the county board forfeits the funding 
        associated with the report for that reporting period and the 
        county board must repay any funds associated with the report 
        received for that reporting period. 
           (f) The commissioner may not delay payments, withhold 
        funds, or require repayment under paragraph (c) or (e) if the 
        county demonstrates that the commissioner failed to provide 
        appropriate forms, guidelines, and technical assistance to 
        enable the county to comply with the requirements.  If the 
        county board disagrees with an action taken by the commissioner 
        under paragraph (c) or (e), the county board may appeal the 
        action according to sections 14.57 to 14.69. 
           (g) Counties subject to withholding of funds under 
        paragraph (c) or forfeiture or repayment of funds under 
        paragraph (e) shall not reduce or withhold benefits or services 
        to clients to cover costs incurred due to actions taken by the 
        commissioner under paragraph (c) or (e). 
           (18) Allocate federal fiscal disallowances or sanctions for 
        audit exceptions when federal fiscal disallowances or sanctions 
        are based on a statewide random sample for the foster care 
        program under title IV-E of the Social Security Act, United 
        States Code, title 42, in direct proportion to each county's 
        title IV-E foster care maintenance claim for that period. 
           (19) Be responsible for ensuring the detection, prevention, 
        investigation, and resolution of fraudulent activities or 
        behavior by applicants, recipients, and other participants in 
        the human services programs administered by the department. 
           (20) Require county agencies to identify overpayments, 
        establish claims, and utilize all available and cost-beneficial 
        methodologies to collect and recover these overpayments in the 
        human services programs administered by the department. 
           (21) Have the authority to administer a drug rebate program 
        for drugs purchased pursuant to the prescription drug program 
        established under section 256.955 after the beneficiary's 
        satisfaction of any deductible established in the program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  Rebate agreements for prescription drugs 
        delivered on or after July 1, 2002, must include rebates for 
        individuals covered under the prescription drug program who are 
        under 65 years of age.  For each drug, the amount of the rebate 
        shall be equal to the basic rebate as defined for purposes of 
        the federal rebate program in United States Code, title 42, 
        section 1396r-8(c)(1).  This basic rebate shall be applied to 
        single-source and multiple-source drugs.  The manufacturers must 
        provide full payment within 30 days of receipt of the state 
        invoice for the rebate within the terms and conditions used for 
        the federal rebate program established pursuant to section 1927 
        of title XIX of the Social Security Act.  The manufacturers must 
        provide the commissioner with any information necessary to 
        verify the rebate determined per drug.  The rebate program shall 
        utilize the terms and conditions used for the federal rebate 
        program established pursuant to section 1927 of title XIX of the 
        Social Security Act. 
           (22) Have the authority to administer the federal drug 
        rebate program for drugs purchased under the medical assistance 
        program as allowed by section 1927 of title XIX of the Social 
        Security Act and according to the terms and conditions of 
        section 1927.  Rebates shall be collected for all drugs that 
        have been dispensed or administered in an outpatient setting and 
        that are from manufacturers who have signed a rebate agreement 
        with the United States Department of Health and Human Services. 
           (23) Have the authority to administer a supplemental drug 
        rebate program for drugs purchased under the medical assistance 
        program.  The commissioner may enter into supplemental rebate 
        contracts with pharmaceutical manufacturers and may require 
        prior authorization for drugs that are from manufacturers that 
        have not signed a supplemental rebate contract.  Prior 
        authorization of drugs shall be subject to the provisions of 
        section 256B.0625, subdivision 13. 
           (24) Operate the department's communication systems account 
        established in Laws 1993, First Special Session chapter 1, 
        article 1, section 2, subdivision 2, to manage shared 
        communication costs necessary for the operation of the programs 
        the commissioner supervises.  A communications account may also 
        be established for each regional treatment center which operates 
        communications systems.  Each account must be used to manage 
        shared communication costs necessary for the operations of the 
        programs the commissioner supervises.  The commissioner may 
        distribute the costs of operating and maintaining communication 
        systems to participants in a manner that reflects actual usage. 
        Costs may include acquisition, licensing, insurance, 
        maintenance, repair, staff time and other costs as determined by 
        the commissioner.  Nonprofit organizations and state, county, 
        and local government agencies involved in the operation of 
        programs the commissioner supervises may participate in the use 
        of the department's communications technology and share in the 
        cost of operation.  The commissioner may accept on behalf of the 
        state any gift, bequest, devise or personal property of any 
        kind, or money tendered to the state for any lawful purpose 
        pertaining to the communication activities of the department.  
        Any money received for this purpose must be deposited in the 
        department's communication systems accounts.  Money collected by 
        the commissioner for the use of communication systems must be 
        deposited in the state communication systems account and is 
        appropriated to the commissioner for purposes of this section. 
           (25) Receive any federal matching money that is made 
        available through the medical assistance program for the 
        consumer satisfaction survey.  Any federal money received for 
        the survey is appropriated to the commissioner for this 
        purpose.  The commissioner may expend the federal money received 
        for the consumer satisfaction survey in either year of the 
        biennium. 
           (26) Incorporate cost reimbursement claims from First Call 
        Minnesota and Greater Twin Cities United Way into the federal 
        cost reimbursement claiming processes of the department 
        according to federal law, rule, and regulations.  Any 
        reimbursement received is appropriated to the commissioner and 
        shall be disbursed to First Call Minnesota and Greater Twin 
        Cities United Way according to normal department payment 
        schedules. 
           (27) Develop recommended standards for foster care homes 
        that address the components of specialized therapeutic services 
        to be provided by foster care homes with those services.  
           Sec. 3.  Minnesota Statutes 2002, section 256.046, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [HEARING AUTHORITY.] A local agency must 
        initiate an administrative fraud disqualification hearing for 
        individuals accused of wrongfully obtaining assistance or 
        intentional program violations, in lieu of a criminal action 
        when it has not been pursued, in the aid to families with 
        dependent children program formerly codified in sections 256.72 
        to 256.87, MFIP, child care assistance programs, general 
        assistance, family general assistance program formerly codified 
        in section 256D.05, subdivision 1, clause (15), Minnesota 
        supplemental aid, medical care, or food stamp programs, general 
        assistance medical care, MinnesotaCare for adults without 
        children, and upon federal approval, all categories of medical 
        assistance and remaining categories of MinnesotaCare except for 
        children through age 18.  The hearing is subject to the 
        requirements of section 256.045 and the requirements in Code of 
        Federal Regulations, title 7, section 273.16, for the food stamp 
        program and title 45, section 235.112, as of September 30, 1995, 
        for the cash grant and medical care programs. 
           Sec. 4.  [256.954] [PRESCRIPTION DRUG DISCOUNT PROGRAM.] 
           Subdivision 1.  [ESTABLISHMENT; ADMINISTRATION.] The 
        commissioner of human services shall establish and administer 
        the prescription drug discount program, effective July 1, 2005.  
           Subd. 2.  [COMMISSIONER'S AUTHORITY.] The commissioner 
        shall administer a drug rebate program for drugs purchased 
        according to the prescription drug discount program.  The 
        commissioner shall require a rebate agreement from all 
        manufacturers of covered drugs as defined in section 256B.0625, 
        subdivision 13.  For each drug, the amount of the rebate shall 
        be equal to the rebate as defined for purposes of the federal 
        rebate program in United States Code, title 42, section 
        1396r-8.  The rebate program shall utilize the terms and 
        conditions used for the federal rebate program established 
        according to section 1927 of title XIX of the federal Social 
        Security Act. 
           Subd. 3.  [DEFINITIONS.] For the purpose of this section, 
        the following terms have the meanings given them: 
           (a) "Commissioner" means the commissioner of human services.
           (b) "Manufacturer" means a manufacturer as defined in 
        section 151.44, paragraph (c). 
           (c) "Covered prescription drug" means a prescription drug 
        as defined in section 151.44, paragraph (d), that is covered 
        under medical assistance as described in section 256B.0625, 
        subdivision 13, and that is provided by a manufacturer that has 
        a fully executed rebate agreement with the commissioner under 
        this section and complies with that agreement.  
           (d) "Health carrier" means an insurance company licensed 
        under chapter 60A to offer, sell, or issue an individual or 
        group policy of accident and sickness insurance as defined in 
        section 62A.01; a nonprofit health service plan corporation 
        operating under chapter 62C; a health maintenance organization 
        operating under chapter 62D; a joint self-insurance employee 
        health plan operating under chapter 62H; a community integrated 
        systems network licensed under chapter 62N; a fraternal benefit 
        society operating under chapter 64B; a city, county, school 
        district, or other political subdivision providing self-insured 
        health coverage under section 461.617 or sections 471.98 to 
        471.982; and a self-funded health plan under the Employee 
        Retirement Income Security Act of 1974, as amended. 
           (e) "Participating pharmacy" means a pharmacy as defined in 
        section 151.01, subdivision 2, that agrees to participate in the 
        prescription drug discount program. 
           (f) "Enrolled individual" means a person who is eligible 
        for the program under subdivision 4 and has enrolled in the 
        program according to subdivision 5. 
           Subd. 4.  [ELIGIBLE PERSONS.] To be eligible for the 
        program, an applicant must: 
           (1) be a permanent resident of Minnesota as defined in 
        section 256L.09, subdivision 4; 
           (2) not be enrolled in medical assistance, general 
        assistance medical care, MinnesotaCare, or the prescription drug 
        program under section 256.955; 
           (3) not be enrolled in and have currently available 
        prescription drug coverage under a health plan offered by a 
        health carrier or under a pharmacy benefit program offered by a 
        pharmaceutical manufacturer; 
           (4) not be enrolled in and have currently available 
        prescription drug coverage under a Medicare supplement plan, as 
        defined in sections 62A.31 to 62A.44, or policies, contracts, or 
        certificates that supplement Medicare issued by health 
        maintenance organizations or those policies, contracts, or 
        certificates governed by section 1833 or 1876 of the federal 
        Social Security Act, United States Code, title 42, section 1395, 
        et. seq., as amended; and 
           (5) have a gross household income that does not exceed 250 
        percent of the federal poverty guidelines. 
           Subd. 5.  [APPLICATION PROCEDURE.] (a) Applications and 
        information on the program must be made available at county 
        social services agencies, health care provider offices, and 
        agencies and organizations serving senior citizens.  Individuals 
        shall submit applications and any information specified by the 
        commissioner as being necessary to verify eligibility directly 
        to the commissioner.  The commissioner shall determine an 
        applicant's eligibility for the program within 30 days from the 
        date the application is received.  Eligibility begins the month 
        after approval. 
           (b) The commissioner shall develop an application form that 
        does not exceed one page in length and requires information 
        necessary to determine eligibility for the program. 
           Subd. 6.  [PARTICIPATING PHARMACY.] According to a valid 
        prescription, a participating pharmacy must sell a covered 
        prescription drug to an enrolled individual at the pharmacy's 
        usual and customary retail price, minus an amount that is equal 
        to the rebate amount described in subdivision 8, plus the amount 
        of any administrative fee and switch fee established by the 
        commissioner under subdivision 10.  Each participating pharmacy 
        shall provide the commissioner with all information necessary to 
        administer the program, including, but not limited to, 
        information on prescription drug sales to enrolled individuals 
        and usual and customary retail prices. 
           Subd. 7.  [NOTIFICATION OF REBATE AMOUNT.] The commissioner 
        shall notify each drug manufacturer, each calendar quarter or 
        according to a schedule to be established by the commissioner, 
        of the amount of the rebate owed on the prescription drugs sold 
        by participating pharmacies to enrolled individuals. 
           Subd. 8.  [PROVISION OF REBATE.] To the extent that a 
        manufacturer's prescription drugs are prescribed to a resident 
        of this state, the manufacturer must provide a rebate equal to 
        the rebate provided under the medical assistance program for any 
        prescription drug distributed by the manufacturer that is 
        purchased by an enrolled individual at a participating 
        pharmacy.  The manufacturer must provide full payment within 30 
        days of receipt of the state invoice for the rebate, or 
        according to a schedule to be established by the commissioner.  
        The commissioner shall deposit all rebates received into the 
        Minnesota prescription drug dedicated fund established under 
        subdivision 11.  The manufacturer must provide the commissioner 
        with any information necessary to verify the rebate determined 
        per drug. 
           Subd. 9.  [PAYMENT TO PHARMACIES.] The commissioner shall 
        distribute on a biweekly basis an amount that is equal to an 
        amount collected under subdivision 8 to each participating 
        pharmacy based on the prescription drugs sold by that pharmacy 
        to enrolled individuals, minus the amount of the administrative 
        fee established by the commissioner under subdivision 10. 
           Subd. 10.  [ADMINISTRATIVE FEE; SWITCH FEE.] (a) The 
        commissioner shall establish a reasonable administrative fee 
        that covers the commissioner's expenses for enrollment, 
        processing claims, and distributing rebates under this program. 
           (b) The commissioner shall establish a reasonable switch 
        fee that covers expenses incurred by pharmacies in formatting 
        for electronic submission claims for prescription drugs sold to 
        enrolled individuals. 
           Subd. 11.  [DEDICATED FUND; CREATION; USE OF FUND.] (a) The 
        Minnesota prescription drug dedicated fund is established as an 
        account in the state treasury.  The commissioner of finance 
        shall credit to the dedicated fund all rebates paid under 
        subdivision 8, any federal funds received for the program, and 
        any appropriations or allocations designated for the fund.  The 
        commissioner of finance shall ensure that fund money is invested 
        under section 11A.25.  All money earned by the fund must be 
        credited to the fund.  The fund shall earn a proportionate share 
        of the total state annual investment income. 
           (b) Money in the fund is appropriated to the commissioner 
        of human services to reimburse participating pharmacies for 
        prescription drug discounts provided to enrolled individuals 
        under this section, to reimburse the commissioner of human 
        services for costs related to enrollment, processing claims, 
        distributing rebates, and for other reasonable administrative 
        costs related to administration of the prescription drug 
        discount program, and to repay the appropriation provided for 
        this section.  The commissioner must administer the program so 
        that the costs total no more than funds appropriated plus the 
        drug rebate proceeds. 
           Subd. 12.  [EXPIRATION.] This section expires upon the 
        effective date of an expanded prescription drug benefit under 
        Medicare. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 5.  Minnesota Statutes 2002, section 256.955, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ELIGIBILITY.] An individual satisfying the 
        following requirements and the requirements described in 
        subdivision 2, paragraph (d), is eligible for the prescription 
        drug program: 
           (1) is at least 65 years of age or older; and 
           (2) is eligible as a qualified Medicare beneficiary 
        according to section 256B.057, subdivision 3, or 3a, or 3b, 
        clause (1), or is eligible under section 256B.057, subdivision 
        3, or 3a, or 3b, clause (1), and is also eligible for medical 
        assistance or general assistance medical care with a spenddown 
        as defined in section 256B.056, subdivision 5. 
           Sec. 6.  Minnesota Statutes 2002, section 256.955, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PRESCRIPTION DRUG COVERAGE.] Coverage under the 
        program shall be limited to those prescription drugs that: 
           (1) are covered under the medical assistance program as 
        described in section 256B.0625, subdivision 13; and 
           (2) are provided by manufacturers that have fully executed 
        senior drug rebate agreements with the commissioner and comply 
        with such agreements; and 
           (3) for a specific enrollee, are not covered under an 
        assistance program offered by a pharmaceutical manufacturer, as 
        determined by the board on aging under section 256.975, 
        subdivision 9, except that this shall not apply to qualified 
        individuals under this section who are also eligible for medical 
        assistance with a spenddown as described in subdivision 2a, 
        clause (2), and subdivision 2b, clause (2). 
           [EFFECTIVE DATE.] This section is effective 90 days after 
        implementation by the board of aging of the prescription drug 
        assistance program under section 256.975, subdivision 9. 
           Sec. 7.  Minnesota Statutes 2002, section 256.955, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [REFERRALS TO PRESCRIPTION DRUG ASSISTANCE 
        PROGRAM.] County social service agencies, in coordination with 
        the commissioner and the Minnesota board on aging, shall refer 
        individuals applying to the prescription drug program, or 
        enrolled in the prescription drug program, to the prescription 
        drug assistance program for all required prescription drugs that 
        the board on aging determines, under section 256.975, 
        subdivision 9, are covered under an assistance program offered 
        by a pharmaceutical manufacturer.  Applicants and enrollees 
        referred to the prescription drug assistance program remain 
        eligible for coverage under the prescription drug program of all 
        prescription drugs covered under subdivision 3.  The board on 
        aging shall phase-in participation of enrollees, over a period 
        of 90 days, after implementation of the program under section 
        256.975, subdivision 9.  This subdivision does not apply to 
        individuals who are also eligible for medical assistance with a 
        spenddown as defined in section 256B.056, subdivision 5. 
           [EFFECTIVE DATE.] This section is effective 90 days after 
        implementation by the board of aging of the prescription drug 
        assistance program under section 256.975, subdivision 9. 
           Sec. 8.  Minnesota Statutes 2002, section 256.969, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [OPERATING PAYMENT RATES.] In determining 
        operating payment rates for admissions occurring on or after the 
        rate year beginning January 1, 1991, and every two years after, 
        or more frequently as determined by the commissioner, the 
        commissioner shall obtain operating data from an updated base 
        year and establish operating payment rates per admission for 
        each hospital based on the cost-finding methods and allowable 
        costs of the Medicare program in effect during the base year.  
        Rates under the general assistance medical care, medical 
        assistance, and MinnesotaCare programs shall not be rebased to 
        more current data on January 1, 1997, and January 1, 2005.  The 
        base year operating payment rate per admission is standardized 
        by the case mix index and adjusted by the hospital cost index, 
        relative values, and disproportionate population adjustment.  
        The cost and charge data used to establish operating rates shall 
        only reflect inpatient services covered by medical assistance 
        and shall not include property cost information and costs 
        recognized in outlier payments. 
           Sec. 9.  Minnesota Statutes 2002, section 256.969, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [PAYMENTS.] (a) Acute care hospital billings 
        under the medical assistance program must not be submitted until 
        the recipient is discharged.  However, the commissioner shall 
        establish monthly interim payments for inpatient hospitals that 
        have individual patient lengths of stay over 30 days regardless 
        of diagnostic category.  Except as provided in section 256.9693, 
        medical assistance reimbursement for treatment of mental illness 
        shall be reimbursed based on diagnostic classifications.  
        Individual hospital payments established under this section and 
        sections 256.9685, 256.9686, and 256.9695, in addition to third 
        party and recipient liability, for discharges occurring during 
        the rate year shall not exceed, in aggregate, the charges for 
        the medical assistance covered inpatient services paid for the 
        same period of time to the hospital.  This payment limitation 
        shall be calculated separately for medical assistance and 
        general assistance medical care services.  The limitation on 
        general assistance medical care shall be effective for 
        admissions occurring on or after July 1, 1991.  Services that 
        have rates established under subdivision 11 or 12, must be 
        limited separately from other services.  After consulting with 
        the affected hospitals, the commissioner may consider related 
        hospitals one entity and may merge the payment rates while 
        maintaining separate provider numbers.  The operating and 
        property base rates per admission or per day shall be derived 
        from the best Medicare and claims data available when rates are 
        established.  The commissioner shall determine the best Medicare 
        and claims data, taking into consideration variables of recency 
        of the data, audit disposition, settlement status, and the 
        ability to set rates in a timely manner.  The commissioner shall 
        notify hospitals of payment rates by December 1 of the year 
        preceding the rate year.  The rate setting data must reflect the 
        admissions data used to establish relative values.  Base year 
        changes from 1981 to the base year established for the rate year 
        beginning January 1, 1991, and for subsequent rate years, shall 
        not be limited to the limits ending June 30, 1987, on the 
        maximum rate of increase under subdivision 1.  The commissioner 
        may adjust base year cost, relative value, and case mix index 
        data to exclude the costs of services that have been 
        discontinued by the October 1 of the year preceding the rate 
        year or that are paid separately from inpatient services.  
        Inpatient stays that encompass portions of two or more rate 
        years shall have payments established based on payment rates in 
        effect at the time of admission unless the date of admission 
        preceded the rate year in effect by six months or more.  In this 
        case, operating payment rates for services rendered during the 
        rate year in effect and established based on the date of 
        admission shall be adjusted to the rate year in effect by the 
        hospital cost index. 
           (b) For fee-for-service admissions occurring on or after 
        July 1, 2002, the total payment, before third-party liability 
        and spenddown, made to hospitals for inpatient services is 
        reduced by .5 percent from the current statutory rates.  
           (c) In addition to the reduction in paragraph (b), the 
        total payment for fee-for-service admissions occurring on or 
        after July 1, 2003, made to hospitals for inpatient services 
        before third-party liability and spenddown, is reduced five 
        percent from the current statutory rates.  Mental health 
        services within diagnosis related groups 424 to 432, and 
        facilities defined under subdivision 16 are excluded from this 
        paragraph. 
           Sec. 10.  Minnesota Statutes 2002, section 256.969, is 
        amended by adding a subdivision to read: 
           Subd. 8b.  [ADMISSIONS FOR PERSONS WHO APPLY DURING 
        HOSPITALIZATION.] For admissions for individuals under section 
        256D.03, subdivision 3, paragraph (a), clause (2), that occur 
        before the date of eligibility, payment for the days that the 
        patient is eligible shall be established according to the 
        methods of subdivision 14. 
           [EFFECTIVE DATE.] This section is effective October 1, 2003.
           Sec. 11.  Minnesota Statutes 2002, section 256.975, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [PRESCRIPTION DRUG ASSISTANCE.] (a) The Minnesota 
        board on aging shall establish and administer a prescription 
        drug assistance program to assist individuals in accessing 
        programs offered by pharmaceutical manufacturers that provide 
        free or discounted prescription drugs or provide coverage for 
        prescription drugs.  The board shall use computer software 
        programs to: 
           (1) list eligibility requirements for pharmaceutical 
        assistance programs offered by manufacturers; 
           (2) list drugs that are included in a supplemental rebate 
        contract between the commissioner and a pharmaceutical 
        manufacturer under section 256.01, subdivision 2, clause (23); 
        and 
           (3) link individuals with the pharmaceutical assistance 
        programs most appropriate for the individual.  The board shall 
        make information on the prescription drug assistance program 
        available to interested individuals and health care providers 
        and shall coordinate the program with the statewide information 
        and assistance service provided through the Senior LinkAge Line 
        under subdivision 7. 
           (b) The board shall work with the commissioner and county 
        social service agencies to coordinate the enrollment of 
        individuals who are referred to the prescription drug assistance 
        program from the prescription drug program, as required under 
        section 256.955, subdivision 4a. 
           Sec. 12.  Minnesota Statutes 2002, section 256.98, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AMOUNT OF ASSISTANCE INCORRECTLY PAID.] The 
        amount of the assistance incorrectly paid under this section is: 
           (a) the difference between the amount of assistance 
        actually received on the basis of misrepresented or concealed 
        facts and the amount to which the recipient would have been 
        entitled had the specific concealment or misrepresentation not 
        occurred.  Unless required by law, rule, or regulation, earned 
        income disregards shall not be applied to earnings not reported 
        by the recipient; or 
           (b) equal to all payments for health care services, 
        including capitation payments made to a health plan, made on 
        behalf of a person enrolled in MinnesotaCare, medical 
        assistance, or general assistance medical care, for which the 
        person was not entitled due to the concealment or 
        misrepresentation of facts. 
           Sec. 13.  Minnesota Statutes 2002, section 256.98, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOVERY OF ASSISTANCE.] The amount of 
        assistance determined to have been incorrectly paid is 
        recoverable from: 
           (1) the recipient or the recipient's estate by the county 
        or the state as a debt due the county or the state or both; and 
           (2) any person found to have taken independent action to 
        establish eligibility for, conspired with, or aided and abetted, 
        any recipient of public assistance found to have been 
        incorrectly paid. 
           The obligations established under this subdivision shall be 
        joint and several and shall extend to all cases involving client 
        error as well as cases involving wrongfully obtained assistance. 
           MinnesotaCare participants who have been found to have 
        wrongfully obtained assistance as described in subdivision 1, 
        but who otherwise remain eligible for the program, may agree to 
        have their MinnesotaCare premiums increased by an amount equal 
        to ten percent of their premiums or $10 per month, whichever is 
        greater, until the debt is satisfied. 
           Sec. 14.  Minnesota Statutes 2002, section 256.98, 
        subdivision 8, is amended to read: 
           Subd. 8.  [DISQUALIFICATION FROM PROGRAM.] (a) Any person 
        found to be guilty of wrongfully obtaining assistance by a 
        federal or state court or by an administrative hearing 
        determination, or waiver thereof, through a disqualification 
        consent agreement, or as part of any approved diversion plan 
        under section 401.065, or any court-ordered stay which carries 
        with it any probationary or other conditions, in the Minnesota 
        family investment program, the food stamp program, the general 
        assistance program, the group residential housing program, or 
        the Minnesota supplemental aid program shall be disqualified 
        from that program.  In addition, any person disqualified from 
        the Minnesota family investment program shall also be 
        disqualified from the food stamp program.  The needs of that 
        individual shall not be taken into consideration in determining 
        the grant level for that assistance unit:  
           (1) for one year after the first offense; 
           (2) for two years after the second offense; and 
           (3) permanently after the third or subsequent offense.  
           The period of program disqualification shall begin on the 
        date stipulated on the advance notice of disqualification 
        without possibility of postponement for administrative stay or 
        administrative hearing and shall continue through completion 
        unless and until the findings upon which the sanctions were 
        imposed are reversed by a court of competent jurisdiction.  The 
        period for which sanctions are imposed is not subject to 
        review.  The sanctions provided under this subdivision are in 
        addition to, and not in substitution for, any other sanctions 
        that may be provided for by law for the offense involved.  A 
        disqualification established through hearing or waiver shall 
        result in the disqualification period beginning immediately 
        unless the person has become otherwise ineligible for 
        assistance.  If the person is ineligible for assistance, the 
        disqualification period begins when the person again meets the 
        eligibility criteria of the program from which they were 
        disqualified and makes application for that program. 
           (b) A family receiving assistance through child care 
        assistance programs under chapter 119B with a family member who 
        is found to be guilty of wrongfully obtaining child care 
        assistance by a federal court, state court, or an administrative 
        hearing determination or waiver, through a disqualification 
        consent agreement, as part of an approved diversion plan under 
        section 401.065, or a court-ordered stay with probationary or 
        other conditions, is disqualified from child care assistance 
        programs.  The disqualifications must be for periods of three 
        months, six months, and two years for the first, second, and 
        third offenses respectively.  Subsequent violations must result 
        in permanent disqualification.  During the disqualification 
        period, disqualification from any child care program must extend 
        to all child care programs and must be immediately applied. 
           (c) Any person found to be guilty of wrongfully obtaining 
        general assistance medical care, MinnesotaCare for adults 
        without children, and upon federal approval, all categories of 
        medical assistance and remaining categories of MinnesotaCare, 
        except for children through age 18, by a federal or state court 
        or by an administrative hearing determination, or waiver 
        thereof, through a disqualification consent agreement, or as 
        part of any approved diversion plan under section 401.065, or 
        any court-ordered stay which carries with it any probationary or 
        other conditions, is disqualified from that program.  The period 
        of disqualification is one year after the first offense, two 
        years after the second offense, and permanently after the third 
        or subsequent offense.  The period of program disqualification 
        shall begin on the date stipulated on the advance notice of 
        disqualification without possibility of postponement for 
        administrative stay or administrative hearing and shall continue 
        through completion unless and until the findings upon which the 
        sanctions were imposed are reversed by a court of competent 
        jurisdiction.  The period for which sanctions are imposed is not 
        subject to review.  The sanctions provided under this 
        subdivision are in addition to, and not in substitution for, any 
        other sanctions that may be provided for by law for the offense 
        involved. 
           Sec. 15.  Minnesota Statutes 2002, section 256B.055, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [RESIDENTS OF INSTITUTIONS FOR MENTAL DISEASES.] 
        Beginning October 1, 2003, persons who would be eligible for 
        medical assistance under this chapter but for residing in a 
        facility that is determined by the commissioner or the federal 
        Centers for Medicare and Medicaid Services to be an institution 
        for mental diseases are eligible for medical assistance without 
        federal financial participation, except that coverage shall not 
        include payment for a nursing facility determined to be an 
        institution for mental diseases. 
           Sec. 16.  Minnesota Statutes 2002, section 256B.056, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [INCOME AND ASSETS GENERALLY.] Unless 
        specifically required by state law or rule or federal law or 
        regulation, the methodologies used in counting income and assets 
        to determine eligibility for medical assistance for persons 
        whose eligibility category is based on blindness, disability, or 
        age of 65 or more years, the methodologies for the supplemental 
        security income program shall be used.  Increases in benefits 
        under title II of the Social Security Act shall not be counted 
        as income for purposes of this subdivision until July 1 of each 
        year.  Effective upon federal approval, for children eligible 
        under section 256B.055, subdivision 12, or for home and 
        community-based waiver services whose eligibility for medical 
        assistance is determined without regard to parental income, 
        child support payments, including any payments made by an 
        obligor in satisfaction of or in addition to a temporary or 
        permanent order for child support, and social security payments 
        are not counted as income.  For families and children, which 
        includes all other eligibility categories, the methodologies 
        under the state's AFDC plan in effect as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        shall be used, except that effective July 1, 2002, the $90 and 
        $30 and one-third earned income disregards shall not apply and 
        the disregard specified in subdivision 1c shall apply October 1, 
        2003, the earned income disregards and deductions are limited to 
        those in subdivision 1c.  For these purposes, a "methodology" 
        does not include an asset or income standard, or accounting 
        method, or method of determining effective dates. 
           Sec. 17.  Minnesota Statutes 2002, section 256B.056, 
        subdivision 1c, is amended to read: 
           Subd. 1c.  [FAMILIES WITH CHILDREN INCOME METHODOLOGY.] 
        (a)(1) For children ages one to five whose eligibility is 
        determined under section 256B.057, subdivision 2, 21 percent of 
        countable earned income shall be disregarded for up to four 
        months.  This clause expires July 1, 2003. 
           (2) For applications processed within one calendar month 
        prior to the date clause (1) expires, eligibility shall be 
        determined by applying the income standards and methodologies in 
        effect prior to the date of the expiration for any months in the 
        six-month budget period before the expiration date and the 
        income standards and methodologies in effect on the expiration 
        date for any months in the six-month budget period on or after 
        that date.  The income standards for each month shall be added 
        together and compared to the applicant's total countable income 
        for the six-month budget period to determine eligibility. 
           (3) For children ages one through 18 whose eligibility is 
        determined under section 256B.057, subdivision 2, the following 
        deductions shall be applied to income counted toward the child's 
        eligibility as allowed under the state's AFDC plan in effect as 
        of July 16, 1996:  $90 work expense, dependent care, and child 
        support paid under court order.  This clause is effective 
        October 1, 2003. 
           (b) For families with children whose eligibility is 
        determined using the standard specified in section 256B.056, 
        subdivision 4, paragraph (c), 17 percent of countable earned 
        income shall be disregarded for up to four months and the 
        following deductions shall be applied to each individual's 
        income counted toward eligibility as allowed under the state's 
        AFDC plan in effect as of July 16, 1996:  dependent care and 
        child support paid under court order. 
           (c) If the four month disregard in paragraph (b) has been 
        applied to the wage earner's income for four months, the 
        disregard shall not be applied again until the wage earner's 
        income has not been considered in determining medical assistance 
        eligibility for 12 consecutive months.  
           [EFFECTIVE DATE.] The amendments to paragraphs (b) and (c) 
        are effective July 1, 2003. 
           Sec. 18.  Minnesota Statutes 2002, section 256B.056, 
        subdivision 3c, is amended to read: 
           Subd. 3c.  [ASSET LIMITATIONS FOR FAMILIES AND CHILDREN.] A 
        household of two or more persons must not own more than 
        $30,000 $20,000 in total net assets, and a household of one 
        person must not own more than $15,000 $10,000 in total net 
        assets.  In addition to these maximum amounts, an eligible 
        individual or family may accrue interest on these amounts, but 
        they must be reduced to the maximum at the time of an 
        eligibility redetermination.  The value of assets that are not 
        considered in determining eligibility for medical assistance for 
        families and children is the value of those assets excluded 
        under the AFDC state plan as of July 16, 1996, as required by 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (PRWORA), Public Law Number 104-193, with the 
        following exceptions: 
           (1) household goods and personal effects are not 
        considered; 
           (2) capital and operating assets of a trade or business up 
        to $200,000 are not considered; 
           (3) one motor vehicle is excluded for each person of legal 
        driving age who is employed or seeking employment; 
           (4) one burial plot and all other burial expenses equal to 
        the supplemental security income program asset limit are not 
        considered for each individual; 
           (5) court-ordered settlements up to $10,000 are not 
        considered; 
           (6) individual retirement accounts and funds are not 
        considered; and 
           (7) assets owned by children are not considered.  
           Sec. 19.  Minnesota Statutes 2002, section 256B.057, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREGNANT WOMEN AND INFANTS.] (a)(1) An 
        infant less than one year of age or a pregnant woman who has 
        written verification of a positive pregnancy test from a 
        physician or licensed registered nurse, is eligible for medical 
        assistance if countable family income is equal to or less than 
        275 percent of the federal poverty guideline for the same family 
        size.  A pregnant woman who has written verification of a 
        positive pregnancy test from a physician or licensed registered 
        nurse is eligible for medical assistance if countable family 
        income is equal to or less than 200 percent of the federal 
        poverty guideline for the same family size.  For purposes of 
        this subdivision, "countable family income" means the amount of 
        income considered available using the methodology of the AFDC 
        program under the state's AFDC plan as of July 16, 1996, as 
        required by the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (PRWORA), Public Law Number 104-193, 
        except for the earned income disregard and employment deductions.
           (2) For applications processed within one calendar month 
        prior to the effective date, eligibility shall be determined by 
        applying the income standards and methodologies in effect prior 
        to the effective date for any months in the six-month budget 
        period before that date and the income standards and 
        methodologies in effect on the effective date for any months in 
        the six-month budget period on or after that date.  The income 
        standards for each month shall be added together and compared to 
        the applicant's total countable income for the six-month budget 
        period to determine eligibility. 
           (b)(1) An amount equal to the amount of earned income 
        exceeding 275 percent of the federal poverty guideline, up to a 
        maximum of the amount by which the combined total of 185 percent 
        of the federal poverty guideline plus the earned income 
        disregards and deductions of the AFDC program under the state's 
        AFDC plan as of July 16, 1996, as required by the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (PRWORA), Public Law Number 104-193, exceeds 275 percent of the 
        federal poverty guideline will be deducted for pregnant women 
        and infants less than one year of age.  This clause expires July 
        1, 2003. 
           (2) For applications processed within one calendar month 
        prior to the date clause (1) expires, eligibility shall be 
        determined by applying the income standards and methodologies in 
        effect prior to the date of the expiration for any months in the 
        six-month budget period before the expiration date and the 
        income standards and methodologies in effect on the expiration 
        date for any months in the six-month budget period on or after 
        that date.  The income standards for each month shall be added 
        together and compared to the applicant's total countable income 
        for the six-month budget period to determine eligibility. 
           (c) Dependent care and child support paid under court order 
        shall be deducted from the countable income of pregnant women. 
           (b) (d) An infant born on or after January 1, 1991, to a 
        woman who was eligible for and receiving medical assistance on 
        the date of the child's birth shall continue to be eligible for 
        medical assistance without redetermination until the child's 
        first birthday, as long as the child remains in the woman's 
        household. 
           [EFFECTIVE DATE.] This section is effective February 1, 
        2004, or upon federal approval, whichever is later, except where 
        a different date is specified in the text. 
           Sec. 20.  Minnesota Statutes 2002, section 256B.057, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHILDREN.] (a) Except as specified in 
        subdivision 1b, effective July 1, 2002 October 1, 2003, a child 
        one through 18 years of age in a family whose countable income 
        is no greater than 170 150 percent of the federal poverty 
        guidelines for the same family size, is eligible for medical 
        assistance.  
           (b) For applications processed within one calendar month 
        prior to the effective date, eligibility shall be determined by 
        applying the income standards and methodologies in effect prior 
        to the effective date for any months in the six-month budget 
        period before that date and the income standards and 
        methodologies in effect on the effective date for any months in 
        the six-month budget period on or after that date.  The income 
        standards for each month shall be added together and compared to 
        the applicant's total countable income for the six-month budget 
        period to determine eligibility. 
           Sec. 21.  Minnesota Statutes 2002, section 256B.057, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [QUALIFYING INDIVIDUALS.] Beginning July 1, 
        1998, to the extent of the federal allocation to Minnesota 
        contingent upon federal funding, a person who would otherwise be 
        eligible as a qualified Medicare beneficiary under subdivision 
        3, except that the person's income is in excess of the limit, is 
        eligible as a qualifying individual according to the following 
        criteria: 
           (1) if the person's income is greater than 120 percent, but 
        less than 135 percent of the official federal poverty guidelines 
        for the applicable family size, the person is eligible for 
        medical assistance reimbursement of Medicare Part B premiums; or 
           (2) if the person's income is equal to or greater than 135 
        percent but less than 175 percent of the official federal 
        poverty guidelines for the applicable family size, the person is 
        eligible for medical assistance reimbursement of that portion of 
        the Medicare Part B premium attributable to an increase in Part 
        B expenditures which resulted from the shift of home care 
        services from Medicare Part A to Medicare Part B under Public 
        Law Number 105-33, section 4732, the Balanced Budget Act of 1997.
           The commissioner shall limit enrollment of qualifying 
        individuals under this subdivision according to the requirements 
        of Public Law Number 105-33, section 4732. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 22.  Minnesota Statutes 2002, section 256B.057, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
        assistance may be paid for a person who is employed and who: 
           (1) meets the definition of disabled under the supplemental 
        security income program; 
           (2) is at least 16 but less than 65 years of age; 
           (3) meets the asset limits in paragraph (b); and 
           (4) effective November 1, 2003, pays a premium, if 
        required, and other obligations under paragraph (c) (d).  
        Any spousal income or assets shall be disregarded for purposes 
        of eligibility and premium determinations. 
           After the month of enrollment, a person enrolled in medical 
        assistance under this subdivision who: 
           (1) is temporarily unable to work and without receipt of 
        earned income due to a medical condition, as verified by a 
        physician, may retain eligibility for up to four calendar 
        months; or 
           (2) effective January 1, 2004, loses employment for reasons 
        not attributable to the enrollee, may retain eligibility for up 
        to four consecutive months after the month of job loss.  To 
        receive a four-month extension, enrollees must verify the 
        medical condition or provide notification of job loss.  All 
        other eligibility requirements must be met and the enrollee must 
        pay all calculated premium costs for continued eligibility. 
           (b) For purposes of determining eligibility under this 
        subdivision, a person's assets must not exceed $20,000, 
        excluding: 
           (1) all assets excluded under section 256B.056; 
           (2) retirement accounts, including individual accounts, 
        401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
           (3) medical expense accounts set up through the person's 
        employer. 
           (c)(1) Effective January 1, 2004, for purposes of 
        eligibility, there will be a $65 earned income disregard.  To be 
        eligible, a person applying for medical assistance under this 
        subdivision must have earned income above the disregard level. 
           (2) Effective January 1, 2004, to be considered earned 
        income, Medicare, social security, and applicable state and 
        federal income taxes must be withheld.  To be eligible, a person 
        must document earned income tax withholding. 
           (d)(1) A person whose earned and unearned income is equal 
        to or greater than 100 percent of federal poverty guidelines for 
        the applicable family size must pay a premium to be eligible for 
        medical assistance under this subdivision.  The premium shall be 
        based on the person's gross earned and unearned income and the 
        applicable family size using a sliding fee scale established by 
        the commissioner, which begins at one percent of income at 100 
        percent of the federal poverty guidelines and increases to 7.5 
        percent of income for those with incomes at or above 300 percent 
        of the federal poverty guidelines.  Annual adjustments in the 
        premium schedule based upon changes in the federal poverty 
        guidelines shall be effective for premiums due in July of each 
        year.  
           (2) Effective January 1, 2004, all enrollees must pay a 
        premium to be eligible for medical assistance under this 
        subdivision.  An enrollee shall pay the greater of a $35 premium 
        or the premium calculated in clause (1). 
           (3) Effective November 1, 2003, all enrollees who receive 
        unearned income must pay one-half of one percent of unearned 
        income in addition to the premium amount. 
           (4) Effective November 1, 2003, for enrollees whose income 
        does not exceed 200 percent of the federal poverty guidelines 
        and who are also enrolled in Medicare, the commissioner must 
        reimburse the enrollee for Medicare Part B premiums under 
        section 256B.0625, subdivision 15, paragraph (a). 
           (d) (e) A person's eligibility and premium shall be 
        determined by the local county agency.  Premiums must be paid to 
        the commissioner.  All premiums are dedicated to the 
        commissioner. 
           (e) (f) Any required premium shall be determined at 
        application and redetermined annually at recertification at the 
        enrollee's six-month income review or when a change in income or 
        family household size occurs is reported.  Enrollees must report 
        any change in income or household size within ten days of when 
        the change occurs.  A decreased premium resulting from a 
        reported change in income or household size shall be effective 
        the first day of the next available billing month after the 
        change is reported.  Except for changes occurring from annual 
        cost-of-living increases, a change resulting in an increased 
        premium shall not affect the premium amount until the next 
        six-month review. 
           (f) (g) Premium payment is due upon notification from the 
        commissioner of the premium amount required.  Premiums may be 
        paid in installments at the discretion of the commissioner. 
           (g) (h) Nonpayment of the premium shall result in denial or 
        termination of medical assistance unless the person demonstrates 
        good cause for nonpayment.  Good cause exists if the 
        requirements specified in Minnesota Rules, part 9506.0040, 
        subpart 7, items B to D, are met.  Except when an installment 
        agreement is accepted by the commissioner, all persons 
        disenrolled for nonpayment of a premium must pay any past due 
        premiums as well as current premiums due prior to being 
        reenrolled.  Nonpayment shall include payment with a returned, 
        refused, or dishonored instrument.  The commissioner may require 
        a guaranteed form of payment as the only means to replace a 
        returned, refused, or dishonored instrument. 
           [EFFECTIVE DATE.] This section is effective November 1, 
        2003, except that the amendments to Minnesota Statutes 2002, 
        section 256B.057, subdivision 9, paragraphs (f) and (h), are 
        effective July 1, 2003. 
           Sec. 23.  Minnesota Statutes 2002, section 256B.057, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CERTAIN PERSONS NEEDING TREATMENT FOR BREAST OR 
        CERVICAL CANCER.] (a) Medical assistance may be paid for a 
        person who: 
           (1) has been screened for breast or cervical cancer by the 
        Minnesota breast and cervical cancer control program, and 
        program funds have been used to pay for the person's screening; 
           (2) according to the person's treating health professional, 
        needs treatment, including diagnostic services necessary to 
        determine the extent and proper course of treatment, for breast 
        or cervical cancer, including precancerous conditions and early 
        stage cancer; 
           (3) meets the income eligibility guidelines for the 
        Minnesota breast and cervical cancer control program; 
           (4) is under age 65; 
           (5) is not otherwise eligible for medical assistance under 
        United States Code, title 42, section 1396(a)(10)(A)(i); and 
           (6) is not otherwise covered under creditable coverage, as 
        defined under United States Code, title 42, section 
        300gg(c) 1396a(aa). 
           (b) Medical assistance provided for an eligible person 
        under this subdivision shall be limited to services provided 
        during the period that the person receives treatment for breast 
        or cervical cancer. 
           (c) A person meeting the criteria in paragraph (a) is 
        eligible for medical assistance without meeting the eligibility 
        criteria relating to income and assets in section 256B.056, 
        subdivisions 1a to 5b. 
           Sec. 24.  Minnesota Statutes 2002, section 256B.0595, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROHIBITED TRANSFERS.] (a) For transfers 
        of assets made on or before August 10, 1993, if a person or the 
        person's spouse has given away, sold, or disposed of, for less 
        than fair market value, any asset or interest therein, except 
        assets other than the homestead that are excluded under the 
        supplemental security program, within 30 months before or any 
        time after the date of institutionalization if the person has 
        been determined eligible for medical assistance, or within 30 
        months before or any time after the date of the first approved 
        application for medical assistance if the person has not yet 
        been determined eligible for medical assistance, the person is 
        ineligible for long-term care services for the period of time 
        determined under subdivision 2.  
           (b) Effective for transfers made after August 10, 1993, a 
        person, a person's spouse, or any person, court, or 
        administrative body with legal authority to act in place of, on 
        behalf of, at the direction of, or upon the request of the 
        person or person's spouse, may not give away, sell, or dispose 
        of, for less than fair market value, any asset or interest 
        therein, except assets other than the homestead that are 
        excluded under the supplemental security income program, for the 
        purpose of establishing or maintaining medical assistance 
        eligibility.  This applies to all transfers, including those 
        made by a community spouse after the month in which the 
        institutionalized spouse is determined eligible for medical 
        assistance.  For purposes of determining eligibility for 
        long-term care services, any transfer of such assets within 36 
        months before or any time after an institutionalized person 
        applies for medical assistance, or 36 months before or any time 
        after a medical assistance recipient becomes institutionalized, 
        for less than fair market value may be considered.  Any such 
        transfer is presumed to have been made for the purpose of 
        establishing or maintaining medical assistance eligibility and 
        the person is ineligible for long-term care services for the 
        period of time determined under subdivision 2, unless the person 
        furnishes convincing evidence to establish that the transaction 
        was exclusively for another purpose, or unless the transfer is 
        permitted under subdivision 3 or 4.  Notwithstanding the 
        provisions of this paragraph, in the case of payments from a 
        trust or portions of a trust that are considered transfers of 
        assets under federal law, any transfers made within 60 months 
        before or any time after an institutionalized person applies for 
        medical assistance and within 60 months before or any time after 
        a medical assistance recipient becomes institutionalized, may be 
        considered. 
           (c) This section applies to transfers, for less than fair 
        market value, of income or assets, including assets that are 
        considered income in the month received, such as inheritances, 
        court settlements, and retroactive benefit payments or income to 
        which the person or the person's spouse is entitled but does not 
        receive due to action by the person, the person's spouse, or any 
        person, court, or administrative body with legal authority to 
        act in place of, on behalf of, at the direction of, or upon the 
        request of the person or the person's spouse.  
           (d) This section applies to payments for care or personal 
        services provided by a relative, unless the compensation was 
        stipulated in a notarized, written agreement which was in 
        existence when the service was performed, the care or services 
        directly benefited the person, and the payments made represented 
        reasonable compensation for the care or services provided.  A 
        notarized written agreement is not required if payment for the 
        services was made within 60 days after the service was provided. 
           (e) This section applies to the portion of any asset or 
        interest that a person, a person's spouse, or any person, court, 
        or administrative body with legal authority to act in place of, 
        on behalf of, at the direction of, or upon the request of the 
        person or the person's spouse, transfers to any annuity that 
        exceeds the value of the benefit likely to be returned to the 
        person or spouse while alive, based on estimated life expectancy 
        using the life expectancy tables employed by the supplemental 
        security income program to determine the value of an agreement 
        for services for life.  The commissioner may adopt rules 
        reducing life expectancies based on the need for long-term 
        care.  This section applies to an annuity described in this 
        paragraph purchased on or after March 1, 2002, that: 
           (1) is not purchased from an insurance company or financial 
        institution that is subject to licensing or regulation by the 
        Minnesota department of commerce or a similar regulatory agency 
        of another state; 
           (2) does not pay out principal and interest in equal 
        monthly installments; or 
           (3) does not begin payment at the earliest possible date 
        after annuitization.  
           (f) For purposes of this section, long-term care services 
        include services in a nursing facility, services that are 
        eligible for payment according to section 256B.0625, subdivision 
        2, because they are provided in a swing bed, intermediate care 
        facility for persons with mental retardation, and home and 
        community-based services provided pursuant to sections 
        256B.0915, 256B.092, and 256B.49.  For purposes of this 
        subdivision and subdivisions 2, 3, and 4, "institutionalized 
        person" includes a person who is an inpatient in a nursing 
        facility or in a swing bed, or intermediate care facility for 
        persons with mental retardation or who is receiving home and 
        community-based services under sections 256B.0915, 256B.092, and 
        256B.49. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003.  
           Sec. 25.  Minnesota Statutes 2002, section 256B.0595, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [PROHIBITED TRANSFERS.] (a) Notwithstanding any 
        contrary provisions of this section, this subdivision applies to 
        transfers involving recipients of medical assistance that are 
        made on or after July 1, 2003, and to all transfers involving 
        persons who apply for medical assistance on or after July 1, 
        2003, if the transfer occurred within 72 months before the 
        person applies for medical assistance, except that this 
        subdivision does not apply to transfers made prior to July 1, 
        2003.  A person, a person's spouse, or any person, court, or 
        administrative body with legal authority to act in place of, on 
        behalf of, at the direction of, or upon the request of the 
        person or the person's spouse, may not give away, sell, dispose 
        of, or reduce ownership or control of any income, asset, or 
        interest therein for less than fair market value for the purpose 
        of establishing or maintaining medical assistance eligibility.  
        This applies to all transfers, including those made by a 
        community spouse after the month in which the institutionalized 
        spouse is determined eligible for medical assistance.  For 
        purposes of determining eligibility for medical assistance 
        services, any transfer of such income or assets for less than 
        fair market value within 72 months before or any time after a 
        person applies for medical assistance may be considered.  Any 
        such transfer is presumed to have been made for the purpose of 
        establishing or maintaining medical assistance eligibility, and 
        the person is ineligible for medical assistance services for the 
        period of time determined under subdivision 2b, unless the 
        person furnishes convincing evidence to establish that the 
        transaction was exclusively for another purpose or unless the 
        transfer is permitted under subdivision 3b or 4b. 
           (b) This section applies to transfers to trusts.  The 
        commissioner shall determine valid trust purposes under this 
        section.  Assets placed into a trust that is not for a valid 
        purpose shall always be considered available for the purposes of 
        medical assistance eligibility, regardless of when the trust is 
        established. 
           (c) This section applies to transfers of income or assets 
        for less than fair market value, including assets that are 
        considered income in the month received, such as inheritances, 
        court settlements, and retroactive benefit payments or income to 
        which the person or the person's spouse is entitled but does not 
        receive due to action by the person, the person's spouse, or any 
        person, court, or administrative body with legal authority to 
        act in place of, on behalf of, at the direction of, or upon the 
        request of the person or the person's spouse. 
           (d) This section applies to payments for care or personal 
        services provided by a relative, unless the compensation was 
        stipulated in a notarized written agreement that was in 
        existence when the service was performed, the care or services 
        directly benefited the person, and the payments made represented 
        reasonable compensation for the care or services provided.  A 
        notarized written agreement is not required if payment for the 
        services was made within 60 days after the service was provided. 
           (e) This section applies to the portion of any income, 
        asset, or interest therein that a person, a person's spouse, or 
        any person, court, or administrative body with legal authority 
        to act in place of, on behalf of, at the direction of, or upon 
        the request of the person or the person's spouse, transfers to 
        any annuity that exceeds the value of the benefit likely to be 
        returned to the person or the person's spouse while alive, based 
        on estimated life expectancy, using the life expectancy tables 
        employed by the supplemental security income program, or based 
        on a shorter life expectancy if the annuitant had a medical 
        condition that would shorten the annuitant's life expectancy and 
        that was diagnosed before funds were placed into the annuity.  
        The agency may request and receive a physician's statement to 
        determine if the annuitant had a diagnosed medical condition 
        that would shorten the annuitant's life expectancy.  If so, the 
        agency shall determine the expected value of the benefits based 
        upon the physician's statement instead of using a life 
        expectancy table.  This section applies to an annuity described 
        in this paragraph purchased on or after March 1, 2002, that: 
           (1) is not purchased from an insurance company or financial 
        institution that is subject to licensing or regulation by the 
        Minnesota department of commerce or a similar regulatory agency 
        of another state; 
           (2) does not pay out principal and interest in equal 
        monthly installments; or 
           (3) does not begin payment at the earliest possible date 
        after annuitization. 
           (f) Transfers under this section shall affect 
        determinations of eligibility for all medical assistance 
        services or long-term care services, whichever receives federal 
        approval. 
           [EFFECTIVE DATE.] (a) This section is effective July 1, 
        2003, to the extent permitted by federal law.  If any provision 
        of this section is prohibited by federal law, the provision 
        shall become effective when federal law is changed to permit its 
        application or a waiver is received.  The commissioner of human 
        services shall notify the revisor of statutes when federal law 
        is enacted or a waiver or other federal approval is received and 
        publish a notice in the State Register.  The commissioner must 
        include the notice in the first State Register published after 
        the effective date of the federal changes. 
           (b) If, by July 1, 2003, any provision of this section is 
        not effective because of prohibitions in federal law, the 
        commissioner of human services shall apply to the federal 
        government by August 1, 2003, for a waiver of those prohibitions 
        or other federal authority, and that provision shall become 
        effective upon receipt of a federal waiver or other federal 
        approval, notification to the revisor of statutes, and 
        publication of a notice in the State Register to that effect.  
        In applying for federal approval to extend the lookback period, 
        the commissioner shall seek the longest lookback period the 
        federal government will approve, not to exceed 72 months. 
           Sec. 26.  Minnesota Statutes 2002, section 256B.0595, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PERIOD OF INELIGIBILITY.] (a) For any 
        uncompensated transfer occurring on or before August 10, 1993, 
        the number of months of ineligibility for long-term care 
        services shall be the lesser of 30 months, or the uncompensated 
        transfer amount divided by the average medical assistance rate 
        for nursing facility services in the state in effect on the date 
        of application.  The amount used to calculate the average 
        medical assistance payment rate shall be adjusted each July 1 to 
        reflect payment rates for the previous calendar year.  The 
        period of ineligibility begins with the month in which the 
        assets were transferred.  If the transfer was not reported to 
        the local agency at the time of application, and the applicant 
        received long-term care services during what would have been the 
        period of ineligibility if the transfer had been reported, a 
        cause of action exists against the transferee for the cost of 
        long-term care services provided during the period of 
        ineligibility, or for the uncompensated amount of the transfer, 
        whichever is less.  The action may be brought by the state or 
        the local agency responsible for providing medical assistance 
        under chapter 256G.  The uncompensated transfer amount is the 
        fair market value of the asset at the time it was given away, 
        sold, or disposed of, less the amount of compensation received.  
           (b) For uncompensated transfers made after August 10, 1993, 
        the number of months of ineligibility for long-term care 
        services shall be the total uncompensated value of the resources 
        transferred divided by the average medical assistance rate for 
        nursing facility services in the state in effect on the date of 
        application.  The amount used to calculate the average medical 
        assistance payment rate shall be adjusted each July 1 to reflect 
        payment rates for the previous calendar year.  The period of 
        ineligibility begins with the first day of the month after the 
        month in which the assets were transferred except that if one or 
        more uncompensated transfers are made during a period of 
        ineligibility, the total assets transferred during the 
        ineligibility period shall be combined and a penalty period 
        calculated to begin in on the first day of the month after the 
        month in which the first uncompensated transfer was made.  If 
        the transfer was not reported to the local agency at the time of 
        application, and the applicant received medical assistance 
        services during what would have been the period of ineligibility 
        if the transfer had been reported, a cause of action exists 
        against the transferee for the cost of medical assistance 
        services provided during the period of ineligibility, or for the 
        uncompensated amount of the transfer, whichever is less.  The 
        action may be brought by the state or the local agency 
        responsible for providing medical assistance under chapter 
        256G.  The uncompensated transfer amount is the fair market 
        value of the asset at the time it was given away, sold, or 
        disposed of, less the amount of compensation received.  
        Effective for transfers made on or after March 1, 1996, 
        involving persons who apply for medical assistance on or after 
        April 13, 1996, no cause of action exists for a transfer unless: 
           (1) the transferee knew or should have known that the 
        transfer was being made by a person who was a resident of a 
        long-term care facility or was receiving that level of care in 
        the community at the time of the transfer; 
           (2) the transferee knew or should have known that the 
        transfer was being made to assist the person to qualify for or 
        retain medical assistance eligibility; or 
           (3) the transferee actively solicited the transfer with 
        intent to assist the person to qualify for or retain eligibility 
        for medical assistance.  
           (c) If a calculation of a penalty period results in a 
        partial month, payments for long-term care services shall be 
        reduced in an amount equal to the fraction, except that in 
        calculating the value of uncompensated transfers, if the total 
        value of all uncompensated transfers made in a month not 
        included in an existing penalty period does not exceed $200, 
        then such transfers shall be disregarded for each month prior to 
        the month of application for or during receipt of medical 
        assistance. 
           [EFFECTIVE DATE.] Paragraph (b) of this section is 
        effective July 1, 2003. 
           Sec. 27.  Minnesota Statutes 2002, section 256B.0595, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 
        any contrary provisions of this section, this subdivision 
        applies to transfers, including transfers to trusts, involving 
        recipients of medical assistance that are made on or after July 
        1, 2003, and to all transfers involving persons who apply for 
        medical assistance on or after July 1, 2003, regardless of when 
        the transfer occurred, except that this subdivision does not 
        apply to transfers made prior to July 1, 2003.  For any 
        uncompensated transfer occurring within 72 months prior to the 
        date of application, at any time after application, or while 
        eligible, the number of months of cumulative ineligibility for 
        medical assistance services shall be the total uncompensated 
        value of the assets and income transferred divided by the 
        statewide average per-person nursing facility payment made by 
        the state in effect at the time a penalty for a transfer is 
        determined.  The amount used to calculate the average per-person 
        nursing facility payment shall be adjusted each July 1 to 
        reflect average payments for the previous calendar year.  For 
        applicants, the period of ineligibility begins with the month in 
        which the person applied for medical assistance and satisfied 
        all other requirements for eligibility, or the first month the 
        local agency becomes aware of the transfer and can give proper 
        notice, if later.  For recipients, the period of ineligibility 
        begins in the first month after the month the agency becomes 
        aware of the transfer and can give proper notice, except that 
        penalty periods for transfers made during a period of 
        ineligibility as determined under this section shall begin in 
        the month following the existing period of ineligibility.  If 
        the transfer was not reported to the local agency, and the 
        applicant received medical assistance services during what would 
        have been the period of ineligibility if the transfer had been 
        reported, a cause of action exists against the transferee for 
        the cost of medical assistance services provided during the 
        period of ineligibility or for the uncompensated amount of the 
        transfer that was not recovered from the transferor through the 
        implementation of a penalty period under this subdivision, 
        whichever is less.  Recovery shall include the costs incurred 
        due to the action.  The action may be brought by the state or 
        the local agency responsible for providing medical assistance 
        under chapter 256B.  The total uncompensated value is the fair 
        market value of the income or asset at the time it was given 
        away, sold, or disposed of, less the amount of compensation 
        received.  No cause of action exists for a transfer unless: 
           (1) the transferee knew or should have known that the 
        transfer was being made by a person who was a resident of a 
        long-term care facility or was receiving that level of care in 
        the community at the time of the transfer; 
           (2) the transferee knew or should have known that the 
        transfer was being made to assist the person to qualify for or 
        retain medical assistance eligibility; or 
           (3) the transferee actively solicited the transfer with 
        intent to assist the person to qualify for or retain eligibility 
        for medical assistance. 
           (b) If a calculation of a penalty period results in a 
        partial month, payments for medical assistance services shall be 
        reduced in an amount equal to the fraction, except that in 
        calculating the value of uncompensated transfers, if the total 
        value of all uncompensated transfers made in a month not 
        included in an existing penalty period does not exceed $200, 
        then such transfers shall be disregarded for each month prior to 
        the month of application for or during receipt of medical 
        assistance. 
           (c) Ineligibility under this section shall apply to medical 
        assistance services or long-term care services, whichever 
        receives federal approval. 
           [EFFECTIVE DATE.] (a) This section is effective July 1, 
        2003, to the extent permitted by federal law.  If any provision 
        of this section is prohibited by federal law, the provision 
        shall become effective when federal law is changed to permit its 
        application or a waiver is received.  The commissioner of human 
        services shall notify the revisor of statutes when federal law 
        is enacted or a waiver or other federal approval is received and 
        publish a notice in the State Register.  The commissioner must 
        include the notice in the first State Register published after 
        the effective date of the federal changes. 
           (b) If, by July 1, 2003, any provision of this section is 
        not effective because of prohibitions in federal law, the 
        commissioner of human services shall apply to the federal 
        government by August 1, 2003, for a waiver of those prohibitions 
        or other federal authority, and that provision shall become 
        effective upon receipt of a federal waiver or other federal 
        approval, notification to the revisor of statutes, and 
        publication of a notice in the State Register to that effect.  
        In applying for federal approval to extend the lookback period, 
        the commissioner shall seek the longest lookback period the 
        federal government will approve, not to exceed 72 months. 
           Sec. 28.  Minnesota Statutes 2002, section 256B.0595, is 
        amended by adding a subdivision to read: 
           Subd. 3b.  [HOMESTEAD EXCEPTION TO TRANSFER 
        PROHIBITION.] (a) This subdivision applies to transfers 
        involving recipients of medical assistance that are made on or 
        after July 1, 2003, and to all transfers involving persons who 
        apply for medical assistance on or after July 1, 2003, 
        regardless of when the transfer occurred, except that this 
        subdivision does not apply to transfers made prior to July 1, 
        2003.  A person is not ineligible for medical assistance 
        services due to a transfer of assets for less than fair market 
        value as described in subdivision 1b, if the asset transferred 
        was a homestead, and: 
           (1) a satisfactory showing is made that the individual 
        intended to dispose of the homestead at fair market value or for 
        other valuable consideration; or 
           (2) the local agency grants a waiver of a penalty resulting 
        from a transfer for less than fair market value because denial 
        of eligibility would cause undue hardship for the individual and 
        there exists an imminent threat to the individual's health and 
        well-being.  Whenever an applicant or recipient is denied 
        eligibility because of a transfer for less than fair market 
        value, the local agency shall notify the applicant or recipient 
        that the applicant or recipient may request a waiver of the 
        penalty if the denial of eligibility will cause undue hardship.  
        In evaluating a waiver, the local agency shall take into account 
        whether the individual was the victim of financial exploitation, 
        whether the individual has made reasonable efforts to recover 
        the transferred property or resource, and other factors relevant 
        to a determination of hardship.  If the local agency does not 
        approve a hardship waiver, the local agency shall issue a 
        written notice to the individual stating the reasons for the 
        denial and the process for appealing the local agency's decision.
           (b) When a waiver is granted under paragraph (a), clause 
        (2), a cause of action exists against the person to whom the 
        homestead was transferred for that portion of medical assistance 
        services granted within 72 months of the date the transferor 
        applied for medical assistance and satisfied all other 
        requirements for eligibility or the amount of the uncompensated 
        transfer, whichever is less, together with the costs incurred 
        due to the action.  The action shall be brought by the state 
        unless the state delegates this responsibility to the local 
        agency responsible for providing medical assistance under 
        chapter 256B. 
           [EFFECTIVE DATE.] (a) This section is effective July 1, 
        2003, to the extent permitted by federal law.  If any provision 
        of this section is prohibited by federal law, the provision 
        shall become effective when federal law is changed to permit its 
        application or a waiver is received.  The commissioner of human 
        services shall notify the revisor of statutes when federal law 
        is enacted or a waiver or other federal approval is received and 
        publish a notice in the State Register.  The commissioner must 
        include the notice in the first State Register published after 
        the effective date of the federal changes. 
           (b) If, by July 1, 2003, any provision of this section is 
        not effective because of prohibitions in federal law, the 
        commissioner of human services shall apply to the federal 
        government by August 1, 2003, for a waiver of those prohibitions 
        or other federal authority, and that provision shall become 
        effective upon receipt of a federal waiver or other federal 
        approval, notification to the revisor of statutes, and 
        publication of a notice in the State Register to that effect.  
        In applying for federal approval to extend the lookback period, 
        the commissioner shall seek the longest lookback period the 
        federal government will approve, not to exceed 72 months. 
           Sec. 29.  Minnesota Statutes 2002, section 256B.0595, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] This 
        subdivision applies to transfers involving recipients of medical 
        assistance that are made on or after July 1, 2003, and to all 
        transfers involving persons who apply for medical assistance on 
        or after July 1, 2003, regardless of when the transfer occurred, 
        except that this subdivision does not apply to transfers made 
        prior to July 1, 2003.  A person or a person's spouse who made a 
        transfer prohibited by subdivision 1b is not ineligible for 
        medical assistance services if one of the following conditions 
        applies: 
           (1) the assets or income were transferred to the 
        individual's spouse or to another for the sole benefit of the 
        spouse, except that after eligibility is established and the 
        assets have been divided between the spouses as part of the 
        asset allowance under section 256B.059, no further transfers 
        between spouses may be made; 
           (2) the institutionalized spouse, prior to being 
        institutionalized, transferred assets or income to a spouse, 
        provided that the spouse to whom the assets or income were 
        transferred does not then transfer those assets or income to 
        another person for less than fair market value.  At the time 
        when one spouse is institutionalized, assets must be allocated 
        between the spouses as provided under section 256B.059; 
           (3) the assets or income were transferred to a trust for 
        the sole benefit of the individual's child who is blind or 
        permanently and totally disabled as determined in the 
        supplemental security income program and the trust reverts to 
        the state upon the disabled child's death to the extent the 
        medical assistance has paid for services for the grantor or 
        beneficiary of the trust.  This clause applies to a trust 
        established after the commissioner publishes a notice in the 
        State Register that the commissioner has been authorized to 
        implement this clause due to a change in federal law or the 
        approval of a federal waiver; 
           (4) a satisfactory showing is made that the individual 
        intended to dispose of the assets or income either at fair 
        market value or for other valuable consideration; or 
           (5) the local agency determines that denial of eligibility 
        for medical assistance services would cause undue hardship and 
        grants a waiver of a penalty resulting from a transfer for less 
        than fair market value because there exists an imminent threat 
        to the individual's health and well-being.  Whenever an 
        applicant or recipient is denied eligibility because of a 
        transfer for less than fair market value, the local agency shall 
        notify the applicant or recipient that the applicant or 
        recipient may request a waiver of the penalty if the denial of 
        eligibility will cause undue hardship.  In evaluating a waiver, 
        the local agency shall take into account whether the individual 
        was the victim of financial exploitation, whether the individual 
        has made reasonable efforts to recover the transferred property 
        or resource, and other factors relevant to a determination of 
        hardship.  If the local agency does not approve a hardship 
        waiver, the local agency shall issue a written notice to the 
        individual stating the reasons for the denial and the process 
        for appealing the local agency's decision.  When a waiver is 
        granted, a cause of action exists against the person to whom the 
        assets were transferred for that portion of medical assistance 
        services granted within 72 months of the date the transferor 
        applied for medical assistance and satisfied all other 
        requirements for eligibility, or the amount of the uncompensated 
        transfer, whichever is less, together with the costs incurred 
        due to the action.  The action shall be brought by the state 
        unless the state delegates this responsibility to the local 
        agency responsible for providing medical assistance under this 
        chapter. 
           [EFFECTIVE DATE.] (a) This section is effective July 1, 
        2003, to the extent permitted by federal law.  If any provision 
        of this section is prohibited by federal law, the provision 
        shall become effective when federal law is changed to permit its 
        application or a waiver is received.  The commissioner of human 
        services shall notify the revisor of statutes when federal law 
        is enacted or a waiver or other federal approval is received and 
        publish a notice in the State Register.  The commissioner must 
        include the notice in the first State Register published after 
        the effective date of the federal changes. 
           (b) If, by July 1, 2003, any provision of this section is 
        not effective because of prohibitions in federal law, the 
        commissioner of human services shall apply to the federal 
        government by August 1, 2003, for a waiver of those prohibitions 
        or other federal authority, and that provision shall become 
        effective upon receipt of a federal waiver or other federal 
        approval, notification to the revisor of statutes, and 
        publication of a notice in the State Register to that effect.  
        In applying for federal approval to extend the lookback period, 
        the commissioner shall seek the longest lookback period the 
        federal government will approve, not to exceed 72 months. 
           Sec. 30.  [256B.0596] [MENTAL HEALTH CASE MANAGEMENT.] 
           Counties shall contract with eligible providers willing to 
        provide mental health case management services under section 
        256B.0625, subdivision 20.  In order to be eligible, in addition 
        to general provider requirements under this chapter, the 
        provider must: 
           (1) be willing to provide the mental health case management 
        services; and 
           (2) have a minimum of at least one contact with the client 
        per week. 
           Sec. 31.  Minnesota Statutes 2002, section 256B.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CITIZENSHIP REQUIREMENTS.] (a) Eligibility for 
        medical assistance is limited to citizens of the United States, 
        qualified noncitizens as defined in this subdivision, and other 
        persons residing lawfully in the United States. 
           (b) "Qualified noncitizen" means a person who meets one of 
        the following immigration criteria: 
           (1) admitted for lawful permanent residence according to 
        United States Code, title 8; 
           (2) admitted to the United States as a refugee according to 
        United States Code, title 8, section 1157; 
           (3) granted asylum according to United States Code, title 
        8, section 1158; 
           (4) granted withholding of deportation according to United 
        States Code, title 8, section 1253(h); 
           (5) paroled for a period of at least one year according to 
        United States Code, title 8, section 1182(d)(5); 
           (6) granted conditional entrant status according to United 
        States Code, title 8, section 1153(a)(7); 
           (7) determined to be a battered noncitizen by the United 
        States Attorney General according to the Illegal Immigration 
        Reform and Immigrant Responsibility Act of 1996, title V of the 
        Omnibus Consolidated Appropriations Bill, Public Law Number 
        104-200; 
           (8) is a child of a noncitizen determined to be a battered 
        noncitizen by the United States Attorney General according to 
        the Illegal Immigration Reform and Immigrant Responsibility Act 
        of 1996, title V, of the Omnibus Consolidated Appropriations 
        Bill, Public Law Number 104-200; or 
           (9) determined to be a Cuban or Haitian entrant as defined 
        in section 501(e) of Public Law Number 96-422, the Refugee 
        Education Assistance Act of 1980. 
           (c) All qualified noncitizens who were residing in the 
        United States before August 22, 1996, who otherwise meet the 
        eligibility requirements of chapter 256B, are eligible for 
        medical assistance with federal financial participation. 
           (d) All qualified noncitizens who entered the United States 
        on or after August 22, 1996, and who otherwise meet the 
        eligibility requirements of chapter 256B, are eligible for 
        medical assistance with federal financial participation through 
        November 30, 1996. 
           Beginning December 1, 1996, qualified noncitizens who 
        entered the United States on or after August 22, 1996, and who 
        otherwise meet the eligibility requirements of chapter 256B are 
        eligible for medical assistance with federal participation for 
        five years if they meet one of the following criteria: 
           (i) refugees admitted to the United States according to 
        United States Code, title 8, section 1157; 
           (ii) persons granted asylum according to United States 
        Code, title 8, section 1158; 
           (iii) persons granted withholding of deportation according 
        to United States Code, title 8, section 1253(h); 
           (iv) veterans of the United States Armed Forces with an 
        honorable discharge for a reason other than noncitizen status, 
        their spouses and unmarried minor dependent children; or 
           (v) persons on active duty in the United States Armed 
        Forces, other than for training, their spouses and unmarried 
        minor dependent children. 
           Beginning December 1, 1996, qualified noncitizens who do 
        not meet one of the criteria in items (i) to (v) are eligible 
        for medical assistance without federal financial participation 
        as described in paragraph (j). 
           (e) Noncitizens who are not qualified noncitizens as 
        defined in paragraph (b), who are lawfully residing in the 
        United States and who otherwise meet the eligibility 
        requirements of chapter 256B, are eligible for medical 
        assistance under clauses (1) to (3).  These individuals must 
        cooperate with the Immigration and Naturalization Service to 
        pursue any applicable immigration status, including citizenship, 
        that would qualify them for medical assistance with federal 
        financial participation. 
           (1) Persons who were medical assistance recipients on 
        August 22, 1996, are eligible for medical assistance with 
        federal financial participation through December 31, 1996. 
           (2) Beginning January 1, 1997, persons described in clause 
        (1) are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (3) Beginning December 1, 1996, persons residing in the 
        United States prior to August 22, 1996, who were not receiving 
        medical assistance and persons who arrived on or after August 
        22, 1996, are eligible for medical assistance without federal 
        financial participation as described in paragraph (j). 
           (f) Nonimmigrants who otherwise meet the eligibility 
        requirements of chapter 256B are eligible for the benefits as 
        provided in paragraphs (g) to (i).  For purposes of this 
        subdivision, a "nonimmigrant" is a person in one of the classes 
        listed in United States Code, title 8, section 1101(a)(15). 
           (g) Payment shall also be made for care and services that 
        are furnished to noncitizens, regardless of immigration status, 
        who otherwise meet the eligibility requirements of chapter 256B, 
        if such care and services are necessary for the treatment of an 
        emergency medical condition, except for organ transplants and 
        related care and services and routine prenatal care.  
           (h) For purposes of this subdivision, the term "emergency 
        medical condition" means a medical condition that meets the 
        requirements of United States Code, title 42, section 1396b(v). 
           (i) Pregnant noncitizens who are undocumented or 
        nonimmigrants, who otherwise meet the eligibility requirements 
        of chapter 256B, are eligible for medical assistance payment 
        without federal financial participation for care and services 
        through the period of pregnancy, and 60 days postpartum, except 
        for labor and delivery.  
           (j) Qualified noncitizens as described in paragraph (d), 
        and all other noncitizens lawfully residing in the United States 
        as described in paragraph (e), who are ineligible for medical 
        assistance with federal financial participation and who 
        otherwise meet the eligibility requirements of chapter 256B and 
        of this paragraph, are eligible for medical assistance without 
        federal financial participation.  Qualified noncitizens as 
        described in paragraph (d) are only eligible for medical 
        assistance without federal financial participation for five 
        years from their date of entry into the United States.  
           (k) The commissioner shall submit to the legislature by 
        December 31, 1998, a report on the number of recipients and cost 
        of coverage of care and services made according to paragraphs 
        (i) and (j).  Beginning October 1, 2003, persons who are 
        receiving care and rehabilitation services from a nonprofit 
        center established to serve victims of torture and are otherwise 
        ineligible for medical assistance under chapter 256B or general 
        assistance medical care under section 256D.03 are eligible for 
        medical assistance without federal financial participation.  
        These individuals are eligible only for the period during which 
        they are receiving services from the center.  Individuals 
        eligible under this clause shall not be required to participate 
        in prepaid medical assistance. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        except where a different date is specified in the text. 
           Sec. 32.  Minnesota Statutes 2002, section 256B.061, is 
        amended to read: 
           256B.061 [ELIGIBILITY; RETROACTIVE EFFECT; RESTRICTIONS.] 
           (a) If any individual has been determined to be eligible 
        for medical assistance, it will be made available for care and 
        services included under the plan and furnished in or after the 
        third month before the month in which the individual made 
        application for such assistance, if such individual was, or upon 
        application would have been, eligible for medical assistance at 
        the time the care and services were furnished.  The commissioner 
        may limit, restrict, or suspend the eligibility of an individual 
        for up to one year upon that individual's conviction of a 
        criminal offense related to application for or receipt of 
        medical assistance benefits. 
           (b) On the basis of information provided on the completed 
        application, an applicant who meets the following criteria shall 
        be determined eligible beginning in the month of application: 
           (1) whose gross income is less than 90 percent of the 
        applicable income standard; 
           (2) whose total liquid assets are less than 90 percent of 
        the asset limit; 
           (3) does not reside in a long-term care facility; and 
           (4) meets all other eligibility requirements. 
        The applicant must provide all required verifications within 30 
        days' notice of the eligibility determination or eligibility 
        shall be terminated. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        or upon federal approval, whichever is later. 
           Sec. 33.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [INTENSIVE EARLY INTERVENTION BEHAVIOR THERAPY 
        SERVICES FOR CHILDREN WITH AUTISM SPECTRUM DISORDERS.] (a)  
        [COVERAGE.] Medical assistance covers home-based intensive early 
        intervention behavior therapy for children with autism spectrum 
        disorders, effective July 1, 2007.  Children with autism 
        spectrum disorder, and their custodial parents or foster 
        parents, may access other covered services to treat autism 
        spectrum disorder, and are not required to receive intensive 
        early intervention behavior therapy services under this 
        subdivision.  Intensive early intervention behavior therapy does 
        not include coverage for services to treat developmental 
        disorders of language, early onset psychosis, Rett's disorder, 
        selective mutism, social anxiety disorder, stereotypic movement 
        disorder, dementia, obsessive compulsive disorder, schizoid 
        personality disorder, avoidant personality disorder, or reactive 
        attachment disorder.  If a child with autism spectrum disorder 
        is diagnosed to have one or more of these conditions, intensive 
        early intervention behavior therapy includes coverage only for 
        services necessary to treat the autism spectrum disorder. 
           (b) Subd. 5b.  [PURPOSE OF INTENSIVE EARLY INTERVENTION 
        BEHAVIOR THERAPY SERVICES (IEIBTS).] The purpose of IEIBTS is to 
        improve the child's behavioral functioning, to prevent 
        development of challenging behaviors, to eliminate autistic 
        behaviors, to reduce the risk of out-of-home placement, and to 
        establish independent typical functioning in language and social 
        behavior.  The procedures used to accomplish these goals are 
        based upon research in applied behavior analysis. 
           (c) Subd. 5c.  [ELIGIBLE CHILDREN.] A child is eligible to 
        initiate IEIBTS if, the child meets the additional eligibility 
        criteria in paragraph (d) and in a diagnostic assessment by a 
        mental health professional who is not under the employ of the 
        service provider, the child: 
           (1) is found to have an autism spectrum disorder; 
           (2) has a current IQ of either untestable, or at least 30; 
           (3) if nonverbal, initiated behavior therapy by 42 months 
        of age; 
           (4) if verbal, initiated behavior therapy by 48 months of 
        age; or 
           (5) if having an IQ of at least 50, initiated behavior 
        therapy by 84 months of age. 
        To continue after six-month individualized treatment plan (ITP) 
        reviews, at least one of the child's custodial parents or foster 
        parents must participate in an average of at least five hours of 
        documented behavior therapy per week for six months, and 
        consistently implement behavior therapy recommendations 24 hours 
        a day.  To continue after six-month individualized treatment 
        plan (ITP) reviews, the child must show documented progress 
        toward mastery of six-month benchmark behavior objectives.  The 
        maximum number of months during which services may be billed is 
        54, or up to the month of August in the first year in which the 
        child completes first grade, whichever comes last.  If 
        significant progress towards treatment goals has not been 
        achieved after 24 months of treatment, treatment must be 
        discontinued. 
           (d) Subd. 5d.  [ADDITIONAL ELIGIBILITY CRITERIA.] A child 
        is eligible to initiate IEIBTS if: 
           (1) in medical and diagnostic assessments by medical and 
        mental health professionals, it is determined that the child 
        does not have severe or profound mental retardation; 
           (2) an accurate assessment of the child's hearing has been 
        performed, including audiometry if the brain stem auditory 
        evokes response; 
           (3) a blood lead test has been performed prior to 
        initiation of treatment; and 
           (4) an EEG or neurologic evaluation is done, prior to 
        initiation of treatment, if the child has a history of staring 
        spells or developmental regression.  
           (e) Subd. 5e.  [COVERED SERVICES.] The focus of IEIBTS must 
        be to treat the principal diagnostic features of the autism 
        spectrum disorder.  All IEIBTS must be delivered by a team of 
        practitioners under the consistent supervision of a single 
        clinical supervisor.  A mental health professional must develop 
        the ITP for IEIBTS.  The ITP must include six-month benchmark 
        behavior objectives.  All behavior therapy must be based upon 
        research in applied behavior analysis, with an emphasis upon 
        positive reinforcement of carefully task-analyzed skills for 
        optimum rates of progress.  All behavior therapy must be 
        consistently applied and generalized throughout the 24-hour day 
        and seven-day week by all of the child's regular care 
        providers.  When placing the child in school activities, a 
        majority of the peers must have no mental health diagnosis, and 
        the child must have sufficient social skills to succeed with 80 
        percent of the school activities.  Reactive consequences, such 
        as redirection, correction, positive practice, or time-out, must 
        be used only when necessary to improve the child's success when 
        proactive procedures alone have not been effective.  IEIBTS must 
        be delivered by a team of behavior therapy practitioners who are 
        employed under the direction of the same agency.  The team may 
        deliver up to 200 billable hours per year of direct clinical 
        supervisor services, up to 700 billable hours per year of senior 
        behavior therapist services, and up to 1,800 billable hours per 
        year of direct behavior therapist services.  A one-hour clinical 
        review meeting for the child, parents, and staff must be 
        scheduled 50 weeks a year, at which behavior therapy is reviewed 
        and planned.  At least one-quarter of the annual clinical 
        supervisor billable hours shall consist of on-site clinical 
        meeting time.  At least one-half of the annual senior behavior 
        therapist billable hours shall consist of direct services to the 
        child or parents.  All of the behavioral therapist billable 
        hours shall consist of direct on-site services to the child or 
        parents.  None of the senior behavior therapist billable hours 
        or behavior therapist billable hours shall consist of clinical 
        meeting time.  If there is any regression of the autistic 
        spectrum disorder after 12 months of therapy, a neurologic 
        consultation must be performed. 
           (f) Subd. 5f.  [PROVIDER QUALIFICATIONS.] The provider 
        agency must be capable of delivering consistent applied behavior 
        analysis (ABA) based behavior therapy in the home.  The site 
        director of the agency must be a mental health professional and 
        a board certified behavior analyst certified by the behavior 
        analyst certification board.  Each clinical supervisor must be a 
        certified associate behavior analyst certified by the behavior 
        analyst certification board or have equivalent experience in 
        applied behavior analysis. 
           (g) Subd. 5g.  [SUPERVISION REQUIREMENTS.] (1) Each 
        behavior therapist practitioner must be continuously supervised 
        while in the home until the practitioner has mastered 
        competencies for independent practice.  Each behavior therapist 
        must have mastered three credits of academic content and 
        practice in an applied behavior analysis sequence at an 
        accredited university before providing more than 12 months of 
        therapy.  A college degree or minimum hours of experience are 
        not required.  Each behavior therapist must continue training 
        through weekly direct observation by the senior behavior 
        therapist, through demonstrated performance in clinical meetings 
        with the clinical supervisor, and annual training in applied 
        behavior analysis. 
           (2) Each senior behavior therapist practitioner must have 
        mastered the senior behavior therapy competencies, completed one 
        year of practice as a behavior therapist, and six months of 
        co-therapy training with another senior behavior therapist or 
        have an equivalent amount of experience in applied behavior 
        analysis.  Each senior behavior therapist must have mastered 12 
        credits of academic content and practice in an applied behavior 
        analysis sequence at an accredited university before providing 
        more than 12 months of senior behavior therapy.  Each senior 
        behavior therapist must continue training through demonstrated 
        performance in clinical meetings with the clinical supervisor, 
        and annual training in applied behavior analysis. 
           (3) Each clinical supervisor practitioner must have 
        mastered the clinical supervisor and family consultation 
        competencies, completed two years of practice as a senior 
        behavior therapist and one year of co-therapy training with 
        another clinical supervisor, or equivalent experience in applied 
        behavior analysis.  Each clinical supervisor must continue 
        training through annual training in applied behavior analysis. 
           (h) Subd. 5h.  [PLACE OF SERVICE.] IEIBTS are provided 
        primarily in the child's home and community.  Services may be 
        provided in the child's natural school or preschool classroom, 
        home of a relative, natural recreational setting, or day care. 
           (i) Subd. 5i.  [PRIOR AUTHORIZATION REQUIREMENTS.] Prior 
        authorization shall be required for services provided after 200 
        hours of clinical supervisor, 700 hours of senior behavior 
        therapist, or 1,800 hours of behavior therapist services per 
        year. 
           (j) Subd. 5j.  [PAYMENT RATES.] The following payment rates 
        apply: 
           (1) for an IEIBTS clinical supervisor practitioner under 
        supervision of a mental health professional, the lower of the 
        submitted charge or $67 per hour unit; 
           (2) for an IEIBTS senior behavior therapist practitioner 
        under supervision of a mental health professional, the lower of 
        the submitted charge or $37 per hour unit; or 
           (3) for an IEIBTS behavior therapist practitioner under 
        supervision of a mental health professional, the lower of the 
        submitted charge or $27 per hour unit. 
        An IEIBTS practitioner may receive payment for travel time which 
        exceeds 50 minutes one-way.  The maximum payment allowed will be 
        $0.51 per minute for up to a maximum of 300 hours per year. 
           For any week during which the above charges are made to 
        medical assistance, payments for the following services are 
        excluded:  supervising mental health professional hours and 
        personal care attendant, home-based mental health, 
        family-community support, or mental health behavioral aide hours.
           (k) Subd. 5k.  [REPORT.] The commissioner shall collect 
        evidence of the effectiveness of intensive early intervention 
        behavior therapy services and present a report to the 
        legislature by July 1, 2006 2010. 
           Sec. 34.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 9, is amended to read: 
           Subd. 9.  [DENTAL SERVICES.] (a) Medical assistance covers 
        dental services.  Dental services include, with prior 
        authorization, fixed bridges that are cost-effective for persons 
        who cannot use removable dentures because of their medical 
        condition.  
           (b) Coverage of dental services for adults age 21 and over 
        who are not pregnant is subject to a $500 annual benefit limit 
        and covered services are limited to:  
           (1) diagnostic and preventative services; 
           (2) basic restorative services; and 
           (3) emergency services. 
           Emergency services, dentures, and extractions related to 
        dentures are not included in the $500 annual benefit limit. 
           Sec. 35.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
        except for fertility drugs when specifically used to enhance 
        fertility, if prescribed by a licensed practitioner and 
        dispensed by a licensed pharmacist, by a physician enrolled in 
        the medical assistance program as a dispensing physician, or by 
        a physician or a nurse practitioner employed by or under 
        contract with a community health board as defined in section 
        145A.02, subdivision 5, for the purposes of communicable disease 
        control.  
           (b) The dispensed quantity of a prescription drug must not 
        exceed a 34-day supply, unless authorized by the commissioner.  
           (c) Medical assistance covers the following 
        over-the-counter drugs when prescribed by a licensed 
        practitioner or by a licensed pharmacist who meets standards 
        established by the commissioner, in consultation with the board 
        of pharmacy:  antacids, acetaminophen, family planning products, 
        aspirin, insulin, products for the treatment of lice, vitamins 
        for adults with documented vitamin deficiencies, vitamins for 
        children under the age of seven and pregnant or nursing women, 
        and any other over-the-counter drug identified by the 
        commissioner, in consultation with the formulary committee, as 
        necessary, appropriate, and cost-effective for the treatment of 
        certain specified chronic diseases, conditions, or disorders, 
        and this determination shall not be subject to the requirements 
        of chapter 14.  A pharmacist may prescribe over-the-counter 
        medications as provided under this paragraph for purposes of 
        receiving reimbursement under Medicaid.  When prescribing 
        over-the-counter drugs under this paragraph, licensed 
        pharmacists must consult with the recipient to determine 
        necessity, provide drug counseling, review drug therapy for 
        potential adverse interactions, and make referrals as needed to 
        other health care professionals. 
           Subd. 13c.  [FORMULARY COMMITTEE.] The commissioner, after 
        receiving recommendations from professional medical associations 
        and professional pharmacist pharmacy associations, and consumer 
        groups shall designate a formulary committee to advise the 
        commissioner on the names of drugs for which payment is made, 
        recommend a system for reimbursing providers on a set fee or 
        charge basis rather than the present system, and develop methods 
        encouraging use of generic drugs when they are less expensive 
        and equally effective as trademark drugs.  The formulary 
        committee shall consist of nine members, four of whom shall be 
        physicians who are not employed by the department of human 
        services, and a majority of whose practice is for persons paying 
        privately or through health insurance, three of whom shall be 
        pharmacists who are not employed by the department of human 
        services, and a majority of whose practice is for persons paying 
        privately or through health insurance, a consumer 
        representative, and a nursing home representative carry out 
        duties as described in subdivisions 13 to 13g.  The formulary 
        committee shall be comprised of four licensed physicians 
        actively engaged in the practice of medicine in Minnesota one of 
        whom must be actively engaged in the treatment of persons with 
        mental illness; at least three licensed pharmacists actively 
        engaged in the practice of pharmacy in Minnesota; and one 
        consumer representative; the remainder to be made up of health 
        care professionals who are licensed in their field and have 
        recognized knowledge in the clinically appropriate prescribing, 
        dispensing, and monitoring of covered outpatient drugs.  Members 
        of the formulary committee shall not be employed by the 
        department of human services.  Committee members shall serve 
        three-year terms and shall serve without compensation.  Members 
        may be reappointed once by the commissioner.  The formulary 
        committee shall meet at least quarterly.  The commissioner may 
        require more frequent formulary committee meetings as needed.  
        An honorarium of $100 per meeting and reimbursement for mileage 
        shall be paid to each committee member in attendance.  
           Subd. 13d.  [DRUG FORMULARY.] (b) The commissioner shall 
        establish a drug formulary.  Its establishment and publication 
        shall not be subject to the requirements of the Administrative 
        Procedure Act, but the formulary committee shall review and 
        comment on the formulary contents.  
           The formulary shall not include:  
           (i) (1) drugs or products for which there is no federal 
        funding; 
           (ii) (2) over-the-counter drugs, except for antacids, 
        acetaminophen, family planning products, aspirin, insulin, 
        products for the treatment of lice, vitamins for adults with 
        documented vitamin deficiencies, vitamins for children under the 
        age of seven and pregnant or nursing women, and any other 
        over-the-counter drug identified by the commissioner, in 
        consultation with the drug formulary committee, as necessary, 
        appropriate, and cost-effective for the treatment of certain 
        specified chronic diseases, conditions or disorders, and this 
        determination shall not be subject to the requirements of 
        chapter 14 as provided in subdivision 13; 
           (iii) anorectics, except that medically necessary 
        anorectics shall be covered for a recipient previously diagnosed 
        as having pickwickian syndrome and currently diagnosed as having 
        diabetes and being morbidly obese (3) drugs used for weight 
        loss, except that medically necessary lipase inhibitors may be 
        covered for a recipient with type II diabetes; 
           (iv) (4) drugs for which medical value has not been 
        established; and 
           (v) (5) drugs from manufacturers who have not signed a 
        rebate agreement with the Department of Health and Human 
        Services pursuant to section 1927 of title XIX of the Social 
        Security Act. 
           The commissioner shall publish conditions for prohibiting 
        payment for specific drugs after considering the formulary 
        committee's recommendations.  An honorarium of $100 per meeting 
        and reimbursement for mileage shall be paid to each committee 
        member in attendance.  
           Subd. 13e.  [PAYMENT RATES.] (c) (a) The basis for 
        determining the amount of payment shall be the lower of the 
        actual acquisition costs of the drugs plus a fixed dispensing 
        fee; the maximum allowable cost set by the federal government or 
        by the commissioner plus the fixed dispensing fee; or the usual 
        and customary price charged to the public.  The amount of 
        payment basis must be reduced to reflect all discount amounts 
        applied to the charge by any provider/insurer agreement or 
        contract for submitted charges to medical assistance programs.  
        The net submitted charge may not be greater than the patient 
        liability for the service.  The pharmacy dispensing fee shall be 
        $3.65, except that the dispensing fee for intravenous solutions 
        which must be compounded by the pharmacist shall be $8 per bag, 
        $14 per bag for cancer chemotherapy products, and $30 per bag 
        for total parenteral nutritional products dispensed in one liter 
        quantities, or $44 per bag for total parenteral nutritional 
        products dispensed in quantities greater than one liter.  Actual 
        acquisition cost includes quantity and other special discounts 
        except time and cash discounts.  The actual acquisition cost of 
        a drug shall be estimated by the commissioner, at average 
        wholesale price minus nine 11.5 percent, except that where a 
        drug has had its wholesale price reduced as a result of the 
        actions of the National Association of Medicaid Fraud Control 
        Units, the estimated actual acquisition cost shall be the 
        reduced average wholesale price, without the nine 11.5 percent 
        deduction.  The maximum allowable cost of a multisource drug may 
        be set by the commissioner and it shall be comparable to, but no 
        higher than, the maximum amount paid by other third-party payors 
        in this state who have maximum allowable cost programs.  The 
        commissioner shall set maximum allowable costs for multisource 
        drugs that are not on the federal upper limit list as described 
        in United States Code, title 42, chapter 7, section 1396r-8(e), 
        the Social Security Act, and Code of Federal Regulations, title 
        42, part 447, section 447.332.  Establishment of the amount of 
        payment for drugs shall not be subject to the requirements of 
        the Administrative Procedure Act.  
           (b) An additional dispensing fee of $.30 may be added to 
        the dispensing fee paid to pharmacists for legend drug 
        prescriptions dispensed to residents of long-term care 
        facilities when a unit dose blister card system, approved by the 
        department, is used.  Under this type of dispensing system, the 
        pharmacist must dispense a 30-day supply of drug.  The National 
        Drug Code (NDC) from the drug container used to fill the blister 
        card must be identified on the claim to the department.  The 
        unit dose blister card containing the drug must meet the 
        packaging standards set forth in Minnesota Rules, part 
        6800.2700, that govern the return of unused drugs to the 
        pharmacy for reuse.  The pharmacy provider will be required to 
        credit the department for the actual acquisition cost of all 
        unused drugs that are eligible for reuse.  Over-the-counter 
        medications must be dispensed in the manufacturer's unopened 
        package.  The commissioner may permit the drug clozapine to be 
        dispensed in a quantity that is less than a 30-day supply.  
           (c) Whenever a generically equivalent product is available, 
        payment shall be on the basis of the actual acquisition cost of 
        the generic drug, unless the prescriber specifically indicates 
        "dispense as written - brand necessary" on the prescription as 
        required by section 151.21, subdivision 2 or on the maximum 
        allowable cost established by the commissioner. 
           (d) For purposes of this subdivision, "multisource drugs" 
        means covered outpatient drugs, excluding innovator multisource 
        drugs for which there are two or more drug products, which: 
           (1) are related as therapeutically equivalent under the 
        Food and Drug Administration's most recent publication of 
        "Approved Drug Products with Therapeutic Equivalence 
        Evaluations"; 
           (2) are pharmaceutically equivalent and bioequivalent as 
        determined by the Food and Drug Administration; and 
           (3) are sold or marketed in Minnesota. 
        "Innovator multisource drug" means a multisource drug that was 
        originally marketed under an original new drug application 
        approved by the Food and Drug Administration. 
           (e) The basis for determining the amount of payment for 
        drugs administered in an outpatient setting shall be the lower 
        of the usual and customary cost submitted by the provider, the 
        average wholesale price minus five percent, or the maximum 
        allowable cost set by the federal government under United States 
        Code, title 42, chapter 7, section 1396r-8(e), and Code of 
        Federal Regulations, title 42, section 447.332, or by the 
        commissioner under paragraphs (a) to (c). 
           Subd. 13f.  [PRIOR AUTHORIZATION.] (a) The formulary 
        committee shall review and recommend drugs which require prior 
        authorization.  The formulary committee may recommend drugs for 
        prior authorization directly to the commissioner, as long as 
        opportunity for public input is provided.  Prior authorization 
        may be requested by the commissioner based on medical and 
        clinical criteria and on cost before certain drugs are eligible 
        for payment.  Before a drug may be considered for prior 
        authorization at the request of the commissioner: 
           (1) the drug formulary committee must develop criteria to 
        be used for identifying drugs; the development of these criteria 
        is not subject to the requirements of chapter 14, but the 
        formulary committee shall provide opportunity for public input 
        in developing criteria; 
           (2) the drug formulary committee must hold a public forum 
        and receive public comment for an additional 15 days; 
           (3) the drug formulary committee must consider data from 
        the state Medicaid program if such data is available; and 
           (4) the commissioner must provide information to the 
        formulary committee on the impact that placing the drug on prior 
        authorization will have on the quality of patient care and on 
        program costs, and information regarding whether the drug is 
        subject to clinical abuse or misuse.  
           Prior authorization may be required by the commissioner 
        before certain formulary drugs are eligible for payment.  If 
        prior authorization of a drug is required by the commissioner, 
        the commissioner must provide a 30-day notice period before 
        implementing the prior authorization.  If a prior authorization 
        request is denied by the department, the recipient may appeal 
        the denial in accordance with section 256.045.  If an appeal is 
        filed, the drug must be provided without prior authorization 
        until a decision is made on the appeal.  
           (f) The basis for determining the amount of payment for 
        drugs administered in an outpatient setting shall be the lower 
        of the usual and customary cost submitted by the provider; the 
        average wholesale price minus five percent; or the maximum 
        allowable cost set by the federal government under United States 
        Code, title 42, chapter 7, section 1396r-8(e), and Code of 
        Federal Regulations, title 42, section 447.332, or by the 
        commissioner under paragraph (c). 
           (g) Prior authorization shall not be required or utilized 
        for any antipsychotic drug prescribed for the treatment of 
        mental illness where there is no generically equivalent drug 
        available unless the commissioner determines that prior 
        authorization is necessary for patient safety.  This paragraph 
        applies to any supplemental drug rebate program established or 
        administered by the commissioner.  The formulary committee shall 
        establish general criteria to be used for the prior 
        authorization of brand-name drugs for which generically 
        equivalent drugs are available, but the committee is not 
        required to review each brand-name drug for which a generically 
        equivalent drug is available.  
           (b) Prior authorization may be required by the commissioner 
        before certain formulary drugs are eligible for payment.  The 
        formulary committee may recommend drugs for prior authorization 
        directly to the commissioner.  The commissioner may also request 
        that the formulary committee review a drug for prior 
        authorization.  Before the commissioner may require prior 
        authorization for a drug: 
           (1) the commissioner must provide information to the 
        formulary committee on the impact that placing the drug on prior 
        authorization may have on the quality of patient care and on 
        program costs, information regarding whether the drug is subject 
        to clinical abuse or misuse, and relevant data from the state 
        Medicaid program if such data is available; 
           (2) the formulary committee must review the drug, taking 
        into account medical and clinical data and the information 
        provided by the commissioner; and 
           (3) the formulary committee must hold a public forum and 
        receive public comment for an additional 15 days. 
        The commissioner must provide a 15-day notice period before 
        implementing the prior authorization.  
           (c) Prior authorization shall not be required or utilized 
        for any atypical antipsychotic drug prescribed for the treatment 
        of mental illness if: 
           (1) there is no generically equivalent drug available; and 
           (2) the drug was initially prescribed for the recipient 
        prior to July 1, 2003; or 
           (3) the drug is part of the recipient's current course of 
        treatment. 
        This paragraph applies to any multistate preferred drug list or 
        supplemental drug rebate program established or administered by 
        the commissioner. 
           (h) (d) Prior authorization shall not be required or 
        utilized for any antihemophilic factor drug prescribed for the 
        treatment of hemophilia and blood disorders where there is no 
        generically equivalent drug available unless the commissioner 
        determines that prior authorization is necessary for patient 
        safety.  This paragraph applies to if the prior authorization is 
        used in conjunction with any supplemental drug rebate program or 
        multistate preferred drug list established or administered by 
        the commissioner.  This paragraph expires July 1, 2003 2005. 
           (e) The commissioner may require prior authorization for 
        brand name drugs whenever a generically equivalent product is 
        available, even if the prescriber specifically indicates 
        "dispense as written-brand necessary" on the prescription as 
        required by section 151.21, subdivision 2. 
           Subd. 13g.  [PREFERRED DRUG LIST.] (a) The commissioner 
        shall adopt and implement a preferred drug list by January 1, 
        2004.  The commissioner may enter into a contract with a vendor 
        or one or more states for the purpose of participating in a 
        multistate preferred drug list and supplemental rebate program.  
        The commissioner shall ensure that any contract meets all 
        federal requirements and maximizes federal financial 
        participation.  The commissioner shall publish the preferred 
        drug list annually in the State Register and shall maintain an 
        accurate and up-to-date list on the agency Web site. 
           (b) The commissioner may add to, delete from, and otherwise 
        modify the preferred drug list, after consulting with the 
        formulary committee and appropriate medical specialists and 
        providing public notice and the opportunity for public comment. 
           (c) The commissioner shall adopt and administer the 
        preferred drug list as part of the administration of the 
        supplemental drug rebate program.  Reimbursement for 
        prescription drugs not on the preferred drug list may be subject 
        to prior authorization, unless the drug manufacturer signs a 
        supplemental rebate contract. 
           (d) For purposes of this subdivision, "preferred drug list" 
        means a list of prescription drugs within designated therapeutic 
        classes selected by the commissioner, for which prior 
        authorization based on the identity of the drug or class is not 
        required. 
           (e) The commissioner shall seek any federal waivers or 
        approvals necessary to implement this subdivision. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 36.  Minnesota Statutes 2002, section 256B.0625, 
        subdivision 17, is amended to read: 
           Subd. 17.  [TRANSPORTATION COSTS.] (a) Medical assistance 
        covers transportation costs incurred solely for obtaining 
        emergency medical care or transportation costs incurred by 
        nonambulatory eligible persons in obtaining emergency or 
        nonemergency medical care when paid directly to an ambulance 
        company, common carrier, or other recognized providers of 
        transportation services.  For the purpose of this subdivision, a 
        person who is incapable of transport by taxicab or bus shall be 
        considered to be nonambulatory. 
           (b) Medical assistance covers special transportation, as 
        defined in Minnesota Rules, part 9505.0315, subpart 1, item F, 
        if the provider receives and maintains a current physician's 
        order by the recipient's attending physician certifying that the 
        recipient has a physical or mental impairment that would 
        prohibit the recipient from safely accessing and using a bus, 
        taxi, other commercial transportation, or private automobile.  
        The commissioner may use an order by the recipient's attending 
        physician to certify that the recipient requires special 
        transportation services.  Special transportation includes 
        driver-assisted service to eligible individuals.  
        Driver-assisted service includes passenger pickup at and return 
        to the individual's residence or place of business, assistance 
        with admittance of the individual to the medical facility, and 
        assistance in passenger securement or in securing of wheelchairs 
        or stretchers in the vehicle.  The commissioner shall establish 
        maximum medical assistance reimbursement rates for special 
        transportation services for persons who need a 
        wheelchair-accessible van or stretcher-accessible vehicle and 
        for those who do not need a wheelchair-accessible van or 
        stretcher-accessible vehicle.  The average of these two rates 
        per trip must not exceed $15 for the base rate and $1.40 per 
        mile.  Special transportation provided to nonambulatory persons 
        who do not need a wheelchair-accessible van or 
        stretcher-accessible vehicle, may be reimbursed at a lower rate 
        than special transportation provided to persons who need a 
        wheelchair-accessible van or stretcher-accessible 
        vehicle.  Special transportation providers must obtain written 
        documentation from the health care service provider who is 
        serving the recipient being transported, identifying the time 
        that the recipient arrived.  Special transportation providers 
        may not bill for separate base rates for the continuation of a 
        trip beyond the original destination.  Special transportation 
        providers must take recipients to the nearest appropriate health 
        care provider, using the most direct route available.  The 
        maximum medical assistance reimbursement rates for special 
        transportation services are: 
           (1) $18 for the base rate and $1.40 per mile for services 
        to eligible persons who need a wheelchair-accessible van; 
           (2) $12 for the base rate and $1.35 per mile for services 
        to eligible persons who do not need a wheelchair-accessible van; 
        and 
           (3) $36 for the base rate and $1.40 per mile, and an 
        attendant rate of $9 per trip, for services to eligible persons 
        who need a stretcher-accessible vehicle. 
           Sec. 37.  [256B.0631] [MEDICAL ASSISTANCE CO-PAYMENTS.] 
           Subdivision 1.  [CO-PAYMENTS.] (a) Except as provided in 
        subdivision 2, the medical assistance benefit plan shall include 
        the following co-payments for all recipients, effective for 
        services provided on or after October 1, 2003: 
           (1) $3 per nonpreventive visit.  For purposes of this 
        subdivision, a visit means an episode of service which is 
        required because of a recipient's symptoms, diagnosis, or 
        established illness, and which is delivered in an ambulatory 
        setting by a physician or physician ancillary, chiropractor, 
        podiatrist, nurse midwife, advanced practice nurse, audiologist, 
        optician, or optometrist; 
           (2) $3 for eyeglasses; 
           (3) $6 for nonemergency visits to a hospital-based 
        emergency room; and 
           (4) $3 per brand-name drug prescription and $1 per generic 
        drug prescription, subject to a $20 per month maximum for 
        prescription drug co-payments.  No co-payments shall apply to 
        antipsychotic drugs when used for the treatment of mental 
        illness. 
           (b) Recipients of medical assistance are responsible for 
        all co-payments in this subdivision. 
           Subd. 2.  [EXCEPTIONS.] Co-payments shall be subject to the 
        following exceptions: 
           (1) children under the age of 21; 
           (2) pregnant women for services that relate to the 
        pregnancy or any other medical condition that may complicate the 
        pregnancy; 
           (3) recipients expected to reside for at least 30 days in a 
        hospital, nursing home, or intermediate care facility for the 
        mentally retarded; 
           (4) recipients receiving hospice care; 
           (5) 100 percent federally funded services provided by an 
        Indian health service; 
           (6) emergency services; 
           (7) family planning services; 
           (8) services that are paid by Medicare, resulting in the 
        medical assistance program paying for the coinsurance and 
        deductible; and 
           (9) co-payments that exceed one per day per provider for 
        nonpreventive visits, eyeglasses, and nonemergency visits to a 
        hospital-based emergency room. 
           Subd. 3.  [COLLECTION.] The medical assistance 
        reimbursement to the provider shall be reduced by the amount of 
        the co-payment, except that reimbursement for prescription drugs 
        shall not be reduced once a recipient has reached the $20 per 
        month maximum for prescription drug co-payments.  The provider 
        collects the co-payment from the recipient.  Providers may not 
        deny services to recipients who are unable to pay the 
        co-payment, except as provided in subdivision 4. 
           Subd. 4.  [UNCOLLECTED DEBT.] If it is the routine business 
        practice of a provider to refuse service to an individual with 
        uncollected debt, the provider may include uncollected 
        co-payments under this section.  A provider must give advance 
        notice to a recipient with uncollected debt before services can 
        be denied. 
           Sec. 38.  Minnesota Statutes 2002, section 256B.0635, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INCREASED EMPLOYMENT.] (a) Until June 30, 
        2002, medical assistance may be paid for persons who received 
        MFIP or medical assistance for families and children in at least 
        three of six months preceding the month in which the person 
        became ineligible for MFIP or medical assistance, if the 
        ineligibility was due to an increase in hours of employment or 
        employment income or due to the loss of an earned income 
        disregard.  In addition, to receive continued assistance under 
        this section, persons who received medical assistance for 
        families and children but did not receive MFIP must have had 
        income less than or equal to the assistance standard for their 
        family size under the state's AFDC plan in effect as of July 16, 
        1996, increased by three percent effective July 1, 2000, at the 
        time medical assistance eligibility began.  A person who is 
        eligible for extended medical assistance is entitled to six 
        months of assistance without reapplication, unless the 
        assistance unit ceases to include a dependent child.  For a 
        person under 21 years of age, medical assistance may not be 
        discontinued within the six-month period of extended eligibility 
        until it has been determined that the person is not otherwise 
        eligible for medical assistance.  Medical assistance may be 
        continued for an additional six months if the person meets all 
        requirements for the additional six months, according to title 
        XIX of the Social Security Act, as amended by section 303 of the 
        Family Support Act of 1988, Public Law Number 100-485. 
           (b) Beginning July 1, 2002, contingent upon federal 
        funding, medical assistance for families and children may be 
        paid for persons who were eligible under section 256B.055, 
        subdivision 3a, in at least three of six months preceding the 
        month in which the person became ineligible under that section 
        if the ineligibility was due to an increase in hours of 
        employment or employment income or due to the loss of an earned 
        income disregard.  A person who is eligible for extended medical 
        assistance is entitled to six months of assistance without 
        reapplication, unless the assistance unit ceases to include a 
        dependent child, except medical assistance may not be 
        discontinued for that dependent child under 21 years of age 
        within the six-month period of extended eligibility until it has 
        been determined that the person is not otherwise eligible for 
        medical assistance.  Medical assistance may be continued for an 
        additional six months if the person meets all requirements for 
        the additional six months, according to title XIX of the Social 
        Security Act, as amended by section 303 of the Family Support 
        Act of 1988, Public Law Number 100-485. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 39.  Minnesota Statutes 2002, section 256B.0635, 
        subdivision 2, is amended to read: 
           Subd. 2.  [INCREASED CHILD OR SPOUSAL SUPPORT.] (a) Until 
        June 30, 2002, medical assistance may be paid for persons who 
        received MFIP or medical assistance for families and children in 
        at least three of the six months preceding the month in which 
        the person became ineligible for MFIP or medical assistance, if 
        the ineligibility was the result of the collection of child or 
        spousal support under part D of title IV of the Social Security 
        Act.  In addition, to receive continued assistance under this 
        section, persons who received medical assistance for families 
        and children but did not receive MFIP must have had income less 
        than or equal to the assistance standard for their family size 
        under the state's AFDC plan in effect as of July 16, 1996, 
        increased by three percent effective July 1, 2000, at the time 
        medical assistance eligibility began.  A person who is eligible 
        for extended medical assistance under this subdivision is 
        entitled to four months of assistance without reapplication, 
        unless the assistance unit ceases to include a dependent child, 
        except medical assistance may not be discontinued for that 
        dependent child under 21 years of age within the four-month 
        period of extended eligibility until it has been determined that 
        the person is not otherwise eligible for medical assistance. 
           (b) Beginning July 1, 2002, contingent upon federal 
        funding, medical assistance for families and children may be 
        paid for persons who were eligible under section 256B.055, 
        subdivision 3a, in at least three of the six months preceding 
        the month in which the person became ineligible under that 
        section if the ineligibility was the result of the collection of 
        child or spousal support under part D of title IV of the Social 
        Security Act.  A person who is eligible for extended medical 
        assistance under this subdivision is entitled to four months of 
        assistance without reapplication, unless the assistance unit 
        ceases to include a dependent child, except medical assistance 
        may not be discontinued for that dependent child under 21 years 
        of age within the four-month period of extended eligibility 
        until it has been determined that the person is not otherwise 
        eligible for medical assistance. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 40.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POLICY, APPLICABILITY, PURPOSE, AND 
        CONSTRUCTION; DEFINITION.] (a) It is the policy of this state 
        that individuals or couples, either or both of whom participate 
        in the medical assistance program, use their own assets to pay 
        their share of the total cost of their care during or after 
        their enrollment in the program according to applicable federal 
        law and the laws of this state.  The following provisions apply: 
           (1) subdivisions 1c to 1k shall not apply to claims arising 
        under this section which are presented under section 525.313; 
           (2) the provisions of subdivisions 1c to 1k expanding the 
        interests included in an estate for purposes of recovery under 
        this section give effect to the provisions of United States 
        Code, title 42, section 1396p, governing recoveries, but do not 
        give rise to any express or implied liens in favor of any other 
        parties not named in these provisions; 
           (3) the continuation of a recipient's life estate or joint 
        tenancy interest in real property after the recipient's death 
        for the purpose of recovering medical assistance under this 
        section modifies common law principles holding that these 
        interests terminate on the death of the holder; 
           (4) all laws, rules, and regulations governing or involved 
        with a recovery of medical assistance shall be liberally 
        construed to accomplish their intended purposes; 
           (5) a deceased recipient's life estate and joint tenancy 
        interests continued under this section shall be owned by the 
        remaindermen or surviving joint tenants as their interests may 
        appear on the date of the recipient's death.  They shall not be 
        merged into the remainder interest or the interests of the 
        surviving joint tenants by reason of ownership.  They shall be 
        subject to the provisions of this section.  Any conveyance, 
        transfer, sale, assignment, or encumbrance by a remainderman, a 
        surviving joint tenant, or their heirs, successors, and assigns 
        shall be deemed to include all of their interest in the deceased 
        recipient's life estate or joint tenancy interest continued 
        under this section; and 
           (6) the provisions of subdivisions 1c to 1k continuing a 
        recipient's joint tenancy interests in real property after the 
        recipient's death do not apply to a homestead owned of record, 
        on the date the recipient dies, by the recipient and the 
        recipient's spouse as joint tenants with a right of 
        survivorship.  Homestead means the real property occupied by the 
        surviving joint tenant spouse as their sole residence on the 
        date the recipient dies and classified and taxed to the 
        recipient and surviving joint tenant spouse as homestead 
        property for property tax purposes in the calendar year in which 
        the recipient dies.  For purposes of this exemption, real 
        property the recipient and their surviving joint tenant spouse 
        purchase solely with the proceeds from the sale of their prior 
        homestead, own of record as joint tenants, and qualify as 
        homestead property under section 273.124 in the calendar year in 
        which the recipient dies and prior to the recipient's death 
        shall be deemed to be real property classified and taxed to the 
        recipient and their surviving joint tenant spouse as homestead 
        property in the calendar year in which the recipient dies.  The 
        surviving spouse, or any person with personal knowledge of the 
        facts, may provide an affidavit describing the homestead 
        property affected by this clause and stating facts showing 
        compliance with this clause.  The affidavit shall be prima facie 
        evidence of the facts it states. 
           (b) For purposes of this section, "medical assistance" 
        includes the medical assistance program under this chapter and 
        the general assistance medical care program under chapter 256D, 
        but does not include the alternative care program for nonmedical 
        assistance recipients under section 256B.0913, subdivision 4. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to estates of decedents who die on or after that 
        date. 
           Sec. 41.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ESTATES SUBJECT TO CLAIMS.] If a person 
        receives any medical assistance hereunder, on the person's 
        death, if single, or on the death of the survivor of a married 
        couple, either or both of whom received medical assistance, or 
        as otherwise provided for in this section, the total amount paid 
        for medical assistance rendered for the person and spouse shall 
        be filed as a claim against the estate of the person or the 
        estate of the surviving spouse in the court having jurisdiction 
        to probate the estate or to issue a decree of descent according 
        to sections 525.31 to 525.313.  
           A claim shall be filed if medical assistance was rendered 
        for either or both persons under one of the following 
        circumstances: 
           (a) the person was over 55 years of age, and received 
        services under this chapter, excluding alternative care; 
           (b) the person resided in a medical institution for six 
        months or longer, received services under this chapter excluding 
        alternative care, and, at the time of institutionalization or 
        application for medical assistance, whichever is later, the 
        person could not have reasonably been expected to be discharged 
        and returned home, as certified in writing by the person's 
        treating physician.  For purposes of this section only, a 
        "medical institution" means a skilled nursing facility, 
        intermediate care facility, intermediate care facility for 
        persons with mental retardation, nursing facility, or inpatient 
        hospital; or 
           (c) the person received general assistance medical care 
        services under chapter 256D.  
           The claim shall be considered an expense of the last 
        illness of the decedent for the purpose of section 524.3-805.  
        Any statute of limitations that purports to limit any county 
        agency or the state agency, or both, to recover for medical 
        assistance granted hereunder shall not apply to any claim made 
        hereunder for reimbursement for any medical assistance granted 
        hereunder.  Notice of the claim shall be given to all heirs and 
        devisees of the decedent whose identity can be ascertained with 
        reasonable diligence.  The notice must include procedures and 
        instructions for making an application for a hardship waiver 
        under subdivision 5; time frames for submitting an application 
        and determination; and information regarding appeal rights and 
        procedures.  Counties are entitled to one-half of the nonfederal 
        share of medical assistance collections from estates that are 
        directly attributable to county effort.  Counties are entitled 
        to ten percent of the collections for alternative care directly 
        attributable to county effort. 
           [EFFECTIVE DATE.] The amendments in this section relating 
        to the alternative care program are effective July 1, 2003, and 
        apply to the estates of decedents who die on or after that 
        date.  The remaining amendments in this section are effective 
        August 1, 2003, and apply to the estates of decedents who die on 
        and after that date. 
           Sec. 42.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [NOTICE OF POTENTIAL CLAIM.] (a) A state agency 
        with a claim or potential claim under this section may file a 
        notice of potential claim under this subdivision anytime before 
        or within one year after a medical assistance recipient dies.  
        The claimant shall be the state agency.  A notice filed prior to 
        the recipient's death shall not take effect and shall not be 
        effective as notice until the recipient dies.  A notice filed 
        after a recipient dies shall be effective from the time of 
        filing.  
           (b) The notice of claim shall be filed or recorded in the 
        real estate records in the office of the county recorder or 
        registrar of titles for each county in which any part of the 
        property is located.  The recorder shall accept the notice for 
        recording or filing.  The registrar of titles shall accept the 
        notice for filing if the recipient has a recorded interest in 
        the property.  The registrar of titles shall not carry forward 
        to a new certificate of title any notice filed more than one 
        year from the date of the recipient's death. 
           (c) The notice must be dated, state the name of the 
        claimant, the medical assistance recipient's name and social 
        security number if filed before their death and their date of 
        death if filed after they die, the name and date of death of any 
        predeceased spouse of the medical assistance recipient for whom 
        a claim may exist, a statement that the claimant may have a 
        claim arising under this section, generally identify the 
        recipient's interest in the property, contain a legal 
        description for the property and whether it is abstract or 
        registered property, a statement of when the notice becomes 
        effective and the effect of the notice, be signed by an 
        authorized representative of the state agency, and may include 
        such other contents as the state agency may deem appropriate. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to the estates of decedents who die on or after that 
        date. 
           Sec. 43.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1d.  [EFFECT OF NOTICE.] From the time it takes 
        effect, the notice shall be notice to remaindermen, joint 
        tenants, or to anyone else owning or acquiring an interest in or 
        encumbrance against the property described in the notice that 
        the medical assistance recipient's life estate, joint tenancy, 
        or other interests in the real estate described in the notice: 
           (1) shall, in the case of life estate and joint tenancy 
        interests, continue to exist for purposes of this section, and 
        be subject to liens and claims as provided in this section; 
           (2) shall be subject to a lien in favor of the claimant 
        effective upon the death of the recipient and dealt with as 
        provided in this section; 
           (3) may be included in the recipient's estate, as defined 
        in this section; and 
           (4) may be subject to administration and all other 
        provisions of chapter 524 and may be sold, assigned, 
        transferred, or encumbered free and clear of their interest or 
        encumbrance to satisfy claims under this section. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to the estates of decedents who die on or after that 
        date. 
           Sec. 44.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1e.  [FULL OR PARTIAL RELEASE OF NOTICE.] (a) The 
        claimant may fully or partially release the notice and the lien 
        arising out of the notice of record in the real estate records 
        where the notice is filed or recorded at any time.  The claimant 
        may give a full or partial release to extinguish any life 
        estates or joint tenancy interests which are or may be continued 
        under this section or whose existence or nonexistence may create 
        a cloud on the title to real property at any time whether or not 
        a notice has been filed.  The recorder or registrar of titles 
        shall accept the release for recording or filing.  If the 
        release is a partial release, it must include a legal 
        description of the property being released. 
           (b) At any time, the claimant may, at the claimant's 
        discretion, wholly or partially release, subordinate, modify, or 
        amend the recorded notice and the lien arising out of the notice.
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to the estates of decedents who die on or after that 
        date. 
           Sec. 45.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1f.  [AGENCY LIEN.] (a) The notice shall constitute a 
        lien in favor of the department of human services against the 
        recipient's interests in the real estate it describes for a 
        period of 20 years from the date of filing or the date of the 
        recipient's death, whichever is later.  Notwithstanding any law 
        or rule to the contrary, a recipient's life estate and joint 
        tenancy interests shall not end upon the recipient's death but 
        shall continue according to subdivisions 1h, 1i, and 1j.  The 
        amount of the lien shall be equal to the total amount of the 
        claims that could be presented in the recipient's estate under 
        this section. 
           (b) If no estate has been opened for the deceased 
        recipient, any holder of an interest in the property may apply 
        to the lien holder for a statement of the amount of the lien or 
        for a full or partial release of the lien.  The application 
        shall include the applicant's name, current mailing address, 
        current home and work telephone numbers, and a description of 
        their interest in the property, a legal description of the 
        recipient's interest in the property, and the deceased 
        recipient's name, date of birth, and social security number.  
        The lien holder shall send the applicant by certified mail, 
        return receipt requested, a written statement showing the amount 
        of the lien, whether the lien holder is willing to release the 
        lien and under what conditions, and inform them of the right to 
        a hearing under section 256.045.  The lien holder shall have the 
        discretion to compromise and settle the lien upon any terms and 
        conditions the lien holder deems appropriate. 
           (c) Any holder of an interest in property subject to the 
        lien has a right to request a hearing under section 256.045 to 
        determine the validity, extent, or amount of the lien.  The 
        request must be in writing, and must include the names, current 
        addresses, and home and business telephone numbers for all other 
        parties holding an interest in the property.  A request for a 
        hearing by any holder of an interest in the property shall be 
        deemed to be a request for a hearing by all parties owning 
        interests in the property.  Notice of the hearing shall be given 
        to the lien holder, the party filing the appeal, and all of the 
        other holders of interests in the property at the addresses 
        listed in the appeal by certified mail, return receipt 
        requested, or by ordinary mail.  Any owner of an interest in the 
        property to whom notice of the hearing is mailed shall be deemed 
        to have waived any and all claims or defenses in respect to the 
        lien unless they appear and assert any claims or defenses at the 
        hearing. 
           (d) If the claim the lien secures could be filed under 
        subdivision 1h, the lien holder may collect, compromise, settle, 
        or release the lien upon any terms and conditions it deems 
        appropriate.  If the claim the lien secures could be filed under 
        subdivision 1i or 1j, the lien may be adjusted or enforced to 
        the same extent had it been filed under subdivisions 1i and 1j, 
        and the provisions of subdivisions 1i, clause (f), and lj, 
        clause (d), shall apply to voluntary payment, settlement, or 
        satisfaction of the lien. 
           (e) If no probate proceedings have been commenced for the 
        recipient as of the date the lien holder executes a release of 
        the lien on a recipient's life estate or joint tenancy interest, 
        created for purposes of this section, the release shall 
        terminate the life estate or joint tenancy interest created 
        under this section as of the date it is recorded or filed to the 
        extent of the release.  If the claimant executes a release for 
        purposes of extinguishing a life estate or a joint tenancy 
        interest created under this section to remove a cloud on title 
        to real property, the release shall have the effect of 
        extinguishing any life estate or joint tenancy interests in the 
        property it describes which may have been continued by reason of 
        this section retroactive to the date of death of the deceased 
        life tenant or joint tenant except as provided for in section 
        514.981, subdivision 6. 
           (f) If the deceased recipient's estate is probated, a claim 
        shall be filed under this section.  The amount of the lien shall 
        be limited to the amount of the claim as finally allowed.  If 
        the claim the lien secures is filed under subdivision 1h, the 
        lien may be released in full after any allowance of the claim 
        becomes final or according to any agreement to settle and 
        satisfy the claim.  The release shall release the lien but shall 
        not extinguish or terminate the interest being released.  If the 
        claim the lien secures is filed under subdivision 1i or 1j, the 
        lien shall be released after the lien under subdivision 1i or 1j 
        is filed or recorded, or settled according to any agreement to 
        settle and satisfy the claim.  The release shall not extinguish 
        or terminate the interest being released.  If the claim is 
        finally disallowed in full, the claimant shall release the 
        claimant's lien at the claimant's expense. 
           [EFFECTIVE DATE.] This section takes effect on August 1, 
        2003, and applies to the estates of decedents who die on or 
        after that date. 
           Sec. 46.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1g.  [ESTATE PROPERTY.] Notwithstanding any law or 
        rule to the contrary, if a claim is presented under this 
        section, interests or the proceeds of interests in real property 
        a decedent owned as a life tenant or a joint tenant with a right 
        of survivorship shall be part of the decedent's estate, subject 
        to administration, and shall be dealt with as provided in this 
        section. 
           [EFFECTIVE DATE.] This section takes effect on August 1, 
        2003, and applies to the estates of decedents who die on or 
        after that date. 
           Sec. 47.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1h.  [ESTATES OF SPECIFIC PERSONS RECEIVING MEDICAL 
        ASSISTANCE.] (a) For purposes of this section, paragraphs (b) to 
        (k) apply if a person received medical assistance for which a 
        claim may be filed under this section and died single, or the 
        surviving spouse of the couple and was not survived by any of 
        the persons described in subdivisions 3 and 4. 
           (b) For purposes of this section, the person's estate 
        consists of:  (1) their probate estate; (2) all of the person's 
        interests or proceeds of those interests in real property the 
        person owned as a life tenant or as a joint tenant with a right 
        of survivorship at the time of the person's death; (3) all of 
        the person's interests or proceeds of those interests in 
        securities the person owned in beneficiary form as provided 
        under sections 524.6-301 to 524.6-311 at the time of the 
        person's death, to the extent they become part of the probate 
        estate under section 524.6-307; and (4) all of the person's 
        interests in joint accounts, multiple party accounts, and pay on 
        death accounts, or the proceeds of those accounts, as provided 
        under sections 524.6-201 to 524.6-214 at the time of the 
        person's death to the extent they become part of the probate 
        estate under section 524.6-207.  Notwithstanding any law or rule 
        to the contrary, a state or county agency with a claim under 
        this section shall be a creditor under section 524.6-307. 
           (c) Notwithstanding any law or rule to the contrary, the 
        person's life estate or joint tenancy interest in real property 
        not subject to a medical assistance lien under sections 514.980 
        to 514.985 on the date of the person's death shall not end upon 
        the person's death and shall continue as provided in this 
        subdivision.  The life estate in the person's estate shall be 
        that portion of the interest in the real property subject to the 
        life estate that is equal to the life estate percentage factor 
        for the life estate as listed in the Life Estate Mortality Table 
        of the health care program's manual for a person who was the age 
        of the medical assistance recipient on the date of the person's 
        death.  The joint tenancy interest in real property in the 
        estate shall be equal to the fractional interest the person 
        would have owned in the jointly held interest in the property 
        had they and the other owners held title to the property as 
        tenants in common on the date the person died. 
           (d) The court upon its own motion, or upon motion by the 
        personal representative or any interested party, may enter an 
        order directing the remaindermen or surviving joint tenants and 
        their spouses, if any, to sign all documents, take all actions, 
        and otherwise fully cooperate with the personal representative 
        and the court to liquidate the decedent's life estate or joint 
        tenancy interests in the estate and deliver the cash or the 
        proceeds of those interests to the personal representative and 
        provide for any legal and equitable sanctions as the court deems 
        appropriate to enforce and carry out the order, including an 
        award of reasonable attorney fees. 
           (e) The personal representative may make, execute, and 
        deliver any conveyances or other documents necessary to convey 
        the decedent's life estate or joint tenancy interest in the 
        estate that are necessary to liquidate and reduce to cash the 
        decedent's interest or for any other purposes. 
           (f) Subject to administration, all costs, including 
        reasonable attorney fees, directly and immediately related to 
        liquidating the decedent's life estate or joint tenancy interest 
        in the decedent's estate, shall be paid from the gross proceeds 
        of the liquidation allocable to the decedent's interest and the 
        net proceeds shall be turned over to the personal representative 
        and applied to payment of the claim presented under this section.
           (g) The personal representative shall bring a motion in the 
        district court in which the estate is being probated to compel 
        the remaindermen or surviving joint tenants to account for and 
        deliver to the personal representative all or any part of the 
        proceeds of any sale, mortgage, transfer, conveyance, or any 
        disposition of real property allocable to the decedent's life 
        estate or joint tenancy interest in the decedent's estate, and 
        do everything necessary to liquidate and reduce to cash the 
        decedent's interest and turn the proceeds of the sale or other 
        disposition over to the personal representative.  The court may 
        grant any legal or equitable relief including, but not limited 
        to, ordering a partition of real estate under chapter 558 
        necessary to make the value of the decedent's life estate or 
        joint tenancy interest available to the estate for payment of a 
        claim under this section. 
           (h) Subject to administration, the personal representative 
        shall use all of the cash or proceeds of interests to pay an 
        allowable claim under this section.  The remaindermen or 
        surviving joint tenants and their spouses, if any, may enter 
        into a written agreement with the personal representative or the 
        claimant to settle and satisfy obligations imposed at any time 
        before or after a claim is filed. 
           (i) The personal representative may, at their discretion, 
        provide any or all of the other owners, remaindermen, or 
        surviving joint tenants with an affidavit terminating the 
        decedent's estate's interest in real property the decedent owned 
        as a life tenant or as a joint tenant with others, if the 
        personal representative determines in good faith that neither 
        the decedent nor any of the decedent's predeceased spouses 
        received any medical assistance for which a claim could be filed 
        under this section, or if the personal representative has filed 
        an affidavit with the court that the estate has other assets 
        sufficient to pay a claim, as presented, or if there is a 
        written agreement under paragraph (h), or if the claim, as 
        allowed, has been paid in full or to the full extent of the 
        assets the estate has available to pay it.  The affidavit may be 
        recorded in the office of the county recorder or filed in the 
        office of the registrar of titles for the county in which the 
        real property is located.  Except as provided in section 
        514.981, subdivision 6, when recorded or filed, the affidavit 
        shall terminate the decedent's interest in real estate the 
        decedent owned as a life tenant or a joint tenant with others.  
        The affidavit shall:  (1) be signed by the personal 
        representative; (2) identify the decedent and the interest being 
        terminated; (3) give recording information sufficient to 
        identify the instrument that created the interest in real 
        property being terminated; (4) legally describe the affected 
        real property; (5) state that the personal representative has 
        determined that neither the decedent nor any of the decedent's 
        predeceased spouses received any medical assistance for which a 
        claim could be filed under this section; (6) state that the 
        decedent's estate has other assets sufficient to pay the claim, 
        as presented, or that there is a written agreement between the 
        personal representative and the claimant and the other owners or 
        remaindermen or other joint tenants to satisfy the obligations 
        imposed under this subdivision; and (7) state that the affidavit 
        is being given to terminate the estate's interest under this 
        subdivision, and any other contents as may be appropriate.  
        The recorder or registrar of titles shall accept the affidavit 
        for recording or filing.  The affidavit shall be effective as 
        provided in this section and shall constitute notice even if it 
        does not include recording information sufficient to identify 
        the instrument creating the interest it terminates.  The 
        affidavit shall be conclusive evidence of the stated facts. 
           (j) The holder of a lien arising under subdivision 1c shall 
        release the lien at the holder's expense against an interest 
        terminated under paragraph (h) to the extent of the termination. 
           (k) If a lien arising under subdivision 1c is not released 
        under paragraph (j), prior to closing the estate, the personal 
        representative shall deed the interest subject to the lien to 
        the remaindermen or surviving joint tenants as their interests 
        may appear.  Upon recording or filing, the deed shall work a 
        merger of the recipient's life estate or joint tenancy interest, 
        subject to the lien, into the remainder interest or interest the 
        decedent and others owned jointly.  The lien shall attach to and 
        run with the property to the extent of the decedent's interest 
        at the time of the decedent's death. 
           [EFFECTIVE DATE.] This section takes effect on August 1, 
        2003, and applies to the estates of decedents who die on or 
        after that date. 
           Sec. 48.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1i.  [ESTATES OF PERSONS RECEIVING MEDICAL ASSISTANCE 
        AND SURVIVED BY OTHERS.] (a) For purposes of this subdivision, 
        the person's estate consists of the person's probate estate and 
        all of the person's interests in real property the person owned 
        as a life tenant or a joint tenant at the time of the person's 
        death. 
           (b) Notwithstanding any law or rule to the contrary, this 
        subdivision applies if a person received medical assistance for 
        which a claim could be filed under this section but for the fact 
        the person was survived by a spouse or by a person listed in 
        subdivision 3, or if subdivision 4 applies to a claim arising 
        under this section. 
           (c) The person's life estate or joint tenancy interests in 
        real property not subject to a medical assistance lien under 
        sections 514.980 to 514.985 on the date of the person's death 
        shall not end upon death and shall continue as provided in this 
        subdivision.  The life estate in the estate shall be the portion 
        of the interest in the property subject to the life estate that 
        is equal to the life estate percentage factor for the life 
        estate as listed in the Life Estate Mortality Table of the 
        health care program's manual for a person who was the age of the 
        medical assistance recipient on the date of the person's death.  
        The joint tenancy interest in the estate shall be equal to the 
        fractional interest the medical assistance recipient would have 
        owned in the jointly held interest in the property had they and 
        the other owners held title to the property as tenants in common 
        on the date the medical assistance recipient died. 
           (d) The county agency shall file a claim in the estate 
        under this section on behalf of the claimant who shall be the 
        commissioner of human services, notwithstanding that the 
        decedent is survived by a spouse or a person listed in 
        subdivision 3.  The claim, as allowed, shall not be paid by the 
        estate and shall be disposed of as provided in this paragraph.  
        The personal representative or the court shall make, execute, 
        and deliver a lien in favor of the claimant on the decedent's 
        interest in real property in the estate in the amount of the 
        allowed claim on forms provided by the commissioner to the 
        county agency filing the lien.  The lien shall bear interest as 
        provided under section 524.3-806, shall attach to the property 
        it describes upon filing or recording, and shall remain a lien 
        on the real property it describes for a period of 20 years from 
        the date it is filed or recorded.  The lien shall be a 
        disposition of the claim sufficient to permit the estate to 
        close. 
           (e) The state or county agency shall file or record the 
        lien in the office of the county recorder or registrar of titles 
        for each county in which any of the real property is located.  
        The recorder or registrar of titles shall accept the lien for 
        filing or recording.  All recording or filing fees shall be paid 
        by the department of human services.  The recorder or registrar 
        of titles shall mail the recorded lien to the department of 
        human services.  The lien need not be attested, certified, or 
        acknowledged as a condition of recording or filing.  Upon 
        recording or filing of a lien against a life estate or a joint 
        tenancy interest, the interest subject to the lien shall merge 
        into the remainder interest or the interest the recipient and 
        others owned jointly.  The lien shall attach to and run with the 
        property to the extent of the decedent's interest in the 
        property at the time of the decedent's death as determined under 
        this section.  
           (f) The department shall make no adjustment or recovery 
        under the lien until after the decedent's spouse, if any, has 
        died, and only at a time when the decedent has no surviving 
        child described in subdivision 3.  The estate, any owner of an 
        interest in the property which is or may be subject to the lien, 
        or any other interested party, may voluntarily pay off, settle, 
        or otherwise satisfy the claim secured or to be secured by the 
        lien at any time before or after the lien is filed or recorded.  
        Such payoffs, settlements, and satisfactions shall be deemed to 
        be voluntary repayments of past medical assistance payments for 
        the benefit of the deceased recipient, and neither the process 
        of settling the claim, the payment of the claim, or the 
        acceptance of a payment shall constitute an adjustment or 
        recovery that is prohibited under this subdivision. 
           (g) The lien under this subdivision may be enforced or 
        foreclosed in the manner provided by law for the enforcement of 
        judgment liens against real estate or by a foreclosure by action 
        under chapter 581.  When the lien is paid, satisfied, or 
        otherwise discharged, the state or county agency shall prepare 
        and file a release of lien at its own expense.  No action to 
        foreclose the lien shall be commenced unless the lien holder has 
        first given 30 days' prior written notice to pay the lien to the 
        owners and parties in possession of the property subject to the 
        lien.  The notice shall:  (1) include the name, address, and 
        telephone number of the lien holder; (2) describe the lien; (3) 
        give the amount of the lien; (4) inform the owner or party in 
        possession that payment of the lien in full must be made to the 
        lien holder within 30 days after service of the notice or the 
        lien holder may begin proceedings to foreclose the lien; and (5) 
        be served by personal service, certified mail, return receipt 
        requested, ordinary first class mail, or by publishing it once 
        in a newspaper of general circulation in the county in which any 
        part of the property is located.  Service of the notice shall be 
        complete upon mailing or publication. 
           [EFFECTIVE DATE.] This section takes effect August 1, 2003, 
        and applies to estates of decedents who die on or after that 
        date. 
           Sec. 49.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1j.  [CLAIMS IN ESTATES OF DECEDENTS SURVIVED BY 
        OTHER SURVIVORS.] For purposes of this subdivision, the 
        provisions in subdivision 1i, paragraphs (a) to (c) apply. 
           (a) If payment of a claim filed under this section is 
        limited as provided in subdivision 4, and if the estate does not 
        have other assets sufficient to pay the claim in full, as 
        allowed, the personal representative or the court shall make, 
        execute, and deliver a lien on the property in the estate that 
        is exempt from the claim under subdivision 4 in favor of the 
        commissioner of human services on forms provided by the 
        commissioner to the county agency filing the claim.  If the 
        estate pays a claim filed under this section in full from other 
        assets of the estate, no lien shall be filed against the 
        property described in subdivision 4. 
           (b) The lien shall be in an amount equal to the unpaid 
        balance of the allowed claim under this section remaining after 
        the estate has applied all other available assets of the estate 
        to pay the claim.  The property exempt under subdivision 4 shall 
        not be sold, assigned, transferred, conveyed, encumbered, or 
        distributed until after the personal representative has 
        determined the estate has other assets sufficient to pay the 
        allowed claim in full, or until after the lien has been filed or 
        recorded.  The lien shall bear interest as provided under 
        section 524.3-806, shall attach to the property it describes 
        upon filing or recording, and shall remain a lien on the real 
        property it describes for a period of 20 years from the date it 
        is filed or recorded.  The lien shall be a disposition of the 
        claim sufficient to permit the estate to close. 
           (c) The state or county agency shall file or record the 
        lien in the office of the county recorder or registrar of titles 
        in each county in which any of the real property is located.  
        The department shall pay the filing fees.  The lien need not be 
        attested, certified, or acknowledged as a condition of recording 
        or filing.  The recorder or registrar of titles shall accept the 
        lien for filing or recording. 
           (d) The commissioner shall make no adjustment or recovery 
        under the lien until none of the persons listed in subdivision 4 
        are residing on the property or until the property is sold or 
        transferred.  The estate or any owner of an interest in the 
        property that is or may be subject to the lien, or any other 
        interested party, may voluntarily pay off, settle, or otherwise 
        satisfy the claim secured or to be secured by the lien at any 
        time before or after the lien is filed or recorded.  The 
        payoffs, settlements, and satisfactions shall be deemed to be 
        voluntary repayments of past medical assistance payments for the 
        benefit of the deceased recipient and neither the process of 
        settling the claim, the payment of the claim, or acceptance of a 
        payment shall constitute an adjustment or recovery that is 
        prohibited under this subdivision. 
           (e) A lien under this subdivision may be enforced or 
        foreclosed in the manner provided for by law for the enforcement 
        of judgment liens against real estate or by a foreclosure by 
        action under chapter 581.  When the lien has been paid, 
        satisfied, or otherwise discharged, the claimant shall prepare 
        and file a release of lien at the claimant's expense.  No action 
        to foreclose the lien shall be commenced unless the lien holder 
        has first given 30 days prior written notice to pay the lien to 
        the record owners of the property and the parties in possession 
        of the property subject to the lien.  The notice shall:  (1) 
        include the name, address, and telephone number of the lien 
        holder; (2) describe the lien; (3) give the amount of the lien; 
        (4) inform the owner or party in possession that payment of the 
        lien in full must be made to the lien holder within 30 days 
        after service of the notice or the lien holder may begin 
        proceedings to foreclose the lien; and (5) be served by personal 
        service, certified mail, return receipt requested, ordinary 
        first class mail, or by publishing it once in a newspaper of 
        general circulation in the county in which any part of the 
        property is located.  Service shall be complete upon mailing or 
        publication. 
           (f) Upon filing or recording of a lien against a life 
        estate or joint tenancy interest under this subdivision, the 
        interest subject to the lien shall merge into the remainder 
        interest or the interest the decedent and others owned jointly, 
        effective on the date of recording and filing.  The lien shall 
        attach to and run with the property to the extent of the 
        decedent's interest in the property at the time of the 
        decedent's death as determined under this section. 
           (g)(1) An affidavit may be provided by a personal 
        representative, at their discretion, stating the personal 
        representative has determined in good faith that a decedent 
        survived by a spouse or a person listed in subdivision 3, or by 
        a person listed in subdivision 4, or the decedent's predeceased 
        spouse did not receive any medical assistance giving rise to a 
        claim under this section, or that the real property described in 
        subdivision 4 is not needed to pay in full a claim arising under 
        this section. 
           (2) The affidavit shall:  (i) describe the property and the 
        interest being extinguished; (ii) name the decedent and give the 
        date of death; (iii) state the facts listed in clause (1); (iv) 
        state that the affidavit is being filed to terminate the life 
        estate or joint tenancy interest created under this subdivision; 
        (v) be signed by the personal representative; and (vi) contain 
        any other information that the affiant deems appropriate. 
           (3) Except as provided in section 514.981, subdivision 6, 
        when the affidavit is filed or recorded, the life estate or 
        joint tenancy interest in real property that the affidavit 
        describes shall be terminated effective as of the date of filing 
        or recording.  The termination shall be final and may not be set 
        aside for any reason. 
           [EFFECTIVE DATE.] This section takes effect on August 1, 
        2003, and applies to the estates of decedents who die on or 
        after that date. 
           Sec. 50.  Minnesota Statutes 2002, section 256B.15, is 
        amended by adding a subdivision to read: 
           Subd. 1k.  [FILING.] Any notice, lien, release, or other 
        document filed under subdivisions 1c to 1l, and any lien, 
        release of lien, or other documents relating to a lien filed 
        under subdivisions 1h, 1i, and 1j must be filed or recorded in 
        the office of the county recorder or registrar of titles, as 
        appropriate, in the county where the affected real property is 
        located.  Notwithstanding section 386.77, the state or county 
        agency shall pay any applicable filing fee.  An attestation, 
        certification, or acknowledgment is not required as a condition 
        of filing.  If the property described in the filing is 
        registered property, the registrar of titles shall record the 
        filing on the certificate of title for each parcel of property 
        described in the filing.  If the property described in the 
        filing is abstract property, the recorder shall file and index 
        the property in the county's grantor-grantee indexes and any 
        tract indexes the county maintains for each parcel of property 
        described in the filing.  The recorder or registrar of titles 
        shall return the filed document to the party filing it at no 
        cost.  If the party making the filing provides a duplicate copy 
        of the filing, the recorder or registrar of titles shall show 
        the recording or filing data on the copy and return it to the 
        party at no extra cost. 
           [EFFECTIVE DATE.] This section takes effect on August 1, 
        2003, and applies to the estates of decedents who die on or 
        after that date. 
           Sec. 51.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SURVIVING SPOUSE, MINOR, BLIND, OR DISABLED 
        CHILDREN.] If a decedent who is survived by a spouse, or was 
        single, or who was the surviving spouse of a married couple, and 
        is survived by a child who is under age 21 or blind or 
        permanently and totally disabled according to the supplemental 
        security income program criteria, no a claim shall be filed 
        against the estate according to this section. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to decedents who die on or after that date. 
           Sec. 52.  Minnesota Statutes 2002, section 256B.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [OTHER SURVIVORS.] If the decedent who was single 
        or the surviving spouse of a married couple is survived by one 
        of the following persons, a claim exists against the estate in 
        an amount not to exceed the value of the nonhomestead property 
        included in the estate and the personal representative shall 
        make, execute, and deliver to the county agency a lien against 
        the homestead property in the estate for any unpaid balance of 
        the claim to the claimant as provided under this section: 
           (a) a sibling who resided in the decedent medical 
        assistance recipient's home at least one year before the 
        decedent's institutionalization and continuously since the date 
        of institutionalization; or 
           (b) a son or daughter or a grandchild who resided in the 
        decedent medical assistance recipient's home for at least two 
        years immediately before the parent's or grandparent's 
        institutionalization and continuously since the date of 
        institutionalization, and who establishes by a preponderance of 
        the evidence having provided care to the parent or grandparent 
        who received medical assistance, that the care was provided 
        before institutionalization, and that the care permitted the 
        parent or grandparent to reside at home rather than in an 
        institution. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to decedents who die on or after that date. 
           Sec. 53.  Minnesota Statutes 2002, section 256B.195, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS TO CERTAIN SAFETY NET PROVIDERS.] (a) 
        Effective July 15, 2001, the commissioner shall make the 
        following payments to the hospitals indicated after noon on the 
        15th of each month: 
           (1) to Hennepin County Medical Center, any federal matching 
        funds available to match the payments received by the medical 
        center under subdivision 2, to increase payments for medical 
        assistance admissions and to recognize higher medical assistance 
        costs in institutions that provide high levels of charity care; 
        and 
           (2) to Regions hospital, any federal matching funds 
        available to match the payments received by the hospital under 
        subdivision 2, to increase payments for medical assistance 
        admissions and to recognize higher medical assistance costs in 
        institutions that provide high levels of charity care.  
           (b) Effective July 15, 2001, the following percentages of 
        the transfers under subdivision 2 shall be retained by the 
        commissioner for deposit each month into the general fund: 
           (1) 18 percent, plus any federal matching funds, shall be 
        allocated for the following purposes: 
           (i) during the fiscal year beginning July 1, 2001, of the 
        amount available under this clause, 39.7 percent shall be 
        allocated to make increased hospital payments under section 
        256.969, subdivision 26; 34.2 percent shall be allocated to fund 
        the amounts due from small rural hospitals, as defined in 
        section 144.148, for overpayments under section 256.969, 
        subdivision 5a, resulting from a determination that medical 
        assistance and general assistance payments exceeded the charge 
        limit during the period from 1994 to 1997; and 26.1 percent 
        shall be allocated to the commissioner of health for rural 
        hospital capital improvement grants under section 144.148; and 
           (ii) during fiscal years beginning on or after July 1, 
        2002, of the amount available under this clause, 55 percent 
        shall be allocated to make increased hospital payments under 
        section 256.969, subdivision 26, and 45 percent shall be 
        allocated to the commissioner of health for rural hospital 
        capital improvement grants under section 144.148; and 
           (2) 11 percent shall be allocated to the commissioner of 
        health to fund community clinic grants under section 145.9268. 
           (c) This subdivision shall apply to fee-for-service 
        payments only and shall not increase capitation payments or 
        payments made based on average rates. 
           (d) Medical assistance rate or payment changes, including 
        those required to obtain federal financial participation under 
        section 62J.692, subdivision 8, shall precede the determination 
        of intergovernmental transfer amounts determined in this 
        subdivision.  Participation in the intergovernmental transfer 
        program shall not result in the offset of any health care 
        provider's receipt of medical assistance payment increases other 
        than limits resulting from hospital-specific charge limits and 
        limits on disproportionate share hospital payments. 
           (e) Effective July 1, 2003, if the amount available for 
        allocation under paragraph (b) is greater than the amounts 
        available during March 2003, after any increase in 
        intergovernmental transfers and payments that result from 
        section 256.969, subdivision 3a, paragraph (c), are paid to the 
        general fund, any additional amounts available under this 
        subdivision after reimbursement of the transfers under 
        subdivision 2 shall be allocated to increase medical assistance 
        payments, subject to hospital-specific charge limits and limits 
        on disproportionate share hospital payments, as follows: 
           (1) if the payments under subdivision 5 are approved, the 
        amount shall be paid to the largest ten percent of hospitals as 
        measured by 2001 payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nonstate 
        government hospital category.  Payments shall be allocated 
        according to each hospital's proportionate share of the 2001 
        payments; or 
           (2) if the payments under subdivision 5 are not approved, 
        the amount shall be paid to the largest ten percent of hospitals 
        as measured by 2001 payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nonstate 
        government category and to the largest ten percent of hospitals 
        as measured by payments for medical assistance, general 
        assistance medical care, and MinnesotaCare in the nongovernment 
        hospital category.  Payments shall be allocated according to 
        each hospital's proportionate share of the 2001 payments in 
        their respective category of nonstate government and 
        nongovernment.  The commissioner shall determine which hospitals 
        are in the nonstate government and nongovernment hospital 
        categories. 
           Sec. 54.  Minnesota Statutes 2002, section 256B.195, 
        subdivision 5, is amended to read: 
           Subd. 5.  [INCLUSION OF FAIRVIEW UNIVERSITY MEDICAL 
        CENTER.] (a) Upon federal approval of the inclusion of Fairview 
        University Medical Center in the nonstate government 
        category payments in paragraph (b), the commissioner shall 
        establish an intergovernmental transfer with the University of 
        Minnesota in an amount determined by the commissioner based on 
        the increase in the amount of Medicare upper payment limit due 
        solely to the inclusion of Fairview University Medical Center as 
        a nonstate government hospital and limited available for 
        nongovernment hospitals adjusted by hospital-specific charge 
        limits and the amount available under the hospital-specific 
        disproportionate share limit. 
           (b) Effective July 1, 2003, the commissioner shall increase 
        payments for medical assistance admissions at Fairview 
        University Medical Center by 71 percent of the transfer plus any 
        federal matching payments on that amount, to increase payments 
        for medical assistance admissions and to recognize higher 
        medical assistance costs in institutions that provide high 
        levels of charity care.  From this payment, Fairview University 
        Medical Center shall pay to the University of Minnesota the cost 
        of the transfer, on the same day the payment is received.  
        Eighteen percent of the transfer plus any federal matching 
        payments shall be used as specified in subdivision 3, paragraph 
        (b), clause (1).  Payments under section 256.969, subdivision 
        26, may be increased above the 90 percent level specified in 
        that subdivision within the limits of additional funding 
        available under this subdivision.  Eleven percent of the 
        transfer shall be used to increase the grants under section 
        145.9268 Twenty-nine percent of the transfer plus federal 
        matching funds available as a result of the transfers in 
        subdivision 5 shall be paid to the largest ten percent of 
        hospitals in the nongovernment hospital category as measured by 
        2001 payments for medical assistance, general assistance medical 
        care, and MinnesotaCare.  Payments shall be allocated according 
        to each hospital's proportionate share of the 2001 payments.  
        The commissioner shall determine which hospitals are in the 
        nongovernment hospital category. 
           Sec. 55.  Minnesota Statutes 2002, section 256B.32, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FACILITY FEE PAYMENT.] (a) The 
        commissioner shall establish a facility fee payment mechanism 
        that will pay a facility fee to all enrolled outpatient 
        hospitals for each emergency room or outpatient clinic visit 
        provided on or after July 1, 1989.  This payment mechanism may 
        not result in an overall increase in outpatient payment rates.  
        This section does not apply to federally mandated maximum 
        payment limits, department approved program packages, or 
        services billed using a nonoutpatient hospital provider number. 
           (b) For fee-for-service services provided on or after July 
        1, 2002, the total payment, before third-party liability and 
        spenddown, made to hospitals for outpatient hospital facility 
        services is reduced by .5 percent from the current statutory 
        rates. 
           (c) In addition to the reduction in paragraph (b), the 
        total payment for fee-for-service services provided on or after 
        July 1, 2003, made to hospitals for outpatient hospital facility 
        services before third-party liability and spenddown, is reduced 
        five percent from the current statutory rates.  Facilities 
        defined under section 256.969, subdivision 16, are excluded from 
        this paragraph. 
           Sec. 56.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        the following terms have the meanings given.  
           (a) "Commissioner" means the commissioner of human services.
        For the remainder of this section, the commissioner's 
        responsibilities for methods and policies for implementing the 
        project will be proposed by the project advisory committees and 
        approved by the commissioner.  
           (b) "Demonstration provider" means a health maintenance 
        organization, community integrated service network, or 
        accountable provider network authorized and operating under 
        chapter 62D, 62N, or 62T that participates in the demonstration 
        project according to criteria, standards, methods, and other 
        requirements established for the project and approved by the 
        commissioner.  For purposes of this section, a county board, or 
        group of county boards operating under a joint powers agreement, 
        is considered a demonstration provider if the county or group of 
        county boards meets the requirements of section 256B.692.  
        Notwithstanding the above, Itasca county may continue to 
        participate as a demonstration provider until July 1, 2004. 
           (c) "Eligible individuals" means those persons eligible for 
        medical assistance benefits as defined in sections 256B.055, 
        256B.056, and 256B.06. 
           (d) "Limitation of choice" means suspending freedom of 
        choice while allowing eligible individuals to choose among the 
        demonstration providers.  
           (e) This paragraph supersedes paragraph (c) as long as the 
        Minnesota health care reform waiver remains in effect.  When the 
        waiver expires, this paragraph expires and the commissioner of 
        human services shall publish a notice in the State Register and 
        notify the revisor of statutes.  "Eligible individuals" means 
        those persons eligible for medical assistance benefits as 
        defined in sections 256B.055, 256B.056, and 256B.06.  
        Notwithstanding sections 256B.055, 256B.056, and 256B.06, an 
        individual who becomes ineligible for the program because of 
        failure to submit income reports or recertification forms in a 
        timely manner, shall remain enrolled in the prepaid health plan 
        and shall remain eligible to receive medical assistance coverage 
        through the last day of the month following the month in which 
        the enrollee became ineligible for the medical assistance 
        program. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        or upon federal approval, whichever is later. 
           Sec. 57.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LIMITATION OF CHOICE.] (a) The commissioner 
        shall develop criteria to determine when limitation of choice 
        may be implemented in the experimental counties.  The criteria 
        shall ensure that all eligible individuals in the county have 
        continuing access to the full range of medical assistance 
        services as specified in subdivision 6.  
           (b) The commissioner shall exempt the following persons 
        from participation in the project, in addition to those who do 
        not meet the criteria for limitation of choice:  
           (1) persons eligible for medical assistance according to 
        section 256B.055, subdivision 1; 
           (2) persons eligible for medical assistance due to 
        blindness or disability as determined by the social security 
        administration or the state medical review team, unless:  
           (i) they are 65 years of age or older; or 
           (ii) they reside in Itasca county or they reside in a 
        county in which the commissioner conducts a pilot project under 
        a waiver granted pursuant to section 1115 of the Social Security 
        Act; 
           (3) recipients who currently have private coverage through 
        a health maintenance organization; 
           (4) recipients who are eligible for medical assistance by 
        spending down excess income for medical expenses other than the 
        nursing facility per diem expense; 
           (5) recipients who receive benefits under the Refugee 
        Assistance Program, established under United States Code, title 
        8, section 1522(e); 
           (6) children who are both determined to be severely 
        emotionally disturbed and receiving case management services 
        according to section 256B.0625, subdivision 20; 
           (7) adults who are both determined to be seriously and 
        persistently mentally ill and received case management services 
        according to section 256B.0625, subdivision 20; and 
           (8) persons eligible for medical assistance according to 
        section 256B.057, subdivision 10; and 
           (9) persons with access to cost-effective 
        employer-sponsored private health insurance or persons enrolled 
        in an individual health plan determined to be cost-effective 
        according to section 256B.0625, subdivision 15.  
        Children under age 21 who are in foster placement may enroll in 
        the project on an elective basis.  Individuals excluded under 
        clauses (6) and (7) may choose to enroll on an elective 
        basis.  The commissioner may enroll recipients in the prepaid 
        medical assistance program for seniors who are (1) age 65 and 
        over, and (2) eligible for medical assistance by spending down 
        excess income. 
           (c) The commissioner may allow persons with a one-month 
        spenddown who are otherwise eligible to enroll to voluntarily 
        enroll or remain enrolled, if they elect to prepay their monthly 
        spenddown to the state.  
           (d) The commissioner may require those individuals to 
        enroll in the prepaid medical assistance program who otherwise 
        would have been excluded under paragraph (b), clauses (1), (3), 
        and (8), and under Minnesota Rules, part 9500.1452, subpart 2, 
        items H, K, and L.  
           (e) Before limitation of choice is implemented, eligible 
        individuals shall be notified and after notification, shall be 
        allowed to choose only among demonstration providers.  The 
        commissioner may assign an individual with private coverage 
        through a health maintenance organization, to the same health 
        maintenance organization for medical assistance coverage, if the 
        health maintenance organization is under contract for medical 
        assistance in the individual's county of residence.  After 
        initially choosing a provider, the recipient is allowed to 
        change that choice only at specified times as allowed by the 
        commissioner.  If a demonstration provider ends participation in 
        the project for any reason, a recipient enrolled with that 
        provider must select a new provider but may change providers 
        without cause once more within the first 60 days after 
        enrollment with the second provider. 
           Sec. 58.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PROSPECTIVE PER CAPITA PAYMENT.] The 
        commissioner shall establish the method and amount of payments 
        for services.  The commissioner shall annually contract with 
        demonstration providers to provide services consistent with 
        these established methods and amounts for payment.  
           If allowed by the commissioner, a demonstration provider 
        may contract with an insurer, health care provider, nonprofit 
        health service plan corporation, or the commissioner, to provide 
        insurance or similar protection against the cost of care 
        provided by the demonstration provider or to provide coverage 
        against the risks incurred by demonstration providers under this 
        section.  The recipients enrolled with a demonstration provider 
        are a permissible group under group insurance laws and chapter 
        62C, the Nonprofit Health Service Plan Corporations Act.  Under 
        this type of contract, the insurer or corporation may make 
        benefit payments to a demonstration provider for services 
        rendered or to be rendered to a recipient.  Any insurer or 
        nonprofit health service plan corporation licensed to do 
        business in this state is authorized to provide this insurance 
        or similar protection.  
           Payments to providers participating in the project are 
        exempt from the requirements of sections 256.966 and 256B.03, 
        subdivision 2.  The commissioner shall complete development of 
        capitation rates for payments before delivery of services under 
        this section is begun.  For payments made during calendar year 
        1990 and later years, the commissioner shall contract with an 
        independent actuary to establish prepayment rates. 
           By January 15, 1996, the commissioner shall report to the 
        legislature on the methodology used to allocate to participating 
        counties available administrative reimbursement for advocacy and 
        enrollment costs.  The report shall reflect the commissioner's 
        judgment as to the adequacy of the funds made available and of 
        the methodology for equitable distribution of the funds.  The 
        commissioner must involve participating counties in the 
        development of the report. 
           Beginning July 1, 2004, the commissioner may include 
        payments for elderly waiver services and 180 days of nursing 
        home care in capitation payments for the prepaid medical 
        assistance program for recipients age 65 and older.  Payments 
        for elderly waiver services shall be made no earlier than the 
        month following the month in which services were received.  
           Sec. 59.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [MANAGED CARE CONTRACTS.] (a) Managed care 
        contracts under this section and sections 256L.12 and 256D.03, 
        shall be entered into or renewed on a calendar year basis 
        beginning January 1, 1996.  Managed care contracts which were in 
        effect on June 30, 1995, and set to renew on July 1, 1995, shall 
        be renewed for the period July 1, 1995 through December 31, 1995 
        at the same terms that were in effect on June 30, 1995.  The 
        commissioner may issue separate contracts with requirements 
        specific to services to medical assistance recipients age 65 and 
        older. 
           (b) A prepaid health plan providing covered health services 
        for eligible persons pursuant to chapters 256B, 256D, and 256L, 
        is responsible for complying with the terms of its contract with 
        the commissioner.  Requirements applicable to managed care 
        programs under chapters 256B, 256D, and 256L, established after 
        the effective date of a contract with the commissioner take 
        effect when the contract is next issued or renewed. 
           (c) Effective for services rendered on or after January 1, 
        2003, the commissioner shall withhold five percent of managed 
        care plan payments under this section for the prepaid medical 
        assistance and general assistance medical care programs pending 
        completion of performance targets.  Each performance target must 
        be quantifiable, objective, measurable, and reasonably 
        attainable, except in the case of a performance target based on 
        a federal or state law or rule.  Criteria for assessment of each 
        performance target must be outlined in writing prior to the 
        contract effective date.  The withheld funds must be returned no 
        sooner than July of the following year if performance targets in 
        the contract are achieved.  The commissioner may exclude special 
        demonstration projects under subdivision 23.  A managed care 
        plan or a county-based purchasing plan under section 256B.692 
        may include as admitted assets under section 62D.044 any amount 
        withheld under this paragraph that is reasonably expected to be 
        returned. 
           [EFFECTIVE DATE.] This section is effective for services 
        rendered on or after July 1, 2003, except that the amendment to 
        paragraph (c) is effective for services rendered on or after 
        January 1, 2004.  
           Sec. 60.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 5c, is amended to read: 
           Subd. 5c.  [MEDICAL EDUCATION AND RESEARCH FUND.] (a) 
        Except as provided in paragraph (c), the commissioner of human 
        services shall transfer each year to the medical education and 
        research fund established under section 62J.692, the following: 
           (1) an amount equal to the reduction in the prepaid medical 
        assistance and prepaid general assistance medical care payments 
        as specified in this clause.  Until January 1, 2002, the county 
        medical assistance and general assistance medical care 
        capitation base rate prior to plan specific adjustments and 
        after the regional rate adjustments under section 256B.69, 
        subdivision 5b, is reduced 6.3 percent for Hennepin county, two 
        percent for the remaining metropolitan counties, and no 
        reduction for nonmetropolitan Minnesota counties; and after 
        January 1, 2002, the county medical assistance and general 
        assistance medical care capitation base rate prior to plan 
        specific adjustments is reduced 6.3 percent for Hennepin county, 
        two percent for the remaining metropolitan counties, and 1.6 
        percent for nonmetropolitan Minnesota counties.  Nursing 
        facility and elderly waiver payments and demonstration project 
        payments operating under subdivision 23 are excluded from this 
        reduction.  The amount calculated under this clause shall not be 
        adjusted for periods already paid due to subsequent changes to 
        the capitation payments; 
           (2) beginning July 1, 2001, $2,537,000 2003, $2,157,000 
        from the capitation rates paid under this section plus any 
        federal matching funds on this amount; 
           (3) beginning July 1, 2002, an additional $12,700,000 from 
        the capitation rates paid under this section; and 
           (4) beginning July 1, 2003, an additional $4,700,000 from 
        the capitation rates paid under this section. 
           (b) This subdivision shall be effective upon approval of a 
        federal waiver which allows federal financial participation in 
        the medical education and research fund. 
           (c) Effective July 1, 2003, the amount reduced from the 
        prepaid general assistance medical care payments under paragraph 
        (a), clause (1), shall be transferred to the general fund. 
           Sec. 61.  Minnesota Statutes 2002, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 5h.  [PAYMENT REDUCTION.] In addition to the 
        reduction in subdivision 5g, the total payment made to managed 
        care plans under the medical assistance program is reduced 1.0 
        percent for services provided on or after October 1, 2003, and 
        an additional 1.0 percent for services provided on or after 
        January 1, 2004.  This provision excludes payments for nursing 
        home services, home and community-based waivers, and payments to 
        demonstration projects for persons with disabilities. 
           Sec. 62.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [NURSING HOME SERVICES.] (a) Notwithstanding 
        Minnesota Rules, part 9500.1457, subpart 1, item B, up to 90 180 
        days of nursing facility services as defined in section 
        256B.0625, subdivision 2, which are provided in a nursing 
        facility certified by the Minnesota department of health for 
        services provided and eligible for payment under Medicaid, shall 
        be covered under the prepaid medical assistance program for 
        individuals who are not residing in a nursing facility at the 
        time of enrollment in the prepaid medical assistance 
        program.  The commissioner may develop a schedule to phase in 
        implementation of the 180-day provision. 
           (b) For individuals enrolled in the Minnesota senior health 
        options project authorized under subdivision 23, nursing 
        facility services shall be covered according to the terms and 
        conditions of the federal agreement governing that demonstration 
        project. 
           Sec. 63.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 6b, is amended to read: 
           Subd. 6b.  [HOME AND COMMUNITY-BASED WAIVER SERVICES.] (a) 
        For individuals enrolled in the Minnesota senior health options 
        project authorized under subdivision 23, elderly waiver services 
        shall be covered according to the terms and conditions of the 
        federal agreement governing that demonstration project. 
           (b) For individuals under age 65 enrolled in demonstrations 
        authorized under subdivision 23, home and community-based waiver 
        services shall be covered according to the terms and conditions 
        of the federal agreement governing that demonstration project. 
           (c) Notwithstanding Minnesota Rules, part 9500.1457, 
        subpart 1, item C, elderly waiver services shall be covered 
        under the prepaid medical assistance program for all individuals 
        who are eligible according to section 256B.0915.  The 
        commissioner may develop a schedule to phase in implementation 
        of these waiver services.  
           Sec. 64.  Minnesota Statutes 2002, section 256B.69, is 
        amended by adding a subdivision to read: 
           Subd. 6d.  [PRESCRIPTION DRUGS.] Effective January 1, 2004, 
        the commissioner may exclude or modify coverage for prescription 
        drugs from the prepaid managed care contracts entered into under 
        this section in order to increase savings to the state by 
        collecting additional prescription drug rebates.  The contracts 
        must maintain incentives for the managed care plan to manage 
        drug costs and utilization and may require that the managed care 
        plans maintain an open drug formulary.  In order to manage drug 
        costs and utilization, the contracts may authorize the managed 
        care plans to use preferred drug lists and prior authorization.  
        This subdivision is contingent on federal approval of the 
        managed care contract changes and the collection of additional 
        prescription drug rebates.  
           Sec. 65.  Minnesota Statutes 2002, section 256B.69, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PREADMISSION SCREENING WAIVER.] Except as 
        applicable to the project's operation, the provisions of section 
        256B.0911 are waived for the purposes of this section for 
        recipients enrolled with demonstration providers or in the 
        prepaid medical assistance program for seniors.  
           Sec. 66.  Minnesota Statutes 2002, section 256B.75, is 
        amended to read: 
           256B.75 [HOSPITAL OUTPATIENT REIMBURSEMENT.] 
           (a) For outpatient hospital facility fee payments for 
        services rendered on or after October 1, 1992, the commissioner 
        of human services shall pay the lower of (1) submitted charge, 
        or (2) 32 percent above the rate in effect on June 30, 1992, 
        except for those services for which there is a federal maximum 
        allowable payment.  Effective for services rendered on or after 
        January 1, 2000, payment rates for nonsurgical outpatient 
        hospital facility fees and emergency room facility fees shall be 
        increased by eight percent over the rates in effect on December 
        31, 1999, except for those services for which there is a federal 
        maximum allowable payment.  Services for which there is a 
        federal maximum allowable payment shall be paid at the lower of 
        (1) submitted charge, or (2) the federal maximum allowable 
        payment.  Total aggregate payment for outpatient hospital 
        facility fee services shall not exceed the Medicare upper 
        limit.  If it is determined that a provision of this section 
        conflicts with existing or future requirements of the United 
        States government with respect to federal financial 
        participation in medical assistance, the federal requirements 
        prevail.  The commissioner may, in the aggregate, prospectively 
        reduce payment rates to avoid reduced federal financial 
        participation resulting from rates that are in excess of the 
        Medicare upper limitations. 
           (b) Notwithstanding paragraph (a), payment for outpatient, 
        emergency, and ambulatory surgery hospital facility fee services 
        for critical access hospitals designated under section 144.1483, 
        clause (11), shall be paid on a cost-based payment system that 
        is based on the cost-finding methods and allowable costs of the 
        Medicare program. 
           (c) Effective for services provided on or after July 1, 
        2003, rates that are based on the Medicare outpatient 
        prospective payment system shall be replaced by a budget neutral 
        prospective payment system that is derived using medical 
        assistance data.  The commissioner shall provide a proposal to 
        the 2003 legislature to define and implement this provision. 
           (d) For fee-for-service services provided on or after July 
        1, 2002, the total payment, before third-party liability and 
        spenddown, made to hospitals for outpatient hospital facility 
        services is reduced by .5 percent from the current statutory 
        rate. 
           (e) In addition to the reduction in paragraph (d), the 
        total payment for fee-for-service services provided on or after 
        July 1, 2003, made to hospitals for outpatient hospital facility 
        services before third-party liability and spenddown, is reduced 
        five percent from the current statutory rates.  Facilities 
        defined under section 256.969, subdivision 16, are excluded from 
        this paragraph. 
           Sec. 67.  Minnesota Statutes 2002, section 256B.76, is 
        amended to read: 
           256B.76 [PHYSICIAN AND DENTAL REIMBURSEMENT.] 
           (a) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for physician 
        services as follows: 
           (1) payment for level one Centers for Medicare and Medicaid 
        Services' common procedural coding system codes titled "office 
        and other outpatient services," "preventive medicine new and 
        established patient," "delivery, antepartum, and postpartum 
        care," "critical care," cesarean delivery and pharmacologic 
        management provided to psychiatric patients, and level three 
        codes for enhanced services for prenatal high risk, shall be 
        paid at the lower of (i) submitted charges, or (ii) 25 percent 
        above the rate in effect on June 30, 1992.  If the rate on any 
        procedure code within these categories is different than the 
        rate that would have been paid under the methodology in section 
        256B.74, subdivision 2, then the larger rate shall be paid; 
           (2) payments for all other services shall be paid at the 
        lower of (i) submitted charges, or (ii) 15.4 percent above the 
        rate in effect on June 30, 1992; 
           (3) all physician rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases 
        except that payment rates for home health agency services shall 
        be the rates in effect on September 30, 1992; 
           (4) effective for services rendered on or after January 1, 
        2000, payment rates for physician and professional services 
        shall be increased by three percent over the rates in effect on 
        December 31, 1999, except for home health agency and family 
        planning agency services; and 
           (5) the increases in clause (4) shall be implemented 
        January 1, 2000, for managed care. 
           (b) Effective for services rendered on or after October 1, 
        1992, the commissioner shall make payments for dental services 
        as follows: 
           (1) dental services shall be paid at the lower of (i) 
        submitted charges, or (ii) 25 percent above the rate in effect 
        on June 30, 1992; 
           (2) dental rates shall be converted from the 50th 
        percentile of 1982 to the 50th percentile of 1989, less the 
        percent in aggregate necessary to equal the above increases; 
           (3) effective for services rendered on or after January 1, 
        2000, payment rates for dental services shall be increased by 
        three percent over the rates in effect on December 31, 1999; 
           (4) the commissioner shall award grants to community 
        clinics or other nonprofit community organizations, political 
        subdivisions, professional associations, or other organizations 
        that demonstrate the ability to provide dental services 
        effectively to public program recipients.  Grants may be used to 
        fund the costs related to coordinating access for recipients, 
        developing and implementing patient care criteria, upgrading or 
        establishing new facilities, acquiring furnishings or equipment, 
        recruiting new providers, or other development costs that will 
        improve access to dental care in a region.  In awarding grants, 
        the commissioner shall give priority to applicants that plan to 
        serve areas of the state in which the number of dental providers 
        is not currently sufficient to meet the needs of recipients of 
        public programs or uninsured individuals.  The commissioner 
        shall consider the following in awarding the grants: 
           (i) potential to successfully increase access to an 
        underserved population; 
           (ii) the ability to raise matching funds; 
           (iii) the long-term viability of the project to improve 
        access beyond the period of initial funding; 
           (iv) the efficiency in the use of the funding; and 
           (v) the experience of the proposers in providing services 
        to the target population. 
           The commissioner shall monitor the grants and may terminate 
        a grant if the grantee does not increase dental access for 
        public program recipients.  The commissioner shall consider 
        grants for the following: 
           (i) implementation of new programs or continued expansion 
        of current access programs that have demonstrated success in 
        providing dental services in underserved areas; 
           (ii) a pilot program for utilizing hygienists outside of a 
        traditional dental office to provide dental hygiene services; 
        and 
           (iii) a program that organizes a network of volunteer 
        dentists, establishes a system to refer eligible individuals to 
        volunteer dentists, and through that network provides donated 
        dental care services to public program recipients or uninsured 
        individuals; 
           (5) beginning October 1, 1999, the payment for tooth 
        sealants and fluoride treatments shall be the lower of (i) 
        submitted charge, or (ii) 80 percent of median 1997 charges; 
           (6) the increases listed in clauses (3) and (5) shall be 
        implemented January 1, 2000, for managed care; and 
           (7) effective for services provided on or after January 1, 
        2002, payment for diagnostic examinations and dental x-rays 
        provided to children under age 21 shall be the lower of (i) the 
        submitted charge, or (ii) 85 percent of median 1999 charges.  
           (c) Effective for dental services rendered on or after 
        January 1, 2002, the commissioner may, within the limits of 
        available appropriation, increase reimbursements to dentists and 
        dental clinics deemed by the commissioner to be critical access 
        dental providers.  Reimbursement to a critical access dental 
        provider may be increased by not more than 50 percent above the 
        reimbursement rate that would otherwise be paid to the 
        provider.  Payments to health plan companies shall be adjusted 
        to reflect increased reimbursements to critical access dental 
        providers as approved by the commissioner.  In determining which 
        dentists and dental clinics shall be deemed critical access 
        dental providers, the commissioner shall review: 
           (1) the utilization rate in the service area in which the 
        dentist or dental clinic operates for dental services to 
        patients covered by medical assistance, general assistance 
        medical care, or MinnesotaCare as their primary source of 
        coverage; 
           (2) the level of services provided by the dentist or dental 
        clinic to patients covered by medical assistance, general 
        assistance medical care, or MinnesotaCare as their primary 
        source of coverage; and 
           (3) whether the level of services provided by the dentist 
        or dental clinic is critical to maintaining adequate levels of 
        patient access within the service area. 
        In the absence of a critical access dental provider in a service 
        area, the commissioner may designate a dentist or dental clinic 
        as a critical access dental provider if the dentist or dental 
        clinic is willing to provide care to patients covered by medical 
        assistance, general assistance medical care, or MinnesotaCare at 
        a level which significantly increases access to dental care in 
        the service area. 
           (d) Effective July 1, 2001, the medical assistance rates 
        for outpatient mental health services provided by an entity that 
        operates: 
           (1) a Medicare-certified comprehensive outpatient 
        rehabilitation facility; and 
           (2) a facility that was certified prior to January 1, 1993, 
        with at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year who are medical 
        assistance recipients, will be increased by 38 percent, when 
        those services are provided within the comprehensive outpatient 
        rehabilitation facility and provided to residents of nursing 
        facilities owned by the entity. 
           (e) An entity that operates both a Medicare certified 
        comprehensive outpatient rehabilitation facility and a facility 
        which was certified prior to January 1, 1993, that is licensed 
        under Minnesota Rules, parts 9570.2000 to 9570.3600, and for 
        whom at least 33 percent of the clients receiving rehabilitation 
        services in the most recent calendar year are medical assistance 
        recipients, shall be reimbursed by the commissioner for 
        rehabilitation services at rates that are 38 percent greater 
        than the maximum reimbursement rate allowed under paragraph (a), 
        clause (2), when those services are (1) provided within the 
        comprehensive outpatient rehabilitation facility and (2) 
        provided to residents of nursing facilities owned by the entity. 
           (f) Effective for services rendered on or after January 1, 
        2007, the commissioner shall make payments for physician and 
        professional services based on the Medicare relative value units 
        (RVUs).  This change shall be budget neutral and the cost of 
        implementing RVUs will be incorporated in the established 
        conversion factor. 
           Sec. 68.  Minnesota Statutes 2002, section 256D.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
        (a) General assistance medical care may be paid for any person 
        who is not eligible for medical assistance under chapter 256B, 
        including eligibility for medical assistance based on a 
        spenddown of excess income according to section 256B.056, 
        subdivision 5, or MinnesotaCare as defined in paragraph (b), 
        except as provided in paragraph (c);, and: 
           (1) who is receiving assistance under section 256D.05, 
        except for families with children who are eligible under 
        Minnesota family investment program (MFIP), or who is having a 
        payment made on the person's behalf under sections 256I.01 to 
        256I.06, or who resides in group residential housing as defined 
        in chapter 256I and can meet a spenddown using the cost of 
        remedial services received through group residential housing; or 
           (2)(i) who is a resident of Minnesota; and 
           (i) who has gross countable income not in excess of 75 
        percent of the federal poverty guidelines for the family size, 
        using a six-month budget period and whose equity in assets is 
        not in excess of $1,000 per assistance unit.  Exempt assets, the 
        reduction of excess assets, and the waiver of excess assets must 
        conform to the medical assistance program in chapter 
        256B section 256B.056, subdivision 3, with the following 
        exception:  the maximum amount of undistributed funds in a trust 
        that could be distributed to or on behalf of the beneficiary by 
        the trustee, assuming the full exercise of the trustee's 
        discretion under the terms of the trust, must be applied toward 
        the asset maximum; and or 
           (ii) who has gross countable income not in excess above 75 
        percent of the assistance standards established in section 
        256B.056, subdivision 5c, paragraph (b), or whose excess income 
        is spent down to that standard using a six-month budget period.  
        The method for calculating earned income disregards and 
        deductions for a person who resides with a dependent child under 
        age 21 shall follow the AFDC income disregard and deductions in 
        effect under the July 16, 1996, AFDC state plan.  The earned 
        income and work expense deductions for a person who does not 
        reside with a dependent child under age 21 shall be the same as 
        the method used to determine eligibility for a person under 
        section 256D.06, subdivision 1, except the disregard of the 
        first $50 of earned income is not allowed; 
           (3) who would be eligible for medical assistance except 
        that the person resides in a facility that is determined by the 
        commissioner or the federal Centers for Medicare and Medicaid 
        Services to be an institution for mental diseases; or 
           (4) who is ineligible for medical assistance under chapter 
        256B or general assistance medical care under any other 
        provision of this section, and is receiving care and 
        rehabilitation services from a nonprofit center established to 
        serve victims of torture.  These individuals are eligible for 
        general assistance medical care only for the period during which 
        they are receiving services from the center.  During this period 
        of eligibility, individuals eligible under this clause shall not 
        be required to participate in prepaid general assistance medical 
        care the federal poverty guidelines but not in excess of 175 
        percent of the federal poverty guidelines for the family size, 
        using a six-month budget period, whose equity in assets is not 
        in excess of the limits in section 256B.056, subdivision 3c, and 
        who applies during an inpatient hospitalization.  
           (b) Beginning January 1, 2000, General assistance medical 
        care may not be paid for applicants or recipients who meet all 
        eligibility requirements of MinnesotaCare as defined in sections 
        256L.01 to 256L.16, and are:  
           (i) adults with dependent children under 21 whose gross 
        family income is equal to or less than 275 percent of the 
        federal poverty guidelines; or. 
           (ii) adults without children with earned income and whose 
        family gross income is between 75 percent of the federal poverty 
        guidelines and the amount set by section 256L.04, subdivision 7, 
        shall be terminated from general assistance medical care upon 
        enrollment in MinnesotaCare.  Earned income is deemed available 
        to family members as defined in section 256D.02, subdivision 8. 
           (c) For services rendered on or after July 1, 1997, 
        eligibility is limited to one month prior to application if the 
        person is determined eligible in the prior month applications 
        received on or after October 1, 2003, eligibility may begin no 
        earlier than the date of application.  For individuals eligible 
        under paragraph (a), clause (2), item (i), a redetermination of 
        eligibility must occur every 12 months.  Individuals are 
        eligible under paragraph (a), clause (2), item (ii), only during 
        inpatient hospitalization but may reapply if there is a 
        subsequent period of inpatient hospitalization.  Beginning 
        January 1, 2000, Minnesota health care program applications 
        completed by recipients and applicants who are persons described 
        in paragraph (b), may be returned to the county agency to be 
        forwarded to the department of human services or sent directly 
        to the department of human services for enrollment in 
        MinnesotaCare.  If all other eligibility requirements of this 
        subdivision are met, eligibility for general assistance medical 
        care shall be available in any month during which a 
        MinnesotaCare eligibility determination and enrollment are 
        pending.  Upon notification of eligibility for MinnesotaCare, 
        notice of termination for eligibility for general assistance 
        medical care shall be sent to an applicant or recipient.  If all 
        other eligibility requirements of this subdivision are met, 
        eligibility for general assistance medical care shall be 
        available until enrollment in MinnesotaCare subject to the 
        provisions of paragraph (e). 
           (d) The date of an initial Minnesota health care program 
        application necessary to begin a determination of eligibility 
        shall be the date the applicant has provided a name, address, 
        and social security number, signed and dated, to the county 
        agency or the department of human services.  If the applicant is 
        unable to provide an initial application a name, address, social 
        security number, and signature when health care is delivered due 
        to a medical condition or disability, a health care provider may 
        act on the person's an applicant's behalf to complete the 
        establish the date of an initial Minnesota health care program 
        application by providing the county agency or department of 
        human services with provider identification and a temporary 
        unique identifier for the applicant.  The applicant must 
        complete the remainder of the application and provide necessary 
        verification before eligibility can be determined.  The county 
        agency must assist the applicant in obtaining verification if 
        necessary.  On the basis of information provided on the 
        completed application, an applicant who meets the following 
        criteria shall be determined eligible beginning in the month of 
        application: 
           (1) has gross income less than 90 percent of the applicable 
        income standard; 
           (2) has liquid assets that total within $300 of the asset 
        standard; 
           (3) does not reside in a long-term care facility; and 
           (4) meets all other eligibility requirements. 
        The applicant must provide all required verifications within 30 
        days' notice of the eligibility determination or eligibility 
        shall be terminated. 
           (e) County agencies are authorized to use all automated 
        databases containing information regarding recipients' or 
        applicants' income in order to determine eligibility for general 
        assistance medical care or MinnesotaCare.  Such use shall be 
        considered sufficient in order to determine eligibility and 
        premium payments by the county agency. 
           (f) General assistance medical care is not available for a 
        person in a correctional facility unless the person is detained 
        by law for less than one year in a county correctional or 
        detention facility as a person accused or convicted of a crime, 
        or admitted as an inpatient to a hospital on a criminal hold 
        order, and the person is a recipient of general assistance 
        medical care at the time the person is detained by law or 
        admitted on a criminal hold order and as long as the person 
        continues to meet other eligibility requirements of this 
        subdivision.  
           (g) General assistance medical care is not available for 
        applicants or recipients who do not cooperate with the county 
        agency to meet the requirements of medical assistance.  General 
        assistance medical care is limited to payment of emergency 
        services only for applicants or recipients as described in 
        paragraph (b), whose MinnesotaCare coverage is denied or 
        terminated for nonpayment of premiums as required by sections 
        256L.06 and 256L.07.  
           (h) In determining the amount of assets of an 
        individual eligible under paragraph (a), clause (2), item (i), 
        there shall be included any asset or interest in an asset, 
        including an asset excluded under paragraph (a), that was given 
        away, sold, or disposed of for less than fair market value 
        within the 60 months preceding application for general 
        assistance medical care or during the period of eligibility.  
        Any transfer described in this paragraph shall be presumed to 
        have been for the purpose of establishing eligibility for 
        general assistance medical care, unless the individual furnishes 
        convincing evidence to establish that the transaction was 
        exclusively for another purpose.  For purposes of this 
        paragraph, the value of the asset or interest shall be the fair 
        market value at the time it was given away, sold, or disposed 
        of, less the amount of compensation received.  For any 
        uncompensated transfer, the number of months of ineligibility, 
        including partial months, shall be calculated by dividing the 
        uncompensated transfer amount by the average monthly per person 
        payment made by the medical assistance program to skilled 
        nursing facilities for the previous calendar year.  The 
        individual shall remain ineligible until this fixed period has 
        expired.  The period of ineligibility may exceed 30 months, and 
        a reapplication for benefits after 30 months from the date of 
        the transfer shall not result in eligibility unless and until 
        the period of ineligibility has expired.  The period of 
        ineligibility begins in the month the transfer was reported to 
        the county agency, or if the transfer was not reported, the 
        month in which the county agency discovered the transfer, 
        whichever comes first.  For applicants, the period of 
        ineligibility begins on the date of the first approved 
        application. 
           (i) When determining eligibility for any state benefits 
        under this subdivision, the income and resources of all 
        noncitizens shall be deemed to include their sponsor's income 
        and resources as defined in the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, title IV, Public Law 
        Number 104-193, sections 421 and 422, and subsequently set out 
        in federal rules. 
           (j)(1) An Undocumented noncitizen or a nonimmigrant 
        is noncitizens and nonimmigrants are ineligible for general 
        assistance medical care other than emergency services, except an 
        individual eligible under paragraph (a), clause (4), remains 
        eligible through September 30, 2003.  For purposes of this 
        subdivision, a nonimmigrant is an individual in one or more of 
        the classes listed in United States Code, title 8, section 
        1101(a)(15), and an undocumented noncitizen is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           (2) This paragraph does not apply to a child under age 18, 
        to a Cuban or Haitian entrant as defined in Public Law Number 
        96-422, section 501(e)(1) or (2)(a), or to a noncitizen who is 
        aged, blind, or disabled as defined in Code of Federal 
        Regulations, title 42, sections 435.520, 435.530, 435.531, 
        435.540, and 435.541, or effective October 1, 1998, to an 
        individual eligible for general assistance medical care under 
        paragraph (a), clause (4), who cooperates with the Immigration 
        and Naturalization Service to pursue any applicable immigration 
        status, including citizenship, that would qualify the individual 
        for medical assistance with federal financial participation. 
           (k) For purposes of paragraphs (g) and (j), "emergency 
        services" has the meaning given in Code of Federal Regulations, 
        title 42, section 440.255(b)(1), except that it also means 
        services rendered because of suspected or actual pesticide 
        poisoning.  
           (l) Notwithstanding any other provision of law, a 
        noncitizen who is ineligible for medical assistance due to the 
        deeming of a sponsor's income and resources, is ineligible for 
        general assistance medical care. 
           (l) Effective July 1, 2003, general assistance medical care 
        emergency services end.  
           [EFFECTIVE DATE.] (a) The amendments to paragraph (a), 
        clauses (1) to (4), and paragraphs (b), (c), and (h), are 
        effective October 1, 2003.  For applications processed within 
        one calendar month prior to the effective date, eligibility will 
        be determined by applying the income standards and methodologies 
        in effect prior to the effective date for any months in the 
        six-month budget period before that date and the income 
        standards and methodologies in effect on the effective date for 
        any months in the six-month budget period on or after that 
        date.  The income standards for each month will be added 
        together and compared to the applicant's total countable income 
        for the six-month budget period to determine eligibility. 
           (b) The amendments to paragraphs (d), (g), (j), and (k), 
        are effective July 1, 2003.  
           Sec. 69.  Minnesota Statutes 2002, section 256D.03, 
        subdivision 4, is amended to read: 
           Subd. 4.  [GENERAL ASSISTANCE MEDICAL CARE; SERVICES.] 
        (a)(i) For a person who is eligible under subdivision 3, 
        paragraph (a), clause (3) (2), item (i), general assistance 
        medical care covers, except as provided in paragraph (c): 
           (1) inpatient hospital services; 
           (2) outpatient hospital services; 
           (3) services provided by Medicare certified rehabilitation 
        agencies; 
           (4) prescription drugs and other products recommended 
        through the process established in section 256B.0625, 
        subdivision 13; 
           (5) equipment necessary to administer insulin and 
        diagnostic supplies and equipment for diabetics to monitor blood 
        sugar level; 
           (6) eyeglasses and eye examinations provided by a physician 
        or optometrist; 
           (7) hearing aids; 
           (8) prosthetic devices; 
           (9) laboratory and X-ray services; 
           (10) physician's services; 
           (11) medical transportation except special transportation; 
           (12) chiropractic services as covered under the medical 
        assistance program; 
           (13) podiatric services; 
           (14) dental services and dentures, subject to the 
        limitations specified in section 256B.0625, subdivision 9; 
           (15) outpatient services provided by a mental health center 
        or clinic that is under contract with the county board and is 
        established under section 245.62; 
           (16) day treatment services for mental illness provided 
        under contract with the county board; 
           (17) prescribed medications for persons who have been 
        diagnosed as mentally ill as necessary to prevent more 
        restrictive institutionalization; 
           (18) psychological services, medical supplies and 
        equipment, and Medicare premiums, coinsurance and deductible 
        payments; 
           (19) medical equipment not specifically listed in this 
        paragraph when the use of the equipment will prevent the need 
        for costlier services that are reimbursable under this 
        subdivision; 
           (20) services performed by a certified pediatric nurse 
        practitioner, a certified family nurse practitioner, a certified 
        adult nurse practitioner, a certified obstetric/gynecological 
        nurse practitioner, a certified neonatal nurse practitioner, or 
        a certified geriatric nurse practitioner in independent 
        practice, if (1) the service is otherwise covered under this 
        chapter as a physician service, (2) the service provided on an 
        inpatient basis is not included as part of the cost for 
        inpatient services included in the operating payment rate, and 
        (3) the service is within the scope of practice of the nurse 
        practitioner's license as a registered nurse, as defined in 
        section 148.171; 
           (21) services of a certified public health nurse or a 
        registered nurse practicing in a public health nursing clinic 
        that is a department of, or that operates under the direct 
        authority of, a unit of government, if the service is within the 
        scope of practice of the public health nurse's license as a 
        registered nurse, as defined in section 148.171; and 
           (22) telemedicine consultations, to the extent they are 
        covered under section 256B.0625, subdivision 3b.  
           (ii) Effective October 1, 2003, for a person who is 
        eligible under subdivision 3, paragraph (a), clause (2), item 
        (ii), general assistance medical care coverage is limited to 
        inpatient hospital services, including physician services 
        provided during the inpatient hospital stay.  A $1,000 
        deductible is required for each inpatient hospitalization.  
           (b) Except as provided in paragraph (c), for a recipient 
        who is eligible under subdivision 3, paragraph (a), clause (1) 
        or (2), general assistance medical care covers the services 
        listed in paragraph (a) with the exception of special 
        transportation services. 
           (c) Gender reassignment surgery and related services are 
        not covered services under this subdivision unless the 
        individual began receiving gender reassignment services prior to 
        July 1, 1995.  
           (d) (c) In order to contain costs, the commissioner of 
        human services shall select vendors of medical care who can 
        provide the most economical care consistent with high medical 
        standards and shall where possible contract with organizations 
        on a prepaid capitation basis to provide these services.  The 
        commissioner shall consider proposals by counties and vendors 
        for prepaid health plans, competitive bidding programs, block 
        grants, or other vendor payment mechanisms designed to provide 
        services in an economical manner or to control utilization, with 
        safeguards to ensure that necessary services are provided.  
        Before implementing prepaid programs in counties with a county 
        operated or affiliated public teaching hospital or a hospital or 
        clinic operated by the University of Minnesota, the commissioner 
        shall consider the risks the prepaid program creates for the 
        hospital and allow the county or hospital the opportunity to 
        participate in the program in a manner that reflects the risk of 
        adverse selection and the nature of the patients served by the 
        hospital, provided the terms of participation in the program are 
        competitive with the terms of other participants considering the 
        nature of the population served.  Payment for services provided 
        pursuant to this subdivision shall be as provided to medical 
        assistance vendors of these services under sections 256B.02, 
        subdivision 8, and 256B.0625.  For payments made during fiscal 
        year 1990 and later years, the commissioner shall consult with 
        an independent actuary in establishing prepayment rates, but 
        shall retain final control over the rate methodology.  
        Notwithstanding the provisions of subdivision 3, an individual 
        who becomes ineligible for general assistance medical care 
        because of failure to submit income reports or recertification 
        forms in a timely manner, shall remain enrolled in the prepaid 
        health plan and shall remain eligible for general assistance 
        medical care coverage through the last day of the month in which 
        the enrollee became ineligible for general assistance medical 
        care. 
           (e) There shall be no copayment required of any recipient 
        of benefits for any services provided under this subdivision. 
        A hospital receiving a reduced payment as a result of this 
        section may apply the unpaid balance toward satisfaction of the 
        hospital's bad debts. 
           (d) Recipients eligible under subdivision 3, paragraph (a), 
        clause (2), item (i), shall pay the following co-payments for 
        services provided on or after October 1, 2003: 
           (1) $3 per nonpreventive visit.  For purposes of this 
        subdivision, a visit means an episode of service which is 
        required because of a recipient's symptoms, diagnosis, or 
        established illness, and which is delivered in an ambulatory 
        setting by a physician or physician ancillary, chiropractor, 
        podiatrist, nurse midwife, mental health professional, advanced 
        practice nurse, physical therapist, occupational therapist, 
        speech therapist, audiologist, optician, or optometrist; 
           (2) $25 for eyeglasses; 
           (3) $25 for nonemergency visits to a hospital-based 
        emergency room; 
           (4) $3 per brand-name drug prescription and $1 per generic 
        drug prescription, subject to a $20 per month maximum for 
        prescription drug co-payments.  No co-payments shall apply to 
        antipsychotic drugs when used for the treatment of mental 
        illness; and 
           (5) 50 percent coinsurance on basic restorative dental 
        services. 
           (e) Recipients of general assistance medical care are 
        responsible for all co-payments in this subdivision.  The 
        general assistance medical care reimbursement to the provider 
        shall be reduced by the amount of the co-payment, except that 
        reimbursement for prescription drugs shall not be reduced once a 
        recipient has reached the $20 per month maximum for prescription 
        drug co-payments.  The provider collects the co-payment from the 
        recipient.  Providers may not deny services to recipients who 
        are unable to pay the co-payment, except as provided in 
        paragraph (f). 
           (f) If it is the routine business practice of a provider to 
        refuse service to an individual with uncollected debt, the 
        provider may include uncollected co-payments under this 
        section.  A provider must give advance notice to a recipient 
        with uncollected debt before services can be denied. 
           (f) (g) Any county may, from its own resources, provide 
        medical payments for which state payments are not made. 
           (g) (h) Chemical dependency services that are reimbursed 
        under chapter 254B must not be reimbursed under general 
        assistance medical care. 
           (h) (i) The maximum payment for new vendors enrolled in the 
        general assistance medical care program after the base year 
        shall be determined from the average usual and customary charge 
        of the same vendor type enrolled in the base year. 
           (i) (j) The conditions of payment for services under this 
        subdivision are the same as the conditions specified in rules 
        adopted under chapter 256B governing the medical assistance 
        program, unless otherwise provided by statute or rule. 
           (k) Inpatient and outpatient payments shall be reduced by 
        five percent, effective July 1, 2003.  This reduction is in 
        addition to the five percent reduction effective July 1, 2003, 
        and incorporated by reference in paragraph (i).  
           (l) Payments for all other health services except 
        inpatient, outpatient, and pharmacy services shall be reduced by 
        five percent, effective July 1, 2003.  
           (m) Payments to managed care plans shall be reduced by five 
        percent for services provided on or after October 1, 2003. 
           (n) A hospital receiving a reduced payment as a result of 
        this section may apply the unpaid balance toward satisfaction of 
        the hospital's bad debts. 
           [EFFECTIVE DATE.] This section is effective October 1, 
        2003, except that paragraph (c) is effective July 1, 2003. 
           Sec. 70.  Minnesota Statutes 2002, section 256G.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NON-MINNESOTA RESIDENTS.] State residence is not 
        required for receiving emergency assistance in the Minnesota 
        supplemental aid program.  The receipt of emergency assistance 
        must not be used as a factor in determining county or state 
        residence.  Non-Minnesota residents are not eligible for 
        emergency general assistance medical care, except emergency 
        hospital services, and professional services incident to the 
        hospital services, for the treatment of acute trauma resulting 
        from an accident occurring in Minnesota.  To be eligible under 
        this subdivision a non-Minnesota resident must verify that they 
        are not eligible for coverage under any other health care 
        program, including coverage from a program in their state of 
        residence. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 71.  Minnesota Statutes 2002, section 256L.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [COVERED HEALTH SERVICES.] For individuals 
        under section 256L.04, subdivision 7, with income no greater 
        than 75 percent of the federal poverty guidelines or for 
        families with children under section 256L.04, subdivision 1, all 
        subdivisions of this section apply.  "Covered health services" 
        means the health services reimbursed under chapter 256B, with 
        the exception of inpatient hospital services, special education 
        services, private duty nursing services, adult dental care 
        services other than preventive services services covered under 
        section 256B.0625, subdivision 9, paragraph (b), orthodontic 
        services, nonemergency medical transportation services, personal 
        care assistant and case management services, nursing home or 
        intermediate care facilities services, inpatient mental health 
        services, and chemical dependency services.  Effective July 1, 
        1998, adult dental care for nonpreventive services with the 
        exception of orthodontic services is available to persons who 
        qualify under section 256L.04, subdivisions 1 to 7, with family 
        gross income equal to or less than 175 percent of the federal 
        poverty guidelines.  Outpatient mental health services covered 
        under the MinnesotaCare program are limited to diagnostic 
        assessments, psychological testing, explanation of findings, 
        medication management by a physician, day treatment, partial 
        hospitalization, and individual, family, and group psychotherapy.
           No public funds shall be used for coverage of abortion 
        under MinnesotaCare except where the life of the female would be 
        endangered or substantial and irreversible impairment of a major 
        bodily function would result if the fetus were carried to term; 
        or where the pregnancy is the result of rape or incest. 
           Covered health services shall be expanded as provided in 
        this section. 
           [EFFECTIVE DATE.] This section is effective October 1, 2003.
           Sec. 72.  [256L.035] [LIMITED BENEFITS COVERAGE FOR CERTAIN 
        SINGLE ADULTS AND HOUSEHOLDS WITHOUT CHILDREN.] 
           (a) "Covered health services" for individuals under section 
        256L.04, subdivision 7, with income above 75 percent, but not 
        exceeding 175 percent, of the federal poverty guideline means: 
           (1) inpatient hospitalization benefits with a ten percent 
        co-payment up to $1,000 and subject to an annual limitation of 
        $10,000; 
           (2) physician services provided during an inpatient stay; 
        and 
           (3) physician services not provided during an inpatient 
        stay, outpatient hospital services, chiropractic services, lab 
        and diagnostic services, and prescription drugs, subject to an 
        aggregate cap of $2,000 per calendar year and the following 
        co-payments: 
           (i) $50 co-pay per emergency room visit; 
           (ii) $3 co-pay per prescription drug; and 
           (iii) $5 co-pay per nonpreventive physician visit. 
           For purposes of this subdivision, "a visit" means an 
        episode of service which is required because of a recipient's 
        symptoms, diagnosis, or established illness, and which is 
        delivered in an ambulatory setting by a physician or physician 
        ancillary. 
           Enrollees are responsible for all co-payments in this 
        subdivision. 
           (b) The November 2006 MinnesotaCare forecast for the 
        biennium beginning July 1, 2007, shall assume an adjustment in 
        the aggregate cap on the services identified in paragraph (a), 
        clause (3), in $1,000 increments up to a maximum of $10,000, but 
        not less than $2,000, to the extent that the balance in the 
        health care access fund is sufficient in each year of the 
        biennium to pay for this benefit level.  The aggregate cap shall 
        be adjusted according to the forecast. 
           (c) Reimbursement to the providers shall be reduced by the 
        amount of the co-payment, except that reimbursement for 
        prescription drugs shall not be reduced once a recipient has 
        reached the $20 per month maximum for prescription drug 
        co-payments.  The provider collects the co-payment from the 
        recipient.  Providers may not deny services to recipients who 
        are unable to pay the co-payment, except as provided in 
        paragraph (d). 
           (d) If it is the routine business practice of a provider to 
        refuse service to an individual with uncollected debt, the 
        provider may include uncollected co-payments under this 
        section.  A provider must give advance notice to a recipient 
        with uncollected debt before services can be denied. 
           [EFFECTIVE DATE.] This section is effective October 1, 2003.
           Sec. 73.  Minnesota Statutes 2002, section 256L.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FAMILIES WITH CHILDREN.] (a) Families with 
        children with family income equal to or less than 275 percent of 
        the federal poverty guidelines for the applicable family size 
        shall be eligible for MinnesotaCare according to this section.  
        All other provisions of sections 256L.01 to 256L.18, including 
        the insurance-related barriers to enrollment under section 
        256L.07, shall apply unless otherwise specified. 
           (b) Parents who enroll in the MinnesotaCare program must 
        also enroll their children and dependent siblings, if the 
        children and their dependent siblings are eligible.  Children 
        and dependent siblings may be enrolled separately without 
        enrollment by parents.  However, if one parent in the household 
        enrolls, both parents must enroll, unless other insurance is 
        available.  If one child from a family is enrolled, all children 
        must be enrolled, unless other insurance is available.  If one 
        spouse in a household enrolls, the other spouse in the household 
        must also enroll, unless other insurance is available.  Families 
        cannot choose to enroll only certain uninsured members.  
           (c) Beginning October 1, 2003, the dependent sibling 
        definition no longer applies to the MinnesotaCare program.  
        These persons are no longer counted in the parental household 
        and may apply as a separate household. 
           (d) Beginning July 1, 2003, or upon federal approval, 
        whichever is later, parents are not eligible for MinnesotaCare 
        if their gross income exceeds $50,000. 
           [EFFECTIVE DATE.] This section is effective October 1, 
        2003, unless the statutory language specifies a different 
        effective date. 
           Sec. 74.  Minnesota Statutes 2002, section 256L.04, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CITIZENSHIP REQUIREMENTS.] Eligibility for 
        MinnesotaCare is limited to citizens of the United States, 
        qualified noncitizens, and other persons residing lawfully in 
        the United States as described in section 256B.06, subdivision 
        4, paragraphs (a) to (e) and (j).  Undocumented noncitizens and 
        nonimmigrants are ineligible for MinnesotaCare.  For purposes of 
        this subdivision, a nonimmigrant is an individual in one or more 
        of the classes listed in United States Code, title 8, section 
        1101(a)(15), and an undocumented noncitizen is an individual who 
        resides in the United States without the approval or 
        acquiescence of the Immigration and Naturalization Service. 
           Subd. 10a.  [SPONSOR'S INCOME AND RESOURCES DEEMED 
        AVAILABLE; DOCUMENTATION.] When determining eligibility for any 
        federal or state benefits under sections 256L.01 to 256L.18, the 
        income and resources of all noncitizens whose sponsor signed an 
        affidavit of support as defined under United States Code, title 
        8, section 1183a, shall be deemed to include their sponsors' 
        income and resources as defined in the Personal Responsibility 
        and Work Opportunity Reconciliation Act of 1996, title IV, 
        Public Law Number 104-193, sections 421 and 422, and 
        subsequently set out in federal rules.  To be eligible for the 
        program, noncitizens must provide documentation of their 
        immigration status.  
           Sec. 75.  Minnesota Statutes 2002, section 256L.05, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [RENEWAL OF ELIGIBILITY.] (a) Beginning January 
        1, 1999, an enrollee's eligibility must be renewed every 12 
        months.  The 12-month period begins in the month after the month 
        the application is approved.  
           (b) Beginning October 1, 2004, an enrollee's eligibility 
        must be renewed every six months.  The first six-month period of 
        eligibility begins in the month after the month the application 
        is approved.  Each new period of eligibility must take into 
        account any changes in circumstances that impact eligibility and 
        premium amount.  An enrollee must provide all the information 
        needed to redetermine eligibility by the first day of the month 
        that ends the eligibility period.  The premium for the new 
        period of eligibility must be received as provided in section 
        256L.06 in order for eligibility to continue. 
           Sec. 76.  Minnesota Statutes 2002, section 256L.05, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPLICATION PROCESSING.] The commissioner of 
        human services shall determine an applicant's eligibility for 
        MinnesotaCare no more than 30 days from the date that the 
        application is received by the department of human services.  
        Beginning January 1, 2000, this requirement also applies to 
        local county human services agencies that determine eligibility 
        for MinnesotaCare.  Once annually at application or 
        reenrollment, to prevent processing delays, applicants or 
        enrollees who, from the information provided on the application, 
        appear to meet eligibility requirements shall be enrolled upon 
        timely payment of premiums.  The enrollee must provide all 
        required verifications within 30 days of notification of the 
        eligibility determination or coverage from the program shall be 
        terminated.  Enrollees who are determined to be ineligible when 
        verifications are provided shall be disenrolled from the program.
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        or upon federal approval, whichever is later. 
           Sec. 77.  Minnesota Statutes 2002, section 256L.06, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COMMISSIONER'S DUTIES AND PAYMENT.] (a) Premiums 
        are dedicated to the commissioner for MinnesotaCare. 
           (b) The commissioner shall develop and implement procedures 
        to:  (1) require enrollees to report changes in income; (2) 
        adjust sliding scale premium payments, based upon changes in 
        enrollee income; and (3) disenroll enrollees from MinnesotaCare 
        for failure to pay required premiums.  Failure to pay includes 
        payment with a dishonored check, a returned automatic bank 
        withdrawal, or a refused credit card or debit card payment.  The 
        commissioner may demand a guaranteed form of payment, including 
        a cashier's check or a money order, as the only means to replace 
        a dishonored, returned, or refused payment. 
           (c) Premiums are calculated on a calendar month basis and 
        may be paid on a monthly, quarterly, or annual semiannual basis, 
        with the first payment due upon notice from the commissioner of 
        the premium amount required.  The commissioner shall inform 
        applicants and enrollees of these premium payment options. 
        Premium payment is required before enrollment is complete and to 
        maintain eligibility in MinnesotaCare.  Premium payments 
        received before noon are credited the same day.  Premium 
        payments received after noon are credited on the next working 
        day.  
           (d) Nonpayment of the premium will result in disenrollment 
        from the plan effective for the calendar month for which the 
        premium was due.  Persons disenrolled for nonpayment or who 
        voluntarily terminate coverage from the program may not reenroll 
        until four calendar months have elapsed.  Persons disenrolled 
        for nonpayment who pay all past due premiums as well as current 
        premiums due, including premiums due for the period of 
        disenrollment, within 20 days of disenrollment, shall be 
        reenrolled retroactively to the first day of disenrollment.  
        Persons disenrolled for nonpayment or who voluntarily terminate 
        coverage from the program may not reenroll for four calendar 
        months unless the person demonstrates good cause for 
        nonpayment.  Good cause does not exist if a person chooses to 
        pay other family expenses instead of the premium.  The 
        commissioner shall define good cause in rule. 
           [EFFECTIVE DATE.] This section is effective October 1, 2004.
           Sec. 78.  Minnesota Statutes 2002, section 256L.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERAL REQUIREMENTS.] (a) Children 
        enrolled in the original children's health plan as of September 
        30, 1992, children who enrolled in the MinnesotaCare program 
        after September 30, 1992, pursuant to Laws 1992, chapter 549, 
        article 4, section 17, and children who have family gross 
        incomes that are equal to or less than 175 150 percent of the 
        federal poverty guidelines are eligible without meeting the 
        requirements of subdivision 2 and the four-month requirement in 
        subdivision 3, as long as they maintain continuous coverage in 
        the MinnesotaCare program or medical assistance.  Children who 
        apply for MinnesotaCare on or after the implementation date of 
        the employer-subsidized health coverage program as described in 
        Laws 1998, chapter 407, article 5, section 45, who have family 
        gross incomes that are equal to or less than 175 150 percent of 
        the federal poverty guidelines, must meet the requirements of 
        subdivision 2 to be eligible for MinnesotaCare. 
           (b) Families enrolled in MinnesotaCare under section 
        256L.04, subdivision 1, whose income increases above 275 percent 
        of the federal poverty guidelines, are no longer eligible for 
        the program and shall be disenrolled by the commissioner.  
        Individuals enrolled in MinnesotaCare under section 256L.04, 
        subdivision 7, whose income increases above 175 percent of the 
        federal poverty guidelines are no longer eligible for the 
        program and shall be disenrolled by the commissioner.  For 
        persons disenrolled under this subdivision, MinnesotaCare 
        coverage terminates the last day of the calendar month following 
        the month in which the commissioner determines that the income 
        of a family or individual exceeds program income limits.  
           (c)(1) Notwithstanding paragraph (b), individuals and 
        families enrolled in MinnesotaCare under section 256L.04, 
        subdivision 1, may remain enrolled in MinnesotaCare if ten 
        percent of their annual income is less than the annual premium 
        for a policy with a $500 deductible available through the 
        Minnesota comprehensive health association.  Individuals and 
        Families who are no longer eligible for MinnesotaCare under this 
        subdivision shall be given an 18-month notice period from the 
        date that ineligibility is determined before 
        disenrollment.  This clause expires February 1, 2004. 
           (2) Effective February 1, 2004, notwithstanding paragraph 
        (b), children may remain enrolled in MinnesotaCare if ten 
        percent of their annual family income is less than the annual 
        premium for a policy with a $500 deductible available through 
        the Minnesota comprehensive health association.  Children who 
        are no longer eligible for MinnesotaCare under this clause shall 
        be given a 12-month notice period from the date that 
        ineligibility is determined before disenrollment.  The premium 
        for children remaining eligible under this clause shall be the 
        maximum premium determined under section 256L.15, subdivision 2, 
        paragraph (b). 
           (d) Effective July 1, 2003, notwithstanding paragraphs (b) 
        and (c), parents are no longer eligible for MinnesotaCare if 
        gross household income exceeds $50,000. 
           [EFFECTIVE DATE.] The amendments to paragraph (a) are 
        effective July 1, 2003.  The amendments to paragraph (c), clause 
        (1), are effective October 1, 2003. 
           Sec. 79.  Minnesota Statutes 2002, section 256L.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OTHER HEALTH COVERAGE.] (a) Families and 
        individuals enrolled in the MinnesotaCare program must have no 
        health coverage while enrolled or for at least four months prior 
        to application and renewal.  Children enrolled in the original 
        children's health plan and children in families with income 
        equal to or less than 175 150 percent of the federal poverty 
        guidelines, who have other health insurance, are eligible if the 
        coverage: 
           (1) lacks two or more of the following: 
           (i) basic hospital insurance; 
           (ii) medical-surgical insurance; 
           (iii) prescription drug coverage; 
           (iv) dental coverage; or 
           (v) vision coverage; 
           (2) requires a deductible of $100 or more per person per 
        year; or 
           (3) lacks coverage because the child has exceeded the 
        maximum coverage for a particular diagnosis or the policy 
        excludes a particular diagnosis. 
           The commissioner may change this eligibility criterion for 
        sliding scale premiums in order to remain within the limits of 
        available appropriations.  The requirement of no health coverage 
        does not apply to newborns.  
           (b) Medical assistance, general assistance medical care, 
        and the Civilian Health and Medical Program of the Uniformed 
        Service, CHAMPUS, or other coverage provided under United States 
        Code, title 10, subtitle A, part II, chapter 55, are not 
        considered insurance or health coverage for purposes of the 
        four-month requirement described in this subdivision. 
           (c) For purposes of this subdivision, Medicare Part A or B 
        coverage under title XVIII of the Social Security Act, United 
        States Code, title 42, sections 1395c to 1395w-4, is considered 
        health coverage.  An applicant or enrollee may not refuse 
        Medicare coverage to establish eligibility for MinnesotaCare. 
           (d) Applicants who were recipients of medical assistance or 
        general assistance medical care within one month of application 
        must meet the provisions of this subdivision and subdivision 2. 
           (e) Effective October 1, 2003, applicants who were 
        recipients of medical assistance and had cost-effective health 
        insurance which was paid for by medical assistance are exempt 
        from the four-month requirement under this section. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003, 
        except where a different effective date is specified in the text.
           Sec. 80.  Minnesota Statutes 2002, section 256L.12, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COPAYMENTS AND BENEFIT LIMITS.] Enrollees are 
        responsible for all copayments in section sections 256L.03, 
        subdivision 4 5, and 256L.035, and shall pay copayments to the 
        managed care plan or to its participating providers.  The 
        enrollee is also responsible for payment of inpatient hospital 
        charges which exceed the MinnesotaCare benefit limit. 
           Sec. 81.  Minnesota Statutes 2002, section 256L.12, 
        subdivision 9, is amended to read: 
           Subd. 9.  [RATE SETTING; PERFORMANCE WITHHOLDS.] (a) Rates 
        will be prospective, per capita, where possible.  The 
        commissioner may allow health plans to arrange for inpatient 
        hospital services on a risk or nonrisk basis.  The commissioner 
        shall consult with an independent actuary to determine 
        appropriate rates. 
           (b) For services rendered on or after January 1, 2003, to 
        December 31, 2003, the commissioner shall withhold .5 percent of 
        managed care plan payments under this section pending completion 
        of performance targets.  The withheld funds must be returned no 
        sooner than July 1 and no later than July 31 of the following 
        year if performance targets in the contract are achieved.  A 
        managed care plan may include as admitted assets under section 
        62D.044 any amount withheld under this paragraph that is 
        reasonably expected to be returned.  
           (c) For services rendered on or after January 1, 2004, the 
        commissioner shall withhold five percent of managed care plan 
        payments under this section pending completion of performance 
        targets.  Each performance target must be quantifiable, 
        objective, measurable, and reasonably attainable, except in the 
        case of a performance target based on a federal or state law or 
        rule.  Criteria for assessment of each performance target must 
        be outlined in writing prior to the contract effective date.  
        The withheld funds must be returned no sooner than July 1 and no 
        later than July 31 of the following calendar year if performance 
        targets in the contract are achieved.  A managed care plan or a 
        county-based purchasing plan under section 256B.692 may include 
        as admitted assets under section 62D.044 any amount withheld 
        under this paragraph that is reasonably expected to be returned. 
           [EFFECTIVE DATE.] This section is effective for services 
        rendered on or after July 1, 2003, except as otherwise provided 
        in the statutory language. 
           Sec. 82.  Minnesota Statutes 2002, section 256L.12, is 
        amending by adding a subdivision to read: 
           Subd. 9a.  [RATE SETTING; RATABLE REDUCTION.] For services 
        rendered on or after October 1, 2003, the total payment made to 
        managed care plans under the MinnesotaCare program is reduced 
        1.0 percent. 
           Sec. 83.  Minnesota Statutes 2002, section 256L.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREMIUM DETERMINATION.] (a) Families with 
        children and individuals shall pay a premium determined 
        according to a sliding fee based on a percentage of the family's 
        gross family income subdivision 2.  
           (b) Pregnant women and children under age two are exempt 
        from the provisions of section 256L.06, subdivision 3, paragraph 
        (b), clause (3), requiring disenrollment for failure to pay 
        premiums.  For pregnant women, this exemption continues until 
        the first day of the month following the 60th day postpartum.  
        Women who remain enrolled during pregnancy or the postpartum 
        period, despite nonpayment of premiums, shall be disenrolled on 
        the first of the month following the 60th day postpartum for the 
        penalty period that otherwise applies under section 256L.06, 
        unless they begin paying premiums. 
           Sec. 84.  Minnesota Statutes 2002, section 256L.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SLIDING FEE SCALE TO DETERMINE PERCENTAGE OF 
        GROSS INDIVIDUAL OR FAMILY INCOME.] (a) The commissioner shall 
        establish a sliding fee scale to determine the percentage of 
        gross individual or family income that households at different 
        income levels must pay to obtain coverage through the 
        MinnesotaCare program.  The sliding fee scale must be based on 
        the enrollee's gross individual or family income.  The sliding 
        fee scale must contain separate tables based on enrollment of 
        one, two, or three or more persons.  The sliding fee scale 
        begins with a premium of 1.5 percent of gross individual or 
        family income for individuals or families with incomes below the 
        limits for the medical assistance program for families and 
        children in effect on January 1, 1999, and proceeds through the 
        following evenly spaced steps:  1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 
        7.4, and 8.8 percent.  These percentages are matched to evenly 
        spaced income steps ranging from the medical assistance income 
        limit for families and children in effect on January 1, 1999, to 
        275 percent of the federal poverty guidelines for the applicable 
        family size, up to a family size of five.  The sliding fee scale 
        for a family of five must be used for families of more than 
        five.  Effective October 1, 2003, the commissioner shall 
        increase each percentage by 0.5 percentage points for enrollees 
        with income greater than 100 percent but not exceeding 200 
        percent of the federal poverty guidelines and shall increase 
        each percentage by 1.0 percentage points for families and 
        children with incomes greater than 200 percent of the federal 
        poverty guidelines.  The sliding fee scale and percentages are 
        not subject to the provisions of chapter 14.  If a family or 
        individual reports increased income after enrollment, premiums 
        shall not be adjusted until eligibility renewal. 
           (b)(1) Enrolled individuals and families whose gross annual 
        income increases above 275 percent of the federal poverty 
        guideline shall pay the maximum premium.  This clause expires 
        effective February 1, 2004.  
           (2) Effective February 1, 2004, children in families whose 
        gross income is above 275 percent of the federal poverty 
        guidelines shall pay the maximum premium.  
           (3) The maximum premium is defined as a base charge for 
        one, two, or three or more enrollees so that if all 
        MinnesotaCare cases paid the maximum premium, the total revenue 
        would equal the total cost of MinnesotaCare medical coverage and 
        administration.  In this calculation, administrative costs shall 
        be assumed to equal ten percent of the total.  The costs of 
        medical coverage for pregnant women and children under age two 
        and the enrollees in these groups shall be excluded from the 
        total.  The maximum premium for two enrollees shall be twice the 
        maximum premium for one, and the maximum premium for three or 
        more enrollees shall be three times the maximum premium for one. 
           [EFFECTIVE DATE.] The amendments to this section are 
        effective October 1, 2003, unless specified otherwise in the 
        statutory text.  
           Sec. 85.  Minnesota Statutes 2002, section 256L.15, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXCEPTIONS TO SLIDING SCALE.] An annual premium 
        of $48 is required for all children in families with income at 
        or less than 175 150 percent of federal poverty guidelines. 
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 86.  Minnesota Statutes 2002, section 256L.17, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIMIT ON TOTAL ASSETS.] (a) Effective July 1, 
        2002, or upon federal approval, whichever is later, in order to 
        be eligible for the MinnesotaCare program, a household of two or 
        more persons must not own more than $30,000 $20,000 in total net 
        assets, and a household of one person must not own more 
        than $15,000 $10,000 in total net assets. 
           (b) For purposes of this subdivision, assets are determined 
        according to section 256B.056, subdivision 3c.  
           [EFFECTIVE DATE.] This section is effective July 1, 2003. 
           Sec. 87.  Minnesota Statutes 2002, section 295.53, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
        are excluded from the gross revenues subject to the hospital, 
        surgical center, or health care provider taxes under sections 
        295.50 to 295.57: 
           (1) payments received for services provided under the 
        Medicare program, including payments received from the 
        government, and organizations governed by sections 1833 and 1876 
        of title XVIII of the federal Social Security Act, United States 
        Code, title 42, section 1395, and enrollee deductibles, 
        coinsurance, and co-payments, whether paid by the Medicare 
        enrollee or by a Medicare supplemental coverage as defined in 
        section 62A.011, subdivision 3, clause (10).  Payments for 
        services not covered by Medicare are taxable; 
           (2) medical assistance payments including payments received 
        directly from the government or from a prepaid plan; 
           (3) payments received for home health care services; 
           (4) (3) payments received from hospitals or surgical 
        centers for goods and services on which liability for tax is 
        imposed under section 295.52 or the source of funds for the 
        payment is exempt under clause (1), (2), (7), (8), 
        (10) (7), (13) (10), or (20) (17); 
           (5) (4) payments received from health care providers for 
        goods and services on which liability for tax is imposed under 
        this chapter or the source of funds for the payment is exempt 
        under clause (1), (2), (7), (8), (10) (7), (13) (10), 
        or (20) (17); 
           (6) (5) amounts paid for legend drugs, other than 
        nutritional products, to a wholesale drug distributor who is 
        subject to tax under section 295.52, subdivision 3, reduced by 
        reimbursements received for legend drugs otherwise exempt under 
        this chapter; 
           (7) payments received under the general assistance medical 
        care program including payments received directly from the 
        government or from a prepaid plan; 
           (8) payments received for providing services under the 
        MinnesotaCare program including payments received directly from 
        the government or from a prepaid plan and enrollee deductibles, 
        coinsurance, and copayments.  For purposes of this clause, 
        coinsurance means the portion of payment that the enrollee is 
        required to pay for the covered service; 
           (9) (6) payments received by a health care provider or the 
        wholly owned subsidiary of a health care provider for care 
        provided outside Minnesota; 
           (10) (7) payments received from the chemical dependency 
        fund under chapter 254B; 
           (11) (8) payments received in the nature of charitable 
        donations that are not designated for providing patient services 
        to a specific individual or group; 
           (12) (9) payments received for providing patient services 
        incurred through a formal program of health care research 
        conducted in conformity with federal regulations governing 
        research on human subjects.  Payments received from patients or 
        from other persons paying on behalf of the patients are subject 
        to tax; 
           (13) (10) payments received from any governmental agency 
        for services benefiting the public, not including payments made 
        by the government in its capacity as an employer or insurer or 
        payments made by the government for services provided under 
        medical assistance, general assistance medical care, or the 
        MinnesotaCare program; 
           (14) (11) payments received for services provided by 
        community residential mental health facilities licensed under 
        Minnesota Rules, parts 9520.0500 to 9520.0690, community support 
        programs and family community support programs approved under 
        Minnesota Rules, parts 9535.1700 to 9535.1760, and community 
        mental health centers as defined in section 245.62, subdivision 
        2; 
           (15) (12) government payments received by a regional 
        treatment center; 
           (16) (13) payments received for hospice care services; 
           (17) (14) payments received by a health care provider for 
        hearing aids and related equipment or prescription eyewear 
        delivered outside of Minnesota; 
           (18) (15) payments received by an educational institution 
        from student tuition, student activity fees, health care service 
        fees, government appropriations, donations, or grants.  Fee for 
        service payments and payments for extended coverage are taxable; 
           (19) (16) payments received for services provided by:  
        assisted living programs and congregate housing programs; and 
           (20) (17) payments received under the federal Employees 
        Health Benefits Act, United States Code, title 5, section 
        8909(f), as amended by the Omnibus Reconciliation Act of 1990. 
           (b) Payments received by wholesale drug distributors for 
        legend drugs sold directly to veterinarians or veterinary bulk 
        purchasing organizations are excluded from the gross revenues 
        subject to the wholesale drug distributor tax under sections 
        295.50 to 295.59. 
           [EFFECTIVE DATE.] This section is effective for services 
        rendered on or after January 1, 2004. 
           Sec. 88.  Minnesota Statutes 2002, section 297I.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GOVERNMENT PAYMENTS.] Premiums under 
        medical assistance, general assistance medical care, the 
        MinnesotaCare program, and the Minnesota comprehensive health 
        insurance plan and all payments, revenues, and reimbursements 
        received from the federal government for Medicare-related 
        coverage as defined in section 62A.31, subdivision 3, are not 
        subject to tax under this chapter. 
           [EFFECTIVE DATE.] This section is effective for premiums 
        paid to health carriers on or after January 1, 2004. 
           Sec. 89.  Minnesota Statutes 2002, section 297I.15, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PREMIUMS PAID TO HEALTH CARRIERS BY STATE.] A 
        health carrier as defined in section 62A.011 is exempt from the 
        taxes imposed under this chapter on premiums paid to it by the 
        state.  Premiums paid by the state under medical assistance, 
        general assistance medical care, and the MinnesotaCare program 
        are not exempt under this subdivision. 
           [EFFECTIVE DATE.] This section is effective for premiums 
        paid to health carriers on or after January 1, 2004. 
           Sec. 90.  Minnesota Statutes 2002, section 514.981, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TIME LIMITS; CLAIM LIMITS; LIENS ON LIFE ESTATES 
        AND JOINT TENANCIES.] (a) A medical assistance lien is a lien on 
        the real property it describes for a period of ten years from 
        the date it attaches according to section 514.981, subdivision 
        2, paragraph (a), except as otherwise provided for in sections 
        514.980 to 514.985.  The agency may renew a medical assistance 
        lien for an additional ten years from the date it would 
        otherwise expire by recording or filing a certificate of renewal 
        before the lien expires.  The certificate shall be recorded or 
        filed in the office of the county recorder or registrar of 
        titles for the county in which the lien is recorded or filed.  
        The certificate must refer to the recording or filing data for 
        the medical assistance lien it renews.  The certificate need not 
        be attested, certified, or acknowledged as a condition for 
        recording or filing.  The registrar of titles or the recorder 
        shall file, record, index, and return the certificate of renewal 
        in the same manner as provided for medical assistance liens in 
        section 514.982, subdivision 2. 
           (b) A medical assistance lien is not enforceable against 
        the real property of an estate to the extent there is a 
        determination by a court of competent jurisdiction, or by an 
        officer of the court designated for that purpose, that there are 
        insufficient assets in the estate to satisfy the agency's 
        medical assistance lien in whole or in part because of the 
        homestead exemption under section 256B.15, subdivision 4, the 
        rights of the surviving spouse or minor children under section 
        524.2-403, paragraphs (a) and (b), or claims with a priority 
        under section 524.3-805, paragraph (a), clauses (1) to (4).  For 
        purposes of this section, the rights of the decedent's adult 
        children to exempt property under section 524.2-403, paragraph 
        (b), shall not be considered costs of administration under 
        section 524.3-805, paragraph (a), clause (1). 
           (c) Notwithstanding any law or rule to the contrary, the 
        provisions in clauses (1) to (7) apply if a life estate subject 
        to a medical assistance lien ends according to its terms, or if 
        a medical assistance recipient who owns a life estate or any 
        interest in real property as a joint tenant that is subject to a 
        medical assistance lien dies. 
           (1) The medical assistance recipient's life estate or joint 
        tenancy interest in the real property shall not end upon the 
        recipient's death but shall merge into the remainder interest or 
        other interest in real property the medical assistance recipient 
        owned in joint tenancy with others.  The medical assistance lien 
        shall attach to and run with the remainder or other interest in 
        the real property to the extent of the medical assistance 
        recipient's interest in the property at the time of the 
        recipient's death as determined under this section. 
           (2) If the medical assistance recipient's interest was a 
        life estate in real property, the lien shall be a lien against 
        the portion of the remainder equal to the percentage factor for 
        the life estate of a person the medical assistance recipient's 
        age on the date the life estate ended according to its terms or 
        the date of the medical assistance recipient's death as listed 
        in the Life Estate Mortality Table in the health care program's 
        manual. 
           (3) If the medical assistance recipient owned the interest 
        in real property in joint tenancy with others, the lien shall be 
        a lien against the portion of that interest equal to the 
        fractional interest the medical assistance recipient would have 
        owned in the jointly owned interest had the medical assistance 
        recipient and the other owners held title to that interest as 
        tenants in common on the date the medical assistance recipient 
        died. 
           (4) The medical assistance lien shall remain a lien against 
        the remainder or other jointly owned interest for the length of 
        time and be renewable as provided in paragraph (a). 
           (5) Subdivision 5, paragraphs (a), clause (4), (b), clauses 
        (1) and (2); and subdivision 6, paragraph (b), do not apply to 
        medical assistance liens which attach to interests in real 
        property as provided under this subdivision. 
           (6) The continuation of a medical assistance recipient's 
        life estate or joint tenancy interest in real property after the 
        medical assistance recipient's death for the purpose of 
        recovering medical assistance provided for in sections 514.980 
        to 514.985 modifies common law principles holding that these 
        interests terminate on the death of the holder. 
           (7) Notwithstanding any law or rule to the contrary, no 
        release, satisfaction, discharge, or affidavit under section 
        256B.15 shall extinguish or terminate the life estate or joint 
        tenancy interest of a medical assistance recipient subject to a 
        lien under sections 514.980 to 514.985 on the date the recipient 
        dies. 
           (8) The provisions of clauses (1) to (7) do not apply to a 
        homestead owned of record, on the date the recipient dies, by 
        the recipient and the recipient's spouse as joint tenants with a 
        right of survivorship.  Homestead means the real property 
        occupied by the surviving joint tenant spouse as their sole 
        residence on the date the recipient dies and classified and 
        taxed to the recipient and surviving joint tenant spouse as 
        homestead property for property tax purposes in the calendar 
        year in which the recipient dies.  For purposes of this 
        exemption, real property the recipient and their surviving joint 
        tenant spouse purchase solely with the proceeds from the sale of 
        their prior homestead, own of record as joint tenants, and 
        qualify as homestead property under section 273.124 in the 
        calendar year in which the recipient dies and prior to the 
        recipient's death shall be deemed to be real property classified 
        and taxed to the recipient and their surviving joint tenant 
        spouse as homestead property in the calendar year in which the 
        recipient dies.  The surviving spouse, or any person with 
        personal knowledge of the facts, may provide an affidavit 
        describing the homestead property affected by this clause and 
        stating facts showing compliance with this clause.  The 
        affidavit shall be prima facie evidence of the facts it states. 
           [EFFECTIVE DATE.] This section is effective August 1, 2003, 
        and applies to all medical assistance liens recorded or filed on 
        or after that date. 
           Sec. 91.  Minnesota Statutes 2002, section 641.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MEDICAL AID.] Except as provided in section 
        466.101, the county board shall pay the costs of medical 
        services provided to prisoners.  The amount paid by the Anoka 
        county board for a medical service shall not exceed the maximum 
        allowed medical assistance payment rate for the service, as 
        determined by the commissioner of human services.  The county is 
        entitled to reimbursement from the prisoner for payment of 
        medical bills to the extent that the prisoner to whom the 
        medical aid was provided has the ability to pay the bills.  The 
        prisoner shall, at a minimum, incur copayment obligations for 
        health care services provided by a county correctional 
        facility.  The county board shall determine the copayment 
        amount.  Notwithstanding any law to the contrary, the copayment 
        shall be deducted from any of the prisoner's funds held by the 
        county, to the extent possible.  If there is a disagreement 
        between the county and a prisoner concerning the prisoner's 
        ability to pay, the court with jurisdiction over the defendant 
        shall determine the extent, if any, of the prisoner's ability to 
        pay for the medical services.  If a prisoner is covered by 
        health or medical insurance or other health plan when medical 
        services are provided, the county providing the medical services 
        has a right of subrogation to be reimbursed by the insurance 
        carrier for all sums spent by it for medical services to the 
        prisoner that are covered by the policy of insurance or health 
        plan, in accordance with the benefits, limitations, exclusions, 
        provider restrictions, and other provisions of the policy or 
        health plan.  The county may maintain an action to enforce this 
        subrogation right.  The county does not have a right of 
        subrogation against the medical assistance program or the 
        general assistance medical care program. 
           Sec. 92.  [PHARMACY PLUS WAIVER.] 
           (a) The commissioner of human services shall seek a 
        pharmacy plus federal waiver for the prescription drug program 
        in Minnesota Statutes, section 256.955, that uses the 
        accumulated savings from all pharmacy and asset transfer 
        provisions in this act and previously adopted pharmacy savings 
        strategies as the factor to prove fiscal neutrality.  If the 
        waiver is approved and federal funds are received for the 
        prescription drug program, the commissioner shall expand 
        eligibility for the program in the following order:  
           (1) increase income eligibility up to 135 percent of the 
        federal poverty guidelines for individuals eligible under 
        Minnesota Statutes, section 256.955, subdivision 2a; and 
           (2) increase income eligibility up to 135 percent of the 
        federal poverty guidelines for individuals eligible under 
        Minnesota Statutes, section 256.955, subdivision 2b. 
           (b) If eligibility is increased, the commissioner shall 
        publish the new income eligibility levels for the program in the 
        State Register and shall inform the agencies and organizations 
        serving senior citizens and persons with disabilities.  
           Sec. 93.  [REVIEW OF SPECIAL TRANSPORTATION ELIGIBILITY 
        CRITERIA AND POTENTIAL COST SAVINGS.] 
           The commissioner of human services, in consultation with 
        the commissioner of transportation and special transportation 
        service providers, shall review eligibility criteria for medical 
        assistance special transportation services and shall evaluate 
        whether the level of special transportation services provided 
        should be based on the degree of impairment of the client, as 
        well as the medical diagnosis.  The commissioner shall also 
        evaluate methods for reducing the cost of special transportation 
        services, including, but not limited to: 
           (1) requiring providers to maintain a daily log book 
        confirming delivery of clients to medical facilities; 
           (2) requiring providers to implement commercially available 
        computer mapping programs to calculate mileage for purposes of 
        reimbursement; 
           (3) restricting special transportation service from being 
        provided solely for trips to pharmacies; 
           (4)modifying eligibility for special transportation; 
           (5) expanding alternatives to the use of special 
        transportation services; 
           (6) improving the process of certifying persons as eligible 
        for special transportation services; and 
           (7) examining the feasibility and benefits of licensing 
        special transportation providers. 
           The commissioner shall present recommendations for changes 
        in the eligibility criteria and potential cost-savings for 
        special transportation services to the chairs and ranking 
        minority members of the house and senate committees having 
        jurisdiction over health and human services spending by January 
        15, 2004.  The commissioner is prohibited from using a broker or 
        coordinator to manage special transportation services until July 
        1, 2005, except for the purposes of checking for recipient 
        eligibility, authorizing recipients for appropriate level of 
        transportation, and monitoring provider compliance with 
        Minnesota Statutes, section 256B.0625, subdivision 17.  This 
        prohibition does not apply to the purchase or management of 
        common carrier transportation. 
           Sec. 94.  [FEDERAL APPROVAL.] 
           If the amendments to Minnesota Statutes, sections 256.046, 
        subdivision 1, and 256.98, subdivision 8, are not effective 
        because of prohibitions in federal law, the commissioner of 
        human services shall seek the federal waivers and authority 
        necessary to implement the provisions. 
           Sec. 95.  [WITHHOLD EXEMPTION.] 
           The commissioner of human services may exempt from the five 
        percent withhold in Minnesota Statutes, section 256B.69, 
        subdivision 5a, paragraph (c), and the five percent withhold in 
        Minnesota Statutes, section 256L.12, subdivision 9, paragraph 
        (b), a managed care plan that has entered into a managed care 
        contract with the commissioner in accordance with Minnesota 
        Statutes, section 256B.69 or 256L.12, if the contract was the 
        initial contract between the managed care plan and the 
        commissioner, and it was entered into after January 1, 2000.  
           If an exemption is given, the exemption shall only apply 
        for the first five years of operation of the managed care plan. 
           Sec. 96.  [DRUG PURCHASING PROGRAM.] 
           The commissioner of human services, in consultation with 
        other state agencies, shall evaluate whether participation in a 
        multistate or multiagency drug purchasing program can reduce 
        costs or improve the operations of the drug benefit programs 
        administered by the commissioner and other state agencies.  The 
        commissioner shall also evaluate the possibility of contracting 
        with a vendor or other states for purposes of participating in a 
        multistate or multiagency drug purchasing program.  The 
        commissioner shall submit the recommendations to the legislature 
        by January 15, 2004. 
           Sec. 97.  [MAIL ORDER DISPENSING OF PRESCRIPTION DRUGS.] 
           The commissioner of human services shall assess the cost 
        savings that could be generated by the mail order dispensing of 
        prescription drugs to recipients of medical assistance, general 
        assistance medical care, and the prescription drug program.  The 
        report shall include the viability of contracting with mail 
        order pharmacy vendors to provide mail order dispensing for 
        state public programs.  The commissioner shall report to the 
        chairs and ranking minority members of the health and human 
        services finance committees by January 7, 2004. 
           Sec. 98.  [NONPROFIT FOUNDATION GRANTS.] 
           (a) The commissioner of human services may accept grants or 
        donations from a nonprofit charitable foundation for the purpose 
        of increasing dental access in the medical assistance program.  
           (b) The commissioner may increase the critical access 
        dental payments under Minnesota Statutes, section 256B.76, 
        paragraph (c), and use any money received under paragraph (a) 
        for the nonfederal state share of the medical assistance cost. 
           Sec. 99.  [PHARMACEUTICAL CARE DEMONSTRATION PROJECT.] 
           (a) The commissioner shall seek federal approval for a 
        demonstration project to provide culturally specific 
        pharmaceutical care to American Indian medical assistance 
        recipients who are age 55 and older.  In developing the 
        demonstration project, the commissioner shall consult with 
        organizations and health care providers experienced in 
        developing and implementing culturally competent intervention 
        strategies to manage the use of prescription drugs, 
        over-the-counter drugs, other drug products, and native 
        therapies by American Indian elders.  
           (b) For purposes of this section, "pharmaceutical care" 
        means the provision of drug therapy and native therapy for the 
        purpose of improving a patient's quality of life by:  (1) curing 
        a disease; (2) eliminating or reducing a patient's symptoms; (3) 
        arresting or slowing a disease process; or (4) preventing a 
        disease or a symptom.  Pharmaceutical care involves the 
        documented process through which a pharmacist cooperates with a 
        patient and other professionals in designing, implementing, and 
        monitoring a therapeutic plan that is expected to produce 
        specific therapeutic outcomes, through the identification, 
        resolution, and prevention of drug-related problems.  Nothing in 
        this project shall be construed to expand or modify the scope of 
        practice of the pharmacist as defined in Minnesota Statutes, 
        section 151.01, subdivision 27. 
           (c) Upon receipt of federal approval, the commissioner 
        shall report to the legislature for legislative approval for 
        implementation of the demonstration project. 
           Sec. 100.  [HEALTH CARE PROGRAM REDUCTIONS.] 
           The commissioner of human services may implement changes to 
        the medical assistance, general assistance medical care, and 
        MinnesotaCare programs, which will result in a reduction in 
        state expenditures during the period of July 1, 2004, through 
        June 30, 2005.  The commissioner may use the following options 
        to achieve this savings:  
           (1) require providers to use generally accepted clinical 
        practice guidelines for specific services; 
           (2) implement clinical care coordination programs, 
        including chronic and acute care disease management programs; 
        and 
           (3) volume purchase health services as established in 
        Minnesota Statutes, section 256B.04, subdivision 14, except that 
        special transportation services shall be subject to the 
        timelines established in Minnesota Statutes, section 256B.0625, 
        subdivision 17.  
           The commissioner shall notify the chairs of the house and 
        senate health and human services policy and finance committees 
        of any changes implemented as a result of this section. 
           Sec. 101.  [REPEALER.] 
           (a) Minnesota Statutes 2002, sections 256.955, subdivision 
        8; and 256B.057, subdivision 1b, are repealed July 1, 2003.  
           (b) Minnesota Statutes 2002, section 256B.055, subdivision 
        10a, is repealed July 1, 2003, or upon federal approval, 
        whichever is later. 

                                  ARTICLE 13A
                 HEALTH AND HUMAN SERVICES FORECAST ADJUSTMENTS 
        Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
           The dollar amounts shown in the columns marked 
        "APPROPRIATIONS" are added to or, if shown in parentheses, are 
        subtracted from the appropriations in Laws 2001, First Special 
        Session chapter 9, as amended by Laws 2002, chapter 220, and 
        Laws 2002, chapter 374, and are appropriated from the general 
        fund, or any other fund named, to the agencies and for the 
        purposes specified in this article, to be available for the 
        fiscal year indicated for each purpose.  The figure "2003" used 
        in this article means that the appropriation or appropriations 
        listed under it are available for the fiscal year ending June 
        30, 2003. 
                                SUMMARY BY FUND
                                                               2003 
        General                                            $103,756,000
        Health Care Access                                   (1,492,000) 
        Federal TANF                                         20,419,000 
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                Ending June 30, 2003
        Sec. 2.  COMMISSIONER OF 
        HUMAN SERVICES
        Subdivision 1.  Total 
        Appropriation                                      $128,203,000 
                      Summary by Fund
        General                           109,276,000
        Health Care Access                 (1,492,000)
        Federal TANF                       20,419,000
        Subd. 2.  Administrative 
        Reimbursement/Pass-through                             1,180,000
        Subd. 3.  Basic Health Care 
        Grants 
        General                                              59,364,000
        Health Care Access                                   (1,492,000)
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) MinnesotaCare Grants 
        Health Care Access                                   (1,492,000) 
        (b) MA Basic Health Care Grants - 
        Families and Children 
        General                                              14,708,000 
        (c) MA Basic Health Care Grants - 
        Elderly and Disabled 
        General                                              15,137,000 
        (d) General Assistance Medical Care 
        Grants 
        General                                              29,519,000 
        Subd. 4.  Continuing Care Grants 
        General                                              56,615,000 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Medical Assistance Long-Term Care 
        Waivers and Home Care Grants 
        General                                              57,388,000 
        (b) Medical Assistance Long-Term Care 
        Facilities Grants 
        General                                                 678,000 
        (c) Group Residential Housing Grants 
        General                                              (1,451,000) 
        Subd. 5.  Economic Support Grants 
        General                                              (6,703,000)
        Federal TANF                                         19,239,000 
        The amounts that may be spent from the 
        appropriation for each purpose are as 
        follows: 
        (a) Assistance to Families Grants 
        General                                              (9,306,000) 
        Federal TANF                                         19,239,000 
        (b) General Assistance Grants 
        General                                               3,491,000 
        (c) Minnesota Supplemental Aid Grants 
        General                                                (888,000) 
        Sec. 3.  COMMISSIONER OF HEALTH
        Subdivision 1.  Total Appropriation                  (5,520,000)
                      Summary by Fund
        General                                              (5,520,000) 
        Subd. 2.  Access and Quality Improvement             (5,520,000)
           Sec. 4.  [EFFECTIVE DATE.] 
           Sections 1 to 3 are effective the day following final 
        enactment. 

                                  ARTICLE 13B 
                 DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING
                              FORECAST ADJUSTMENT 
        Section 1.  [ADJUSTMENT.] 
           The dollar amounts shown are added to or, if shown in 
        parentheses, are subtracted from the appropriations in Laws 
        2001, First Special Session chapter 6, as amended by Laws 2002, 
        chapter 220, and Laws 2002, chapter 374, or other law, and are 
        appropriated from the general fund to the department of 
        children, families, and learning for the purposes specified in 
        this article, to be available for the fiscal year indicated for 
        each purpose.  The figure "2003" used in this article means that 
        the appropriation or appropriations listed are available for the 
        fiscal year ending June 30, 2003. 
                                                               2003 
                                                   APPROPRIATION CHANGE
        Sec. 2.  APPROPRIATIONS; EARLY CHILDHOOD
        AND FAMILY EDUCATION 
        MFIP Child Care                                       6,817,000 

                                  ARTICLE 13C 
                                 APPROPRIATIONS 
        Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
           The sums shown in the columns marked "APPROPRIATIONS" are 
        appropriated from the general fund, or any other fund named, to 
        the agencies and for the purposes specified in the sections of 
        this article, to be available for the fiscal years indicated for 
        each purpose.  The figures "2004" and "2005" where used in this 
        article, mean that the appropriation or appropriations listed 
        under them are available for the fiscal year ending June 30, 
        2004, or June 30, 2005, respectively.  Where a dollar amount 
        appears in parentheses, it means a reduction of an appropriation.
                                SUMMARY BY FUND
                                                             BIENNIAL
                                   2004          2005           TOTAL
        General            $3,765,212,000 $3,727,319,000 $7,492,531,000
        State Government
        Special Revenue        45,337,000     45,104,000     90,441,000
        Health Care 
        Access                294,090,000    308,525,000    602,615,000
        Federal TANF          261,552,000    270,364,000    531,916,000
        Lottery Prize 
        Fund                    1,556,000      1,556,000      3,112,000
        Special Revenue         3,340,000      3,340,000      6,680,000
        TOTAL              $4,371,087,000 $4,356,208,000 $8,727,295,000
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                   Ending June 30 
                                                  2004         2005 
        Sec. 2.  COMMISSIONER OF
        HUMAN SERVICES
        Subdivision 1.  Total
        Appropriation                     $4,111,558,000 $4,110,496,000
                      Summary by Fund
        General           3,566,163,000 3,541,854,000
        State Government 
        Special Revenue         534,000       534,000
        Health Care
        Access              287,753,000   302,188,000
        Federal TANF        255,552,000   264,364,000
        Lottery Cash
        Flow                  1,556,000     1,556,000
        [FEDERAL CONTINGENCY APPROPRIATION.] 
        (a) Any additional federal Medicaid 
        funds made available under title IV of 
        the federal Jobs and Growth Tax Relief 
        Reconciliation Act of 2003 are 
        appropriated to the commissioner of 
        human services for use in the state's 
        medical assistance and MinnesotaCare 
        programs.  The commissioners of human 
        services and finance shall report to 
        the legislative advisory committee on 
        the additional federal Medicaid 
        matching funds that will be available 
        to the state. 
        (b) Contingent upon the availability of 
        these funds, the following policies 
        shall become effective and necessary 
        funds are appropriated for those 
        purposes: 
        (1) medical assistance and 
        MinnesotaCare eligibility and local 
        financial participation changes 
        provided for in this act may be 
        implemented prior to September 2, 2003, 
        or may be delayed as necessary to 
        maximize the use of federal funds 
        received under title IV of the Jobs and 
        Growth Tax Relief Reconciliation Act of 
        2003; 
        (2) the aggregate cap on the services 
        identified in Minnesota Statutes, 
        section 256L.035, paragraph (a), clause 
        (3), shall be increased from $2,000 to 
        $5,000.  This increase shall expire at 
        the end of fiscal year 2007.  Funds may 
        be transferred from the general fund to 
        the health care access fund as 
        necessary to implement this provision; 
        and 
        (3) the following payment shifts shall 
        not be implemented: 
        (i) MFIP payment shift found in 
        subdivision 11; 
        (ii) the county payment shift found in 
        subdivision 1; and 
        (iii) the delay in medical assistance 
        and general assistance medical care 
        fee-for-service payments found in 
        subdivision 6. 
        (c) Notwithstanding section 14, 
        paragraphs (a) and (b) shall expire 
        June 30, 2007. 
        [RECEIPTS FOR SYSTEMS PROJECTS.] 
        Appropriations and federal receipts for 
        information system projects for MAXIS, 
        PRISM, MMIS, and SSIS must be deposited 
        in the state system account authorized 
        in Minnesota Statutes, section 
        256.014.  Money appropriated for 
        computer projects approved by the 
        Minnesota office of technology, funded 
        by the legislature, and approved by the 
        commissioner of finance may be 
        transferred from one project to another 
        and from development to operations as 
        the commissioner of human services 
        considers necessary.  Any unexpended 
        balance in the appropriation for these 
        projects does not cancel but is 
        available for ongoing development and 
        operations. 
        [GIFTS.] Notwithstanding Minnesota 
        Statutes, chapter 7, the commissioner 
        may accept on behalf of the state 
        additional funding from sources other 
        than state funds for the purpose of 
        financing the cost of assistance 
        program grants or nongrant 
        administration.  All additional funding 
        is appropriated to the commissioner for 
        use as designated by the grantor of 
        funding. 
        [SYSTEMS CONTINUITY.] In the event of 
        disruption of technical systems or 
        computer operations, the commissioner 
        may use available grant appropriations 
        to ensure continuity of payments for 
        maintaining the health, safety, and 
        well-being of clients served by 
        programs administered by the department 
        of human services.  Grant funds must be 
        used in a manner consistent with the 
        original intent of the appropriation. 
        [NONFEDERAL SHARE TRANSFERS.] The 
        nonfederal share of activities for 
        which federal administrative 
        reimbursement is appropriated to the 
        commissioner may be transferred to the 
        special revenue fund. 
        [TANF FUNDS APPROPRIATED TO OTHER 
        ENTITIES.] Any expenditures from the 
        TANF block grant shall be expended in 
        accordance with the requirements and 
        limitations of part A of title IV of 
        the Social Security Act, as amended, 
        and any other applicable federal 
        requirement or limitation.  Prior to 
        any expenditure of these funds, the 
        commissioner shall assure that funds 
        are expended in compliance with the 
        requirements and limitations of federal 
        law and that any reporting requirements 
        of federal law are met.  It shall be 
        the responsibility of any entity to 
        which these funds are appropriated to 
        implement a memorandum of understanding 
        with the commissioner that provides the 
        necessary assurance of compliance prior 
        to any expenditure of funds.  The 
        commissioner shall receipt TANF funds 
        appropriated to other state agencies 
        and coordinate all related interagency 
        accounting transactions necessary to 
        implement these appropriations.  
        Unexpended TANF funds appropriated to 
        any state, local, or nonprofit entity 
        cancel at the end of the state fiscal 
        year unless appropriating language 
        permits otherwise. 
        [TANF FUNDS TRANSFERRED TO OTHER 
        FEDERAL GRANTS.] The commissioner must 
        authorize transfers from TANF to other 
        federal block grants so that funds are 
        available to meet the annual 
        expenditure needs as appropriated.  
        Transfers may be authorized prior to 
        the expenditure year with the agreement 
        of the receiving entity.  Transferred 
        funds must be expended in the year for 
        which the funds were appropriated 
        unless appropriation language permits 
        otherwise.  In accelerating transfer 
        authorizations, the commissioner must 
        aim to preserve the future potential 
        transfer capacity from TANF to other 
        block grants. 
        [TANF MAINTENANCE OF EFFORT.] (a) In 
        order to meet the basic maintenance of 
        effort (MOE) requirements of the TANF 
        block grant specified under Code of 
        Federal Regulations, title 45, section 
        263.1, the commissioner may only report 
        nonfederal money expended for allowable 
        activities listed in the following 
        clauses as TANF/MOE expenditures: 
        (1) MFIP cash, diversionary work 
        program, and food assistance benefits 
        under Minnesota Statutes, chapter 256J; 
        (2) the child care assistance programs 
        under Minnesota Statutes, sections 
        119B.03 and 119B.05, and county child 
        care administrative costs under 
        Minnesota Statutes, section 119B.15; 
        (3) state and county MFIP 
        administrative costs under Minnesota 
        Statutes, chapters 256J and 256K; 
        (4) state, county, and tribal MFIP 
        employment services under Minnesota 
        Statutes, chapters 256J and 256K; 
        (5) expenditures made on behalf of 
        noncitizen MFIP recipients who qualify 
        for the medical assistance without 
        federal financial participation program 
        under Minnesota Statutes, section 
        256B.06, subdivision 4, paragraphs (d), 
        (e), and (j); and 
        (6) qualifying working family credit 
        expenditures under Minnesota Statutes, 
        section 290.0671. 
        (b) The commissioner shall ensure that 
        sufficient qualified nonfederal 
        expenditures are made each year to meet 
        the state's TANF/MOE requirements.  For 
        the activities listed in paragraph (a), 
        clauses (2) to (6), the commissioner 
        may only report expenditures that are 
        excluded from the definition of 
        assistance under Code of Federal 
        Regulations, title 45, section 260.31. 
        (c) By August 31 of each year, the 
        commissioner shall make a preliminary 
        calculation to determine the likelihood 
        that the state will meet its annual 
        federal work participation requirement 
        under Code of Federal Regulations, 
        title 45, sections 261.21 and 261.23, 
        after adjustment for any caseload 
        reduction credit under Code of Federal 
        Regulations, title 45, section 261.41.  
        If the commissioner determines that the 
        state will meet its federal work 
        participation rate for the federal 
        fiscal year ending that September, the 
        commissioner may reduce the expenditure 
        under paragraph (a), clause (1), to the 
        extent allowed under Code of Federal 
        Regulations, title 45, section 
        263.1(a)(2). 
        (d) For fiscal years beginning with 
        state fiscal year 2003, the 
        commissioner shall assure that the 
        maintenance of effort used by the 
        commissioner of finance for the 
        February and November forecasts 
        required under Minnesota Statutes, 
        section 16A.103, contains expenditures 
        under paragraph (a), clause (1), equal 
        to at least 25 percent of the total 
        required under Code of Federal 
        Regulations, title 45, section 263.1. 
        (e) If nonfederal expenditures for the 
        programs and purposes listed in 
        paragraph (a) are insufficient to meet 
        the state's TANF/MOE requirements, the 
        commissioner shall recommend additional 
        allowable sources of nonfederal 
        expenditures to the legislature, if the 
        legislature is or will be in session to 
        take action to specify additional 
        sources of nonfederal expenditures for 
        TANF/MOE before a federal penalty is 
        imposed.  The commissioner shall 
        otherwise provide notice to the 
        legislative commission on planning and 
        fiscal policy under paragraph (g). 
        (f) If the commissioner uses authority 
        granted under section 11, or similar 
        authority granted by a subsequent 
        legislature, to meet the state's 
        TANF/MOE requirement in a reporting 
        period, the commissioner shall inform 
        the chairs of the appropriate 
        legislative committees about all 
        transfers made under that authority for 
        this purpose. 
        (g) If the commissioner determines that 
        nonfederal expenditures under paragraph 
        (a) are insufficient to meet TANF/MOE 
        expenditure requirements, and if the 
        legislature is not or will not be in 
        session to take timely action to avoid 
        a federal penalty, the commissioner may 
        report nonfederal expenditures from 
        other allowable sources as TANF/MOE 
        expenditures after the requirements of 
        this paragraph are met.  The 
        commissioner may report nonfederal 
        expenditures in addition to those 
        specified under paragraph (a) as 
        nonfederal TANF/MOE expenditures, but 
        only ten days after the commissioner of 
        finance has first submitted the 
        commissioner's recommendations for 
        additional allowable sources of 
        nonfederal TANF/MOE expenditures to the 
        members of the legislative commission 
        on planning and fiscal policy for their 
        review. 
        (h) The commissioner of finance shall 
        not incorporate any changes in federal 
        TANF expenditures or nonfederal 
        expenditures for TANF/MOE that may 
        result from reporting additional 
        allowable sources of nonfederal 
        TANF/MOE expenditures under the interim 
        procedures in paragraph (g) into the 
        February or November forecasts required 
        under Minnesota Statutes, section 
        16A.103, unless the commissioner of 
        finance has approved the additional 
        sources of expenditures under paragraph 
        (g). 
        (i) Minnesota Statutes, section 
        256.011, subdivision 3, which requires 
        that federal grants or aids secured or 
        obtained under that subdivision be used 
        to reduce any direct appropriations 
        provided by law, do not apply if the 
        grants or aids are federal TANF funds. 
        (j) Notwithstanding section 14, 
        paragraph (a), clauses (1) to (6), and 
        paragraphs (b) to (j) expire June 30, 
        2007. 
        [WORKING FAMILY CREDIT EXPENDITURES AS 
        TANF MOE.] The commissioner may claim 
        as TANF maintenance of effort up to the 
        following amounts of working family 
        credit expenditures for the following 
        fiscal years: 
        (1) fiscal year 2004, $7,013,000; 
        (2) fiscal year 2005, $25,133,000; 
        (3) fiscal year 2006, $6,942,000; and 
        (4) fiscal year 2007, $6,707,000. 
        [FISCAL YEAR 2003 APPROPRIATIONS 
        CARRYFORWARD.] Effective the day 
        following final enactment, 
        notwithstanding Minnesota Statutes, 
        section 16A.28, or any other law to the 
        contrary, state agencies and 
        constitutional offices may carry 
        forward unexpended and unencumbered 
        nongrant operating balances from fiscal 
        year 2003 general fund appropriations 
        into fiscal year 2004 to offset general 
        budget reductions. 
        [TRANSFER OF GRANT BALANCES.] Effective 
        the day following final enactment, the 
        commissioner of human services, with 
        the approval of the commissioner of 
        finance and after notification of the 
        chair of the senate health, human 
        services and corrections budget 
        division and the chair of the house of 
        representatives health and human 
        services finance committee, may 
        transfer unencumbered appropriation 
        balances for the biennium ending June 
        30, 2003, in fiscal year 2003 among the 
        MFIP, MFIP child care assistance under 
        Minnesota Statutes, section 119B.05, 
        general assistance, general assistance 
        medical care, medical assistance, 
        Minnesota supplemental aid, and group 
        residential housing programs, and the 
        entitlement portion of the chemical 
        dependency consolidated treatment fund, 
        and between fiscal years of the 
        biennium. 
        [TANF APPROPRIATION CANCELLATION.] 
        Notwithstanding the provisions of Laws 
        2000, chapter 488, article 1, section 
        16, any prior appropriations of TANF 
        funds to the department of trade and 
        economic development or to the job 
        skills partnership board or any 
        transfers of TANF funds from another 
        agency to the department of trade and 
        economic development or to the job 
        skills partnership board are not 
        available until expended, and if 
        unobligated as of June 30, 2003, these 
        appropriations or transfers shall 
        cancel to the TANF fund. 
        [SHIFT COUNTY PAYMENT.] The 
        commissioner shall make up to 100 
        percent of the calendar year 2005 
        payments to counties for developmental 
        disabilities semi-independent living 
        services grants, developmental 
        disabilities family support grants, and 
        adult mental health grants from fiscal 
        year 2006 appropriations.  This is a 
        onetime payment shift.  Calendar year 
        2006 and future payments for these 
        grants are not affected by this shift.  
        This provision expires June 30, 2006. 
        [CAPITATION RATE INCREASE.] Of the 
        health care access fund appropriations 
        to the University of Minnesota in the 
        higher education omnibus appropriation 
        bill, $2,157,000 in fiscal year 2004 
        and $2,157,000 in fiscal year 2005 are 
        to be used to increase the capitation 
        payments under Minnesota Statutes, 
        section 256B.69.  Notwithstanding the 
        provisions of section 14, this 
        provision shall not expire. 
        Subd. 2.  Agency Management        
                      Summary by Fund
        General              41,473,000    27,868,000
        State Government                             
        Special Revenue         415,000       415,000
        Health Care Access    3,673,000     3,673,000
        Federal TANF            320,000       320,000
        The amounts that may be spent from the 
        appropriation for each purpose are as 
        follows: 
        (a) Financial Operations 
        General               8,751,000     9,056,000
        Health Care Access      828,000       828,000
        Federal TANF            220,000       220,000
        [SPECIAL REVENUE FUND TRANSFER.] 
        Notwithstanding any law to the 
        contrary, excluding accounts authorized 
        under Minnesota Statutes, section 
        16A.1286, and chapter 254B, the 
        commissioner shall transfer $1,400,000 
        of uncommitted special revenue fund 
        balances to the general fund upon final 
        enactment.  The actual transfers shall 
        be identified within the standard 
        information provided to the chairs of 
        the house health and human services 
        finance committee and the senate 
        health, human services, and corrections 
        budget division in December 2003. 
        (b) Legal and
        Regulation Operations 
        General               7,896,000     8,168,000
        State Government                             
        Special Revenue         415,000       415,000
        Health Care Access      244,000       244,000
        Federal TANF            100,000       100,000
        (c) Management Operations 
        General              17,373,000     3,076,000
        Health Care Access    1,623,000     1,623,000
        (d) Information Technology
        Operations 
        General               7,453,000     7,568,000
        Health Care Access      978,000       978,000
        Subd. 3.  Revenue and Pass-Through 
        Federal TANF         55,855,000    53,315,000
        [TANF TRANSFER TO SOCIAL SERVICES BLOCK 
        GRANT.] $3,137,000 in fiscal year 2005 
        is appropriated to the commissioner for 
        the purposes of providing services for 
        families with children whose incomes 
        are at or below 200 percent of the 
        federal poverty guidelines.  The 
        commissioner shall authorize a 
        sufficient transfer of funds from the 
        state's federal TANF block grant to the 
        state's federal social services block 
        grant to meet this appropriation.  The 
        funds shall be distributed to counties 
        for the children and community services 
        grant according to the formula for the 
        state appropriations in Minnesota 
        Statutes, chapter 256M. 
        [TANF FUNDS FOR FISCAL YEAR 2006 AND 
        FISCAL YEAR 2007 REFINANCING.] 
        $12,692,000 in fiscal year 2006 and 
        $9,192,000 in fiscal year 2007 in TANF 
        funds are available to the commissioner 
        to replace general funds in the amount 
        of $12,692,000 in fiscal year 2006 and 
        $9,192,000 in fiscal year 2007 in 
        expenditures that may be counted toward 
        TANF maintenance of effort requirements 
        or as an allowable TANF expenditure. 
        [ADJUSTMENTS IN TANF TRANSFER TO CHILD 
        CARE AND DEVELOPMENT FUND.] Transfers 
        of TANF to the child care development 
        fund for the purposes of MFIP child 
        care assistance shall be reduced by 
        $116,000 in fiscal year 2004 and shall 
        be increased by $1,976,000 in fiscal 
        year 2005. 
        Subd. 4.  Children's Services Grants 
                      Summary by Fund
        General             111,264,000    94,020,000
        Federal TANF            -0-         3,137,000
        [ADOPTION ASSISTANCE INCENTIVE GRANTS.] 
        Federal funds available during fiscal 
        year 2004 and fiscal year 2005, for 
        adoption incentive grants are 
        appropriated to the commissioner for 
        these purposes. 
        [ADOPTION ASSISTANCE AND RELATIVE 
        CUSTODY ASSISTANCE.] The commissioner 
        may transfer unencumbered appropriation 
        balances for adoption assistance and 
        relative custody assistance between 
        fiscal years and between programs. 
        [CHILDREN AND COMMUNITY SERVICES 
        GRANTS.] Counties shall not reduce 
        children and community service grant 
        expenditures for services to adults 
        with disabilities by more than the 
        overall percentage of the reduction in 
        the county's allocation of children and 
        community service grant funds when 
        compared to the county's calendar year 
        2003 allocation of former children's 
        services and community service grants 
        defined under Minnesota Statutes, 
        section 256M.10, subdivision 5. 
        [OUT-OF-HOME PLACEMENT.] Minnesota 
        youth who require out-of-home placement 
        through a corrections order must be 
        placed in a Minnesota program or 
        facility unless a program in a border 
        state is closer to the youth's home or 
        there is no vacancy in an appropriate 
        in-state program or facility.  If no 
        appropriate, cost-effective regional or 
        in-state program is available, this 
        must be documented in the case plan 
        prior to placement in an out-of-state 
        facility.  Justification for 
        out-of-state placement of Minnesota 
        youth must be included in reports to 
        the Minnesota department of corrections.
        Subd. 5.  Children's Services Management 
        General               5,221,000     5,283,000
        Subd. 6.  Basic Health Care Grants 
                      Summary by Fund
        General           1,499,941,000 1,533,016,000
        Health Care Access  268,151,000   282,605,000
        [UPDATING FEDERAL POVERTY GUIDELINES.] 
        Annual updates to the federal poverty 
        guidelines are effective each July 1, 
        following publication by the United 
        States Department of Health and Human 
        Services for health care programs under 
        Minnesota Statutes, chapters 256, 256B, 
        256D, and 256L. 
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) MinnesotaCare Grants 
        Health Care Access 267,401,000   281,855,000
        [MINNESOTACARE FEDERAL RECEIPTS.] 
        Receipts received as a result of 
        federal participation pertaining to 
        administrative costs of the Minnesota 
        health care reform waiver shall be 
        deposited as nondedicated revenue in 
        the health care access fund.  Receipts 
        received as a result of federal 
        participation pertaining to grants 
        shall be deposited in the federal fund 
        and shall offset health care access 
        funds for payments to providers. 
        [MINNESOTACARE FUNDING.] The 
        commissioner may expend money 
        appropriated from the health care 
        access fund for MinnesotaCare in either 
        fiscal year of the biennium. 
        (b) MA Basic Health Care Grants - 
        Families and Children 
        General             568,254,000   582,161,000
        [SERVICES TO PREGNANT WOMEN.] The 
        commissioner shall use available 
        federal money for the State-Children's 
        Health Insurance Program for medical 
        assistance services provided to 
        pregnant women who are not otherwise 
        eligible for federal financial 
        participation beginning in fiscal year 
        2003.  This federal money shall be 
        deposited in the federal fund and shall 
        offset general funds for payments to 
        providers.  Notwithstanding section 14, 
        this paragraph shall not expire. 
        [MANAGED CARE RATE INCREASE.] (a) 
        Effective January 1, 2004, the 
        commissioner of human services shall 
        increase the total payments to managed 
        care plans under Minnesota Statutes, 
        section 256B.69, by an amount equal to 
        the cost increases to the managed care 
        plans from by the elimination of: (1) 
        the exemption from the taxes imposed 
        under Minnesota Statutes, section 
        297I.05, subdivision 5, for premiums 
        paid by the state for medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program; 
        and (2) the exemption of gross revenues 
        subject to the taxes imposed under 
        Minnesota Statutes, sections 295.50 to 
        295.57, for payments paid by the state 
        for services provided under medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program.  
        Any increase based on clause (2) must 
        be reflected in provider rates paid by 
        the managed care plan unless the 
        managed care plan is a staff model 
        health plan company. 
        (b) The commissioner of human services 
        shall increase by two percent the 
        fee-for-service payments under medical 
        assistance, general assistance medical 
        care, and the MinnesotaCare program for 
        services subject to the hospital, 
        surgical center, or health care 
        provider taxes under Minnesota 
        Statutes, sections 295.50 to 295.57, 
        effective for services rendered on or 
        after January 1, 2004.  
        (c) The commissioner of finance shall 
        transfer from the health care access 
        fund to the general fund the following 
        amounts in the fiscal years indicated:  
        2004, $16,587,000; 2005, $46,322,000; 
        2006, $49,413,000; and 2007, 
        $52,659,000. 
        (d) For fiscal years after 2007, the 
        commissioner of finance shall transfer 
        from the health care access fund to the 
        general fund an amount equal to the 
        revenue collected by the commissioner 
        of revenue on the following:  
        (1) gross revenues received by 
        hospitals, surgical centers, and health 
        care providers as payments for services 
        provided under medical assistance, 
        general assistance medical care, and 
        the MinnesotaCare program, including 
        payments received directly from the 
        state or from a prepaid plan, under 
        Minnesota Statutes, sections 295.50 to 
        295.57; and 
        (2) premiums paid by the state under 
        medical assistance, general assistance 
        medical care, and the MinnesotaCare 
        program under Minnesota Statutes, 
        section 297I.05, subdivision 5.  
        The commissioner of finance shall 
        monitor and adjust if necessary the 
        amount transferred each fiscal year 
        from the health care access fund to the 
        general fund to ensure that the amount 
        transferred equals the tax revenue 
        collected for the items described in 
        clauses (1) and (2) for that fiscal 
        year. 
        (e) Notwithstanding section 14, these 
        provisions shall not expire. 
        (c) MA Basic Health Care Grants - Elderly 
        and Disabled 
        General             695,421,000   741,605,000
        [DELAY MEDICAL ASSISTANCE 
        FEE-FOR-SERVICE - ACUTE CARE.] The 
        following payments in fiscal year 2005 
        from the Medicaid Management 
        Information System that would otherwise 
        have been made to providers for medical 
        assistance and general assistance 
        medical care services shall be delayed 
        and included in the first payment in 
        fiscal year 2006: 
        (1) for hospitals, the last two 
        payments; and 
        (2) for nonhospital providers, the last 
        payment. 
        This payment delay shall not include 
        payments to skilled nursing facilities, 
        intermediate care facilities for mental 
        retardation, prepaid health plans, home 
        health agencies, personal care nursing 
        providers, and providers of only waiver 
        services.  The provisions of Minnesota 
        Statutes, section 16A.124, shall not 
        apply to these delayed payments.  
        Notwithstanding section 14, this 
        provision shall not expire. 
        [DEAF AND HARD-OF-HEARING SERVICES.] 
        If, after making reasonable efforts, 
        the service provider for mental health 
        services to persons who are deaf or 
        hearing impaired is not able to earn 
        $227,000 through participation in 
        medical assistance intensive 
        rehabilitation services in fiscal year 
        2005, the commissioner shall transfer 
        $227,000 minus medical assistance 
        earnings achieved by the grantee to 
        deaf and hard-of-hearing grants to 
        enable the provider to continue 
        providing services to eligible persons. 
        (d) General Assistance Medical Care 
        Grants 
        General             223,960,000   196,617,000
        (e) Health Care Grants - Other 
        Assistance 
        General               3,067,000     3,407,000
        Health Care Access      750,000       750,000
        [MINNESOTA PRESCRIPTION DRUG DEDICATED 
        FUND.] Of the general fund 
        appropriation, $284,000 in fiscal year 
        2005 is appropriated to the 
        commissioner for the prescription drug 
        dedicated fund established under the 
        prescription drug discount program. 
        [DENTAL ACCESS GRANTS CARRYOVER 
        AUTHORITY.] Any unspent portion of the 
        appropriation from the health care 
        access fund in fiscal years 2002 and 
        2003 for dental access grants under 
        Minnesota Statutes, section 256B.53, 
        shall not cancel but shall be allowed 
        to carry forward to be spent in the 
        biennium beginning July 1, 2003, for 
        these purposes. 
        [STOP-LOSS FUND ACCOUNT.] The 
        appropriation to the purchasing 
        alliance stop-loss fund account 
        established under Minnesota Statutes, 
        section 256.956, subdivision 2, for 
        fiscal years 2004 and 2005 shall only 
        be available for claim reimbursements 
        for qualifying enrollees who are 
        members of purchasing alliances that 
        meet the requirements described under 
        Minnesota Statutes, section 256.956, 
        subdivision 1, paragraph (f), clauses 
        (1), (2), and (3). 
        (f) Prescription Drug Program 
        General               9,239,000     9,226,000
        [PRESCRIPTION DRUG ASSISTANCE PROGRAM.] 
        Of the general fund appropriation, 
        $702,000 in fiscal year 2004 and 
        $887,000 in fiscal year 2005 are for 
        the commissioner to establish and 
        administer the prescription drug 
        assistance program through the 
        Minnesota board on aging. 
        [REBATE REVENUE RECAPTURE.] Any funds 
        received by the state from a drug 
        manufacturer due to errors in the 
        pharmaceutical pricing used by the 
        manufacturer in determining the 
        prescription drug rebate are 
        appropriated to the commissioner to 
        augment funding of the prescription 
        drug program established in Minnesota 
        Statutes, section 256.955. 
        Subd. 7.  Health Care Management 
                      Summary by Fund
        General              24,845,000    26,199,000
        Health Care Access   14,522,000    14,533,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Health Care Policy Administration 
        General               5,523,000     7,223,000
        Health Care Access    1,066,000     1,200,000
        [PAYMENT CODE STUDY.] Of this 
        appropriation, $345,000 each year is 
        for a study to determine the 
        appropriateness of eliminating 
        reimbursement for certain payment codes 
        under medical assistance, general 
        assistance medical care, or 
        MinnesotaCare.  As part of the study, 
        the commissioner shall also examine 
        covered services under the Minnesota 
        health care programs and make 
        recommendations on possible 
        modification of the services covered 
        under the program.  The commissioner 
        shall report to the legislature by 
        January 15, 2005, with an analysis of 
        the feasibility of this approach, a 
        list of codes, if any, to be eliminated 
        from the payment system, and estimates 
        of savings to be obtained from this 
        approach. 
        [TRANSFERS FROM HEALTH CARE ACCESS 
        FUND.] (a) Notwithstanding Minnesota 
        Statutes, section 295.581, to the 
        extent available resources in the 
        health care access fund exceed 
        expenditures in that fund during fiscal 
        years 2005 to 2007, the excess annual 
        funds shall be transferred from the 
        health care access fund to the general 
        fund on June 30 of fiscal years 2005, 
        2006, and 2007.  These transfers shall 
        not be reduced to accommodate 
        MinnesotaCare expansions.  The 
        estimated amounts to be transferred are:
        (1) in fiscal year 2005, $192,442,000; 
        (2) in fiscal year 2006, $52,943,000; 
        and 
        (3) in fiscal year 2007, $59,105,000. 
        These estimates shall be updated with 
        each forecast, but in no case shall the 
        transfers exceed the amounts listed in 
        clauses (1) to (3). 
        (b) The commissioner shall limit 
        transfers under paragraph (a) in order 
        to avoid implementation of Minnesota 
        Statutes, section 256L.02, subdivision 
        3, paragraph (b). 
        (c) For fiscal years 2004 to 2007, 
        MinnesotaCare shall be a forecasted 
        program and, if necessary, the 
        commissioner shall reduce transfers 
        under paragraph (a) to meet forecasted 
        expenditures. 
        (d) The department of human services in 
        recommending its 2007-2008 budget shall 
        consider the repayment of the amount 
        transferred in fiscal years 2006 and 
        2007 from the health care access fund 
        to the general fund to the health care 
        access fund. 
        (e) Notwithstanding section 14, this 
        section is in effect until June 30, 
        2007. 
        [MINNESOTACARE OUTREACH REIMBURSEMENT.] 
        Federal administrative reimbursement 
        resulting from MinnesotaCare outreach 
        is appropriated to the commissioner for 
        this activity. 
        [MINNESOTA SENIOR HEALTH OPTIONS 
        REIMBURSEMENT.] Federal administrative 
        reimbursement resulting from the 
        Minnesota senior health options project 
        is appropriated to the commissioner for 
        this activity. 
        [UTILIZATION REVIEW.] Federal 
        administrative reimbursement resulting 
        from prior authorization and inpatient 
        admission certification by a 
        professional review organization shall 
        be dedicated to the commissioner for 
        these purposes.  A portion of these 
        funds must be used for activities to 
        decrease unnecessary pharmaceutical 
        costs in medical assistance. 
        (b) Health Care Operations 
        General              19,322,000    18,976,000
        Health Care Access   13,456,000    13,333,000
        [PREPAID MEDICAL PROGRAMS.] For all 
        counties in which the PMAP program has 
        been operating for 12 or more months, 
        state funding for the nonfederal share 
        of prepaid medical assistance program 
        administration costs for county managed 
        care advocacy and enrollment operations 
        is eliminated.  State funding will 
        continue for these activities for 
        counties and tribes establishing new 
        PMAP programs for a maximum of 16 
        months (four months prior to beginning 
        PMAP enrollment and through the first 
        12 months of their PMAP program 
        operation).  Those counties operating 
        PMAP programs for less than 12 months 
        can continue to receive state funding 
        for advocacy and enrollment activities 
        through their first year of operation. 
        Subd. 8.  State-operated Services 
        General             195,062,000   186,775,000
        [MITIGATION RELATED TO STATE-OPERATED 
        SERVICES RESTRUCTURING.] Money 
        appropriated to finance mitigation 
        expenses related to restructuring 
        state-operated services programs and 
        administrative services may be 
        transferred between fiscal years within 
        the biennium. 
        [REPAIRS AND BETTERMENTS.] The 
        commissioner may transfer unencumbered 
        appropriation balances between fiscal 
        years within the biennium for the state 
        residential facilities repairs and 
        betterments account and special 
        equipment. 
        [ONETIME REDUCTION TO DEDICATED 
        REVENUES.] (a) For fiscal year 2003 
        only, the commissioner shall transfer 
        $4,700,000 of state-operated services 
        fund balances from the accounts 
        indicated to the general fund as 
        follows: 
        (1) $3,200,000 from traumatic brain 
        injury enterprises; 
        (2) $1,000,000 from lease income; and 
        (3) $500,000 from ICF/MR depreciation. 
        (b) Paragraph (a) is effective the day 
        following final enactment. 
        Subd. 9.  Continuing Care Grants 
                      Summary by Fund
        General           1,504,933,000 1,490,958,000
        Lottery Prize Fund    1,408,000     1,408,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Community Social Services
        General                 496,000       371,000
        (b) Aging and Adult Service Grant 
        General              12,998,000    13,951,000
        [LONG-TERM CARE PROGRAM REDUCTIONS.] 
        For the biennium ending June 30, 2005, 
        state funding for the following state 
        long-term care programs is reduced by 
        15 percent from the level of state 
        funding provided on June 30, 2003:  
        SAIL project grants under Minnesota 
        Statutes, section 256B.0917; senior 
        nutrition programs under Minnesota 
        Statutes, section 256.9752; foster 
        grandparents program under Minnesota 
        Statutes, section 256.976; retired 
        senior volunteer program under 
        Minnesota Statutes, section 256.9753; 
        and the senior companion program under 
        Minnesota Statutes, section 256.977. 
        (c) Deaf and Hard-of-hearing 
        Service Grants 
        General               1,719,000     1,490,000
        (d) Mental Health Grants 
        General              53,479,000    34,690,000
        Lottery Prize Fund    1,408,000     1,408,000
        [RESTRUCTURING OF ADULT MENTAL HEALTH 
        SERVICES.] The commissioner may make 
        transfers that do not increase the 
        state share of costs to effectively 
        implement the restructuring of adult 
        mental health services.  
        [COMPULSIVE GAMBLING.] Of the 
        appropriation from the lottery prize 
        fund, $250,000 each year is for the 
        following purposes: 
        (1) $100,000 each year is for a grant 
        to the Southeast Asian Problem Gambling 
        Consortium.  The consortium must 
        provide statewide compulsive gambling 
        prevention and treatment services for 
        Lao, Hmong, Vietnamese, and Cambodian 
        families, adults, and adolescents.  The 
        appropriation in this clause shall not 
        become part of base level funding for 
        the biennium beginning July 1, 2005.  
        Any unencumbered balance of the 
        appropriation in the first year does 
        not cancel but is available for the 
        second year; and 
        (2) $150,000 each year is for a grant 
        to a compulsive gambling council 
        located in St. Louis county.  The 
        gambling council must provide a 
        statewide compulsive gambling 
        prevention and education project for 
        adolescents.  Any unencumbered balance 
        of the appropriation in the first year 
        of the biennium does not cancel but is 
        available for the second year. 
        (e) Community Support Grants 
        General               12,523,000    9,093,000
        [CENTERS FOR INDEPENDENT LIVING STUDY.] 
        The commissioner of human services, in 
        consultation with the commissioner of 
        economic security, the centers for 
        independent living, and consumer 
        representatives, shall study the 
        financing of the centers for 
        independent living authorized under 
        Minnesota Statutes, section 268A.11, 
        and make recommendations on options to 
        maximize federal financial 
        participation.  Study components shall 
        include: 
        (1) the demographics of individuals 
        served by the centers for independent 
        living; 
        (2) the range of services the centers 
        for independent living provide to these 
        individuals; 
        (3) other publicly funded services 
        received by individuals supported by 
        the centers; and 
        (4) strategies for maximizing federal 
        financial participation for eligible 
        activities carried out by centers for 
        independent living. 
        The commissioner shall report with 
        fiscal and programmatic recommendations 
        to the chairs of the appropriate house 
        of representatives and senate finance 
        and policy committees by January 15, 
        2004. 
        (f) Medical Assistance Long-Term 
        Care Waivers and Home Care Grants 
        General              659,211,000  718,665,000
        [RATE AND ALLOCATION DECREASES FOR 
        CONTINUING CARE PROGRAMS.] 
        Notwithstanding any law or rule to the 
        contrary, the commissioner of human 
        services shall decrease reimbursement 
        rates or reduce allocations to assure 
        the necessary reductions in state 
        spending for the providers or programs 
        listed in paragraphs (a) to (d).  The 
        decreases are effective for services 
        rendered on or after July 1, 2003. 
        (a) Effective July 1, 2003, the 
        commissioner shall reduce payment rates 
        for services and individual or service 
        limits by one percent.  The rate 
        decreases described in this section 
        must be applied to: 
        (1) home and community-based waivered 
        services for the elderly under 
        Minnesota Statutes, section 256B.0915; 
        (2) day training and habilitation 
        services for adults with mental 
        retardation or related conditions under 
        Minnesota Statutes, sections 252.40 to 
        252.46; 
        (3) the group residential housing 
        supplementary service rate under 
        Minnesota Statutes, section 256I.05, 
        subdivision 1a; 
        (4) chemical dependency residential and 
        nonresidential service rates under 
        Minnesota Statutes, section 245B.03; 
        (5) consumer support grants under 
        Minnesota Statutes, section 256.476; 
        and 
        (6) home and community-based services 
        for alternative care services under 
        Minnesota Statutes, section 256B.0913. 
        (b) The commissioner shall reduce 
        allocations made available to county 
        agencies for home and community-based 
        waivered services to assure a 
        one-percent reduction in state spending 
        for services rendered on or after July 
        1, 2003.  The commissioner shall apply 
        the allocation decreases described in 
        this section to: 
        (1) persons with mental retardation or 
        related conditions under Minnesota 
        Statutes, section 256B.501; 
        (2) waivered services under community 
        alternatives for disabled individuals 
        under Minnesota Statutes, section 
        256B.49; 
        (3) community alternative care waivered 
        services under Minnesota Statutes, 
        section 256B.49; and 
        (4) traumatic brain injury waivered 
        services under Minnesota Statutes, 
        section 256B.49. 
        County agencies will be responsible for 
        100 percent of any spending in excess 
        of the allocation made by the 
        commissioner.  Nothing in this section 
        shall be construed as reducing the 
        county's responsibility to offer and 
        make available feasible home and 
        community-based options to eligible 
        waiver recipients within the resources 
        allocated to them for that purpose. 
        (c) The commissioner shall reduce deaf 
        and hard-of-hearing grants by one 
        percent on July 1, 2003. 
        (d) Effective July 1, 2003, the 
        commissioner shall reduce payment rates 
        for each facility reimbursed under 
        Minnesota Statutes, section 256B.5012, 
        by decreasing the total operating 
        payment rate for intermediate care 
        facilities for the mentally retarded by 
        one percent.  For each facility, the 
        commissioner shall multiply the 
        adjustment by the total payment rate, 
        excluding the property-related payment 
        rate, in effect on June 30, 2003.  A 
        facility whose payment rates are 
        governed by closure agreements, 
        receivership agreements, or Minnesota 
        Rules, part 9553.0075, is not subject 
        to an adjustment otherwise taken under 
        this subdivision. 
        Notwithstanding section 14, these 
        adjustments shall not expire. 
        [REDUCE GROWTH IN MR/RC WAIVER.] The 
        commissioner shall reduce the growth in 
        the MR/RC waiver by not allocating the 
        300 additional diversion allocations 
        that are included in the February 2003 
        forecast for the fiscal years that 
        begin on July 1, 2003, and July 1, 2004.
        [MANAGE THE GROWTH IN THE TBI WAIVER.] 
        During the fiscal years beginning on 
        July 1, 2003, and July 1, 2004, the 
        commissioner shall allocate money for 
        home and community-based programs 
        covered under Minnesota Statutes, 
        section 256B.49, to assure a reduction 
        in state spending that is equivalent to 
        limiting the caseload growth of the TBI 
        waiver to 150 in each year of the 
        biennium.  Priorities for the 
        allocation of funds shall be for 
        individuals anticipated to be 
        discharged from institutional settings 
        or who are at imminent risk of a 
        placement in an institutional setting. 
        [TARGETED CASE MANAGEMENT FOR HOME CARE 
        RECIPIENTS.] Implementation of the 
        targeted case management benefit for 
        home care recipients, according to 
        Minnesota Statutes, section 256B.0621, 
        subdivisions 2, 3, 5, 6, 7, 9, and 10, 
        will be delayed until July 1, 2005. 
        [COMMON SERVICE MENU.] Implementation 
        of the common service menu option 
        within the home and community-based 
        waivers, according to Minnesota 
        Statutes, section 256B.49, subdivision 
        16, will be delayed until July 1, 2005. 
        [LIMITATION ON COMMUNITY ALTERNATIVES 
        FOR DISABLED INDIVIDUALS CASELOAD 
        GROWTH.] For the biennium ending June 
        30, 2005, the commissioner shall limit 
        the allocations made available in the 
        community alternatives for disabled 
        individuals waiver program in order not 
        to exceed average caseload growth of 95 
        per month from June 2003 program 
        levels, plus any additional 
        legislatively authorized program 
        growth.  The commissioner shall 
        allocate available resources to achieve 
        the following outcomes: 
        (1) the establishment of feasible and 
        viable alternatives for persons in 
        institutional or hospital settings to 
        relocate to home and community-based 
        settings; 
        (2) the availability of timely 
        assistance to persons at imminent risk 
        of institutional or hospital placement 
        or whose health and safety is at 
        immediate risk; and 
        (3) the maximum provision of essential 
        community supports to eligible persons 
        in need of and waiting for home and 
        community-based service alternatives.  
        The commissioner may reallocate 
        resources from one county or region to 
        another if available funding in that 
        county or region is not likely to be 
        spent and the reallocation is necessary 
        to achieve the outcomes specified in 
        this paragraph. 
        (g) Medical Assistance Long-term 
        Care Facilities Grants 
        General             543,999,000   514,483,000
        (h) Alternative Care Grants 
        General              75,206,000    66,351,000
        [ALTERNATIVE CARE TRANSFER.] Any money 
        allocated to the alternative care 
        program that is not spent for the 
        purposes indicated does not cancel but 
        shall be transferred to the medical 
        assistance account. 
        [ALTERNATIVE CARE APPROPRIATION.] The 
        commissioner may expend the money 
        appropriated for the alternative care 
        program for that purpose in either year 
        of the biennium. 
        [ALTERNATIVE CARE IMPLEMENTATION OF 
        CHANGES TO FEES AND ELIGIBILITY.] 
        Changes to Minnesota Statutes, section 
        256B.0913, subdivision 4, paragraph 
        (d), and subdivision 12, are effective 
        July 1, 2003, for all persons found 
        eligible for the alternative care 
        program on or after July 1, 2003.  All 
        recipients of alternative care funding 
        as of June 30, 2003, shall be subject 
        to Minnesota Statutes, section 
        256B.0913, subdivision 4, paragraph 
        (d), and subdivision 12, on the annual 
        reassessment and review of their 
        eligibility after July 1, 2003, but no 
        later than January 1, 2004. 
        (i) Group Residential Housing Grants 
        General              94,996,000    80,472,000
        [GROUP RESIDENTIAL HOUSING COSTS 
        REFINANCED.] (1) Effective July 1, 
        2004, the commissioner shall increase 
        the home and community-based service 
        rates and county allocations provided 
        to programs for persons with 
        disabilities established under section 
        1915(c) of the Social Security Act to 
        the extent that these programs will be 
        paying for the costs above the rate 
        established in Minnesota Statutes, 
        section 256I.05, subdivision 1. 
        (2) For persons in receipt of services 
        under Minnesota Statutes, section 
        256B.0915, who reside in licensed adult 
        foster care beds for which a 
        supplemental room and board payment was 
        being made under Minnesota Statutes, 
        section 256I.05, subdivision 1, 
        counties may request an exception to 
        the individual caps specified in 
        Minnesota Statutes, section 256B.0915, 
        subdivision 3, paragraph (b), not to 
        exceed the difference between the 
        individual cap and the client's monthly 
        service expenditures plus the amount of 
        the supplemental room and board rate.  
        The county must submit a request to 
        exceed the individual cap to the 
        commissioner for approval. 
        (j) Chemical Dependency
        Entitlement Grants 
        General              49,251,000    50,337,000
        (k) Chemical Dependency Nonentitlement 
        Grants 
        General               1,055,000     1,055,000
        Subd. 10.  Continuing Care Management 
                      Summary by Fund
        General              21,697,000    21,206,000
        State Government 
        Special Revenue         119,000       119,000
        Lottery Prize Fund      148,000       148,000
        [APPROPRIATION; REPORT ON LONG-TERM 
        CARE FINANCING REFORM.] Money 
        appropriated to the commissioner for 
        fiscal year 2004 for the report on 
        long-term care financing reform and 
        long-term care insurance purchase 
        incentives shall not cancel but shall 
        be available to the commissioner for 
        that purpose in fiscal year 2005. 
        Subd. 11.  Economic Support Grants 
                      Summary by Fund
        General             122,647,000   117,198,000
        Federal TANF        199,009,000   207,224,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Minnesota Family Investment Program 
        General              59,922,000    39,375,000
        Federal TANF        106,535,000   110,543,000
        (b) Work Grants 
        General                 666,000    14,678,000
        Federal TANF         92,474,000    96,681,000
        [MFIP SUPPORT SERVICES COUNTY AND 
        TRIBAL ALLOCATION.] When determining 
        the funds available for the 
        consolidated MFIP support services 
        grant in the 18-month period ending 
        December 31, 2004, the commissioner 
        shall apportion the funds appropriated 
        for fiscal year 2005 in such manner as 
        necessary to provide $14,000,000 more 
        to counties and tribes for the period 
        ending December 31, 2004, than would 
        have been available had the funds been 
        evenly divided within the fiscal year 
        between the period before December 31, 
        2004, and the period after December 31, 
        2004. 
        For allocations for the calendar years 
        starting January 1, 2005, the 
        commissioner shall apportion the funds 
        appropriated for each fiscal year in 
        such manner as necessary to provide 
        $14,000,000 more to counties and tribes 
        for the period ending December 31 of 
        that year than would have been 
        available had the funds been evenly 
        divided within the fiscal year between 
        the period before December 31 and the 
        period after December 31. 
        (c) Economic Support Grants - Other 
        Assistance 
        General               3,358,000     3,463,000
        [SUPPORTIVE HOUSING.] Of the general 
        fund appropriation, $500,000 each year 
        is to provide services to families who 
        are participating in the supportive 
        housing and managed care pilot project 
        under Minnesota Statutes, section 
        256K.25.  This appropriation shall not 
        become part of base level funding for 
        the biennium beginning July 1, 2007. 
        (d) Child Support Enforcement Grants 
        General               3,571,000     3,503,000
        (e) General Assistance Grants
        General              24,901,000    24,732,000
        [GENERAL ASSISTANCE STANDARD.] The 
        commissioner shall set the monthly 
        standard of assistance for general 
        assistance units consisting of an adult 
        recipient who is childless and 
        unmarried or living apart from parents 
        or a legal guardian at $203.  The 
        commissioner may reduce this amount 
        according to Laws 1997, chapter 85, 
        article 3, section 54. 
        [EMERGENCY GENERAL ASSISTANCE.] The 
        amount appropriated for emergency 
        general assistance funds is limited to 
        no more than $7,889,812 in each fiscal 
        year of 2004 and 2005.  Funds to 
        counties shall be allocated by the 
        commissioner using the allocation 
        method specified in Minnesota Statutes, 
        section 256D.06. 
        (f) Minnesota Supplemental Aid Grants 
        General              30,229,000    31,447,000
        [EMERGENCY MINNESOTA SUPPLEMENTAL AID 
        FUNDS.] The amount appropriated for 
        emergency Minnesota supplemental aid 
        funds is limited to no more than 
        $1,138,707 in fiscal year 2004 and 
        $1,017,000 in fiscal year 2005.  Funds 
        to counties shall be allocated by the 
        commissioner using the allocation 
        method specified in Minnesota Statutes, 
        section 256D.46. 
        Subd. 12.  Economic Support
        Management 
                      Summary by Fund
        General              39,080,000    39,331,000
        Health Care Access    1,407,000     1,377,000
        Federal TANF            368,000       368,000
        The amounts that may be spent from this 
        appropriation for each purpose are as 
        follows: 
        (a) Economic Support 
        Policy Administration
        General               5,360,000     5,587,000
        Federal TANF            368,000       368,000
        (b) Economic Support 
        Operations 
        General              33,720,000    33,744,000
        Health Care Access    1,407,000     1,377,000
        [SPENDING AUTHORITY FOR FOOD STAMPS 
        ENHANCED FUNDING.] In the event that 
        Minnesota qualifies for the U.S. 
        Department of Agriculture Food and 
        Nutrition Services Food Stamp Program 
        enhanced funding beginning in federal 
        fiscal year 2002, the funding is 
        appropriated to the commissioner.  The 
        commissioner shall retain 25 percent of 
        the funding, with the other 75 percent 
        divided among the counties according to 
        a formula that takes into account each 
        county's impact on the statewide food 
        stamp error rate. 
        [CHILD SUPPORT PAYMENT CENTER.] 
        Payments to the commissioner from other 
        governmental units, private 
        enterprises, and individuals for 
        services performed by the child support 
        payment center must be deposited in the 
        state systems account authorized under 
        Minnesota Statutes, section 256.014.  
        These payments are appropriated to the 
        commissioner for the operation of the 
        child support payment center or system, 
        according to Minnesota Statutes, 
        section 256.014. 
        [CHILD SUPPORT COST RECOVERY FEES.] The 
        commissioner shall transfer $247,000 of 
        child support cost recovery fees 
        collected in fiscal year 2005 to the 
        PRISM special revenue account to offset 
        PRISM system costs of implementing the 
        fee. 
        [FINANCIAL INSTITUTION DATA MATCH AND 
        PAYMENT OF FEES.] The commissioner is 
        authorized to allocate up to $310,000 
        each year in fiscal year 2004 and 
        fiscal year 2005 from the PRISM special 
        revenue account to make payments to 
        financial institutions in exchange for 
        performing data matches between account 
        information held by financial 
        institutions and the public authority's 
        database of child support obligors as 
        authorized by Minnesota Statutes, 
        section 13B.06, subdivision 7. 
        [CONSISTENT ACCOUNTING FOR PROGRAMS TO 
        BE TRANSFERRED.] To ensure consistent 
        accounting, including forecasting, 
        budgeting, cost allocation, and 
        financial reporting, the commissioner 
        may establish accounts and processes in 
        the state's accounting system so the 
        programs being transferred from other 
        state agencies are integrated into the 
        department's standard accounting 
        policies and procedures. 
        Sec. 3.  COMMISSIONER OF HEALTH
        Subdivision 1.  Total
        Appropriation                        104,995,000    106,328,000
                      Summary by Fund
        General              59,842,000    61,438,000
        State Government
        Special Revenue      32,880,000    32,617,000
        Health Care Access    6,273,000     6,273,000
        Federal TANF          6,000,000     6,000,000
        Subd. 2.  Health Improvement 
                      Summary by Fund
        General              44,595,000    46,459,000
        State Government
        Special Revenue       1,987,000     1,987,000
        Health Care Access    3,510,000     3,510,000
        Federal TANF          6,000,000     6,000,000
        [TOBACCO PREVENTION ENDOWMENT FUND 
        TRANSFERS.] (a) On July 1, 2003, the 
        commissioner of finance shall transfer 
        $4,000,000 from the tobacco use 
        prevention and local public health 
        endowment expendable trust fund to the 
        general fund. 
        (b) Notwithstanding Minnesota Statutes, 
        section 16A.62, any remaining 
        unexpended balance in the fund after 
        the transfer in paragraph (a) shall be 
        transferred to the miscellaneous 
        special revenue fund and dedicated to 
        the commissioner of health for local 
        tobacco prevention grants under 
        Minnesota Statutes, section 144.396, 
        subdivision 6.  Of this amount the 
        commissioner may retain up to $150,000 
        for administration and evaluation costs.
        (c) Of the general fund appropriation 
        for fiscal year 2005, $3,280,000 is to 
        the commissioner for the grants 
        specified in paragraph (b). 
        [TANF APPROPRIATIONS.] TANF funds 
        appropriated to the commissioner are 
        available for home visiting and 
        nutritional activities listed under 
        Minnesota Statutes, section 145.882, 
        subdivision 7, clauses (6) and (7), and 
        eliminating health disparities 
        activities under Minnesota Statutes, 
        section 145.928, subdivision 10.  
        Funding shall be distributed to 
        community health boards and tribal 
        governments based on the formula in 
        Minnesota Statutes, section 145A.131, 
        subdivisions 1 and 2. 
        [TANF CARRYFORWARD.] Any unexpended 
        balance of the TANF appropriation in 
        the first year of the biennium does not 
        cancel but is available for the second 
        year. 
        [MINNESOTA CHILDREN WITH SPECIAL HEALTH 
        NEEDS CARRYFORWARD.] General fund 
        appropriations for treatment services 
        in the services for Minnesota children 
        with special health needs program are 
        available for either year of the 
        biennium. 
        [TRANSFER OF ENDOWMENT FUNDS.] On July 
        1, 2003, the commissioner of finance 
        shall transfer the tobacco use 
        prevention and local public health 
        endowment fund and the medical 
        education endowment fund to the general 
        fund. 
        Subd. 3.  Health Quality and 
        Access 
                      Summary by Fund
        General                 868,000       606,000
        State Government
        Special Revenue       8,888,000     8,888,000
        Health Care Access    2,763,000     2,763,000
        [STATE GOVERNMENT SPECIAL REVENUE FUND 
        TRANSFERS.] On July 1, 2003, the 
        commissioner of finance shall transfer 
        $4,000,000 from the state government 
        special revenue fund to the general 
        fund. 
        [NURSING HOME RECEIVERSHIP COSTS.] In 
        the event that other funds are not 
        available, the commissioner is 
        authorized to expend up to $230,000 
        from the fiscal year 2003 state 
        government special revenue 
        appropriation for nursing home 
        regulation for those costs associated 
        with nursing home receiverships 
        necessary to protect the health and 
        safety of residents.  The commissioner 
        shall assert claims against any and all 
        appropriate parties seeking 
        reimbursement of any funds expended.  
        This provision is effective the day 
        following final enactment. 
        [NURSING PROVIDERS WORK GROUP.] The 
        commissioner shall establish a working 
        group consisting of nursing home and 
        boarding care home providers, 
        representatives of nursing home 
        residents, and other health care 
        providers to review current licensure 
        provisions and evaluate the continued 
        appropriateness of these provisions.  
        The commissioner shall present 
        recommendations to the legislature by 
        November 1, 2004. 
        [MERC FUNDING.] Amounts in the medical 
        education and research costs (MERC) 
        special account not to exceed 
        $8,660,000 in fiscal year 2004 and 
        $8,616,000 in fiscal year 2005 are 
        appropriated to the commissioner for 
        medical education and research funding. 
        Subd. 4.  Health Protection 
                      Summary by Fund
        General               9,130,000     9,130,000
        State Government
        Special Revenue      22,005,000    21,742,000
        Subd. 5.  Management and Support 
        Services 
        General               5,249,000     5,243,000
        Sec. 4.  VETERANS NURSING HOMES BOARD 
        General              30,030,000    30,030,000
        [VETERANS HOMES SPECIAL REVENUE 
        ACCOUNT.] The general fund 
        appropriations made to the board may be 
        transferred to a veterans homes special 
        revenue account in the special revenue 
        fund in the same manner as other 
        receipts are deposited according to 
        Minnesota Statutes, section 198.34, and 
        are appropriated to the board for the 
        operation of board facilities and 
        programs. 
        Sec. 5.  HEALTH-RELATED BOARDS 
        Subdivision 1.  Total
        Appropriation                         11,441,000     11,471,000 
                      Summary by Fund
        State Government            
        Special Revenue      11,377,000    11,407,000
        Health Care Access       64,000        64,000
        [STATE GOVERNMENT SPECIAL REVENUE 
        FUND.] The appropriations in this 
        section are from the state government 
        special revenue fund, except where 
        noted. 
        [NO SPENDING IN EXCESS OF REVENUES.] 
        The commissioner of finance shall not 
        permit the allotment, encumbrance, or 
        expenditure of money appropriated in 
        this section in excess of the 
        anticipated biennial revenues or 
        accumulated surplus revenues from fees 
        collected by the boards.  Neither this 
        provision nor Minnesota Statutes, 
        section 214.06, applies to transfers 
        from the general contingent account. 
        [STATE GOVERNMENT SPECIAL REVENUE FUND 
        TRANSFERS.] On July 1, 2003, the 
        commissioner of finance shall transfer 
        $7,500,000 from the state government 
        special revenue fund to the general 
        fund.  Of this amount, $3,500,000 shall 
        be transferred from the health-related 
        boards and $4,000,000 shall be 
        transferred as designated by the 
        commissioner of finance. 
        Subd. 2.  Board of Chiropractic
        Examiners                                384,000        384,000 
        [CONTESTED CASE EXPENSES.] In fiscal 
        year 2003, $70,000 in state government 
        special revenue funds is transferred 
        from Laws 2001, First Special Session 
        chapter 10, article 1, section 33, to 
        the board of chiropractic examiners to 
        pay for contested case activity.  These 
        funds are available until September 30, 
        2003. 
        Subd. 3.  Board of Dentistry                                    
        State Government Special    
        Revenue Fund                             858,000        858,000 
        Health Care                 
        Access Fund                               64,000         64,000 
        Subd. 4.  Board of Dietetic and 
        Nutrition Practice                       101,000        101,000 
        Subd. 5.  Board of Marriage and
        Family Therapy                           118,000        118,000 
        Subd. 6.  Board of Medical
        Practice                               3,498,000      3,498,000 
        Subd. 7.  Board of Nursing             2,405,000      2,405,000 
        Subd. 8.  Board of Nursing
        Home Administrators                      198,000        198,000 
        Subd. 9.  Board of Optometry              96,000         96,000 
        Subd. 10.  Board of Pharmacy           1,386,000      1,386,000 
        [ADMINISTRATIVE SERVICES UNIT.] Of this 
        appropriation, $359,000 the first year 
        and $359,000 the second year are for 
        the health boards administrative 
        services unit.  The administrative 
        services unit may receive and expend 
        reimbursements for services performed 
        for other agencies. 
        Subd. 11.  Board of Physical
        Therapy                                  197,000        197,000 
        Subd. 12.  Board of Podiatry              45,000         45,000 
        Subd. 13.  Board of Psychology           680,000        680,000 
        Subd. 14.  Board of Social 
        Work                                   1,073,000      1,073,000 
        Subd. 15.  Board of Veterinary
        Medicine                                 163,000        163,000 
        Subd. 16.  Board of Behavioral
        Health and Therapy                       175,000        205,000 
        [ADDITIONAL FUNDING.] This amount is 
        from the state government special 
        revenue fund and is in addition to the 
        appropriation in Laws 2003, chapter 
        118, section 27.  Licensure fees will 
        be increased accordingly to reimburse 
        the fund balance. 
        Sec. 6.  EMERGENCY MEDICAL SERVICES BOARD 
        Subdivision 1.  Total
        Appropriation                          3,027,000      3,027,000
                      Summary by Fund
        General               2,481,000     2,481,000
        State Government
        Special Revenue         546,000       546,000
        [HEALTH PROFESSIONAL SERVICES 
        ACTIVITY.] $546,000 each year from the 
        state government special revenue fund 
        is for the health professional services 
        activity. 
        [COMPREHENSIVE ADVANCED LIFE SUPPORT 
        ADMINISTRATIVE COSTS.] Of the 
        appropriation for the comprehensive 
        advanced life support program, not more 
        than $5,000 each year may be retained 
        by the board for administrative costs. 
        [ROYALTY PAYMENTS DEDICATED TO BOARD.] 
        Royalty payments from the sale of the 
        Internet-based ambulance reporting 
        program are appropriated to the board 
        and shall remain available until 
        expended.  Notwithstanding section 14, 
        this provision shall not expire. 
        [EMERGENCY MEDICAL SERVICES REGIONAL 
        GRANTS.] Of this appropriation, 
        $657,000 each year is for the purposes 
        of Minnesota Statutes, section 144E.50. 
        [AMBULANCE TRAINING GRANT CARRYFORWARD 
        AND TRANSFER.] (a) Effective for fiscal 
        year 2003 and succeeding fiscal years, 
        any unspent portion of the 
        appropriation for ambulance training 
        grants shall not cancel but shall carry 
        forward and be used in the following 
        fiscal year for the purposes of 
        Minnesota Statutes, section 144E.50.  
        The board shall not retain any portion 
        of the appropriation carried forward 
        for administrative costs. 
        (b) Notwithstanding section 14, this 
        provision shall not expire. 
        (c) This provision is effective the day 
        following final enactment. 
        Sec. 7.  COUNCIL ON DISABILITY 
        General                                  500,000        500,000
        Sec. 8.  OMBUDSMAN FOR MENTAL HEALTH 
        AND MENTAL RETARDATION                                          
        General                                1,462,000      1,462,000 
        Sec. 9.  OMBUDSMAN FOR FAMILIES
        General                                  245,000        245,000 
        Sec. 10.  DEPARTMENT OF CHILDREN, 
        FAMILIES, AND LEARNING 
        Subdivision 1.  Total 
        Appropriation                     $  107,829,000 $   92,649,000
                      Summary by Fund
        General             104,489,000    89,309,000
        State Special 
        Revenue               3,340,000     3,340,000 
        Subd. 2.  Child Care 
        [BASIC SLIDING FEE CHILD CARE.] Of this 
        appropriation, $27,628,000 in fiscal 
        year 2004 and $18,771,000 in fiscal 
        year 2005 are for child care assistance 
        according to Minnesota Statutes, 
        section 119B.03.  These appropriations 
        are available to be spent either year.  
        The fiscal years 2006 and 2007 general 
        fund base for basic sliding fee child 
        care is $30,312,000 each year. 
        [MFIP CHILD CARE.] Of this 
        appropriation, $69,543,000 in fiscal 
        year 2004 and $63,720,000 in fiscal 
        year 2005 are for MFIP child care. 
        [CHILD CARE PROGRAM INTEGRITY.] Of this 
        appropriation, $425,000 in fiscal year 
        2004, and $376,000 in fiscal year 2005 
        are for the administrative costs of 
        program integrity and fraud prevention 
        for child care assistance under 
        Minnesota Statutes, chapter 119B. 
        [CHILD CARE DEVELOPMENT.] Of this 
        appropriation, $1,115,000 in fiscal 
        year 2004, and $1,164,000 in fiscal 
        year 2005 are for child care 
        development grants according to 
        Minnesota Statutes, section 119B.21. 
        Subd. 3.  Child Care Assistance
        Special Revenue Account                3,340,000      3,340,000
        [CHILD SUPPORT SPECIAL REVENUE 
        ACCOUNT.] Appropriations and transfers 
        in this subdivision are from the child 
        support collection payments in the 
        special revenue fund, pursuant to 
        Minnesota Statutes, section 119B.074.  
        The sums indicated are appropriated to 
        the department of children, families, 
        and learning for the fiscal years 
        designated. 
        [CHILD CARE ASSISTANCE.] Of this 
        appropriation, $3,340,000 in fiscal 
        year 2004, and $3,340,000 in fiscal 
        year 2005 are for child care assistance 
        according to Minnesota Statutes, 
        section 119B.03. 
        [SPECIAL REVENUE ACCOUNT UNOBLIGATED 
        FUND TRANSFER.] On July 1, 2003, the 
        commissioner of finance shall transfer 
        $1,800,000 from the special revenue 
        fund to the general fund. 
        Subd. 4.  Child Care
        Assistance TANF Funds
        [FEDERAL TANF TRANSFERS.] The sums 
        indicated in this section are 
        transferred from the federal TANF fund 
        to the child care and development fund 
        and are appropriated to the department 
        of children, families, and learning for 
        the fiscal years indicated.  The 
        commissioner shall ensure that all 
        transferred funds are expended 
        according to the child care and 
        development fund regulations and that 
        maximum allowable transferred funds are 
        used for the following programs: 
        (a) For basic sliding fee child care, 
        $17,686,000 in fiscal year 2004 and 
        $17,700,000 in fiscal year 2005 are for 
        child care assistance under Minnesota 
        Statutes, section 119B.03. 
        (b) For MFIP/TY, $7,312,000 in fiscal 
        year 2004 and $4,919,000 in fiscal year 
        2005 are for child care assistance 
        under Minnesota Statutes, section 
        119B.05. 
        (c) For child care development grants 
        under Minnesota Statutes, section 
        119B.21, $14,000 is available in fiscal 
        year 2004. 
        Subd. 5.  Self-Sufficiency Programs
        General        5,278,000     5,278,000 
        [MINNESOTA ECONOMIC OPPORTUNITY 
        GRANTS.] Of this appropriation, 
        $4,000,000 in fiscal year 2004 and 
        $4,000,000 in fiscal year 2005 are for 
        Minnesota economic opportunity grants.  
        Any balance in the first year does not 
        cancel but is available in the second 
        year. 
        [FOOD SHELF PROGRAMS.] Of this 
        appropriation, $1,278,000 in fiscal 
        year 2004 and $1,278,000 in fiscal year 
        2005 are for food shelf programs under 
        Minnesota Statutes, section 119A.44.  
        Any balance in the first year does not 
        cancel but is available in the second 
        year. 
        Subd. 6.  Family Assets for Independence
                         500,000         -0-   
        Any balance in the first year does not 
        cancel but is available in the second 
        year. 
           Sec. 11.  [TRANSFERS.] 
           Subdivision 1.  [GRANTS.] The commissioner of human 
        services, with the approval of the commissioner of finance, and 
        after notification of the chair of the senate health, human 
        services and corrections budget division and the chair of the 
        house health and human services finance committee, may transfer 
        unencumbered appropriation balances for the biennium ending June 
        30, 2005, within fiscal years among the MFIP, general 
        assistance, general assistance medical care, medical assistance, 
        MFIP child care assistance under Minnesota Statutes, section 
        119B.05, Minnesota supplemental aid, and group residential 
        housing programs, and the entitlement portion of the chemical 
        dependency consolidated treatment fund, and between fiscal years 
        of the biennium. 
           Subd. 2.  [ADMINISTRATION.] Positions, salary money, and 
        nonsalary administrative money may be transferred within the 
        departments of human services and health and within the programs 
        operated by the veterans nursing homes board as the 
        commissioners and the board consider necessary, with the advance 
        approval of the commissioner of finance.  The commissioner or 
        the board shall inform the chairs of the house health and human 
        services finance committee and the senate health, human services 
        and corrections budget division quarterly about transfers made 
        under this provision. 
           Subd. 3.  [PROHIBITED TRANSFERS.] Grant money shall not be 
        transferred to operations within the departments of human 
        services and health and within the programs operated by the 
        veterans nursing homes board without the approval of the 
        legislature. 
           Sec. 12.  [INDIRECT COSTS NOT TO FUND PROGRAMS.] 
           The commissioners of health and of human services shall not 
        use indirect cost allocations to pay for the operational costs 
        of any program for which they are responsible. 
           Sec. 13.  [CARRYOVER LIMITATION.] 
           The appropriations in this article which are allowed to be 
        carried forward from fiscal year 2004 to fiscal year 2005 shall 
        not become part of the base level funding for the 2006-2007 
        biennial budget, unless specifically directed by the legislature.
           Sec. 14.  [SUNSET OF UNCODIFIED LANGUAGE.] 
           All uncodified language contained in this article expires 
        on June 30, 2005, unless a different expiration date is explicit.
           Sec. 15.  [REPEALER.] 
           Laws 2002, chapter 374, article 9, section 8, is repealed 
        effective upon final enactment. 
           Sec. 16.  [EFFECTIVE DATE.] 
           The provisions in this article are effective July 1, 2003, 
        unless a different effective date is specified. 
           Presented to the governor May 30, 2003 
           Signed by the governor June 5, 2003, 4:27 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes